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SEMS II helps operators identify and mitigate risks.

Originally published on OilPro, 01 July, 2015

SEMS II is a requirement of law but it is also a great opportunity for operators to identify and mitigate risks to the bottom line.

After Macondo, the Bureau of Safety and Environmental Enforcement (BSEE) set to work on reforms by looking to American Petroleum Institute RP-75 (API RP-75) Recommended Practice for Development of a Safety and Environmental Management Program for Offshore Operations and Facilities, which has been around since 2004. In October 2010, the U.S. Code of Federal Regulations (Title 30 Part 250) grew to include subpart S. This subpart, known as SEMS made conformance to Subpart S and API RP-75 a requirement under law for offshore oil and gas operators. Later SEMS was modified with additional requirements, called SEMS II. Some of these changes included adding Center for Offshore Safety documents as law. However, it is all SEMS and should not be thought of as two separate regulatory requirements.

The law requires operators to use an effective SEMS II to identify, address and manage safety and environmental hazards and impacts during the design, construction, start-up, operation, inspection and maintenance of all new and existing Outer Continental Shelf (OCS) and deepwater facilities. SEMS does not stipulate the details of how every management system must operate. It does prescribe seventeen components or elements (hazard analysis, safe work practices, audits, etc.) of a conformant /compliant system.

Brady Austin is the Energy QHSE Service Line Owner for Lloyd's Register. He has more than 20 years' experience working in the offshore oil and gas industry in various phases of operations, as a regulatory compliance inspector, BSEE regulator and industry consultant. He is actively involved in the API, COS and IADC committees related to SEMS II regulations and revisions.

Brady says it is unwise to think of the SEMS II regulatory requirements as separate from the management system. SEMS II auditing goals should ensure and demonstrate the effectiveness of the management system. Inability to demonstrate to SEMS II auditors the effectiveness of the overall management system may lead BSEE to increase the frequency of inspections or broaden inspections across operations.

"Under SEMS II, the operator's top management is ultimately responsible for maintaining an effective management system, but achieving that goal requires the collaboration of everyone involved. The goal is to continually improve the effectiveness of the management system resulting in a positive safety culture for all involved. SEMS II effectiveness requires collaboration between operators, contractors and subcontractors to ensure SEMS II conformance/compliance extends to all entities involved in the operation."

SEMS II is an opportunity

SEMS II is the law, but it's also an opportunity to become even more efficient in your business. Environmental and safety risks are also risks to the bottom line and SEMS II provides a ready-made template for mitigating those risks. SEMS II involves a holistic approach which is different from a prescriptive requirement.

Brady says an effective management system starts with the identification of hazards associated with your operations and the risk mitigation measures taken. Those risk mitigation measures will likely include, but not limited to documentation (policies, procedures, work instructions, etc.), training and the creation of records which will all need to be measured. Those measurements will verify implementation, effectiveness and should be used to drive continuous improvement.

Lloyd's Register Quality Assurance (LRQA) is currently revising their successful auditing program to accommodate SEMS II auditing requirements. LRQA has been performing certification audits since 1985 and is seen as a world leader in management system certifications. Processes have been in place to support clients in independent auditing requirements to help drive continual improvement for many years. The COS is in the process of advancing our accreditation to become a SEMS II Audit Service Provider (ASP).

He says, "Through our Lloyd's Register consulting services, we help you develop your SEMS II for effective measuring and design a path of continual improvement to ensure your ASP certification audit will be successful and meet regulatory deadlines."

Brady goes on to explain, "We offer SEMS II training for awareness level, audit team member and audit team lead that meet the COS requirements here at our brand new training facility in Houston or at your desired location. Having the knowledge and ability to deliver training on a vessel coming into United States waters helps to ensure they will meet regulatory SEMS II requirements upon arrival. We can also develop valuable customized SEMS II training based on your company's methodology, terminology and documentation. The customized training is the best path to educate employees on your SEMS II and will drastically increase their understanding that SEMS II is not something residing outside of their work environment. The duties and responsibilities of each employee are addressed through the company SEMS II and regulatory requirements state they must be trained in your SEMS II during induction and at various stages throughout their employ. The customized training will do just that. When those employees leave the training course and get back to their workplace, it looks and sounds like what they just learned."

Maximizing effectiveness

Once an operator has a program in place, the key to managing it is to measure frequently and objectively and assess those measurements for opportunities for continual improvement.

If ever there was a place for an independent third party audit, it's in the management system and needs to focus on the implementation of the management system on the facility. In fact, after the occurrence of a serious event, the DOJ will likely require an independent third party to perform all audit activities. They will then likely require another third party to verify that audits have been performed without bias and given adequate resources to audit the whole system, especially implementation and effectiveness.

A successful SEMS II audit is a bit like a visit to the doctor. The doctor takes your blood pressure and temperature and performs a routine exam before recommending more targeted testing. A SEMS II audit begins with a gap analysis, a review of management system documentation to ensure it contains the elements required by law. Where a requirement calls for a procedure or process, that component is verified to exist.

If a doctor needs more information, he may order an MRI or other common diagnostic tests. The SEMS II auditor will conduct an in-depth review of the management system documents to ensure that the appropriate documents exist and verify that they meet the content requirements to adequately mitigate the hazards.

A full audit will verify implementation and effectiveness. A surgeon will sometimes perform exploratory surgery to find out what more superficial tests cannot reveal. A SEMS II auditor will check documentation, interview staff, check performance records and determine how well the management system is operating. This is a key role for the independent auditor, because implementation is the core of the management system and the largest exposure to incidents and failures, requiring the most human interaction and maintenance to keep things improving.

COS accredited auditing programs can also help operators keep up with changes to SEMS II. As BSEE observes submitted audit results and assesses how the industry is adopting SEMS II, they too must continually improve the regulatory regime. They have already revised SEMS II with additional regulatory elements such as ultimate work authority and employee participation planning. They will continue to enhance value, safety and SEMS II ownership at all levels in the industry as SEMS II is implemented and matures.

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