Update on Recent Reforms

Undertaken by PESO

Press Briefing

September 2021
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Page
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 Table of Contents
Title Page Number
I. What is PESO – Activities under PESO 3 and 4
II. Rule Amendments Implemented and Amendments under Consultation 5 and 6
III. Addressing the Need for Amendments 7
Case Study I – Lessons Learnt from Ammonium Nitrate Explosion in Beirut,
IV. 8
Lebanon
V. Case Study II – Addressing Shortage of Medical Oxygen Supply Management due to 9
COVID-19 Pandemic
VI. Timeline of Reforms Undertaken 10
VII. Amendments in Specific Rules 11
VIII. Proposed Impact 12

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 Petroleum and Explosive Safety Organisation
(PESO)

• The Petroleum and Explosives Safety Organization (PESO), formerly known as Department of Explosives, since
its inception on 05/09/1898, has been serving the nation as a nodal agency for regulating safety of hazardous
substances such as explosives, compressed gas and petroleum.
• PESO’s major work is to administer the responsibilities delegated under the Explosives Act 1884 and Petroleum
Act 1934 and the Rules made thereunder related to manufacture, import, export, transport, possession, sale
and use of Explosives, Petroleum products and Compressed gases.

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 Activities under PESO
Acts Rules Activity
Regulation of import, storage, production, refining, blending of petroleum and
Petroleum Act, 1934 Petroleum Rule, 2002 transportation by road and pipelines including approval of jetties, ports, Ex-
electrical equipments.
Regulation of storage, transport and import of compressed gases in Pressure
SMPV(U) Rules, 2016 Vessels including approval of fabrication shop for manufacturing of pressure
vessels , safety relief valves & vaporizers.
Regulation of filling, storage, transport and import of compressed gases in Gas
Explosives Act, 1884
Gas Cylinders Rules, 2016 Cylinders including CNG stations and approval of cylinders, valves and regulator
manufacturing units.
Explosives Rules, 2008 Regulation of import, export, storage, sale, transportation and use of explosives
Ammonium Nitrate Rules, 2012 and Ammonium Nitrate
MSIHC Rules,1989
Approval of Cross country pipelines for transportation of inflammable and other
Environment (Protection) Act, hazardous products , LPG Pipeline, LNG Jetties etc.
1986 Chemical Accident (emergency
planning, preparedness &
response) Rules, 1996 Representation in Central, state & district level crisis management group

Inflammable Substance Act,

Regulation of import, transport, storage and production of dangerously
1952 Calcium Carbide Rules, 1987
inflammable substances by applying thereto the Petroleum Act, 1934,

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 Rule Amendments Implemented
Rule Date of Notification

I. Final Amendments
1. Ammonium Nitrate (Amendment) Rules, 2021 G.S.R. 608( E) Dt. 31st August, 2021
• Draft rules were notified on 2nd February 2021
2. Calcium Carbide (Amendment) Rules, 2021 G.S.R. 610(E), Dt. 31st August, 2021
• Draft rules were notified on 10th February 2021
3. SMPV (Unfired)(Amendment) Rules, 2021 G.S.R. 609(E), Dt. 31st August, 2021
• Draft rules were notified on 24th March 2021

II. Draft Amendments

1. Gas Cylinder (4th Amendment) Draft Rules, 2021 G.S.R. 462(E) Dt. 25th June, 2021
• Stakeholder meetings held
2. Petroleum (Amendment) Rules, 2021 G.S.R. 614(E), Dt. 02nd September, 2021.
• Draft rules were forwarded to MoPNG on 4th April
2021
Explosives Rules 2008 • Under consultation

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 Consultative Process for Implementing Amendments

• In all the above rules, stakeholders representations were examined and meetings were held with industries and
associations before notification of the draft rules.
• Meetings were also held after the inputs / comments were received from the concerned industries.
• The suggestions inter alia includes increasing competent persons and enabling third party inspection agencies, allowing
ISO containers for multimodal transport of cryogenic compressed gases , allowing increase in storage quantity in
existing premises , reducing timelines in grant of NOC by District Authorities, reducing frequency of renewals etc. Also,
PESO conducted meetings with concerned industries to study the global best practices to enhance the safety in
hazardous premises.
• Further suggestions to reduce regulatory compliance burden were also received from the industry associations through
the regulatory compliance burden portals.

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 Addressing the Need for Amendments

A. Study of Global Best Practices by PESO

C. Public Safety Concerns identified by Beirut Incident and COVID Oxygen Supply Gaps
Enhancing Safety
• Import of AN in bagged form only for safe
handling.
• Provision for shifting of imported AN from Port
to a safe storehouse located beyond 500 Meters
from the port.
• Adequate firefighting facilities in line with
global best practices.
• Geo mapping of the calcium carbide storage
premises
• Electronic marking on cylinders for their tracking
inter alia ensuring public safety
B. Addressing Needs of Industry
Ease of Doing Business Reducing Compliance Burden
• Allowed ISO containers for transporting Petroleum • Timelines specified for issuance of DM NOC
products, Compressed gases e.g. Oxygen, Nitrogen,
LNG etc, to facilitate multimodal transport and to • Provisions for Deemed DM NOC
reduce transportation cost and time
• Introduction of concept of Third Party Inspection • Compliance Burden for 111 regulations reduced
Agency for testing and certification including safety (Detailed list annexed)
audit
• Relaxation in experience criteria for selection of • License approval and Fees Payment made Online
Competent Persons.
• Exclude regulations of stevedores to avoid
• Allowing transfer of Ammonium Nitrate from one
duplicity and reduction in compliance burden
location to another of the same licensee
• More ammonium nitrate can be stored in same • Increased validity of license for storage of
storehouse. Calcium Carbide from 3 years to 10 years
• Allowed auction of seized serviceable ammonium
nitrate • Provision of duplicate license has been dispensed.

Creating an Ecosystem for Industrial Safety 7

 Case Study I – Lessons Learnt from Ammonium
Nitrate Explosion in Beirut, Lebanon
Huge Fire and Explosion occurred in warehouse of seized Ammonium Nitrate (2750 MT) at Port Area
Catastrophic event leading to death of at least 280 and injuring almost 7000 and loss of property
AN Rules amended to ensure safety during import and storage

• The August 4, 2020

Beirut, Lebanon
explosion: A
Technological Disaster

• Explosion Sequence in
Beirut Port

• Ammonium Nitrate
Explosion Disaster
comprised of following
four stages

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Case Study II – Addressing Shortage of Medical Oxygen
Supply Management due to COVID-19 Pandemic
Huge Demand of Medical Oxygen during Second Wave leading to a peak demand of 8943 MT
Timely Supply of Medical Oxygen became important – Transfer of Oxygen from Surplus to Deficit areas
Rules amended to allow import and domestic transport of Medical Oxygen through ISO Tankers

• ISO Tank Containers

transport higher cargo
by volume than dry
box containers

• Loading and Discharge

is safer, faster and
cheaper to transport

• Enable multimodal
transportation and
Environment Friendly

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 Timeline of Reforms Undertaken

PESO regulations amended as per the Process outlined below

Nov 2020 – May 2021

Feb 2021 – Mar 2021 Mar 2021 – Jul 2021 Aug – Sep 2021
Baseline Stakeholder
Amendments Drafted Feedback Collated Amendments Notified
Consultations

• Stakeholder consultation on Global • Ammonium Nitrate (Amendment) Draft Rules, 2021 • Objection and Suggestions • Ammonium Nitrate (Amendment)
Best Practices in Storage and were published vide G.S.R. 111 (E), dated the 10th of Draft Ammonium Nitrate Rules, 2021 vide G.S.R. 608(E), Dt.
Transportation of Ammonium February, 2021 Rules and SMPV(U) rules 31.08.2021
Nitrate was held on 18.11.2020 • SMPV(Unfired)(Amendment) Draft Rules, 2021 were received in March, • Calcium Carbide (Amendment)
• Stakeholder consultation on Global notified vide G.S.R. 96 (E), Dt. 2nd February, 2021 2021 Rules, 2021 vide G.S.R. 610(E), Dt.
Best Practices in Storage and • Calcium Carbide (Amendment) Draft Rules notified • Objection and Suggestions 31.08.2021
Transportation of Compressed vide G.S.R. 259(E), dated the 26th March, 2021 of Draft Calcium Carbide • SMPV (Unfired)(Amendment) Rules,
Flammable, Toxic and Hazardous • Petroleum (Amendment) Draft Rules, 2021 notified Rules were received in April, 2021 vide G.S.R. 609( E) Dt.
Gases in Cylinders and Pressure vide G.S.R. 614(E), Dt. 02nd September, 2021 2021 31.08.2021
Vessels were held on 04.12.2020 • Gas Cylinder (4th Amendment) Draft Rules, 2021
notified vide G.S.R. 462(E) Dt. 25 th June, 2021

Result: Reforms Implemented for Enhancing Industrial Safety and Reducing Compliance Burden
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 Amendments in Specific Rules
Ammonium
1 SMPV 2 Calcium Carbide 3
Nitrate
• Arunachal has developed
• Provision of adequate Fire Fighting
• Introduction of Third Party • Increasing the validity of
facilities in storage and handling
Inspection Agency (TPIA) for renewal of license from 3
areas
certification, testing, inspection years to 10 years
• Provision for auction of seized
and safety audit • Provision of geo-mapping
Ammonium Nitrate
• Relaxation in the selection introduced to monitor
• Exclusion of regulation of
criteria (experience) of premises of storage of calcium
stevedores to handle Ammonium
competent persons carbide
Nitrate
• Permission accorded to ISO • Amendments made to ensure
• Provision to import Ammonium
containers to move proper records and
Nitrate only in bagged form to
compressed gases e.g. oxygen, compliance of storage related
curb pilferage
nitrogen etc. for domestic information
• Reduction in timeline to provide
transport • Provision of Online Fees
DM NOC in 3 months.
• Reduction in timeline for Facility
• More ammonium nitrate can be
issuance of DM NOC and
stored in same storehouse
provision of Deemed DM NOC
Single Window
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 Proposed Impact
 Stipulating timeline of DM NOC and provision of deemed issuance of DM NOC will reduce the
compliance burden of industries and will smoothen the process of setting up of LPG Bottling Plants, Auto
LPG Dispensing Stations, compressed flammable / toxic & Corrosive gas storage & LNG dispensing
stations.
 Introduction of ISO tank containers for domestic transport of compressed gases e.g. Oxygen, Nitrogen,
LNG etc. will facilitate the multimodal transport of these products and reduce the transportation time
and cost.
 Transportation of LNG through ISO containers will greatly help the setting up of LNG stations throughout
the country and promote the green fuel initiative of Government of India.
 Conversion of all the 47 licensing module to online paperless module has reduced the compliance
burden and enhance the transparency in the system.
 Introduction of ‘Third Party Inspection Agencies’ for certification, testing & safety audit; increased
number of competent persons will reduce the certification and testing time.
 Amendment in these rules in line with global best practices will enhance safety in Ammonium Nitrate
and Calcium Carbide premises and benefit the industry by allowing storage of more ammonium nitrate in
same store houses and increasing the validity period of calcium carbide storage licenses.

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Thank
Thankyou
You

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 Amendments in SMPV Rules (1/3)
Need for amendment
Industry represented need
for reducing time lines for
inspection and testing
requirements of industry.
• Presently there are only
389 competent persons.
Amendment in Rule Impact
To increase professional As the year of experience
competent persons required for becoming CP is
reduced from 10 years to 5
years, more number of
professionals will become
eligible for becoming CP.
To allow third party Professional TPIAs will be
inspection agencies recognized that will help
(TPIA) in the rules and industry to attend the testing
enable them for and inspection in timely manner
inspection, testing &
safety audits
Further action
Drive to be initiated by PESO
for increasing CPs through
exams and trainings.
PESO has initiated action for
holding exams for CPs
through NPC.
PESO will initiate drive for
recognition of TPIAs.
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 Amendments in SMPV Rules (2/3)
Need for amendment
During pandemic, medical
oxygen transportation
required use of ISO
containers
Allow import and transport
of other cryogenic gases in
ISO Tank Containers
Amendment in Rule Impact Further action
Transportation of ISO Bulk transportation of liquid On suggestion of industry, a
containers allowed medical oxygen will be facilitated. committee is formed to
examine static storage of
cryogenic compressed gases
in ISO containers.
Import and transport of Bulk (multimodal) transportation PESO to provide online
ISO containers allowed of other cryogenic gases such as modules to facilitate
Argon, Nitrogen and LNG will be paperless licensing of the ISO
facilitated. Tank Containers
It will increase the availability of
LNG for small industries and is
likely to replace requirement of
diesel in such industries.
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 Amendments in SMPV Rules (3/3)
Need for amendment
Compliance burden related
to submission of application
and fees for duplicate licence
Reduce timelines for grant of
NOC by District Authorities
Amendment in Rule Impact Further action
Provision deleted and Need to submit application and
online license copy fees removed
downloaded from system
is allowed
Timeline reduced from 4 Timelines for grant of NOC is PESO to provide online
months to 2 months from reduced . This will promote modules to facilitate
the date of receipt of EODB. paperless applications for
application from the seeking NOC from District
applicant. Authorities.
Provision for deemed
NOC after 2 months
introduced
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 Amendments in Ammonium Nitrate Rules (1/2)
Need for amendment Amendment in Rule Impact Further action
Duplication in regulation of Provisions for stevedores Reduction in compliance
stevedores to be eliminated. deleted from the rules burden

Stevedores (agency handling

loading / unloading of AN on ship)
are required to seek licence from
PESO as well as from the Port
Authorities.
Transfer of AN from one premises Provisions made in rules Increase ease of doing
to other of same licencee to be business
allowed
Reduce timelines in grant of NOC Timelines reduced from 6 Reduction in timelines to PESO to provide online
by District Authorities moths to 3 months seek licence. module for the applicants to
Provision for deemed The NOC process will be submit online request to
approval introduced completed in time bound concerned District
manner Authorities.

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 Amendments in Ammonium Nitrate Rules (2/2)
Need for Amendment in Rule Impact Further
amendment action
Strengthen safety The storage of AN to be done in storage houses situated The port safety is enhanced
and Security 500 m beyond the ports area.
Provision of security cabin made at 30 meter distance The security at storehouse is
from the store house. enhanced.
District Magistrate and Police officers authorised for Enhanced monitoring will
inspection of premises in 6 months prevent accidents and
pilferages , if any.
Study of global best Provision of adequate firefighting facilities Enhanced safety
practices by PESO
Appropriate flooring in premises to prevent accidents Enhanced safety
introduced within 1 years from the rules.
Compliance burden Provision deleted and online license copy downloaded Need to submit application
related to from system is allowed and fees removed
submission of
application and fees
for duplicate licence
Disposal of seized AN Provision made to allow auction of the seized lots of AN. This will also reduce chances
of accidents due to
accumulation and non-
disposal
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 Amendments in Calcium Carbide Rules (1/1)
Need for amendment
Frequency for renewal of licence
for storage was 3 years
Need for application and fees to
seek duplicate licence is
redundant as licenses are issued
online
Online payment of fees required
strengthen safety - Monitoring of
premises storing Calcium Carbide
Strengthen safety – Licencee to
maintain record of storage
Amendment in Rule Impact Further action
Increased from 3 years to Regulatory compliance burden
10 years reduced
The provision removed reduced the burden of submitting
from rules. physical application and fees for
Online copy of licence issuance of duplicate licence.
will be sufficient.
Included in rules This will promotes EODB
Geo-mapping of the The information on the premises will PESO to share geo-
premises included be made available to the concerned mapping
state and central authorities that information with
review the preparedness of the concerned district
hazardous premises to prevent authorities, DDMA,
accidents. SDMA
Format for maintaining increase transparency and access to PESO to make
records included information and will help in online modules for
monitoring compliance of storage monitoring
conditions
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Work in progress
Draft Gas Cylinder (Amendment) Rules, 2021 – Notified on 24th June 2021
Draft Petroleum (Amendment) Rules, 2021 – Notified on 2nd September 2021

Explosive Rules – under consultation

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 Draft Gas Cylinder (Amendment) Rules(1/1)
Need for amendment
Tracking and tracing of medical
oxygen cylinder was
recommended by the national
Task Force
Additional suggestions from
stakeholders
Ease of doing business and
reduction in compliance burden
To fix timeline for issuance of DM
NOC
Eliminate need for duplicate
licence as licences are online
Proposed Amendment in Rule Impact Further action
The QR code based tracking The inventory of oxygen PESO to provide means
and tracing made mandatory cylinders in hospitals can to the industry to
be tracked. provide data on its
website
DM NOC is not required for This will reduce the The District authority
storage of toxic and flammable compliance burden for the empowered for ERDMP
gases in premises situated in industries and On-site emergency
notified industrial area, NOC plan as per MSIHC Rules,
form concerned industrial 1989 under Environment
authority only required Protection Act will
required study on safety
and emergency crisis
management in the event
of disaster./ major
accidents.
Time for issuance of DM NOC is This will help the industry in Under consideration
fixed to two month getting the NOC in time and
Also, deemed approval provision reduce their compliance
to be made burden
To allow system generated It will reduce need for Under consideration.
licence copies making application and
submit fees 21
 Draft Petroleum (Amendment) Rules 2021 (1/4)
Need for amendment Proposed Amendment in Impact Further action
Rule
Industry represented need To increase professional As the year of experience Drive to be initiated by PESO
for reducing time lines for competent persons required for becoming CP is for increasing CPs through
inspection and testing reduced from 10 years to 5 exams and trainings.
requirements of industry. years, more number of
• Presently there are only professionals will become PESO has initiated action for
401 competent persons. eligible for becoming CP. holding exams for CPs
through NPC.

To allow third party Professional TPIAs will be PESO will initiate drive for
inspection agencies recognized that will help industry recognition of TPIAs.
(TPIA) in the rules and to carry out periodical inspection
enable them for and safety audit of Major
inspection, testing & Accident Hazards (MAH)
Safety audit. premises as defined under
MSIHC Rules, 1989 in timely
manner

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 Draft Petroleum (Amendment) Rules 2021 (2/4)
Need for Proposed Amendment in Rule Impact Further action
amendment
Import of Petroleum Provision made for licence to import of This will help the industry to import Period for seeking comments
product through air petroleum products through air (quantity petroleum products thorough air which from stakeholders on the draft
more than 30 lit) and in accordance with will greatly reduce their transportation rules will be over by 2nd
the regulations of IATA for its packaging/ time for the Petroleum R&D centers. October 2021.
containers.

Import of petroleum Petroleum products are allowed to be This will facilitate the multimodal
products in ISO imported in ISO containers transport of petroleum products from
containers port to the licensed premises and will
reduce the transportation cost and time.

Compliance burden • DM NOC is not required for petroleum This will drastically reduced the setting
retail outlets which are forming part up time of petroleum retail outlets in
of existing CNG and LNG Stations existing CNG and LNG stations.
covered under DM NOC.
• DM NOC for renewal to be removed
• Provision of deemed issuance of DM
NOC is added

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 Draft Petroleum (Amendment) Rules 2021 (3/4)
Need for Proposed Amendment in Rule Impact Further action
amendment
Compliance burden Provision deleted and online license copy Need to submit application
related to downloaded from system is allowed and fees removed
submission of
application and
fees for duplicate
licence
Enhanced safety to • Provision for licencee to prevent vapour • Help in prevent fire hazard
prevent escape of escape and scale of firefighting as per OISD std
petroleum vapours to 244
prevent fire hazard • Restriction on electric wiring near petroleum • Prevent fire hazard
carrying pipelines
• Enhance hydrostatics testing pressure to 1.25
time ( instead of 1.1 times) • Enhance safety
• Testing of tanks in every 7 years
E-payment provision Provision introduced Facilitate EODB
required

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 Draft Petroleum (Amendment) Rules 2021 (4/4)
Need for Proposed Amendment in Rule Impact Further action
amendment
The rules are not • Requirement of exhaust pipe in front of Facilitate EODB
updated with vehicle in case of BS IV compliant vehicles
advancement in exempted
technology • Provision for alternate material for pipelines
• API: 620 is being used for construction of tank
for light petroleum like light Naphtha,
Isomerate, etc. The same need to be included
in PR 2002.

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