Curious about how to avoid fines for lack of compliance with 49 CFR §192, Transportation of Natural and Other Gas by Pipeline, and 49 CFR §195, Transportation of Hazardous Liquids by Pipeline? In this series of posts about pipeline integrity and compliance myths, we explain how to avoid some of the most common mistakes companies make when operating oil and gas pipelines.
The “Wiggle Room” Problem: Vague Isn’t Good Enough
Are you ready for compliance myth #2?
“If our procedures are vague, that gives us ‘wiggle room’ when audit time comes.”
Sorry, no.
To be compliant with 49 CFR §§192 and 195, your procedures must spell out exactly how you complete tasks, inspections, and contingencies. PHMSA auditors don’t let you “slide” when testing compliance with federal regulations.
For example, you have to be specific when you explain how you address any event when the regulations say, “An operator must take prompt action to address…”.
It’s tempting to be vague. We’ve heard it from several operators when we work together on a DOT mock-audit: “We don’t really want to show the auditor what we really do because then we’ll be held accountable for it. When the auditor says, ‘Show me how you do this, we have ways of showing them without providing written documentation that explains what we do.’”
But when reading a company procedure is as informative as reading the opening paragraphs of Moby Dick, you don’t have a procedure. You have a work of fiction.
PHMSA is changing its focus, and the fines are not inconsequential. As of March, 31st of 2023, one operator has already received two $222,504 penalties for not following some procedures and not having others, which led to a pipeline rupture.
How to Avoid Fines for Incomplete Procedures
With incomplete procedures, there’s the looming threat of DOT fines, but consider something else:
If you have an incomplete or incorrect procedure and someone gets injured or dies because of it, the responsible personnel can be held personally liable. Can the prosecutor prove that you’ve willingly violated the code or tried to obfuscate the truth? When someone intentionally violates the law, that person stands a good chance of going to federal prison.
You may be wondering how to avoid getting caught in the trap of inadequate procedures. Here are three things you need to keep in mind:
1. Make your procedures airtight.
A good procedure identifies a) company best practices, backed by industry; b) risks associated with the applicable assets; and c) a clear way to train and communicate with employees, contractors, and other people who could be affected by the asset. The procedure should also spell out how you will learn from near-misses and failures and who is responsible for each part of the procedure.
2. Write a best-in-class procedure.
Stay tuned for our post on that topic—coming soon.
3. Have a qualified third-party review your procedures and give suggestions on how to make them better.
Do you have to use all the suggestions? Of course not. But having a fresh set of eyes on your procedures can help you understand potential threats you may have overlooked. (See our LinkedIn post about drinking your own Kool-Aid.)
Now that you know how to avoid fines for incomplete procedures, read our other related posts and plan the next step on your compliance journey.
Links to our other compliance myth posts:
Questions? Concerns?
Schedule a free, 30-minute pipeline safety and compliance consultation.
Dan Prascher, Principal
(307) 488-0110 (O) | (303) 941-3773 (M)