ARCHIVED - Emera Brunswick Pipeline Company Ltd. - Audit Report OF-Surv-OpAud-E236 01 - Appendix VII: EBPC Management Review Audit Evaluation Table

APPENDIX VII
EBPC MANAGEMENT REVIEW AUDIT EVALUATION TABLE

5.0 MANAGEMENT REVIEW

5.1 Management Review

Expectations: Senior management should formally review the management and protection programs for continuing suitability, adequacy and effectiveness. The review should be based on appropriate documentation and records including the results of the surveillance, monitoring and audit programs. This review should be formal and documented and should occur on a regular basis. The management review should include a review of any decisions, actions and commitments which relate to the improvement of the programs and the company’s overall performance.

References:
Environment:	Safety:	Integrity:	Crossings and Awareness:	Emergency Management:
OPR-99 sections 53 and 55 CSA Z662-07 Clause10.2.2 (h) (iii)	OPR-99 sections 53 and 55 CSA Z662-07 Clause10.2.2 (h) (iii)	OPR-99 sections 4, 40, 53 and 55 CSA Z662-07 Clauses 10.2.2 (h) (iii) and 10.14.1	OPR-9 9 section 53 CSA Z662-07 Clause 10.2.2 (h) (iii) PCR Part II, sections 4 and 5	OPR-99 sections 53 and 55 CSA Z662-07 Clause 10.2.2 (h) (iii)

Assessment:
The expectations for Management Review describe the Board’s expectation for anticipated level of oversight, direction and communication that the Board requires of the certificate holder’s senior management. In the case of the Brunswick Pipeline, the responsibility of the development and maintenance of all operational programs has been designated by EBPC, the certificate holder, to the Operator through an Operations and Maintenance (O&M) Agreement. While the O&M agreement describes the responsibilities of the designated Operator, the Board expects that the certificate holder demonstrate adequate oversight and monitoring of and direction to the Operator, regardless of the Operator’s depth of experience. It is the expectation of the Board that EBPC formally and actively oversee processes including the review of contracts, reporting and communication processes in place in order to ensure that the continued suitability of the operational programs and the adequacy with which these programs address the hazards and risks while remaining in compliance with all applicable legal requirements.

To establish EBPC’s level of oversight of the operational programs, the Board conducted interviews and examined the documentation that resulted from the formal and informal interactions between EBPC and its Operator. The Board was able to ascertain the nature of the information exchanged by reviewing the content of the Operations and Maintenance Agreement, senior management committee structures, standing agenda items, meeting minutes and reports. Document review confirmed that EBPC monitored its Operator’s progress in meeting the goals targets and objectives. EBPC indicated that it discusses objectives at the beginning of the year, at least once during the year and again at the end of the year when the past year’s performance is evaluated and objectives are established for the next year. EBPC Management indicated that it reviews the Operator’s messages to internal and external stakeholders to ensure consistency with EBPC expectations. EBPC Management was also demonstrating a degree of the required oversight by reviewing reports and monitoring operational activities such as right-of-way patrols, safety incidents, facility operations and maintenance review.

EBPC Management also indicated that it intends to apply Emera Inc.’s Environmental Management System to provide guidance to the Operator by outlining its regulatory requirements and expectations. It was confirmed that the elements are aligned with the intent of the program requirements of OPR-99. According to EBPC, it intends to audit the compliance and suitability of the program by applying a combination of the Operator’s internal audit process and Emera Inc.’s Environmental Management System audit requirements. At the time of the audit however, EBPC could not demonstrate that it had formally reviewed the programs developed by the Operator to ensure their suitability in meeting its regulatory obligations.

The Board expects that the certificate holder is able to demonstrate oversight and review of the development and implementation of appropriate processes for the measuring and monitoring the activities undertaken on its behalf. This oversight is required in order to ensure ongoing compliance with its certificate(s) and regulatory requirements. Record review confirmed that EBPC staff participate in regularly scheduled operations and maintenance management meetings with the Operator.

In order for EBPC to be meet the regulatory obligations of a certificate holder, it must demonstrate that its senior management is actively and formally directing and measuring the development of effective and compliant programs. This active direction includes the establishment of requirements for managing and monitoring programs to ensure they are functioning for the identification, communication and mitigation of hazards, the integration of legal requirements and the establishment of goals and targets using a formal and documented reporting process. EBPC was able to demonstrate that it routinely requests follow-up on issues identified to ensure corrective and preventative actions are performed according to the procedures.

It was noted that the Operator was conducting internal audits and formal reviews of its Environmental Health and Safety Management System as required by OPR-99. The audit report also noted that the Operator was not conducting the assessment that is required in the Pipeline Crossing Regulations. When reviewing the existing information sharing processes between EBPC and the Operator, the Board could not verify that the results of the Operator’s 2009 program audits were being communicated with EBPC or that there was a communication process in place to ensure appropriate distribution of the reports.

During the audit, EBPC provided documentation that demonstrated that there was a level of oversight occurring for the operational programs. As noted throughout this audit report, EBPC and the Operator were communicating on a regular basis concerning the Brunswick Pipeline and related activities. There are routinely scheduled meetings occurring that follow a set agenda and where updates are provided. However, as discussed in Element 3.4 Communication, there is a lack of a formal communication process between EBPC and its Operator. Without a plan in place, the Board could not confirm that EBPC was receiving and reviewing all of the necessary information from each program to support the oversight required to meet the Board’s expectations.

EBPC could not demonstrate that it had formally reviewed the operational programs to ensure they were meeting all applicable regulatory requirements or managing the hazards and risks associated with its activities.

Compliance Status: Non-compliant