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National Energy Board Onshore Pipeline Regulations (OPR) - Final Audit Report of the TransCanada PipeLines Public Awareness Program - OF-Surv-OpAud-T211-2013-2014 01 [PDF 1373 KB]

444 Seventh Avenue SW
Calgary, Alberta
T2P 0X8

National Energy Board Onshore Pipeline Regulations (OPR)
Final Audit Report of the TransCanada
Public Awareness Program

File Number: OF-Surv-OpAud-T211-2013-2014 01

TransCanada PipeLines Limited and National Energy Board-Regulated Subsidiaries (TransCanada)
450-1^st Street SW
Calgary, Alberta T2P 5H1

31 March 2014

Executive Summary

NEB-regulated companies must demonstrate a proactive commitment to continual improvement in safety, security, and environmental protection. Pipeline companies under the Board’s regulation are required to incorporate effective and implemented Management Systems into their day-to-day operations. These systems include the tools, technologies and actions needed to ensure that pipelines are safe and remain that way over time. Public Awareness Programs enable companies to communicate with stakeholders to promote safety, environmental protection and regulatory compliance.

This report documents the Board’s comprehensive audit of TransCanada’s Public Awareness Program as it applies to its NEB-regulated subsidiaries and pipeline facilities. The audit was conducted using the National Energy Board Onshore Pipeline Regulations (OPR) as amended on 21 April 2013. The amendment, among other things, now requires companies to have an effective and well-documented Safety Management program as a key component of their Management Systems. The OPR was promulgated with no implementation grace period for federally regulated companies. As Public Awareness Programs are considered by the Board to be an extension of the Safety Program, this audit was conducted considering the requirements of the new OPR as well as requirements of the National Energy Board Pipeline Crossing Regulations, Part 1 and Part II that have been in place since 1989.

The Board’s audit was conducted following its Audit Protocol, which identifies five Management System elements. These five elements are further broken down into 17 sub-elements. Each sub-element reflects a number of regulatory requirements. The NEB requires companies to be compliant with one hundred percent of the regulatory requirements of a sub-element being assessed. If a company’s program is found to be deficient with respect to any regulatory requirement, the entire sub-element will be found Non-Compliant.

TransCanada’s management demonstrated that the company has resourced the Environmental Protection Program and has involved itself in implementation and oversight at senior management levels. TransCanada has also demonstrated that it has established an appropriate inspection and monitoring program to ensure the adequacy and effectiveness of its Environmental Program.

The Board’s audit finds that TransCanada has developed and implemented a Public Awareness Program to identify, manage and control the hazards associated with third parties mechanically excavating or constructing near its facilities. TransCanada demonstrated that it has established a Public Awareness Program for communication with and education of third parties who live and work near pipelines. TransCanada’s management demonstrated that the company has resourced the Public Awareness Program and is involved in implementation and oversight at senior management levels.

The audit also identified a number of Non-Compliant findings, the majority of which fall into three general categories:

the lack of documented, established and implemented processes that correspond with the Management System requirements as required by the recently updated OPR;
the development and implementation of effective processes related to ongoing, internal evaluation of the compliance to legal requirements, and the adequacy and effectiveness of its Public Awareness Program; and
inability to demonstrate consistent implementation and integration of the OPR Management System requirements to the Public Awareness Program across its operational regions.

The Board has determined that no enforcement actions are immediately required to address the Non-Compliant findings identified in this audit. Within 30 days of the Final Audit Report being issued, TransCanada must develop and submit a Corrective Action Plan for Board approval detailing how it intends to resolve Non-Compliances identified by this audit. The Board will assess the implementation of the corrective actions to confirm they are completed in an expedient manner and on a system-wide basis. The Board will also continue to monitor the overall implementation and effectiveness of TransCanada’s Management System through targeted compliance verification activities as a part of its on-going regulatory mandate.

Appendices

1.0 Audit Terminology and Definitions

Audit: A systematic, independent and documented process for obtaining evidence and evaluating it objectively to determine the extent to which audit criteria are fulfilled.

Compliant: A program element meets legal requirements. The company has demonstrated that it has developed and implemented programs, processes and procedures that meet legal requirements.

Corrective Action Plan: Addresses the Non-Compliances identified in the Audit Report and explains the methods and actions which will be used to "correct" them.

Finding: The evaluation or determination of the adequacy of programs or elements in meeting the requirements of the National Energy Board Act, Part II of the Canada Labour Code, and their associated regulations.

Non-Compliant: A program element does not meet legal requirements. The company has not demonstrated that it has developed and implemented programs, processes and procedures that meet the legal requirements. A corrective action must be developed and implemented.

Procedure: A documented series of steps followed in a regular and defined order allowing individual activities to be completed in an effective and safe manner. The procedure will also outline roles, responsibilities and authorities required for completing each step.

Process: A systematic series of actions or changes taking place in a definite order and directed towards a result.

Program: A documented set of processes and procedures to regularly accomplish a result. The program outlines how plans and procedures are linked, and how each one contributes towards the result.

2.0 Abbreviations

CAP: Corrective Action Plan

CLC: Canada Labour Code Part II

COHSR: Canada Occupational Health and Safety Regulations

EM: Emergency Management

EP: Environmental Protection

GOT: Goals, Objectives and Targets

HS&E: Health Safety & Environment

IIT: Incident and Issue Tracking

NEB: National Energy Board

NGTL: Nova Gas Transmission Ltd.

OPR: National Energy Board Onshore Pipeline Regulations

SM: Safety Management

TOPs: TransCanada Operating Procedures

TransCanada: TransCanada PipeLines Limited and its NEB-regulated subsidiaries

TQM: TransCanada Québec & Maritimes Pipeline Inc.

3.0 Introduction: NEB Purpose and Framework

The NEB’s purpose is to promote safety and security, environmental protection, and efficient energy infrastructure and markets in the Canadian public interest within the mandate set by Parliament in the regulation of pipelines, energy development and trade.

To evaluate a regulated company’s compliance with its regulations, the NEB undertakes Management System audits of its regulated companies. The NEB requires that each company demonstrate the adequacy and implementation of the methods the company has selected and employed in order to proactively identify and manage hazards and risks to achieve Compliance.

Following the audits, companies are required to submit and implement a Corrective Action Plan (CAP) to address all findings of Non-Compliance. The results of the audits are considered as a part of the NEB’s risk-informed life cycle approach to compliance assurance.

4.0 Background

TransCanada operates approximately 42,000 km of federally regulated pipeline from British Columbia to Quebec. In order for the audit of TransCanada to reflect the way it runs its operations, the NEB audited each program separately. Therefore, this audit is one of a series of six program audits having been undertaken by the Board with respect to NEB-regulated facilities operated within TransCanada’s organization. The audits are titled:

TransCanada Integrity Management Program Audit; (Final Audit Report released February 2014)
TransCanada Safety Management Program Audit;
TransCanada Environmental Protection Program Audit;
TransCanada Emergency Management Program Audit;
TransCanada Third Party Crossings Program Audit; and
TransCanada Public Awareness Program Audit.

These audits identified that TransCanada operates its facilities using a common organizational and technical management structure for all of the facilities noted. Some of the findings are therefore similar in each audit and the individual audit reports reflect this. During the audit, the Board reviewed and evaluated a sample set of facilities based on the individual activities, as well as the associated hazards and risks, as reflected in the individual audit reports.

5.0 Audit Objectives and Scope

The objective of the audit was to determine the adequacy and effectiveness of TransCanada’s Public Awareness Program. The requirements against which TransCanada was audited are contained within:

The National Energy Board Act;
The National Energy Board Onshore Pipeline Regulations; and
The Pipeline Crossing Regulations Part I SOR/88-528 and Part II SOR/88-529;
The Canada Labour Code;
The Safety and Health Committees and Representatives Regulations; and
TransCanada’s policies, practices and procedures.

In utilising the OPR, the Board notes its amendment on 21 April 2013, which clarified the Board’s expectations for establishing and implementing a formal Management System and Public Awareness Program. These amendments were preceded by consultation between the Board and its regulated companies, and accordingly the OPR was not promulgated with an implementation grace period. As a result, the audit of TransCanada’s Public Awareness Program was conducted using the amended OPR.

The scope of the audit included the following companies that hold certificates to operate in Canada:

TransCanada PipeLines Limited;
TransCanada Keystone Pipeline GP Ltd.;
Trans Québec & Maritimes Pipeline Inc. (TQM);
Foothills Pipe Lines Ltd.; and
NOVA Gas Transmission Ltd. (NGTL).

These subsidiaries hold the certificates for TransCanada’s NEB-regulated facilities, which include the Canadian Mainline (operating under TransCanada PipeLines Limited), Keystone Pipeline (operating under TransCanada Keystone Pipeline GP Ltd.), TQM Pipeline System (operating under Trans Québec & Maritimes Pipeline Inc.), Foothills System (operating under Foothills Pipe Lines Ltd.), and the Alberta System (operating under NGTL). For more TransCanada facility information, refer to Appendix II of this report.

6.0 Audit Process and Methodology

TransCanada and its NEB-regulated subsidiaries operate approximately 42,000 kilometres of federally regulated pipeline across the country. TransCanada and its subsidiaries operate these facilities using a common organizational and technical Management System. Accordingly, and in order to complete an assessment of its Management System in a reasonable timeframe, the Board elected to audit and assess a representative sample of TransCanada and its subsidiaries utilising a risk-informed approach that included a review of previous compliance history.

The Board chose to use NGTL and the Alberta System as its representative sample. The Board also included areas of the TransCanada system presenting unique potential hazards in order to assess system-specific hazards. As such, a review of documents and records as well as site visits and interviews in the Eastern Region were conducted due to the unique hazards introduced to the Public Awareness Program by bilingual requirements and population density in Eastern Canada.

TransCanada has divided its Canadian facilities and assets into five operational regions. These regions are the Wildrose Region, Rocky Mountain Region, Central Region, Northern Ontario Region and Eastern Region. As TransCanada applies the same Public Awareness Program across all of its systems, any findings and corrective actions required will be applied across all of TransCanada’s systems and subsidiaries. The NEB will verify the implementation of any Corrective Action Plans with subsequent compliance verification activities at each subsidiary once TransCanada’s Corrective Action Plan has been approved and implemented.

TransCanada’s utilization of one set of policies and procedures for its Public Awareness Program also guided the implementation of the Board’s audit process. Interviews and document review on the Public Awareness Program were conducted at the Head Office in Calgary, Alberta. Site visits were conducted at select NGTL, TransCanada Mainline and TQM facilities. During these site visits, activities were evaluated for each Management System element through interviews with a number of personnel at various levels, as well as document and record review.

7.0 Audit Activities

The audit involved Board review of TransCanada company documents, interviewing company representatives at all levels of the organization, and conducting field verification of Compliance with NEB requirements at selected sites.

On 19 June 2013, an opening meeting was conducted with representatives from TransCanada in Calgary, Alberta to discuss the Board’s audit objectives, scope and process. A schedule for conducting the staff interviews and site verifications was also developed at this meeting. Throughout the audit, daily summaries with action items were provided to TransCanada.

On 24 October 2013, the Board held an audit Pre-Close-Out meeting with TransCanada to discuss additional information that could be of value to the Board prior to compiling its draft audit report. An audit Close-Out meeting was held on 6 November 2013.

For a list of TransCanada representatives interviewed, refer to Appendix III For a list of documents and records reviewed, refer to Appendix IV.

**Public Awareness Program Audit Field Activities**
Audit Opening Meeting (Calgary, AB) – 19 June 2013 Head Office Interviews (Calgary, AB) – 29 August to 8 October 2013 Field verification activities for the Public Awareness Program Audit: Grande Prairie, AB – 23 to 25 July 2013 Fairview, AB – 23 to 25 July 2013 Airdrie, AB – 16 to 17 September 2013 Medicine Hat, AB – 10 to 13 September 2013 Brooks, AB – 10 to 13 September 2013 High Level, AB (by phone) – 18 September 2013 Vaughn, ON – 23 to 24 September 2013 Les Cèdres, QC – 25 to 26 September 2013 Audit Pre-Close-Out Meeting of Information Gaps (Calgary, AB

8.0 Program Summary

TransCanada’s Public Awareness Program applies to all TransCanada corporate entities and the operation of all TransCanada natural gas and oil pipelines and associated facilities in Canada. The Public Awareness Program oversees communication with external stakeholders, related projects as well the operational phase of their pipeline systems. Overall management of the Public Awareness Program resides in the TransCanada head office in Calgary with the Regional Offices developing plans based on the characteristics of their regions.

9.0 Summary of Findings

The following summary represents a high-level overview of the Board’s audit findings for TransCanada’s Public Awareness Program based on information provided for the audit. Details of how each of the audited elements impacts the Public Awareness Program and a full description of the Board’s assessment for each of its Management System sub-elements can be found in Appendix I of this report.

Element 1.0 - Policy and Commitment

Sub-element 1.1 - Leadership and Accountability

As the position of accountable officer was introduced into the OPR in April of 2013, there has not been time for a full planning cycle. Therefore, in determining Compliance to this sub-element, the Board is satisfied that TransCanada has appointed an accountable officer and outlined the responsibilities of this position to the Board in accordance with the regulations and submission deadlines. Subsequent NEB compliance activities will verify the adequacy and effectiveness of the process implementation once a full planning cycle has been completed. As a result, the Board finds TransCanada to be Compliant with this sub-element.

Sub-element 1.2 - Policy and Commitment Statements

TransCanada demonstrated that it has established and implemented a Health Safety & Environment Commitment Statement and 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. Following review, 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 finds TransCanada to be Non-Compliant with this sub-element.

Element 2.0 - Planning

Sub-element 2.1 - Hazard Identification, Risk Assessment and Control

TransCanada demonstrated that it has established and implemented a Public Awareness Program that incorporates the identification of hazards and introduces controls. However, TransCanada was not able to demonstrate that it has established an exhaustive inventory of hazards, a process to evaluate the risk or a systematic implementation of corresponding controls as required by the Board’s expectations. As a result, the Board finds TransCanada to be Non-Compliant with this sub-element.

Sub-element 2.2 - Legal Requirements

TransCanada demonstrated that it is tracking, listing and communicating some of its legal requirements. However, TransCanada did not demonstrate that it has an inventory of specific legal requirements or a process to ensure that regulatory changes trigger program changes or communication to all staff involved in the Public Awareness Program. 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 required by the Board’s expectations. As a result, the Board finds TransCanada to be Non-Compliant with this sub-element.

Sub-element 2.3 - Goals, Objectives and Targets

The Board’s audit identified that TransCanada has developed and implemented an internal program for the establishment and management of corporate commitments and priorities with respect to the Public Awareness Program and Health Safety & Environment management in general. The Board also determined that TransCanada has implemented documented processes for communicating and monitoring the requirements derived from the commitments and priorities its Public Awareness Program establishes.

During interviews at the management level, TransCanada staff used multiple terms interchangeably in their description of these goals, objectives and targets. Consequently, during the audit, and in order 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 linkages between TransCanada’s varied internal terminology and the regulatory requirements. This table was not provided to Board auditors. As a result, the Board finds TransCanada to be Non-Compliant with this sub-element.

Sub-element 2.4 - Organizational Structure, Roles and Responsibilities

The Board finds TransCanada’s processes and established hierarchy of responsibility within the Public Awareness Program to be Compliant.

Element 3.0 - Implementation

Sub-element 3.1 - Operational Control-Normal Operations

TransCanada demonstrated that it has established an overarching Public Awareness Program. TransCanada has also demonstrated the regional implementation of its Public Awareness Program. However, TransCanada did not demonstrate that it has implemented a process for the evaluation of Public Awareness activities to ensure the effective control of the hazards. The absence of a consistent process is reflected in program implementation differences among TransCanada’s operating regions, which differences were not supported by clear rationale. As a result, the Board finds TransCanada to be Non-Compliant with this sub-element.

Sub-element 3.2 - Operational Control-Upset or Abnormal Operating Conditions

TransCanada demonstrated that its Public Awareness Team plays a role in supporting the Emergency Management Program by leveraging its awareness mail-outs and outreach activities to include aspects of ongoing education of the plans and procedures to identify the potential for upset or abnormal operating conditions, accidental releases, incidents and emergency situations. As a result, the Board finds TransCanada to be Compliant with this sub-element.

Sub-element 3.3 - Management of Change

In the context of broader management of change processes that could affect the Public Awareness Program TransCanada did not demonstrate that it has an established and implemented a 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 finds TransCanada to be Non-Compliant with this sub-element.

Sub-element 3.4 - Training, Competence and Evaluation

TransCanada demonstrated that it has developed and implemented a process for identifying, tracking and managing training. However, the audit found that the company’s suite of training is incomplete for staff and contractors involved in awareness activities. The audit determined that the current training program does not include TransCanada’s expectations for identification, reporting and conduct if its employees and contractors should encounter hostility from third parties while conducting awareness activities. The training program does not include training for all potential hazards associated with the Public Awareness Program and does not meet the Board’s requirements. As a result, the Board finds TransCanada to be Non-Compliant with this sub-element.

Sub-element 3.5 - Communication

TransCanada demonstrated that it has established an external communication plan identifying appropriate stakeholders and has developed messages 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. Therefore, the Board finds this sub-element of TransCanada’s Public Awareness Program to be Compliant.

Sub-element 3.6 - Documentation and Document Control

The Board finds TransCanada has established and implemented effective processes for identifying and managing documents required to meet the Board’s requirements. Therefore, the Board finds TransCanada to be Compliant with this sub-element.

Element 4.0 - Checking and Corrective Action

Sub-element 4.1 - Inspection, Measurement and Monitoring

The Board finds TransCanada has established and implemented effective processes for inspecting and monitoring its activities and facilities and for evaluating the adequacy and effectiveness of its Public Awareness Program. Therefore, the Board finds TransCanada to be Compliant with this sub-element.

Sub-element 4.2 - Investigating and Reporting Incidents and Near-misses

TransCanada demonstrated that it has a process in place to identify, track, analyze and resolve issues and incidents through its Incident and Issue Management Program. However, TransCanada did not provide an adequate sample of Incident and Issue Tracking records for the Board to determine the effectiveness of the implementation of this program. As a result, the Board finds TransCanada to be Non-Compliant with this sub-element.

Sub-element 4.3 - Internal Audit

TransCanada demonstrated that its quality assurance program is implemented on a frequency that exceeds regulatory requirements. However, implementation of the program only measures performance relative to internal TransCanada requirements and does not include compliance relative to legal requirements. As a result, the Board finds TransCanada to be Non-Compliant with this sub-element.

Sub-element 4.4 - Records Management

TransCanada demonstrated that it has established effective processes for generating, retaining, and maintaining records that document the implementation of its Public Awareness Program, and for providing access to those who require them. As a result, the Board views these processes as meeting its expectations, and finds TransCanada to Compliant with this sub-element.

Element 5.0 - Management Review

Sub-element 5.1 - Management Review

TransCanada demonstrated that it is undertaking a significant number of management review activities consistent with the descriptions included in its internal Health Safety & Environment Framework document. However, TransCanada did not demonstrate that it has a documented and comprehensive process for reviewing the Public Awareness Program that describes activities for adequately and effectively undertaking its management reviews to ensure continual improvement as described in the Board’s expectations. As a result, the Board finds TransCanada to be Non-Compliant with this sub-element.

10.0 Conclusions

NEB-regulated companies must demonstrate a proactive commitment to continual improvement in safety, security, and environmental protection. Pipeline companies under the Board’s regulation are required to incorporate effective and well-implemented Management Systems into their day-to-day operations. These programs include the tools, technologies and actions needed to ensure that pipelines are safe and remain that way over time. In particular, Public Awareness Programs are required by the Board to ensure that companies have a program in place to provide ongoing safety and awareness information to people who live and work around federally regulated pipelines in order to prevent unintended damage to buried facilities.

The Board’s audit finds that TransCanada has developed and implemented a Public Awareness Program to identify, manage and control the hazards associated with third parties mechanically excavating and constructing near company facilities. Also, TransCanada demonstrated that it has established a Public Awareness Program for communication with and education of third parties who live and work near pipelines. TransCanada’s management demonstrated that the company has resourced the Public Awareness Program and has involved itself in implementation and oversight at senior management levels.

Notwithstanding the work being conducted and the processes in place, the audit has also identified areas of Non-Compliance with NEB requirements. The Board concludes that the majority of the Non-Compliant findings fall into three general categories:

the lack of documented, established and implemented processes that correspond with the Management System requirements as required by the recently updated OPR;
the development and implementation of effective processes related to ongoing, internal evaluation of the compliance to legal requirements, and the adequacy and effectiveness of its Public Awareness Program; and
inability to demonstrate consistent implementation and integration of the OPR Management System requirements to the Public Awareness Program across its operational regions.

The Board has determined that no enforcement actions are immediately required to address the Non-Compliant findings identified in this audit. As per the Board’s standard audit practice, TransCanada must develop and submit a Corrective Action Plan to the Board describing its methods and timing for resolving the Non-Compliances identified by this audit. The Corrective Action Plan must be submitted for Board approval within 30 days of the Final Audit Report being issued.

The Board will assess the implementation of the corrective actions to confirm they are completed in an expedient manner and on a system-wide basis. The Board will also continue to monitor the overall implementation and effectiveness of TransCanada’s Management Systems through targeted compliance verification activities as part of its on-going regulatory mandate.

Date modified:: 2021-02-22

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