Professional Documents
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Manual For SIEP-led HSE Auditing
Manual For SIEP-led HSE Auditing
EP 95-0130
HSE
MANUAL
6 Perform Audits 17
6.1 Auditkit 17
6.2 Opening presentations and team briefing 17
6.3 Organisation 17
6.4 Finalisation of the Audit 19
7 Apply Results 23
8 Monitor Follow-Up 25
11 Initiate Improvements to
Framework 31
12 Manage Staffing and
Administration 33
Foreword
Group-wide requirements covering all types of audits are defined in the Internal Audit Guidelines
(IAG) (Ref 1) issued by the Corporate Centre Internal Audit Department, and amplified in the
'Guidelines for the Application of Health, Safety and Environmental (HSE) Auditing' issued by the
Group HSE Adviser. These guidelines are included in this manual as Appendix 1.
This manual represents the application of these Group guidelines in the context of independent SIEP-
led HSE auditing with supplementary requirements being defined by the EPS-HE function in the SIEP
Strategy and Business Services Directorate (SBS). The objective of this document is to convey the
principles and practice of independent SIEP-led HSE auditing in an HSE Management System (HSE-
MS) context as practised in the EP Operating Units (OUs). As such it constitutes the Sector guidance
required by Appendix 1.
This manual provides guidance to lead auditors, audit team members, auditees and line managers. It
provides a methodology for balanced judgement of OU performance along HSE-MS principles
following a structured auditing technique. It is HSE specific and is consistent with the higher level
documents in SIEP and the Group. Generic principles, also applicable to non-HSE audits, as provided
in the higher level documents are repeated in this document where they are considered to underpin the
principles.
The structure of this manual will be updated at regular intervals to reflect changes in the SIEP role in
HSE auditing or practical experience of SIEP lead auditors gained whilst conducting audits.
The contents of this manual may assist OUs with an internal HSE auditing process along principles
similar to SIEP-led audits.
1.1 Introduction
The Statement of General Business Principles (Ref. 2) provides policy guidance covering all Group
activity. The Shell Group HSE policy is outlined as follows:
'It is the policy of Shell companies to conduct their activities in such a way as to take foremost
account of the health and safety of their employees and of other persons, and to give proper regard to
the conservation of the environment. Shell companies pursue a policy of continuous improvement in
the measures taken to protect the health, safety and environment of those who may be affected by
their activities.
Shell companies establish health, safety and environmental practices and integrate them in a
commercially sound manner into each business as an essential element of management'.
In order to comply with the above and other policy elements, specific responsibilities have been
delegated to the managers of the individual OUs. The introduction to Business Control Guidelines
(Ref. 3) states:
' It is the responsibility of chief executives and managers in Group companies to establish, maintain,
operate and demonstrate an appropriate framework of business controls. The framework should cover
all activities of a company, whether operational, technical, commercial, financial or administrative'.
activity (or a defined part of that activity) are adequately managed. Appendix 1 states:
' These audits provide independent verification of the effectiveness of the OpCo HSE-MS, including
internal HSE audit, and the strength of the framework of control.'
' The report shall provide an overall rating of HSE controls against specific standards using a defined
technique'.'
' The report shall identify significant deficiencies against standards, and recommendations shall be as
specific as the team allows.'
' Specificity and transparency of the audit will be the key.'
Organisation, Responsibilities
Resources, Standards & Doc.
Implementation Monitoring
HSE-MS audits are an integral part of this system and assess the effectiveness of the application of
this system.
The following chapters will define the methodology and procedures for SIEP-led HSE auditing in
HSE-MS context.
AUD-05 AUD-35
Analyse/
Plan Schedule Perform Apply Monitor
Improve
Audits Audits Audits Results Follow-up
Process
AUD-10 AUD-15 AUD-20 AUD-25 AUD-30
Manage Staffing/Administration
AUD-05
In this diagram, activities in boxes with dashed borders are not strictly part of the IA process.
However, as these activities are routinely reviewed as part of HSE audit scopes they are included to
provide overview and to illustrate interfaces with other processes. Similarly, the 10 IAPM elements,
as applied to SIEP-led HSE audits, are used to structure the core chapters 3-12 of this guideline.
The integration of IA in the business is illustrated in module A-02 of the EP Business Model (EPBM)
(Ref. 5).
As a further element of the audit direction process, shareholders will expect OU audit programmes to
include independent HSE audits. Appendix 1 states:
' Independent audits shall verify the internal HSE audit process, testing reports, working files and
implementation control, with sufficient sampling of operations to test effectiveness.'
As such:
' OpCo audit guidelines will identify the proportion of the total HSE audits to be independent audits,
within BusCom guidelines.'
' The BusComs will monitor that OpCos have a structured programme for HSE audits in place.'
The OU internal HSE audit guidelines need to be updated from time to time in light of changes in
risks or risk acceptance criteria resulting from changing internal and external forces which include
legislation and technological development.
Also included within the audit directing process is final approval of the annual OU audit plan, the
formulation of which is covered in the Chapter 4.
4 Plan Audits
These standard types of audit focus on the HSE-critical activities as indicated below:
Types of HSE Audit in the EPBM
The sequential driver activity Produce is individually assessed by facilities audits. Other
sequential driver activities i.e. Explore, Appraise, Develop and Abandon, are assessed by
audits of the recurrent execution activities as follows:
Drilling and Well Operations as Drilling Audits.
Survey Operations as Seismic Audits.
Facility Design and Construction as Start Up Audits
Abandonment should be subject to an environmental audit. Air operations are subject to audit by Shell
Aircraft.
The standard packages provide for common audit methodology and scope along approved Group and
SIEP guidelines. These comprise BusCom standards which are compatible with IAG and corporate
HSE guidelines. Reference is made to Appendix 2 for a scope description of these audit types.
The first four of the above audits types are structured to provide comprehensive coverage of all
elements of the HSE-MS; their scope includes detailed reference to HSE Case documentation or risk
analysis material already available within the OU. The separate Occupational Health and
Environmental audits are aimed at OU-wide management. These require SIEP specialist skills
additional to the level normally provided in conducting the first four audit types.
All audits, regardless of being OU or SIEP-led, are essentially review processes of the OU
business controls to establish that they are applied, effectively and efficiently, and comply
with OU requirements. For HSE audits it is essential to verify that all risks have been
identified, adequate controls have been identified and that controls are complied with. Given
the inevitably wide scope and limited duration of SIEP-led HSE audits, this verification will
be done via sampling as detailed verification of all the risk elements of the audited facility or
activity cannot be achieved. As such the SIEP-led audits focus on:
verification that structured risk assessment has been applied to the key HSE risk elements
of the facility or activity,
sample whether these risks have been appropriately assessed and the correct controls have
been identified, and
sample whether these controls are adequately implemented and complied with.
By limiting the audit scope the sampling can be improved thus the verification can be done more
thoroughly.
The standard audit packages provide guidelines to meet these principle objectives in which
compliance observations are the key towards conclusions on adequacy of controls. Where possible
SIEP-led audits will attempt to identify root causes for the observed deficiencies.
The packages are OU independent and, with reference to Chapter 6, the contents will require some
tailoring to fit the defined scope for individual OU audits.
In addition to the above, on OU request, SIEP will provide HSE auditing services as related
to miscellaneous OU specific activity or theme audits, such as:
Transport audits,
Emergency Response audits,
HSE management of contractors audits,
Permit To Work audits, and
HSE training audits
Whereas these are covered in considerable depth in the first four of the above standard packages, OU
specific circumstances may occasionally justify a more concentrated assessment in dedicated audits.
The scope definition for these audits will invariably require more dialogue between the OU and
assigned SIEP lead auditors when compared to the standard packages.
There should be demonstrable continuity in each annual update of the five-year plan. It is at this stage
that OUs, within New and Regional Business Directorates (N/RBD) guidelines, will determine which
of the planned HSE audits will be SIEP-led. Appendix 1 states:
'Having established the total long term audit plan, the OpCo should identify the proportion to be
independent audits as opposed to internal audits, within such guidelines as may be issued by the
BusCom.'
Following agreement of the plans with the N/RBDs, the plans for SIEP-led HSE audits should be
submitted to EPS-HE for resource planning and execution scheduling within the overall EP
independent HSE audit programme. Timing of plan submissions should be in accordance with the
SIEP planning cycle, the details of which are communicated to each OU at the appropriate juncture in
the cycle. Plans for SIEP-led HSE audits must be firmed-up in advance of the commencement of Year
1.
EPS-HE should then nominate a leader for each audit identified as SIEP-led HSE audit (refer to
Chapter 12).
Audit duration is determined by the audit scope, the principles of team building, OU
participation for ownership and the need to present a report on site. With reference to the
scope typically covered in the standard audit packages as per Chapter 4.3 above, experience
has led to the following recommended BusCom standards for SIEP-led audits:
Facilities audits - 16-18 days
Start-up audits - 14-16 days
Activity audits - 12-18 days
Environmental audits - 12-14 days
Drilling audits - 10-14 days
Seismic audits - 8-10 days
Occupational Health audits - 7-12 days
OU plans for SIEP-led audits should be based on these durations whereas the precise duration of each
audit is determined as part of the detailed scheduling process of the individual audits. Deviations from
these guidelines may be justified following detailed consideration of the Terms of Reference (see
Chapter 5) and scope, and require approval by the nominated SIEP audit leader.
Objective
With reference to Sections 1.2 and 1.3 above, the principal objective of all HSE audits (except facility
start-up audits - see below), whether OU- or SIEP-led, is to assess the effectiveness of the corporate
HSE management system as applied to the specific facility, operation or activity. In this context the
HSE management system is either the formally defined HSE-MS or, where this does not exist, the
totality of those systems, procedures and practices used by the OU to manage HSE.
The principal objectives of a facility pre start-up audit differ slightly from the above but are
essentially to verify that:
the facility itself is in a fit state for start-up from an HSE perspective,
all associated resources, controls, procedures and services are available to support the new
activity, and
HSE management was effective through development, construction and commissioning of
the facility. The audit observations and recommendations in this context will be of
marginal benefit to the audited project, however learning points may be identified for
future OU projects of a similar nature.
Supplementary audit objectives may be defined as appropriate to the specific needs of the individual
OU or as dovetailing with the specialist expertise of the individual audit team members. This is an OU
responsibility.
As a standard all SIEP-led audits will deliver an opinion on the overall level of control in relation to
the individual elements of the HSE-MS. Depending on the results of this detailed assessment the audit
will be considered 'satisfactory' or 'unsatisfactory' (Chapter 6.4).
Scope
Definition of audit boundaries or scope for SIEP-led HSE audits is an OU responsibility and should
be in accordance with the outline agreed between OU and N/RBD in the Audit Plan.
The scope should include the entirety of the subject facility, operation or activity as appropriate,
including all relevant interfaces. The scope definition should be as specific as possible in relation to
the audit type. Where an EPS-HE standard package has been selected for conducting the audit, the
scope should be tailored to the standard audit methodology as detailed in this manual. For example,
the scope definition for a facility audit should define boundary limits, specifically including or
Standards
The standards for assessment for all HSE audits should include, in priority order:
laws and regulations of the country,
OU current standards and procedures including HSE-MS and HSE Case(s), and
standards specified in the Basis for Design (covering design, construction, commissioning
and operation).
SIEP-led audits will be expected to comment on any shortfall in the above in relation to Group
policies, guidelines and standards.
Reporting
Reporting requirements in the TOR should provide for the audit results to be presented to the auditee
and relevant members of OU management, and for delivery of a draft report at the end of the audit.
Reports of SIEP-led HSE audits will be stand-alone. Appendix 1 states that:
'Findings shall be detailed and effective. Follow-up actions shall be defined and secured.'
The report will contain recommended actions which are classified in accordance with the seriousness
of the observed and documented weaknesses or deficiencies. All SIEP-led audits will use the
classification methodology as outlined in the IAG (Ref. 1). Further details are provided in Chapter
6.3. The classification of individual recommendations may form the basis for OU-specific ranking
methodology.
Where practical, weaknesses and recommendations will be grouped together to facilitate further
analysis of root causes and formulation of generic recommendations. Where identified, structural
weaknesses, deficiencies and recommendations will be highlighted in the report Main Findings.
Notwithstanding this, translating audit observations and recommendations into agreed actions
assigned to action parties is essentially a post audit activity and is an OU responsibility.
The report will demonstrate how either the individual or the aggregate of the observed weaknesses
have been used to assess the individual HSE-MS elements of the subject facility, operation or activity.
Further details are provided in Chapter 6.4.
Following the completion of final report editing in Central Offices, the SIEP audit leader will, within
one month of the end of the audit, issue the formal report as per the agreed distribution list.
Distribution will be restricted to OU-approved addressees which should include EPS-HE and the
relevant N/RBD. Although the report will be registered with the SIEP EP library, the OU will remain
the owner of the report and as such will define access.
As a minimum, prior to commencing the audit, all team members should be expected to have read the
guidelines as contained in this document.
All team members must commit to participate full-time in the audit unless agreed otherwise by the
audit leader in advance of confirmation of the team composition.
5.3 Audit timing and duration
The start date for an audit should be arranged by mutual agreement between the auditee and the audit
leader.
The precise timing of facility and activity HSE audits is normally not critical and these should be
closely aligned with the annual audit plans. The timing of pre start-up audits, being project-related,
requires a balance between project completion - i.e. preparedness for audit - and time required for
corrections as resulting from critical audit findings. Ultimately, the auditee should decide the start-
date which should be fixed at least one month in advance of commencement of the pre start-up audit.
Durations of SIEP-led audits should normally align with those given in Section 4.5. However, taking
into account the specific audit scope, the auditee, audit leader, IA Department representative or the
relevant line manager may propose a duration outside the recommended time frame. Such variations
must be agreed by the SIEP audit leader who carries ultimate responsibility for the successful
completion of the audit.
All SIEP-led HSE audits include an element of training for those team members which are lacking in
previous HSE audit experience. This will be provided by the audit leader at the commencement of the
audit. The time required for this is included in the guidelines provided in Section 4.5.
6 Perform Audits
6.1 Auditkit
'Auditkit' presents a task listing and set of tools to aid the SIEP audit leader in the conduct of an audit.
It includes sample slide presentations, questionnaires, templates and guidelines and can be customised
and supplemented by the leader to suit the individual audit requirements. Use of 'Auditkit' forms part
of the training of SIEP audit leaders.
'Auditkit' is available on the EP 95000 CD-ROM and on the Shell World Wide WEB. In using
'Auditkit' from CD-ROM it is advisable to verify the latest version with EPS-HE, as it is planned to
update 'Auditkit' on a regular basis.
The following is an explanation of the generic audit process, the detail of which will be defined by the
audit leader at commencement of each audit.
Ideally, the opening presentation should be followed by a presentation by the auditee to familiarise the
team with the audited operation, explain corporate and departmental objectives, summarise HSE
performance and to identify any areas requiring special attention or sensitivity.
These initial presentations should be followed by a team meeting in which the audit leader briefs the
team members on the conduct of the audit, allocates areas of investigation to team members and
makes plans for team visits. This meeting will also identify the report structure and outline the report
contents listing. Depending on the composition of the team and their previous audit experience, the
initial part of the briefing may include an element of training in audit techniques.
6.3 Organisation
The team briefing slides in 'Auditkit' may be used by the leader at key milestones throughout the
audit. They remind team members of key aspects to facilitate the smooth running of the audit and
production of a quality report. Aspects included are interview strategy and guidelines on conduct,
verification of findings, identification of root causes of deficiencies, formulating audit actions and
report drafting/formatting.
Work distribution
Following team introduction, the team leader will assign responsibilities for writing sections of the
audit report to individual team members, depending their specific expertise.
Team management
Team members are normally paired in relation to the expertise of individuals and the assigned tasks.
Each pair makes its individual programme of document reviews, visits and interviews. Following this
preparation, further team meetings will confirm plans and eliminate possible overlaps or omissions in
the audit scope.
Facility/activity visits
It is useful, early in the programme, for the whole team to visit the main audited location as a group,
accompanied by the auditee or his delegate. This will help the audit team gain an overview and allow
the more experienced auditors in the team to identify "leads" to the less experienced members.
Individual auditor visits will be conducted at a later stage in the audit.
Documentation of facts/findings
As the audit progresses, team members should document and verify their findings and formulate
remedial actions. Frequent team meetings should be held to allow team members to share findings,
use team expertise in defining actions, discuss issues, identify underlying root causes and define the
recommendations of a broader nature.
Report drafting
One or more drafts of the audit report may be made and distributed among the team to promote
cohesion, identify gaps, eliminate overlaps and improve structure and quality of the document. Team
members should be encouraged to discuss their drafts with appropriate staff within the audited
organisation in order to improve quality and transparency of their findings and recommendations,
minimise later misunderstanding and maximise buy-in to the audit results.
Certain parts of Chapters 3 and 4 are interlinked and care is required to avoid duplication. The
detailed audit findings and recommendations should be given in Chapter 4 whereas Chapter 3 should
focus on the root causes and recommendations related to the findings of Chapter 4.
Audit recommendations
Particular attention will be required to ensure that audit recommendations are stand-alone and
SMART - Specific, Measurable, Achievable, Realistic and Time-based. The audit team may include
views on required urgency, but defining the implementation timing of individual audit
recommendations remains an auditee responsibility.
All audit recommendations will be classified in accordance with the definitions of the IAG
(Ref. 1) for rating of weaknesses. In an HSE context these are translated as follows:
Weakness Level Definition
Serious A serious weakness exposes the company to a major extent in terms of achievement of the
corporate HSE objectives or results.
High A high weakness is one which, though not serious, is essential to be brought to the attention of
the senior management team. This should also include any otherwise medium weakness which is
a repeat finding from a previous report.
Medium A medium weakness could result in a perceptible and undesirable effect on achievement of HSE
objectives.
Low A low weakness has no major HSE impact at the process level but nevertheless its correction
will assure greater effectiveness/efficiency in the process concerned.
In experiencing difficulty in establishing weakness levels, weaknesses may be ranked in terms of the
expected impact, and dividing lines may be drawn to establish precise cut-off points. Classification
should preferably be based on team consensus, but ultimate accountability for classification lies with
the audit leader.
All observations of weaknesses leading to recommendations will be detailed in the audit report. The
recommendations subsequently classified as 'low' will be excluded from the audit report and will be
issued as an audit memo from the audit leader to the auditee. The memo will be appended to the audit
report.
Weaknesses are classified as part of the audit process to assist auditors in arriving at the assessment of
the individual HSE-MS elements and the subsequent overall audit result. Auditee disagreement with
the documented classifications should not preclude timely close-out of the audit recommendations
inclusive of documented audit trail.
The existing four point scale currently used in SIEP-led HSE audits is essentially equivalent to the
IAG terminology. Its precise wording has been formulated to improve focus and clarity of the audit
statement and as such it will be retained as follows:
Having read the draft audit report in detail, and having participated in the report editing sessions and
the classification of weaknesses and recommendations, each team member should make his own
assessment of each element. An audit assessment questionnaire, an example of which is provided in
'Auditkit', may be used to structure this process. The results should then be debated within the team
until a consensus is achieved, although ultimate accountability for assessment lies with the audit
leader.
To arrive at the audit opinion on the overall level of control for the subject area, any HSE-MS element
assessed to be 'double negative' will result in an 'unsatisfactory' audit.
Main findings
Having completed the assessment of the HSE-MS elements and concluded the overall audit result, the
Main Findings should be drafted by the leader and reviewed and agreed within the team. Where
possible they will highlight root causes for the observed deficiencies. They should be communicated,
together with HSE-MS element assessment and the audit opinion, to the auditee not later than the end
of the working day preceding the concluding presentation of the audit results. Whilst the content of
the Main Findings is determined and agreed by the team, the leader should agree the factual
correctness and discuss the precise wording with the auditee.
Every effort should be made to provide the auditee with a preliminary draft report to assist in
understanding the context of the Main Findings.
Final presentation
With the final draft report complete, a formal presentation should be given to the auditee by the team
leader, in the presence of the whole audit team. The presentation should be a factual summary of the
7 Apply Results
With reference to Chapter 2, application of audit results is not strictly part of the IAPM process.
However, with reference to Appendix 1, SIEP-led HSE audits specifically include assessment of the
implementation or application of the recommendations of previous independent audits. As such it is
covered in this manual in outline.
Internal to OU
The process of translating audit recommendations into agreed actions assigned to an action party is an
OU responsibility. Assigning an audit follow-up co-ordinator is a widely adopted and successful
approach. The follow-up process should itself be auditable and an OU register of deficiencies and
corrective actions ensures that deficiencies are not overlooked and allows overall prioritisation.
Subsequent decisions should be recorded, including decisions to do nothing or change action parties.
Periodic reports are needed to keep the register up-to-date and inform management. A multi-user
access tracking system will allow OU staff to update and check status and reduces the amount of
unread information in circulation. It will also assist auditors in verifying that audit follow-up is
adequately managed.
Where a deficiency has been found in one part of the OU and corrective action recommended, the
audit follow-up co-ordinator must consider the broader significance and if lateral corrective action
may be needed e.g. if an operational audit has identified a weakness in the application of permits to
work in one operational unit, other operational units should be checked for the same weakness.
Verification of lateral application of audit recommendations should be a key element in the scope of
all audits.
External to OU
In conducting HSE audits SIEP staff will identify issues and practices which warrant communication
to other OUs. In finalising the audit the SIEP audit leader will highlight these to OU management and
request approval for SIEP dissemination of this information. Having obtained OU approval, the SIEP
audit leader is responsible for ensuring that the relevant SIEP organisation is alerted to this
information.
8 Monitor Follow-Up
Monitoring of audit follow-up is an OU responsibility. However, with reference to the guidelines
provided in Appendix 1, SIEP-led HSE audits specifically include assessment of the follow-up to
recommendations of previous independent audits. As such it is covered in this manual in outline.
Further guidance is provided in the IAG (Ref. 1).
The IA Department should maintain a register of audit recommendations in which the status
of each OU open action is regularly updated. The following may serve as a guideline:
Completed One off items physically completed.
Continuing items instructions issued and actioned for the first time
Rejected The objective is not accepted and the authorised variance detailing the reasoning has been
documented.
Varied The same objective is to be achieved by a different route; should identify whether it is
"agreed" or "completed".
Agreed Specification of action has been decided, and expenditure has been authorised and
instruction to go ahead to completion given.
Study Not yet categorised.
A summary of the status of open audits should periodically be presented to the IAC who will assess
the adequacy of follow-up activity and expedite any necessary OU remedial action. Responsibility for
taking the necessary action, however, should remain with the line, completed actions should be
formally documented and signed-off by persons of appropriate seniority. Documentation of closed-out
items should be retained for possible inspection during subsequent audits.
With reference to the guidelines in Appendix 1, approved justifications of variations or rejections of
recommendations from SIEP-led audits will be copied to the audit team leader to avoid
misinterpretation of recommendations. There is no further requirement to report routine audit follow-
up details to the SIEP audit leader.
The results of each such review should be included in an annual report. Review of this report should
be an integral element of the IA improvement process.
A supervisory review of each audit provides material for a periodic review of the way audits are
conducted in house. Especially in those OUs where HSE audits are part of the role of Internal Audit,
the HSE function should be involved in these supervisory reviews.
In addition to audits, incident investigations may also identify areas where controls need to be
improved, or where the audit process needs to verify effectiveness of the HSE management process.
Each incident should be reviewed to decide whether an audit before the incident could have identified
the deficiencies. Failing to do this may require the scope of the HSE audits to be extended.
Other assessments of the audit process come from SIEP-led HSE audits and Business Control
Reviews. There is also an increasing involvement of outside bodies in setting standards for audits and
auditors, particularly in the environmental area (EU Environmental Management and Audit
Regulation - EMAS - Ref. 6). In general, the requirements set out in EP 93-1600 (Ref. 7) and this
guideline exceed external requirements, although additional documentation may be required for
formal compliance.
Changes to the audit process need to be endorsed by the OU IAC and formalised by updating the OU
audit manual.
12.1 Staffing
Within SIEP, the SBS Directorate maintains a pool of qualified HSE audit leaders to assist
OUs conduct their audit programmes. The SIEP HSE audit leaders occupy their positions for
a period of 2-3 years as part of their career development. Prerequisites for SIEP audit leaders
are as follows:
minimum level JG2,
CEP paralleling the current JG level of potential auditees,
at least 15 years experience relevant to the types of audit that they will conduct,
technical/operational HSE management experience,
sound interpersonal and communication skills, and
qualities of independence, objectivity and analysis.
Prior to leading audits, SIEP audit leaders will undergo training including the following:
Technical Audit course (EP04),
Managing HSE in the Business Course (V2FA),
Helicopter Underwater Escape Training (HUET) (periodically renewable),
Basic Offshore Survival Training (periodically renewable), and
participation in two HSE audits led by competent SIEP audit leaders.
Suitably qualified SIEP staff will be made available to participate in SIEP-led audits in accordance
with resourcing plans as agreed with EPS-HE at the start of the activity planning period. SIEP audit
leaders are responsible for nominating and approving individual SIEP staff who, in addition to having
suitable audit scope related experience, should be JG3 or higher although a JG4 may exceptionally be
included. They should attend the Technical Audit Course prior to participation in their first audit.
Selected SIEP staff will be communicated to OU auditees, highlighting relevant experience and
selection criteria used.
Following similar principles, OUs should have a means to identify line staff suitably qualified to
participate in SIEP-led HSE audits. Approval of nominated OU staff for participation in SIEP-led
audits is a joint responsibility of auditee and SIEP audit leader.
12.2 Administration
The SIEP audit leader should prepare a budget in advance of each SIEP-led audit which covers all
SIEP costs, including preparation time, travel and accommodation. The budget should be formally
approved by EPS-HE. Overall SIEP related audit cost will be communicated to the auditee prior to
commencing the audit. On completion of the audit, excessive variation (>10%) from the budget
should be justified by the audit leader.
The audit leader is responsible for maintaining audit correspondence files from inception until two
years following completion of the audit. The audit leader will register a copy of the audit report in the
EP library where it will be retained indefinitely. The reports may provide benchmarks in monitoring
the development of the facility or activity concerned and evidence of an active search for deficiencies.
Access to the reports will be specified by the OU.
APPENDIX I
GUIDELINES FOR THE APPLICATION OF HEALTH,
SAFETY AND ENVIRONMENTAL (HSE) AUDITING
Endorsed by the HSE Advisers Panel,July 1996
(Original was signed by the Chairman, R. Laufs, PXE)
1 Introduction
1.1 General
HSE issues can give rise to major business risks. The Health, Safety and Environment Management
Systems (HSE-MS), which are currently being implemented by Group companies, should include
well structured HSE audit systems. Auditing forms an important element in systems designed to
monitor, manage and contain HSE issues.
The roles and responsibilities for HSE Auditing in Shell were first outlined in the note from HSE to
Co-ordinators dated 2 November 1987. These have been refined with experience and discussion and
the principles stated by Legal in the context of Operating/Service Company relationships.
The reorganisation of the Service Companies (ServCos) entails some modification to the interplay
between the various parties involved in HSE audits. The basic principles underlying HSE audits
remain unchanged. For the sake of clarity, they are summarised in this note.
1.2 Intent
These corporate guidelines provide the basis for establishing individual HSE audit policies and plans
for Operating Companies (OpCos) and are intended for General managers and senior managers
accountable for OpCo HSE performance or involved in HSE auditing.
The guiding principle for HSE audits is that it is an OpCo management responsibility to conduct or
have conducted HSE audits1) . The BusComs will monitor that OpCos have a structured programme
for HSE audits in place.
These Guidelines on HSE Auditing are consistent with Group Internal Audit Guidelines.
1 ) H SE audits of joint ventures will depend on the contractual arrangements, in particular the extent of
involvement of Shell companies or staff in the operation or management of the joint venture, as covered in
Associated Company Guidelines.
2 ) Independent HSE-MS audit has been used here to mean an HSE audit of a Company earned out by a
2 Criteria
Due diligence requires that:
HSE auditing shall be a responsibility of the management of each OpCo.
hareholders will expect OpCos' audit programmes to include independent HSE audits.
The depth and frequency of HSE audits will be based on an assessment of the various HSE
risks.
Terms of reference, scope, objectives and time-table shall be agreed and specified.
The competence of auditors shall be assured and verified.
The audit report shall be a formal and independent document.
Specificity and transparency of the audit shall be the key.
Findings shall be detailed and effective.
Follow-up actions shall be defined and secured.
Monitoring of follow-up shall be an integral part of the auditing process.
3 Application
Each of the criteria is expanded below, to explain how it should be met.
requirements, Group Policy and other corporate Group Guidelines and OpCo standards.
The OpCo HSE Management System scope and content shall be assessed by comparison with the
Group model, including control of technical integrity. Its effectiveness shall be assessed against
BusCom's HSE Management System objectives.
Committee's (IAC) satisfaction. The line shall formally approve or reject justifications for rejecting or
varying audit recommendations. Periodic internal audits of the implementation process will be
included in the plan.
Approved justifications of variations or rejections of independent audit recommendations will be
copied to the audit teamleader to avoid misinterpretation of recommendations.
Independent audits will include assessment of the implementation of the recommendations of
previous independent audits.
APPENDIX II
HSE-MS AUDIT REPORT - MODEL CONTENTS LISTING
1 EXECUTIVE SUMMARY
1.1 Introduction
1.2 Scope
1.3 Main findings
1.4 Audit opinion
2 AUDIT ADMINISTRATION
3.6 Planning
3.6.1 Corporate level planning
3.6.2 Process level planning
3.6.3 Activity and task level planning
3.6.4 Contingency and emergency planning
3.9 Audit
3.9.1 Corporate auditing
3.9.2 Departmental and contractor auditing
3.9.3 Audit follow-up
APPENDIX IIa
SECTION 4 - FACILITIES AUDITS
4.1 Containment
4.1.1 Wells, flowlines and manifolds
4.1.2 Process systems
4.1.3 Flaring and venting systems
4.1.4 Drains systems
4.1.5 Pipelines
4.1.6 Product storage and loading facilities
4.1.7 Inspection and corrosion management
4.1.8 Emission control, effluent and waste management
APPENDIX IIb
SECTION 4 - SEISMIC AUDITS
4.1 Health
4.1.1 Health Risks Assessment (HRA)
4.1.2 Risk control measures
4.1.3 Medical checks
4.1.4 Medical records
4.1.5 Health promotion
4.1.6 Medevac response
4.4 Security
APPENDIX IIc
SECTION 4 - DRILLING AUDITS
APPENDIX IId
SECTION 4 - ENVIRONMENTAL AUDITS
4.7 Engineering
4.7.1 Project management
4.7.2 Design
4.7.3 Construction/commissioning
APPENDIX IIe
SECTION 4 - OCCUPATIONAL HEALTH AUDITS
APPENDIX III
HSE-MS ASSESSMENT ELEMENTS
Audit results should, in principle, be based on the assessment of the elements of the model
HSE-MS which are as follows:
1 Leadership and Commitment
2 Policy and Strategic Objectives
3 Organisation, Responsibilities, Resources, Standards and Documentation
4 HEMP
5 Planning and Procedures
6 Implementation and Monitoring
7 Audit
8 Management Review
For these reasons the audit assessment elements are defined as follows:
1 Leadership and Commitment
2 Policy and Strategic Objectives
3 Organisation and Responsibilities
4 Resources and Competence Assurance
5 HEMP
6 Planning
7 Standards, Procedures and Document Control
8 Implementation and Monitoring
9 Audit
10 Management Review
For clarity purposes the report contents (Appendix 2) will be aligned with the assessment elements.
References
1 Internal Audit Guidelines (December 1995)
2 Statement of General Business Principles (July 1994)
3 Business Control Guidelines (January 1992)
4 HSE Management System (September 1994)
5 EP Business Model - Version 3 - EP 95-7000 (August 1995)
6 EU Environmental Management and Audit Regulation
7 EP Guideline on Audits and Reviews EP 93-1600 (November 1993)
8 EP Business Governance Guide (July 1996)
9 Audit and Review Services Guide - EP 96-2021 (Final Draft July 1996)
58 Revision