Environmental and Safety Audits - A Process to Improve Business Performance

Abstract

For a number of years numerous organizations have utilized environmental and safety compliance audits to verify that facilities and operations were meeting legal and company requirements. Historically these audits have focused on ensuring that regulatory standards, permit conditions, company standards, etc., were being achieved. In some companies the focus of internal audits is moving away from compliance to an evaluation of the management systems and work processes that lead to improved environmental and safety performance in concert with improved business performance. This paper discusses this evolution within a U.S. Business Unit of an international oil and gas company. A process for the management of these audits at both a facility and business unit level will be presented. The benefits of periodic reviews focused on the environmental and safety management systems and work processes within an organization in identifying both deficiencies and "best practices" will be demonstrated. It will also be shown that improvements in environmental and safety performance, as measured by both safety and environmental performance metrics, can contribute to improved business performance in terms of reduced operating costs. Introduction In light of the tougher regulatory environment which the oil industry must operate in today, a comprehensive environmental and safety auditing process is essential to provide management "compliance assurance". Not only have regulations continued to become more stringent, the authority granted to federal and state agencies to levy civil and criminal penalties has greatly increased as well. However, the cost of non-compliance doesn't stop at large fines and penalties, lapses in compliance can result in catastrophic losses from spills, releases, or fires and can also result in serious personal injury and death. There is no question that the bottom line of any size company can be impacted by a serious incident of non-compliance. An effective compliance assurance process should be multi-tiered or multi-leveled. This starts at the local level with the operator in the field taking responsibility to know and understand the regulations and policies that apply to his or her own operations. This local level process should also include periodic facility inspections and reviews of specific permit requirements on some frequency through the use of review teams or safety committees armed with spite-specific protocols or checklists. The next level in the compliance assurance process typically involves a team of employees from outside the immediate area being reviewed. This introduces a fresh set of eyes in reviewing facilities and permit requirements. The focus of this level of review also shifts to include some of the management systems in place to assure compliance. Since this type of review typically covers several areas, the team can also help identify and share "best practices" through comparison of approaches used in each area for compliance assurance. This level of the review process is normally administered at the Business Unit or Division level. In a large corporation, a corporate review process is an integral part of the overall compliance assurance program. This level of review would include a team normally made up of employees from outside the local management structure. The corporate review focuses almost entirely on management systems, although sampling of specific compliance requirements is often done for validation or confirmation of findings. These corporate level reveiws occur on a less frequent basis than the mid-level reviews. A corporate review may also be focused on a specific topic or program such as HAZWOPER. P. 399