1

PETRONAS TECHNICAL STANDARDS

HEALTH, SAFETY AND ENVIRONMENT

Tier 3 HSE ASSURANCE

(GUIDELINE)

PTS 60.0102
JUNE 2006

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PREFACE

PETRONAS Technical Standards (PTS) publications reflect the views, at the time of publication, of
PETRONAS Group of Companies.

They are based on the experience acquired during the involvement with the design, construction, operation and
maintenance of processing units and facilities. Where appropriate they are based on, or reference is made to,
national and international standards and codes of practice.

The objective is to set the recommended standard for good technical practice to be applied by PETRONAS
Group of Companies in oil and gas production facilities, refineries, gas processing plants, chemical plants,
marketing facilities or any other such facility, and thereby to achieve maximum technical and economic benefit
from standardisation.

The information set forth in these publications is provided to users for their consideration and decision to
implement. This is of particular importance where PTS may not cover every requirement or diversity of
condition at each locality. The system of PTS is expected to be sufficiently flexible to allow individual
operating units to adapt the information set forth in PTS to their own environment and requirements.

When Contractors or Manufacturers/Suppliers use PTS they shall be solely responsible for the quality of work
and the attainment of the required design and engineering standards. In particular, for those requirements not
specifically covered, the Principal will expect them to follow those design and engineering practices which will
achieve the same level of integrity as reflected in the PTS. If in doubt, the Contractor or Manufacturer/Supplier
shall, without detracting from his own responsibility, consult the Principal or its technical advisor.

The right to use PTS rests with three categories of users:

1) PETRONAS and its affiliates.

2) Other parties who are authorised to use PTS subject to appropriate contractual arrangements.

3) Contractors/subcontractors and Manufacturers/Suppliers under a contract with users referred

to under 1) and 2) which requires that tenders for projects, materials supplied or - generally -
work performed on behalf of the said users comply with the relevant standards.

Subject to any particular terms and conditions as may be set forth in specific agreements with users,
PETRONAS disclaims any liability of whatsoever nature for any damage (including injury or death) suffered
by any company or person whomsoever as a result of or in connection with the use, application or
implementation of any PTS, combination of PTS or any part thereof. The benefit of this disclaimer shall inure
in all respects to PETRONAS and/or any company affiliated to PETRONAS that may issue PTS or require the
use of PTS.

Without prejudice to any specific terms in respect of confidentiality under relevant contractual arrangements,
PTS shall not, without the prior written consent of PETRONAS, be disclosed by users to any company or
person whomsoever and the PTS shall be used exclusively for the purpose they have been provided to the user.
They shall be returned after use, including any copies, which shall only be made by users with the express prior
written consent of PETRONAS. The copyright of PTS vests in PETRONAS. Users shall arrange for PTS to be
held in safe custody and PETRONAS may at any time require information satisfactory to PETRONAS in order
to ascertain how users implement this requirement.

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NOTE FOR USERS

This is a PETRONAS Technical Standard PTS document.

The PETRONAS Management Committee (MC) has agreed in its meeting of 13 May 1992,
that all Operating Units (OPUs) be directed to adopt PETRONAS Technical Standard (PTS)
for implementation. The PTS to be the basic PETRONAS standard. OPUs desirous of
applying other standards on the ground that these standards were technically superior or
more compatible, should seek the Technical Standard Steering Committee. (TSSC) prior
approval for adoption or for modification of the current PTS.

(Please note that this standard is based on Shell standard. Essential adaptation to meet
PETRONAS specific needs will be done in due course).

Technical Service Department

PETRONAS
August 2004

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HSE MANUAL AMENDMENT RECORD SHEET

PTS Number: 60.0103
PTS Title: MANUAL FOR PETRONAS-LED HSE ASSURANCE

Chapter Section Description Issue Date Revision Date Approve

No. No. No. No. by :
(initial)
All All Renumbering 1 June 1 June IGA
to PTS 06 2006
60.0102 Tier
3 HSE
Assurance

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CONTENTS

FOREWORD

1. RATIONALE FOR INDEPENDENT HSE - MS ASSURANCE

1.1 INTRODUCTION
1.2 PURPOSE OF HSE ASSURANCE
1.3 OBJECTIVE OF PETRONAS-LED ASSURANCE
1.4 BUSINESS CONTROLS AND HSE - MS ASSURANCE

2. THE INTERNAL ASSURANCE PROCESS

3. DIRECT THE ASSURANCE PROCESS

4. PLAN ASSURANCES

4.1 HSE ASSURANCE PHILOSOPHY AND PROGRAMME

4.2 FREQUENCY OF HSE ASSURANCES
4.3 STANDARD HSE ASSURANCE PACKAGES
4.4 FORMULATION OF HSE ASSURANCE PLANS
4.5 DURATION OF HSE ASSURANCES

5. SCHEDULE PETRONAS-LED ASSURANCES

5.1 TERMS OF REFERENCE

5.2 ASSURANCE TEAM COMPOSITION
5.3 ASSURANCE TIMING AND DURATION

6. PERFORM ASSURANCES

6.1 OPENING PRESENTATIONS AND TEAM BRIEFING

6.2 ORGANISATION
6.3 FINALISATION OF THE ASSURANCE

7. APPLY RESULTS

8. MONITOR FOLLOW-UP

9. ANALYSE AND IMPROVE PROCESS

10. ASSESS OVERALL CONTROL FRAMEWORK

11. INITIATE IMPROVEMENTS TO FRAMEWORK

12. MANAGE STAFFING AND ADMINISTRATION

12.1 STAFFING
12.2 ADMINISTRATION

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APPENDICES

I Guidelines for the Application of Health, Safety and Environmental (HSE)

Assurance
II HSE-MS Assurance Report - Model Contents Listing
III HSE-MS Assessment Elements

GLOSSARY OF TERMS AND ABBREVIATIONS USED

REFERENCES

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FOREWORD

Group-wide requirements covering all types of assurances are defined in the Internal
Assurance Guidelines (IAG) (Ref 1) issued by the Corporate Internal Assurance Department.

The objective of this document is to convey the principles and practice of independent
PETRONAS-led HSE assurance in an HSE Management System (HSE-MS) context as
practised in the PETRONAS Operating Units (OPU/JVs).

This manual provides guidance to lead assessors, assurance team members, assesses and line
managers. It provides a methodology for balanced judgement of OPU/JV performance along
HSE-MS principles following a structured assessment technique. It is HSE specific and is
consistent with the higher level documents in PETRONAS. Generic principles, also
applicable to non-HSE assurances, 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
PETRONAS role in HSE assurance or practical experience of PETRONAS lead assessors
gained whilst conducting assessments.

The contents of this manual may assist OPU/JVs with an internal HSE assurance process
along principles similar to PETRONAS-led assurances.

1. RATIONALE FOR INDEPENDENT HSE-MS ASSURANCE

1.1 INTRODUCTION

The PETRONAS Guidelines for General Conduct provides policy guidance covering
all Group activity. The PETRONAS HSE policy is outlined as follows:

Quote

'It is the policy of PETRONAS 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
• give proper regard to the conservation of the environment.

PETRONAS 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.

PETRONAS establish health, safety and environmental practices and integrate them
in a commercially sound manner into each business as an essential element of
management'. Unquote.

In order to comply with the above and other policy elements, specific responsibilities
have been delegated to the managers of the individual OPU/JVs. The introduction to
Business Control Guidelines (Ref. 2) states:

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'It is the responsibility of chief executives and managers in PETRONAS Group of

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'.

1.2 PURPOSE OF HSE ASSURANCE

With reference to the above, assurance is a structured and independent means to

demonstrate that the required business controls framework is appropriate and
effective. The purpose of HSE assurance is:

'to provide OPU/JV management a systematic and independent assessment of the

consistent and effective implementation of the HSE-MS. The HSE assurance process
should enable OPU/JV management to ensure that potential or actual flaws are
remedied through effective follow-up action. Corporate HSE will monitor this and
may insist that follow-up action is completed or improved where necessary.'

1.3 OBJECTIVE OF PETRONAS-LED ASSURANCE

Appendix 1 further outlines the role of the OPU/JVs in independent HSE assurance
as follows:

'PETRONAS will expect OPU/JVs’ assurance programmes to include independent

HSE assurance.'

'OPU/JVs will usually engage CHSE assurance department to conduct independent

HSEMS assurance.'

'OPU/JVs too small for effective internal assurance shall make use of independent
assessors.'

Independent has been used here to mean an HSE assurance of an OPU/JV carried out
by a body external to the OPU/JV. In the PETRONAS environment it covers
OPU/JV assurance led by either PETRONAS (functional internal audit) or by a non-
PETRONAS Group organisation (external audit). Conducting has been used here to
mean leading the assessments.

Thus it follows that the objective of PETRONAS-led HSE assurance is to provide

independent assurance to OPU/JV management to enable them to demonstrate to
shareholders that the HSE aspects of a company's activity (or a defined part of that
activity) are adequately managed. Appendix 1 states:

'These assurances provide independent verification of the effectiveness of the

OPU/JV HSE-MS, including internal HSE assurance, 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'.

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'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.'

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1.4 BUSINESS CONTROLS AND HSE-MS ASSURANCE

Quality management principles demand that business controls are integrated within a
management system, and that correct operation of the system is verified by audit.

The required HSE Management System (HSE-MS) is defined in PTS 60.0101 Group Deleted: 2
Health Safety and Environment Management System Manual. The HSE-MS
incorporates the generic controls and provides specific detail and focus on HSE
aspects, including the Hazard and Effects Management Process (HEMP). An HSE-
MS in its highest-level overview can be illustrated as follows:

HSE Management System

Leadership and commitment

Policy and strategic objectives

Organization, responsibilities,
Resources, standards, etc.,

Hazards and effects management

Corrective
Planning and procedures action

Implementation Monitoring

Assurance Corrective action &

improvement s
Corrective action &
Management review improvements

HSE-MS assurances 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 PETRONAS-
led HSE assurance in HSE-MS context.

2. THE INTERNAL ASSURANCE PROCESS

PETRONAS-led assurances are part of the OPU/JV Internal Assurance (IA) process.

The IA process is applicable to all types of assurances, including HSE Assurance,

irrespective of whether these are OPU/JV led assessments or independent
assessments led by PETRONAS staff. The IAPM is represented as follows:

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Internal Assurance Process Model

Direct the assurance Initiate improvements Assess overall

process to framework control framework

Plan Schedule Carry out Analyze /

Assurance Assurance Apply Monitor Improve
Assurance
Process Process Results Follow-up Process
Process

Manage staffing / administration

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 assurance
scopes they are included to provide overview and to illustrate interfaces with other
processes.

3. DIRECT THE ASSURANCE PROCESS

Direction of the OPU/JV assurance process is the responsibility of the Internal

Assurance Board Committee (IABC), the composition of which is determined by the
OPU/JV. The role of the IABC, defined in the IAG (Ref. 1), relates to all types of
assurance including financial, commercial and technical. The Internal Assurance and
HSE Managers normally attend the IABC.

Fundamental to directing the assurance process is the production and maintenance of

adequate assurance guidelines - which include standards and procedures - and
ensuring their effective application. Each OPU/JV determines its own internal HSE
assurance guidelines, which is consistent with PETRONAS Group guidelines and
should include the following as a minimum:

• mission and vision statements for HSE, including assurance,

• required strategic development direction of HSE assurance,

• types of assurance to be conducted,

• minimum frequency for each type of assurance,

• duration range for each type of assurance,

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• requirements for evaluation and assessment and

• requirements for follow-up of assurance recommendations.

As a further element of the assurance direction process, PETRONAS will expect

OPU/JV assurance programmes to include independent HSE assurance. Appendix 1
states:

'Independent assurance shall verify the internal HSE assurance process, testing
reports, working files and implementation control, with sufficient sampling of
operations to test effectiveness.'

As such:

'OPU/JV assurance guidelines will identify the proportion of the total HSE
assurances to be independent assurances, within the business guidelines.'

'The Corporate Health Safety & Environment Committee will monitor that OPU/JVs
have a structured programme for HSE assurance in place.'

The OPU/JV internal HSE assurance 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 assurance directing process is final approval of the annual
OPU/JV assurance plan, the formulation of which is covered in the Chapter 4.

4. PLAN ASSURANCES

4.1 HSE ASSURANCE PHILOSOPHY AND PROGRAMME

The IAG (Ref. 1) requires that each OPU/JV develop an assurance programme to
cover all processes within a five-year cycle. For PETRONAS OPUs/JVs, about half
of the total process elements are considered to be HSE-critical and should be subject
to HSE assurance. The portion of HSE-critical process elements varies from around
70% for key asset management and related execution processes to less than 10% for
support processes. OPU/JVs should structure their HSE assurance programme in a
manner which demonstrably covers all HSE-critical processes. Appendix 1 states:

'In many OPU/JVs a formal HSE-MS with HSE Cases for critical activities is the
mechanism for such identification and control of risk and HSE assurance is an
important part of any HSE-MS.'

An assurance philosophy along HSE risk-based criteria will provide the basis for an
effective and efficient assurance programme. In developing a risk-based assurance
programme - what assurance should be performed, why and when - HSE-MS and
HSE Case documentation should serve as a key reference. These should provide a
comprehensive listing of processes, events and activities which are considered

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critical to the OPU/JV in terms of health, safety and environmental risk.

It is recognised that many OPUs/JV are yet to develop their assurance philosophy in
full along HSE risk-based criteria.

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4.2 FREQUENCY OF HSE ASSURANCE

Frequency definition for of each type of HSE assurance is an OPU/JV responsibility

and the frequencies should be specified in the OPU/JV HSE Assurance Guidelines.
As a guideline, Appendix 1 states:

'All business processes should be periodically assessed, and the frequency and depth
of HSE assurance of a particular activity should be appropriate for the degree of
potential risk.

Only OPU/JV management can fully assess their local circumstances and select the
appropriate frequency and depth of assurance appropriate for each activity. This
selection shall be formal and transparent, and shall be regularly reviewed to take
account of experience of incidents and changes in the OPU/JV's environment. An
assurance cycle should not be longer than five years as in that time major changes
may have taken place and the consequences for the integrity of the control
framework need to be verified.'

In following the above, the frequency at which individual processes or assets are
assessed should be subject to the degree of HSE risk, the criticality of the process in
relation to the business objectives and the perceived degree of control of that process.
As such, even well controlled processes or well managed assets may need to be
assessed more frequently than once every five years.

4.3 STANDARD HSE ASSURANCE PACKAGES

The following standard HSE assurance packages have been developed:

• Facility Operations HSE assurances,

• Facility Start-up HSE assurances,

• Seismic HSE assurances,

• Drilling HSE assurances,

• Environmental assurances and

• Occupational Health assurances

These standard types of assurance focus on the HSE-critical activities indicated as:

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The sequential driver activity “Produce” is individually assessed by facilities

assurances. Other sequential driver activities i.e. Explore, Appraise, Develop and
Abandon, are assessed by assurances of the recurrent execution activities as follows:

• Drilling and Well Operations as Drilling Assurances.

• Survey Operations as Seismic Assurances.

• Facility Design and Construction as Start Up Assurances

Abandonment should be subject to an environmental assurance. Air operations are

subject to assurance by PETRONAS.

The standard packages provide for common assurance methodology and scope along
approved PETRONAS Group guidelines. Reference is made to Appendix 2 for a
scope description of these assurance types.

The first four of the above assurances 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
OPU/JV.

The separate Occupational Health and Environmental assurances are aimed at OPU-
wide management. These require PETRONAS specialist skills additional to the level
normally provided in conducting the first four assurance types.

All assurances, regardless of being OPU/JV or PETRONAS-led, are essentially

review processes of the OPU/JV business controls to establish that they are applied,
effectively and efficiently, and comply with OPU/JV requirements. For HSE
assurances, 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 PETRONAS-led HSE assurances, this
verification will be done via sampling as detailed verification of all the risk elements
of the assessed facility or activity cannot be achieved. As such the PETRONAS-led
assurances focus on:

• verification that structured risk assessment has been applied to the key HSE risk
elements of the facility or activity,

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• sample whether these risks have been appropriately assessed and the correct
controls have been identified, and

• sample whether these controls have been adequately implemented and complied
with.

By limiting the assurance scope, the sampling can be improved thus the verification
can be done more thoroughly.

The standard assurance packages provide guidelines to meet these principle

objectives in which compliance observations are the key towards conclusions on
adequacy of controls. Where possible PETRONAS-led assurances will attempt to
identify root causes for the observed deficiencies.

The packages are OPU/JV independent and, with reference to Chapter 6, the contents
will require some tailoring to fit the defined scope for individual OPU/JV assurances.

In addition to the above, on OPU/JV request, PETRONAS will provide HSE

assurance services as related to miscellaneous OPU specific activity or theme
assurances, such as:

• Transport assurances,

• Emergency Response assurances, 

• HSE management of contractors assurances,

• Permit To Work assurances and 

• HSE training assurances

Whereas these are covered in considerable depth in the first four of the above
standard packages, OPU/JV specific circumstances may occasionally justify a more
concentrated assessment in dedicated assurances. The scope definition for these
assurances will invariably require more dialogue between the OPU/JV and assigned
PETRONAS lead assessors when compared to the standard packages.

4.4 FORMULATION OF HSE ASSURANCE PLANS

HSE assurance plans should be prepared as integral elements of the OPU/JV annual
business planning cycle. The timing of individual HSE assurances should be
determined and prioritised by the OPU/JV’s IA Department in consultation with HSE
and line managers and potential assessee, taking account of risk criteria and any new
or revised business objectives. The typical five-year cycle assurance plans should
identify:

Year 1 : precise assurance scope, outline terms of reference and timing of

assurances

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Year 2 : outline scope and quarterly phasing for Year 2

Year 3-5 : categories / titles per year.

There should be demonstrable continuity in each annual update of the five-year plan.
It is at this stage that an OPU/JV, within its business guidelines, will determine
which of the planned HSE assurances will be PETRONAS-led. Appendix 1 states:

'Having established the total long term assurance plan, the OPU/JV should identify
the proportion to be independent assurances as opposed to internal assurances, within
such guidelines as may be issued by the Business Sector Committee.'

After agreement, the plans for PETRONAS-led HSE assurances should be submitted
to Corporate HSE Unit for resource planning and execution scheduling within the
overall PETRONAS independent HSE assurance programme. Timing of plan
submissions should be in accordance with the PETRONAS planning cycle, the
details of which are communicated to each OPU/JV at the appropriate juncture in the
cycle. Plans for PETRONAS-led HSE assurances must be firmed-up in advance of
the commencement of Year 1.

Corporate HSE Unit should then nominate a leader for each assurance identified as
PETRONAS-led HSE assurance (refer to Chapter 12).

4.5 DURATION OF HSE ASSURANCES

Duration is determined by the assurance scope, the principles of team building,

OPU/JV participation for ownership and the need to present a report on site. With
reference to the scope typically covered in the standard assurance packages as per
Chapter 4.3 above, experience has led to the following recommended standards for
PETRONAS-led assurances:

• Facilities assurances - 16-18 days

• Start-up assurances - 14-16 days

• Activity assurances - 12-18 days

• Environmental assurances - 12-14 days

• Drilling assurances - 10-14 days

• Seismic assurances - 8-10 days

• Occupational Health assurances - 7-12 days

OPU/JV plans for PETRONAS-led assurances should be based on these durations

whereas the precise duration of each assurance is determined as part of the detailed
scheduling process of the individual assurances. Deviations from these guidelines

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may be justified following detailed consideration of the Terms of Reference (see

Chapter 5) and scope, and require approval by the nominated PETRONAS assurance
leader.

5. SCHEDULE PETRONAS-LED ASSURANCES

5.1 TERMS OF REFERENCE

The first step in scheduling any assurance is to define the detailed Terms of
Reference (TOR) as these may affect resource requirements and dictate the mix of
skills required within the assurance team. For PETRONAS-led assurances, either the
assessee or the PETRONAS assurance leader may initiate the TOR definition
process, but it is the assurance leader's responsibility to ensure that this process
commences at least three months in advance of the planned start date.

The TOR must have been agreed between assessee and assurance leader prior to the
start of the assurance. If this cannot be achieved, the assurance must be deferred until
such time that agreement is reached. Specifically for PETRONAS-led assurances the
TOR must be agreed at least one month in advance to secure a confirmed start date
with a view to travel arrangements.

The TOR must confirm objective, scope, standards, assessee, team members (see
Chapter 5.2), assurance methodology, and reporting requirements.

OBJECTIVE

With reference to Sections 1.2 and 1.3 above, the principal objective of all HSE
assurances (except facility start-up assurances - see below), whether OPU - or
PETRONAS-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 OPU to
manage HSE.

The principal objectives of a facility pre start-up assurance 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 assurance observations and recommendations
in this context will be of marginal benefit to the assured project, however learning
points may be identified for future OPU projects of a similar nature.

Supplementary assurance objectives may be defined as appropriate to the specific

needs of the individual OPU/JV or as dovetailing with the specialist expertise of the

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individual assurance team members. This is an OPU/JV responsibility.

As a standard all PETRONAS-led assurances 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 assurance will be considered 'satisfactory'
or 'unsatisfactory' (Chapter 6.4).

SCOPE

Definition of assurance boundaries or scope for PETRONAS-led HSE assurances is

an OPU/JV responsibility and should be in accordance with the outline agreed
between OPU/JV and Corporate HSE in the Assurance 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 assurance type. Where a standard package has
been selected for conducting the assurance, the scope should be tailored to the
standard assurance methodology as detailed in this manual. For example, the scope
definition for a facility assurance should define boundary limits, specifically
including or excluding named up- and down-stream pipelines and adjacent facilities.

If a PETRONAS-led assurance has not been conducted in an OPU/JV for more than a
year, it is recommended that the assurance scope includes assessment of the broader
aspects of corporate HSE-MS, including for example management commitment and
leadership, HSE policy, assurance, etc. (refer to Chapter 6.4). As the assurance
results in this scope context will usually be beyond the control of the assessee,
observations and recommendations should be aimed at senior management and IAC
level.

STANDARDS

The standards for assessment for all HSE assurances should include, in priority order:

• laws and regulations of the country,

• OPU/JV 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).

PETRONAS-led assurances will be expected to comment on any shortfall in the

above in relation to Group policies, guidelines and standards.

ASSESSEE AND CO-ORDINATOR

Nominating the assessee is an OPU/JV responsibility. The assessee should be an

individual, preferably the asset holder or process owner, clearly identified by name
and/or reference indicator. Multiple assesses should be avoided by nominating an

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assessee at the higher level where overall accountability for the assured operation or
facility is accepted.

Early nomination of an assurance co-ordinator has been proven instrumental in

getting PETRONAS-led assurances off to an efficient start. The incumbent will be
required to assist in liaison between assessee and PETRONAS and arrange logistics,
offices, documentation and accommodation for PETRONAS and third party
assurance team members. Combining these activities with the assessee
responsibilities is usually unsuccessful.

METHODOLOGY AND STRUCTURE

As a common approach to all assurances, assurance team members are required to

gather information by observation, through interviews and by checks of hardware and
documentation. An essential element in the assurance process is the conscientious
verification of facts and findings and the confirmation of the validity of
recommended actions. Where judgement is required, the result should be determined
by consensus within the assurance team in which the assurance leader has overall
responsibility for reaching a conclusion.

All PETRONAS-led HSE assurances will, in principle, be conducted in accordance

with Business Sector Committee standards, which follow the principles as
documented in HSE Manual.

REPORTING

Reporting requirements in the TOR should provide for the assurance results to be
presented to the assessee and relevant members of OPU/JV management, and for
delivery of a draft report at the end of the assurance.

Reports of PETRONAS-led HSE assurances 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
PETRONAS-led assurances 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 OPU/JV 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 assurance
observations and recommendations into agreed actions assigned to action parties is
essentially a post assurance activity and is an OPU responsibility.

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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, the PETRONAS assurance leader
will, within one month of the end of the assurance, issue the formal report as per the
agreed distribution list. Distribution will be restricted to OPU/JV -approved
addressees which should include Corporate HSE. Although the report will be
registered with the PETRONAS library, the OPU/JV will remain the owner of the
report and as such will define access.

5.2 ASSURANCE TEAM COMPOSITION

The correct balance of skills, expertise and seniority in an assurance team is a critical
success factor in the outcome of any assessment. Full agreement is required between
OPU/JV assessee and PETRONAS assurance leader before undertaking the task, in
which either party has the authority to decline the assurance process when an
appropriate team cannot be made available.

Qualification criteria for PETRONAS assurance leaders are detailed in Chapter 12.
Assurance team members should be selected such that their skills are appropriate to
the assurance type and scope. If an OPU/JV lacks the appropriate skills and expertise
to provide a suitable assurance team, the PETRONAS team leader will resource
additional team members from PETRONAS or other resource pools. This will be
agreed with the assessee in advance.

To ensure independence in assessing the individual and overall level of HSE control,
the PETRONAS-led assurance team should ideally be an equal mix of PETRONAS
and OPU/JV personnel. As a minimum, two PETRONAS members (including team
leader) are recommended. Team members from third parties or other OPU/JVs may
be proposed by either OPU/JV or PETRONAS where this would add value to the
assurance.

Team members should normally be Salary Grade E3 – E4, although an E2 may be

included where the incumbent has specific expertise relevant to the assurance scope.
As a minimum, one of the OPU/JV team members should be sufficiently senior to
represent the management view to the remainder of the assurance team. In the
interests of maintaining independence and objectivity, not more than one member of
the assurance team should be directly involved in the assured operation. For similar
reasons, PETRONAS assessors will not normally participate in OPU/JV assurances
within two years following an assignment in that OPU/JV.

All team members should be notified of their inclusion within the assurance team at
least three weeks prior to the start date. They should each be briefed on the TOR and,
if it is their first assurance, the assurance process. The responsibilities for these
briefings are as follows:

• OPU/JV IA department representative for OPU/JV team members,

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• PETRONAS assurance leader for PETRONAS team members,

• IA department representative for those third-party team members nominated by

the OPU/JV to participate in the assurance, and

• PETRONAS assurance leader for those third-party team members nominated by

PETRONAS to participate in the assurances.

As a minimum, prior to commencing the assurance, 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 assurance unless
agreed otherwise by the assurance leader in advance of confirmation of the team
composition.

5.3 ASSURANCE TIMING AND DURATION

The start date for an assurance should be arranged by mutual agreement between the
assessee and the assurance leader.

The precise timing of facility and activity HSE assurances is normally not critical and
these should be closely aligned with the annual assurance plans. The timing of pre
start-up assurances, being project-related, requires a balance between project
completion i.e. preparedness for assurance and time required for corrections as
resulting from critical assurance findings. Ultimately, the assessee should decide the
start-date which should be fixed at least one month in advance of commencement of
the pre start-up assurance.

Durations of PETRONAS-led assurances should normally align with those given in

Section 4.5. However, taking into account the specific assurance scope, the assessee,
assurance 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 PETRONAS assurance leader who carries ultimate responsibility for
the successful completion of the assurance.

All PETRONAS-led HSE assurances include an element of training for those team
members which are lacking in previous HSE assurance experience. This will be
provided by the assurance leader at the commencement of the assurance. The time
required for this is included in the guidelines provided in Section 4.5.

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6. PERFORM ASSURANCES

The following is an explanation of the generic assurance process, the detail of which
will be defined by the assurance leader at commencement of each assurance.

OPENING PRESENTATIONS AND TEAM BRIEFING

Each PETRONAS-led assurance will commence with an opening presentation by the

assurance leader to the assessee and relevant members of line management. This
presentation should cover:

• introduction of team members,

• terms of reference,

• assurance methodology,

• locations to be visited,

• interviewing methodology,

• planned timetable,

• report outline,

• classification and assessment criteria, and

• date and time of the final presentation of assurance results

Ideally, the opening presentation should be followed by a presentation by the

assessee to familiarise the team with the assessed 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

assurance leader briefs the team members on the conduct of the assurance, 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 assurance experience,
the initial part of the briefing may include an element of training in assurance
techniques.

6.2 ORGANISATION

The team will be briefed on key aspects to facilitate the smooth running of the
assurance 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 assurance actions and report drafting/formatting.

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WORK DISTRIBUTION

Following team introduction, the team leader will assign responsibilities for writing
sections of the assurance report to individual team members, depending on 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 assurance scope

FACILITY / ACTIVITY VISITS

It is useful, early in the programme, for the whole team to visit the main assessed
location as a group, accompanied by the assessee or his delegate. This will help the
assurance team gain an overview and allow the more experienced assessors in the
team to identify "leads" to the less experienced members. Individual assessor visits
will be conducted at a later stage in the assurance.

DOCUMENTATION OF FACTS / FINDINGS

As the assurance 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.

ASSURANCE REPORT CONTENTS

The standard report contents for PETRONAS-led assurances conducted in

accordance with the Assurance methodology is given in Appendix 2. The report
index is essentially structured in line with the elements of the model HSE-MS and is
subdivided to facilitate the assessment process. The report comprises:

Chapter 1 : the executive summary including main assurance findings and

assessment results.

Chapter 2 : assurance administration details including TOR and assurance follow-

up.

Chapter 3 : the generic elements of the HSE-MS, applicable to all types of HSE-MS
assurance.

Chapter 4 : the elements specific to the assurance type.

Where available, HSE-MS and HSE Case documentation will be key reference
material for both assurance review and report documentation. The standard index of

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report Chapters 3 and 4 may, if necessary, be adjusted to meet the specific scope and
requirements of the assurance. The proposed listing is designed to provide
comprehensive coverage when used in conjunction with the questionnaires in
'Auditkit' and significant variation should be unnecessary.

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REPORT DRAFTING

One or more drafts of the assurance 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 assured organisation in order to improve
quality and transparency of their findings and recommendations, minimise later
misunderstanding and maximise buy-in to the assurance results.

Certain parts of Chapters 3 and 4 are interlinked and care is required to avoid
duplication. The detailed assurance 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.

ASSURANCE RECOMMENDATIONS

Particular attention will be required to ensure that assurance recommendations are

stand-alone and SMART - Specific, Measurable, Achievable, Realistic and Time-
based. The assurance team may include views on required urgency, but defining the
implementation timing of individual assurance recommendations remains an assessee
responsibility.

All assurance 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
Definition
Level
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
I
n effect on achievement of HSE objectives.
Low A low weakness has no major HSE impact at the process level but
e nevertheless its correction will assure greater
x 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 assurance leader.

All observations of weaknesses leading to recommendations will be detailed in the

assurance report. The recommendations subsequently classified as 'low' will be
excluded from the assurance report and will be issued as an assurance memo from

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the assurance leader to the assessee. The memo will be appended to the assurance
report.

Weaknesses are classified as part of the assurance process to assist assessors in

arriving at the assessment of the individual HSE-MS elements and the subsequent
overall audit result. Assessee disagreement with the documented classifications
should not preclude timely close-out of the assurance recommendations inclusive of
documented assurance trail.

6.3 FINALISATION OF THE ASSURANCE

REPORT EDITING

The final draft report should be reviewed and agreed by all team members. The most
effective method for this is a team editing session in which the report is projected
from a word processor onto a screen visible to the whole team. Each section is then
reviewed in its entirety and issues are discussed with the objective of obtaining
unanimous agreement on final report text with each member offering his comments.
Assurance leaders shall have editorial control and a deciding vote in case of
disagreements. Editing may be conducted "on line" as the session progresses.

ASSURANCE ASSESSMENT OF LEVEL OF CONTROLS

One of the final stages in completing the assurance is the delivery of an assurance
opinion on the level of control for the individual elements of the model HSE-MS.
Whereas the model contains 8 elements, this assessment is conducted along 10
elements which are 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 Assurance

10 Management Review

Appendix 3 details the rationale for selection of these elements from the model HSE-

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MS.

The assessment terminology in the IAG (Ref. 1) is as follows:

Assurance Level of
Inference for senior management
Opinion concern
No follow-up required by assessee's function
Good Specific
head (IAC) member.
Fair Overall scope In addition to following up correction of any
for high or medium weaknesses the function head
enhancement should encourage general improvement in
control awareness.
Unsatisfactory Overall cause In addition to following up correction of any
for concern high or medium weaknesses the function head
should take affirmative action to ensure that
control standards in this area are raised.
Unacceptable Overall cause In addition to following up correction of
for grave serious, high or medium weaknesses the
concern function head should satisfy the senior
T management team concerning affirmative
action to raise control standards in this area.
T
The existing four-point scale currently used in PETRONAS-led HSE assurances is
essentially equivalent to the IAG terminology. Its precise wording has been
formulated to improve focus and clarity of the assurance statement and as such it will
be retained as follows:

Assurance
Inference for senior management
Opinion
A high standard of control requiring no additional management
++
attention.
A high enough standard of control for improvements to be handled
+
by the normal management involvement.
H Essential controls are in place, but deficiencies require focused
a- management intervention.
v Essential controls are missing or ineffective. Prompt management
i action is needed.
n
Having read the draft assurance 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 assurance
assessment questionnaire 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 assurance leader.

To arrive at the assurance 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'
assurance.

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MAIN FINDINGS

Having completed the assessment of the HSE-MS elements and concluded the
overall assurance 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 assurance opinion, to the assessee not later than the end
of the working day preceding the concluding presentation of the assurance 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
assessee.

Every effort should be made to provide the assessee 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
assessee by the team leader, in the presence of the whole assurance team. The
presentation should be a factual summary of the findings, key recommendations and
assessment results.

Selection and invitation of the audience is an assessee responsibility but should

include the assessee's immediate supervisor or manager. Other interested managers
and staff may attend.

Although preferably conducted by the assessee following the assurance, the

assurance leader, at assessee request, may give additional presentations to assessee's
subordinate staff and/or contractors.

ISSUE OF FINAL DRAFT AND FINAL REPORT

A copy of the final draft of the assurance report should be handed to the assessee
before the team leader leaves the OPU/JV. The formal report should be issued within
one month, a copy will be registered in the PETRONAS library with access
determined by the OPU/JV.

7. APPLY RESULTS

With reference to Chapter 2, application of assurance results is not strictly part of the
IA process. However, with reference to Appendix 1, PETRONAS-led HSE
assurances specifically include assessment of the implementation or application of
the recommendations of previous independent assurances. As such it is covered in
this manual in outline.

INTERNAL TO OPU/JV

The process of translating assurance recommendations into agreed actions assigned

to an action party is an OPU/JV responsibility. Assigning a follow-up co-ordinator is

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a widely adopted and successful approach. The follow-up process should itself be
assessable and an OPU/JV 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 OPU/JV staff to update
and check status and reduces the amount of unread information in circulation. It will
also assist assessors in verifying that assurance follow-up is adequately managed.

Where a deficiency has been found in one part of the OPU/JV and corrective action
recommended, the follow-up co-ordinator must consider the broader significance and
if lateral corrective action may be needed e.g. if an operational assurance 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 assurance recommendations should be a key element in the
scope of all assurances.

EXTERNAL TO OPU/JV

In conducting HSE assurances, PETRONAS staff will identify issues and practices
which warrant communication to other OPU/JVs. In finalizing the assurance the
PETRONAS assurance leader will highlight these to OPU/JV management and
request approval for PETRONAS dissemination of this information. Having obtained
OPU/JV approval, the PETRONAS assurance leader is responsible for ensuring that
the relevant PETRONAS organisation is alerted to this information.

8. MONITOR FOLLOW-UP

Monitoring of assurance follow-up is an OPU/JV responsibility. However, with

reference to the guidelines provided in Appendix 1, PETRONAS-led HSE assurances
specifically include assessment of the follow-up to recommendations of previous
independent assurances. 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 assurance recommendations in

which the status of each OPU/JV open action is regularly updated. The following
may serve as a guideline:

Completed One off items Physically completed.

Instructions issued and actioned for the
Continuing items
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.

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A summary of the status of open assurances should periodically be presented to the

IABC who will assess the adequacy of follow-up activity and expedite any necessary
OPU/JV 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 PETRONAS-led assurances will be copied to
the assurance team leader to avoid misinterpretation of recommendations. There is no
further requirement to report routine assurance follow-up details to the PETRONAS
assurance leader.

9. ANALYSE AND IMPROVE PROCESS

Analysis of the assurance process and implementation of improvements is an

OPU/JV responsibility. However, in the context of the HSE-MS element
Management Review, PETRONAS-led HSE assurances may include a review of this
IAG element. As such it is covered in this guideline in outline, further guidance is
provided in the IAG (Ref. 1).

Annual reviews of all HSE assurance activity conducted in each OPU/JV by OPU/JV
and PETRONAS, should be made within the respective organisations.

These reviews should include analysis of:

• numbers and types of assurances conducted,

• overall assurance results i.e. satisfactory/unsatisfactory,

• assurance results of HSE-MS element assessment,

• findings (to identify commonly recurring deficiencies),

• assurance participation by various departments,

• assurance training conducted,

• changes in the available assurance skills pool, and

• costs.

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 assurance provides material for a periodic review of the
way assurances are conducted in house. Especially in those OPU/JVs where HSE
assurances are part of the role of Internal Assurance, the HSE function should be

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involved in these supervisory reviews.

In addition to assurances, incident investigations may also identify areas where

controls need to be improved, or where the assurance process needs to verify
effectiveness of the HSE management process. Each incident should be reviewed to
decide whether an assurance before the incident could have identified the
deficiencies. Failing to do this may require the scope of the HSE assurances to be
extended.

Other assessments of the assurance process come from PETRONAS-led HSE

assurances. There is also an increasing involvement of outside bodies in setting
standards for assurances and assessors, particularly in the environmental area.

Changes to the assurance process need to be endorsed by the OPU/JV and formalized
by updating the OPU/JV assurance manual.

10. ASSESS OVERALL CONTROL FRAMEWORK

Assessment of the overall control framework is an OPU/JV responsibility. However,

in the context of the HSE-MS element Management Review, PETRONAS-led HSE
assurances may include a review of this IAG element. As such, it is covered in this
guideline in outline. Further guidance is provided in the IAG (Ref. 1) and the
PETRONAS Business Conduct Guidelines.

The OPU/JV should review the outcome of the year's HSE assurances together with
the results of other assurances, reviews, incident investigations and management
inspections to see if there are common underlying control problems which need
action at high level across the company. Areas of weakness should be correlated with
elements of OPU/JV HSE-MS with a view to appropriate corrective action.

11. INITIATE IMPROVEMENTS TO FRAMEWORK

As indicated in Chapter 2, this element of the IAG is not strictly part of the IA
process. It is a top-level management activity performed in relation to all assurances
and reviews conducted in the business. It is mentioned in this manual only to
illustrate the continuity in the overall process of dealing with assurances. Detailed
guidance is provided in Internal Assurance Guidelines (Ref. 1).

12. MANAGE STAFFING AND ADMINISTRATION

12.1 STAFFING

Within PETRONAS, Corporate HSE maintains a pool of qualified HSE assurance

leaders to assist OPU/JVs conduct their assurance programmes. The PETRONAS
HSE assurance leaders occupy their positions for a period of 2-3 years as part of their
career development. Prerequisites for PETRONAS assurance leaders are as follows:

• at least 15 years experience relevant to the types of assurance that they will
conduct, 

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• technical / operational HSE management experience,

• sound interpersonal and communication skills, and

• qualities of independence, objectivity and analysis.

Prior to leading assurances, PETRONAS assurance leaders will undergo training

including the following:

• Technical Assurance course,

• Helicopter Underwater Escape Training (HUET) (periodically renewable),

• Basic Offshore Survival Training (periodically renewable), and

• Participation in two HSE assurances led by competent PETRONAS assurance

leaders.

Suitably qualified PETRONAS staff will be made available to participate in

PETRONAS-led assurances in accordance with resourcing plans as agreed with
Corporate HSE at the start of the activity planning period. PETRONAS assurance
leaders are responsible for nominating and approving individual PETRONAS staff.
They should attend the Technical Assurance Course prior to participation in their first
assurance. Selected PETRONAS staff will be communicated to OPU/JV assesses,
highlighting relevant experience and selection criteria used.

Following similar principles, OPU/JVs should have a means to identify line staff
suitably qualified to participate in PETRONAS-led HSE assurances. Approval of
nominated OPU/JV staff for participation in PETRONAS-led assurances is a joint
responsibility of assessee and PETRONAS assurance leader.

12.2 ADMINISTRATION

The PETRONAS assurance leader should prepare a budget in advance of each

PETRONAS-led assurance which covers all PETRONAS costs, including
preparation time, travel and accommodation. The budget should be formally
approved by Corporate HSE. Overall PETRONAS related assurance cost would be
communicated to the assessee prior to commencing the assurance. On completion of
the assurance, excessive variation (>10%) from the budget should be justified by the
assurance leader.

The assurance leader is responsible for maintaining assurance correspondence files

from inception until two years following completion of the assurance. The assurance
leader will register a copy of the assurance report in the PETRONAS 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 OPU/JV.

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APPENDIX I GUIDELINES FOR THE APPLICATION OF HEALTH,

SAFETY AND ENVIRONMENT (HSE) ASSURANCE
PROCESS

1. INTRODUCTION

1.1 GENERAL

HSE issues can give rise to major business risks. The Health, Safety and
Environment Management Systems (HSEMS), which are currently being
implemented by PETRONAS Group of companies, should include well structured
HSE assurance systems. Assurance forms an important element in systems designed
to monitor, manage and contain HSE issues.

1.2 INTENT

These corporate guidelines provide the basis for establishing individual HSE
assurance policies and plans for Operating / Joint Venture Companies (OPU/JVs)
and are intended for General managers and senior managers accountable for OPU/JV
HSE performance or involved in HSE assurance.

The guiding principle for HSE assurances is that it is an OPU/JV management

1)
responsibility to conduct or have conducted HSE assurances . The Business Sector
Committee will monitor that OPU/JVs have a structured programme for HSE
assurances in place.

These Guidelines on HSE Assurance are consistent with Group Internal Assurance
Guidelines.

1.3 PURPOSES OF HSE ASSURANCE

The overriding purpose of HSE assurance should be to provide OPU/JV

management a systematic and independent assessment of the consistent and effective
implementation of the HSEMS. The HSE assurance process should enable OPU/JV
management to ensure that potential or actual flaws are remedied through effective
follow-up action. Business Sector Committee will monitor this and may insist that
follow-up action is completed or improved where necessary.

1.4 ROLE OF OTHER COMPANIES AS ASSESSORS

OPU/JVs will usually engage HSE advisors in other companies to carry out
independent HSEMS assurance2). The role of these personnel in respect of follow-up
action will be as agreed. Generally it will be the responsibility of the OPU/JV to take
remedial action.

1)
HSE assurances of joint ventures will depend on the contractual arrangements, in
particular the extent of involvement of PETRONAS companies or staff in the

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operation or management of the joint venture.

2. CRITERIA

Due diligence requires that:

• HSE assurance shall be a responsibility of the management of each OPU/JV.

• The depth and frequency of HSE assurances will be based on an assessment of

the various HSE risks.

• Terms of reference, scope, objectives and timetable shall be agreed and specified.

• The competence of assessors shall be assured and verified.

• The assurance report shall be a formal and independent document.

• Specificity and transparency of the assurance 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 assurance process.

3. APPLICATION

Each of the criteria is expanded below, to explain how it should be met.

3.01 HSE ASSURANCE SHALL BE A RESPONSIBILITY OF THE

MANAGEMENT OF EACH OPU/JV

The OPU/JV shall have an explicit HSE assurance policy and plan covering all
activities and carried out to specified standards. The numerous differences of
activities in the OPU/JVs may result in a wide range of approaches. OPU/JV HSE
assurance guidelines shall cover how the frequency of HSE assurances is to be
determined. Assurance frequency for an activity shall not be longer than 5 years. The
OPU/JV integrated 5 year plan, including HSE assurances shall be reviewed by the
Corporate HSE Unit.

2)
Independent HSE-MS assurance has been used here to mean an HSE assurance of a
company earned out by a body which is not part of that Company. It covers OPU/JV
assurances led by an OPU/JV or by a non-Group organisation (external). An
independent assurance may benefit from the inclusion of OPU staff in the team but
the lead assessor, his team composition and the assurance standards and technique
followed should be selected by the assurance organisation

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3.02 SHAREHOLDERS WILL EXPECT OPUS' ASSURANCE PROGRAMMES

TO INCLUDE INDEPENDENT HSE ASSURANCES

The OPU/JV's internal HSE assurance procedures shall be reviewed as part of Group
Business Control Reviews for adequacy and effectiveness. OPU/JV management
should plan and carry out internal assessments of HSE assurance effectiveness and be
assessed/appraised on this process.

OPU/JV assurance guidelines will identify the proportion of the total HSE assurances
to be independent assurances, within Corporate HSE guidelines. A formal agreement
between the OPU/JV and external assessors shall be in place covering
responsibilities, liabilities and the criteria used for the assurance and cited in the
assurance report.

Independent assurances shall verify the internal HSE assurance process, testing
reports, working files and implementation control, with sufficient sampling of
operations to test effectiveness. OPU/JVs too small for effective internal assurance
shall make use of independent assessors.

To qualify as one of the required independent HSE assurances, the standards of an

external assurance shall be compatible and comparable with Corporate HSE
standards. HSE assurances which may be imposed by external authorities should be
integrated in the plan to avoid unnecessary duplication but must meet the
PETRONAS standard in order to qualify as an independent assurance. In exceptional
cases, where provided for by Agreements, shareholders may carry out Shareholder
HSE Assurances (e.g. in Joint Ventures).

3.03 THE DEPTH AND FREQUENCY OF HSE ASSURANCES WILL BE BASED

ON AN EVALUATION OF THE VARIOUS HSE RISKS

The objective of HSE assurance is to provide reasonable assurance to management

that HSE risks have been identified and an appropriate framework of controls is in
place and effective. These guidelines cover the integrity of the assurance system and
the professionalism of the assurance; but how the assurance system is applied to the
various business activities depends on analysis of the HSE risks of those activities.

All business processes should be periodically assessed, and the frequency and depth
of HSE assurance of a particular activity should be appropriate for the degree of
potential HSE risk. Assurance frequencies shall also be related to the findings of
previous assurances.

In many OPU/JVs a formal HSEMS, with HSE Cases for critical activities, is the
mechanism for such identification and control of risk and HSE assurance is an
important part of any HSEMS. Until HSEMS is effectively in place, HSE assurances
should be programmed to provide assurance that the HSE risks are being effectively
managed.

Only OPU/JV management can fully assess their local circumstances and select the
appropriate frequency and depth of assurance appropriate for each activity. This

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selection shall be formal and transparent, and shall be regularly reviewed to take
account of experience of incidents and changes in the OPU/JV's environment. An
assurance cycle should not be longer than five years as in that time major changes
may have taken place and the consequences for the integrity of the control
framework need to be verified.

Having established the total long term assurance plan, the OPU/JV should identify
the proportion to be independent assurances as opposed to internal assurances, within
such guidelines as may be issued by the Business Sector Committee. These
assurances provide independent verification of the effectiveness of the OPU/JV
HSEMS including internal HSE assurance, and the strength of the framework of
control.

The OPU/JV also needs to assess the level of control it has, which is related to work
force attitude, degree of supervision, geographical scatter, communications and the
quality of business controls in place as evidenced by previous assurances. At the
same level of risk a low level of control requires a higher frequency or intensity of
assurance.

3.04 TERMS OF REFERENCE, SCOPE, OBJECTIVES AND TIMETABLE

SHALL BE AGREED AND SPECIFIED

An OPU/JV assurance standard shall specify terms of reference, scope, objectives

and timetable for typical internal assurances. Variations from this for a specific
assurance shall be formally agreed by the OPU/JV Internal Assurance Committee
(IAC) and assessee before the assurance starts.

The assurance standard set by Corporate HSE for terms of reference, scope,
objectives, and timetable will be followed for OPU/JV led assurances except where
specific variations have been agreed beforehand by both the OPU/JV IABC and team
leader.

The minimum standard for HSE management systems shall be compliance with
statutory requirements, PETRONAS Group Policy and Guidelines and OPU/JV
standards.

The OPU/JV HSE Management System scope and content shall be assessed by
comparison with PETRONAS’ Group model, including control of technical integrity.
Its effectiveness shall be assessed against Business Sector Committee's HSE
Management System objectives.

3.05 THE COMPETENCE OF ASSESSORS SHALL BE ASSURED AND

VERIFIED

The OPU/JV shall have explicit standards for the assurance qualifications of leaders
of internal HSE assurances and for the technical expertise of team members. The
selection of leader and team members shall ensure independence of the assessed
activity. The OPU/Jv standard assurance technique shall be consistently followed.

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HSE assurance leaders shall be qualified to PETRONAS Group standards.

Feedback on the quality of assurance execution, reporting and recommendations will

be included in the competence assurance of assurance leaders. The assessee's
supervisor feedback shall be solicited on assurance effectiveness.

3.06 THE ASSURANCE REPORT SHALL BE A FORMAL AND INDEPENDENT

DOCUMENT

Internal assurance reports shall be OPU/JV documents in standard format with

controlled circulation and filing.

Independent assurance reports shall be Company to Company documents with the

status of formal advice from the lead assessor's organisation. The OPU/JV may
comment on the draft report, through its members of the team or through the assessee
to the team leader but cannot override the team leader's responsibility for the final
report.

For both internal and independent HSE assurances, the report shall be agreed by all
the team members, though assurance leaders shall have editorial control and a
deciding vote in case of disagreements.

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3.07 SPECIFICITY AND TRANSPARENCY OF THE ASSURANCE SHALL BE

THE KEY

The assurance shall provide an audit trail, either maintaining a confidential working
file of evidence to support the findings and recommendations of the report or using
the full text format, with samples, findings and deficiencies complete in the report.
The report shall identify all significant deficiencies against standards, and
recommendations shall be as specific as the expertise of the team allows. Each
recommendation shall be uniquely identified, and prioritised.

The report shall provide an overall rating of HSE controls against specific standards
using a defined technique.

3.08 FINDINGS SHALL BE DETAILED AND EFFECTIVE

The system failure, as well as the immediate cause of each deficiency, shall normally
be identified and corrective action detailed.

Deficiencies shall be systematically related to weaknesses in the management

system, and major deficiencies shall be analysed in a consistent summary form for
the OPU/JV.

Each recommendation for action shall be discrete, specific, clear, realistic and
measurable as to its completion.

3.09 FOLLOW-UP ACTIONS SHALL BE DEFINED AND SECURED

An internal control system shall maintain an audit trail, recording the change of
status of each outstanding recommendation until all recommendations are closed out
to the Internal Assurance Board Committee's (IABC) satisfaction. The line shall
formally approve or reject justifications for rejecting or varying assurance
recommendations. Periodic internal assurances of the implementation process will be
included in the plan.

Approved justifications of variations or rejections of independent assurance

recommendations will be copied to the assurance team leader to avoid
misinterpretation of recommendations.

Independent assurances will include assessment of the implementation of the

recommendations of previous independent assurances.

3.10 FOLLOW-UP SHALL BE AN INTEGRAL PART OF THE ASSURANCE

PROCESS

An OPU/JV follow-up coordinator shall be nominated for every assurance. Regular

collated implementation progress reports shall be sent to the IABC or included in the
OPU/JV Management Information Systems (MIS). The IABC shall review the
progress of implementation at each meeting and shall provide a mechanism for the
identification and implementation of lateral action within the OPU/JV.

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Corporate HSE will monitor the implementation progress for independent audits, as a
minimum reviewing numerical progress reports annually and also review overall
implementation progress by each OPU/JV annually and provide a mechanism for
identification and implementation of learning points between OPU/JVs.

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APPENDIX II HSE-MS ASSURANCE REPORT - MODEL CONTENTS

LISTING

1 EXECUTIVE SUMMARY

1.1 INTRODUCTION
1.2 SCOPE
1.3 MAIN FINDINGS
1.4 ASSURANCE OPINION

2 ASSURANCE ADMINISTRATION

2.1 TERMS OF REFERENCE

2.1.1 objective
2.1.2 scope
2.1.3 standards
2.1.4 assessee
2.1.5 methodology

2.2 FOLLOW-UP TO THE ASSURANCE

2.2.1 Approach
2.2.2 Classification of actions
2.2.3 Classification of follow-up progress

3 HSE MANAGEMENT SYSTEM

3.1 LEADERSHIP AND COMMITMENT

3.1.1 Management leadership and commitment
3.1.2 Leadership and commitment in the line

3.2 POLICY AND STRATEGIC OBJECTIVES

3.2.1 HSE policies
3.2.2 Strategic objectives

3.3 ORGANISATION AND RESPONSIBILITIES

3.3.1 Organisation structure
3.3.2 Definition of responsibilities and empowerment
3.3.3 Relations with authorities
3.3.4 Management of change

3.4 MANPOWER RESOURCES AND COMPETENCE ASSURANCE

3.4.1 Manning levels
3.4.2 Definition and verification of competence requirements
3.4.3 Training
3.4.4 Staff experience and turnover

3.5 HAZARDS AND EFFECTS MANAGEMENT PROCESS

3.5.1 Hazard identification and assessment
3.5.2 Risk reduction and demonstration of ALARP

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3.5.3 Management of residual hazards and effects

3.5.4 HSE Case

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

3.7 STANDARDS, PROCEDURES AND DOCUMENT CONTROL

3.7.1 Standards and legislation
3.7.2 Procedures
3.7.3 Contracting standards and procedures
3.7.4 Management of change
3.7.5 Document control

3.8 IMPLEMENTATION AND MONITORING

3.8.1 Activity and tasks
3.8.2 Monitoring and records
3.8.3 Non-compliance and corrective action
3.8.4 Incident investigation reporting
3.8.5 Communication and motivation

3.9 ASSURANCE
3.9.1 Corporate assurance
3.9.2 Departmental and contractor assurance
3.9.3 Assurance follow-up

3.10 MANAGEMENT REVIEW

3.10.1 Review and inspection programme and follow-up
3.10.2 Review of external factors

4 HSE IN THE BUSINESS

This section of the report is specific to the assurance type. The assurance leader
should therefore select the correct listing for Section 4 from the selection shown
below:

Assurance Type

Facilities (incl start-up) Appendix 2a

Seismic Appendix 2b
Drilling Appendix 2c
Environmental Appendix 2d
Occupational Health Appendix 2e
Petrochemical/Refinery Appendix 2f

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APPENDIX II A SECTION 4 - FACILITIES ASSURANCES

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

4.2 CONTROL OF IGNITION

4.2.1 Layout, equipment spacing and Hazardous Area Classification (HAC)
4.2.2 Electrical equipment and systems
4.2.3 Fired heaters and combustion engines
4.2.4 Access control and security

4.3 SAFEGUARDING SYSTEMS

4.3.1 General controls
4.3.2 Control, alarm and shut-down systems
4.3.3 Pressure relief equipment
4.3.4 Blowdown systems
4.3.5 Gas detection (flammable and toxic)
4.3.6 Smoke, heat and fire detection
4.3.7 Leak detection

4.4 OPERATOR/PROCESS INTERFACES

4.4.1 Wells, process and facilities surveillance
4.4.2 Plant buildings and control room
4.4.3 Telecommunications equipment

4.5 PERSONNEL EMERGENCY SERVICES

4.5.1 POB control and emergency induction
4.5.2 Emergency escape, evacuation and drills
4.5.3 Medical and first-aid facilities

4.6 FIRE HAZARD MANAGEMENT

4.6.1 Policy, procedures and plans
4.6.2 Passive fire protection facilities
4.6.3 Fixed fire protection and firefighting facilities
4.6.4 Mobile and portable firefighting facilities
4.6.5 Firefighting preparedness

4.7 WORKPLACE PRACTICES

4.7.1 Permit To Work (PTW) system
4.7.2 Maintenance
4.7.3 Isolation practices
4.7.4 Process interlocking control practices

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4.7.5 Housekeeping

4.8 OCCUPATIONAL HEALTH

4.8.1 Health risk assessment
4.8.2 Noise and vibration
4.8.3 HVAC and lighting
4.8.4 Radiation heat stress
4.8.5 Ergonomics
4.8.6 Materials selection and handling
4.8.7 Accommodation and sanitation
4.8.8 Personnel protection equipment
4.8.9 Welfare provisions

4.9 TRANSPORT AND LOGISTICS

4.9.1 Land transport
4.9.2 Marine transport
4.9.3 Air transport
4.9.4 Cranes and lifting equipment

4.10 HSE IN ENGINEERING

4.10.1 Design reviews and HAZOP
4.10.2 Environmental and social impact
4.10.3 Occupational health in facilities design
4.10.4 Construction and commissioning
4.10.5 Purchasing controls
4.10.6 Technical documentation and records
4.10.7 Change and variance control

APPENDIX II B SECTION 4 - SEISMIC ASSURANCES

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

4.2 ENVIRONMENTAL EFFECTS AND CONTROL

4.2.1 Environmental Assessment (EA) process
4.2.2 Seismic land operations effects and controls
4.2.3 Waste management
4.2.4 Spill control
4.2.5 Marine operations effects and control
4.2.6 Impact of operations on local communities

4.3 LAND OPERATIONS BASE CAMPS

4.3.1 Camp access and lay out

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4.3.2 Kitchen
4.3.3 Electrical systems
4.3.4 Workshop
4.3.5 Fuel handling

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4.4 SECURITY

4.5 TRANSPORT IN LAND OPERATIONS

4.5.1 Scope and resources
4.5.2 Safety features and equipment
4.5.3 Maintenance
4.5.4 Personnel selection, training and control
4.5.5 Journey management and procedures
4.5.6 Operating procedures

4.6 EMERGENCY EQUIPMENT

4.6.1 Communications
4.6.2 Firefighting
4.6.3 Maritime emergencies

4.7 SEISMIC LINE OPERATIONS (LAND)

4.7.1 General seismic line safety
4.7.2 Surveying and line cutting
4.7.3 Drilling
4.7.4 Recording

4.8 EXPLOSIVES STORAGE AND HANDLING

4.8.1 Storage
4.8.2 Record-keeping, distribution and handling
4.8.3 Transport to field
4.8.4 In field storage, distribution, handling
4.8.5 Shot hole loading
4.8.6 Shooting
4.8.7 Misfires

4.9 MARINE VESSELS

4.9.1 General
4.9.2 Vessel maintenance
4.9.3 Uncontrolled hazards and housekeeping
4.9.4 Chase vessel
4.9.5 Firefighting
4.9.6 Life saving equipment and procedures
4.9.7 Shore based logistics

4.10 MARINE SEISMIC OPERATIONS

4.10.1 Use of small boats
4.10.2 Back-deck operations

Appendix II C SECTION 4 - DRILLING ASSURANCES

4.1 WELL CONTROL

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4.1.1 Technical well design

4.1.2 BOPs
4.1.3 Accumulator unit
4.1.4 Choke manifold
4.1.5 Mud-gas separator
4.1.6 Degasser
4.1.7 Well control procedures
4.1.8 Kick drills and stripping exercises
4.1.9 Emission control
4.1.10 Simultaneous (concurrent) operations

4.4 RIG EQUIPMENT

4.4.1 Rig specifications and modifications
4.4.2 Location design / restoration
4.4.3 Slush pumps and mud system
4.4.4 Derrick, hoisting and rotary equipment (including top drive)
4.4.5 Auxiliary brake
4.4.6 Rig floor equipment
4.3.1 Fire detection
4.3.2 Flammable gas detection
4.3.3 H2S detection
4.3.4 Fire and general alarms
4.3.5 ESD systems
4.2 4.3.6 Ballast
CONTROL / control room
OF IGNITION
4.2.1 Hazardous Area Classification (HAC)
4.2.2 DC motor blowers
4.2.3 Electrical equipment
4.2.4 Portable electrical equipment and power supply
4.2.5 Generator, motor and compressor rooms

4.3 DETECTION, ALARMS AND SHUT-DOWN SYSTEMS

4.4.7 Driller's console
4.4.8 Winches
4.4.9 Pressurised tanks

4.5 LIFESAVING, FIRE PROTECTION AND FIREFIGHTING FACILITIES

4.5.1 Firefighting facilities
4.5.2 Evacuation and escape plan
4.5.3 First aid and medical facilities
4.5.4 Emergency generator

4.6 WORKPLACE PROCEDURES

4.6.1 Permit To Work (PTW)
4.6.2 Personal Protective Equipment (PPE)
4.6.3 Toolbox meetings
4.6.4 STOP, UAA and JSA
4.6.5 Deficiency register
4.6.6 Maintenance

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4.6.7 Change control

4.6.8 Housekeeping
4.6.9 Waste management
4.6.10 Chemical management

4.7 OCCUPATIONAL HEALTH

4.7.1 Noise
4.7.2 Chemicals
4.7.3 Lighting
4.7.4 Accommodation
4.7.5 Eye wash and deluge facilities
4.7.6 Radioactive sources

4.8 TRANSPORT AND MATERIALS HANDLING

4.8.1 Land
4.8.2 Marine
4.8.3 Air
4.8.4 Cranes and lifting equipment
4.8.5 Forklift truck

4.9 SERVICE CONTRACTORS

4.9.1 Mud engineering
4.9.2 Electric wireline logging
4.9.3 Cementing and pumping services
4.9.4 Mud logging
4.9.5 Integrated services

APPENDIX II D SECTION 4 - ENVIRONMENTAL ASSURANCES

4.1 ENVIRONMENTAL ASSESSMENT (EA)

4.1.1 General
4.1.2 Role of the Environmental Advisor
4.1.3 Consultation
4.1.4 The EA process
4.1.5 Identification of hazards and effects
4.1.6 Evaluation of controls
4.1.7 Management controls

4.2 SOCIAL IMPACT ASSESSMENT

4.2.1 Demographic impacts
4.2.2 Socio-economic impacts
4.2.3 Health impacts
4.2.4 Impact on social infrastructure and resources
4.2.5 Psychological and cultural community impacts
4.2.6 Mitigation and monitoring

4.3 WASTE MANAGEMENT

4.3.1 Management systems

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4.3.2 Responsible disposal

4.3.3 Control and monitoring
4.3.4 Applied practices

4.4 EFFLUENT CONTROL

4.4.1 Management systems
4.4.2 Responsible disposal
4.4.3 Control and monitoring
4.4.4 Applied practices

4.5 EMISSION CONTROL

4.5.1 Management systems
4.5.2 Responsible disposal
4.5.3 Control and monitoring
4.5.4 Applied practices

4.6 LOGISTICS AND MATERIALS

4.6.1 Transport
4.6.2 Chemicals and hazardous materials

4.7 ENGINEERING
4.7.1 Project management
4.7.2 Design
4.7.3 Construction/commissioning

4.8 DECOMMISSIONING, ABANDONMENT, RESTORATION

4.8.1 Legislation, planning and evaluation
4.8.2 Program implementation
4.8.3 Monitoring

4.9 CONTINGENCY PLANNING AND PREPAREDNESS

4.9.1 Policies and plans
4.9.2 Oil spills
4.9.3 Other environmental emergencies

APPENDIX II E SECTION 4 - OCCUPATIONAL HEALTH ASSURANCES

4.1 HEALTH RISK ASSESSMENT

4.1.1 Chemical agents
4.1.2 Physical agents

4.2 HEALTH RISK CONTROL

4.2.1 Engineering controls
4.2.2 Procedural controls
4.2.3 Personal protective equipment

4.3 HUMAN FACTORS (ERGONOMICS)

4.3.1 Management of ergonomics

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4.3.2 Implementation at the workplace

4.3.3 Working hours / working cycles

4.4 LIFE STYLE

4.4.1 Alcohol and drugs abuse
4.4.2 Smoking
4.4.3 AIDS
4.4.4 Fitness standards

4.5 PUBLIC HEALTH (LIVING ENVIRONMENT)

4.5.1 General housing and living facilities
4.5.2 Sanitary facilities
4.5.3 Catering and food hygiene
4.5.4 Drinking water
4.5.5 Pest and vector control
4.5.6 Disease prevention
4.5.7 Environmental health (community health)

4.6 HEALTH SURVEILLANCE AND MONITORING

4.7 MEDICAL EMERGENCY RESPONSE AND TREATMENT FACILITIES

(RECOVERY)
4.7.1 Medical emergency plan and first-aid procedures
4.7.2 Company facilities
4.7.3 External facilities

4.8 HEALTH PROMOTION

4.9 RECORD KEEPING AND REPORTING

4.9.1 Health performance reporting
4.9.2 Incident investigation
4.9.3 Records and analysis

APPENDIX II F SECTION 4 – PETROCHEMICAL/REFINERY ASSURANCES

4.1 CONTAINMENT
4.1.1 Feed storage tanks, piping 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

4.2 CONTROL OF IGNITION

4.2.1 Layout, equipment spacing and Hazardous Area Classification (HAC)
4.2.2 Electrical equipment and systems
4.2.3 Fired heaters and combustion engines

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4.2.4 Access control and security

4.3 SAFEGUARDING SYSTEMS

4.3.1 General controls
4.3.2 Control, alarm and shut-down systems
4.3.3 Pressure relief equipment
4.3.4 Blowdown systems
4.3.5 Gas detection (flammable and toxic)
4.3.6 Smoke, heat and fire detection
4.3.7 Leak detection

4.4 OPERATOR/PROCESS INTERFACES

4.4.1 Tanks, process and facilities surveillance
4.4.2 Plant buildings and control room
4.4.3 Telecommunications equipment

4.5 PERSONNEL EMERGENCY SERVICES

4.5.1 Personnel control and emergency induction
4.5.2 Emergency escape, evacuation and drills
4.5.3 Medical and first-aid facilities

4.6 FIRE HAZARD MANAGEMENT

4.6.1 Policy, procedures and plans
4.6.2 Passive fire protection facilities
4.6.3 Fixed fire protection and firefighting facilities
4.6.4 Mobile and portable firefighting facilities
4.6.5 Firefighting preparedness

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4.7 WORKPLACE PRACTICES

4.7.1 Permit To Work (PTW) system
4.7.2 Maintenance
4.7.3 Isolation practices
4.7.4 Process interlocking control practices
4.7.5 Housekeeping

4.8.1 Health risk assessment

4.8.2 Noise and vibration
4.8.3 HVAC and lighting
4.8.4 Radiation heat stress
4.8.5 Ergonomics
4.8.6 Materials selection and handling
4.8.7 Office and sanitation
4.8.8 Personnel protection equipment
4.8.9 Welfare provisions
4.8 OCCUPATIONAL HEALTH

4.9 TRANSPORT AND LOGISTICS

4.9.1 Land transport
4.9.2 Marine transport
4.9.3 Cranes and lifting equipment

4.10 HSE IN ENGINEERING

4.10.1 Design reviews and HAZOP
4.10.2 Environmental and social impact
4.10.3 Occupational health in facilities design
4.10.4 Construction and commissioning
4.10.5 Purchasing controls
4.10.6 Technical documentation and records
4.10.7 Change and variance control

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APPENDIX III HSE - MS ASSESSMENT ELEMENTS

Assurance 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. Assurance
8. Management Review

To aid a balanced assessment, the following factors require consideration:

1. The third element "Organisation, Responsibilities, Resources, Standards and

Documentation" covers too large a part of the HSE-MS and assurance scope and requires
further breakdown.

2. The fifth element "Planning and Procedures" contains two separate and important
subjects which merit separate assessment.

3. Experience has shown that standards and procedures are frequently integrated within the
same documents (a typical example being the "Safety Manual"). To avoid assurance
teams wasting time discussing whether a particular document is a standard or procedure,
standards and procedures need to be assessed together.

4. There is a need for focus on the important subject of competence assurance as a sub-
element of "Resources".

For these reasons the assurance 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. Assurance
10. Management Review

For clarity purposes the report contents (Appendix 2) will be aligned with the assessment
elements.

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GLOSSARY OF TERMS AND ABBREVIATIONS USED

ALARP As Low As Reasonably Practicable

Assurance A structured independent examination
CHSE Corporate HSE
EU European Union
HEMP Hazard and Effects Management Process
HSE Health Safety and Environment
HSEMS Health, Safety and Environment Management System
HUET Helicopter Underwater Escape Training
IA Internal Assurance
IAC Internal Assurance Committee
IAG Internal Assurance Guidelines
IAPM Internal Assurance Process Model
SG Salary Group
Operating Company / Joint Venture as used in a
OPU/JV
PETRONAS wide context
POB Persons on Board
Specific, Measurable, Achievable, Realistic and Time-
SMART
based

REFERENCES

1. PTS 60.0301 Group HSE Assurance Guidelines

2. PETRONAS Guidelines for Business Conduct
3. PTS 60.0101 Group HSE Management System Manual

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