The offshore installations (safety case) regulations 2005

SPC/ENF/158

OG status:: Fully Open
Author unit / section:: HID OSD 2.4
Target audience:: OSD Inspectors

Purpose

This guidance highlights key issues for inspectors and provides information on enforcement and interpretation. It should be read in conjunction with the published guidance to the regulations, booklet L30. Additional guidance is in the safety case assessment procedures and in the offshore section of the HSE website.

Background

Scope

SCR does not extend to territorial waters adjacent to Northern Ireland, for which separate regulations have been made.

SCR does not require safety cases for offshore pipelines. The Offshore Installations (Management and Administration) Regulations 1995 (MAR) deem any part of a pipeline connected to an installation, and associated apparatus and works, within 500m of the installation, to be part of that installation. Safety cases should also take account of any equipment beyond the 500m zone on which the safety of the installation may depend. This includes interaction with other installations linked by pipeline, and the effect that an interconnected pipeline system could have on the installation.

Any well connected to an offshore installation is part of that installation.

Enforcement

The safety case, notification and verification requirements of SCR are an integral part of HSE's inspection and enforcement strategy. It is essential therefore that the regulations are effectively enforced and that dutyholders understand that HSE expects full compliance with them.

The Independent Competent Person (ICP) has no duties under SCR. The duty is on the installation operator or owner to run an effective verification scheme. Inspection of the actions of ICPs can however take place as part of inspection of the dutyholder's arrangements.

Application of the Enforcement Management Model (EMM) to SCR

The EMM applies to permissioning regimes such as SCR. Further information is available in the EMM guidance section.

Applying the model to SCR requires qualification because the regulations make it an offence to operate an installation without an accepted safety case - no offence is created by an incomplete or late submission.

Table 5.3 determines the Initial Enforcement Expectation (IEE) due to deviations from the permissioning document. This table is not relevant to SCR. If an installation is operated (or decommissioned) without an accepted safety case or relevant exemption certificate, the IEE from table 5.2 is an improvement notice. However, strategic factors should be taken into account and prosecution should be considered.

For administrative breaches of SCR (such as failure to notify, regulations 11 and 12), table 5.2 should be used to determine the IEE. This table should not be used to determine the outcome of safety case assessments, which should be undertaken in line with assessment guidance. For all other breaches the risk gap should be determined in the usual way, using table 2.1 or 2.2 followed by table 5.1.

Further guidance on applying the EMM to permissioning is in SPC/Enforcement/61.

Verification scheme enforcement

Where inspectors identify significant deficiencies in verification arrangements, enforcement action should be taken. Examples are:

lack of an adequate written verification scheme,
not all safety critical elements (SCEs) have been identified,
SCEs are unsuitable or not in good condition or repair,
a verification scheme exists but is not suitable or is not put into effect,
independent competent persons lack competence or independence,
scheme reviews are not being carried out, and
verification records do not exist.

Interpretation (regulation 2)

'Acceptance'

Acceptance of a safety case is a matter of professional judgement, and does not mean that the installation is safe. An acceptable case is one which contains the information in regulation 12 and the relevant schedules, thereby enabling HSE to decide that the document contains a reasoned case for health and safety.

The following criteria are considered by the Legal Adviser to represent a reasonable basis on which to decide acceptability of a safety case:

in respect of hazards with the potential to cause a major accident, there is no prima facie evidence of non compliance (except for trivial aspects) with the HSW Act and the relevant statutory provisions or, where such evidence exists, each such failure to comply is addressed by an improvement plan in the safety case,
all the factual information required by the regulations is contained in the safety case, and
the demonstrations required by the regulations are not deficient. A demonstration is deficient if any of the following apply:
- the management system described is unlikely to ensure compliance with the appropriate relevant statutory provisions,
- the audit and audit reporting arrangements described are unlikely to achieve the objectives of a safety management auditing scheme,
- here are inadequacies in the potential major accident hazard identification and risk assessment process which are likely to render the basis for risk management decisions invalid, or
- further risk reduction measures are reasonably practicable.

'Installation'

Well service vessels

The MAR guidance booklet L70 provides guidance on when such vessels become subject to the requirements for offshore installations under MAR.

Heavy lift vessels (HLVs)

HLVs are not offshore installations as defined in MAR. However if an HLV is contracted solely or mainly to provide accommodation for an installation's workforce, that vessel may become an installation – see SPC/Enforcement/153.

Similar principles apply to other vessels that are not installations but which may be used to provide accommodation. However accommodation provided only incidentally to a heavy lift operation does not bring the vessel within the definition. In cases of doubt it will be necessary to examine the vessels' operating contract – see booklet L70.

Shuttle tankers

Shuttle tankers are vessels which transport oil from an offshore installation. They are not an installation and a safety case is not required. However, the presence of a shuttle tanker will need to be taken into consideration in the safety case for the installation.

Shuttle tankers may also act as floating storage units. If they are permanently on station, they are installations. If however they change out, even when the filling operation takes a significant time, they are not installations.

MODU conversion for temporary or extended production

The primary purpose of MODU operations is not production. During exploration activities, oil and gas may be produced from the well for testing purposes. Extended well testing or limited early production may also form part of normal MODU activities and when foreseen, these activities should be covered in a regulation 8 non- production safety case.

Where a MODU is converted for production activities it will come within the definition of a production installation. Whether a regulation 7 production safety case is required depends on the nature of the conversion. The following guidance applies.

Temporary modification of a MODU (with existing safety case)

Where a conversion for production work is clearly temporary, the installation remains a non-production installation for the purposes of SCR. A regulation 14(2) revision to the existing case is appropriate. However where the temporary conversion is for long-term production (more than 90 days) a regulation 7(1) case is required and the MODU becomes a production installation for the purposes of SCR.

Temporary modification of a new MODU (without existing safety case)

A MODU entering UK waters for the first time requires a case which correctly reflects the activities for which it is intended. Where the conversion to production work is clearly temporary, for example for well-testing for no more than 90 days, a regulation 8 case is appropriate. Where the temporary conversion is for long-term production, a regulation 7(1) case is required.

Permanent conversion of a MODU

Where the conversion is intended to be permanent, a MODU becomes a production installation. A design notification and a regulation 7(1) case are required.

Pipelay barges

Pipelay barges are not installations and do not require safety cases.

'Take account' (regulation 6(1))

'Take account' does not require a dutyholder to agree to do anything at the design stage. The words merely define the time frame for submission. If a dutyholder, in response to issues raised by HSE, indicates it is too late to take account of them, there may be a breach of regulation 6(1) because the notification has not been submitted early enough. However if the dutyholder considers the issues but takes no further action, there may not be a breach of this regulation, though it may mean that the later operational safety case is not acceptable.

'Matters relating to health and safety' (regulation 6(1))

This regulation contemplates, but does not require, that HSE advises dutyholders of matters to be taken into account at the design stage, and by implication identifies major concerns that might prevent acceptance of the operational case. Design issues involve matters of professional opinion rather than of proof.

Continued dialogue with the dutyholder on compliance with the HSW Act and the relevant statutory provisions, as part of the inspection process, is essential in the period between the design notification and the operational case.

'Commencement of operation' (regulation 7(2))

For the purposes of SCR, a production installation becomes operational when either of the events in regulation 7(2) occur. The time of these events (and not any earlier time) determines when the operation is commenced. Although accommodation may be occupied prior to 'commencement of operation', a safety case only needs to be submitted six months before the activities described in regulation 7(2) begin.

For the purposes of MAR, a structure becomes an installation when the first significant part reaches its working station prior to operating or being constructed there. Offshore health and safety legislation, both general and specific, applies from that time.

Management of health and safety and control of major accident hazards (regulation 12)

'Demonstrate' (regulation 12(1))

'Demonstrate' means 'show' rather than 'prove'. The implication is that prima facie information should be sufficient; professional judgement should be exercised rather than extensive scrutiny.

Management systems

Contract-managed installation (control)

There is no specific requirement for a dutyholder whose installation is substantially managed by another company, to detail that company's SMS in the safety case. However the dutyholder must demonstrate:

how their own management systems interlink with those of the contractor, how the contractor's arrangements are monitored and assessed, and how their audit and verification arrangements will be effective.

Sufficient details of the contractor's SMS should be included to achieve these aims.

The requirements of regulation 12(1)(a) are qualified by 'in respect of matters within his control'. This does not refer just to day-to-day control but includes the dutyholder's ability to exercise control as part of the contractual arrangements. Inspectors should challenge any assertion by a dutyholder that ensuring compliance with essential health and safety provisions is outside their control, just because the dutyholder does not have day-to-day management of the installation.

In regulation 2(1) the operator of a production installation is 'the person appointed by the licensee to manage and control directly or by any other person the execution of the main functions of a production installation'. The phrase 'any other person' means that the appointed person remains the operator irrespective of any contract they may have with a third party to actually run the installation.

The safety of people on an offshore installation is primarily the responsibility of their employer. However the owner or operator of an installation also has responsibility for the safety of people on the installation under the offshore-specific regulations. Where an installation is entirely operated by a contractor, then the contractor becomes the owner or operator and takes on the duties which go with that role.

Contractors

The duty in regulation 12(1)(a) for an owner or operator to demonstrate that their management system is adequate is very wide. They have to ensure that there will be compliance with the relevant statutory provisions on the installation and in relation to connected activities. Where the work is carried out by one or more specialist contractors, the safety case should contain information on the dutyholder's management system for ensuring they comply with the relevant statutory provisions. This is particularly important where the operator or owner relies on the use of competent specialists.

The duty in regulation 12(1)(a) is qualified by 'in respect of matters within his control'. This does not mean that the dutyholder may rely entirely on the expertise and competence of a specialist contractor. The safety case should contain sufficient detail to show that failures by the contractors will be identified by the dutyholder's management system.

Where contractors are using specialised equipment the management system should provide (so far as is reasonably practicable) for expertise from within the owner's or operator's organisation (or from a contractor or consultant). There should be adequate systems to verify and confirm systems of work and procedures, and to ensure that the performance of the contractor is monitored.

Revision of safety cases (regulation 14)

Commencement of major modification (regulation 14(2))

For major modifications (unlike the provisions of regulations 7 and 8) there is no requirement for acceptance of a safety case revision before work on the modifications starts. HSE aims to complete the assessment within the three-month advance submission period, but has no legal obligation to do so. Operation of the installation after the modifications have been made and brought into use would be a breach of regulation 16 unless the revision has been accepted.

MODU re-entering relevant waters

Where a MODU with an accepted safety case re-enters UK waters and has, during this period, changed its ownership, regulation 2(9) applies.

Duty to conform with the safety case (regulation 16)

Enforcement

Acceptance of a safety case is based on the information in the case and any clarifications and amendments during assessment. No verification is involved. It is therefore a serious contravention if the case is intentionally inaccurate or misleading, since the basis for acceptance would be incorrect. However inspectors should ensure that enforcement under regulation 16 relates to significant matters, and not to matters of oversight or of detail not posing a serious risk to health and safety.

When considering enforcement action inspectors should ensure that the safety case they are using is the latest version.

Major modifications

A regulation 14(2) revision should be submitted before major modifications are carried out. If they are to be carried out over a long period (some months) the revision will need to detail a modification period, to comply with regulation 16. Inspectors should be pragmatic in applying the regulation in such situations. Two revisions may be submitted, one for the construction stage and one for its completion, but this is not essential.

There is no restriction on how much information can be included in a submission. A case can include details of all intended major revisions known about at the time of submission. It can specify when the revisions will be operational and which information in the case will then no longer be current.

Verification

Schedule 7

Selection of persons for scheme review

46 The dutyholder has to show the principles used to select persons to keep the
scheme under review. Suitable persons can be dutyholder employees, ICP contractor employees or other external personnel, but the responsibility for ensuring reviews are undertaken, and actions and revisions successfully implemented, rests with the dutyholder.

Continuing effect of verification schemes (regulation 21)

Scheme becoming and remaining effective

The verification scheme has to remain effective throughout an installation's lifecycle. For new fixed installations the verification scheme has to be put into effect before design completion, and is therefore in place during onshore construction. The scheme ceases when the installation ceases to be an offshore installation, after removal from site. Records of the scheme need to be kept for six months after the scheme ceases.

For mobile installations, verification requirements take effect when they enter UK waters and cease when they leave. However, a continuous documented verification history prior to entry is essential for assessing the installation's suitability for operation in UK waters.

Maintenance of integrity – DCR regulation 8

Under DCR regulation 8, dutyholders must have suitable arrangements for maintaining the integrity of the installation, including arrangements for periodic assessment of its integrity and for carrying out remedial work in the event of damage or deterioration. Dutyholders cannot transfer this responsibility to another party.

Elements of an installation structure can be SCEs under the verification scheme. Therefore the dutyholder, in consultation with the ICP, needs to determine their suitability and ensure they remain in good condition during the installation's lifecycle. There is no intention to duplicate work in setting performance standards or compiling maintenance and examination work scopes. Work to comply with DCR regulation 8 can contribute to the SCR verification scheme, and vice versa, providing both sets of provisions are met. On floating installations, examination work by an ICP to satisfy maritime class surveys can contribute to DCR regulation 8 and SCR verification requirements. However a verification scheme involving some maintenance activities may not be sufficient to fully comply with DCR regulation 8.

The periodic integrity assessments required by DCR regulation 8 need not be carried out by an ICP. However there is no conflict of interest if the same ICP carries out examination work under both sets of regulations, or maritime survey. However the same person cannot carry out an examination and any repair work required as a result of the examination. If the same company is responsible for both, robust management systems are required to ensure independence and objectivity.

DCR well examinations

DCR regulation 18 requires well operators to arrange for ICPs to examine wells to ensure that they are designed, constructed and maintained that there is no unplanned escape of fluid, and risks to persons are as low as reasonably practicable. Where a dutyholder considers wells to be SCEs, then work to comply with DCR may be wholly or partly suitable to comply with the SCR verification scheme.

Exemptions (regulation 23)

The use of exemptions from the regulations should be minimised. See Guidance on Exemptions.

By granting an exemption HSE is applying the same philosophy as when a safety case is accepted, namely giving permission. Exemptions from the duty to conform with the accepted safety case should not normally be given. Dutyholders should ensure that realistic operating limits and performance standards are set. If the arrangements need to be changed a revision should be submitted.

Exemptions should not be given for dedicated accommodation units (vessels or rigs). As with flotels and accommodation platforms, safety cases are required – see the guidance above on heavy lift vessels.

Further information

Further information can be obtained from the OSD Legal and Operational Strategy team, 01224 252603.