L1.HSE -2017-7.

3-01 Terms of Reference Level 1 HSE MSOil North Directroate

TERMS OF REFERENCE:
PDO Level 1 HSE MS Audit
Oil North Directorates HSE- MS Audit
Type of Audit Level 1 HSE MS Audit
Sponsor MSEM
Auditee Saadi Khamis OIL DIRECTOR - NORTH OND
Facility Audit
Ismaili, Said HSE Advisor ONS3
coordinator
Health, Safety and Corporate Health, Safety & Environment
Salmani, Mohamed MSEM
Environment Manager Manager
Audit Manager Hinai, Younis Head HSE Corporate Planning MSE5
Lead Auditor Moamary, Said HSE Auditor MSE531
Hassan, Ammar HSE Auditor MSE532
Rawahi Ahmed HSE Auditor MSE533
Audit Team Geafar Elvin Functional Senior CSU Engineer UOP41
Dhuhly Nasser Maintenance Coordinator OSO4B
Harthy, Salim Geomatics Manager XGG
Petrizzo, Jose Senior Industrial Hygienist MCOH1
Maskari, Mohammed HSE Advisor OSSN
Follow Up co-ordinator Ismaili, Said HSE Advisor ONS3
Peer Reviewer Hinai, Younis Head HSE Corporate Planning MSE5
Locations to be
Muscat / Interior. Locations to be finalized 2 weeks prior to audit
covered
Period of Audit 26 February - 09 March 2017
Audit Reference L1.HSE -2017 -7.3 01
Date Issued 01 Dec. 16

Objectives

The objectives of the audit are:

To appraise the completeness of the Oil North Directorate HSE MS against PDO HSE Policies, Objectives,
Standards and Procedures.
To assess the adequacy & effectiveness of the HSE Management System with respect to the Oil North
Directorate
Where weaknesses are identified, to highlight what is expected and needed to demonstrate adherence to
the PDOs HSE Policy and Standards.

Scope

The scope includes all activities, processes and facilities under the operational control of Oil North Directorate HSE
Management and interfaces including other business activities, contractors, sub-contractors & projects.
Not every aspect of each process or facility will be audited, as the audit is risk-based (see methodology
described below). Sample areas will include activities and processes of PDO and Contractor/subcontractor at their
offices and sites.

Specific focus areas have been defined for this HSE-MS audit, although these may not be exhaustive. System
failure issues identified during the audit may necessitate inclusion in an agreed and expanded scope of work:

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Risk Area Focus points

Common Processes Completeness and effectiveness of the inventory of hazards and controls
(HEMP Process)
Identification of HSE critical activities, roles and responsibilities including
Adequacy of Emergency response plan
Incident investigation
HSE Competency, Training & Awareness
HSE Contractor Management

Personal Safety Permit To Work

Working Safely (Life Saving Rules & Golden Rules)
Working at Height
Scaffolding
Excavation
Transport
Heavy Lifting and Hoisting

Occupational Health & MER Fitness to Work

HRA
Medical Emergency Responses

Assurance HSE Assurance processes

Environment (ISO 14001 Assurance) Environmental Permits, Aspects & Impacts

Borrow pits
Waste Management
Chemicals Managements

Standards

The audit will be carried out against the following standards:

1. Omans laws and regulations.
2. PDOs HSE Commitment and Policy.
3. PDOs HSE Management system, manuals and procedures.
Particular emphasis areas:
(PR-1980, SP-2000, SP-2001, PR-1172, PR-1708, PR-1709, PR-1969, SP-1230, SP-1231, SP-1225,SP-
1013, SP-1257)

Audit Plan

The audit takes place in the period from 26 February to 09 March 2017 and may include the weekends as working
days.

A proposed audit plan containing details on the proposed site fieldwork and interviewees will be sent and agreed
separately. The Auditee will submit the organisational chart and general site processes description to the lead
auditor to allow for the schedule to be made specific to the auditees organisation as detailed in their HSE-MS.
The facility/business unit shall finalise and agree the draft schedule 2 weeks prior to the audit. During the
execution of the audit the audit leader may request to modify the schedule to accommodate additional interviews
or sample locations.

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Interviews shall generally be conducted in the workplace of the interviewee (e.g. offices of management,
workshops of maintenance persons, control rooms of operations persons). Arrangements shall be requested for
detailed inspections of facilities consisting of walk-through of operating areas (to be determined) and including
storage facilities, areas for waste treatment and hazardous waste storage.

The facility shall provide the necessary personal protective equipment (PPE).

The audit plan will include adequate time set aside for the audit team at the facility for clarification and draft
report writing.

Proposed Event Proposed Timing

Audit team brief 1 26/02/2017
Opening Meeting lead auditor, presentation Auditee 1 26/02/2017
Interviews 1-9 26/02 06/03/2017
Field Work/visits 2-9 27/02 06/03/2017
Draft Audit Findings 10 07/03/2017
Independent Review 11 08/03/2017
Review agreed findings with Auditee 12 09/03/2017
Close-Out Meeting 12 09/03/2017
Draft Report Issued to Auditee 19 16/03/2017
Responses from Auditee to be returned to Audit Team 40 06/04/2017
Final Report Issued 47 13/04/2017

Methodology

The audit will be conducted in accordance with the methodology described in this ToR. Findings shall be classified
and the acceptability of Risk Area Controls assessed in accordance with the criteria shown below.

To facilitate the efficient and effective execution of the audit, it is required that the HSE hazard registers,
organisation charts, site & process descriptions and key elements of the current HSE Management System
documentation be submitted to the Audit Team. This will allow a review of the auditees arrangements and enable
set-up of the audit to ensure focus on the areas likely to represent the highest risk to the business.

The methodology will use a risk-based approach and a general auditing approach in line with good industry
practice. Team members will gather information by field observation, through interviews and including checks of
hardware and documentations. Audit evidence will be based upon sampling of the available information and
therefore should not be considered all-inclusive or exhaustive. Conscientious efforts will be made to verify
findings and to confirm the validity of recommended actions. Where judgement is required, the result will be
determined by consensus within the audit team.

Audit Findings Classification

Classification of the audit findings shall be in accordance with the Rating Level table (Table 1).

Weakness Level Definition

The finding is likely to cause a high undesirable effect on the achievement of
Serious (S) the entitys objectives and / or is likely to have a notable impact on other PDO
entities, therefore warranting immediate reporting to senior management.
The finding is likely to cause a high undesirable effect on the achievement of
High (H) one of the entitys objectives, warranting reporting to the auditees
management.

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The finding is likely to cause a measurable undesirable effect on the

Medium (M)
achievement of one of the entitys objectives.
The weakness is unlikely to have a measurable impact on the entitys
Low (L)
objectives, but its correction would enhance the risk based control framework.
Non-compliance to specific external legal or other regulations applicable to the
Non-Compliance (C)
entity.
Table 1 Rating Level table

All findings are to be classified based upon the professional judgment of the audit team. The primary criterion for
rating each finding is the adequacy of the control for the risk as defined in the Assets relevant Hazard register.

Overall Assessment of HSE Risk Controls and Audit Rating

No audit opinion will be provided. Assessments of the HSE Risk Controls areas will be indicated by reference to
three possible categories:

Controls Acceptable

None, or a few Low and/or Medium rated findings are reported which indicate that a once-off rather
than process or system structural weaknesses is present or that general enhancement of the controls,
process or system framework is not needed.
Controls Need Improvement

Some Medium and / or one or more High rated findings are reported which indicate a weakness in key
controls / barriers or in a part of the process or system structural framework.
Controls Need Major Improvement

Three or more High and/or one or more Serious rated findings are reported indicating failures in key
controls / barriers or across a significant part of the process or system structural framework.

A qualitative description will be provided as part of the Summary and Conclusions, to summarize the overall
outcome and highlighting the control areas where findings are identified. This is in the form of a table that depicts
a reference to each finding and the Control Acceptability assessment for each Risk Area with control acceptability
assessments for those HSSE-MS element areas only where systemic issues are identified and observed across
multiple risk management areas, as per below example.

During the audit the audit team may come across weaknesses in risk control areas, which have already been
identified by the Auditee. In some of these cases the Auditee may be able to claim work-in-progress (WIP) when
the following criteria have been met:
Relevant issues and actions are identified and documented prior to the start of the audit.
For these issues and actions an implementation plan was already in place prior to the start of the audit
with milestones set and resources allocated together with evidence of implementation having begun.
During the audit, the follow-up process was found to be satisfactory, taking into account the track record
of the business in closing out action items.
Interim mitigations to control the risk area are in place, and deemed effective by the audit team.

Where testing by the audit team proves that the above criteria can be met, reliance can be placed on the existing
process. No specific findings shall be raised for these issues in the audit report, however, due reference will be
made in the executive summary of the audit report as to the degree of reliance that was placed on the process
and highlighted in the control acceptability matrix (example CAM, table 2). Such issues will also not have major
impacts on the opinion. Where one of the above criteria has not been met, reliance cannot be placed on the

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process. Another finding will therefore be raised to ensure that relevant actions are taken. The audit opinion will
take such audit findings into account.

Table 2: Control Example of Acceptability Matrix (CAM)

Report

The draft Audit Report will undergo a peer review prior to the discussion with the Auditee.

The team will present the audit results to the Auditee and their management at the conclusion of the audit. This
closing meeting or presentation shall be conducted at the end of the audit or as pre-arranged between the
Auditee and the Lead Auditor. The purpose of this meeting is to formally communicate the findings and the
assessment of the acceptability of controls to the Auditee and the management team and to ensure clarity of
understanding. The findings, associated classifications, and acceptability of controls shall be considered frozen
and only editorial changes allowed may be considered. The Audit Leader may also be asked by the Auditee to
present the audit results to wider audience.

Within 7 calendar days of the audit conclusion, the Lead Auditor shall send a Draft for Review copy of the Audit
Report to the Auditee. The Auditee will work with his/her organisation to identify underlying causes of the
findings where these are required, and develop suitable means to address the findings, including assigning action
parties and planned completion date.

For Legal (C), Serious (S) and High (H) findings, the Auditee shall have 21 calendar days to perform root cause
investigation into underlying causes, and complete the Underlying Cause, Action, Action Party and Due
Date fields for each of the findings.

For Medium (M) and Low (L) findings, the Auditee shall have 21 calendar days to identify appropriate actions and
complete the Action, Action Party and Due Date fields for each of the findings.

The lead auditor will review the actions and timings proposed by the site and will request clarification if required
to ensure that actions do address the underlying action resulting from the audit findings. When substantial
agreement has been reached on the contents of the report, the report will become Final.

Where agreement on findings or appropriate actions to address findings and/or recommendations cannot be
reached, the Lead Auditor may discuss with the next level of management of the Auditees business and agree a
forward plan to resolve the issue. In cases where resolution between the auditor and Auditee / auditees line
management cannot be reached, they shall be escalated to the Audit Sponsor. If the disputed area cannot be
resolved, the Lead Auditor view will prevail although the Auditee will have the right to insert a management
comment to provide his/her point of view, (on the appropriateness of actions only).

Once the report is completed, it shall be distributed as agreed with the Auditee as shown in these Terms of
Reference. Actions will be uploaded into the PDO Incident Management System (PIM).

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Report-Distribution

The final report distribution will be as shown in appendix A below.

Logistics and coordination

The audit coordinator must ensure the provision of:

An opening presentation detailing the operations provides, and indicating how MSE is managed
within the function
Coordination and setting up of meetings in MAF
Flights, pickups and accommodation on site.
Travel and guides on site.
Specialized personal protective equipment (PPE). (Excludes coveralls and boots)
IT authorization for audit team to access local data files
A lockable office with sufficient space, desk/table area, and chairs for the audit team and flipcharts
Flip chart holder with paper, ink markers
Computer connection to electronic system where documents are stored (e.g., local intranet, shared
folders)
Computer projector (beamer)
Permission and permit (including gas testing as required) to take photographs on site.

HSE-MS Documentation Request

Documentation including, but not limited to the following may be requested during the audit planning and
implementation process.
Key elements of the current HSE Management System documentation
Organisation Charts
A general description of operations undertaken & an overview of the processes (See presentation above)
HSE Hazard Register
Health Risk Assessments
HSE Plans (Own & contractors)
HSE Audit Programme and Schedule. (Own & contractors)
Reports of recent HSE related audits and reviews (Own & contractors)
Follow up records for past audits (Own & contractors)
Accident and incident reports (Own & contractors)
HSE performance indicators and statistics for the last year and year to date (Own & contractors)
HSE Plans, both plans specific to the facility/business unit and plans at business level related to the
facility/business, for last year and year to date
HSE Targets and Objectives, both plans specific to the facility/business unit and plans at business level
related to the facility/business, for last year and year to date
Contractor details, services supplied and related contractor HSE documentation

Note: Relevant Contract specific documentation and records may be requested during the audit planning and
implementation process.

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Distribution list

Saadi Khamis OIL DIRECTOR - NORTH OND

Farsi Salah HSE Team Lead ONS
Salmani, Mohamed Corporate Health, Safety & Environment Manager MSEM
Hinai, Younis Head HSE Corporate Planning MSE5
Moamary, Said HSE Auditor MSE531
Hassan, Ammar HSE Auditor MSE532
Rawahi, Ahmed HSE Auditor MSE533
Geafar Elvin Functional Senior CSU Engineer UOP41
Dhuhly Nasser Maintenance Coordinator OSO4B
Harthy, Salim Geomatics Manager XGG
Petrizzo, Jose Senior Industrial Hygienist MCOH1
Maskari, Mohammed HSE Advisor OSSN

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