ARCHIVED - Final Audit Report of the TransCanada Third Party Crossings Program - Appendix I - Crossings Program Audit Evaluation Table

Appendix I

Crossings Program Audit Evaluation Table^[i]

• 1.0 Policy and Commitment
  • 1.1 Leadership Accountability
  • 1.2 Policy and Commitment Statements
• 2.0 Planning
  • 2.1 Hazard Identification, Risk Assessment and Control
  • 2.2 Legal Requirements
  • 2.3 Goals, Objectives and Targets
  • 2.4 Organizational Structure, Roles and Responsibilities
• 3.0 Implementation
  • 3.1 Operational Control-Normal Operations
  • 3.2 Operational Control-Upset or Abnormal Operating Conditions
  • 3.3 Management of Change
  • 3.4 Training, Competence and Evaluation
  • 3.5 Communication
  • 3.6 Documentation and Document Control
• 4.0 Checking and Corrective Action
  • 4.1 Inspection, Measurement and Monitoring
  • 4.2 Investigating and Reporting Incidents and Near-misses
  • 4.3 Internal Audits
  • 4.4 Records Management
• 5.0 Management Review
  • 5.1 Management Review
• Endnotes

1.0 POLICY AND COMMITMENT

1.1 Leadership Accountability

Expectations: The company shall have an accountable officer appointed who has the appropriate authority over the company’s human and financial resources required to establish, implement and maintain its management system and protection programs, and to ensure that the company meets its obligations for safety, security and protection of the environment. The company shall have notified the Audit Team of the identity of the accountable officer within 30 days of the appointment and ensure that the accountable officer submits a signed statement to the Audit Team accepting the responsibilities of their position.

References: PCR Part II  section 4; OPR sections 6.1, 6.2, 40, 47, 48

Finding:

Following the release of the amended OPR on 10 April 2013, the National Energy Board (Board or NEB) gave its regulated companies 30 days to submit written notice of compliance with the provision as well as the name of its appointed accountable officer. On 10 May 2013, TransCanada submitted its written notice to the NEB indicating that its Executive Vice President of Operations and Major Projects had been appointed as accountable officer for TransCanada and all of its subsidiaries. In its submission, TransCanada confirmed that its accountable officer has the authority over the human and financial resources required to meet the Board’s substantive expectations.

The position of accountable officer was introduced into the OPR in April of 2013 and the audit commenced in June 2013. Therefore, the accountable officer role at TransCanada had been in effect for approximately 2 months and the accountable officer had not completed an annual planning cycle to adequately fulfill the responsibilities of the role. As the requirement for an Accountable Officer came into force in April of 2013, the Board is not in a position at this time to assess the performance of TransCanada’s accountable officer relative to its substantive expectations for this sub-element. As a result, and in this context, the Board views TransCanada’s compliance with the Board’s administrative expectations in this sub-element to be adequate in supporting a finding of Compliance for this sub-element.

Compliance Status: Compliant

1.2 Policy and Commitment Statements

Expectations: The company shall have documented policies and goals intended to ensure activities are conducted in a manner that ensures the safety and security of the public, workers, the pipeline, and protection of property and the environment. The company shall base its management system and protection programs on those policies and goals. The company shall include goals for the prevention of ruptures, liquids and gas releases, fatalities and injuries and for the response to incidents and emergency situations.

The company shall have a policy for the internal reporting of hazards, potential hazards, incidents and near-misses that includes the conditions under which a person who makes a report will be granted immunity from disciplinary action.

The company’s accountable officer shall prepare a policy statement that sets out the company’s commitment to these policies and goals and shall communicate that statement to the company’s employees.

References: PCR Part II section 4; OPR sections 6.1, 6.3, 40, 47, 48

Finding:

Due to the obligation to work with members of the public who excavate and construct around the pipeline, the Crossings Program is implemented at the functional intersection of several programs: the Integrity Program, the Lands Services and Stakeholder Engagement. As such, it operates in accordance with the policy statements for each of the groups. Due to the aspects of interaction with the public inherent with the Crossings Program, TransCanada staff identified the Guiding Principles for Land Services as one of the primary policies because it incorporates the aspect of "developing and maintaining relationships with landowners and communities". As the Crossings Program is also a component of TransCanada’s Health, Safety and Environment (HS&E) framework, TransCanada staff indicated that the program also subsumed within with the HS&E Commitment Statement document that includes the statement "we conduct our business so it meets or exceeds all applicable laws and regulations and minimize risk to our employees, the public and the environment". It was noted during the audit that the HS&E commitment statement is available for employees on the internal website and was posted in both head office and field locations. During the audit, TransCanada demonstrated that the HS&E Commitment statement is reviewed annually and signed by the CEO, the accountable officer and the Vice President of Community, Safety and Environment branch.

The audit determined that although these statements include the promotion of awareness and safety for those who live and work around TransCanada’s pipelines, it does not meet the requirements for a policy in the context of the Board`s expectations. With the promulgation of the amended OPR, the Board has clarified its expectations for management systems including the required content for the policies that govern company technical programs. As per the OPR, companies must have policies for the internal reporting of hazards, potential hazards, incidents and near misses that include the conditions under which a person who makes a report will be granted immunity from disciplinary action. Review of the various policies associated with this program did not identify that this requirement was being met.

At the time of the audit, TransCanada had not adopted a policy that meets the above mentioned criteria for its HS&E programs which includes the Crossings Program. While the purpose of the Crossings Program is documented in the operating procedures, TransCanada did not demonstrate that it has a policy for its Crossings program that meets the requirements of the Board. Review of TransCanada’s Code of Business Ethics identified that it includes the requirement for staff to report any actual or suspected violation of the law without fear of retaliation. In the Board’s view, this document does not adequately address the requirements as it is limited to violations of the law and does not clearly include hazards and potential hazards. TransCanada has also implemented an Incident Management Program to manage the reporting of violations, hazards and potential hazards that "encourages notification of all incidents". The Board has determined that it is not explicit from these documents that staff who reported a hazard or near miss within the Crossings Program would be granted immunity from disciplinary action. Therefore the Board has determined that, at the time of the audit, TransCanada had not adopted a policy that meets the OPR requirements.

TransCanada demonstrated that it has established and implemented an HS&E Commitment Statement, an Incident Management Program and a Code of Business Ethics that include protection of the public, workers and the environment and immunity from disciplinary action for employees that report any actual or suspected violation of the law. The Board has determined that these documents do not demonstrate the existence of policies for the internal reporting of hazards, potential hazards, incidents and near-misses that includes the conditions under which a person who makes a report will be granted immunity from disciplinary action. As a result, the Board has determined that this sub-element is Non-Compliant.

Compliance Status: Non-Compliant

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2.0 PLANNING

2.1 Hazard Identification, Risk Assessment and Control^[1]

Expectations: The company shall have an established, implemented and effective process for identifying and analyzing all hazards and potential hazards. The company shall establish and maintain an inventory of hazards and potential hazards. The company shall have an established, implemented and effective process for evaluating the risks associated with these hazards, including the risks related to normal and abnormal operating conditions. As part of its formal risk assessment, a company shall keep records to demonstrate the implementation of the hazard identification and risk assessment processes.  

The company shall have an established, implemented and effective process for the internal reporting of hazards, potential hazards, incidents and near-misses, and for taking corrective and preventive actions, including the steps to manage imminent hazards. The company shall have and maintain a data management system for monitoring and analyzing the trends in hazards, incidents, and near-misses.

The company shall have an established, implemented and effective process for developing and implementing controls to prevent, manage and mitigate the identified hazards and risks. The company shall communicate those controls to anyone exposed to the risks.

References: PCR Part II section 4, OPR sections 6.1, 6.5(1)(c), (d), (e), (f), (r), (s), 40, 47, 48

Finding:

TransCanada staff indicated that the main document for identifying and assessing hazards for the Crossings Program is the Pipeline Crossing and Encroachment Procedure (Crossing TOP). As identified in this TOP, the purpose of this procedure is "to outline the process the Applicant and TransCanada must follow in order to apply for, review, process, approve, construct, and document an encroachment or foreign crossing across TransCanada facilities." During interviews, company staff indicated that the identification and assessment of hazards is the main driver for the Crossing Program as there are typically hazards associated with requests for permission to excavate or construct near pipelines. In order for TransCanada to ensure third parties can work safely around its facilities, it must verify that the hazards associated with any proposed project are identified, that the risks are analyzed and that the controls are introduced for those risks and hazards. TransCanada staff further added that this hazard identification process, risk assessment and control process has been the main driver for the development and ongoing implementation of the Crossing Program that is documented in the Crossing TOP.

Document review confirmed that the Crossing TOP identifies the circumstances when safety measures such as engineering assessments, pipe locates or post-construction inspections are specifically required for a given request. The TOP also outlines the decision-making process for each set of potential circumstances. Once the hazards associated with the request for permission have been assessed, TransCanada staff determines the necessary safety mitigation steps and processes the requests accordingly. For example, section 4.2.2 of the Crossing TOP lists the circumstances that require crossing and encroachment approval at the regional level. Audit interviews confirmed that staff in the head office and field locations were knowledgeable with respect to this TOP.

When it comes to advising third parties regarding the hazards associated with their requests for permission to cross, TransCanada staff indicated that the majority of the communication of hazards comes from the Lands Team. The Lands Team representative typically communicates with the third parties regarding the hazards of each request throughout the process from the receipt of the request for permission to cross to the sending of the approval and issuing of the agreement. Also, third parties who apply to excavate or construct near a pipeline or cross a ROW with heavy machinery are provided with safety information and TransCanada’s Technical Crossing Guidelines which outline the steps required to ensure the safety of the facilities during and following the project. Copies of the approved requests for permission and associated documents are made available to TransCanada staff in the region of the project.

TransCanada staff also discussed its processes for the identification of potential hazards with its urban development monitoring which commission through a contracted survey company. They explained that a third party survey company reports to them concerning any new urban developments being planned or constructed along TransCanada ROW. This information is used to monitor the land use adjacent to its facilities and ROW and identify the potential hazards associated with urban encroachment.

During the audit, TransCanada demonstrated that it has based its Crossing process on hazard identification, risk assessment and control of the hazards. In its Crossing TOP, it has established a hazard inventory based on third party requests for permission to conduct excavation or construction work near its facilities. This inventory consists of typical hazards that are associated with activities to be undertaken by third parties working around its facilities. Furthermore, TransCanada has classified these hazards according to the type of risk assessment process that it will use to mitigate each type of hazard. Also, based on the information reviewed, it was determined that risk assessment guides the process for evaluating and classifying each type of crossing request including the process and criteria for evaluating requests for heavy vehicles to cross the ROW. TransCanada has established procedures to follow that align with the level of risk associated with different types of proposed activities. Also, TransCanada’s process directs it to communicate to the third party throughout the processing of their requests for permission and provide them information and instructions required for the safe completion of the project being considered. Interviews conducted during the audit confirmed that TransCanada staff, at all levels of the Crossing Program, were aware of the Crossing TOP and the processes it outlined.

Based on the information provided by TransCanada during the audit, the Board did not identify any non-compliance with TransCanada’s established processes for hazard identification, risk assessment and control in the Crossing Program. As a result, the Board views this process as being Compliant in meeting its expectations for this sub-element.

Compliance Status: Compliant

2.2 Legal Requirements

Expectations: The company shall have an established, implemented and effective process for identifying and monitoring compliance with all legal requirements that are applicable to the company in matters of safety, security and protection of the environment. The company shall have and maintain a list of those legal requirements. The company shall have a documented process to identify and resolve non-compliances as they relate to legal requirements, which includes updating the management and protection programs as required.

References: PCR Part II section 4;  OPR sections 6.1, 6.5(1)(g), (h), (i), 40, 47, 48

Finding:

TransCanada tracks changes its legal requirements using various methods including a third party subscription service that monitors various government and regulatory agencies and notifies subscribers by email when changes to relevant regulations are announced. During the interview process TransCanada advised that it is the regulatory group’s responsibility to notify internal stakeholders in various departments of these changes. In addition to the subscription service, TransCanada monitors regulatory changes by performing periodic reviews of government websites and participation in industry groups such as the Canadian Energy Pipelines Association. Staff indicated that legislative changes identified are then entered into the Incident and Issue Tracking (IIT) database as an issue and then delegated to the appropriate staff to action any changes required.

TransCanada’s legal requirements are incorporated into its operating procedures and listed in the TransCanada Operating Procedures (TOPs) database. As a result, the TOPs database tracks the relevant legislation associated with the procedures as well as the as the driver, the contact who is responsible for managing the TOP and any changes that are required. The database lists the regulation and allows staff to click on the regulation listed. According to the process, TOP owners in the respective business units are responsible for monitoring the legal requirements that will impact its procedures and ensuring that the TOPs are adjusted accordingly.

Along with the TOP updating process, TransCanada provided its Legislative Monitoring Process document for review. This document states, "TransCanada monitors legislation for any regulatory changes having the potential to impact TransCanada’s pipe, energy and gas storage in Canada". The document also outlines that it is the Directors or Vice Presidents of the business unit impacted by the regulatory change that would be accountable to ensure conformance to Company Standards and Specifications, to the regulatory requirements. In Canada, the Canadian Pipeline Operations - Compliance and the Canadian Gas Storage groups are accountable for the monitoring and interpretation of legislative changes. Review of TransCanada’s records confirmed that this group communicates regulatory changes or potential regulatory changes to internal TransCanada stakeholders in order to prepare a response or gather feedback on new or potential changes to legal requirements.

For the Crossings Program, the Board determined that the TOPs regulations list does include some, but not all, of the applicable regulatory requirements. Although TransCanada has developed a list of relevant legislation, according to its supplied Legislative Monitoring Process "the list is not all inclusive or indicative of all of the Acts, Codes, Regulations, Directives etc. required to be reviewed in developing the Company’s written Policies, Programs and Procedures". This list consists of relevant legislation and does not include the specific, applicable provisions within the legislation. As well, document review identified that the list provided was not up-to-date. As an example, the list provided, dated 2011, did not include the recent amendments to the OPR, or Board Orders such as the MO-2010-20 (An Exemption Order respecting crossings by agricultural vehicles or mobile equipment) or the NEB Administrative Monetary Penalties (AMPs) legislation.

The Board noted that, along with the absence of an overarching process to identify and monitor compliance with all legal requirements and a list of all legal requirements, TransCanada does not have an effective process for the communication of changes in legal requirements with field staff. Interviews with field staff confirmed that they were aware of the regulation list that is part of the TOPs database; however, when asked about the recent changes to the NEB Act or the AMPs legislation, field staff who work with third party crossings were unaware of any regulatory changes that could potentially impact the third parties. These changes to the NEB Act and the promulgation of the NEB Administrative Monetary Penalties (AMP) regulations could result in consequences for third parties that conduct unauthorized excavation and construction activities within 30 metres of TransCanada’s facilities. Specifically, the amendments to the NEB Act in July 2012 included changes to section 112 section (8) which states that:

"Every person who contravenes subsection (1) or (2)... is guilty of an offence and liable:

1. on summary conviction, to a fine not exceeding one hundred thousand dollars or to imprisonment for a term not exceeding one year or both"

Although the changes to the NEB Act were introduced in 2012, and the AMP regulations were released in July of 2013, the impact of these changes was not reflected in the Crossings Program to inform the third parties, nor was there a communication plan to inform field staff that conduct third party crossings and unauthorized activity investigations and follow-up.

While TransCanada demonstrated that it is tracking, listing and communicating some legislation, it did not demonstrate that it has established a complete and current inventory of specific legal requirements or a process to ensure that regulatory changes trigger program changes or a process to communicate to all staff involved with third party crossings. Therefore, TransCanada did not demonstrate that it has an established, implemented and effective process for identifying and monitoring compliance with all legal requirements that are applicable to the company in matters of safety, security and protection of the environment. As a result, the Board has determined that this sub-element is Non-Compliant.

Compliance Status: Non-Compliant

2.3 Goals, Objectives and Targets

Expectations: The company shall have an established, implemented and effective process for developing and setting goals, objectives and specific targets relevant to the risks and hazards associated with the company’s facilities and activities (i.e., construction, operation and maintenance). The company’s process for setting objectives and specific targets shall ensure that the objectives and targets are those required to achieve its goals, and shall ensure that the objectives and targets are reviewed annually.

The company shall include goals for the prevention of ruptures, liquid and gas releases, fatalities and injuries, and for the response to incidents and emergency situations. The company’s goals shall be communicated to employees.

The company shall develop performance measures for assessing the company’s success in achieving its goals, objectives, and targets. The company shall annually review its performance in achieving its goals, objectives and targets and the performance of its management system. The company shall document the annual review of its performance, including the actions taken during the year to correct any deficiencies identified in its quality assurance program, in an annual report, signed by the accountable officer.

References: PCR Part II section 4, OPR sections 6.1, 6.3, 6.5(1)(a), (b), 6.6, 40, 47, 48

Finding:

During interviews at the management level, TransCanada staff articulated multiple terms interchangeably in their description of their performance measurement. For example, in reviewing the information TransCanada provided, the audit noted that it links its HS&E Programs to the Key Focus Area titled "Safety & Environmental Compliance" which can be found in the Peak Performance insert card. However, TransCanada also refers to the Corporate Performance Scorecard which uses the term "Key Performance Area" (KPA). It was not clearly explained how the Key Focus Areas differ from Key Performance Areas or how either of these terms equate to goals, targets or objectives for the HS&E programs, as required by the Board. Consequently, during the audit, and to advance the Board’s assessment of this sub-element, Board auditors requested clarification from TransCanada via a table of concordance to confirm the appropriate correlation between TransCanada’s varied internal terminology and the regulatory requirements. This table was not, however, provided to Board auditors during the audit. As a result, the Board is unable to find TransCanada compliant with the Board’s expectations in this sub-element.

In evaluating this element, the Board notes that TransCanada did provide its process for measuring its performance. The Board reviewed TransCanada’s Corporate Performance Scorecard process. The Corporate Performance Scorecard is the aggregation of scorecards from each level of organization. The scorecard lists the Key Performance Areas (KPAs) and the Key Performance Indicators (KPIs) that are measured under each KPA. At the corporate level the KPAs are business performance related goals with KPIs that include asset integrity and compliance safety performance. TransCanada senior management stated that TransCanada sets its corporate benchmarks using the Peak Performance management tool. Through Peak Performance, Managers align employee performance KPAs and KPIs with those of the organization. During interviews, staff stated that these KPAs and KPIs are then aligned with in individual performance evaluations.

TransCanada staff explained that it tracks measures for the Crossings Program that are based on its function within Lands Department. Therefore performance measures for the Crossing Program are based on turnaround times and service standards for third party crossing applications. These service standards are then transferred into the personnel role profiles such as the one for the Manager of Land Administration which included the KPAs including: "Customers/clients/stakeholders were satisfied". These KPAs were associated to KPIs including: "Regulated crossing program effective and compliant meeting 10day  turnaround", which was associated with a standard of 100% to meet the 10day  turnaround.

Upon its review of the documentation provided, the Board noted that TransCanada’s Crossing Program does not have developed goals, objectives and specific targets relevant to its hazards and risks at the Program level. Instead, the KPAs and KPIs for the Crossing Program are based on its staff’s ability to meet established service and budget expectations. As a result, the Board has determined that this sub-element is Non-Compliant.

Compliance Status: Non-Compliant

2.4 Organizational Structure, Roles and Responsibilities

Expectations: The company shall have a documented organizational structure that enables it to meet the requirements of its management system and its obligations to carry out activities in a manner that ensures the safety and security of the public, company employees and the pipeline, and protection of property and the environment. The documented structure shall enable the company to determine and communicate the roles, responsibilities and authority of the officers and employees at all levels. The company shall document contractors’ responsibilities in its construction and maintenance safety manuals.

The documented organizational structure shall also enable the company to demonstrate that the human resources allocated to establishing, implementing and maintaining the management system are sufficient to meet the requirements of the management system and to meet the company’s obligations to design, construct, operate or abandon its facilities to ensure the safety and security of the public and the company’s employees, and the protection of property and the environment. The company shall complete an annual documented evaluation in order to demonstrate adequate human resourcing to meet these obligations.

References: PCR Part II section 4; OPR sections  6.1, 6.4, 20, 31, 40, 47, 48

Finding:

The Crossings Program is developed and implemented at TransCanada’s Head Office by the Canada Land Management group, which is part of the Community, Safety and Environment Group. Engineers from the Damage Prevention Group also participate in the evaluation of complex requests for permission when required. In each regional field office, there are designated pipeline technicians who are accountable to execute the onsite duties resulting from the third party crossing requests such as locates and site inspections. The Pipeline Crossing and Encroachment TOP states that TransCanada’s Regional Representatives are accountable and responsible for tasks such as acting as the company representative when third parties are working around the TransCanada pipelines, completing the necessary reports as well as conducting any required follow-up inspections. The pipeline technicians that conduct this type of work on behalf of the Crossings Group report to and are evaluated by the Area Managers in each regional office.

Review of TransCanada’s documentation indicated that regardless of rank or position, TransCanada assigns and manages all employee roles using a standard process. The process is implemented using TransCanada’s Role Profiles and Performance Agreements. Each TransCanada employee is given a Role Profile during the onboarding process that contains the key functional and behavioural competencies for each position. The Role Profiles are reviewed and revised annually during employee performance reviews. Performance Agreements are the employees’ line of sight performance evaluation documents that describe how their performance supports the corporate objectives. Review of supplied documents and records indicated that the process meets the Board’s expectations and that TransCanada is implementing its described practices consistently as designed.

With respect to TransCanada ensuring that it has adequate resources to implement its Crossing Program, TransCanada demonstrated during interviews and by document and record reviews that it is meeting requirements. In order to assess the resources required for the Crossings program, Senior Management review several factors in the department scorecards such as timely completion of assigned work, amount of overtime performed by staff, size and number of projects in a given area, etc. To supplement its Land Agents during high volume periods, TransCanada contracts a third party to provide land agents to manage right of way encroachments including new urban developments. These contractors report to the Manager, Land Administration. Review of the contractor management process indicates that these contractors are evaluated at TransCanada Head Office annually when the scope of work in the contract is re-examined using the Procurement and Contractor Management Program.

The Board did not identify any non-compliances with TransCanada’s documented organizational structure and the communication of roles and responsibilities within the Crossings Program. As a result, the Board views this process as being Compliant in meeting its expectations for this sub-element.

Compliance Status: Compliant

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3.0 IMPLEMENTATION

3.1 Operational Control-Normal Operations

Expectations: The company shall have an established, implemented and effective process for developing and implementing corrective, mitigative, preventive and protective controls associated with the hazards and risks identified in elements 2.0 and 3.0, and for communicating these controls to anyone who is exposed to the risks.

The company shall have an established, implemented and effective process for coordinating, controlling and managing the operational activities of employees and other people working with or on behalf of the company.

References: Crossings: PCR Part II section 4; OPR sections 6.1, 6.5(1)(e), (f), (q), 40, 47, 48

Finding:

TransCanada has established its Crossings Program to manage third party requests for permission to excavate or construct near its facilities. The Pipeline Crossing and Encroachment TOP outlines the responsibilities and accountabilities of each of the Lands, Damage Prevention and field technician groups for the process. The Crossings Program manages the lifecycle of each crossing project in order to ensure that the third party crossings are conducted safely and in compliance with regulatory requirements. Document review and interviews confirmed that TransCanada’s Land Management Group at the Head Office:

• receives the requests for permission to cross;
• classifies the requests by their level of complexity;
• distributes the requests to the Damage Prevention group for review if an engineering assessment is required;
• sends the approval and crossing agreement with safety information to the third party; and
• notifies the regional office where the project is to take place.

Record review and interviews indicated that TransCanada pipeline technicians in the field offices, who are designated as the third party crossing contacts, conduct such activities as:

• meeting with third parties;
• performing pipeline locates;
• conducting or attending pre-job meetings with third parties;
• attending third party crossing installations and excavations on the ROW and within 5 metres of the pipe as the TransCanada representative to ensure safety instructions are followed;
• performing visual analysis to identify and report any visual anomalies in the pipe;
• conducting backfill inspections; and
• completing reports regarding post-crossing pipeline inspections.

Board interviews confirmed that TransCanada staff members at the locations visited during the audit were familiar with their responsibilities as well as the process for managing the requests for permission to cross TransCanada facilities.

Based on the information provided by TransCanada during the audit, the Board did not identify any non-compliance with TransCanada’s processes for the Crossings Program in the control of its hazards. As a result, the Board views this process as being Compliant in meeting its expectations for this sub-element.

Compliance Status: Compliant

3.2 Operational Control-Upset or Abnormal Operating Conditions

Expectations: The company shall establish and maintain plans and procedures to identify the potential for upset or abnormal operating conditions, accidental releases, incidents and emergency situations. The company shall also define proposed responses to these events and prevent and mitigate the likely consequence and/or impacts of these events. The procedures must be periodically tested and reviewed, and revised where appropriate (for example, after upset or abnormal events). The company shall have an established, implemented and effective process for developing contingency plans for abnormal events that may occur during construction, operation, maintenance, abandonment or emergency situations.

References: PCR Part II section 4; OPR sections 6.1, 6.5(1)(c), (d), (e), (f), (t), 32, 40, 47, 48

Finding:

TransCanada’s Emergency Management Program is developed and implemented at the Calgary Head Office. There are members of the Emergency Management Team in each region. While not identified as officially part of the Emergency Management team, some of the Crossings technicians interviewed for the audit identified that they were trained to participate in the response to an emergency situation involving the TransCanada facilities. Interviews in Head Office as well as the field offices confirmed that pipeline technicians who work in third party crossings are also trained in the Incident Command System to participate in the event of an emergency situation. They also participate in the Emergency Management training that occurs throughout the year such as table top and full scale exercises in their respective areas. Also, field staff confirmed that each company truck is equipped with an emergency response kit.

Based on the information provided by TransCanada during the audit, the Board did not identify any non-compliance with TransCanada’s established processes for integrating its Crossings field technicians into its emergency response plans and procedures to address upset or abnormal operating conditions, accidental releases, incidents and emergency situations. As a result, the Board views this process as being Compliant in meeting its expectations for this sub-element.

Compliance Status: Compliant

3.3 Management of Change

Expectations: The company shall have an established, implemented and effective process for identifying and managing any change that could affect safety, security or protection of the environment, including any new hazard or risk, any change in a design, specification, standard or procedure and any change in the company’s organizational structure or the legal requirements applicable to the company.

References: PCR Part II section 4; OPR sections 6.1, 6.5(1)(i), 40, 47, 48

Finding:

At the time of the audit, TransCanada identified that it had developed and implemented two separate MOC processes to manage and document changes that affect its Crossings Program. The first process was developed and implemented as part of its Integrity Management Program, and is captured in the Management of Change form (Integrity MOC). This Integrity MOC is asset based and therefore is triggered by changes to equipment or software. Changes are described and tracked using a standardized form that documents both description of the rationale for the change being managed, as well as internal and external stakeholder notifications that need to be considered under its process.

The second process used to manage changes in its protection programs leverages some of the functionality of the TransCanada Operating Procedures (TOPs) database and the TOPs Framework Process. The TOPs database contains the operating procedures and some related documents for each of the protection programs. Each year, the TOPs related to the Crossings Program, such as the Pipeline Crossings and Encroachment TOP is subject to a review process. Once the revisions have been made, the document is loaded into the TOPs database.

The TOPs database contains the operating procedures and some related documents for each of the protection programs. As per the TOPs framework process, the TOPs contact for each of the crossings related TOPs modifies the TOP and reloads it into the database, the TOPs database automatically notifies a list of pre-identified internal stakeholders of the new version of the document in order to solicit comments on the changes. Further, once changes have been finalized, the TOPs management process automatically disseminates a monthly report for all employees outlining the TOPs that have been modified during the previous period. TransCanada staff stated that any change that would affect their programs would be part of the annual TOPS review. As well, some technical changes to the pipeline crossing related TOPs trigger exams that pipeline staff are prompted to write and pass. Their leaders are notified if the exam is not successfully completed. TransCanada staff indicated that these two processes ensure that changes to procedures are managed and communicated throughout its organization.

Upon review, the Board determined that as the Pipeline Integrity MOC process is reserved for asset based changes and the TOPs framework manages changes that are captured by the existing scope of the TOPs framework process. As the TOPs framework is intended to manage versions of operational and procedural documents exclusively, it is also too narrow in scope to meet the requirements of an MOC as outlined in the OPR. Also, the Board notes that neither of these processes include steps to proactively identify change that could affect safety, security or the protection of the environment. The Board has determined that by using the Integrity MOC and TOPs framework processes, TransCanada has implemented some aspects necessary for an MOC process by documenting and communicating of some types of change through document versioning, however, these processes are not adequate either separately or in combination to satisfy the OPR requirements due the narrow scope and limited application of them within the organization.

In considering the MOC process as it integrates the HS&E management system, during the audit, TransCanada staff indicated that, while the company considers its presently implemented MOC processes to be compliant with the Board’s requirements, it has a project underway to implement a singular MOC process which will better meet the Board’s requirements. The new MOC is scheduled to be fully implemented by the end of 2014. TransCanada staff provided an overview presentation of the new MOC. Initial review indicates that it could potentially address the OPR requirements. During interviews TransCanada indicated that the company has developed the new MOC as the result of a corrective action arising from an internal audit completed in 2009. While the Board acknowledges the improvements that the new process represents, the Board notes that that the 2014 implementation date represents approximately 5 years from identification of the issue through to correction. The Board has addressed this issue in its evaluation of sub-elements 4.3 Internal Audits and 5.1 Management Review.  

While TransCanada has implemented some aspects of an MOC, at the time of the audit, TransCanada did not demonstrate that it has an established and implemented process for identifying and managing change that could affect safety, security or protection of the environment, including new hazards or risks, changes in design, specifications, standards or procedures, and change in the company’s organizational structure or the legal requirements. As a result, the Board views this process as being Non-Compliant in meeting its expectations for this sub-element.

The Board notes that the corrective actions implemented by TransCanada to address findings in sub-elements 2.1 and 2.2 will trigger the updating of the MOC discussed in this sub-element.

Compliance Status: Non-Compliant

3.4 Training, Competence and Evaluation

Expectations: The company shall have an established, implemented and effective process for developing competency requirements and training programs that provide employees and other persons working with or on behalf of the company with the training that will enable them to perform their duties in a manner that is safe, ensures the security of the pipeline and protects the environment.

The company shall have an established, implemented and effective process for verifying that employees and other persons working with or on behalf of the company are trained and competent, and for supervising them to ensure that they perform their duties in a manner that is safe, ensures the security of the pipeline and protects the environment. The company shall have an established, implemented and effective process for making employees and other persons working with or on behalf of the company aware of their responsibilities in relation to the processes and procedures required by the management system or the company’s protection programs.

The company shall have an established, implemented and effective process for generating and managing training documents and records.

References: PCR Part II section 4; OPR sections 6.1, 6.5(1)(j), (k), (l), (p), 40, 47, 48

Finding:

TransCanada staff has developed a formal Learning Management System (LMS) for assigning, tracking and managing Crossing Program staff training. Through the LMS, staff are notified when they are required to take or refresh training. In order to ensure that training is current and monitored, managers are also notified if any of their staff’s training has expired. Training is provided through internal classroom and on-line modules and employees must pass a written exam for certain modules to establish that they have met competency requirements. Pipeline technicians also take external training on industry best practices for ground disturbance as well as training given by the manufacturer on the locate equipment they use.

The training programs for the staff in Lands, Damage Prevention and the pipeline technicians who conduct third party crossings are described in each employee’s role profile. For pipeline technicians, the role profile also indicates their level of experience and training by designating them with a  level of 1 to 4. Also, for certain high risk activities, such as excavation, pipeline technicians are given a rating of master in that skill indicating that they are qualified to evaluate another employee for that skill. During the audit interviews, staff at all levels indicated that they were aware of how their training was managed and documented through the LMS system.

The audit activities identified that training of field staff in the Crossings Program consists of internally delivered online training on TransCanada procedures and externally provided training for activities such as ground disturbance. For certain high-risk activities like excavation, TransCanada also uses a mentor/ peer evaluation process. Only staff members qualified as highly skilled or master level by this process are allowed to perform these high risk tasks without supervision. TransCanada hires contractors to perform some locates as well as aerial patrols in Western Canada. These contractors report to the Regional Director and are selected, managed and evaluated through the TransCanada Contractor Safety Management Program.

TransCanada has developed an extensive skills-based training program for its Crossings staff. The training provided demonstrates that TransCanada has identified many of the hazards that these employees and contractors may face in the course of conducting a crossing or identifying an unauthorized activity. However, the document review and interviews revealed a gap in the training program when it comes to this group’s interaction with the public and the possibility of hostility from an external party. Specifically, TransCanada staff and contractors indicated that they understand that as representatives of TransCanada, there is an expectation that they intervene on behalf of the safety of the pipeline when a third party is working unsafely or without permission around its facilities. During interviews, TransCanada staff and contractors stated that they had encountered situations where they intervened and this intervention was met with hostility and the responses for how these instances were handled were inconsistent. The audit found that there was no training identified or provided to these staff or procedures given to its contractors that outlined TransCanada’s expectations for these types of events. While the Board acknowledges that TransCanada has a Violence in the Workplace Policy in place as required by the Canada Labour Code, Part II, there was no documentation or staff interview that confirmed that this policy was reflected in the training program or that staff understood its application in the case of violence from a third party.

Even though TransCanada has established a training program for Crossings, it did not indicate that it provides its staff or contractors with procedures for reporting and addressing events or potential issues of hostility from the public while performing Crossings related duties. These staff and contractors could encounter a hostile third party while intervening on an unauthorized activity in progress or conducting a follow-up visit for a reported unauthorized activity. At the time of the audit, TransCanada did provide a Corporate Security briefing as well as a Security Awareness presentation that addressed personal safety and identifying aggressive behaviour. However, field staff and contractors interviewed did not indicate that they were aware of any procedure for identifying or addressing or that this Security briefing was part of the training program. During interviews, field staff indicated that they were unaware of any documented procedure or company-approved response they were to follow should they encounter hostility from external parties while conducting Crossings related activities. Also, TransCanada did not demonstrate that staff or contractors who conduct Crossings activities are expected to follow the hazard identification process when it comes to working with third parties.

While TransCanada demonstrated that it has developed and implemented a process for identifying, tracking and managing training, its suite of training is incomplete for staff and contractors involved in Crossings. The current training program does not include TransCanada’s expectations for its employees and contractors regarding the identification, reporting and addressing of hostility from third parties while conducting Crossings activities. As the training program does not include training for all potential hazards associated with the Crossing Program, the training program does not meet the Board’s requirements. As a result, the Board has determined that this sub-element is Non-Compliant.

Compliance Status: Non-Compliant

3.5 Communication

Expectations: The company shall have an established, implemented and effective process for the internal and external communication of information relating to safety, security and environmental protection. The process should include procedures for communication with the public, company employees, contractors, regulatory agencies and emergency responders.

References: PCR Part II section 4; OPR sections 6.1, 6.5(1)(m), 40, 47, 48

Finding:

During the audit, TransCanada provided documentation and records indicating that it has established external and internal processes for communicating information and processes relating to its Crossings Program. TransCanada indicated that its primary communication tool for external stakeholders was its website. The website focuses on communication with respect to living and working safely around its pipeline. At the time of the audit, the TransCanada site contained information regarding the process for contacting the company, the circumstances under which they are required to do so, as well as the process for obtaining permission to work around its pipeline. It was noted that, at the time of the audit, on its "Call Before you Dig" webpage, TransCanada provides links to the NEB Onshore Pipeline Regulations (OPR-99), and did not include a link to the Pipeline Crossing Regulations, Parts I and II which outline the regulatory requirements for third parties as well as the Company related to living and working around federally regulated pipelines.

The processing of a request for permission to cross from a third party requires communication between the regional and field offices as well as within the Lands and Damage Prevention groups, depending on the complexity of the project. During the audit it was identified that TransCanada’s Crossings Program has established several effective communication processes between the company’s Crossings, Lands, Integrity and Awareness staff for use at various times during the processing of a request for permission to cross and for internally managing the Crossings Program activities.

TransCanada demonstrated that it has established an external communication plan that identifies the appropriate stakeholders and developed message relating to maintaining the safety and security of the pipeline and protection of the environment. The company also demonstrated that it has established an internal communication plan to ensure that relevant safety information is communicated to internal stakeholders. Based on the information provided during the audit, the Board did not identify any non-compliance with TransCanada’s process relating to external and internal communication requirements. As a result, the Board views these processes as being Compliant in meeting its expectations for this sub-element.

Compliance Status:  Compliant

3.6 Documentation and Document Control

Expectations: The company shall have an established, implemented and effective process for identifying the documents required for the company to meet its obligations to conduct activities in a manner that ensures the safety and security of the public, company employees and the pipeline, and protection of property and the environment. The documents shall include all of the processes and procedures required as part of the company’s management system.

The company shall have an established, implemented and effective process for preparing, reviewing, revising and controlling documents, including a process for obtaining approval of the documents by the appropriate authority. The documentation should be reviewed and revised at regular and planned intervals.  

Documents shall be revised where changes are required as a result of legal requirements. Documents should be revised immediately where changes may result in significant negative consequences.

References: PCR Part II section 4; OPR sections 6.1, 6.5(1)(i), (n), (o), 6.5(3), 40, 47, 48

Finding:

TransCanada indicated that in order to manage and control its two hundred or more procedures and the related operational documentation, TransCanada has developed and implemented the TransCanada Operations Procedures (TOPs) Program. The TOPs Program Owner is the Vice President of Engineering and Asset Reliability. TransCanada has outlined the TOPs Program in a Framework Document. The Framework Document reads "the objective of the TransCanada TOPs Program is to create a framework for the development and maintenance of the documentation necessary for TransCanada employees and contractors to efficiently and correctly conduct the operational and maintenance activities associated with TransCanada’s facilities". Also the Framework document clarifies that, "the TOP Program applies to all TransCanada TOPs when being created, revised, reviewed or retired."

The TOPs Framework document also provides the description of the roles and responsibilities for the hierarchy of responsibility from the TOP Program Manager, the TOP Contact, the TOP Manager as well as the reviewers. The Framework document also outlines the parameters for the development, maintenance, and access to operational procedures and related templates and work instructions that together make up the task packages. Crossings staff refer to these task packages when performing various crossing related duties. Interviews confirmed that TransCanada staff were aware that the most current documents for the task packages were available through the TOPs process.

In aid of managing the TOPs process, TransCanada has developed and implemented a database to house the TOPs documents. The TOPs database is available to staff through the corporate Intranet and generates a monthly report to track and alert internal stakeholders of any updates to TOPs and produces a monthly report listing the TOPs that were updated within the month. Interviews with Head Office and field staff confirmed that staff involved at each level of the Crossings process is aware that the most current versions of the procedures and templates are accessible through the TOPs database.

Based on the information provided during the audit, the Board did not identify any non-compliance with TransCanada’s process relating to establishing and implementing effective processes for identifying and managing documents required to meet the requirements. As a result, the Board views these processes as being Compliant in meeting its expectations for this sub-element.

Compliance Status: Compliant

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4.0 CHECKING AND CORRECTIVE ACTION

4.1 Inspection, Measurement and Monitoring

Expectations: The company shall have an established, implemented and effective process for inspecting and monitoring the company’s activities and facilities to evaluate the adequacy and effectiveness of the protection programs and for taking corrective and preventive actions if deficiencies are identified. The evaluation shall include compliance with legal requirements.

The company shall have an established, implemented and effective process for evaluating the adequacy and effectiveness of the company’s management system, and for monitoring, measuring and documenting the company’s performance in meeting its obligations to perform its activities in a manner that ensures the safety and security of the public, company employees and the pipeline, and protection of property and the environment.

The company shall have an established, maintained and effective data management system for monitoring and analyzing the trends in hazards, incidents and near-misses. The company shall have documentation and records resulting from the inspection and monitoring activities for its programs.

The company management system shall ensure coordination between its protection programs, and the company should integrate the results of its inspection and monitoring activities with other data in its hazard identification and analysis, risk assessments, performance measures and annual management reviews, to ensure continual improvement in meeting the company’s obligations for safety, security and protection of the environment.

References: PCR Part II section 4; OPR sections 6.1, 6.5(1)(g), (s), (u), (v), 40, 47, 48

Finding:

TransCanada provided information indicating that its Crossings Program includes several inspection and monitoring activities related to maintaining ongoing pipeline safety. The reported activities include:

• inspections conducted following a third party crossing;
• the inspection of pipe coating when a third party is working within 5 metres; and
• right of way inspections conducted to monitor right of way conditions and identify potential unauthorized activity. These are primarily undertaken utilizing aerial patrols.

With respect to inspections of third party crossings, interviews and document review confirmed that pipeline technician follow documented technical guidelines that include documented inspection reports. The technical guidelines are intended to ensure that the pipeline has been exposed in a manner that would not cause damage to the pipeline and to ensure that backfilling is completed using acceptable methods and backfill material. The inspection reports completed describe the condition of the coating and any anomalies identified in the coating or the pipe. If any anomaly is identified, the pipeline technicians must include the measures that were taken to mitigate them or forward the reports for further review to the Damage Prevention Engineers for evaluation and resolution.

As noted, TransCanada also indicated that it utilizes ROW inspections within its Crossings Program. These are conducted by aerial patrols. TransCanada outlines its aerial patrol program in the Aerial Pipeline Patrol TOP that was supplied to the Board during the audit. The Aerial Pipeline Patrol TOP includes the process for aerial patrol as well as a list of what TransCanada has included its expectations for right-of-way monitoring. This list of aspects of the ROW condition to be included in the inspection report comprises some environmental issues such as erosion in addition to evidence of unauthorized third party activity like spoil piles and excavations. The audit confirmed that the helicopter pilots were aware of the Aerial TOP as well as how and under what circumstances to report unauthorized activity. During the interviews, the pilots stated that they file formal ROW patrol reports and any photographs taken of the right of way in the Web Anomaly Reporting System (WARS). TransCanada staff stated during interviews that these reports are then distributed to various groups in Lands, Environment and Integrity for follow-up as required.

TransCanada’s Aerial Pipeline Patrol TOP includes a section on determining the frequency of aerial patrols. For Canadian pipelines, it lists a minimum of twice a year. The procedure also indicates "TransCanada, at our discretion may do more frequent patrols based on levels of activity, integrity concerns, etc. Based on the review of the aerial patrol schedules for the Wildrose and Rocky Mountain Regions compared to the Eastern Region, an inconsistency in determining the frequency of aerial patrols between the regions was noted by the Board. During the audit, TransCanada staff confirmed that for the Wildrose and Rocky Mountain Regions, a contract helicopter company patrols each area of the NOVA rights of way 4 times a year regardless of identified hazards such as population density, urban development, or unauthorized activity reports. In comparison, in the Eastern region, interviews confirmed that TransCanada pilots patrol sections of the ROW on a weekly, bi-weekly or bi-annual basis depending on the hazards and risks identified for each section such as population density and encroachment activity.

Throughout the audit, TransCanada identified third party unauthorized excavation or installation of facilities on the ROW as a hazard to its facilities. TransCanada relies on its Public Awareness Program to address and control this hazard. A review of the unauthorized activity reports for the NOVA system submitted to the NEB as per the PCR requirements, indicates that many of the unauthorized activities reported were discovered by "an employee just happened to be driving by" or "employees arrived on the site to conduct a locate as requested". A similar review of reports from the Eastern Region indicates that aerial patrol was the main mechanism for identifying unauthorized activity along the ROW. Interviews confirmed that the Eastern Region has established a staggered aerial patrol schedule to reflect the hazards and risks of that area. While TransCanada confirmed that similar hazards and risk exist in the Wildrose and Rocky Mountain Regions, it has established a patrol schedule of four times a year for the entire NOVA system.

In response to the Board’s questions regarding its process for determining the required frequency of ROW patrols, TransCanada’s stated that ROW "patrols are not a preventive activity, rather they are an inspection to observe conditions that exist on the right-of-way in order to investigate and take action."  The Board finds this response to be inadequate for the following reasons:

• TransCanada did not provide an alternative patrol method such as a documented ground patrol program. Therefore, aerial patrol exists as the only documented mechanism for TransCanada to identify unauthorized activities on its rights of way.
• Further, as the only documented method TransCanada has implemented to patrol and monitor its pipeline rights of way to identify unauthorized activities, the process for determining the adequacy of its aerial patrolling schedule has not been demonstrated to the Board’s satisfaction.
• Considering the frequency of patrol and the process used by the Eastern Region to determine patrol frequency, TransCanada’s response does not appear to be applied in the Eastern Region and no rationale was provided for the difference in aerial patrol schedules.

The Board has determined that implementation of the aerial pipeline patrol process between the operational regions is inconsistent and does not agree with the rationale provided by TransCanada during the audit. Given the information provided, the Board has determined that TransCanada has not implemented a process to determine the adequacy or effectiveness of its ROW patrol methodology and scheduling that applies across its system. The Board requires that there is a process in place to monitor activities on the ROW, to evaluate the adequacy and effectiveness of the protection programs and for taking corrective and preventive actions if deficiencies are identified.

During the audit, TransCanada demonstrated that it has established and implemented several types of inspections of third party crossings and has implemented them consistently with its internal planning. However, TransCanada did not demonstrate that it has established an adequate process for determining the adequate frequency for conducting its aerial patrols applicable to each operating region. As a result, the Board has determined that this sub-element is Non-Compliant.

Compliance Status: Non-Compliant

4.2 Investigating and Reporting Incidents and Near-misses

Expectations: The company shall have an established, implemented and effective process for reporting on hazards, potential hazards, incidents and near-misses, and for taking corrective and preventive actions. This should include conducting investigations where required or where hazards, potential hazards, incidents and near-misses have or could have resulted in the safety and security of the public, company employees and the pipeline, and protection of property and the environment, being significantly compromised.  

The company shall have an established, maintained and effective data management system for monitoring and analyzing the trends in hazards, incidents and near-misses.

The company should integrate the results of its reporting on hazards, potential hazards, incidents and near-misses with other data in hazard identification and analysis, risk assessments, performance measures and annual management reviews, to ensure continual improvement in meeting the company’s obligations for safety, security and protection of the environment.

References: PCR Part II section 4; OPR sections 6.1, 6.5(1)(r), (s), (u), (w), (x), 40, 47, 48, 52

Finding:

TransCanada has implemented the Incident and Issue Management program in order to track, document, analyze, communicate and report hazards, near-misses, and injuries that applies to all of its HS&E programs including Crossings. According to the procedure, the Incident and Issue Management Program is operationalized by tools and procedures designed to promote the reporting, tracking, resolution, communication, and sharing of learnings for events that caused loss or had the potential to cause loss or injury. Events such as injury and illness, spill or release, authorized activities and Tier 1, Tier 2 and Tier 3 audit findings are managed by the Incident and Issue Management program. In order to promote consistency reporting and classification of events entered into IIT across its system, TransCanada developed the Incident Classification Guide.

TransCanada uses its Incident and Issue Tracking (IIT) database company-wide as the tool for employees to report, track, communicate and analyze all near misses both internal and external for each of its protection programs. The IIT database is available to all employees through the TransCanada Intranet. To ensure that reports, called "IITs", are communicated by email to the appropriate people throughout the organization, staff subscribe to the category of IITs that are relevant to their position. When an event that meets the criteria of being an issue or an incident occurs, the employee enters all known information. Then the system automatically notifies the pre-determined list of internal stakeholders. For example, HS&E Senior Management and related areas such as the Lands Department receive all of the IITs regarding unauthorized activity by third parties. Managers and Directors can assign the resolution of certain IITs to staff using IIT and the database will notify the employees and their managers if the actions are past due for resolution. With each new IIT entry, the database creates a file where it stores documents related to the event such as regulatory reports and follow up investigations. Site visits and interviews confirmed that the Incident Classification related materials were available at the sites and known to staff. Field interviews confirmed that the pipeline technicians are assigned to follow-up with third parties in the event of a reported unauthorized activity in IIT. These staff will meet with the third parties and provide them with awareness packages and contact information and discuss the requirements to call before they dig.

At the time of the audit, TransCanada did not provide sufficient access to IIT database and its records, which were required for the Board to evaluate adequacy and effectiveness of the implementation of the IIT process as part of the Crossings Program. The Board was unable to verify the adequacy of the implementation of the process. Therefore, in accordance with the Board’s audit process, a lack of demonstration on the company’s part results in a finding of Non-Compliance.

This audit examined the Incident and Issue Management process, its intended function within the overall HS&E Management System as well as how it is communicated to employees and how it identifies trends. TransCanada was demonstrated that it has a process in place to identify, track, analyze and resolve issues and incidents throughout its Incident and Issue Management Program that reflects some of the Board’s expectations for this sub-element and is understood by staff. However, TransCanada did not provide the required access to the IIT records to determine the current status of the effectiveness of the implementation of the IIT program in regards to the Crossings Program. The Board has determined that given the information provided, it was unable to attest to the effectiveness of the process regarding the Crossing Program. As a result, the Board has determined that this sub-element is Non-Compliant.

Compliance Status: Non-Compliant

4.3 Internal Audits

Expectations: The company shall have an established, implemented and effective quality assurance program for its management system and for each protection program, including a process for conducting regular inspections and audits and for taking corrective and preventive actions if deficiencies are identified. The audit process should identify and manage the training and competency requirements for staff carrying out the audits.

The company should integrate the results of its audits with other data in hazard identification and analysis, risk assessment, performance measures and annual management review, to ensure continual improvement in meeting the company’s obligations for safety, security and protection of the environment.

References: PCR Part II section 4; OPR sections 6.1, 6.5(1)(w), (x), 40, 47, 48

Finding:

TransCanada demonstrated that it has established and implemented an audit process which is comprised of both internal and external audits. TransCanada has also implemented a targeted audit program that focuses on determining ongoing equipment suitability and maintenance. The Board notes that the documents and records provided by TransCanada indicate that its audit program is presently being implemented at a frequency exceeding the requirements to audit on a maximum three-year interval. TransCanada’s quality assurance program is implemented using a multi-level approach  that includes:

• Tier 1 - Conformance reviews;
• Tier 2 - Inspections: Planned inspections;
• Tier 3 - Internal system audits and targeted audits focused on maintenance and equipment suitability; and
• Tier 4 - External audits and assessments.

The Board expects companies to have a process for evaluating the adequacy and effectiveness of the company’s management system. The Board also expects companies to have an effective quality assurance program for their management system, including a process for conducting audits in accordance with applicable statutory requirements outlined in the OPR. However, review of TransCanada’s standard and audit specific protocols and records indicated that its audits are conducted to measure TransCanada’s conformance to its own internal requirements in order to confirm that programs are being implemented as designed and continue to be fit for purpose. While these types of audits can be useful, in order for an audit process to meet the Board’s requirements, companies must have a process whereby they verify the status of the programs compliance with the statutory requirements that the Board expects. Although  TransCanada advised that its processes and programs are derived from legal requirements, TransCanada did not demonstrate a process for the monitoring and tracking of all legal requirements are integrated into its procedures that was effective to meet the Board’s expectations (See sub-element 2.2 of this Appendix).

The NEB audit determined that TransCanada’ s internal audit process as well as the third party external audits have consisted entirely of conformance audits. A conformance audit is conducted by comparing the procedure as written to how the program is being implemented. This type of audit ensures that the procedures developed by the company are being implemented as designed. While this type of audit is useful in determining the ongoing validity of company procedures and programs, it does not satisfy the Board’s requirements because it does not include an assessment of compliance of its established programs and the related documentations such as the TOPs to the legal requirements for that program. For a complete assessment of the TransCanada audit program, please see the assessment of element 4.3 in the Safety Management, Emergency Management or Environmental Protection Program audit reports in this series.

TransCanada staff stated that the Crossings Program has not been the subject of a Tier 3 or targeted audit. They explained that there is an annual review and revision of the Crossings related procedures through the TOPs Program. This review is designed to confirm ongoing suitability of the procedures and the incorporation of any changes and is therefore not necessarily reviewing the adequacy and effectiveness of the implementation of the Crossings Program as a whole. Furthermore, while this type of review can be useful in determining the ongoing validity of company procedures, it does not include an assessment of the program’s compliance to legal requirements.

While TransCanada was able to demonstrate that its quality assurance program is implemented on a scale that exceeds the Board’s expectations with respect to frequency, the audits focused on conformance to internal requirements rather than compliance with legal requirements. Although TransCanada has conducted conformance reviews of its Crossings related procedures, it has not included the Crossings Program into its audit process. Also, TransCanada does not have a process to audit the Crossings Program to its compliance with legal requirements. As a result, the Board has determined that this sub-element is Non-Compliant.

Compliance Status: Non-Compliant

4.4 Records Management

Expectations: The company shall have an established, implemented and effective process for generating, retaining, and maintaining records that document the implementation of the management system and its protection programs, and for providing access to those who require them in the course of their duties.

References: PCR Part II section 4; OPR sections 6.1, 6.5(1)(p), 40, 47, 48

Finding:

During the audit, TransCanada provided documents and records indicating that it has established a Business Information Management Program to manage the records that are generated in support of or in performance of its operational activities including the Crossings Program. The Records Classification System and Records Retention Schedule document has been developed to reflect regulatory and business information retention requirements within this Program. The Classification System also contains instructions to ensure the protection of personal information collected as part of business activities including information related to landowner files such as crossing agreements.

For Crossings, the Community, Safety and Environment (CS&E) Records Management and Land Administration provide the oversight and procedural direction for the management, access and retention of Lands files, such as the records related to a third party request for permission to cross the facility as well as Master Road Use Agreements. Other operational records such third party locate requests are issued and managed through work orders issued through an Avantis work order system.

Based on the information provided during the audit, the Board did not identify any non-compliances with TransCanada’s process relating to establishing and implementing effective processes for generating, retaining, and maintaining records that document the implementation of the management system and its protection programs and for providing access to those who require them. The Board has determined that TransCanada is Compliant in meeting the requirements associated with this sub-element.

Compliance Status: Compliant

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5.0 MANAGEMENT REVIEW

5.1 Management Review

Expectations: The company shall have an established, implemented and effective process for conducting an annual management review of the management system and each protection program and for ensuring continual improvement in meeting the company’s obligations to perform its activities in a manner that ensures the safety and security of the public, company employees and the pipeline, and protection of property and the environment. The management review should include a review of any decisions, actions and commitments which relate to the improvement of the management system and protection programs, and the company’s overall performance.

The company shall complete an annual report for the previous calendar year, signed by the accountable officer, that describes the performance of the company’s management system in meeting its obligations for safety, security and protection of the environment and the company’s achievement of its goals, objectives and targets during that year, as measured by the performance measures developed under the management system and any actions taken during that year to correct deficiencies identified by the quality assurance program. The company shall submit to the Board a statement, signed by the accountable officer, no later than April 30 of each year, indicating that it has completed its annual report.

References: PCR Part II section 4; OPR sections 6.1, 6.5(1)(w), (x), 6.6, 40, 47, 48

Finding:

The Health, Safety and Environment Management System Framework (HS&E Framework) document describes the HS&E Governance Structure for TransCanada. At TransCanada, an HS&E Committee of the Board is comprised of Directors that monitor practices and procedures to ensure compliance with legislation, conformity with policies, procedures and programs, and the prevention and mitigation of losses. The HS&E Committee of the Board also considers implementation and effectiveness of policies, procedures and programs and makes recommendations to the Board. The HS&E Committee meets monthly, validates HS&E performance and goals, and conducts a critical review of incidents and incident trends. The HS&E Management System Responsibility Matrix sets out responsibilities, accountabilities, consultation and information for the HS&E Management System for all employees. Annually, the HS&E committee sets goals and objectives, with overall key performance indicators to monitor progress through scorecards. The scorecards are based on a vast number of metrics. TransCanada provided records of the HS&E Committee meetings conducted on a monthly basis over the last two years. These records demonstrate the review of performance and incidents, and the assignment of actions.

The Board expects companies to have effective processes for conducting annual management reviews of the management system including the Crossings Program and for ensuring continual improvement in meeting their regulatory obligations to ensure the safety of people and protection of property and the environment.

Interviews with TransCanada staff and review of the supporting documentation and records provided by TransCanada indicated that the company undertakes a significant amount of work in the oversight of its Health, Safety and Environmental (HS&E) programs.

While TransCanada demonstrated that there is communication and reporting occurring throughout the year from the Crossings Program to internal stakeholders at all levels, it did not demonstrate that there was adequate direction provided by senior management in the form of program assessment for the identification of continual improvement. Specifically these include evaluating and managing the results of: internal inspection and monitoring programs; investigations of incidents; audits; and the results of compliance verification activities conducted by regulatory agencies. The audit found that although there are monthly, quarterly and annual reports distributed to internal stakeholders including senior management that discuss unauthorized activities, there was no process for assessing any continual improvement initiatives for the Crossings Program based on learnings from these near-miss reports. The audit did not see any process where TransCanada examines its own response to identify opportunities for improvement in its own Crossings Program or communication materials. An examination of the quarterly reports also identifies the types of unauthorized activities, but does not demonstrate any process of review for the purposes of identifying opportunities for continual improvements for TransCanada itself.

While the Board was able to confirm that TransCanada is undertaking a significant number of management review activities consistent with the descriptions included in TransCanada’s HS&E Framework document, TransCanada did not demonstrate that it has a comprehensive management review process for the Crossings Program. The Board expects a company’s management review process for its Crossings Program to describe activities for adequately and effectively undertaking its management reviews and for ensuring continual improvement as described in the Board’s expectations.  As a result, the Board has determined that this sub-element is Non-Compliant.

Compliance Status: Non-Compliant

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Endnotes

[i] The "References" in this table contain specific examples of the legal requirements applicable to each element but are not exhaustive and do not represent a complete list of all applicable legal requirements audited to, which are found within the NEB Act and its associated regulations, as well as other applicable legislation, technical and other standards including the Canada Labour Code and CSA Z662, and any conditions contained within applicable certificates or orders enforced by the Board.

[1] Hazard:  Source or situation with a potential for harm in terms of injury, ill health, damage to property, damage to workplace and environment, or a combination of these. Risk:  Combination of the likelihood and consequence(s) of a specified hazardous event occurring.

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