Management and Failure Reporting Systems Task 3 Report: Failure Reporting Systems
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Risk Assessment for Life Cycle Management and Failure Reporting Systems Task 3 Report: Failure Reporting Systems Submitted to The Bureau of Safety and Environmental Enforcement (BSEE) Submitted by ABSG CONSULTING INC. 1525 Wilson Blvd., Suite 625 Arlington, VA 22209 (703) 351-3700 BPA Contract # E13PA00008 Contract Number# E14PB00045 7 August 2015 THIS PAGE INTENTIONALLY LEFT BLANK BSEE Failure Reporting Task 3 Final Report i | Page Executive Summary The American Bureau of Shipping (ABS) Consulting prepared this report on failure reporting systems for the Bureau of Safety and Environmental Enforcement (BSEE) to provide support in development of a risk management system. The goal of the report is to enhance efficiency, effectiveness, and risk reductions in the regulated Oil and Gas (O&G) industry. Based on the findings from the Task 1 Report, ABS Consulting conducted a further analysis of selected agencies and industry organizations. Each agency and organization was reviewed for further programmatic elements, best practices, the role of the regulated industry, effectiveness, data, and the onus of liability. ABS Consulting’s review indicates that failure reporting is in wide use by regulatory bodies and industry; however, the purpose of the systems, types of failure reporting, their degree of prescriptiveness, types of incidents covered, and the historical institutionalization of these systems vary greatly. In this Task 3 Report, we conducted a review of the following agencies and organizations: • Domestic Agencies o Department of Homeland Security: United States Coast Guard o Department of Defense (DoD) o Department of Transportation (DOT): Federal Highway Administration (FHWA) o Department of Transportation: Pipeline and Hazardous Materials Safety Administration o Nuclear Regulatory Commission • International Agencies o New Zealand Department of Labor o Norway Petroleum Safety Authority o United Kingdom (UK) Health and Safety Executive • Industry Organizations o American Petroleum Institute o International Association of Drilling Contractors o International Organization for Standards o Industry Representative Companies • Software Providers o International Business Machines o PTC o ALD Services o Reliasoft BSEE Failure Reporting Task 3 Final Report ii | Page One of the first distinctions found is the tendency of an agency to use broad, non-exclusive levels of requirements for failure reporting, rather than a simple failure reporting system with an involved failure reporting corrective action system. Several of the industry standards provide a simple reporting mechanism, while the more prescriptive programs like DoD’s Failure Reporting, Analysis, and Corrective Action System implement a feedback loop to include the Original Equipment Manufacturers (OEMs) as a means of implementing continuous improvement. Due to the potentially sensitive nature of the data being provided and collected, data issues are paramount. Data aggregation is key for understanding and identifying trends across an industry. Many of the international and industry standards do not require data reporting directly, resulting in company- specific data. The DOT’s FHWA provides a form and template for the requested data, but to achieve compliance and uniformity across the data, FHWA’s process impacts the budgetary and appropriations processes for the states and for Congress. The same liability issues presented in the Task 2 Report on Life Cycle Management (LCM) Systems would also apply to failure reporting, but with more impact or consequence. Since LCM systems are largely maintenance focused, failure of the LCM system may not result in a reportable incident. A failure of a failure reporting system could result in reportable incidents not being reported or increased potential for negative outcomes from the publishing of company-specific and company proprietary information. Successful programs are clear and uniformly understood by the industry. Having a reporting mechanism to the OEM is a useful function, but having clear accountability of compliance with reporting is vital to ensure usable data. If the focus of compliance is on reporting, then industry may be more likely to participate. A focus on reporting compliance should not reduce the emphasis on the quality of the data reported. However, establishing a clear and understood standard of what is reportable and having a simple mechanism for reporting, aligned with industry practice, should help ensure compliance with failure reporting requirements. The distinction between simple failure reporting systems and those with the corrective action feedback component impacts the outcome of the failure reporting process. Simple failure reporting as implemented in the UK and Norway collects, compiles, and publishes data for others to use or analyze, but does not provide guidance, corrective action, or improvements. Having a corrective action system addresses past failures and provides an opportunity to reduce the likelihood of a similar event occurring again in the future. However, this approach still only focuses on failures actually experienced and does not typically address any potential, new or emerging issues. Failure reporting systems are a key part of a broader asset management approach and should be paired with other systems like a LCM system or a Safety and Environmental Management System. As found in many companies in the O&G industry, failure reporting is often already integrated into other management systems and processes. Given that failure reporting is by its nature a reactive system, even if corrective action is integrated, this pairing with preventative approaches would provide a process to identify issues and address concerns, both before and after an incident occurs. BSEE Failure Reporting Task 3 Final Report iii | Page If BSEE implements a failure reporting requirement, BSEE should provide clear and uniform standards of incidents to be reported, reporting requirements, and a set data structure. This will aid industry in identifying the specific equipment or components of concern and help ensure applicability across the industry. This data should be used to address past failures, provide feedback to the equipment manufacturers, and allow regulators to have the data analysis capabilities to prioritize concerns, monitor compliance, and assess trends. Many agencies also use risk-based decision-making tools to analyze the failure data to separate pressing issues from non-critical incidents. BSEE Failure Reporting Task 3 Final Report iv | Page Table of Contents 1. Introduction .......................................................................................................................................... 1 2. Objectives and Purpose ........................................................................................................................ 1 3. Approach ............................................................................................................................................... 2 4. Agency Review ...................................................................................................................................... 3 4.1 Domestic Federal Agencies ........................................................................................................... 3 4.1.1 Department of Homeland Security – United States Coast Guard ........................................ 3 4.1.1.1 Information, Policies, and Procedures .......................................................................... 4 4.1.1.2 Elements, Best Practices, Lessons Learned ................................................................... 7 4.1.1.3 Role of Industry ............................................................................................................. 9 4.1.1.4 Effectiveness ............................................................................................................... 11 4.1.1.5 Outcomes .................................................................................................................... 12 4.1.1.6 Data ............................................................................................................................. 13 4.1.1.7 Liabilities ..................................................................................................................... 14 4.1.1.8 Application to BSEE ..................................................................................................... 14 4.1.2 Department of Defense – Failure Reporting, Analysis and Corrective Action System ....... 14 4.1.2.1 Information, Policies, and Procedures ........................................................................ 15 4.1.2.2 Elements, Best Practices, Lessons Learned ................................................................. 16 4.1.2.3 Role of Industry ........................................................................................................... 17 4.1.2.4 Effectiveness ............................................................................................................... 17 4.1.2.5 Outcomes .................................................................................................................... 18 4.1.2.6 Data ............................................................................................................................. 19 4.1.2.7 Liabilities ..................................................................................................................... 19 4.1.2.8 Application to BSEE