Lessons Learnedfrom PSM Auditing

OUTLINE

• What is an audit?• Why are audits important?• Regulatory requirements• Audit procedure • Common deficiencies found in PSM audits• Considering a Maturity ModelTM

WHAT IS AN AUDIT?

• An audit is a systematic, independent review toverify conformance with established guidelines orstandards. It employs a well defined reviewprocess to ensure consistency and to allow theauditor to reach defensible conclusions. (Guidelinesfor Auditing Process Safety Management Systems, 2ndEdition, CCPS 2011)

• Systematic, independent and documented processfor obtaining audit evidence and evaluating itobjectively to determine the extent to whichthe audit criteria are fulfilled. (ISO 19011:2011(en)Guidelines for auditing management systems)

• An exercise in frustration• An interruption of routine• A threat to the facility• A waste of time• An unwanted intrusion into my life• The ignorant leading the blind

Something THEY do to ME

WHAT IS AN AUDIT?

WHY ISAUDITING IMPORTANT?

"Progress, far from consisting in change, depends on retentiveness. When change is absolute there remains no being to improve and no

direction is set for possible improvement: and when experience is not retained, as among savages, infancy is perpetual. Those who cannot

remember the past are condemned to repeat it."

George Santayana

"Those that fail to learn from history,are doomed to repeat it."

Winston Churchill

LESSONS FROM THE PAST

1974 Flixborough

1976 Seveso

1979 Three Mile Island

1984 Bhopal1989 Phillips Pasadena

PROCESS SAFETYREGULATIONS

• 29 CFR 1910.119, OSHA Process Safety Management of Highly Hazardous Chemicals – Promulgated 1992

• 40 CFR Part 68, EPA Risk Management Program Rule –Promulgated 1996

ARE THE REGULATIONSWORKING?

Buncefield 2005, BP Texas City 2005

Deepwater Horizon 2010

West Texas 2013

DuPont Insecticide Plant 2015

WHAT IS BEING DONE?

PSM Regulations have not changed since their promulgation, but…• Letters of Interpretation

• OSHA Petroleum Refinery Process Safety Management National Emphasis Program (NEP) Directive – 2007

• OSHA PSM Covered Chemical Facilities National Emphasis Program (NEP) Directive – 2011

• Executive Order 13650 (August 1, 2013)– More chemicals, lower TQs, more covered facilities

• EPA revised the RMP Rule

COMPLIANCE AUDITWHY?

• Excellent tool to assess an organization’s Process Safety effectiveness – written program and implementation

• Assess compliance; benchmark performance with industry

• Identify and mitigate “early warning signs” before a potential incident

• Integral to “PLAN – DO – CHECK – ACT” cycle of continuous improvement

• Required under PSM/RMP

Regulatory Requirements

ELEMENTS OF PSM

1. Employee Participation2. Process Safety

Information3. Process Hazard Analysis4. Operating Procedures5. Training6. Contractors7. Pre-startup Safety Review

8. Mechanical Integrity9. Hot Work10. Management of Change11. Incident Investigation12.Emergency Planning and

Response13. Compliance Audits14. Trade Secrets

COVERED PROCESSESAND CHEMICALS

• OSHA (29CFR1910.119)– A process which involves a chemical at or above the specified

threshold quantities listed in Appendix A of OSHA 29CFR1910.119

– A process which involves a Category 1 flammable gas or aflammable liquid with a flashpoint below 100 oF on site in onelocation, in a quantity of 10,000 pounds or more

• EPA (40CFR68)– A threshold quantity of a regulated substance listed in §68.130 is

present at a stationary source if the total quantity of the regulatedsubstance contained in a process exceeds the threshold

REGULATORYREQUIREMENTS

Compliance Audits

• 1910.119(o)(1), 68.79(a): Employers shall certify that they have evaluated compliance with the provisions of this section at least every three years to verify that the procedures and practices developed under the standard are adequate and are being followed.

• 1910.119(o)(2), 68.79 (b): The compliance audit shall be conducted by at least one person knowledgeable in the process.

• 1910.119(o)(3), 68.79 (c): A report of the findings of the audit shall be developed.

REGUATORYREQUIREMENTS

Compliance Audits

• 1910.119(o)(4), 68.79 (d): The employer shall promptly determine and document an appropriate response to each of the findings of the compliance audit, and document that deficiencies have been corrected.

• Employers shall retain the two (2) most recent compliance audit reports.

CORPORATE GOALS

• Gap analysis • Communication of information and Feedback• Performance Measurement• Monitoring PSM program continuous

improvement• Reducing the process safety risk • Training of Auditors• Sharing successful or best practices

3RD PARTYAUDIT PROCEDURE

• Lead Auditor puts a team put together• An audit schedule is put together• Request for information is sent to the facility• An audit protocol is developed• Site Tour• Audit information is gathered through

– Interviews– Site walk-through– Records review

• Audit results are analyzed and findings are presented to the facility

• A report is prepared and certified

Common Deficiencies

COMMON DEFICIENCIES

Mechanical Integrity 202Process Safety Information 189Process Hazard Analysis 188Operating Procedures 184Management of Change 92Incident Investigation 71Compliance Audits 47Contractors 33Training 29

70%

COMMON DEFICIENCIES

Emergency Planning and Response 17Employee Participation 15Pre-Startup Safety Review

13

Hot Work Permits 8Trade Secrets 0

Total PSM Citations 1088

COMMON DEFICIENCIES

Mechanical Integrity 156Process Safety Information 140Operating Procedures 114Process Hazard Analysis 106Management of Change 44Compliance Audits 35Training 21Incident Investigation 19Employee Participation 16

76%

COMMON DEFICIENCIES

Contractors 14Emergency Planning and Response 7Pre-Startup Safety Review

5

Hot Work Permits 1Trade Secrets 0

Total PSM Citations 678

BASIS FORTHESE STATEMENTS

• 350+ audits / assessments performed

• 2010 – 2016

• Large, major operating companies to smaller, niche specialty chemical companies and industries

SITE WALK-THROUGHOBSERVATIONS

Cracked Hoses

Leaking Liquids

Lack of ID for Manual

Valves

Rusty Pipes Lack of Hazard Communication Signage

SITE WALK-THROUGHOBSERVATIONS

COMMON DEFICIENCIESDEFINITIONS OF

PSM BOUNDARIES

• Boundaries of PSM-covered process not well-defined or documented; leading to inconsistent interpretation of PSM boundaries across different departments and incomplete PHA assessment

• Failure to include interconnecting utilities in the PSM-covered process and PHA review process (e.g., steam, nitrogen, cooling water, etc.)

Any possible solutions to this problem?

• SOLUTION: Redline/mark PSM-covered process boundaries on Facility Plot Plan AND process P&ID(s) AND Communicate

COMMON DEFICIENCIESPROCESS SAFETY INFORMATION

• Hazardous effects of inadvertent mixing of different chemicals that could foreseeably occur not addressed

• Lack of complete Electrical Area Classification documentation and field survey

• Design basis information for emergency relief/PSV and flare systems incomplete (e.g., API RP520/521 RV sizing “contingency analysis ” and flare analysis)

COMMON DEFICIENCIESPROCESS SAFETY INFORMATION• Design basis information for safeguards,

which prevent or mitigate a potential release, incomplete (e.g., fire water systems).

• Materials of construction information not on file for all equipment in the “covered process”.

• Lack of reference Plant design codes and standards identified (“RAGAGEP”).

Standard TitleAPI 520 Sizing, Selection & Installation of Pressure-Relieving Devices in

RefineriesAPI 521 Pressure-Relieving and Depressuring SystemsAPI 752 Management of Hazards Associated with Location of Process

Plant Permanent BuildingsAPI 753 Management of Hazards Associated with Location of Process

Plant Portable BuildingsAPI 510 Pressure Vessel Inspection Code – In-service Inspection,

Rating, Repair and AlterationAPI 570 Piping Inspection Code – In-service Inspection, Rating, Repair

and Alteration of PipingAPI 574 Inspection Practices for Piping System ComponentsANSI/ISA S84.01

Functional Safety – Safety Instrumented Systems for the Process Industry Sector

COMMON DEFICIENCIESPROCESS SAFETY INFORMATION

• PHA fails to comprehensively identify all hazards of the process because:– Selection of the wrong methodology based on complexity

of the process– Incomplete set of Guidewords + Parameters

(“Deviations”) utilized– Failure to review Startup / Shutdown issues, Abnormal

Operations

Can you recall an incident that happened during start-up?

COMMON DEFICIENCIESPROCESS HAZARD ANALYSIS

• PHA performed in the absence of at least one employee who has experience and knowledge specific to the process being evaluated.

• Failure to assess consequences to “ultimate” loss event assuming safeguards are non-existent or ineffective as designed.

• Safeguards not independent of the initiating event / cause. Failure to perform Layer of Protection Analysis (LOPA) to assess effectiveness of safeguards.

COMMON DEFICIENCIESPROCESS HAZARD ANALYSIS

• Previous incidents, including “near misses”, not considered by the PHA team.

• Overdue PHA recommendations with no managed schedule for resolution and completion.

• Incomplete compilation of Process Safety Information prior to performing the PHA.

COMMON DEFICIENCIESPROCESS HAZARD ANALYSIS

• Process hazard analyses were not updated and revalidated at least every five (5) years.

• Failure to address FACILITY SITING issues.

• Failure to address HUMAN FACTORS issues.

USE INDUSTRY-STANDARD CHECKLISTS!!!

COMMON DEFICIENCIESPROCESS HAZARD ANALYSIS

COMMON DEFICIENCIESOPERATING PROCEDURES

• SOPs not written for ALL phases of operation (esp., non-routine operations, e.g., purging, cleaning, sampling, temporary operation, emergency operation, etc.)

• Safe operating limits and consequences of deviation from these limits not well-defined. Steps to correct/avoid deviations not documented

• No written procedures for Shift Change / Handover operations

• Lack of annual certification

• No documented Equipment-specific procedures for LOTO, Confined Space

• Lack of periodic training for LOTO, Confined Space

COMMON DEFICIENCIESSAFE WORKING PRACTICES

• MOC process not applied for:• Installation of temporary equipment• Decommissioning or taking equipment out-of-

service• Changes to alarm setpoints• Procedural-only changes (e.g., conversion from

paper-based to electronic systems)• Changes in shift work; workforce reductions

Why do you think it is important to address organizational changes?

COMMON DEFICIENCIESMANAGEMENT OF CHANGE

• PSI, SOPs, M.I. not updated when affected by the MOC.

• MOC forms completed and signed off before PSSR completed.

COMMON DEFICIENCIESMANAGEMENT OF CHANGE

• “FIX IT WHEN IT BREAKS” mentality

• Failure to identify “critical equipment” relative to the PSM-covered process

• Lack of written deficiency management program for non-conformances identified during inspection and testing activities

• Overdue inspections

• Failure to identify and implement RAGAGEPs for inspections and tests

COMMON DEFICIENCIESMECHANICAL INTEGRITY

• Failure to review PHA and include all “safeguards” in Mechanical Integrity program.

• Focus on stationary equipment; less emphasis on Rotating Equipment and Instrumentation & Controls.

• Lack of “fitness for service” documentation for process equipment.

• MOC process not used for changes to inspection frequency.

COMMON DEFICIENCIESMECHANICAL INTEGRITY

• “Near misses” not recorded; possibly due to:– Lack of good, uniform

understanding of what the definition of a “near miss”

– Lack of positive culture that promotes reporting of “near misses”

• Focus on reporting and investigation of personnel safety incidents (a “lagging” indicator) versus “near misses” (a leading indicator)

Level 1Incidents of

greater consequence

Level 2 Incidents of lesser

consequence

Level 3 Challenges to safety system

Level 4Operating Discipline & Management System

Performance Indicators.(Not reported yet in RCI)

COMMON DEFICIENCIESINCIDENT INVESTIGATION

• Missing records of initial training for qualified operators.

• Refresher training not conducted

• at least every three (3) years.

• Lack of verification of personnel comprehension of training program.

• No written proof that operators were consulted on frequency or content of refresher training.

• Refresher training too focused on “normal” operations.

COMMON DEFICIENCIESTRAINING

• Lack of due diligence qualification, certification records for contractor employees who perform “specialized skill or craft work”, e.g.,– Crane and rigging work– Forklift driving, mobile lifts/JLGs– Certified welding– Instrument calibration– Other

• Lack of periodic surveillance of contractors post-selection; contractors only disciplined when something goes wrong

COMMON DEFICIENCIESCONTRACTORS

• Lack of well-articulated management expectations and defined goals; leading to weak employee morale and decreased employee participation.

• Employees do not know how to access PHAs and other PSM information.

COMMON DEFICIENCIESEMPLOYEE INVOLVEMENT

Considering theMaturity Model™

PSRG’s Maturity ModelTM is an extension of the business practice of examining the maturity of a business process by comparison to a set of indicators and assigning a score. Its best and highest use is to align Process Safety Management as a business practice in the minds of corporate executives.

• Based on Levels 1-4 where 1 is Reactive and 4 is Optimized (Best-in-Class)

• Ability to gauge overall as well as individual PSM element performance

• Model defines Best-in-Class Safety Management System

Level Definition

1 Reactive/Initial

2 Dependent/Defined

3 Managed/Independent Managed

4 Optimized/Interdependent

MATURITY MODEL

Level 1: Reactive/Initial

• Immature safety system, procedures reviewed when needed.

• Employer meets less than 80% of the criteria developed in Level 4.

Level 2: Dependent/Defined

• Structured and documented policies with focus on following procedures

• Good understanding of the requirements outlined in 29 CFR 1910.119.

• The employer meets at least 80% of the criteria developed in Level 4

Level 3: Managed/Independent

Managed

• Individuals use wide range of tools and behaviors to care for themselves with managers taking action when needed.

• The employer meets at least 90% of the criteria developed in Level 4.

Level 4: Optimized/Interdependent

• Everyone takes proactive approach, peer to peer focus, assessment through continuous improvement.

• The employer has consistently achieved 98% of the criteria developed for the past three PSM audits as certified by external auditors.

MATURITY MODEL

Element Level 1 Level 2 Level 3 Level 4Process Hazard Analysis

• Hazards inadequately addressed

• Lack of full team member ID and Expertise

• No system to promptly address recommendations

• Actions not communicated to working groups

• Not timely updated/revalidated within 5 years

• Not retrievable

• Procedure developedwith methodologies

• Subsequent PHAs timely updated or revalidated

• Employees trained in leadership or PHA participation

• Pre-formatted industry standard templates used

• Team members and areas of expertise identified

• Comprehensive reports

• System to promptly communicate recommendations

• PHA revalidated every 5 years

• Records Retrievable

• Procedure developedwith methodologies including LOPA

• Subsequent PHAs timely updated or revalidated before 5-year anniversary

• Employees trained in leadership or PHA participation

• Pre-formatted industry standard templates used

• Team members and areas of expertise identified

• Comprehensive reports • System to promptly

communicate recommendations

• Tracking System for actions includes metrics

• System to promptly communicate actions/findings

• 5 year PHA schedule developed

• Procedure developed with methodologies including LOPA

• Subsequent PHAs timely updated or revalidated before 5-year anniversary

• Employees trained in leadership or PHA participation

• Pre-formatted industry standard templates used

• Team members and areas of expertise identified

• Comprehensive reports • System to promptly

communicate recommendations

• Tracking System for actions includes metrics

• Findings/Actions communicated to affected workforce

• 5 year PHA schedule developed, reviewed annually for planning and team assignment

EXAMPLE CHECKLISTMATURITY MODEL

0

1

2

3

4

5

Leve

l

Facility

AB

D

C

Target (Best-in-Class)Maturity Level

Score

Between Level 1 & 2

1 (Below Compliance)

Level 2 2 (Compliance)Between Level 2 & 3

3 (Compliance plus)

Level 4 4 (Best-in-Class)

Levels 1-4 where 1 is below par and 4 is Best-in-Class

COMPARISON TOSTYLES OF BENCHMARKING

IN SUM

• Why is Auditing Important

• Regulatory Requirements

• Common PSM Audit Deficiencies

• PSRG’s Process Safety Management Maturity Model™

SOME REFERENCES

• Guidelines for Auditing Process Safety Management Systems, 2nd Edition, CCPS (Center for Chemical Process Safety), 2011

• (ISO 19011:2011(en) Guidelines for auditing management systems)

• U.S. Chemical Safety and Hazard Identification Board, Investigation report, report No. 2005-04-I-TX, Refinery Explosion and Fire, 2007

• The Environmental Health and Safety Auditor’s Handbook (Greeno et al., 1987)

• An exercise in frustration• An interruption of routine• A threat to the facility• A waste of time• An unwanted intrusion into my life• The ignorant leading the blind

Something THEY do to ME

WHAT IS AN AUDIT?

SOMETHING THEY DO TO ME

MUST BECOME

SOMETHING WE DO TOGETHER

3RD PARTY PERSPECTIVE FOR A SUCCESSFUL AUDIT

THANK YOU