Office national de Pénergie National Energy Board MEMORANDUM Security: Protected B Document: 841901 Date: 12 Nov, 2015 To: Board Members From: Chris Loewen, Vice-President, Operations Subject: ‘The NEB and Transportation Safety Board (TSB) Relationship For Information PURPOSE. Background information requested at 12 November 2015 Board Meeting. BACKGROUND Overview of the TSB Mandate The mandate of the TSB is to advance transportation safety in the marine, pipeline, rail and modes of transportation by + conducting independent investigations, including public inquiries when necessary, into selected transportation occurrences in order to make findings as to their causes and contributing factors; + identifying safety deficiencies, as evidenced by transportation occurrences; + making recommendations designed to eliminate or reduce any such safety deficiencies; and + reporting publicly on its investigations and on the findings in relation thereto, ‘As part of its ongoing investigations, the TSB also reviews developments in transportation safety and identifies safety risks that it believes government and the transportation industry should address to reduce injury and loss. As part of its investigation into an event, the TSB may also investigate the regulator and the application of regulatory oversight. Incident Reporting In 1999, the NEB and TSB informed their regulated companies to report all incidents/occurrences to the TSB who would then relay the information to the NEB. ‘This was referred to as the “one-window” approach to reporting. In December 2014 both the NEB and the TSB issued letters directing their regulated companies to report events to the newly developed online Event Reporting System (ERS) developed by the NEB; this maintains the “one-window” approach to incident reporting between the two organizations. As of Jan 1, 2015 companies are now using ERS to report various events required by the regulations of both the TSB and the NEB. ‘A0010777_23-000089‘The NEB and TSB Relationship Relationship between the TSB and NEB during and after an incident ‘The NEB is the lead regulatory agency in emergency response, environmental protection and safety concerns during an incident on an NEB-regulated facility or operation. The TSB will conduct an investigation into incidents if doing so will advance transportation safety. In the event the TSB conducts and investigation, they are the sole agency to determine cause and contributing factors leading to an accident/incident for those investigations. To maintain the investigative independence of the two organizations, in these situations the NEB is precluded from determining cause and contributing factors. However the NEB will conduct a concurrent and co-operative investigation with the TSB focused on factors relating to regulatory compliance, trends within industry, and what actions are necessary to prevent similar occurrences in the future, Where the ‘TSB does not investigate, the NEB becomes the lead investigator to determine cause and contributing factors, Memorandum of Understanding (MOU) between the TSB and NEB In 1994, the NEB and TSB signed the first MOU between the two organizations. In August 2011, the most recent MOU between the two organizations was signed. Over the term of the first MOU, the NEB and TSB developed a working relationship of sharing and where possible, mutual support. That working relationship has grown and matured. The 2011 MOU solidified the sharing of information while maintaining investigative independence of each organization. Both organizations actively work toward keeping this relationship open, cordial and professional so that we can work toward common goals in the event of a pipeline incident ‘TSB Organizational Structure Under the COO, Jean Laporte (bio attached), there are 7 Directors, 3 of which correspond to the ‘main transportation modes of Marine, Rail/Pipeline and Air. The remaining directorates are of a ‘corporate or multi-modal testing nature. Kirby Jang is the Director of the Investigations Rail/Pipeline, with 3 regional rail managers and one pipeline investigation manager, Our information is that the pipeline group is extremely small, with only 1 —2 full-time staffed investigators. Status of Implementation of Management Systems within industry ‘The NEB regularly monitors the implementation of management systems in industry through its compliance planning and compliance verification processes. This can include both inspections that provide a “snapshot” of how the company is implementing its safety management system as well as audits that provide a much more in depth and broad view of how the companies are designing, tracking and implementing that system, Industry oversight and enforcement — Comparison with recent findings from another jurisdiction Earlier this year, the TSB identified issues with Transport Canada (TC) oversight in the Rail transportation mode. The findings regarding TC from the Lac Megantic report fall into two primary categories below. Under each of the categories, staff has placed a summary of how the ‘NEB approaches these issues: Recurring Inspection Deficiencies ROIS HAIIOT Sy Faghnr72t0008"The NEB and TSB Relationship ‘The NEB’s Compliance Verification Planning risk model accounts for repeat non-compliances observed through our inspection program. ‘These repeat findings are indicators that raise the risk score of a regulated company and helps staff identify appropriate compliance activities to address reourring problems, ‘With the most recent amendments to the OPR', management system requirements have been clarified including the requirement to have a process to manage the resolution of corrective actions. As a result, staff has formally included an assessment of the corrective action process as part of our updated audit protocol. Weak Internal Audits, Risk and Change Management Risk assessment, change management, and internal auditing are critical elements within a company’s management system. Inadequate or absent processes and procedures prevent the effective management of safety, Board staff has identified similar weaknesses in these elements during recent management system audits and are conducting follow-up in accordance with our current procedures With the recent amendments to the OPR, each of these elements requires a process which the company must demonstrate in order for the corrective action plan to be resolved. For example, in order to resolve a finding of deficiency related to internal audit, the company now must demonstrate that it has a process for conducting internal audits in addition to demonstrating that it has conducted audits. The process must include the development of protocols, a method of prioritization, and identification of how the company will manage and verify the implementation of all corrective actions. TSB investigations into Pipeline Incidents Over the past 5 years, the TSB has investigated 6 pipeline-related incidents. Over the 5 years prior, it investigated 9 additional pipeline incidents. The TSB’s investigation reports are posted on its website http://www. bst-tsb.gc.ca/eng/rapports-reports/pipeline/index.asp. Links to TSB reports into pipeline ruptures can also be found on the Board’s website https://www.neb- one.ge.ca/sfinvenmnt/sft/pplnrptr/index-eng.html, Over the past 5 years, the TSB has issued two safety advisories (or recommendations) to the NEB. "The OPR was amended in 2013 to include a general duty clause and explicit management system requirements designed to support improved safety, security, and environmental outcomes. The amendment included: a requirement for the appointment of an Accountable Officer (AO); a detailed list of required processes with clear outcomes designed to effectively manage risk; and a requirement to complete an annual performance report with submission of an annual statement signed by the AO to the Board confirming completion RDIMS 841901 3[re eer zeenenesThe NEB and TSB Relationship Appendix I - Bio for Jean L. Laporte Appointed Chief Operating Officer on 24 August 2009 Jean Laporte was born and raised in Ottawa, He is a recognized leader in public service management and is actively engaged in various professional networks both inside and outside government, ‘He sits on various federal interdepartmental working groups and advisory committees at the Assistant Deputy Minister and senior executive levels. He is a frequent speaker and organizer of professional development activities. He is actively involved in promoting strong management and accountability within the federal Public Service. Mr. Laporte’s public service career began at the Treasury Board Secretariat, followed by a stay at Revenue Canada, Customs and Excise, In 1985, he joined the Canadian Aviation Safety Board and subsequently the Transportation Safety Board of Canada (TSB), occupying a variety of progressively more senior positions, including those of the Chief Financial Officer and Director General of Corporate Services. Mr. Laporte graduated from the University of Ottawa with an Honours Bachelor of Commerce degree in 1984, In 1989, he received his Certified General Accountant (CGA) designation, and became a Chartered Professional Accountant (CPA) in 2013. In 2002, Mr. Laporte was awarded the Queen’s Jubilee Medal in recognition for his contribution to the federal public service, and in 2007 was awarded a Fellowship by the Certified General Accountants Association of Canada for his contribution to the accounting profession. RDIMS 841907 FT Pageh0010777_28-000008