Improving the Statutory
                                                  Compliance of Physical Assets
                  ...
Agenda
       • Introduction to CCI Pope Asset Management Services Group
       • Introduction to Statutory Compliance of ...
Asset Management Services Group
       • CCI Pope’s Asset Management Services group offer a range of
         services to ...
What is Statutory Compliance?
       “Compliance is an outcome of an organisation meeting its
         obligations.”

    ...
Statutory Obligations
       • Government Acts
          – Legal framework. Legislation made by Parliament
       • Regula...
Statutory Obligations
       •     Examples of Acts
              – Occupational Health and Safety Act 2000 (NSW)
        ...
Why is Statutory Compliance so Important?
       •      Failing to meet obligations increases the risk of safety and envir...
Non-compliance Penalties
              Maximum penalty NSW OHS Act 2000 number 40:

              ….. the maximum penaltie...
How Can Compliance be Improved?
       •      AS3806 - 2006 Compliance Programs
               – Commitment
              ...
Case Study
       •     Tomago Aluminium Company – Newcastle, NSW
              – One of the largest aluminium smelters in...
Project Justification
       • Newly appointed management had a good understanding of
         statutory requirements and ...
Compliance Auditing
       • CCI Pope performed preliminary review of asset compliance
         concentrating on pressure ...
Strategic Opportunities
       •     Improve and document compliance policy
       •     Improve and document compliance p...
Process Opportunities
       •     Improve & define processes
              – Single point of management - Inspection of 1...
Systems Opportunities
       • Multiple, labour intensive management systems
          – 15 different asset categories bei...
Resource Opportunities
       •     No documented roles, responsibilities or accountabilities regarding
             Statu...
Summary of Opportunities
       •      Opportunities existed to further reduce level of business risk
              associ...
Improvement Methodology
       • Designed upgraded Statutory Compliance management program in
         line with AS3806-20...
Strategic Improvements
       •     Developed and implemented site compliance policy
       •     Improved, documented and...
Process Improvements
       •     Developed
             and
             implemented
             standardised
          ...
Systems Improvements
       • Collated all compliance information into single data source
       • Verified all site compl...
Resource Improvements
       • Updated role descriptions to include statutory responsibilities and
         accountabiliti...
Learnings
       • Site systems do not necessarily meet statutory needs and are often
         difficult to change
       ...
Results Achieved
  Result Area                                          Before                         After

  Personnel ...
Customer Feedback




© 2007 CCI Pope Asset Management Services Group                       www.ccipope.com.au/ams
Customer Feedback




© 2007 CCI Pope Asset Management Services Group                       www.ccipope.com.au/ams
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Statutory Compliance (Conference, 2007)

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Statutory Compliance (Conference, 2007)

  1. 1. Improving the Statutory Compliance of Physical Assets Chad Moffiet and Adrian Kuchta Australian Mining Maintenance Conference, Brisbane 2007 © 2007 CCI Pope Asset Management Services Group www.ccipope.com.au/ams
  2. 2. Agenda • Introduction to CCI Pope Asset Management Services Group • Introduction to Statutory Compliance of Physical Assets – What is statutory compliance? – Why is it important? – How can compliance be improved? • Case Study – Site Background – Project Justification – Opportunities – Improvement Methodology – Learnings – Results Achieved • Questions © 2007 CCI Pope Asset Management Services Group www.ccipope.com.au/ams
  3. 3. Asset Management Services Group • CCI Pope’s Asset Management Services group offer a range of services to raise the level of asset management capability of our customers • These services are designed to ensure statutory compliance and deliver improvement in equipment reliability, production performance and business processes • We are committed to building and maintaining a reputation for delivering proven results and superior returns © 2007 CCI Pope Asset Management Services Group www.ccipope.com.au/ams
  4. 4. What is Statutory Compliance? “Compliance is an outcome of an organisation meeting its obligations.” (AS3806-2006 Compliance Programs ) What is Statutory Compliance? What is it Important? How can it be Improved? © 2007 CCI Pope Asset Management Services Group www.ccipope.com.au/ams
  5. 5. Statutory Obligations • Government Acts – Legal framework. Legislation made by Parliament • Regulations – A regulation is law. • Industry standards – Standards incorporated into Acts or Regulations legally binding • Codes of Practice – Not law but should be followed unless there is better way. – Failure to observe an industry code of practice may be used as evidence in proceedings for an offence under the Act . What is Statutory Compliance? What is it Important? How can it be Improved? © 2007 CCI Pope Asset Management Services Group www.ccipope.com.au/ams
  6. 6. Statutory Obligations • Examples of Acts – Occupational Health and Safety Act 2000 (NSW) – Dangerous Goods Act 1975 (NSW) – Coal Mining Safety and Health Act 1999 (QLD) • Examples of Regulations – Workers Compensation Regulation 2003 – Coal Mining Health and Safety Regulation, 2001 (QLD) – Workers Compensation (General) Regulation 1995 • Examples of Standards – Pressure Equipment – In service Inspection AS3788 – 2006 – Pressure Equipment – Hazard Levels AS4343 - 2005 – Cranes, Hoists and Winches AS 1418.1 & 10-18 - 2005 . What is Statutory Compliance? What is it Important? How can it be Improved? © 2007 CCI Pope Asset Management Services Group www.ccipope.com.au/ams
  7. 7. Why is Statutory Compliance so Important? • Failing to meet obligations increases the risk of safety and environmental incidents • Companies and their employees are increasingly at risk of prosecution if an incident occurs • Principle of proportionality in pursuing prosecution “The approach taken by WorkCover during workplace interaction will be proportionate to… the level of non-compliance with legislative requirements.” (WorkCover Prosecution Guidelines) “On numerous occasions the courts have considered an organisation’s commitment to compliance when determining the appropriate penalty for contraventions of relevant laws.” (AS3806 – Compliance Programs) What is Statutory Compliance? What is it Important? How can it be Improved? © 2007 CCI Pope Asset Management Services Group www.ccipope.com.au/ams
  8. 8. Non-compliance Penalties Maximum penalty NSW OHS Act 2000 number 40: ….. the maximum penalties are as follows: (a) in the case of a corporation—$1,650,000, (b) in the case of an individual—$165,000 or imprisonment for 5 years, or both. What is Statutory Compliance? What is it Important? How can it be Improved? © 2007 CCI Pope Asset Management Services Group www.ccipope.com.au/ams
  9. 9. How Can Compliance be Improved? • AS3806 - 2006 Compliance Programs – Commitment – Implementation – Monitoring & Measuring – Continual improvement • AS/NZS ISO9001:2000 Quality Management Systems – Understanding & meeting requirements – Monitor program performance – Implement mechanisms for continual improvement • A holistic systematic approach – Strategies – Processes – Systems – People What is Statutory Compliance? What is it Important? How can it be Improved? © 2007 CCI Pope Asset Management Services Group www.ccipope.com.au/ams
  10. 10. Case Study • Tomago Aluminium Company – Newcastle, NSW – One of the largest aluminium smelters in Australasia – More than 1000 people – Annual revenue of more than $1.1billion – 3 potlines – 280 pots per potline – 215,000 amps in pots – Capacity of 520,000 tonnes per annum (as at Dec 2006) – Over 2000 items of statutory plant Background Justification Opportunities Improvements Learnings Results © 2007 CCI Pope Asset Management Services Group www.ccipope.com.au/ams
  11. 11. Project Justification • Newly appointed management had a good understanding of statutory requirements and wanted to ensure that all obligations were being met • TAC approached CCI Pope to develop plan to improve statutory compliance on the site Background Justification Opportunities Improvements Learnings Results © 2007 CCI Pope Asset Management Services Group www.ccipope.com.au/ams
  12. 12. Compliance Auditing • CCI Pope performed preliminary review of asset compliance concentrating on pressure vessels and cranes (highest risk categories for the site) • Review identified deficiencies in site compliance reporting process and identified need for full compliance management systems audit • CCI Pope then performed a full compliance management program audit in accordance with the guidelines specified in AS3806-2006 Compliance Programs using a Process Management philosophy – Strategies, Processes, Systems and People Background Justification Opportunities Improvements Learnings Results © 2007 CCI Pope Asset Management Services Group www.ccipope.com.au/ams
  13. 13. Strategic Opportunities • Improve and document compliance policy • Improve and document compliance procedures Background Justification Opportunities Improvements Learnings Results © 2007 CCI Pope Asset Management Services Group www.ccipope.com.au/ams
  14. 14. Process Opportunities • Improve & define processes – Single point of management - Inspection of 15 different asset categories being managed by multiple processes – Consolidate Plant equipment register accuracy – Risk assessment process – Risk based inspection strategies e.g. Pressure Vessel Inspection Timeframes – Corrective Action management – Monitoring of & budgeting for the cost of Compliance – Contractor Management – Service Agreements, Inspection & Corrective Action reporting Background Justification Opportunities Improvements Learnings Results © 2007 CCI Pope Asset Management Services Group www.ccipope.com.au/ams
  15. 15. Systems Opportunities • Multiple, labour intensive management systems – 15 different asset categories being managed using multiple information systems • SAP • Microsoft Excel files • Microsoft Word files • Information difficult to find or collate • Report generation labour intensive due to system complexity Background Justification Opportunities Improvements Learnings Results © 2007 CCI Pope Asset Management Services Group www.ccipope.com.au/ams
  16. 16. Resource Opportunities • No documented roles, responsibilities or accountabilities regarding Statutory obligations • Enhance management awareness of their statutory obligations • Training & understanding – Top down • Multiple people on site shared responsibility for statutory compliance • Improve compliance management budgeting process Background Justification Opportunities Improvements Learnings Results © 2007 CCI Pope Asset Management Services Group www.ccipope.com.au/ams
  17. 17. Summary of Opportunities • Opportunities existed to further reduce level of business risk associated with non-compliance • Opportunities existed to improve level of communication and understanding of risk Background Justification Opportunities Improvements Learnings Results © 2007 CCI Pope Asset Management Services Group www.ccipope.com.au/ams
  18. 18. Improvement Methodology • Designed upgraded Statutory Compliance management program in line with AS3806-2006 Compliance Programs and ISO 9000 Quality Management Systems using a Process Management philosophy • Implemented outsourced compliance management by providing site with a full time Compliance Manager Background Justification Opportunities Improvements Learnings Results © 2007 CCI Pope Asset Management Services Group www.ccipope.com.au/ams
  19. 19. Strategic Improvements • Developed and implemented site compliance policy • Improved, documented and implemented site compliance procedures – For example • Pressure Vessel Plantwide Procedure • Forklift Plantwide Procedure • Inspection & Repair Plant Equipment – Planners • Inspection & Repair Plant Equipment – Plant Services • Inspection & Repair Plant Equipment – Contractors Background Justification Opportunities Improvements Learnings Results © 2007 CCI Pope Asset Management Services Group www.ccipope.com.au/ams
  20. 20. Process Improvements • Developed and implemented standardised compliance process Background Justification Opportunities Improvements Learnings Results © 2007 CCI Pope Asset Management Services Group www.ccipope.com.au/ams
  21. 21. Systems Improvements • Collated all compliance information into single data source • Verified all site compliance related information – Registration of equipment – Inspection status – Repair status • Implemented Risk-Based reporting Background Justification Opportunities Improvements Learnings Results © 2007 CCI Pope Asset Management Services Group www.ccipope.com.au/ams
  22. 22. Resource Improvements • Updated role descriptions to include statutory responsibilities and accountabilities • Conduct compliance training for all site personnel with compliance- related responsibilities or accountabilities beginning with senior management • Implemented single point responsibility via a single site Compliance Manager role • Site provided dedicated funding for compliance related activities Background Justification Opportunities Improvements Learnings Results © 2007 CCI Pope Asset Management Services Group www.ccipope.com.au/ams
  23. 23. Learnings • Site systems do not necessarily meet statutory needs and are often difficult to change • Senior management support and commitment paramount to the success of the overall program • Statutory compliance management requires dedicated resources outside the influence of production pressures Background Justification Opportunities Improvements Learnings Results © 2007 CCI Pope Asset Management Services Group www.ccipope.com.au/ams
  24. 24. Results Achieved Result Area Before After Personnel Responsible Multiple 1 Number of Processes Multiple 1 Number of Systems Multiple 1 Level of Compliance Confidential 100% (verified) (High to Moderate Risk Assets) Background Justification Opportunities Improvements Learnings Results © 2007 CCI Pope Asset Management Services Group www.ccipope.com.au/ams
  25. 25. Customer Feedback © 2007 CCI Pope Asset Management Services Group www.ccipope.com.au/ams
  26. 26. Customer Feedback © 2007 CCI Pope Asset Management Services Group www.ccipope.com.au/ams

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