ABU DHABI CRUDE OIL PIPELINE PROJECT

(ADCOP)

INTERNAL AND EXTERNAL AUDITS PROCEDURE

(Doc. No.: 30-99-90-1615)

CONSULTING
EN GI N EERS

EPC CONTRACTOR: PROJECT MANAGEMENT CONSULTANT:

China Petroleum Engineering ILF Consulting Engineers
& Construction (Group) Corporation P.O.Box 73250
Abu Dhabi Branch
Abu Dhabi, UAE
P.O. Box 127345

PROJECT: ABU DHABI CRUDE OIL PIPELINE PROJECT

EPC Contractor Doc. No.: PAGE: 1 of 10
DOCUMENT No.: 30-99-90-1615 Rev. 1 Project No: E30153 DATE: 26/09/2010
10
CONTENTS PAGE

1 PURPOSE AND SCOPE……………………………………..…………………………………………..4

2 REFERENCE DOCUMENTS…………………………………….…..…………………………………..4

3 RESPONSIBILITIES………………………………………..……………………………………………..4

4 DEFINITION………………………………………………………………………………………………..4

5 PROCEDURE……………………………………………………………………………………………..4

6 RELATED DOCUMENTATION………………………..……………………………………..…………..6

7 RECORD FORMATS…………………………………….………………………………………………..6

DOCUMENT TITLE : INTERNAL AND EXTERNAL AUDITS

Project No: E30153
PROCEDURE
PROJECT: ABU DHABI CRUDE OIL PIPELINE PROJECT Page 3 of 10
DOCUMENT No.: 30-99-90-1615 Rev. 1 26/09/2010
1 PURPOSE AND SCOPE

The purpose of this procedure is to define the extent, sequence and methods of the quality assurance audits
inside ADCOP Project, including the audits to subcontractors and vendors by CPECC to verify the conformity
and effectiveness of implementation of the quality management system.

This procedure is applicable to the audit activities of ADCOP Project quality management system.

2 REFERENCE DOCUMENTS

ISO 9001: 2008 Quality Management System - Requirements

IPIC-CPECC/ADCOP/PCSPA/07/002 ADCOP Pre-Construction Services and Procurement Activities

Agreement

ADCOP/KQ/CP/LT/826/08 LETTER OF APPOINTMENT

Q/CPECC QCP-2006 CPECC Quality Management System Procedures

ADCOP Project Quality Plan (30-99-90-1611)

ADCOP Project Corrective and preventive action control procedure (30-99-90-1617)

3 RESPONSIBILITIES

3.1 QA/QC manager is responsible for ensuring the development and implementation of the project Internal Audit
Programme.

3.2 The CPECC departments/ Suppliers/Subcontractors to which nonconformity items are issued shall ensure
that actions are taken without delay to eliminate detected nonconformities and their causes. Follow-up
activities shall include the verification of the actions taken and the reporting of verification results.

4 DEFINITION:

Corrective Action – the action taken to correct an identified noncompliance, Criticality level is assigned to
corrective action as below.

4.1 C1 : Correction required immediately due to immediate threat to personnel well being, integrity of
product or threat to the environment, current or impending financial loss.

4.2 C2 : Correction required within one month due to situation that could lead to systematic breakdown of
process causing personnel injury, product failure or financial loss.

4.3 C3 : Correction required within three month due to an ineffective, convoluted or unproductive process
or activity that would not seriously affect the business but required to be improved.

5 PROCEDURE

5.1 Raising of Corrective Action Report

5.1.1 Corrective Action Request (CAR - see attachments) may be raised.

5.1.2 It may be raised by the Lead/Internal Auditor during the course of an Internal Audit.
DOCUMENT TITLE : EPC Service Activities of ADCOP Project
Project No:
QUALITY AUDIT CONTROL PROCEDURE E
PROJECT: ABU DHABI CRUDE OIL PIPELINE PROJECT Page 4 of 10
DOCUMENT No.: 30-99-90-1615 Rev. 1 DATE : 26/06/2008
5.2 Numbering of CAR’s. Typical example of structure

BEL-IA-10B-CAR-001 & VO-IA-10A-CAR-003

Here BEL for Belleli and VO for Van Oord similarly for other subcontract/department.

IA- Internal Audit

10A and 10B First ( 10A)and second (10B) Part of Bi-annual schedule

CAR for Corrective Action Request and 001 and 003 are serial number for that sub contract/department.

Similar for all CARs raised during Internal Audit.

5.3 Issues and Response to CAR

5.3.1 The Lead/Internal Auditor shall obtain agreement from management of the function/department on subjects
of CARs to the facts stated.

5.3.2 The description of noncompliance shall clearly identify:

• The requirement which is on compliant (including paragraph or clause number of the procedures codes
or standards legislation etc.)

• The evidence of non compliance.

• The nature of the noncompliance.

5.3.3 The CAR shall be formally issued by the relevant Auditor to the manager of the function within which
noncompliance has been reported. Lead Auditor/Auditor with the help of Quality Coordinators is responsible
for obtaining corrective/Preventive action, follow up and close out of these actions.

5.3.4 CARs raised as result of an audit will be presented to the manager of the responsible function for signatory
agreement and action response at the audit close out meeting.

5.3.5 Responsibility for providing corrective and preventive action and effective date for their implementation lies
with the management of the function or department affected who shall complete Part B of the CAR.

Response of the CAR shall give due consideration to

• the possible extent of the reported non-compliance.

• The establishment of the root cause of the non-compliance
• The effect of proposed corrective/preventive actions on existing procedure or instructions

Effective date for corrective and preventive actions should take consideration of the realistic time scale
required to institute those action specified.

5.3.6 Copies of the CARs received outwith the audit process will be issued to the Lead Auditor/Auditor.

5.3.7 CAR Over due will be followed by the Lead Auditor/Auditor in the following circumstances:

• When action response are not supplied.

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DOCUMENT No.: 30-99-90-1615 Rev. 1 DATE : 26/06/2008
 • When on follow up of the CAR the promised corrective actions have not been implemented by the
agreed target date.

5.4 Close out

5.4.1 When on follow up the promised actions have been implemented but are seen and agreed to be
ineffective then new action and revised effective date shall be recorded and CAR will remain open for
further action.

5.4.2 When the effectiveness of the corrective/preventive action can not be verified due to the activity
concerned being of an infrequent nature then Lead auditor may close out the CAR. When this decision is
taken then the close out section of the CAR shall so indicate.

5.4.3 On Satisfactory close out, Part C shall be completed and signed off by the Auditor.

Audit CAR status shall be discussed and minuted in regular quality meetings and distributed to all
concerned.

5.5 When CAR raised during an audit can not be agreed between auditor and auditee. Auditee can note his
comment of disagreement and CAR be issued by auditor with auditee remarks.

5.6 Records

Records& Register of CARs raised from the audit process shall be maintained and tracked to completion by
the auditor.

5.7 Reporting

Trends Graphs and Charts will be reported at least monthly to the CPECC QA/QC Manager by the lead
auditor, showing trends and quantities by type and location.

5.8 Analysis of CARs and subsequent corrective and preventive actions shall form part of the Managemet
review process.

6.0 RELATED DOCUMENTATION

Corrective and preventive action control procedure

7.0 RECORD FORMATS

QR 8.2.2-1 Audit Checklist

QR 8.2.2-2 Audit Report
QR 8.2.2-3 Corrective Action Request
QR 8.2.2-4 Annual Audit Schedule

The End

QR.8.2.2-1

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DOCUMENT No.: 30-99-90-1615 Rev. 1 DATE : 26/06/2008
 AUDIT CHECK-LIST
(CPECC-HQ)
(Subcont/Dept)

Auditee: Rev - Auditor:

Scope: Issue Date:
Activity Check Action Ref Doc. Evidence & Records Compliance Remarks
No. Yes No N/A
1

.....

......

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DOCUMENT No.: 30-99-90-1615 Rev. 1 DATE : 26/06/2008
 QR8.2.2-2

AUDIT REPORT

Company: Auditor : Date:

Auditee: Scope: Location:
1. Audit Summary
..................................................................................................................................................................
..................................................................................................................................................................
.................................................

2. Detailed Audit Findings

Exhibits ISO 9001 Findings Remarks

Prepared by: Reviewed by: Approved by:

QR8.2.2-3
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DOCUMENT No.: 30-99-90-1615 Rev. 1 DATE : 26/06/2008
 CORRECTIVE ACTION REPORT

Date: CAR Audit Criticality Action Reason

Company: No.: No.: Level
Location: 1 Immediately
Scope: 2 Within 1 month
3 Within 3 Month
Customer:
Governing Subject: Raised By:
A

Documents and Internal Procedure No:

clauses: Clause Reference:

DETAILS PF NON COMPLIANCE:

(QA)

CAR Accepted:
Name: | Signature: | Dept:
POSITIVE REPORTING ASPECTS:
RESPONSE TO NONCOMPLIANCE:
B(RESPONSIBLE) DEPARTMENT/SUPPLIERS/SUBCONTRACTORS

ROOT CAUSE:

CORRECTIVE ACTION(S):

Target Completion Date:

PREVENTIVE ACTION(S)

Target Completion Date(s): Department Signature:

Responsibility for completing:
Completion Cost: Consequence of Non Completion:
Lesson learnt: Best Practice:

CLOSE OUT :
C

Name: Signature:
Date: Date:
(QA)

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QUALITY AUDIT CONTROL PROCEDURE E
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DOCUMENT No.: 30-99-90-1615 Rev. 1 DATE : 26/06/2008
 QR8.2.2-4

Legends:

QA/QC Doc. No - 30-99-97-2601 Planned:

Rev - , Updated : Actual:

CPECC-Abu Dhabi AUDIT PROGRAMME 2010
Jan-10 Feb-10 Mar-10 Aprl-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11
Audit Area Scope Remarks

Prepared By: Reviewed By: Approved By:

Name: Name: Name:
Designation: Designation: Designation:
Sign: Sign: Sign:
Date Date: Date:

DOCUMENT TITLE : EPC Service Activities of ADCOP Project

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QUALITY AUDIT CONTROL PROCEDURE E
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DOCUMENT No.: 30-99-90-1615 Rev. 1 DATE : 26/06/2008