ARCHIVED – National Energy Board Onshore Pipeline Regulations (OPR) – Final Audit Report of the Enbridge Pipelines Inc. Safety Management Program – OF-Surv-OpAud-E101-2014-2015 03

National Energy Board Onshore Pipeline Regulations (OPR) – Final Audit Report of the Enbridge Pipelines Inc. Safety Management Program – OF-Surv-OpAud-E101-2014-2015 03 [PDF 1005 KB]

File OF-Surv-OpAud-E101-2014-2015 03
31 March 2015

Mr. Guy Jarvis
President, Liquids Pipelines
Accountable Officer under the NEB Act
Enbridge Pipelines Inc.
3000 Fifth Avenue Place
425 - 1st Street S.W.
Calgary,  AB T2P 3L8
Facsimile

Dear Mr. Jarvis:

Enbridge Pipelines Inc. (Enbridge) and its Board-Regulated Subsidiaries
- National Energy Board Onshore Pipeline Regulations, (OPR) Final Audit Report
- Safety Management Program

The Board has completed its Final Report for its audit of Enbridge’s Safety Management Program.

A Draft Report documenting the Board’s evaluation of Enbridge’s Safety Management Program was provided to Enbridge on 4 February 2015 for review and comment. On 6 March 2015, Enbridge submitted its response.

The Board has considered Enbridge’s comments and has made changes to the Final Audit Report and its Appendices as it determined to be appropriate.

The findings of the audit are based upon an assessment of whether Enbridge was compliant with the regulatory requirements contained within:

• National Energy Board Act;
• National Energy Board Onshore Pipeline Regulations; and
• Enbridge’s policies, programs, practices and procedures.

Enbridge was required to demonstrate the adequacy and effectiveness of the methods selected and employed within its Programs to meet the regulatory requirements listed above.

The Board has enclosed the Final Audit Report and associated appendices with this letter. The Board will make the Final Audit Report public on the Board’s website.

Within 30 days of the issuance of the Final Audit Report by the Board, Enbridge is required to file a Corrective Action Plan (CAP), which describes the methods and timing for addressing the Non-Compliant findings identified through this audit, for approval.

The Board will make the CAP public and will continue to monitor and assess all of Enbridge’s corrective actions with respect to this audit until they are fully implemented. The Board will also continue to monitor the implementation and effectiveness of Enbridge’s Safety Management Program and management system through targeted compliance verification activities as a part of its on-going regulatory mandate.

If you require any further information or clarification, please contact Ken Colosimo, Lead Auditor, Operations Business Unit, toll-free at 1-800-899-1265.

Yours truly,

Original signed by

Sheri Young
Secretary of the Board

Attachment - Final OPR Audit Report documents

cc: Mr. Al Monaco, President and CEO, Enbridge Inc.

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National Energy Board Onshore Pipeline Regulations (OPR)
Final Audit Report of the Enbridge Pipelines Inc. Safety Management Program

File Number: OF-Surv-OpAud-E101-2014-2015 03

Enbridge Pipelines Inc. and National Energy Board-Regulated Subsidiaries (Enbridge)
3000 Fifth Avenue Place
425 -1st Street S.W.
Calgary, Alberta  T2P 3L8

31 March 2015

Executive Summary

Companies regulated by the National Energy Board (NEB or the Board) 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 adequate, effective and implemented management systems into their day-to-day operations. These systems and associated technical management programs include the tools, technologies and actions needed to ensure NEB regulated pipelines are safe and remain that way over time. In the public interest, the Board holds companies accountable for safety and environmental outcomes.

This report documents the Board’s comprehensive audit of Enbridge’s management system and Safety Management program applicable to its facilities that are regulated by the NEB. The audit was conducted using the National Energy Board Onshore Pipeline Regulations (OPR) as amended on 21 April 2013. This amendment clarified the Board’s expectations for establishing and implementing a documented management system and Safety Management program. Before issuing the amendment, the Board consulted and communicated with its regulated companies with respect to the new requirements; therefore, an implementation grace period was not given when the OPR was promulgated. As a result, when evaluating compliance, this audit did not consider any extra time Enbridge may have needed to implement changes associated with the formalized management system requirements. As indicated in the amendments, companies must have an effective and well-documented Safety Management program as a key component of their management system.

The Board conducted the audit following its published audit protocol, which identifies five management system elements. These five elements are broken into 17 sub-elements. Each sub-element reflects several regulatory requirements. Companies must comply with 100 per cent of the regulatory requirements of each 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. This report also includes an assessment of Enbridge’s management system against the requirements of OPR, section 6.1.

The Board’s audit of Enbridge’s regulated facilities found that Enbridge is in the process of establishing and implementing a management system that reflects its commitment to applying a formal management structure to all of its business functions and departments. Enbridge has not limited its management system to the technical programs required by the Board and was  implementing a corporate management system, not merely an operations management system as many companies have done in response to the Board’s regulatory requirements.

The Board noted that Enbridge’s records indicate that it started developing its management system after the Board’s Integrity Management and Safety Management program audits in 2009. This was before Enbridge was notified of the intended OPR changes.

Regardless of when Enbridge started its management system development, its commitment to establishing and implementing a corporate management system for all of its Board regulated business and facilities is a large, complex undertaking. The Board therefore identified that Enbridge’s management system is in a transitory state between the program-based management practices it used in the past and its new management system approach. This has contributed to a Non-Compliant finding related to establishing and implementing a compliant management system. It is important to understand that the Board’s finding regarding Enbridge’s management system primarily reflects the company’s stage in developing and applying its management system. It does not necessarily reflect the lack of technical management activities being undertaken to ensure the safety of the pipeline.

The Board’s audit of Enbridge’s management system included an assessment of the individual management system processes as described in the OPR and the Board’s audit protocol. As documented in this report, the Board found that Enbridge has documented many of the required processes within its Integrated Management System. However, the Board found that some of Enbridge’s management system processes were not sufficiently systematic, explicit, comprehensive and proactive to meet the OPR requirements.

The Board notes that, regardless of the reasons for non-compliance, companies were required to be compliant with the Board’s management system requirements when the OPR was updated in 2013. Enbridge will need to develop and implement corrective actions to ensure establishment and implementation of its management system.

In addition to evaluating Enbridge’s management system and associated processes, the Board’s audit also included an evaluation of Enbridge’s Safety Management program to determine the applicability and integration of the management system within it and to assess whether Enbridge is meeting its requirements to develop, implement and maintain an safety management protection program that anticipates, prevents, manages and mitigates potentially dangerous conditions and exposure to those conditions during all activities relating to construction, operation, maintenance, abandonment and emergency situations. The Board found that, notwithstanding the documentation issues relating to its management system processes, the processes and practices presently used by Enbridge identified the majority, and most significant, of its safety related hazards and that Enbridge has developed and implemented operational controls and inspection and monitoring programs to address these hazards. The Board notes that Enbridge’s Safety Management program has been in existence for many years, thus its safety related practices and procedures are well established within the organization. The Board did identify some deficiencies not related to management system process development. All of the Board’s findings are documented in Appendix I of this audit report.

In analyzing the results of its audit as a whole, the Board notes that it has made a significant number of Non-Compliant findings.The majority of these findings fall into three general categories:

• Non-compliances relating to management system process development;
• Non-compliances relating to Enbridge’s interpretation of OPR requirements; and
• Non-compliances relating to technical content.

The Board notes that the majority of all of the Non-Compliant findings made by the Board relate to management system process development.

The Board has determined that enforcement actions are not immediately required to address the Non-Compliant findings identified in this audit. Within 30 days of the Final Audit Report being issued, Enbridge must develop and submit a Corrective Action Plan for Board approval. The Corrective Action Plan must detail how Enbridge intends to resolve the non-compliances identified by this audit. The Board will assess implementation of the corrective actions to confirm they are completed in a timely manner and applied consistently across Enbridge’s regulated system. The Board will also continue to monitor the overall implementation and effectiveness of Enbridge’s management system and Safety Management program through targeted compliance verification activities as part of its ongoing regulatory mandate.

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Table of Contents

• 1.0 Audit Terminology and Definitions
• 2.0 Abbreviations
• 3.0 Introduction: NEB Purpose and Framework
• 4.0 Background
• 5.0 Audit Objectives and Scope
• 6.0 Audit Process and Methodology
• 7.0 Audit Activities
• 8.0 Management System Evaluation
• 9.0 Program Summary
• 10.0 Summary of Audit Findings
• 11.0 Conclusions

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1.0 Audit Terminology and Definitions

(The Board has applied the following definitions and explanations in measuring the various requirements included in this audit. They follow or incorporate legislated definitions or guidance and practices established by the Board, where available.)

Adequate: The management system, programs or processes complies with the scope, documentation requirements and, where applicable, the stated goals and outcomes of the NEB Act, its associated regulations and referenced standards. Within the Board’s regulatory requirements, this is demonstrated through documentation.

Audit: A systematic, documented verification process of objectively obtaining and evaluating evidence to determine whether specified activities, events, conditions management systems or information about these matters conform to audit criteria and legal requirements and communicating the results of the process to the company.

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: A plan that addresses the non-compliances identified in the audit report and explains the methods and actions that will be used to correct them.

Developed: A process or other requirement has been created in the format required and meets the described regulatory requirements.

Effective: A process or other requirement meets its stated goals, objectives, targets and regulated outcomes. Continual improvement is being demonstrated. Within the Board’s regulatory requirements, this is primarily demonstrated by records of inspection, measurement, monitoring, investigation, quality assurance, audit and management review processes as outlined in the OPR

Established: A process or other requirement has been developed in the format required. It has been approved and endorsed for use by the appropriate management authority and communicated throughout the organization. All staff and persons working on behalf of the company or others that may require knowledge of the requirement are aware of the process requirements and its application. Staff have been trained on how to use the process or other requirement. The company has demonstrated that the process or other requirement has been implemented on a permanent basis. As a measure of “permanent basis”,  the Board requires the requirement to be implemented, meeting all of the prescribed requirements, for three months.

Finding: The evaluation or determination of the compliance of programs or elements in meeting the requirements of the National Energy Board Act and its associated regulations.

Implemented: A process or other requirement has been approved and endorsed for use by the appropriate management authority. It has been communicated throughout the organization. All staff and persons working on behalf of the company or others that may require knowledge of the requirement are aware of the process requirements and its application. Staff have been trained on how to use the process or other requirement. Staff and others working on behalf of the company have demonstrated use of the process or other requirement. Records and interviews have provided evidence of full implementation of the requirement, as prescribed (i. e. the process or procedures are not partially utilized).

Inventory: A documented compilation of required items. It must be kept in a manner that allows it to be integrated into the management system and management system processes without further definition or analysis.

List: A documented compilation of required items. It must be kept in a manner that allows it to be integrated into the management system and management system processes without further definition or analysis.

Maintained: A process or other requirement has been kept current in the format required and continues to meet regulatory requirements. With documents, the company must demonstrate that it meets the document management requirements in OPR, section 6.5(1)(o). With records, the company must demonstrate that it meets the records management requirements in OPR, section 6.5(1)(p).

Management System: The system set out in OPR sections 6.1 to 6.6. It is a systematic approach designed to effectively manage and reduce risk, and promote continual improvement. The system includes the organizational structures, resources, accountabilities, policies, processes and procedures required for the organization to meet its obligations related to safety, security and environmental protection.

(The Board has applied the following interpretation of the OPR for evaluating compliance of management systems applicable to its regulated facilities.)

As noted above, the NEB management system requirements are set out in OPR sections 6.1 to 6.6. Therefore, in evaluating a company’s management system, the Board considers more than the specific requirements of section 6.1. It considers how well the company has developed, incorporated and implemented the policies and goals on which it must base its management system as described in section 6.3; its organizational structure as described in section 6. 4; and considers the establishment, implementation, development and/or maintenance of the processes, inventory and list described in section 6.5(1). As stated in sections 6.1(c) and (d), the company’s management system and processes must apply and be applied to the programs described in section 55.

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 plan must be developed and implemented.

Practice: A repeated or customary action that is well understood by the persons authorized to carry it out.

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

Process: A documented series of actions that take place in an established order and are directed toward a specific result. A process also outlines the roles, responsibilities and authorities involved in the actions. A process may contain a set of procedures, if required.

(The Board has applied the following interpretation of the OPR for evaluating compliance of management system processes applicable to its regulated facilities.)

OPR section 6.5(1) describes the Board’s required management system processes. In evaluating a company’s management system processes, the Board considers whether each process or requirement: has been established, implemented, developed or maintained as described within each section; whether the process is documented; and whether the process is designed to address the requirements of the process, for example a process for identifying and analyzing all hazards and potential hazards. Processes must contain explicit required actions including roles, responsibilities and authorities for staff establishing, managing and implementing the processes. The Board considers this to constitute a common 5 w’s and h approach (who, what, where, when, why and how). The Board recognizes that the OPR processes have multiple requirements; companies may therefore establish and implement multiple processes, as long as they are designed to meet the legal requirements and integrate any processes linkages contemplated by the OPR section. Processes must incorporate or contain linkage to procedures, where required to meet the process requirements.

As the processes constitute part of the management system, the required processes must be developed in a manner that allows them to function as part of the system. The required management system is described in OPR section 6.1. The processes must be designed in a manner that contributes to the company following its policies and goals established and required by section 6.3.

Further, OPR section 6.5(1) indicates that each process must be part of the management system and the programs referred to in OPR section 55. Therefore, to be compliant, the process must also be designed in a manner which considers the specific technical requirements associated with each program and is applied to and meets the process requirements within each program. The Board recognizes that single process may not meet all of the programs; in these cases it is acceptable to establish governance processes as long as they meet the process requirements (as described above) and direct the program processes to be established and implemented in a consistent manner that allows for the management system to function as described in 6.1.

Program: A documented set of processes and procedures designed to regularly accomplish a result. A program outlines how plans, processes and procedures are linked; in other words, how each one contributes to the result. A company regularly plans and evaluates its program to check that the program is achieving the intended results.

(The Board has applied the following interpretation of the OPR for evaluating compliance of programs required by the NEB regulations.)

The program must include details on the activities to be completed including what, by whom, when, and how. The program must also include the resources required to complete the activities.

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2.0 Abbreviations

CAP: Corrective Action Plan

CLC: Canada Labour Code Part II

COHSR: Canada Occupational Health and Safety Regulations

Enbridge: Enbridge Pipelines Inc. and its NEB-regulated subsidiaries

GOT: Goals, Objectives and Targets

IMS: Enbridge’s Integrated Management System

NEB: National Energy Board

OPR: National Energy Board Onshore Pipeline Regulations

SM: Safety Management

SMS: Safety Management System

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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. In order to assure that pipelines are designed, constructed, operated and abandoned in a manner that ensures: the safety and security of the public and the company’s employees; safety of the pipeline and property; and protection of the environment, the Board has developed regulations requiring companies to establish and implement documented management systems applicable to specified technical management and protection programs. These management systems and programs must take into consideration all applicable requirements of the NEB Act and its associated regulations, as well as the Canada Labour Code (CLC). The Board’s management system requirements are described within OPR, sections 6.1 through 6.6.

To evaluate compliance with its regulations, the Board audits the management system and programs of regulated companies. The Board requires each regulated company to demonstrate that they have established and implemented, adequate and effective methods for proactively identifying and managing hazards and risks.

As part of the audit, the Board reviews the compliance and incident history of the company as recorded in NEB files. This helps the Board determine the appropriate scope for the audit. During the audit, the Board reviews documentation and samples records provided by the company in its demonstration of compliance and interviews corporate and regionally-based staff.

The Board also conducts separate but linked technical inspections of a representative sample of company facilities. This enables the Board to evaluate the adequacy, effectiveness and implementation of the management system and programs. The Board bases the scope and location of the inspections on the needs of the audit. The inspections follow the Board’s standard inspection processes and practices. Although they inform the audit, inspections are considered independent of the audit. If unsafe or non-compliant activities are identified during an inspection, they are actioned as set out by the Board’s standard inspection and enforcement practices.

After completing its field activities, the Board develops and issues a Final Audit Report. The Final Audit Report outlines the Board’s audit activities, provides evaluations of the company’s management system and programs, identifies deficiencies and communicates compliance findings. The audit report follows the format of the Board’s published Audit Protocol. Once the Board issues the Final Audit Report, the company must submit and implement a Corrective Action Plan to address all Non-Compliant findings. Final Audit Reports are published on the Board’s website. The audit results are integrated into NEB’s risk-informed lifecycle approach to compliance assurance.

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4.0 Background

Enbridge operates approximately 10,733 km of pipeline in six Canadian provinces and territories. These pipeline facilities include pump stations, tankage and associated operational assets. All of these facilities are within the definition of a “pipeline” as included in the NEB Act. Enbridge also has a considerable amount of non-federally regulated infrastructure in Alberta and across the United States, which complete its North American system. Enbridge’s system allows it to transport liquids from northern and western Canada to end-users in the Eastern regions of Canada and the United States. In order for Enbridge to operate its pipelines effectively, it has developed a management structure that reflects its safety and security management, and environmental obligations, as well as its corporate, national, regional and international needs. Enbridge Pipelines Inc. controls and uses several entities that hold NEB-issued certificates for operating in Canada. The entities included within the scope of this audit are identified in Section 5.0, Audit Objectives and Scope of this report.

During audit planning, company staff indicated that Enbridge and its subsidiaries operate the pipelines and facilities using a common management system and technical programs. In order to effectively evaluate compliance of such an expansive system within a reasonable timeframe, the Board chose to conduct individual, comprehensive audits of Enbridge’s required technical programs and management system. This report documents one of six management system and program audits. The audits are titled:

• Enbridge Integrity Management Program Audit;
• Enbridge Safety Management Program Audit;
• Enbridge Environmental Protection Program Audit;
• Enbridge Emergency Management Program Audit;
• Enbridge Third-Party Crossings Program Audit; and
• Enbridge Public Awareness Program Audit.

Audit results confirmed that Enbridge operates its facilities using a common organizational structure to implement a common governance management system that applies to all of its business and operational activities. Some findings are therefore similar in each audit and the individual audit reports reflect this.

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5.0 Audit Objectives and Scope

The objective of the audit was to determine the establishment and implementation of Enbridge’s management system, and the adequacy and effectiveness of its Safety Management program. Enbridge was audited against the requirements contained within the following:

• National Energy Board Act;
• National Energy Board Onshore Pipeline Regulations; and
• Enbridge’s policies, programs, practices and procedures.

This audit was conducted using the National Energy Board Onshore Pipeline Regulations (OPR) as amended on 21 April 2013. This amendment clarified the Board’s expectations for establishing and implementing a documented management system and Safety Management program. Before issuing the amendment, the Board consulted and communicated with its regulated companies with respect to the new requirements; therefore, an implementation grace period was not given when the OPR was promulgated. As a result, when evaluating compliance, this audit did not consider any extra time Enbridge may have needed to implement changes.

Section 47 of the OPR indicates that regulated companies “shall develop, implement and maintain a safety management program that anticipates, prevents, manages and mitigates potentially dangerous conditions and exposure to those conditions during all activities relating to construction, operation, maintenance, abandonment and emergency situations.” However, the Board notes that construction and abandonment activities are usually regulated and managed through practices and programs developed and approved for each project or application. Using this audit to evaluate the application of the program and practices for managing activities that have not been fully described and approved would be neither efficient nor in the interest of Canadians. The Board has therefore not included construction and abandonment activities in the scope of this audit. The Board will evaluate these program requirements during separate Board compliance assurance activities.

As noted, Enbridge Pipelines Inc. companies hold a number of certificates to operate in Canada. The Board has included the following companies within the scope of this audit:

• Enbridge Pipelines Inc.;
• Enbridge Bakken Pipeline Company Inc. on behalf of Enbridge Bakken Pipeline Limited Partnership;
• Enbridge Southern Lights GP Inc. on behalf of Enbridge Southern Lights LP;
• Enbridge Pipelines (NW) Inc.; and
• Enbridge Pipelines (Westspur) Inc.

For more Enbridge facility information, refer to Appendix II of this report.

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6.0 Audit Process and Methodology

In undertaking this audit, the Board has applied its standard audit practice following its published protocols. The Board’s standard practice and audit activities include:

• Formal notification of the Board’s intent to audit by letter;
• Interactive planning processes with the company;
• Information gathering;
• Documentation and record review;
• Program presentations by company personnel and interviews with company personnel;
• Associated inspections and facility reviews;
• Close-out discussions and meetings;
• Developing and Issuing Draft Audit Report to Enbridge
• Developing, finalizing and issuing the Final Audit Report;
• Reviewing and approving any required Corrective Action Plans;
• Reviewing implementation of Corrective Action Plans; and
• Issuing closure letters.

These audit activities allow the company to demonstrate whether its management system and programs comply. They also allow the Board to evaluate the company with respect to: assuring compliance to regulatory requirements; and assuring appropriate safety, security and environmental outcomes as described in OPR, section 6.

As noted, Enbridge Pipelines Inc. operates an expansive liquids pipeline system using a common management system and Safety Management program. Furthermore, Enbridge divides its Canadian assets into five operational regions: Northern Region, Western Region, Central Region, Southern Prairie Region and Eastern Region. The Board therefore developed its audit plan to evaluate Enbridge’s management system and Safety Management program and to assure that it was appropriate to manage and applied to all of its regulated facilities regardless of location. To this end, the Board conducted interviews, inspections and documentation and record reviews in each region as well as the Edmonton  office. It is the Board’s expectation that any audit Non-Compliant findings made and corrective actions required by the Board must be applied across all of Enbridge’s Board regulated systems and subsidiaries.

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7.0 Audit Activities

The Board informed Enbridge Pipelines Inc. of its intent to audit its NEB regulated facilities in a letter dated 19 December 2013. Following the issuance of that letter, Board audit staff met with Enbridge staff on a regular basis to arrange and coordinate this audit. The Board also provided Enbridge with an information guidance document to help Enbridge prepare for the audit, and provide access to documentation and records to demonstrate its compliance. Enbridge established a digital access portal for Board staff to review documentation and records.

On 5 May 2014, an opening meeting was conducted with representatives from Enbridge in Edmonton, Alberta to confirm the Board’s audit objectives, scope and process. The opening meeting was followed by Edmonton office interviews from 5 to 16 May 2014, and various field level audit activities as described in the table below. Throughout the audit, Board audit staff gave Enbridge daily summaries with action items, where required.

On 21 and 22 October 2014, the Board held an audit pre-close-out meeting with Enbridge. At this meeting Board staff and Enbridge staff discussed potential deficiencies identified during field activities and discussed 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 17 December 2014 to provide Enbridge with a description of the recommendations that staff would be bringing to the Board for decision.

Safety Management Program Audit Office and Field Activities

• Audit opening meeting (Edmonton, AB) - 5 May 2014
• Edmonton office interviews (Edmonton, AB) - 5-16 May 2014
• Field verification activities:
  • Interviews - Sherwood Park, AB - 26-30 May 2014
  • Interviews - Estevan, SK - 9-11 June 2014
  • Interviews - Regina, SK - 12 June 2014
  • Interviews - Sarnia, ON - 24-26 June 2014
  • Inspection - Alberta - 14-18 July 2014
    • Edmonton Terminal
    • Kerrobert Terminal
    • Cactus lake station
    • Strome station
  • Inspection - NWT - 21-25 July 2014
    • Norman Wells pump station and maintenance shop
    • Fort Simpson maintenance shop and office
  • Inspection - Ontario - 8-12 September 2014
    • Sarnia Terminal
    • Keyser Pump Station
    • Bryanston Pump Station
    • Hilton Pump Station
    • Bellville PLM shop
• Edmonton office interviews (Edmonton, AB) - 14-17 October 2014
• Audit pre-close-out meeting of information gaps (Edmonton, AB) - 21-22 October 2014
• Audit close-out meeting (Edmonton, AB) - 17 December 2014

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8.0 Management System Evaluation

OPR, section 6.1 outlines the Board’s management system requirements as follows:

A company shall establish, implement and maintain a management system that

• (a) is systematic, explicit, comprehensive and proactive;
• (b) integrates the company’s operational activities and technical systems with its management of human and financial resources to enable the company to meet its obligations under section 6;
• (c) applies to all the company’s activities involving the design, construction, operation or abandonment of a pipeline and to the programs referred to in section 55;
• (d) ensures coordination between the programs referred to in section 55; and
• (e) corresponds to the size of the company, to the scope, nature and complexity of its activities and to the hazards and risks associated with those activities.

In assessing Enbridge’s management system the Board applied the definitions and guidance as described in Section 1.0 Audit Terminology and Definitions of this report. The Board’s audit results indicated that Enbridge was in the process of establishing and implementing a management system that reflects its commitment to applying a formal management structure to all of its regulated business operations. Enbridge has not limited its management system to the technical programs required by the Board. The company is committed to implementing a corporate management system and not merely an operations management system as many companies do.

Enbridge’s records indicate that it started developing its management system after the Board’s Integrity Management and Safety Management program audits in 2009 and prior to the Board’s identification of its intended OPR changes.

Regardless of when Enbridge started its management system development, establishing a corporate management system applicable to all of its business and facilities is a large, complex undertaking. The Board’s audit therefore identified that Enbridge’s management system was in a transitory state between the program-based management practices it used in the past and its new management system approach.

In determining Enbridge’s compliance with respect to establishing and implementing a management system, the Board reviewed the audit results of Enbridge’s Safety Management program processes along with the audit results of other Board program audits completed concurrently. This aided the Board in evaluating Enbridge’s systematic practices and deficiencies.

The Board found that Enbridge has not met the requirements for establishing and implementing a management system. For the most part, this reflected the transitory nature of its management system as applied to the Safety Management program. The issues related to designing and establishing processes as described below and in Appendix I also contributed to the Board’s Non-Compliant finding. This is especially true with respect to Enbridge’s Quality Assurance Program and auditing process design.

The Board notes that it is important to understand that the Board’s management system Non-Compliant finding reflects the company’s stage in developing and applying its management system. It does not necessarily reflect the lack of technical management activities being undertaken to ensure the safety.

The Board notes that, regardless of the reasons for non-compliance, companies were required to be compliant with the Board’s management system requirements when the OPR was updated in 2013. Enbridge will need to develop and implement corrective actions to ensure establishment and implementation of its management system.

The Board has further detailed its evaluation below in order for Enbridge to understand the nature of the Board’s management system finding to aid in development of its Corrective Action Plan.

The Board has found Enbridge Non-Compliant with OPR, section 6.1(a).

This section requires management systems to be systematic, explicit, comprehensive and proactive. Enbridge’s documentation that describes its governance management system requirements clearly stated that the company’s management system is intended to meet these outcomes. The Board’s audit determined that Enbridge’s management system did meet the requirements for to being systematic, explicit, comprehensive and proactive at an over-arching, system design level. However, as described below, the design of its processes, interpretation of some of the OPR requirements, lack of clarity with respect to some of the specific requirements, such as OPR section 6.3(a) and (b) policies and goals and its definition of risks vs hazards, did not meet the OPR requirements. This resulted in the Board determining that the present management system processes will not ensure that the company’s management system is systematic, explicit, comprehensive and proactive throughout all levels of the organization.

The Board found that Enbridge’s governance processes for their management system aligned with most of the Board’s process requirements by description. However, as described in Appendix I, there were issues associated with many of Enbridge’s processes. Enbridge has not designed all of its processes in a way that ensures the OPR process requirements are consistently met at the management system and program level. For example, the Board found that many of the processes did not include clear links to or include tier 2 and 3 procedures where inclusion would ensure appropriate or consistent implementation of the processes at the program level. This has led to some of the company’s processes being comprised of commitment statements rather than activity descriptions. Additionally, many of the company’s documented processes lacked full descriptions of the input and output processes and the products associated with each process. The Board found that Enbridge generally mitigated these process design deficiencies from a safety perspective; however, this was accomplished by program-level management practices and procedures. As well, Board documentation and record reviews and interviews with staff responsible for developing processes or programs indicated that many of the missing process components were actually being done by practice but have not been documented in Enbridge’s management system processes.

As part of Enbridge’s Corrective Action Plan to address its management system Non-Compliant finding, the Board is of the view that, Enbridge must develop and implement a compliant document control processes that meet OPR requirements for all new and existing documents in the company’s management system. This will serve to assure that the management system processes are designed appropriately and that existing or referenced documents fully meet the OPR requirements.

In reviewing Non-Compliant findings across the programs being audited concurrently by the Board, it is noted that several of the Non-Compliant findings related to Enbridge’s interpretation of OPR requirements. Enbridge provided specific information with respect to these interpretations during the audit. The Board notes that all regulations are subject to interpretation; however, many of Enbridge’s interpretations in this category did not reflect the wording of the regulations or standard management system practices. Examples of Enbridge’s interpretation issues can be found in the Board’s evaluation of the company’s quality assurance program, auditing, hazard identification and management of change processes, all of which are outlined in Appendix I of this document.

During its audit, the Board noted that Enbridge colour coded some process steps red in its governance process diagrams. According to the legend provided, red indicated that the process step should be considered aspirational. When interviewed, Enbridge staff indicated that aspirational refers to steps considered above regulatory requirements.. The Board has given Enbridge and its regulated industry consistent information with respect to aspirational management practices. If a company identifies a practice as “above regulatory requirements, aspirational or stretch”, the Board will not hold that company accountable for implementing the practice as per OPR, section 4. This is to allow and encourage companies to include aspirational goals or practices in their overall management practices without fear of non-compliance when aspirational goals are not met. The Board found that some of the process steps Enbridge identified as aspirational were actually legally required. Examples of this included steps for identifying and verifying competencies in Enbridge’s IMS 01, 4.14 Workforce Competency and Qualification Process.

All of the comments above contribute to the Board’s Non-Compliant finding with respect to OPR section 6.1(a).

Based on the information from Enbridge and interviews with its staff, the Board’s audit did not identify any non-compliant issues related to OPR, sections 6.1(b) through (e).

Based on the Board’s evaluation of Enbridge’s management system against the OPR requirements, the Board has determined that Enbridge is Non-Compliant with section 6.1. Enbridge will have to develop a Corrective Action Plan to address the described deficiencies.

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9.0 Program 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 safety management programs into their day-to-day operations. These programs must include the tools, technologies and actions needed to ensure that workers are safe.

During the audit Enbridge indicated that the Board’s Safety Management program requirements correspond to the company’s Safety Management System. The Board identified that Enbridge’s Safety Management System (IMS- 04) is one of 19 management systems included in Enbridge’s Integrated Management System (IMS). Further review of Enbridge’s IMS indicated that it is actually comprised of 17 subordinate management systems, governed by two governance management systems, IMS - 01, Governing Policies and Processes Management System and IMS - 02, Compliance and Ethics Management System. These governance management systems outline minimum corporate requirements to be incorporated into each sub-ordinate management system of which IMS-04 is one. As noted previously in section 8.0 of this report, at the time of the audit the Board found that Enbridge has not yet established and implemented its required management system.

The Board has identified that primary responsibility for Enbridge’s Safety Management program resides within its Safety Management department.  This department is comprised of subject matter experts who are responsible for providing safety leadership, promotion and direction in organizational activities through management system development and maintenance, stewardship, technical knowledge and support for Enbridge employees and contractors.

The Board identified that responsibility for implementation of the Safety Management program resides with a number Enbridge’s functional departments. The Board therefore considered the sum of the Safety Management department and all other departments’ safety related responsibilities as comprising the Safety Management program for the purposes of this audit.

Due to the transitory nature of Enbridge’s corporate management system, the Board found that Enbridge’s Safety Management program framework was comprised of a mix of Safety Management System processes and historically established and implemented processes and practices. It was noted during the audit that this transition has created gaps in continuity and consistency.

The Board found that the processes presently used by Enbridge identified the majority, and most significant, of its hazards and that Enbridge has developed and implemented the operational controls and inspection and monitoring programs to address these hazards. The Board also found that Enbridge’s Safety Management program has been in existence for many years, thus the safety related practices and procedures are well established within the organization. Notwithstanding these practices and procedures, the audit identified several non-compliant findings. The majority of the findings fall into three general categories:

• Non-compliances relating to management system process development;
• Non-compliances relating to Enbridge’s interpretation of OPR requirements; and
• Non-compliances relating to technical content.

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, Enbridge 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 that 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 Enbridge’s management system and Safety Management program through targeted compliance verification activities as a part of its on-going regulatory mandate.

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10.0 Summary of Audit Findings

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 each of the Management System sub-elements 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 in Non-Compliance. A Corrective Action Plan will be required in order to demonstrate to the Board that appropriate actions will be taken to achieve full compliance.

The following summary represents a high-level overview of the Board’s audit findings for Enbridge’s Safety Management program based on information provided for the audit.

Details of how each of the audited elements impacts the Safety Management 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

This sub-element of the audit requirements states that the company must appoint an Accountable Officer and notify the Board of the appointment.

Enbridge had submitted a written notice to the NEB indicating that it had appointed an Accountable Officer. In its submission, Enbridge confirmed that its Accountable Officer had authority over the human and financial resources required to meet the Board’s substantive expectations.

Based on the information provided by Enbridge, the Board has not identified any non-compliance issues. The Board has therefore assessed this sub-element as Compliant.

Sub-element 1.2 - Policy and Commitment Statements

This sub-element of the audit requirements states that the company must have documented policies and goals to ensure the safety and security of the public, workers, and the pipeline and ensure protection of property and the environment. Further, as these policies and goals are to be used to establish and implement the management and programs, the Board requires that the policies and goals be explicit from the perspective of design, content and communication.

The Board found that Enbridge has developed and communicated Health and Safety policies applicable to its activities that had been integrated within the company’s activities.

The Board found that Enbridge has established clear management system guidance with respect to its process for developing policies and goals.

The Board found that Enbridge has developed a policy statement that sets out the company’s commitment to these general policies and goals and has communicated the its employees

The Board also found that Enbridge has not established an explicit policy with respect to 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 that meets the Board’s requirements.

Based on the Board’s evaluation of Enbridge’s management system and Safety Management program against the requirements, the Board has determined that Enbridge is Non-Compliant with this sub-element. Enbridge will have to develop corrective actions to address the described deficiencies.

Element 2.0 - Planning

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

This sub-element of the audit requirements states that the company must have an established, implemented and effective process for identifying and analyzing all hazards and potential hazards, assessing the degree of risk associated with the hazards, and implementing control measures to minimize or eliminate risk.

The Board found that Enbridge has developed a governance management system process for identifying, evaluating and managing its hazards and risks; however, the Board also found that this governance level management system process did not meet the OPR requirements.

The Board found that Enbridge had developed and implemented many practices for identifying, evaluating and managing its occupational health and safety hazards and risks at the program level.

The Board found that at a program level Enbridge had listed the majority and most significant of its health and safety hazards; however, the process for developing list of hazards and potential hazards within risk registers, as described in the governance management system processes, did not meet the OPR requirements.

The Board also found that the program level processes, as designed and applied, do not allow for the application of the required hierarchy of controls.

The Board found that Enbridge had established and was maintaining a data management system for monitoring and analyzing the trends in its hazards, incidents, and near-misses.

Based on the Board’s evaluation of Enbridge’s management system and Safety Management program against the requirements, the Board has determined that Enbridge is Non-Compliant with this sub-element. Enbridge will have to develop corrective actions to address the described deficiencies.

Sub-element 2.2 - Legal Requirements

This sub-element of the audit requirements states that the company must have an established, implemented and effective process for identifying and monitoring compliance with all legal requirements applicable to the company. Also, the company must maintain a list of the legal requirements that apply to it.

The Board found that Enbridge had developed a number of governance and program level processes and practices for identifying and monitoring its legal requirements that had accounted for the majority of its legal requirements within its health and safety program.

The Board also found that Enbridge’s governance management system processes did not meet the OPR requirements with respect to process design and implementation.

The Board found that Enbridge had not established and maintained a legal list as required by the OPR.

Based on the Board’s evaluation of Enbridge’s management system and Safety Management program against the requirements, the Board has determined that Enbridge is Non-Compliant with this sub-element. Enbridge will have to develop corrective actions to address the described deficiencies.

Sub-element 2.3 - Goals, Objectives and Targets

This sub-element of the audit requirements states that the company must have an established, implemented and effective process for developing and setting goals, objectives and specific targets for the risks and hazards associated with the company’s facilities and activities. The company must also have established policies and goals for the prevention of ruptures, liquid and gas releases, fatalities and injuries as required by OPR, section 6.3(1)(b).

Based on the Board’s evaluation of Enbridge’s management system and Safety Management program against the requirements, the Board did not find any non-compliance issues. The Board has determined that Enbridge is Compliant with this sub-element.

Sub-element 2.4 - Organizational Structure, Roles and Responsibilities

This sub-element of the audit requirements states that the company must have a documented organizational structure that enables it to meet the requirements of its management system. The company must also complete an annual documented evaluation to demonstrate that there is adequate human resourcing to meet these obligations.

The Board found that Enbridge had a documented organizational structure and communicates the roles responsibilities and authorities of the officers and employees at all levels of the company.

The Board found that Enbridge had established and implemented several mechanisms for reviewing its Safety Management program workforce needs. The Board also found that Enbridge’s evaluation of need did not specifically account for all staff with health and safety or management system establishment, implementation or maintenance responsibilities and, therefore, did not demonstrate that the human resources allocated to establishing, implementing and maintaining its management system and meeting for meeting its OPR section 6 obligations are sufficient.

Based on the Board’s evaluation of Enbridge’s management system and Safety Management program against the requirements, the Board has determined that Enbridge is Non-Compliant with this sub-element. Enbridge will have to develop corrective actions to address the described deficiencies.

Element 3.0 - Implementation

Sub-element 3.1 - Operational Control-Normal Operations

This sub-element of the audit requirements states that the company must have an established, implemented and effective process for developing and implementing corrective, mitigative, preventive and protective controls for the hazards and risks identified in Elements 2.0 and 3.0.

The Board found that, subject to its non-compliant finding relating to its governance management system process with respect to developing controls (Sub-element 2.1 Hazard Identification, Risk Assessment and Control, above),  Enbridge has developed controls that address its identified hazards and risks.

The Board found that, at a program level, the company has implemented practices and processes that address the Board’s requirements for coordinating, controlling and managing the operational activities of employees and other people working with or on behalf of the company.

The Board also found that, at the governance management system level, Enbridge has not established and implemented processes for coordinating, controlling and managing the operational activities of employees and other people working with or on behalf of the company that meet the OPR requirements.

Based on the Board’s evaluation of Enbridge’s management system and the Safety Management program against the requirements, the Board has determined that Enbridge is Non-Compliant with this sub-element. Enbridge will have to develop corrective actions to address the described deficiencies.

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

This sub-element of the audit requirements states that the company must establish and maintain plans to identify the potential for upset or abnormal operating conditions, accidental releases, incidents and emergency situations. This sub-element also included requirements for companies to establish and implement a process for developing contingency plans for abnormal events that may occur during construction, operation, maintenance, abandonment or emergency situations.

The Board found that, subject to its non-compliant finding relating to its governance management system process with respect to developing controls (Sub-element 2.1 Hazard Identification, Risk Assessment and Control, above),  Enbridge has developed controls that address its identified health and safety hazards and risks relating to upset and abnormal operating conditions.

The Board found that Enbridge has developed and documented many contingency plans. The Board also found that Enbridge had not established a management system or program level process for developing contingency plans that meets the Board’s requirements.

Based on the Board’s evaluation of Enbridge’s management system and the Safety Management program against the requirements, the Board has determined that Enbridge is Non-Compliant with this sub-element. Enbridge will have to develop corrective actions to address the described deficiencies.

Sub-element 3.3 - Management of Change

This sub-element of the audit requirements states that the company must have an established, implemented and effective process for identifying and managing any change that could affect safety, security or protection of the environment.

The Board found that Enbridge demonstrated that it had established and implemented a number of MOC procedures and practices to document and manage change at the program level on a consistent basis. The Board identified that all departments and programs were using Enbridge’s Liquids Pipelines MOC process, including Safety Management, as its primary corporate MOC process. The Board, however, identified that this process did not meet all of the MOC process requirements and was specifically not intended to be included within its IMS process.

The Board also found that Enbridge did not demonstrate that it had established and implemented a management system level process that meets the requirements of the OPR.

Based on the Board’s evaluation of Enbridge’s management system and Safety Management program against the requirements, the Board has determined that Enbridge is Non-Compliant with this sub-element. Enbridge will have to develop corrective actions to address the described deficiencies.

Sub-element 3.4 - Training, Competence and Evaluation

This sub-element of the audit requirements states that the company must have an established, implemented and effective process for developing competency requirements and training programs for its employees and contractors. These competency requirements and training programs must enable employees and contractors to perform their duties in a manner that is safe, ensures the security of the pipeline, and protects the environment.

The Board has found that Enbridge has established and implemented a management system for identifying and managing its training requirements.

The Board also found that Enbridge has not established and implemented processes for identifying and verifying the competency requirements of its workers as required in the OPR. The Board identified that Enbridge has started to implement a new process for the identification and verification of worker competency. However, this new process remains Non-Compliant as it has not been established or implemented and that its governance management system process does not meet the Board’s requirements.

Based on the Board’s evaluation of Enbridge’s management system and Safety Management program against the requirements, the Board has determined that Enbridge is Non-Compliant with this sub-element. Enbridge will have to develop corrective actions to address the described deficiencies.

Sub-element 3.5 - Communication

This sub-element of the audit requirements states that the company must have an established, implemented and effective process for internally and externally communicating safety, security and environmental protection information.

The Board found that Enbridge communicates throughout its organization as a matter of organized practice.

The Board also found that Enbridge had not established or implemented a communication process that meets the OPR requirements.

Based on the Board’s evaluation of Enbridge’s management system and Safety Management program against the requirements, the Board has determined that Enbridge is Non-Compliant with this sub-element. Enbridge will have to develop corrective actions to address the described deficiencies.

Sub-element 3.6 - Documentation and Document Control

This sub-element of the audit requirements states that the company must have an established, implemented and effective process for identifying and managing the documents required to meet the company’s obligations for conducting activities in a manner that ensures the safety and security of the public, company employees and the pipeline, and that protects property and the environment.

The Board found that Enbridge had established and implemented a process for controlling its operational program level documentation and had developed a new governance management system level document control process. Review of the new governance process, however, identified that it did not meet the OPR requirements nor had it been established and implemented.

The Board also found that Enbridge had not established and implemented a governance management system process for identifying the documents required for the company to meet its safety obligations under OPR section 6.

Based on the Board’s evaluation of Enbridge’s management system and Safety Management program against the requirements, the Board has determined that Enbridge is Non-Compliant with this sub-element. Enbridge will have to develop corrective actions to address the described deficiencies.

Element 4.0 - Checking and Corrective Action

Sub-element 4.1 - Inspection, Measurement and Monitoring

This sub-element of the audit requirements states that the company must establish and implement an effective process for inspecting and monitoring its activities and facilities. This is so that the company can evaluate the adequacy and effectiveness of the protection programs and take corrective and preventive actions if deficiencies are identified.

The Board found that, subject to its findings related to its review of Enbridge’s Health Check and Internal Review processes (Sub-element 4.3 Internal Audit), the Board found that Enbridge has established and implemented process for inspecting, measuring and monitoring its facilities and program.

Based on the Board’s evaluation of Enbridge’s management system and Safety Management program against the requirements, the Board did not find any issues of non-compliance. The Board has determined that Enbridge is Compliant with this sub-element.

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

This sub-element of the audit requirements states that the company must establish and implement an effective process for reporting hazards, potential hazards, incidents and near-misses, and for taking corrective and preventive actions to address them. This includes investigating if the hazards, potential hazards, incidents and near-misses have or could have resulted in the safety and security of the public, employees and the pipeline, and protection of property and the environment. This sub-element also requires a company to have an established, maintained and effective data management system for monitoring and analyzing the trends in hazards, incidents and near-misses.

The Board found that Enbridge has conducted investigations where required or where hazards, potential hazards, incidents and near-misses have or could have resulted in the safety of the public, company employees and the pipeline being significantly compromised.

The Board also found that, at the governance level, Enbridge’s IMS-01, section 4.10 Event Investigation Processes, dated 11-December 2013 had been documented and included in its Governing Policies and Processes Management System manual and that key activities were being implemented within its programs. These processes were, however, identified as “In Progress” and therefore not established and implemented.

The Board also found that Enbridge’s process for taking corrective and preventative actions is not being implemented as required by OPR. The Board has documented this deficiency in sub-element 4.3 Internal Audits, below. Enbridge is required to specifically consider and include corrective actions to address the process deficiencies identified in this sub-element within and corrective action plan developed for sub-element 4.3.

Based on the Board’s evaluation of Enbridge’s management system and Safety Management program against the requirements, the Board has determined that Enbridge is Non-Compliant with this sub-element. Enbridge will have to develop corrective actions to address the described deficiencies.

Sub-element 4.3 - Internal Audit

This sub-element of the audit requirements states that a company must  establish and implement an 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 Board found that Enbridge was undertaking many of the activities that are normally associated with quality assurance program. The Board found, however, that Enbridge had not organized them within a program as required by the OPR.

With respect to developing a process for conducting audits as required by OPR section 53, Enbridge indicated that it used a number of different methods in combination to meet these requirements. Upon reviewing the individual processes and practices the Board found that they do not meet the OPR requirements by design and practice. Enbridge provided several examples of completed audit related activities, as per its process. The Board found that Enbridge was not able to demonstrate that it has undertaken audits consistent with the OPR requirements.

The Board found that Enbridge had not established and implemented a management system process for taking corrective and preventive actions at both the management system and program levels that meets the OPR requirements. The Board notes that the requirement to have a process to take corrective and preventive action is included in many of the sub-elements within the Board’s audit protocol and the OPR. The Board therefore requires the corrective action plan developed to address the deficiencies identified for this sub-element to explicitly include all sub-element and OPR requirements, where corrective and preventive actions are referenced.

Based on the Board’s evaluation of Enbridge’s management system and Safety Management program against the requirements, the Board has determined that Enbridge is Non-Compliant with this sub-element. Enbridge will have to develop corrective actions to address the described deficiencies.

Sub-element 4.4 - Records Management

This sub-element states that a company must establish and implement an effective process for generating, retaining, and maintaining records that document the implementation of the management system and its protection programs.

The Board also found that Enbridge had implemented a consistent records management practice for application across its organization that resulted in appropriate records management practice being implemented at the program and corporate levels.

The Board also found that Enbridge had developed a draft governance Records Management Process as part of it integrated management system. The Board also found that, due to the draft nature of the process, Enbridge did not demonstrate that it has established and implemented a management system process that meets the OPR requirements.

Based on the Board’s evaluation of Enbridge’s Management System and Safety Management program against the requirements, the Board has determined that Enbridge is Non-Compliant with this sub-element. Enbridge will have to develop corrective actions to address the described deficiencies.

Element 5.0 - Management Review

Sub-element 5.1 - Management Review

This sub-element states that a company must establish and implement an 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. This sub-element also requires a company to complete an annual report for the previous calendar year, signed by the accountable officer, describing the performance of the company’s management system in meeting its obligations.

The Board found that Enbridge had developed processes for and undertaken activities relating to its Management Review responsibilities. The Board also found that Enbridge’s management review did not meet all of the requirements outlined in the OPR as a result of the processes and practices utilized.

Additionally, the Board found that some of the Non-Compliant findings made in this audit fall within the responsibility and accountability of Enbridge’s senior management. These relate to direction, management and oversight and, as such, have contributed to the Non-compliant finding for this element.

Based on the Board’s evaluation of Enbridge’s management system and Safety Management program against the requirements, the Board has determined that Enbridge is Non-Compliant with this sub-element. Enbridge will have to develop corrective actions to address the described deficiencies.

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11.0 Conclusions

Companies regulated by the NEB must demonstrate a proactive commitment to continual improvement in safety, security and environmental protection. Pipeline companies under the Board’s regulation must establish and implement effective management systems and Safety Management programs in their day-to-day operations. This includes the tools, technologies and actions needed to ensure workers are safe.

During this audit Enbridge was required to demonstrate the adequacy and effectiveness of its management system and Safety Management program to the Board. The Board reviewed documentation and records provided by Enbridge, conducted inspections and interviewed Enbridge staff.

Based on its review, the Board found that Enbridge was in a transitory period in terms of establishing and implementing its management system. Additionally, the Board found that some of Enbridge’s management system processes were not designed or established and implemented in a manner that allowed its management system to meet the requirements of OPR section 6.1. Consequently, the Board has found that Enbridge’s management system is Non-Compliant.

The Board has found that Enbridge’s Safety Management program also reflected the transitory nature of Enbridge’s management system and process issues as noted. The Board found, however, and most importantly, that, regardless of the design and implementation status of its management system,  Enbridge’s Safety Management program and the processes and practices being used, identified and controlled the majority and most significant of the company’s hazards and risks. Enbridge’s Safety Management System is closely aligned with the OPR requirements at the program level.

In analyzing Enbridge’s Non-Compliant findings the Board has found that most of them fall into three general categories:

• Non-compliances relating to management system process development;
• Non-compliances relating to Enbridge’s interpretation of OPR requirements; and
• Non-compliances relating to technical content

The Board notes that the majority of all of the Non-Compliant findings made by the Board relate to management system process development.

The Board has determined that while no enforcement actions are immediately required to address these non-compliant findings, as per the Board’s standard audit practice, Enbridge must develop and submit a corrective action plan describing its proposed methods to resolve the non-compliances identified and the timeline in which corrective actions will be completed. Enbridge will be required to submit its corrective action plan for approval within 30 days of the final Audit Report being issued by the Board.

The Board will assess the implementation of all of Enbridge’s corrective actions to confirm they are completed in a timely manner and on a system wide basis until they are fully implemented. The Board will also continue to monitor the overall implementation and effectiveness of Enbridge’s Safety Management program and management system as a whole through targeted compliance verification activities as a part of its ongoing regulatory mandate.

The Board will make its final Audit Report and Enbridge’s approved corrective action plan public on the Board’s website.

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