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Understanding the compliance conundrum

Author : James Steven, DNV GL

01 February 2021

As an inherently hazardous industry, ‘being compliant’ has much deeper resonance and reverberations for the global oil and gas sector and goes way beyond a tick box exercise. Likewise, understanding perceptions of ‘compliance’ can differ, leaving stakeholders exposed to financial, technical and even reputational risk they may not be aware of. James Steven, Development and Innovation Manager Product Assurance at DNV GL, explores the quandaries.

Image: Shutterstock
Image: Shutterstock

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To be compliant, it is important to know what you are trying to demonstrate compliance with. This can encompass a multitude of factors. Therefore, it is essential to determine what you wish or are required to meet and how this can be demonstrated.

Additionally, there are a number of key issues to address to mitigate risk to the integrity of hazardous area installations, whether that be regulatory (dependent on country requirements) or functional (includes environmental management). Indeed, this could be a combination of the two, to ensure safety of personnel and the plant, as well as operational delivery and reputation.

The wide variety of national, regional and international standards, combined in many cases with a limited understanding of how and where equipment will be used, can create a ‘minefield’ of misunderstanding throughout the supply chain. For instance, certification of equipment in accordance with one relevant standard is often misconstrued as proving compliance and suitability of that equipment for all possible uses and operations.

Is what I’ve got sufficient?

There is a common misconception that by simply receiving a report following an inspection or survey, means compliance has been achieved. This may not be the case. It’s crucial to understand the detail on that document to know exactly what has or has not been fulfilled on both the functionality and regulatory front. This will ensure nothing falls through the gap or is waylaid - there may be major repercussions in the long-run if an outstanding task isn’t acted upon.

When utilising certification as part of the demonstration of compliance you need to understand what the “certificate” is actually covering. Product certification is based on three key stages or activities, this covers: the design assessment; intermediate manufacturing surveillance; and the final survey along with relevant testing. Products which have only been surveyed to a standard or code can only confirm the construction and testing and may not meet the full requirements of the referenced standard.

A common example is that a piece of equipment, which is designed and built either isn’t in accordance with functional specifications, is lacking detail or is simply incorrect. This can result in equipment that does not fulfil the end users’ needs, leaving them potentially exposed, should an incident occur.

The safe use of equipment relies on a sound understanding of the operations it will perform, as well as an appreciation of the potential risks associated with it. Considerations can include the effect of noise from the equipment, its hydrocarbon inventory, available fire and gas detection, loads and forces imposed by it, etc., which can trigger a possible health and safety hazard.

Compliance is demonstrated based on the correlation between what is required and what is actually provided.
Compliance is demonstrated based on the correlation between what is required and what is actually provided.

The supplier must be given a vendor specification, detailing requirements which are relevant to the specific host installation and cannot rely on the vendor to define how to manage these. This should include information on how the equipment will influence existing safety systems, such as escape routes, and whether any emergency power or fire and gas detection will be available.

Where does responsibility lie?

A division of responsibilities commonly exists between the supplier and the end user. However, it is often assumed that just because a reputable supplier has been contracted, that all compliancy needs will automatically have been carried out and that no further action is required from the end user. This creates a great deal of disconnect across the value chain.

The end-user is typically responsible for determining which standards are applicable for their application or location and communicating requirements to the manufacturer or supplier.

For temporary equipment, this usually takes the form of a temporary equipment procedure or Performance Standard. These documents should be designed to demonstrate agreement with HSE operational guidelines, statutory regulations, or local regulatory requirements when working outside of the UK.

Since the Macondo event in 2010, awareness amongst industry stakeholders, particularly drilling companies regarding their responsibility for ensuring compliance, has improved and there is greater awareness that compliance is demonstrated based on the correlation between what is required and what is actually provided.

In all cases, it is canny to comprehend the purpose of the equipment being used and the criteria it needs to be checked against for installation, as well as during its operational life. For instance, it is imperative to know that it’s fit for the intended purpose and being able to prove what this is and how it is achieved should be easily demonstrated.

With the UK’s exit from the European Union (EU), this has introduced new requirements which need to be integrated into any compliance plan. UK Conformity Assessed (UKCA) marking has been implemented in the UK in place of EU CE marking. The technical provisions are currently the same as the previous EU Directives, however, the documentation/process of compliance does differ.

The use of a UKAB (UK Approval Body) will be required in place of an EU Notified Body. The UK has agreed to continue accepting EU Notified Bodies and CE marking up to 31st December 2021, giving time for manufacturers’ to transition to a UKAB. Any products which are shipped from the UK to an EU/EEA member will still require to follow EU requirements from 1st January 2021. Acceptance of documents from previous UK Notified Bodies may also have an impact on compliance. It is therefore important to understand how these changes impact upon customers to ensure they have the right documentation to pass on to the next stage. For instance, ensuring the end location/application is known, or planning for supply to both schemes, is essential in order to avoid issues when shipping the final product.

Inspection should be the last line of defence not the first one.
Inspection should be the last line of defence not the first one.

Compliance does not mean complacency

Regulations, such as COMAH (Control of Major Accident Hazards), DSEAR (Dangerous Substances and Explosive Atmospheres Regulations) and PUWER (the Provision and Use of Work Equipment Regulations) for the UK and EU exist, alongside technical standards (API, ISO, IEC, etc) to strengthen the safety and technical case for more specific compliancy assessments. Declarations of compliance mean nothing without the backbone of technical or safety assessments and assurance.

Another contentious area is when an organisation is working as a Notified Body. The conformity process for each directive details when a Notified Body can be used. However, some directives (e.g. ATEX 2014/34/EU) prohibit the use of a Notified Body when not required to do so by the directive.

Notified Bodies are not allowed to issue documentation as compliance when not permitted by the Directive. However, as customers want to have a validation, they do approach organisations which are Notified Bodies to provide this confirmation. This process is defined as ‘voluntary certification’, which is not recognised in the event of an incident and provides no legal protection as would have been provided had this been done in a Notified Body capacity. In some cases, these documents have been handed out like certificates which is a clear breach of the directive. This is also another case of checking and knowing what the document states and how this helps compliance.

What should be considered?

When looking to determine compliance it is important to have a clear plan and roadmap, which may answer the following questions:

• What am I trying to comply with?

• What does the documentation actually mean?

• What does it prove?

• What am I actually trying to demonstrate?

• Have I recorded it in the right way?

James Steven, DNV GL
James Steven, DNV GL

Why does the industry see so many issues with hazardous area installations?

Quite often, particularly on larger projects, some companies may use personnel with only a general understanding of electrical installations as opposed to having specific training in hazardous area requirements. Though technically possible, using one qualified inspector to review multiple vendors or activities increases the likelihood of defects being missed. After all, trying to “inspect in” quality is much more difficult than having more competent eyes throughout the process. For hazardous installations, additional competencies are vital for both the installer and the inspector to be aware of the requirements and the needs to follow these when installing and maintaining equipment.

Likewise, the demands of a particular location or environment needs to be factored along with the consequence of defects created during transportation, for example, with pre-assembled units moving from the manufacturing to the fabrication site. Failure to consider the implication for factors such as potential transportation impacts and other environmental changes can introduce potential defects post final inspection and testing.

Because of the above factors, virtually every project coming into the North Sea from abroad is either having a significant amount of rework, or having significant improvement notices issued by the regulatory authorities for failure to comply with hazardous area equipment requirements. This adds exorbitant cost and months of delays to projects aiming for first oil. Ensuring these types of risks have been identified and that steps for ensuring these can be determined/mitigated have been implemented, will significantly reduce the potential impacts to costs, duration and reputation.

Early engagement

Inspection should be the last line of defence not the first one. It should go without saying that traceable records are imperative and accuracy is crucial but knowing what you need to achieve in the beginning will help make the process work smoothly and more efficiently.

To help save time and reduce costs associated with securing compliance, several tools are available, including remote witnessing, which can provide operators with more flexibility and efficiency without compromising safety. With today’s restrictions on travel and social distancing, this means surveyors do not need to travel to offshore platforms or be physically present at other assets, saving cost, time and reducing risk.

About the author:

James Steven is Development & Innovation Manager, Product Assurance with DNV GL - Oil & Gas. His background as a lead approval engineer (electrical & instrumentation) saw him specialise in offshore, marine and temporary equipment. James is a global technical lead for DNV GL Standard 2.7-2 Offshore Service Modules as well as being a member of the Norsok Z-015 expert group. He also has experience in commissioning of marine and offshore installations to UK verification and Class/Flag requirements on multiple projects.

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