contract management guideline

CONTENTS…………

1. INTRODUCTION

2. PROCEDURE FOR MANAGEMENT OF HSE IN CONTRACTS

3. GUIDELINES FOR HSE PRE-QUALIFICATION OF TENDERERS

4. SPECIFICATION FOR CONTRACT HSE REQUIREMENTS

5. HSE PERFORMANCE REQUIREMENTS

6. GENERAL HSE SPECIFICATIONS FOR LOW-RISK CONTRACTS

7. GUIDELINES FOR CONTENT AND ASSESSMENT OF CONTRACT HSEPLANS

8. GUIDELINES FOR MONITORING HSE IN CONTRACTS

9. GUIDELINES FOR HSE PERFORMANCE CLOSE-OUT REPORTING

10. HUMAN FACTORS CONSIDERATIONS IN CONTRACTORMANAGEMENT

11. SECURITY CONSIDERATION CONTRACTOR MANAGEMENT

Michael Odeleye

Michael Odeleye

Michael Odeleye

Michael Odeleye

Michael Odeleye

Michael Odeleye

Michael Odeleye

Michael Odeleye

Michael Odeleye

Michael Odeleye

Michael Odeleye

Michael Odeleye

Michael Odeleye

CONTRACTOR MANAGEMENT GUIDE

Foreword

SPDC’s operations rely heavily on the goods and services provided by Contractors. Good contractor managementand, in particular, high quality management of HSE in all aspects of the work involving contractors is thereforeof great importance to SPDC’s success. It is SPDC’s objective to implement best practice HSE Management inall its operations. Contractors are contractually obliged to take up this objective when working under SPDCcontracts. This document therefore provides guidelines for the management of contractors with a view to providinga HSE climate, conditions and performance that meet Shell Group and international standards. In preparing thisdocument, every effort has been made to draw from SPDC’s past and recent experience, especially the learningpoints from incident investigations.

This Guide is developed to assist SPDC staff, who may sponsor, hold, or supervise contracts, to comply withSPDC HSE requirements, and be proficient in contractor management. It specifically promotes best practice HSEmanagement in contracts, while offering robust guidance for contractor management including managing theHSE aspects of the involvement of outside bodies and non-contracted personnel supporting or interfacing withSPDC operations, e.g. security forces. All SPDC staff involved in the management of contracts must use therelevant parts of this Guide to conduct their contracting process and to provide Contractors with guidance onhow HSE is to be managed in order to comply with SPDC’s HSE requirements.

It is a requirement that all SPDC contracts specify the conduct of the work in accordance with the proceduresand guidance contained in this manual. This applies in all aspects and throughout all phases of the contractprocesses, that is, from pre-qualification, tendering, evaluation, start-up, and execution, to close-out.

Any exceptional situation that might necessitate non-compliance with this Guide must be brought to theattention of management immediately, before proceeding with the contracting process or the execution of the work.

I wish to take this opportunity to emphasise the role of the Contract Holder as the lynchpin of successfulcontractor management. Line Managers are accountable for ensuring that competent Contract Holders are incharge of every contract, and that they execute all aspects of this Contractor Management Guide accordingly.

Ron van den BergChairman/Managing DirectorShell Petroleum Development Company of Nigeria LimitedLagos, Nigeria

1

FOREWORD

INTRODUCTION

The Purpose of this ManualThe Contractor Management Guide (CMG) is issued to assist SPDC Contract Holders in getting theirContractors to apply consistently high Health, Safety and Environmental Management Standards in theperformance of all SPDC Contracts. To this end, the primary purpose of this Guide is to control and minimisethe risk to People’s Health and Safety; risk to the Environment; and risk to Plant and Equipment in the provisionof goods and services under contract to SPDC. It provides the Contract Holders with a set of easily accessibledocuments that guide the Contract HSE Management Process from pre-qualification to closeout. In particular,Contract Holders must make absolutely sure that all potential tenderers are made fully aware of the requirementsof this Guide and of any other relevant requirements that may subsequently form part of the contract. It is theresponsibility of the Contract Holders to ensure that all tenderers comply; non-compliance may lead todisqualification from the tender exercise.

The principles and processes in this Guide represent SPDC corporate requirements for HSE Management ofContracts. It is Mandatory for staff to use this Guide in managing contracts. The Guide applies to all contractsirrespective of their monetary value or complexity. However, within the Guide, an unambiguous distinction ismade between ‘low risk’ contracts, ‘medium risk’ contracts, and ‘high risk’ complex contracts, and therecommended HSE management emphasis for each category is addressed accordingly.

This Guide derives its origins from the serious weaknesses in Contract Management identified during fatalaccident reviews. In each of the incidents reviewed, poor contractor management and the absence of structuredguidance for Contract Holders recurred as latent failures. The Expanded Short Term HSE Improvement Plan(ESTHSEIP) was prepared to stop the fatalities, and this included developing structured documentation formanaging HSE in contracts, and competence development and competence assurance in contract management.To achieve these two objectives, there was wide consultation internally and externally with the Contract ServicesDepartment (CSE); with best practice of other OUs; with the International Association of Oil and Gas Producers(OGP) in London; etc.

2

INTRODUCTION

Contractor Management Guide (CMG) StructureThe CMG is based on a two-level document structure that cuts across the phases of contracting from Planning,through Tendering and Mobilisation, to Execution and Close-out (see Figure 1 below).

Figure 1: HSE Management of Contracts Flowchart

3

INTRODUCTION

Based on the above diagram, the CMG has been organised according to a five-by-two matrix of ‘Instructions toContract Holders’ (Level 1) and ‘Model Documents and Templates’ (Level 2). It is a suite of 8 documents witha main document number SPDC 99-031 and with sub-document numbers from a to f and Appendices A and B.This document structure is shown in Figure 2 below:

Prepare preliminaryContract

Management Plan

Establish:Contract Strategy

Contract Scope & Schedule

HSE Assessment&

HSE Specification

Pre-qualify PotentialTenderers

(If required)

FinaliseTender

Document

Tenderer preparespreliminary Contract

HSE Plan

ReviewTender

Contract Award

Monitor Contract HSE Planimplementation

acceptance

Maintain same levelof vigilance as

during execution

Contract PerformanceReport

Feedback to CMISCustodian for

update of registerCLOSE-OUT

DE-MOBILISATION

EXECUTION

MOBILISATION

TENDER PERIOD

EVALUATION ANDCONTRACT AWARD

PLANNING ANDINVITATION TO TENDER

PotentialTenderers

Tenderers

Contractors

FinaliseContract HSE Plan

Hold localKick-off meeting

5 x 2 Matrix mapped to CMG suite of documents

4

INTRODUCTION

** Includes ‘Instructions to Tenderers’ and ‘Model HSE Clauses in Contracts’** Includes ‘Guidelines for HSE Kick-off Meetings’

CMG = Contractor Management Guide

Planning

Level 1 Instructions to Contract Holders(Instructions and guidelines on what to do)

Model Documents and Templates(Mandatory and recommended model documents)

• 99-031 Appendix A • 99-031 Appendix BNB: 99-031c and parts of 99-031a Level 2 documents are applicable throughout because they are an

integral part of the Contract document.

Level 2

Tendering Mobilisation Execution Close-out

CONTRACT AWARD

CONTRACT PHASES

CMG 5 X 2Matrix

• 99-031a• 99-031b

• 99-031c • 99-031d • 99-031e • 99-031f

DocumentNumbers:(Primary Relevance)

CMG DOCUMENT STRUCTURE

Document No. Document Title Contracting Phase (Primary Relevance)

SPDC 99-031a Procedure for Management of HSE in Contracts Planning

SPDC 99-031b Guidelines for HSE Pre-qualification of Potential Tenderers Planning

SPDC 99-031c Specification for Contract HSE Requirements* Tendering

SPDC 99-031d Guidelines for Content and Assessment of Contract HSE Plans** Mobilisation

SPDC 99-031e Guidelines for Monitoring HSE in Contracts Execution

SPDC 99-031f Guidelines for Contract HSE Close-out Report Close-out

99-031 Annex A Human Factors Considerations in Contractor Management All Phases

99-031 Annex B Security Considerations in Contractor Management All Phases

Figure 3 below illustrates the relationship between the CMG and other documents relevant to contracting andcontractor management.

Contractor Management Guide and Associated Documents

5

INTRODUCTION

*Management Systems Documents Include: HSE Cases, HSE MSs; Land & Marine Transport Guides; OPGs, etc

Figure 3 above also shows the CMG document hierarchy, and the relationship of the CMG documents to theSPDC HSE Policy, Corporate HSE MS, Contracting Policy and Procedures Manual (CPPM), and other SPDCHSE Procedures, Standards, Guidelines, and Management System Documents.

SPDC HSE Policy

Corporate HSE MS

99-031a

CMG

99-031b

99-031c

99-031d

99-031e

99-031f

Annex A

Annex B

ROBUST CONTRACTOR MANAGEMENT

CPPM

Instruction to Tenderers

Forms of Tender

Model ContractDocuments

HSE Reference Manual

HSE Procedures &Guidelines

Management SystemDocuments*

Use of the ManualContract Holders, Project Engineers, Client Representatives, Project Management Inspectors, Company SiteRepresentatives, HSE Advisors, and Contract Managers will find in this guide a compendium of documents forthe sound management of HSE in contracts. Each document focuses on a definite phase of contracting, and isdivided into two parts: level 1 and level 2. Level 1 details the instructions and best practice guidance for eachphase of contracting; including links to other phases, while Level 2 contains templates, checklists, and othermodel documents relevant to each phase of contracting. Where appropriate, some of the level 2 documents maybe incorporated in any of the Instructions to Tenderers, the Forms of Tender and the Contract Documents. Thus,the Guide is not a contractually binding document in itself.

Each document relates primarily (though not exclusively) to a single phase in the contracting process. Also,the suite of documents are arranged in a logical time and activity sequence, from the earliest phase of Planningto the last phase of Close-out. Thus, the Procedure for Management of HSE in Contracts (SPDC 99-031a)describes the activities to be carried out at the planning stage of a contract. It extends this theme to include adetailed guide for developing a Contract Management Plan (CMP) and a summarised approach to HazardManagement and HSE Risk Assessment.

The Specification for Contract HSE Requirements (SPDC 99-031c) provides each Contract Holder witha template for identifying minimum HSE requirements for a specific contract. The Contract Holder will agreethe appropriate template requirements for specific contracts, based on contract risks, and will formulate thecontract documents accordingly. This will include an explicit obligation on the Contractor to develop hisPreliminary Contract HSE Plan to the agreed template.

The four guideline documents SPDC 99-031b, SPDC 99-031d, SPDC 99-031e, and SPDC 99-031f providethe Contract Holder with detailed guidance on four important elements of the Contract HSE ManagementProcess. These are: HSE Pre-Qualification of Potential Tenderers, preparation of Contract HSE Plans, MonitoringHSE in Contracts, and Contract HSE Performance Close-out, in that order.

Associated Documents and ProcessesIt is the duty of every Contract Holder to be fully conversant with the documents organically related to the CMG.These include policies, reference manuals, procedures and others.

SPDC’s HSE Policy is the prime document governing the application of HSE Management in all SPDCOperations. It is signed by the Managing Director and requires that ‘Contractors manage their operations inline with the policy’. This link is explicitly expressed in relevant CMG templates and in all contract documents.

The SPDC Contracting Policy and Procedures Manual (CPPM) is the controlling document which requiresthat legal, financial, and audit controls are applied to all SPDC Contracts. The legal controls include appropriateexplicit HSE clauses in contracts. Further, the CMG specifies the Management arrangements for HSE in Contractsthat complement and reinforce the requirements of the CPPM.

Detailed standards for on-job Health, Safety and Environmental management can be found in the HSEReference Manual (HRM) which is a contractually binding requirement to be fulfilled. Also, the CMGdocuments provide references to other SPDC HSE Procedures, Standards and Guidelines, which will be used toimplement the ‘Specifications for Contract HSE Requirements’ (SPDC 99-031c).

The relationship between the HSE and Commercial processes as regards documents, systems, competencedevelopment and competence assurance is shown in overview in figure 4 on the next page:

6

INTRODUCTION

Figure 4: HSE – Commercial Services Process Interface

CSE – HSE Contract Management Process Interface

7

INTRODUCTION

ResponsibilitiesIt is the responsibility of all SPDC Contractors to apply the requirements of the CMG in all contract operationsinsofar as they are expressed in the tender and contract documents, and related correspondence of a contractuallybinding nature. In particular, Contract Holders should make it clear to tenderers, in the tender document andrelated correspondence, that their bid should fully reflect the requirements of the tender and contract.

Contract Holders are responsible for ensuring that their Contract HSE Management arrangements arecompliant with the requirements of this Guide. They must also ensure that the Contractor fully implements theobligations of the contract, as well as demonstrate compliance in accordance with SPDC 99-031e – Guidelinesfor Monitoring HSE in Contracts. Such demonstration of compliance will include the systematic identificationand documentation of contractual non-compliance and the application of related of sanctions and remedial measures.

In particular, it is the responsibility of the Contract Holder to ensure that the Tender document, the Contract,and the Scope of the business arrangement are sufficiently defined in line with this Guide. This will ensure thathigh quality Contractor HSE Management is formulated and sustained from contract inception, throughexecution, to close-out.

The Contractor HSE Management Team of Corporate HSE (HSE-CON) will maintain the ContractorManagement Guide to Best Practice status, and will independently monitor its application in SPDC Contractsby means of occasional audits, reviews, checks, etc. It remains the responsibility of the Line Manager to have inplace, and consistently apply, a system to VERIFY that all Contract Holders reporting to him fully apply thisGuide in all contracts.

It is planned to keep this Guide "live" and relevant, reflecting practical challenges in Contract Managementin our environment, while also bringing best practices to bear in our operations. If you find any errors or omissionsin this Guide, you are encouraged to communicate this via the CMG WEB UPDATE REGISTER. Your inputwill be promptly evaluated and captured as appropriate.

Processes

Documents andSystems

Competence Devpt.and Assurance

• Contracting Policies and procedures

• Contract planning and administration

• Tender Board processes

• Vendor management

• Payments, claims, etc

• Contracting Policies and Procedures Manual (CPPM)

• Short Form Contracting Guidelines

• Contract Management Information Systems (CMIS)

• Contract Administration Course

• Commercial Awareness Course

TK-81 – Contract Mgt etc

• Contract management planning

• Mobilisation, execution and close-out

• Contractor HSE evaluation

• Input to Vendor Registration

• Contractor HSE performance information

• Contractor Management Guide (CMG)

• Guidelines for HSE Kick-Off Meetings

• Contractor HSE Evaluation System (COHSEE)

• COHSEE training (1 day)

• Supervising Safety (P-248)

P-287 – Mid-Mgt HSE W/shop. etc.Contract Management Suiteof Courses

Procurement Operations

CSE HSE

CONTRACTOR MANAGEMENT GUIDE

Foreword

SPDC’s operations rely heavily on the goods and services provided by Contractors. Good contractor managementand, in particular, high quality management of HSE in all aspects of the work involving contractors is thereforeof great importance to SPDC’s success. It is SPDC’s objective to implement best practice HSE Management inall its operations. Contractors are contractually obliged to take up this objective when working under SPDCcontracts. This document therefore provides guidelines for the management of contractors with a view to providinga HSE climate, conditions and performance that meet Shell Group and international standards. In preparing thisdocument, every effort has been made to draw from SPDC’s past and recent experience, especially the learningpoints from incident investigations.

This Guide is developed to assist SPDC staff, who may sponsor, hold, or supervise contracts, to comply withSPDC HSE requirements, and be proficient in contractor management. It specifically promotes best practice HSEmanagement in contracts, while offering robust guidance for contractor management including managing theHSE aspects of the involvement of outside bodies and non-contracted personnel supporting or interfacing withSPDC operations, e.g. security forces. All SPDC staff involved in the management of contracts must use therelevant parts of this Guide to conduct their contracting process and to provide Contractors with guidance onhow HSE is to be managed in order to comply with SPDC’s HSE requirements.

It is a requirement that all SPDC contracts specify the conduct of the work in accordance with the proceduresand guidance contained in this manual. This applies in all aspects and throughout all phases of the contractprocesses, that is, from pre-qualification, tendering, evaluation, start-up, and execution, to close-out.

Any exceptional situation that might necessitate non-compliance with this Guide must be brought to theattention of management immediately, before proceeding with the contracting process or the execution of the work.

I wish to take this opportunity to emphasise the role of the Contract Holder as the lynchpin of successfulcontractor management. Line Managers are accountable for ensuring that competent Contract Holders are incharge of every contract, and that they execute all aspects of this Contractor Management Guide accordingly.

Ron van den BergChairman/Managing DirectorShell Petroleum Development Company of Nigeria LimitedLagos, Nigeria

1

FOREWORD

Michael Odeleye

INTRODUCTION

The Purpose of this ManualThe Contractor Management Guide (CMG) is issued to assist SPDC Contract Holders in getting theirContractors to apply consistently high Health, Safety and Environmental Management Standards in theperformance of all SPDC Contracts. To this end, the primary purpose of this Guide is to control and minimisethe risk to People’s Health and Safety; risk to the Environment; and risk to Plant and Equipment in the provisionof goods and services under contract to SPDC. It provides the Contract Holders with a set of easily accessibledocuments that guide the Contract HSE Management Process from pre-qualification to closeout. In particular,Contract Holders must make absolutely sure that all potential tenderers are made fully aware of the requirementsof this Guide and of any other relevant requirements that may subsequently form part of the contract. It is theresponsibility of the Contract Holders to ensure that all tenderers comply; non-compliance may lead todisqualification from the tender exercise.

The principles and processes in this Guide represent SPDC corporate requirements for HSE Management ofContracts. It is Mandatory for staff to use this Guide in managing contracts. The Guide applies to all contractsirrespective of their monetary value or complexity. However, within the Guide, an unambiguous distinction ismade between ‘low risk’ contracts, ‘medium risk’ contracts, and ‘high risk’ complex contracts, and therecommended HSE management emphasis for each category is addressed accordingly.

This Guide derives its origins from the serious weaknesses in Contract Management identified during fatalaccident reviews. In each of the incidents reviewed, poor contractor management and the absence of structuredguidance for Contract Holders recurred as latent failures. The Expanded Short Term HSE Improvement Plan(ESTHSEIP) was prepared to stop the fatalities, and this included developing structured documentation formanaging HSE in contracts, and competence development and competence assurance in contract management.To achieve these two objectives, there was wide consultation internally and externally with the Contract ServicesDepartment (CSE); with best practice of other OUs; with the International Association of Oil and Gas Producers(OGP) in London; etc.

2

INTRODUCTION

Contractor Management Guide (CMG) StructureThe CMG is based on a two-level document structure that cuts across the phases of contracting from Planning,through Tendering and Mobilisation, to Execution and Close-out (see Figure 1 below).


3

INTRODUCTION

Based on the above diagram, the CMG has been organised according to a five-by-two matrix of ‘Instructions toContract Holders’ (Level 1) and ‘Model Documents and Templates’ (Level 2). It is a suite of 8 documents witha main document number SPDC 99-031 and with sub-document numbers from a to f and Appendices A and B.This document structure is shown in Figure 2 below:


Management Plan



HSE Assessment&

HSE Specification

Pre-qualify PotentialTenderers

(If required)

FinaliseTender

Document

Tenderer preparespreliminary Contract

HSE Plan

ReviewTender

Contract Award


acceptance


during execution


Feedback to CMISCustodian for

update of registerCLOSE-OUT

DE-MOBILISATION

EXECUTION

MOBILISATION

TENDER PERIOD



PotentialTenderers

Tenderers

Contractors


Hold localKick-off meeting

5 x 2 Matrix mapped to CMG suite of documents

4

INTRODUCTION

** Includes ‘Instructions to Tenderers’ and ‘Model HSE Clauses in Contracts’** Includes ‘Guidelines for HSE Kick-off Meetings’

CMG = Contractor Management Guide

Planning

Level 1 Instructions to Contract Holders(Instructions and guidelines on what to do)

Model Documents and Templates(Mandatory and recommended model documents)

• 99-031 Appendix A • 99-031 Appendix BNB: 99-031c and parts of 99-031a Level 2 documents are applicable throughout because they are an

integral part of the Contract document.

Level 2

Tendering Mobilisation Execution Close-out

CONTRACT AWARD

CONTRACT PHASES

CMG 5 X 2Matrix

• 99-031a• 99-031b

• 99-031c • 99-031d • 99-031e • 99-031f

DocumentNumbers:(Primary Relevance)

CMG DOCUMENT STRUCTURE

Document No. Document Title Contracting Phase (Primary Relevance)

SPDC 99-031a Procedure for Management of HSE in Contracts Planning

SPDC 99-031b Guidelines for HSE Pre-qualification of Potential Tenderers Planning

SPDC 99-031c Specification for Contract HSE Requirements* Tendering

SPDC 99-031d Guidelines for Content and Assessment of Contract HSE Plans** Mobilisation

SPDC 99-031e Guidelines for Monitoring HSE in Contracts Execution

SPDC 99-031f Guidelines for Contract HSE Close-out Report Close-out

99-031 Annex A Human Factors Considerations in Contractor Management All Phases

99-031 Annex B Security Considerations in Contractor Management All Phases

Figure 3 below illustrates the relationship between the CMG and other documents relevant to contracting andcontractor management.

Contractor Management Guide and Associated Documents

5

INTRODUCTION

*Management Systems Documents Include: HSE Cases, HSE MSs; Land & Marine Transport Guides; OPGs, etc

Figure 3 above also shows the CMG document hierarchy, and the relationship of the CMG documents to theSPDC HSE Policy, Corporate HSE MS, Contracting Policy and Procedures Manual (CPPM), and other SPDCHSE Procedures, Standards, Guidelines, and Management System Documents.

SPDC HSE Policy

Corporate HSE MS

99-031a

CMG

99-031b

99-031c

99-031d

99-031e

99-031f

Annex A

Annex B

ROBUST CONTRACTOR MANAGEMENT

CPPM

Instruction to Tenderers

Forms of Tender

Model ContractDocuments

HSE Reference Manual

HSE Procedures &Guidelines

Management SystemDocuments*

Use of the ManualContract Holders, Project Engineers, Client Representatives, Project Management Inspectors, Company SiteRepresentatives, HSE Advisors, and Contract Managers will find in this guide a compendium of documents forthe sound management of HSE in contracts. Each document focuses on a definite phase of contracting, and isdivided into two parts: level 1 and level 2. Level 1 details the instructions and best practice guidance for eachphase of contracting; including links to other phases, while Level 2 contains templates, checklists, and othermodel documents relevant to each phase of contracting. Where appropriate, some of the level 2 documents maybe incorporated in any of the Instructions to Tenderers, the Forms of Tender and the Contract Documents. Thus,the Guide is not a contractually binding document in itself.

Each document relates primarily (though not exclusively) to a single phase in the contracting process. Also,the suite of documents are arranged in a logical time and activity sequence, from the earliest phase of Planningto the last phase of Close-out. Thus, the Procedure for Management of HSE in Contracts (SPDC 99-031a)describes the activities to be carried out at the planning stage of a contract. It extends this theme to include adetailed guide for developing a Contract Management Plan (CMP) and a summarised approach to HazardManagement and HSE Risk Assessment.

The Specification for Contract HSE Requirements (SPDC 99-031c) provides each Contract Holder witha template for identifying minimum HSE requirements for a specific contract. The Contract Holder will agreethe appropriate template requirements for specific contracts, based on contract risks, and will formulate thecontract documents accordingly. This will include an explicit obligation on the Contractor to develop hisPreliminary Contract HSE Plan to the agreed template.

The four guideline documents SPDC 99-031b, SPDC 99-031d, SPDC 99-031e, and SPDC 99-031f providethe Contract Holder with detailed guidance on four important elements of the Contract HSE ManagementProcess. These are: HSE Pre-Qualification of Potential Tenderers, preparation of Contract HSE Plans, MonitoringHSE in Contracts, and Contract HSE Performance Close-out, in that order.

Associated Documents and ProcessesIt is the duty of every Contract Holder to be fully conversant with the documents organically related to the CMG.These include policies, reference manuals, procedures and others.

SPDC’s HSE Policy is the prime document governing the application of HSE Management in all SPDCOperations. It is signed by the Managing Director and requires that ‘Contractors manage their operations inline with the policy’. This link is explicitly expressed in relevant CMG templates and in all contract documents.

The SPDC Contracting Policy and Procedures Manual (CPPM) is the controlling document which requiresthat legal, financial, and audit controls are applied to all SPDC Contracts. The legal controls include appropriateexplicit HSE clauses in contracts. Further, the CMG specifies the Management arrangements for HSE in Contractsthat complement and reinforce the requirements of the CPPM.

Detailed standards for on-job Health, Safety and Environmental management can be found in the HSEReference Manual (HRM) which is a contractually binding requirement to be fulfilled. Also, the CMGdocuments provide references to other SPDC HSE Procedures, Standards and Guidelines, which will be used toimplement the ‘Specifications for Contract HSE Requirements’ (SPDC 99-031c).

The relationship between the HSE and Commercial processes as regards documents, systems, competencedevelopment and competence assurance is shown in overview in figure 4 on the next page:

6

INTRODUCTION

Figure 4: HSE – Commercial Services Process Interface

CSE – HSE Contract Management Process Interface

7

INTRODUCTION

ResponsibilitiesIt is the responsibility of all SPDC Contractors to apply the requirements of the CMG in all contract operationsinsofar as they are expressed in the tender and contract documents, and related correspondence of a contractuallybinding nature. In particular, Contract Holders should make it clear to tenderers, in the tender document andrelated correspondence, that their bid should fully reflect the requirements of the tender and contract.

Contract Holders are responsible for ensuring that their Contract HSE Management arrangements arecompliant with the requirements of this Guide. They must also ensure that the Contractor fully implements theobligations of the contract, as well as demonstrate compliance in accordance with SPDC 99-031e – Guidelinesfor Monitoring HSE in Contracts. Such demonstration of compliance will include the systematic identificationand documentation of contractual non-compliance and the application of related of sanctions and remedial measures.

In particular, it is the responsibility of the Contract Holder to ensure that the Tender document, the Contract,and the Scope of the business arrangement are sufficiently defined in line with this Guide. This will ensure thathigh quality Contractor HSE Management is formulated and sustained from contract inception, throughexecution, to close-out.

The Contractor HSE Management Team of Corporate HSE (HSE-CON) will maintain the ContractorManagement Guide to Best Practice status, and will independently monitor its application in SPDC Contractsby means of occasional audits, reviews, checks, etc. It remains the responsibility of the Line Manager to have inplace, and consistently apply, a system to VERIFY that all Contract Holders reporting to him fully apply thisGuide in all contracts.

It is planned to keep this Guide "live" and relevant, reflecting practical challenges in Contract Managementin our environment, while also bringing best practices to bear in our operations. If you find any errors or omissionsin this Guide, you are encouraged to communicate this via the CMG WEB UPDATE REGISTER. Your inputwill be promptly evaluated and captured as appropriate.

Processes

Documents andSystems

Competence Devpt.and Assurance

• Contracting Policies and procedures

• Contract planning and administration

• Tender Board processes

• Vendor management

• Payments, claims, etc

• Contracting Policies and Procedures Manual (CPPM)

• Short Form Contracting Guidelines

• Contract Management Information Systems (CMIS)

• Contract Administration Course

• Commercial Awareness Course

TK-81 – Contract Mgt etc

• Contract management planning

• Mobilisation, execution and close-out

• Contractor HSE evaluation

• Input to Vendor Registration

• Contractor HSE performance information

• Contractor Management Guide (CMG)

• Guidelines for HSE Kick-Off Meetings

• Contractor HSE Evaluation System (COHSEE)

• COHSEE training (1 day)

• Supervising Safety (P-248)

P-287 – Mid-Mgt HSE W/shop. etc.Contract Management Suiteof Courses

Procurement Operations

CSE HSE

CONTENTS

LEVEL 1: INSTRUCTIONS TO STAFF 3

1 Introduction 3

2 Purpose 3

3 Scope 4

4 Roles and responsibilities 4

5 Hazard Management in contracts 85.1 Scope 85.2 Related Standards 85.3 The Hazard and Effects Management Process (HEMP) 8

5.3.1 Objective of HEMP 85.3.2 Overview of HEMP 85.3.3 HSE Risk 12

5.4 HEMP in the Contract Management Plan 125.4.1 HEMP and Contract HSE Strategy 125.4.2 HEMP in Contract Scope and Definition 125.4.3 HSE Assessment 125.4.4 HEMP in HSE Specification 125.4.5 Applying HEMP to the Preliminary Contract HSE Plan 13

6 Contract Management Planning 146.1 General 14

6.1.1 Contract Management Planning 156.1.2 Contractor Management Information System (CMIS) 156.1.3 Contractor Health, Safety and Environment Performance Evaluation 156.1.4 HSE Risk Management Requirements 15

6.2 Deliverables within the Contract Management Plan (CMP) 166.2.1 Contract HSE Strategy 166.2.2 Contract HSE Scope and Schedule 186.2.3 HSE Assessment 196.2.4 HSE Specification 196.2.5 HSE in The Tender Evaluation Model 206.2.6 Incentives 226.2.7 Preliminary Contract HSE Management Arrangements 226.2.8 HSE in the Scope of Work and Services 22

6.3 Review and Improvement 246.4 Deviation from Procedures (Step-out and Approval) 24

7 Administrative requirements 25

8 Workcycles 25

9 Medical retainers and fitness certification 25

1

PROCEDURE FOR MANAGEMENT OF HSE IN CONTRACTS

Michael Odeleye

Go to content

LEVEL 2: MODEL DOCUMENTS AND TEMPLATES 28

10 Contract management plan (CMP) -HSE 29

11 HSE Step-out approval letter 35

12 HSE Hand-over form for contract holders 36

13 HSE Hand-over form for company representatives 37

14 HSE Hand-over form for contract sponsors 38

15 Appendix VI – Scope of work (work cycle) 39

16 Appendix VII – Medical fitness certification form 40

2


LEVEL 1: INSTRUCTIONS TO STAFF

1 INTRODUCTION

The Procedure for Management of HSE in Contracts (SPDC 99-031a) is the prime document in the ContractorManagement Guide (CMG) suite of documents. It provides guidance to SPDC staff with responsibility for makingand managing contracts, especially Contract Holders. The procedure is to be applied in all SPDC contractsregardless of size or HSE risk rating. It reinforces SPDC’s HSE Policy and Contracting Policies and ProceduresManual (CPPM) both of which require that a systematic approach to HSE management be applied. Contractorsworking for SPDC must manage HSE in line with SPDC’s HSE Policy. This procedure aligns with the InternationalStandard ISO-14001 specification for an Environmental Management System (EMS) covering relevantenvironmental requirements, procedures, specifications, objectives and targets that will be communicated tocontractors.

The procedure is developed to guide the Contract Holder in the HSE Management aspects of ContractPlanning and Invitation To Tender. It impacts on every aspect of contractor management as some of the Level 2model are included in the Contract, while the Level 1 part sets the scene up front in the planning and tenderingphases. It also provides instructions on Hazard Assessment and the preparation of the Contract Management Plansuch that an organic link is established between the output of the Hazard Assessment and the ContractManagement Plan (CMP). This ensures that hazard management is embedded in the CMP at the earliest stage.As a planning tool, it helps to define the objectives of HSE management in contracts and to evaluate the resourcerequirements to accomplish it.

The procedure discusses other phases of contracting and how they interconnect with the Planning and InvitationTo Tender phase as follows:• Planning and Invitation to Tender: The preparation stage to ensure that contractors clearly understand

SPDC’s HSE requirements, and competent contractors are on the bid list.• Tender Period: What should be forthcoming from the Contractor regarding HSE.• Evaluation and Contract Award: How to evaluate the contractor’s HSE Plan including the of HSE elements

in the Scope of Work.• Mobilisation: Advice on the Kick Off process and assuring contractor HSE readiness to Proceed.• Execution: How the Contract Holder should Monitor the execution of the Contract HSE Plan, and Control

the Contractor’s HSE Management.• Demobilisation: Ensuring HSE considerations are addressed during demobilisation, especially

Site Restoration.• Close-Out: Effective Contract Performance Reporting and capture of feedback for continuous improvement. Detailed Guidance on Pre-Qualification, Monitoring and Contract HSE Plans are contained in other CMG documents.

2 PURPOSE

The purpose of this Procedure is to provide a set of instructions on hazard management in contracts as well ashow to develop a Contract Management Plan (CMP). It interconnects this core purpose with other phases ofcontracting, including execution and close-out to ensure that SPDC’s HSE standards are met or exceeded inmaking and managing contracts. This procedure follows the planned sequence of events in the management ofa contract to ensure that HSE management for the scope of work is provided for at the earliest stage possible.This procedure shall be followed for all contracts made by SPDC. The responsible parties and respectiveresponsibilities are described in 4 below.

3


3 SCOPE

This procedure applies to all contracts executed by SPDC regardless of duration and value. The level of HSE riskpresented by the contract influences the extent to which the requirements of this procedure are applied. Thedecision to execute a procedure step to a lesser degree shall be fully documented, justified, authorised by therelevant Line/Asset Manager, and captured in the contract records.

4 ROLES AND RESPONSIBILITIES

Job Function / Title Role and Responsibilities

Company

Contract Sponsor A named individual within the Department or Section which has the budget andmanagement authority to execute the contract. Where a Department delegates its budget toanother Department (the Budget Executor) who will execute the required activity, a namedindividual within the Budget Executor Department shall be the Contract Sponsor.Responsibilities include:• Provision of sufficient funds to ensure high quality HSE management is applied

in the execution of all contracts

• Verification of the Contract Holder’s control of HSE in contracts to ensure thatthe business interests of the Sponsor Department are met. (Note that thismonitoring role is different to the monitoring done by the Line/Asset Managerof the Contract Holder)

• Integrity management of the contracting process from strategy definition tocloseout (through initiation, pre-qualification, tendering, award, mobilisation,execution and demobilisation) to verify that controls are in place

Contract Holder A person, usually within the Contract Sponsor’s department, appointed by the ContractSponsor, who is responsible for managing the contract. The Contract Holder is whollyaccountable for the making and exercising of the contract:Responsibilities include:• Conduct a structured HSE assessment of the anticipated contract workscope

• Pre-qualify contractors for the bidders list using standard HSE criteria

• Prepare contract HSE specifications for inclusion in the tender documentation

• Prepare an HSE monitoring programme defining the role of companyrepresentative(s) in enduring that the contractor’s HSE plan is finalised and followed

• Prepare company audit and review programme and secure appropriate resources

• Evaluate contractor’s HSE plan

• Assure the adequacy of the contractor’s HSE plan

• Appoint competent company representative(s)

• Supervise company representative(s)

• Conduct a pre-execution HSE audit

• Authorise the contractor to commence work if the pre-execution HSErequirements are met

• Monitor performance of the contractor against his HSE plan

• Authorise deviations from the contractor’s HSE plan

• Authorise additional HSE requirements as deemed necessary

• Apply sanctions in the event of unauthorised deviations from the contractor’s

4


HSE plan or for non-fulfilment of any contractual requirement

• Prepare HSE close–out report and distribute to appropriate company andcontractor personnel for feedback

• Compliance with near-miss reporting, investigation and follow up

• Resolution of interface problems between contractors

• Liaison for matters relating to the contract as a whole, between Contractor andContract User, in cases where there are many Contract Users (e.g. Call-Offcontracts)

• Formal hand-over of certain Contract Holder functions to Contract Users inrelevant cases of multiple users of Umbrella Contracts (e.g. DEE Umbrellacontracts)

Company Site A Person appointed by the Contract Holder to represent SPDC’s interests in the substantiveRepresentative contract. This applies where a contractor may be working in a number of locations thus

compelling the Contract Holder to appoint someone who is responsible for the supervision ofthe physical work being executed under the contract at a specific designated site. He or shemust possess the competence requirements necessary to represents the Company’s interests at thespecific contract location.

He or she will:

• Perform assurance checks on contractor’s review and inspections and follow up

• Verify hazards and effects management controls, as specified in the contractor’sHSE plan, are implemented

• Identify deficiencies in contractor’s HSE plan and agree to remedial action withcontractor or instigating sanctions in consultation with Contract Holder

HSE Adviser Where there is access to SPDC HSE advisers or specialists, it is important that therole of the Adviser is understood to be indeed that of an adviser. Advice, support orservices may be sought from a HSE Adviser on a routine or periodic basic but theresponsibility for HSE matters must remain unmistakably with the ContractHolder and his or her appointed representatives.Normally, the HSE Adviser provides:

• Advice and support in HSE issues as requested• Review/ audit services as requested• Additional advisory support, where needed, to small contractorsIn the case of a small local contractor, a decision may have been taken to provideadditional Supervisory Support and assistance in HSE matters. The Company HSEAdviser and related specialists may be tasked with providing support. SuchCompany HSE Adviser must exercise care (unless otherwise provided for by thecontract or agreed to in the HSE plan) that this is recognised as a Temporary Phase,and that the contractor must be encouraged to develop quickly to a point wheresuch assistance is no longer required

HSE-CON A team of HSE specialists dedicated to the promotion of high quality HSE standards in allSPDC contracts.Responsible for:-• Issue, review and update of SPDC’s Contractor Management Guide (CMG) based

on best practice

• Independent monitoring of contract HSE performance standards

• Advice to the contract community on the exercising of contracts and applicationof SPDC’s HSE specifications

• Identification and incorporation of emerging issues of a HSE-related nature intocontracting

5


Contract User A person who uses a Call-Off or Umbrella Contract set up by a Contract Holder toprovide a service.Responsible for:-• Obtaining a definite mandate from the Contract Holder covering his/her

Contract Management responsibilities, including HSE

• Supervision of the relevant works or services

• Performance reporting to the Contract Holder including, incident reporting,investigation and analysis

Contractor

Contractor A firm that has entered into a legal contract to supply services, materials or knowhow to SPDC, in fulfilment of the duly signed contract.

Responsible for provision of:-

• A Contract HSE Plan to manage HSE hazards in the contract

• Quality HSE management of all contract activities in compliance with theapproved Contract HSE Plan

• Competent staff to execute the contract requirements

• Quality materials and equipment in execution of the contract

Contractor Manager This is the Contractor’s Line Manager responsible for the Contract. His or her roles are to:

• Prepare and assure quality of the contract’s HSE plan

• Define competencies required for HSE critical positions

• Assign appropriate personnel to HSE critical positions

• Assure adequate resources and time in the schedule to manage the contract inaccordance with the contractor’s HSE plan

• Notify the Contract Holder in writing of his nominated ContractorRepresentative(s) and Contractor Site Representative(s)

• Provide resources to implement remedial actions from audits in an expeditiousmanner

Contractor Site This is the Contractor Manager’s appointed liaison to supervise the work being Representative executed under the contract in a specific area. Thus, where a contractor may be

working in a number of areas it is common for the contractor to appoint a personor persons to function as Site Representatives for the contract.

This role exists to:

• Fulfil the pre-execution HSE requirements

• Implement the contractor’s Contract HSE Plan

• Seek formal approval from the Contract Holder for any proposed deviationsfrom or amendments to the contractor’s Contract HSE Plan

• Implement additional requirements as agreed upon with the Contract Holder

In some contracts this role may be the same as the Contractor’s Site Manager.

Contractor HSE This is the Contractor’s dedicated HSE Adviser for the specific contractAdviser*

NB: Contractor HSE Adviser: SPDC may specify the competencies for such a position in a particular contract.

6


7


Clarification Note on Key Action PartiesSometimes the definitions of Contract Sponsor (CS), Contract Holder (CH) and Company Site Representative(CSR) do not have a one-to-one correspondence with the organisational hierarchy, operational realities, and thedisposition of financial authorities for budgeting and commitments. In situations like this, the following generalguidelines, drawn from a real life example below, are apposite:

Example from Petroleum Engineering:• Wireline Logging Contracts are prepared and signed off in Corporate Petroleum Engineering (DPE) where

discipline leaders set the standards to ensure uniformity. • Budget for majority of the services is provided by the Area Teams in Port Harcourt and Warri. • Part of the budget to be spent under these contracts is delegated to Well Engineering. The other part is held

and executed by the Area Teams themselves.• The supervision is partly done on the rig by the Well Engineering Site Representatives for rig jobs, and the

engineers in the Area Teams and/or Well Services (depending on the asset being worked on) on rigless jobs.• The contract itself is managed in Corporate Petroleum Engineering to ensure single point responsibility and

communication with the contractors.

All of these contracts are call-off contracts. While some services are carried out in the Contractor’s offices, othersare carried out on rigs or producing/shut-in wells. Duration of each call-off is 0 - 5 days, with 0 - 3 call-offs ina month on a rig site with many other Contractors. For rigless services, call-off is 0 - 5 days per call-off perlocation. Each location may require a different engineer.

In this scenario the main action parties are:• Contract Sponsor – Petroleum Engineering Manager by Name. He provides integrity management of the

process of making and exercising the contract in his role as a Cross-Functional Discipline Head. He also co-ordinates the budget for making the contract. He signs the contract.

• Contract Holder – Corporate Discipline Head for Petrophysics by Name. He sets up the contract, definesthe standards of performance and is accountable for the exercising of the contract. He provides quality assuranceand quality control corporately for the effective delivery of the contract’s objectives. He co-ordinates the inputof the Company Representatives in the Area Teams across the Company.

• Company Representative – Area Petrophysics Team Leader by Name. He co-ordinates the supervisoryactivities of the Drilling Supervisor (DSV) and the Area Team Petrophysicist in executing the contract.

• Site Representative – Drilling Supervisor (or Well Services Supervisor on work-over/rigless work), Team Petrophysicist and related Well Services Engineers monitor the exercise of the contract at various sites withinthe company on a day-to-day basis and report to the Company Representative in their various locations. Nothing moves on site without his single point responsibility.

Contract StaffThe decision to appoint Contract Staff as Contract Holders is at the discretion of the Line, who will normallytake into account commercial and technical integrity considerations, as well as the competence of the appointee.The same is applicable for Company Site Representatives. This discretion should however be exercised with dueconsideration for the potential exposure inherent in such a situation (e.g. Conflict of Interest, etc.) and any suchdecision should be formally recorded.

5 HAZARD MANAGEMENT IN CONTRACTS

5.1 ScopeHazard assessments are to be performed by the Contract Holder before preparing the HSE Specification for thecontract, and also by the Tenderer when preparing his Preliminary Contract HSE Plan. The Contract Holderwill subsequently review the Preliminary Contract HSE Plan and ensure that this is updated before it is acceptedas the Contract HSE Plan forming part of the signed Contract. The Contract HSE Plan is a mandatory requirementthat must be approved by the Contract Holder. This process is addressed as part of the conditions for issuanceof the HSE Certificate contained in the HSE Specifications. The approved Contract HSE Plan is therefore animplied condition of the contract.

The Hazard and Effects Management Process (HEMP) is the method recommended for use in hazardassessment. Correctly applied, it ensures hazards and their effects have been fully identified and assessed, andcontrol and recovery measures put in place to prevent or mitigate an accidental loss of control. This sectiondescribes HEMP and how it can be applied in the HSE Management of Contracts. It then provides guidance onHSE risk and the recommended methods for managing HSE risk in contracted activities including the HSE Case.

5.2 Related StandardsHSE control documentation relevant to hazard assessment is provided in the HSE Reference Manual and otherprocedures and guidelines listed in the General HSE Specification.

5.3 The Hazard and Effects Management Process (HEMP)The Hazards and Effects Management Process (HEMP) is: “The structured hazard analysis methodology involvinghazard identification, assessment, control and recovery and comparison with screening and performance criteria.”(Source: EP 95-0300).

5.3.1 Objective of HEMPThe objective of HEMP is to provide a structured approach towards the analysis of hazards throughout the life cycle ofan asset. This is achieved through use of tools and techniques that allow hazards to be identified, assessed, and whenfully understood in both situation and context, to be controlled and if necessary recovered from if control is lost.

It should be applied: • at the start of each life cycle phase for an asset; • prior to any major change (structural, operational, or maintenance) to an asset; • prior to the execution of an activity; • prior to the introduction of a new hazard to the operation; • prior to the start of any contracted operation. Further triggers for the application of HEMP should be when:

- hazards appear to pose a significant threat or;- established controls are known to be inadequate to meet standards or;- continuous improvement in HSE performance is required.

Demonstration of HEMP in its most complex form is an HSE Case. This is required only when the risks fromthe hazard are assessed as being High. For all other levels of risk, HEMP is demonstrated through applicationof procedures, checklists and structured ways of working. At its simplest HEMP is no more than a site HSEdiscussion, commonly called a ‘toolbox talk’.

5.3.2 Overview of HEMPHEMP in general is explained in Table 1 and shown in Figure 2. Hazards, which have to be identified, assessed,controlled and recovered from, are the starting point for the HEMP process and can be identified and assessedin a number of ways. These are experience and judgement, checklists, standards, and structured review techniques.

8


Figure 2. Approaches to hazard assessment which support HEMP

Experience/judgementThe knowledge of experienced staff provides a sound basis for hazard identification and assessment. They candraw on experience gained from different aspects of Company operations and the E&P business in general indifferent locations.

ChecklistsThese are a useful way of ensuring that known hazards and threats have been identified and assessed. The use ofchecklists however, must not be allowed to limit the scope of review as the situation and context in which theywere compiled may not be directly applicable to the situation currently under review. They are normally drawnup from standards and operational experience and focus on areas where the potential for mistakes is high or whereproblems have occurred in the past.

StandardsThese reflect collective knowledge and experience, accumulated on the basis of national or international operations.They generally focus on hazard assessment and control, since the hazard is inherent and recognisable. Standardsusually contain information on hazards applicable to a particular type of operation. The designer of a pressure vesselrelief system, for example, can use an ISO Standard to find detailed guidance on the relief cases that should beconsidered. Sometimes compliance with prescriptive standards alone will reduce risk ‘as low as reasonably practicable’.Similarly, the acceptability or otherwise of emissions or discharges to the environment, or release of agents harmfulto health can be assessed by reference to environmental quality standards and occupational health exposure limits.

Structured review techniquesA range of structured review techniques to support all of the above are described in the EP 95-0000 series ofdocuments. Some of these techniques were initially developed for use in safety management others have beenspecifically developed for environmental and occupational health management often using similar principles asfor safety management. One example is HAZID (Hazard Identification) and another is HAZOP (Hazard andOperability Study).

9


Structured ReviewTechniques

Standards

Checklists

Experience / Judgement

HEMPASSESSIDENTIFY

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11


5.3.3 HSE RiskTo apply HEMP effectively, the HSE risk presented by the hazard and its effect must be known. Risk is acombination of two components, frequency and consequence. Risk management requires either a reduction inthe frequency with which something occurs or a reduction in the consequence if it does occur. Risk is assessedusing the Risk Assessment Matrix (RAM).

5.4 HEMP in the Contract Management PlanThe Contract Management Plan (CMP) is described fully in Section 6 below. This section considers those majoraspects of the CMP where HEMP must be effectively applied if the CMP is to achieve its objectives.

5.4.1 HEMP and Contract HSE Strategy The Contract Strategy is a preparatory step that defines the approach to establishing the contract. The decisionto be taken at this stage is who will be responsible for executing HEMP. If a ‘hands on’ approach is chosen, theresponsibility for effective application of HEMP at all stages rests with the Contract Holder. If a ‘hands off’approach is taken, the responsibility of the Contract Holder for executing HEMP ends after the HSE Specificationis completed and then moves to the contractor. However, the Contract Holder remains responsible for theeffectiveness of the Contractor’s application of HEMP at all stages and this needs to be stated either explicitlyor by implication in the Contract Strategy.

5.4.2 HEMP in Contract Scope and DefinitionMajor hazards should be identified and recorded for inclusion in the HSE assessment. During this phase, theContract Holder should perform a preliminary identification of the hazards and effects, and record this in a noteto file.

5.4.3 HSE AssessmentThe HSE risk relating to the identified major hazards should be assessed and methods for reduction of that riskagreed.

HEMP should focus on:• Identifying those hazards that can be eliminated from the workscope;• Quantification of the residual HSE risk in the workscope after established standards have been applied;• Reduction in the residual risk to as low as reasonably practicable by introduction of risk reduction measures;• Specifying as a contractual requirement risk reduction methods as essential controls and clarification of when

these should be in place;• Providing the contractor with the necessary information to get a full understanding of the hazards involved

in the workscope.

The following parties should contribute to the hazard assessment: • Contract Holder; • The planned activity supervisor(s); • A Line HSE Adviser (large high-risk projects may request expertise from the corporate HSE function);• A representative of the Department, or the Asset Holder for the area or facility that the contractor will be

operating.

5.4.4 HEMP in HSE SpecificationThe HSE specification is the output of the Contract Holder’s application of HEMP to the contract in view. Itcontains requirements identified during the HEMP process necessary for the fulfilment of the contract. To beeffective, it should be compatible with SPDC’s HSE Policy, HSE Objectives, HSE Targets and HSE Standards.The HSE specifications emerging from the contract HEMP process should also detail the performance formeasuring compliance.

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HSE specification in general, as opposed to the contractual “object” called “HSE Specification”, is expressed invarious parts of a contract. Section V of the Contract which is “The General Specification of HSE Requirements”is made up of two parts: Part 1 which is the General HSE Requirements and Part 2 which is the General HSESpecification. Part 1 includes a specific statement to the effect that the HSE Reference Manual is a contractuallybinding document. Part 2 empowers the Contract Holder to particularise the HSE specifications for the contractby selecting from a default list of specifications and applicable standards. The results of the HEMP exercise willguide the Contract Holder’s selection of specifications and standards from this default list.

The above notwithstanding, a properly written workscope reflects and, often, specifically includes, statementsof significant HSE implication even though they may be primarily of an operational or technical nature. It isimportant for the Contract Holder to realise that the “total HSE specification” is the sum of all these parts, andall the parts must be mutually compatible and fully sufficient in their totality.

5.4.5 Applying HEMP to the Preliminary Contract HSE PlanIn response to the HSE Specification, the tenderer shall apply the HEMP process in developing a PreliminaryContract HSE Plan which details how the HSE risk should be minimised and managed. It should cover thecontract phases from pre-mobilisation, through contract execution, to demobilisation. It shall state the HSEpolicy, procedures, and standards to be adopted in carrying-out the contract. The Preliminary Contract HSEPlan should demonstrate the tenderer’s understanding of the requirements stated in the HSE Specification andindicate how the contractor should achieve compliance. It is an important indication of how well suited thetenderer is to become the chosen contractor. As such, it forms an important part of the Technical Evaluation ofthe Tender.

The Contract Holder should at this stage be looking for evidence that the Contractors, using their specialistskills, have applied HEMP to comply with the requirements of the HSE Specification. This will be comparedagainst the Contract Holder’s own HSE reference assessment which is a HEMP process output.

The Contract Holder’s reference assessment will be used to:• Confirm the adequacy, scope and content of the Contractor’s Preliminary Contract HSE Plan; and• Provide an output that can be challenged by the contractor with alternatives and improvements.

The HSE Kick-Off Meeting or a HSE Workshop can be used to establish the selected contractor’s understandingof the HSE Specification. If it is found that the selected contractor’s understanding and ability to apply HEMPis lacking then the effectiveness of the HSE pre-qualification should be reviewed.

The aspects of HEMP to be considered are:Identification By the contractor 1. Identification of hazards and effectsAssessment By the contractor 2. Evaluation of risksAssessment By the contractor 3. Recording of hazards and effectsAssessment, Control By the contractor 4. Comparison with objectives and performance criteriaControl, Recovery By the contractor 5. Establishment of risk reduction measures

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6 CONTRACT MANAGEMENT PLANNING

6.1 GeneralThe main activities and actions specific to HSE in the planning and execution of a contract, including theinterfaces between SPDC and the Contractor are summarised in Figure 6.1 below:

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Figure 6.1 Flowchart Showing Interfaces During Execution of CMP

Prepare Preliminary contract

HSE PLAN

Submit with tender

documents

FinaliseContractHSE Plan

CONTRACTOR ACTIVITYINITIATIONPHASE

TENDER PHASE

EXECUTION PHASE

REVIEW PHASE

CompleteRequired

Training/ Procedures

StartWork

ImplementContractHSE Plan

Amend/UpdateContractHSE Plan

EndWork

Contractor Register

PrequalifyRegisteredContractors

Invitationto

Tender

EvaluateTendered Contract

HSE Plans

COMPANY ACTIVITY

Review and Endorse Contract

HSE Plan

Prepare HSE Monitoring Programme

Award Contract

Monitor PerformanceAgainst Contract

HSE Plan

EndorseAmendments to

Contract HSE Plan

ReviewContract HSEPerformance

ConductHSE

Assessment

Define HSE

Specification

Conduct Pre-Start

HSE Audit

AuthoriseStart

of Work

6.1.1 Contract Management Planning It is the Contract Holder’s responsibility to develop the Contract Management Plan (CMP) for the purpose ofplanning resources throughout all phases of the contracting process, and monitoring the implementation of HSEthroughout the contract. Thus, the CMP facilitates the identification and allocation of resources to establish andexercise the contract to ensure that the contractual requirements are fulfilled. The procedural steps for developingthe CMP are described in Table 1 of Level 2: Model Documents and Templates.

The CMP template in Table 1 is to be completed during the Planning phase with details of the contract incontemplation. After the contract has been established, it will be used to progressively track key milestones inexercising the contract until it is closed-out. The Contract Holder MUST prepare a case-specific table for hiscontract, as a first step in Contract Management Planning to be approved by the Contract Sponsor.

6.1.2 Contractor Management Information System (CMIS)In order to ensure that only competent contractors are eligible to tender for a contract SPDC operates a registerof competent contractors. This register is defined by work categories and contractors qualified to offer servicesin each work category are ranked from 1 to 6 in accordance with their rated financial and technical capacity (with1 being the highest). This register is maintained by the Vendor Services Department of the Contracting ServicesFunction (CSE-VEN). Vendor information is uploaded in the Contract Management Information System (CMIS)from which bid lists and contract requisitions are generated and processed. The CMIS custodian is the ContractingPolicies and Procedures Department of Contracting Services Function (CSE-PPS). Advice can be sought fromCSE-PPS as to the status of any company applying to offer services for a scope of work.

The Contract Holder shall ensure that only contractors registered for the work category to be undertakenare short-listed and invited to tender for the scope of work.

6.1.3 Contractor Health, Safety and Environment Performance Evaluation The Contractor HSE Evaluation System (COHSEE v2) is a CMG-support IT tool for the following: Registrationof Contractors; Pre-qualification; Monitoring; and Performance Close-Out. Using COHSEE, the performance ofboth the Contract Holder and the Contractor in executing the Contract HSE Plan will be monitored, reported,and archived. It is a proprietary software tool, used to record and compare contractor HSE performance and is animportant resource in the contract management toolkit of the Contract Holder.

6.1.4 HSE Risk Management RequirementsAll contract work presents some level of HSE risk. The real issue is managing the risk adequately. Differentmanagement of the risk(s) will be required depending on the category of risk identified. The Contract Holdershall conduct and record a HSE Assessment based on HEMP described earlier in Section 5.

The Contract Holder shall refer to and include in the assessment the findings in Part 5 of any SPDC HSECase for assets where the scope of work is to be undertaken. Where an activity within the scope of work is associatedwith hazards identified in the HSE case the Contract Holders shall take this into consideration when assessingthe overall HSE risks from the scope of work.

In addition, where the scope of work is managed as part of a Service Level Agreement (SLA) the ContractHolder shall consider the hazard assessment findings in Parts 4 and 5 of the Service Provider’s HSE MS.

LOW-Risk ContractsLow-Risk Contracts are those where the HSE risk of the hazards for the scope of work, identified in the HSEassessment, is determined to be low.

Examples of contracts that may be determined to be low-risk include:• Office-based consulting services • Computer support services• Secretarial and administrative services

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Abbreviated HSE contracting procedures may be followed for contracts determined by the ContractHolder to be low-risk. This means that a thorough desktop HEMP exercise is sufficient to determinethe HSE specifications for such contracts. Thus, the “General HSE Specification for Low Risk Contracts”shall be used for such low risk workscopes.

After completion of the HSE Assessment, the Contract Holder shall determine whether the work will bemanaged as a Low-Risk Contract. For Low-Risk Contracts, only the following additional requirements of theCMP (Table 1, Level 2) shall apply:• The Contract Holder shall complete the Low HSE Risk Declaration form as well as the “General HSE

Specification for Low Risk Contracts detailed in (SPDC 99-031c Level 2), identifying the contract as a Low-Risk;

• The Contract Holder shall document the decision in a Note To File; identify the contract as a Low HSE RiskContract in the CMP; and obtain the Contract Sponsor’s approval of the CMP.

• The Contractor shall comply with the requirements of the “General HSE Specification for Low Risk Contracts”.

HIGH-Risk ContractA High-Risk scope of work shall be managed by the contractor with the following HSE arrangements todemonstrate that the scope of work will be managed to ALARP principles;• The contractor may be required to provide a HSE Case to SPDC template (reference HSE Guideline

SPDC 99-022 ‘Guidelines for the Development of HSE sub Management Systems and HSE Cases).• The contractor shall provide a Contract HSE Plan describing how the hazards will be managed. • The contractor shall have in place a HSE management system to recognised international standards.The “General Specification of HSE Requirements” shall apply to both High and Medium HSE risk contracts.

MEDIUM-Risk ContractIn addition to the “General Specification of HSE Requirements”, the following HSE management arrangementsshall apply for medium-risk scopes of work, • The contractor shall be required to provide a Contract HSE Plan describing how the hazards will be managed.

The detail of the plan will be consistent with the number and type of risks. • The contractor shall have in place a HSE management system that is easily amenable to verification.

6.2 Deliverables within the Contract Management Plan (CMP)The following defines the minimum requirements for the deliverables detailed in the CMP see Table 4.2

6.2.1 Contract HSE StrategyPrepare a short, but comprehensive description of the work for each contract, from mobilisation to demobilisation,defining the contract strategy, paying particular attention to the boundaries and interfaces of the contract,minimising the HSE exposure during execution. The document shall address how the contract(s) shall be employedto execute the work and detail the Company and Contractor obligations.

The factors to be considered in formulating the contract strategy shall include:• number of contracts (and hence the number of Company / Contractor interfaces);• availability of suitable existing contracts (for example, service, call-off, etc.);• Company supervision resources and skills and competencies;• local environment, including outstanding environmental and community issues;• project schedule and its relationship to the contract schedule;• competitive situation;• Nigerian law, local rules and regulations; influence of the Company to exercise control over the Contractor;

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define boundaries of the contract (mobilisation, demobilisation), define limits of control for off site transportin urban areas and public roads during the contract, Service Level Agreements, HSE requirements and standards

• provisions for delay or forfeiture of contract payments;• results of HSE audit findings, unsatisfactory completion of action items. Non or late submission of key HSE

arrangements and documents should be linked to contract payments.• extent to which project management control (bridging arrangements) is relinquished to or shared with the

Contractor.• Key HSE issues associated with main stages of the contract/project.

A Note on Contracting Strategy (excerpt from the ‘HSE Management: Guidelines for Working Together in aContract Environment’ OGP Report No. 6.64/291 October 1999).

‘One of the most important strategic contract management decisions to be made by Shell is on the way inwhich the contractor, or alliance of contractors, is held responsible for the management of HSE. Two distinctlydifferent modes are described below.Mode 1. The contractor provides people and tools for the execution of work under the supervision, instructions

and HSE-MS of Shell. The contractor has a management system to provide assurance that thepersonnel for whom he is responsible are qualified and healthy for the job and that the tools andmachinery he is providing are properly maintained and suitable for the job.

Mode 2. The contractor executes all aspects of the job under its own HSE Management System, provides thenecessary instructions and supervision and verifies the proper functioning of its HSE ManagementSystem. The company is responsible for verifying the overall effectiveness of the HSE managementcontrols put in place by the contractor, and assuring that both the Shell’s and the contractor’s HSE-MS are appropriately compatible.

Selection of one of these modes is preferred. However, in certain situations it may be necessary to adopt amixture of the two modes. This can be accomplished by following section 3.5 of the E&P Forum Guideline forthe Development and Application of Health, Safety and Environment Management Systems, Report No.6.36/210.This section outlines the interfacing of contractor’s activities with those of the Shell and with other contractorsas appropriate. This may be accomplished by means of a specific interface document between Shell and thecontractor so that differences may be resolved and procedures agreed before work commences.

Examples of such situations are given below.• Operations in an area where there is a limited selection of contractors able to meet the evaluation criteria. For

example an alliance may have to be formed between Shell and available contractors with the objective todevelop, improve and implement an HSE Management System for the contractor while executing work underthe management system of Shell. The management system will initially aim at working under Mode 1.

• Operations too large or diverse for a single contractor may require a number of contractors and subcontractors(a consortium) to work together under the supervision of one main contractor working for Shell under Mode 2.

• The work is intimately associated with the activities of Shell, or present such a high risk to Shell that the workis to be executed using Shell management system under Mode 1.

• The contractor executes most aspect of the job under its own HSE Management System; however, certainsupport activities such as transportation and emergency response are provided by Shell.

• A Drilling Contractor is responsible for identifying and supplying personal protective equipment to itspersonnel. A fluids Contractor designs the mud program for the Operator, with new additives included in thewell plan. In this case Shell has an interface procedure that details the responsibility of the drilling contractorand requires the fluid contractor to provide chemical hazard information (SHOC card/MSDS) to the Operatorand drilling contractor before shipping the materials. The interface procedure further requires the on-site fluidsengineer to communicate chemical hazards during the pre-spud meeting.

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Also, when working with an alliance(s) of contractors or a consortium, it should be made clear in advance, andformally documented, whether the alliance or the lead contractor is fully responsible for all instructions andsupervision or whether that is the responsibility of Shell. If the alliance or consortium is responsible, it shouldbe made clear in the contract how this is organised. In addition, the person responsible for critical activities hasto clearly identified. Joint responsibility should be avoided by breaking down the work into smaller identifiableactivities, each with a party assigned to it with the responsibility for HSE aspects.

Usually Mode 2 is preferred except in “High Risk” situations where no sufficiently capable contractor can befound, or low risk situations where it can be found that, on balance, Shell’s interests are best served by Mode 1.This may apply in situations arising from policy decisions to develop and nurture contractors of limited capacity,for a variety of strategic reasons (e.g. indigenous community contractors).

Example: On an offshore production platform, a modification requiring welding and grinding has to be madein a horizontal area. This is considered a “High Risk” operation. Moreover, the essential controlsand emergency response are arranged by Shell. Typically Mode 1 would be used.

Example: A consortium of contractors with one lead contractor is responsible for the construction of a newonshore production facility. Construction activities are always “High Risk”. However, until themoment that hydrocarbon are introduced, the lead can be held accountable for managing all aspectsof the job provided the construction contractor can demonstrate its capability to manage all HSEaspects. Typically, Mode 2 would be used.

“Low Risk” contract operations, e.g., deliveries of non-critical materials, food, stationery, etc., are usually coveredby Mode 2 whereby the contractor provides the HSE controls. Usually, Shell controls on such low risk activitiesare minimal and Mode 2 is typical. However, contractors working on Shell premises are normally under thecontrol of Shell personnel and should follow Shell’s instructions. For clarity, Mode 2 is the preferred norm whetherin High or Low risk work scopes. The fundamental condition for a Mode 2 arrangements to work is for thecontractor to have an effective HSE management system relevant to the scope of work.

Issues in setting a contract strategy might include: number of contracts, contract schedule, rules andregulations, and the use of Shell standards and/or relevant national HSE legislation and international conventions.’

6.2.2 Contract HSE Scope and ScheduleThe Contract Holder should define the work or services in sufficient detail to identify the major hazards andprovide a basis for executing the HSE Assessment.

This should be determined from a separate appraisal of the business area and activities themselves and shallinclude aspects such as:• type of activities;• location of site(s) and the workplace;• location of Contractor’s base;• mobilisation/ demobilisation point;• timing and sequence;• personnel;• plant and equipment used;• materials and consumables.• Contractor resources and skills and competencies;• Sub contractor resources and skills and competencies;• Company / Contractor responsibilities and bridging arrangements between HSE-MS;

Experience gained from previous projects should be utilised by reference to:• Environmental Impact Assessments (EIAs) and close-out reports from similar projects;• Formal records of previous HSE performance by contractors on similar projects (COHSEE in future);

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• Quantitative Risk Assessments (QRAs) and HSE audits carried out in recent years on similar activities;• General background information on planned areas of operations.• HSE cases for the asset associated with the scope of work.

This shall serve as a basis for and be included in the HSE Assessment.Also, the contract schedule should be developed taking into account HSE issues and deliverables, in particular,

allowing enough time for mobilisation/demobilisation. This will help liberate time for HSE issues that requirespecial emphasis in later contract phases.

6.2.3 HSE AssessmentThe main objective of the formal assessment is to address the HSE risks presented by the contract scope of work,determine whether the contract may be classified as a Low-Risk Contract, provide the necessary input to completethe CMP and update the HSE Specification. The HSE Specifications C-1 and C-2 provide the framework for theContract HSE arrangements. The HSE Assessment should involve people who will participate in the work to becarried out under the contract. The HSE Assessment shall use the Contract Scope and Schedule document as thestarting point.

The main elements of the assessment shall include:• carry out HEMP (Hazard and Effects Management Process) to:

Execute the process of identifying and assessing hazards and establishing methods for their control and recovery in the eventof loss of control. If the contract relates to a development project then the HEMP process should be underway and the hazardsalready identified should be added to those identified as project-specific and included in the project hazards and effectsregister. If the contract relates to a common or recurring activity then the Contract Holder can access the hazards andeffects register for that activity.

• define the level of HSE risk presented by the contract, list the hazards and determine the levels of controlsnecessary to manage the risk;

• determine whether the contract qualifies for classification as a Low, Medium, High-Risk Contract;• identify the applicable HSE legislation and Company standards to be applied;• identify the HSE project organisation / interfaces and define supervision requirements, roles and responsibilities;• critical time schedules and resource limitations may call for extra attention to HSE;• determine communication needs including scope and schedules for meetings;• identify minimum competency and training requirements for both Company and Contractor, and prepare a

training schedule, paying particular attention to training needs for exceptional activities.

The details should be formally recorded with future actions identified and, wherever possible, action partiesnominated. The Company Department training plan should be updated to reflect the results of the HSEAssessment.

The Contract Holder shall confirm the suitability of HSE Assessment against contract scope, schedule andstrategy with the view to minimising the HSE exposure and level of risk for the contract.

6.2.4 HSE SpecificationThe HSE Assessment results shall be used to update the General HSE Specification, or the General HSESpecification for Low Risk Contracts, as applicable for inclusion in the proposed contract, thus, forming part ofthe Invitation To Tender (ITT). The HSE specification defines the HSE requirements of the contract aimed atminimising the risk to SPDC. It shall be used as the basis for monitoring the fulfilment of the contract HSErequirements.

It should be developed as follows:• define the scope of the Contract HSE Case/Plan/HSE-MS;• identify the principal hazards to be addressed in the Contract HSE Case/Plan/HSE-MS;

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• identify the HSE standards and guidelines to be applied to the specific contract, including the requirementto establish a medical retainership arrangement for Contractor staff;

• define the Company / Contractor interfaces and the Company supervision strategy;• define the minimum requirements of the contractor’s HSE organisation;• identify and schedule Contractor training requirements;• identify the minimum requirements and schedules for HSE audits, inspections and meetings;• determine the minimum ‘pre-execution’ requirements;• define Company’s requirements of the Contractor for the management of sub-contractors;• define boundaries of the contract (mobilisation, demobilisation);• define limits of control for off-site transport in rural and urban areas, as well as public roads during the contract;• define consequence management actions applicable to the Contractor for unauthorised deviation from the

Contract HSE Plan or HSE regulations and procedures.

It should be noted that the preparation of a sound HSE Specification addressing the above elements is one of themost important aspects of Contract HSE management. Investment of effort at this early stage has a significanteffect on the HSE performance of the contract.

6.2.5 HSE in The Tender Evaluation ModelEvaluation models may be applied at two levels: pre-qualification for selection of the bidders list; and technicalevaluation for reviewing the technical submissions prior to opening the commercial envelopes of successfultenderers. In both cases the development, structure and contents of the evaluation model is the responsibility ofthe Contract Holder who shall obtain the support of the Contract Sponsor and the approval of the Tender Board.The evaluation model shall be linked to the deliverables of the contract and the assessed HSE risk exposure. Anexample of a simple evaluation for pre-qualification is provided in pages 188 and 189 of the CPPM. The HSEpre-qualification module of COHSEE is designed to support the HSE input to the pre-qualification exercise,and the Control Holder can set a cut-off point for HSE qualification using the output from COHSEE.

Technical bid evaluation involves assessing, analysing, and assigning values or weights to the appraisal scoresof Contractors on important elements, e.g. HSE, personnel, equipment, facilities, financial capacity, etc. requiredfor a specific contract. It is the Contract Holder’s responsibility to prepare this quantitative evaluation model.A simplified technical evaluation model for a construction contract is shown in the table below:

No. Description of Evaluation Weight Contractor Contractor Rank on Element Raw Score Weighted Evaluation

(0-10) Score (0-10) Element

1 Personnel 25

2 Materials and Equipment 20

3 Facilities 20

4 **HSE 20

5 Financial Capacity 15

Total 100

% Score 100

Maximum Score 1000

*Minimum cut-off point is based on Tender Board approval.**HSE or any other evaluation element may be an ‘absolute criteria’.

In some contracts it may be necessary to make HSE an absolute criteria in both the pre-qualification andtechnical evaluation models. This should be done in a transparent and defendable manner backed by the analysisof HSE risk and the risk management controls deemed adequate to deliver the contract safely. For technical

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Contract HSE Plan

Analysed and scored

Contract HSE Plan

Analysed and scored

From Forms of TenderFrom Forms of Tender

Tech. Spec for HSE-critical

equipment

Analysed and scored

Tech. Spec for HSE-critical

equipment

Analysed and scored

COHSEE Record (or similar)

Analysed and scored

COHSEE Record (or similar)

Analysed and scored

Inspection Visit

Analysed and scored

Inspection Visit

Analysed and scored

HSE RecordsHSE Records

Experience

Analysed and scored

Experience

Analysed and scored

evaluation, the Contract Holder may, at his discretion, home in on certain HSE critical requirements and quantifythese as a percentage or as a discrete number in his scoring system.

The Contract Holder shall, as a minimum, consider a quantified aggregation of information to form a matrixthat evaluates ALL the essential elements that give a HSE picture of the tenderer. In this regard, the followingsources of information shall be used: HSE records; experience supported by objective evidence; Contract HSEPlan; COHSEE records; and other Forms of Tender designed to gather information of a HSE nature.

Thus, the one line HSE entry in the evaluation table above is based on:1. An evaluation of the Forms of Tender of a HSE nature, the principal of which is the Contract HSE Plan.2. Certain named returns of a technical nature (or primarily technical nature) insofar as they are not included in

1 above, e.g. technical specifications on HSE-critical equipment.3. COHSEE records (or similar).4. Inspection visit as part of technical evaluation.5. HSE performance records6. Experience

The tender evaluation rules should reflect all of this. This process is summed up in the diagram below:

HSE Evaluation Matrix

No. Description of Evaluation Weight Contractor Contractor Rank on Element Raw Score Weighted Evaluation

(0-10) Score (0-10) Element

1 Contract HSE Plan 25

2 Technical Spec. for 20HSE-critical Equipment

3 COHSEE record (or similar) 15

4 Inspection Visit 15

5 HSE Records 10

6 Experience 15

Total 100

% Score 100

Maximum Score 1000

The HSE score is the rolled up and weighted score of all the elements of the evaluation matrix 1 to 6. This HSEscore is itself weighted against other elements in the overall technical evaluation of tenders submitted for aparticular contract in view.

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6.2.6 IncentivesIncorporating an incentive scheme for HSE, involving additional payment in a contract, needs very carefulconsideration. It can absorb a significant degree of effort to administer and the longer-term effectiveness may bequestionable if not effectively applied. However, where it is properly quantified it can deliver tangible benefits.It is preferable, from a developmental point of view, to design HSE incentives that encourage high HSE standardsin the contract while also encouraging the contractor to grow its own HSE management system. An example ofsuch an incentive system is to link the contractor’s performance on the SIEP HSE MS Self-AssessmentQuestionnaire (SAQ) to a substantial management fee, in a progressive sliding scale – upwards and downwards.

Where applicable, it is recommended to design an incentive system that is based on points, that is, wherethe incentive is to win points. The points can then be traded or converted into contract-specific monetaryawards and penalties or corrective actions. Guided by experience, it is planned to establish a points system inthe future that has the major advantage of providing a “common currency” across all of SPDC. This will be linkedto the framework for consequence management now being constructed.

6.2.7 Preliminary Contract HSE Management ArrangementsIn response to the General Specification of HSE Requirements (SPDC 99-031c Level 2), the tenderer shall developa Preliminary Contract HSE Plan. This may incorporate, or make reference to, a HSE Case or a documentedHSE-MS (if it is a High-Risk scope of work) that details how the HSE risk shall be minimised. Arrangementsshall cover the contract phases from mobilisation through execution, demobilisation and site restoration, andinclude the policy, procedures and standards to be adopted at each phase. The Preliminary Contract HSE Planshall demonstrate the tenderer’s understanding of the requirements stated in the HSE Specification and showhow the tenderer shall achieve compliance.

After contract award, the selected tenderer, if awarded the Contract, shall develop contract HSE arrangementsthat updates and refines the Preliminary Contract HSE Plan. The Contract Holder shall review the HSEarrangements and endorse them if it is determined to be acceptable. Further details on the scope and requirementsof the Contract HSE Plan is contained in the Specification for HSE Requirements in Contracts (SPDC 99-031c).

6.2.8 HSE in the Scope of Work and ServicesThe “Scope of Work” is wholly defined by Shell in the ‘Invitation To Tender’ (ITT) package. It is a closed documentthat is not issued for modification or evaluation by the tenderer. In a similar manner, where there is a requirementto submit “Provisions by the Contractor” the tenderer must provide this list. In the latter case, the tenderer maysuggest alternatives or even exclude certain “provisions” consciously in his tender submittal (that is, as an“alternative”).

As stated in the previous section, the Contract HSE Plan is a translation of the HSE Specification into aprogram of compliance with the contractual HSE requirements. To fulfil the HSE requirements, the work orservices contained in the contract must be performed according to procedures, work methods, and practices thatguarantee full compliance. These HSE compliance requirements also include personnel, materials, equipmentand training, certification, etc. depending on the contract. In the light of lessons learnt from incident reviews,the Contract Holder should consider carefully the need to include Communication Equipment whenpreparing the Scope of Work.

“Cost of HSE”The contractor must fulfil the General Specification of HSE Requirements as well as all other requirements of aHSE nature in other parts of the contract. This in effect means that all contractual requirements must be fulfilledwhether they be commercial, technical, quality, or HSE in nature. As HSE is integrated into all these aspects,the ‘cost of HSE’ is only part of the picture, and even the total picture of the ‘cost of safety’ can not be used (infact should not) in tender evaluation.

Properly done, the ‘cost of HSE’ may be used as a meaningful indicator of a certain defined expectation, butnot in tender evaluation. Irrespective of what HSE costs, what must be provided is the “General HSE

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Requirements”. insofar as they involve cost must be captured in the Scope of Work as an INTEGRAL part of thecontract. This leaves no room for any variations on account of HSE requirements.

The above position notwithstanding, the Contract Holder shall evaluate the provisions in the Scope of Worksubmitted by the various tenderers to achieve HSE compliance using his/her own reference provision. The mainobjective is to obtain an indication of the tenderer’s view of his cost for complying with the General Specificationof HSE Requirements and implementing the Contract HSE Plan. The tender documentation may incorporatea mechanism to show the costs of implementing HSE requirements for the tenderer, but this is only as an indicative‘value’, rather than a basis for tender evaluation.

HSE costs would normally be expected for such items as:• audits, induction and training, emergency response resources;• environmental monitoring/testing and safety surveillance • medical facilities, first aid training, MEDEVAC, safety equipment, health surveillance• waste disposal, promotion schemes, personal protective equipment (PPE), journey management;

HSE costs, at one level, come into 3 groups as represented in the figure below:

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Induction Training

PPE, eg. Hard Hats Management Field Visits

Good Management Field Visits

Journey Management

‘Have’ ‘Do’ ‘Attitude’

Only this is usually “costed” and, even then, only partially (e.g. excludes “good technical specifications.”

Have’ falls into six (6) groups as follows:

Group 1 Group 2 Group 3 Group 4 Group 5 Group 6

Specified HSE Specified HSE Specified HSE “Unspecific” HSE-friendly “Good TechnicalApparatus Services/HR MS Elements Apparatus/ Equipment (that Specifications

(People/ Services/ MS facilitates HSE) (that canConsultants) Elements as per eliminate Latent

interpretation Failures up of the front) Requirements

This group of 3 can be “costed” only on the following CONDITIONS:1. There is a forced or itemised list.2. The output is used on a comparative basis (between tenderers or contractors) ONLY.3. As general Quality Control on quality of tender submittal.4. As general comparative indicator during contract.5. That it is NEVER used as a decision tool for contractor selection.

It is important to bear in mind that the costs in 1, 2, and 3 above is only a number. The real issue is to verifythat the items are there.

6.3 Review and ImprovementHSE CON shall review this procedure as necessary and no less frequently than every four years. The procedureshall be reviewed automatically following accidents and incidents involving contractors. Constructive commentsand feedback from all practitioners are welcome at any time and should be sent to HSE CON. Such feedbackwill be reviewed upon receipt and a decision will be communicated to the initiator as to whether the feedbackwill result in a review and update of the existing procedure and when this will occur.

6.4 Deviation from Procedures (Step-out and Approval)In the event that circumstances prevent compliance with this procedure, the Contract Holder shall advise theContract Sponsor. The Contract Holder shall obtain step-out approval in writing from the Contract Sponsor.Step-out approval must clearly specify the duration and the limitations and pre-conditions of the step outactivities. It must also specify the actions to be taken within this timeframe, ensuring compliance at the end ofthe step-out period.

The step out approval shall record,• The contract reference numbers• The reasons for and scope of the deviation from procedures• Extraordinary controls to be used during the deviation• The time frame for the deviation and expiry dates• Authorisation by the Contract Sponsor.Table 2 of the Level-2 document provides a template ‘Step Out’ approval letter.

24


{

7 ADMINISTRATIVE REQUIREMENTS

Contract Sponsors, Contract Holders and Company Site Representatives may change jobs from time to time inthe normal course of business. When this happens it is the responsibility of the parties named above to ensurethat their Contracts are handed-over appropriately to an in-coming party. This requirement is mandatory in theCPPM but has special significance for proper Contractor HSE Management.

To ensure that this process is consistently applied, three Level-2 forms are provided in Sections 9 through 11of this Procedure. They are to be completed by the parties involved in the Hand-Over exercise. Upon completionof the forms, the original copy should be retained in the Contract File while photocopies should be dispatchedto the CMIS Custodian and HSE-CON respectively. The CMIS Custodian will use the Hand-Over forms to updatethe Corporate Electronic Register of Contract Sponsors, Contract Holders, and Company Site Representatives.

8 WORKCYCLES

When making contracts, especially those involving operations in remote locations, it is the Contract Holder’sresponsibility to ensure that the work-cycles specified for various categories of contractor personnel is appropriate.A Level 2 template in Section 14 has been created for this purpose and this is to be completed and inserted intothe Scope of Work by the Contract Holder.

The determination of appropriate work-cycles for various work categories is driven by the intrinsic nature ofthe job (i.e. how hard the work is); distance to/from home; strangeness of the environment; and the remotenessof the location where it is being executed. In general, work-cycles range between 4/1 (4 days on, 1 day off) to 5/1(5 days on, 1 day off).

9 MEDICAL RETAINERS AND FITNESS CERTIFICATION

Contractor personnel shall be required to undergo medical fitness certification relevant to their jobs. This mustbe performed by a qualified Medical Doctor authorised by the Nigerian Medical Council to practice medicine.For this purpose, a contractor whose personnel provide dedicated service to Shell must show evidence of a medicalretainership arrangement with a hospital or clinic registered by the Nigerian Medical Council. All personnel ofthe contractor shall be certified in this retainer hospital or clinic and receive routine medical care there, exceptwhere for reasons of geographyical location and specialist care this is not practical. In either exceptional case,every effort must be made to minimise the number of retainer clinics for a particular contractor engaged in aparticular contract.

In addition, the contractor shall be required to demonstrate that there are reasonable arrangements forresponding to the health issues of its employees while exercising the contract. The Contract Holder shall verifythat these arrangements for pre-employment fitness certification and routine medical care are in place and effectiveto the fullest extent contractually required. In other to manage this process effectively and create an audit trailfor verification, the contractor’s medical retainer shall use a form containing the basic information in Level 2Appendix VII.

For casual employees, especially community workers engaged for relatively short stints by the contractor,medical fitness certification may not be specified to cover this category of employees because of the practicaldifficulties in fulfilling such a requirement. However, the following information must be obtained from theprospective casual employee by the contractor before engaging him:

25


Name Age

What work, if any, have you done in the last 6 months?

Have you suffered any illness or been admitted to hospital in the last year?

Have you any medical complaints at present?

Do you feel well enough to do the job?

Does anybody in your family suffer from Diabetes or High Blood Pressure?

Do you suffer from:?Fainting?Fits?Headaches?Shortness of Breath?Chest pain?

Are you taking any medicines at present (including herbal medication)?

Do you take drugs (hard drugs)?

How much alcohol do you take- daily,/weekly?

Do you smoke? If so how many sticks per day?

Do you play any sports?

Prospective Employee’s Signature: Date:

Validity Period

26


This page intentionally left blank.

27


LEVEL 2: MODEL DOCUMENTS AND TEMPLATES

The Contract Holder shall prepare the Contract Management Plan (CMP) using the template in Table 1 overleaf.The action parties identified in the CMP shall execute the procedure steps allocated to them.

28


10

CO

NTR

ACT

MA

NA

GEM

ENT

PLA

N (

CM

P)

-HSE

Rev

isio

n H

isto

ry:

Pre

lim

inar

yFi

nal

Rev

. 1R

ev.2

Rev

.3

[Tic

k as

app

lica

ble

(√)]

Dat

e:D

ate:

Dat

e:D

ate:

Dat

e:

29


Con

trac

t N

um

ber

Con

trac

t T

itle

Pre

pare

d by

Con

trac

t H

olde

rA

ppro

ved

by C

ontr

act

Spon

sor

Nam

e:R

ef. I

nd.:

Nam

e:R

ef. I

nd.:

Dat

eD

ate

Act

ivity

Act

ion

Act

ivity D

escr

iption

Ref

eren

ceD

eliv

erable

Date

Res

ourc

e –

By

(Pla

nned

/ A

ctual)

Mandays

(Pla

nned

/act

ual)

Pla

nnin

g a

nd Invi

tation t

o T

ender

App

oint

Con

trac

tSp

onso

r A

ppoi

nt C

ontr

act

Hol

der

in w

riti

ng (a

nd C

ompa

nySe

ctio

n 4

Not

e to

Fil

eP

:

A

:P

:

A:

Hol

der

Rep

rese

ntat

ive/

Site

Rep

rese

ntat

ive,

if r

equi

red)

.

Pre

pare

d H

olde

rP

repa

re p

reli

min

ary

HSE

Con

trac

t M

anag

emen

t P

lan

Sect

ion

6.2

Pre

lim

inar

yP

:

A:

P:

A

: pr

elim

inar

y (C

MP

) – b

y co

mpl

etin

g th

is p

rofo

rma

tabl

e.H

SE C

MP

HSE

CM

P(a

) Ass

ess

acti

viti

es r

equi

red

for

this

con

trac

t co

mm

ensu

rate

wit

h le

vel o

f HSE

ris

k,(b

) Pre

pare

con

trac

t sc

hedu

le b

y in

sert

ing

plan

ned

date

s an

d (c

) Eva

luat

e re

sour

ces

requ

ired

to

man

age

HSE

in t

he

cont

ract

.

Dev

elop

Con

trac

tH

olde

rSu

mm

aris

e W

ork

and

serv

ices

req

uire

d fr

om

Sect

ion

6.2

Con

trac

t H

SEP

:

A:

P:

A

:H

SE S

trat

egy

mob

ilis

atio

n to

dem

obil

isat

ion.

Stra

tegy

Dev

elop

a C

ontr

act

HSE

Str

ateg

y th

at a

ddre

sses

bot

h co

mpa

ny a

nd c

ontr

acto

r ob

liga

tion

s an

d m

inim

ises

the

H

SE e

xpos

ure

duri

ng e

xecu

tion

.P

ay p

arti

cula

r at

tent

ion

to in

terf

aces

and

def

ine

the

boun

dari

es o

f the

con

trac

t.O

btai

n Li

ne a

ppro

val f

or C

ontr

act

HSE

Str

ateg

y

Act

ivity

Act

ion

Act

ivity D

escr

iption

Ref

eren

ceD

eliv

erable

Date

Res

ourc

e –

By

(Pla

nned

/ A

ctual)

Mandays

Pre

pare

Sco

pe o

f H

olde

rD

efin

e w

ork

and

serv

ices

to

the

leve

l of d

etai

l req

uire

d C

PP

Mco

ntra

ct s

cope

and

P:

A

:P

:

A:

Wor

kfo

r co

ntra

ct.

cont

ract

sch

edul

eU

tili

se e

xper

ienc

e ga

ined

from

pre

viou

s pr

ojec

ts a

nd/o

r ea

rlie

r st

ages

of t

he d

evel

opm

ent.

Con

duct

and

H

olde

rC

ondu

ct a

Str

uctu

red,

form

al H

SE A

sses

smen

t us

ing

Sect

ions

Not

e to

Fil

eP

:

A:

P:

A

:re

cord

HSE

St

rate

gy a

nd S

cope

of W

ork

docu

men

ts. T

his

shal

l5.

4 an

d (H

SE A

sses

smen

t)A

sses

smen

tid

enti

fy m

ajor

haz

ards

and

met

hods

for

thei

r 6.

2.3

cont

rol (

HE

MP

).It

pro

vide

s th

e ne

cess

ary

inpu

t to

fina

lise

thi

s C

MP

and

pr

epar

e th

e H

SE s

peci

fica

tion

. Ref

er t

o H

SE C

ases

and

H

SE M

S ha

zard

reg

iste

rs fo

r th

e as

set

or S

ervi

ce L

evel

A

gree

men

t to

det

erm

ine

risk

s as

soci

ated

wit

h th

e Sc

ope

of W

ork.

Det

erm

ine

Hol

der

Use

HSE

Ass

essm

ent

resu

lts

to d

eter

min

e if

the

wor

k Se

ctio

ns

Not

e to

Fil

eC

ontr

act

Ris

k w

ill b

e m

anag

ed a

s a

Low

, Med

ium

, or

Hig

h R

isk

5.4

and

Cir

cle

Yes

or

No

Cat

egor

yco

ntra

ct.

6.2.

3

Pre

pare

HSE

H

olde

rU

se t

he r

esul

ts o

f the

HSE

Ass

essm

ent

to d

evel

op t

he99

-031

cH

SE S

peci

fica

tion

P:

A

:P

:

A:

Spec

ific

atio

n G

ener

al S

peci

fica

tion

of H

SE R

equi

rem

ents

for

(C-1

and

C-2

)in

clus

ion

in t

he S

ecti

on V

of t

he p

ropo

sed

cont

ract

ten

der

(use

pro

form

a fr

om S

PD

C 9

9-03

1ci)

.

Fina

lise

HSE

H

olde

rIf

req

uire

d, r

evis

e C

MP

usi

ng t

he r

esul

ts t

o th

e -

Com

plet

ed C

MP

P:

A

:P

:

A:

CM

PH

SE a

sses

smen

t.

App

rove

CM

PSp

onso

rR

evie

w a

nd a

ppro

ve C

MP,

incl

udin

g de

viat

ions

, mak

e -

Sign

ed/a

ppro

ved

P:

A

:ne

cess

ary

reso

urce

s av

aila

ble.

CM

P

Con

duct

HSE

Hol

der

Use

CO

HSE

E t

o ca

rry

out

the

HSE

Pre

-qua

lifi

cati

on

99-0

31b

HSE

P:

A

:P

:

A:

Pre

-qua

lifi

cati

on

and

incl

ude

addi

tion

al c

rite

ria

that

may

be

spec

ific

to

Pre

-qua

lifi

cati

onus

ing

CO

HSE

Eth

e co

ntra

ct. O

btai

n Te

nder

Boa

rd e

ndor

sem

ent

Cri

teri

aas

nec

essa

ry.

30


The

Tender

Per

iod

Pre

pare

Con

trac

tor

Per

form

haz

ard

asse

ssm

ent

and

prep

are

Pre

lim

inar

y99

-031

cP

reli

min

ary

Con

trac

tP

:

A:

Pre

lim

inar

y C

ontr

act

HSE

Pla

n in

acc

orda

nce

wit

h th

e de

tail

99-0

31d

HSE

Pla

nC

ontr

act

requ

ired

by

the

HSE

Spe

cifi

cati

on. T

he C

ontr

acto

r w

ill

HSE

Pla

nde

mon

stra

te h

is u

nder

stan

ding

of t

he s

peci

fica

tion

and

ho

w c

ompl

ianc

e w

ill b

e ac

hiev

ed.

Site

Vis

itH

olde

rIf

req

uire

d, a

rran

ge a

Sit

e V

isit

to

allo

w a

ll t

ende

rers

to

-M

inut

es o

f Sit

e V

isit

P:

A

:P

:

A:

fam

ilia

rise

the

mse

lves

wit

h th

e Sc

ope

of W

ork.

Cla

rifi

cati

on

Hol

der

If r

equi

red,

arr

ange

a T

ende

r C

lari

fica

tion

Mee

ting

to

-M

inut

es o

f Mee

ting

,P

:

A:

P:

A:

Mee

ting

answ

er t

ende

rers

’ que

stio

ns.

Lett

ers,

and

Age

nda

Pre

pare

HSE

H

olde

rP

repa

re a

Ten

der

Eva

luat

ion

Mod

el t

hat

inco

rpor

ates

C

PP

MTe

nder

Eva

luat

ion

P:

A

:Te

nder

Str

ateg

yH

SE A

sses

smen

t, p

refe

rabl

y us

ing

quan

tita

tive

99

-031

aM

odel

indi

cato

rs. H

SE r

atin

gs, m

ay in

som

e ca

ses,

be

appl

ied

as a

bsol

ute

crit

eria

in t

he E

valu

atio

n M

odel

.

Evalu

ation a

nd C

ontr

act

Aw

ard

Rev

iew

H

olde

rE

valu

ate

Pre

lim

. Con

trac

t H

SE P

lans

aga

inst

the

99-0

31c

Not

e to

Fil

eP

:

A:

Pre

lim

inar

y re

quir

emen

ts o

f the

HSE

Spe

cifi

cati

on o

f the

Ten

der

Con

trac

t H

SE

Doc

umen

ts. C

lari

fy w

ith

Con

trac

tors

to

mak

e bi

dP

lan

com

plia

nt. E

stab

lish

whe

re im

prov

emen

ts w

ill b

e re

quir

ed if

Con

trac

t is

aw

arde

d. A

sses

s w

hich

Con

trac

tors

wou

ld r

equi

re a

ddit

iona

l com

pany

sup

ervi

sion

.

Rec

omm

end

Hol

der

Pre

sent

the

res

ults

of t

he C

ontr

act

HSE

Pla

n ev

alua

tion

s-

Tend

er B

oard

Aw

ard

to T

ende

r B

oard

as

they

are

app

lied

in t

he E

valu

atio

n P

rese

ntat

ion

Mod

el. H

ighl

ight

Con

trac

tors

tha

t fa

il t

o m

eet

the

HSE

Spe

cifi

cati

on r

equi

rem

ents

.

App

oint

H

olde

rN

otif

y C

ontr

acto

rs o

f Com

pany

Rep

rese

ntat

ive

and

-C

ontr

act

Lett

erC

ompa

ny (S

ite)

C

ompa

ny S

ite

Rep

rese

ntat

ives

in w

riti

ng. C

opy

Rep

rese

ntat

ive

noti

fica

tion

to

Con

trac

t Sp

onso

r.

App

oint

C

ontr

acto

rP

ropo

se t

he a

ppoi

ntm

ent

of C

ontr

acto

r’s K

ey p

erso

nnel

-Le

tter

Con

trac

tor

Key

Man

ager

list

ed in

the

Con

trac

t to

SP

DC

i.e.

: Con

trac

tor’s

Per

sonn

elR

epre

sent

ativ

e(s)

, Con

trac

tors

Sit

e R

epre

sent

ativ

e(s)

, an

d C

ontr

acto

r’s H

SE A

dvis

er(s

).

App

rove

H

olde

rC

onfi

rm t

o C

ontr

acto

r M

anag

er S

PD

C’s

acce

ptan

ce o

f-

Con

trac

t Le

tter

Con

trac

tor

Key

ke

y pe

rson

nel l

iste

d in

the

Con

trac

t.P

erso

nnel

31


Mobili

sation

HSE

Kic

k-O

ffH

olde

r C

ondu

ct H

SE K

ick-

Off

Mee

ting

or

HSE

wor

ksho

p

200

1-X

XX

Min

utes

of M

eeti

ngP

:

A:

P:

A

:m

eeti

ng /

HSE

imm

edia

tely

aft

er c

ontr

act

awar

d,w

hich

sha

ll b

eW

orks

hop

atte

nded

by

the

Con

trac

t H

old

eran

d C

ontr

acto

rM

anag

er. I

f th

e C

ontr

acto

r is

new

to

SPD

C, t

he

Con

trac

t Sp

onso

r sh

all a

lso

atte

nd

.

Fina

lise

Con

trac

t

Con

trac

tor

Con

duct

det

aile

d ha

zard

ass

essm

ent,

inco

rpor

ate

SPD

C99

-031

dC

ontr

act

HSE

Pla

nP

:

A:

HSE

Pla

nM

anag

erco

mm

ents

, and

upd

ate

Con

trac

t H

SE P

lan.

End

orse

H

olde

rR

evie

w a

nd e

ndor

se t

he C

ontr

act

HSE

Pla

n as

sat

isfy

ing

99-0

31ci

End

orse

Con

trac

tP

:

A:

P:

A

Con

trac

t

the

requ

irem

ents

of H

SE s

peci

fica

tion

. For

war

d to

the

99-0

31d

HSE

Pla

nH

SE P

lan

Con

trac

t M

anag

er.

:

Dev

elop

HSE

H

olde

rD

etai

l how

the

per

form

ance

of t

he c

ontr

acto

rs w

ill b

e99

-031

eH

SE M

onit

orin

gP

:

A:

Mon

itor

ing

mon

itor

ed a

gain

st t

he c

ontr

act

HSE

pla

n (d

evel

oped

Pro

gram

me

Pro

gram

me

from

HSE

Mon

itor

ing

Pro

gram

me

(HSE

MP

) tem

plat

e

(HSE

MP

)in

99-

031e

)

App

rove

HSE

Sp

onso

rC

ontr

act

Spon

sor

shou

ld a

sses

s an

d co

nfir

m t

hat

the

99-0

31e

HSE

Mon

itor

ing

P:

A:

Mon

itor

ing

reso

urce

s, c

ompe

tenc

ies

and

capa

bili

ties

of C

ontr

act

Pro

gram

me

prog

ram

me

Hol

der

san

d C

ompa

ny (S

ite)

Rep

rese

ntat

ives

are

(HSE

MP)

(app

rove

d)su

ffic

ient

to

disc

harg

e th

eir

duti

es, t

akin

g in

to a

ccou

nt

the

leve

l of H

SE r

isk

for

the

cont

ract

. App

rove

HSE

m

onit

orin

g pr

ogra

mm

e.

HSE

Tra

inin

g –

Hol

der

Com

plet

e H

SE t

rain

ing

as id

enti

fied

in t

he H

SE-

Trai

ning

Rec

ords

P:

A

:(S

PD

C-P

rovi

ded)

Ass

essm

ent.

Mob

ilis

atio

n

Con

trac

tor

Con

trac

tor

to c

omm

ence

mob

ilis

atio

n ac

tivi

ties

.99

-031

d-

Man

ager

Com

pany

mon

itor

ing,

insp

ecti

on a

nd a

udit

ing

to e

nsur

e th

at t

he c

ontr

acto

r co

mpl

ies

wit

h th

e co

ntra

ct H

SE p

lan

and

HSE

spe

cifi

cati

on

Pre

-exe

cuti

on

Hol

der

Con

duct

an

audi

t ag

ains

t th

e co

ntra

ct H

SE p

lan

to99

-031

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32


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33


Con

trac

t H

olde

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orm

ance

rep

orts

pro

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edba

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pons

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n th

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eral

l HSE

per

form

ance

of t

heR

epor

tR

epor

ts

Con

trac

tor

and

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cont

ract

ors.

Rep

orts

to

be s

ubm

itte

d an

nual

ly t

o C

ontr

act

Spon

sor

and

wor

k ca

tego

ry

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sation

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t fo

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use

.

34


11 HSE STEP-OUT APPROVAL LETTER

35


The Shell Petroleum Development Company of Nigeria Limited

Contract Title

Contractor Contract No.

Sub-Contractors

Application To Authorise a Step-Out From Agreeed HSE Requirement(s)

HSE STEP-OUT APPROVAL LETTER

I confirm that the activities in the contract covered by this Step-Out application will be executed in a safe, healthy and environmentally responible manner

Name Date Responsibility Signature

Contractors Authorised Representative

Contract Holder

I hereby approve the step-out procedure for this Contract to allow work to proceed, subject to the full implementation of the HSE risk management controls


Contract Sponsor

Details of Step-Out Required 1. (procedure, method, equipment, etc.) 2.

Reason(s) for Step-Out

Scope of Deviation (summary of extent):

Duration of Deviation Start Date: End Date: Time: Time:

Details of Control Measures: Hazards Controls

1. 1. 2. 2. 3. 3. 4.

Notes

From: Contract Holder To: Contract Sponsor

Name Ref.Ind Name Ref.Ind

•••

*Legend: A= Active, C= Call-Off, R= Retention, S= Suspended

36


Summary of Locations Covered

Summary Note on Company Site Representatives Appointed

Summary Note on Significant HSE/Security Management Investigations

Summary Note on Remedial Actions from Incident Investigation

Summary Note on Contract(s) HSE Monitoring Program

Sign:Contract Holder Handing Over

Contract Sponsor's Notes (Approved/Not Approved):

Name/Ref.Ind: / Signature: Date:

Sign:Contract Holder Receiving

I confirm that I have been adequately briefed on the status of the above contracts and I understand my Contract Holdership Accountabilities with respect to these contracts


Contract Title


Sub-Contractors

Department Hand-Over Date:

HSE HAND-OVER FORM FOR CONTRACT HOLDERS

From: Old Contract Holder To: New Contract HolderName: Name:Ref.Ind: Ref.Ind.:

Contracts Held

S/N Contract Contract Title Start Date End Date Status HSE Risk No (A,C,R,S)* Level (H,M,L)

Contract(s) Status

12 HSE HAND-OVER FORM FOR CONTRACT HOLDERS

13 HSE HAND-OVER FORM FOR COMPANY REPRESENTATIVES

37


Contract Holder's Notes (Approved/Not Approved):

Name:

Sign:Company Site Representative Handing Over

Sign:Company Site Representative Receiving

I confirm that I have been adequately briefed on the status of the above contract and I understand my responsibilities with respect to these contracts

Date:Signature:


Contract Title


Sub-Contractors

Department: Hand-Over Date:

CONTRACT HAND-OVER FORM FOR COMPANY SITE REPRESENTATIVES

From: Old Company Site Representative To: New Company RepresentativeName: Name:Ref.Ind: Ref.Ind.:

Contract Status

Status of Contract HSE Monitoring Program:

Contract HSE Performance Statistics:

Status of Remedial Actions:

14 HSE HAND-OVER FORM FOR CONTRACT SPONSORS

38


Significant Deficiencies:

Integrity Checking Schedule (as per HSE monitoring programme):

Name: Contract Sponsor Handing Over

Close-Out of Remedial Actions from Incident Investigations:

Sign:

Date:

Name: New Contract Sponsor Receiving

Sign:

Date:


Contract Title


Sub-Contractors

Copy: CMIS Administrator (CFE-ITP)

HSE HAND-OVER FORM FOR CONTRACT SPONSORS

S/N Contract No Contract Title HSE Risk Duration Contract Ref. Level Holder's Name Ind. (H,M,L)

STATUS NOTES

39


APPEN

DIX

VI –

SCO

PE

OF

WO

RK

(W

ORK

CY

CLE

)

We

here

by a

gree

that

this

Wor

k C

ycle

sha

ll be

mai

ntai

ned

all t

hrou

gh th

e lif

e of

this

cont

ract

.

*Sw

amp

incl

udes

Offs

hore

(sha

llow

/dee

p); *

*List

per

sonn

el a

re d

edic

ated

to th

is co

ntra

ct.

Con

tract

Titl

e

C

ontra

ct N

o.

C

ontra

ctor

Sub-

Con

tract

ors

CO

NTR

ACT

WO

RK

CY

CLE

DIS

PO

SITI

ON

S/n. W

ork

Cate

gory

**

Nos.

Loca

tion

N

os.

Work

Cycl

e (D

ays

ON

/Days

OFF

)

S

hif

t (in h

rs)

01

Man

agem

ent S

taff

(MD

, Lin

e M

anag

ers,

*Sw

amp

A

sset

Man

ager

s)

L

and

O

ffice

02

Supe

rvis

ors

(Mid

dle

Man

agem

ent)

*S

wam

p

L

and

O

ffice

03

Tech

nici

ans

(Ski

lled

labo

ur)

04

Tech

nici

ans

(Uns

kille

d la

bour

)

05

Driv

ers

and

Qua

term

aste

rs

06

Secu

rity

(Sta

tic g

uard

s, P

atro

l men

)

07

Emer

genc

y St

aff (

Med

ical

/Fire

men

)

Not

es:

The

abov

e W

ORK

CYC

LE s

hall

be a

ppro

ved

by th

e C

ontra

ct H

olde

r.

On

beha

lf of

the

Con

tract

or I

conf

irm th

at th

e W

ork

Cyc

le s

tate

d ab

ove

shal

l be

com

plie

d w

ith th

roug

hout

the

life

of th

is co

ntra

ct w

ork

scop

e. A

ny d

evia

tion,

mus

t be

appr

oved

in w

ritin

g by

the

cont

ract

Hol

der.

Nam

e

D

ate

Res

pon

sibili

ty

Si

gna

ture

C

ontra

ctor

s A

utho

rised

Rep

rese

ntat

ive

Nam

e

D

ate

Res

pon

sibili

ty

Si

gna

ture

SP

DC

Con

tract

Hol

der

SP

DC

Com

pany

Site

Rep

rese

ntat

ive

••

16 APPENDIX VII: MEDICAL FITNESS CERTIFICATION FORM

40


Retainer Hospital

MEDICAL FITNESS CERTIFICATION FORM

Name

Past Medical History

Medical Investigation

The above named person has/is certified fit/unfit to carry out the above specified job.

Name:

Medical Doctor's Name

Date

Signature

Retainer HospitalStamp

Medical Examination

Age Date

Medical Certificate of Fitness for (specify job)

Contractor:

Contractor Number:

Tear-off Portion

Date

To Whom It May Concern

CONTENTS

LEVEL 1: INSTRUCTIONS TO CONTRACT HOLDERS 2

1 Purpose 2

2 Guidelines for HSE pre-qualification of tenderers 22.1 Scope 22.2 Related Standards 42.3 HSE pre-qualification process 4

2.3.1 Criteria for Evaluation 52.3.2 Acceptable levels of performance 52.3.3 Questionnaire 52.3.4 Contact with contractors 62.3.5 Evaluation 62.3.6 Presentation to Tender Board and Quotation Panel 62.3.7 Feedback 7

3 Appendices 73.1 Appendix 1. Glossary of Terms, Definitions, Abbreviations 7

LEVEL 2: HSE PRE-QUALIFICATION QUESTIONNAIRE 8Base HSE Pre-qualification Questionnaire 8Evaluation of Base HSE Pre-qualification Questionnaire 16

1

CONTENTS

LEVEL 1: INSTRUCTIONS TO CONTRACT HOLDERS

1 PURPOSE

This document provides details of how HSE pre-qualification should be carried out in SPDC. The target audienceis primarily Contract Holders. It also applies in diminishing order to Contract Sponsors and CMIS Custodians.Company Site Representatives should also be aware of the contents of this guideline. Throughout this documentthe user is referred to as the ‘Contract Holder’.

The guidelines are designed to ease the task of the Contract Holder in determining that contractors on thebid list possess HSE expertise appropriate to the type of contract to be undertaken. Level 1 consists of generalguidance and instructions to staff - principally Contract Holders - on how to approach contractor HSE pre-qualification. Level 2 provides templates for the HSE pre-qualification exercise. The Level 2 templates givethe Contract Holder standard HSE criteria for evaluation of HSE in contracts, and explain how the criteria shouldbe evaluated to select appropriately HSE-qualified Contractors for different types of contracts. In the applicationof these guidelines the Contract Holder is provided with discretionary considerations in the case of small localcontractors where the HSE risk is low, but advises high standards when the HSE risks of the contract are high.

The Level 2 templates include:• A base HSE Pre-Qualification Questionnaire: - This document provides the Contract Holder with HSE

questions which when answered by the Contractor will provide an evaluation of the contractors HSEmanagement ability.

• Evaluation Guidance – This document provides a scoring system to be used by the Contract Holder inevaluating the completed questionnaires.

This document is developed to provide guidance on the HSE pre-qualification of a potential tenderer so that therequirements of the HSE Assessment and HSE Specification are met. This will minimise SPDC’s and thecontractor’s exposure to HSE risk during execution of the scope of work. It should be noted that failure toeffectively pre-qualify potential tenderers will increase considerably the supervisory workload of the ContractHolder in maintaining SPDC’s HSE standards. This recognises that for a particular contract, the ContractHolder will execute the pre-qualification process as required by the HSE Contract Management Plan (CMP).

2 GUIDELINES FOR HSE PRE-QUALIFICATION OF TENDERERS

2.1 ScopeThe guideline has been produced to record best practice and to give help and assistance on how part of therequirements of the Procedure for Management of HSE in Contracts (SPDC 99-031a) can be achieved. It providesgeneral guidance on HSE pre-qualification for all contracted activity within SPDC’s operations, and may not berelevant for all contracts. Users should select from the guidelines, those sections which are most appropriate totheir needs and which are most relevant to their particular contract. The guidelines can therefore not be definitive.The omission of an issue from a guideline should not be taken to imply that the issue is unimportant and canbe neglected.

The guidance assumes that all aspects of the Planning and Invitation to Tender stage, the Tender Period stageand the Evaluation and Contract Award stage have been correctly completed. An effective HSE Assessment musttherefore have been conducted, an appropriate HSE Specification placed in the contract and an approved ContractManagement Plan in place.

This document only considers the HSE pre-qualification criteria. General criteria for pre-qualification ofcontractors are described in the Contracting Policies and Procedures Manual (CPPM). Figure 1 shows ‘The HSEManagement of Contracts Flowchart’ – this document provides guidance on the area highlighted in red.

2

GUIDELINES FOR HSE PRE-QUALIFICATION OF POTENTIAL TENDERERS


3



Management Plan



HSE Assessment&

HSE Specification

Pre-qualify Contractors (If required)

FinaliseTender

Document

Contractor Prepares Preliminary Contract

HSE Plan

ReviewTender

Contract Award


and Performance


during execution


Feedback to Work Category Custodian for

update of register & future pre-qualification

CLOSE-OUT

DE-MOBILISATION

EXECUTION

MOBILISATION

TENDER PERIOD




Hold localkick-off meeting

2.2 Related StandardsBusiness control documentation to be read along with this guideline is listed below.

4


Type Document Name Doc No

Management System HSE Management System Manual SPDC 99-025

Policy Health, Safety and Environmental Protection Policy, -Commitment and Accountabilities

Procedure Procedure for Management of HSE in Contracts SPDC 99-031a

Policies and Procedure Contracting Policies and Procedures Manual CPPM

Specification Specification for Contract HSE Requirements SPDC 99-031c

Guidelines Content and Assessment of Contract HSE Plans SPDC 99-031d

Monitoring of HSE in Contracts SPDC 99-031e

SIEP EP 95 0000 series HSE Management Systems EP 95-0100

Management of Contractor HSE EP 95-0110

OGP series (formerly HSE Management – Guidelines for working together in a October 1999E&P Forum) contract environment Rep. No. 6.64/291

Reference documents used in the writing of this document and to be consulted if more information is requiredare listed below.

2.3 HSE pre-qualification processThe recommended process to be followed in the HSE pre-qualification of contractors is shown in Figure 2.2 andexpanded upon in the text below.

Establish Criteria for Evaluation

Establish acceptable levels of performance

for each criteria

Update Questionnaire

IssueQuestionnaire to contractors

Update COHSEE

Evaluate Results

Present results to Tender

Board

Feedback results to CMIS Custodian (and contractor)*

Figure 2.2. HSE pre-qualification process

*Feedback from the tendering process to contractors should beapproved by the Quotation Panel.

2.3.1 Criteria for EvaluationIn order that pre-qualification is standardised, use of common criterion for evaluation of contractor HSE isrecommended. The recommended criteria have been selected from the premise that effective HSE managementis achieved through a structured approach to the management of hazards and risk. This structured approach isdemonstrated in the HSE management system (HSE-MS) of the contractor and the HSE performance this systembrings to his business. The criteria for an effective HSE-MS are the same as those used by SPDC in their ownHSE-MS (SPDC99-025) and are summarised in Table 2.1.

Table 2.1. Components of an effective HSE Management System

5


Leadership and commitment How senior management set personal examples, demonstrate involvement andparticipation, communicate to employees, etc. on HSE.

Policy and strategic objectives Policy statements and cascaded objectives on HSE that are to be observed.

Organisation, The formal structure for organisation, allocating resources, defining Responsibilities, communications and responsibilities on HSE issues. The setting of minimum Resources, Standards competence levels and training requirements in HSE expected in the & Documents contractor organisation.

Hazards and effects How hazards and effects are identified, assessed, controlled and how recovery management in the event of loss of control will be carried out.

Planning and procedures How the controls for hazards and effects management are to be implemented.A comprehensive listing of HSE standards and procedures applicable to theworkscope under consideration. Change management proposals and emergencyresponse procedures.

Implementation and How HSE performance is monitored, the criterion for HSE performance andMonitoring how corrective action is taken.

Audit and Management The basis under which internal and external HSE auditing and management review reviews will be conducted.

These criteria form the basis for the questionnaire used to pre-qualify contractors. The pre-qualificationquestionnaire will reflect the Hazards to be controlled in the particular contract, and seek evidence that thecontractor has the capability to manage those hazards effectively.

It should be remembered that the HSE Specification might only consider hazards specific to the workscopewithin the contract. These general hazards (such as community issues, security, etc.) must not be forgotten whenpre-qualifying. The base questionnaire provided in Appendix II addresses some of these general hazards.

2.3.2 Acceptable levels of performanceSPDC’s ‘Health, Safety and Environmental Management System’ (SPDC99-025) defines the minimum levels ofcontrol and performance criteria that must be in place for an acceptable HSE-MS- (Refer to section 4, ‘Hazardsand Effects Management Process’ of the HSE-MS for more detail). Contract Holders should expect the samelevels to be in place within contractors HSE-MS.

The HSE Reference Manual (HSE RM-00) details the minimum HSE performance standards for a wide rangeof hazards commonly encountered in SPDC operations.

The Occupational Health Guidelines provides guidance on acceptable occupational health provisions.

2.3.3 QuestionnaireHSE pre-qualification is completed primarily using a questionnaire, sent out by the Contract Holder forcompletion by the contractor. In order that pre-qualification is consistent, use of a standard questionnaire isrecommended. A sample, base questionnaire is provided in Appendix II. As contractors and contract workscopesvary widely, one standard questionnaire can not be applied to all possible contracts. The Contract Holder shouldtherefore alter the base questionnaire to reflect the level of HSE risk in the workscope. The higher the level of

HSE risk in the workscope, the more detailed the questionnaire should be. Risk is defined through use of theHSE Risk Matrix (ref. SPDC Procedure for Specification and Registration of Hazards HSE-P14) and evaluatedduring the process, which delivers the HSE Assessment and HSE Specification. The content of the HSESpecification is therefore the starting point for altering the base questionnaire.

2.3.4 Contact with contractorsThe questionnaire should be sent to all contractors on the bid list or to contractors whom the Contract Holderwould like to invite to tender. The contractor management who will supervise the scope of work being tenderedshould complete the questionnaire.

The HSE pre-qualification questionnaire should be part of the entire contractor pre-qualification process andshould not be conducted in isolation. Procedures for executing pre-qualification are provided in the CPPMavailable from Contract Services.

2.3.5 EvaluationScoring of the responses to the questionnaire should be against a statement of ‘conditions’ denoting the state ofHSE fitness of the contractor relative to the HSE risk of the contract in view. The recommended conditions asshown in the Level 2 template range from ‘A’ – high HSE risk capability - to ‘D’ – low HSE risk capability.Evaluation of the questionnaire should recognise that a broad range of HSE skills exist in the contractingcommunity that SPDC utilises and therefore a broad range of responses will be obtained.

A contractor that obtains an ‘A’ in all categories is meets the condition for a high HSE risk contract, providedall other aspects of their pre-qualification are acceptable. A contractor that scores a ‘D’ in even one category (withthe exception of section 8) should is by default in a low HSE risk management condition even if other aspectsof their pre-qualification are acceptable. (SPDC HSE Policy should be referred to for confirmation that HSE isto be managed as any other critical business activity and therefore failure to manage HSE to standard is justificationfor disqualification).

A large number of contractors whose pre-qualification criteria are acceptable will lie in the middle. A cut offpoint is suggested which allows for 50% of categories to be ‘B’ or better and 50% to be ‘C’ or better. Contractorswho score below this cut off point should be disqualified. Care should be taken to avoid penalising contractorswho are diligent and honest in their HSE reporting and who may therefore appear to have a ‘poor’ HSE performance.Similarly contractors who provide near perfect responses may have achieved their good performance by beingvery selective in their reporting. If in doubt, a site visit should take place to confirm the responses.

It should be noted that accepting a contractor in a condition of low HSE risk management capability inevitablyincreases the burden on the Contract Holder to ensure SPDC’s HSE standards are maintained. Additionalresources such as permanent Company Site Representatives, skilled in HSE may then have to be budgeted intothe contract to make up these shortfalls.

2.3.6 Presentation to Tender Board and Quotation PanelGuidance on Tender Board presentations is provided in the CPPM. If an HSE pre-qualification is acceptable thenthe HSE pre-qualification criteria are unlikely to be rejected by the Tender Board / Quotation Panel. If the HSEpre-qualification is acceptable but with reservations, the Contract Holder should consider suggesting additionalresources especially if the risk in the workscope is high. The additional resources should be justified against therisk reduction expected against SPDC standards of HSE performance.

If all other aspects of pre-qualification are acceptable but the HSE pre-qualification is unacceptable, then theTender Board Quotation Panel may well request an explanation. Compliance to this CMG guidance, the CPPM,or the standards of SPDC’s HSE Policy and HSE-MS should ensure Tender Board support for the disqualificationof contractors with inadequate HSE Management arrangements.

6


2.3.7 FeedbackIn order to encourage improvement in the HSE performance of all contractors, feedback from the evaluationprocess to contractors is encouraged. Feedback should contain both positive information (where the contractorperformed well) and negative information (where the contractor’s performance was below standard). In order tohelp the contractor improve, the negative feedback should explain the standard that should have been obtainedand at the Contract Holder’s discretion, suggest how that standard could be obtained in the future. There shouldbe no comparison with other contractors in the feedback process. Clearance to provide feedback to contractors onthe tendering process must be obtained from CSE-PPS.

The Contractor HSE Evaluation (COHSEE) application will be adopted for HSE pre-qualification as muchas practicable.

3 APPENDICES

3.1 Appendix I – Glossary of Terms, Definitions, Abbreviations

Acceptance criteria Expresses the level of health, safety and/or environmental performance deemedacceptable for a given period or phase of activities. They may be defined both inquantitative and qualitative terms.Source: E&P Forum Guidelines for the Development and Application of Health, Safety andEnvironmental Management Systems 1994

Performance criteria Performance criteria describe the measurable standards set by company managementto which an activity or system element is to perform. (Some companies may refer toperformance criteria as goals or targets.)Source: E&P Forum Guidelines for the Development and Application of Health, Safety andEnvironmental Management Systems 1994

Performance indicator Comparative, quantitative measures of actual events, against previously specifiedtargets, which provide a qualitative indication of future projected performance basedon current achievement.

CPPM SPDC’s Contracting Policies and Procedures Manual available from Contract Services.

7


LEVEL 2: HSE PRE-QUALIFICATION QUESTIONNAIRE

Base HSE Pre-qualification Questionnaire

General guidelines for preparation of questionnaire:1 This is a base questionnaire only and should be expanded to include the specific HSE management skills

defined in the HSE Specification needed for effective management of the major hazards assessed as beingpresent in the contract scope of work. This base questionnaire is a default setting in the Pre-QualificationModule of the Contractor HSE Evaluation System (COHSEE) which will be used for this exercise. TheContract Holder can include additional items specific to the contract at his discretion.

2 It aims to cover the information required to assess the extent to which HSE and its management aresystematically organised by the contractor.

3 The contractor should be advised to cover all (including support) activities and not just those conductedon SPDC sites.

4 Contractor line management should complete the questionnaire.5 Emphasis should be placed on the need for complete answers substantiated by supporting documentation

as far as is practicable. The Contract Holder should be wary of requesting too much information especiallyif a large number of contractors are being pre-qualified for one scope of work. Increasing amounts of detail(and therefore information required to support it) should be requested as risk increases. If extreme HSErisks (RAM of C5+) are expected then the detail should extend to an HSE Case.

6 Submissions should be assessed by a scoring mechanism (immediately after the questionnaire) that isconsistent, transparent and can be presented to the Tender Board if required.

7 Follow-up discussion with the contractor’s management may be needed.8 The contractor should be encouraged to identify where he exceeds SPDC’s requirements and this excellence

should be recognised.

Should further information be required to improve understanding of each section in the questionnaire (for example,to better understand ‘Leadership and Commitment’, refer to EP 95-0100 (HSE Management Systems).

A Note On Pre-Qualifying Contractors For Low Risk ContractsThe document ‘Guidelines for the Content and Assessment of Contract HSE Plans’ (SPDC 99-031d) provides atemplate for a small contract defined as one of low HSE risk. This template allows statements of intent andsimple procedures to replace complex formal documentation, procedures, schedules etc. A similar approach shouldbe used with HSE pre-qualification resulting in a much shorter, simpler questionnaire being presented to thecontractor.

8


9


Sect

ion 1

: Le

ader

ship

and C

om

mitm

ent

Res

ponse

s

(i)

Com

mit

men

t to

HSE

thr

ough

lead

ersh

ipa)

How

are

Sen

ior

Man

ager

s pe

rson

ally

invo

lved

in

HSE

man

agem

ent?

b) P

rovi

de e

vide

nce

of c

omm

itm

ent

at a

ll le

vels

of

the

orga

nisa

tion

?

c) H

ow d

o yo

u pr

omot

e a

posi

tive

cul

ture

tow

ards

H

SE m

atte

rs?

Sect

ion 2

: Polic

y a

nd S

trate

gic

Obje

ctiv

esRes

ponse

s

(i)

HSE

pol

icy

docu

men

tsa)

Doe

s yo

ur c

ompa

ny h

ave

an H

SE p

olic

y do

cum

ent?

(If t

he a

nsw

er is

YE

S pl

ease

at

tach

a c

opy)

.

b) W

ho h

as o

vera

ll a

nd fi

nal r

espo

nsib

ilit

y fo

r H

SE in

you

r or

gani

sati

on?

c) W

ho is

the

mos

t se

nior

per

son

in t

he

orga

nisa

tion

res

pons

ible

for

this

pol

icy

bein

g ca

rrie

d ou

t on

sit

e w

here

em

ploy

ees

are

wor

king

? (P

rovi

de n

ame,

tit

le a

nd e

xper

ienc

e)

(ii)

Ava

ilab

ilit

y of

pol

icy

stat

emen

ts t

o a)

Ite

mis

e th

e m

etho

ds b

y w

hich

you

hav

e dr

awn

empl

oyee

syo

ur p

olic

y st

atem

ent

to t

he a

tten

tion

of a

ll

your

em

ploy

ees.

b) W

hat

are

your

arr

ange

men

ts fo

r ad

visi

ng

empl

oyee

s of

cha

nges

in t

he p

olic

y?

Tem

pla

te 1

: Base

Contr

act

or

HSE

Pre

-qualif

ication Q

ues

tionnair

e

10


Sect

ion 3

: O

rganis

ation, Res

ponsi

bili

ties

, Res

ourc

es, St

andard

s and D

ocu

men

tation

Res

ponse

s

(i)

Org

anis

atio

n –

com

mit

men

t an

da)

How

is m

anag

emen

t in

volv

ed in

HSE

co

mm

unic

atio

nac

tivi

ties

, obj

ecti

ve-s

etti

ng a

nd m

onit

orin

g?

b)H

ow is

you

r co

mpa

ny s

truc

ture

d to

man

age

and

com

mun

icat

e H

SE e

ffec

tive

ly?

c)W

hat

prov

isio

n do

es y

our

com

pany

mak

e fo

r H

SE c

omm

unic

atio

n m

eeti

ngs?

(ii)

Com

pete

nce

and

Trai

ning

of m

anag

ers/

a)

Hav

e th

e m

anag

ers

and

supe

rvis

ors

at a

ll le

vels

supe

rvis

ors/

seni

or s

ite

staf

f/ H

SE a

dvis

ers

who

wil

l pla

n, m

onit

or, o

vers

ee a

nd c

arry

out

th

e w

ork

rece

ived

form

al H

SE t

rain

ing

in t

heir

re

spon

sibi

liti

es w

ith

resp

ect

to c

ondu

ctin

g w

ork

to H

SE r

equi

rem

ents

?(I

f YE

S pl

ease

giv

e de

tail

s. W

here

the

tra

inin

g is

giv

en in

-hou

se p

leas

e de

scri

be t

he c

onte

nt

and

dura

tion

of c

ours

es).

(iii

)C

ompe

tenc

e an

d G

ener

al H

SE t

rain

ing

a)W

hat

arra

ngem

ents

doe

s yo

ur c

ompa

ny h

ave

to e

nsur

e ne

w e

mpl

oyee

s ha

ve k

now

ledg

e of

ge

nera

l wor

k re

late

d H

SE, a

nd t

o ke

ep t

his

know

ledg

e up

to

date

?

b)W

hat

arra

ngem

ents

doe

s yo

ur c

ompa

ny h

ave

to e

nsur

e ne

w e

mpl

oyee

s al

so h

ave

know

ledg

e of

you

r sp

ecif

ic H

SE p

olic

ies

and

prac

tice

s?

c)W

hat

arra

ngem

ents

doe

s yo

ur c

ompa

ny h

ave

to e

nsur

e ne

w e

mpl

oyee

s ha

ve b

een

inst

ruct

ed

and

have

rec

eive

d in

form

atio

n on

any

spe

cifi

c ha

zard

s ar

isin

g ou

t of

the

act

ivit

ies

desc

ribe

d in

the

sco

pe o

f wor

k?

11

GUIDELINES FOR HSE PRE-QUALIFICATION OF POTENTIAL TENDERERS(i

ii)

Com

pete

nce

and

Gen

eral

HSE

tra

inin

gd)

Wha

t tr

aini

ng d

o yo

u pr

ovid

e to

ens

ure

that

al

l em

ploy

ees

are

awar

e of

SP

DC

’s H

SE

requ

irem

ents

?

e)W

hat

arra

ngem

ents

doe

s yo

ur c

ompa

ny h

ave

to e

nsur

e th

at t

he H

SE k

now

ledg

e of

exi

stin

g st

aff i

s up

to

date

? (I

f tra

inin

g is

pro

vide

d in

-ho

use

plea

se g

ive

deta

ils

of c

onte

nt.)

(iv)

Spec

iali

sed

trai

ning

a)H

ow h

ave

you

iden

tifi

ed a

reas

of y

our

com

pany

’s op

erat

ions

whe

re s

peci

alis

ed

trai

ning

is r

equi

red

to d

eal w

ith

maj

or h

azar

ds?

(If Y

ES

plea

se it

emis

e an

d pr

ovid

e de

tail

s of

tr

aini

ng g

iven

.)

b)If

the

spe

cial

ised

wor

k in

volv

es t

he fo

llow

ing

haza

rds,

how

are

the

haz

ards

iden

tifi

ed,

asse

ssed

and

con

trol

led?

Roa

d tr

ansp

ort

Mar

ine

tran

spor

tC

amp

hygi

ene

Occ

upat

iona

l hea

lth

haza

rds

Rad

iati

onC

hem

ical

han

dlin

gA

sbes

tos

(v)

HSE

qua

lifi

ed s

taff

– a

ddit

iona

l tra

inin

ga)

Doe

s yo

ur C

ompa

ny e

mpl

oy a

ny s

taff

who

po

sses

s H

SE q

uali

fica

tion

s an

d ca

n co

nduc

t H

SE t

rain

ing?

b)If

so,

wha

t ar

e th

eir

qual

ific

atio

ns?

(vi)

Ass

essm

ent

of s

uita

bili

ty o

f sub

cont

ract

ors/

a)

For

your

sub

-con

trac

tors

, how

do

you

asse

ss:

othe

r co

mpa

nies

•H

SE c

ompe

tenc

e•

HSE

per

form

ance

b)W

here

do

you

stat

e th

e st

anda

rds

you

requ

ire

your

con

trac

tors

to

mee

t, a

nd h

ow

do y

ou e

nsur

e yo

ur s

ub c

ontr

acto

rs m

eet

your

HSE

sta

ndar

ds?

12


(vii

)St

anda

rds

a)W

here

do

you

spel

l out

the

HSE

per

form

ance

st

anda

rds

you

requ

ire

to b

e m

et?

b)H

ow d

o yo

u en

sure

the

se a

re m

et a

nd v

erif

ied?

c)H

ow d

o yo

u id

enti

fy n

ew in

dust

ry o

r re

gula

tory

st

anda

rds

that

may

be

appl

icab

le t

o yo

ur a

ctiv

itie

s

d)Is

the

re a

n ov

eral

l str

uctu

re fo

r pr

oduc

ing,

up

dati

ng a

nd d

isse

min

atin

g st

anda

rds

Sect

ion 4

: H

aza

rds

and E

ffec

ts M

anagem

ent

Res

ponse

s

(i)

Haz

ards

and

eff

ects

ass

essm

ent

a)W

hat

tech

niqu

es a

re u

sed

wit

hin

your

com

pany

fo

r th

e id

enti

fica

tion

, ass

essm

ent,

con

trol

and

re

cove

ry o

f haz

ards

and

eff

ects

?

(ii)

Exp

osur

e of

the

wor

kfor

cea)

Wha

t sy

stem

s ar

e in

pla

ce t

o m

onit

or t

he

expo

sure

of y

our

wor

kfor

ce t

o ch

emic

al o

r ph

ysic

al a

gent

s?

(iii

)H

andl

ing

of c

hem

ical

sa)

How

is y

our

wor

kfor

ce a

dvis

ed o

n th

e pr

oper

ties

of c

hem

ical

s en

coun

tere

d in

the

co

urse

of t

heir

wor

k?

(iv)

Per

sona

l pro

tect

ive

equi

pmen

ta)

Wha

t ar

rang

emen

ts d

oes

your

com

pany

hav

e fo

r pr

ovis

ion

and

upke

ep o

f pro

tect

ive

clot

hing

, bo

th s

tand

ard

issu

e, a

nd t

hat

requ

ired

for

spec

iali

sed

acti

viti

es?

(v)

Was

te m

anag

emen

ta)

Wha

t sy

stem

s ar

e in

pla

ce fo

r id

enti

fica

tion

, cl

assi

fica

tion

and

man

agem

ent

of w

aste

?

(vi)

Dru

gs a

nd A

lcoh

ola)

Do

you

have

a D

rugs

and

Alc

ohol

Pol

icy

in

your

org

anis

atio

n?(I

f so,

doe

s it

incl

ude

pre-

empl

oym

ent

and

rand

om t

esti

ng).

13


Sect

ion 5

: Pla

nnin

g a

nd P

roce

dure

sRes

ponse

s

(i)

HSE

or

oper

atio

ns m

anua

lsa)

Do

you

have

a c

ompa

ny H

SE m

anua

l (or

O

pera

tion

s m

anua

l wit

h re

leva

nt s

ecti

ons

on

HSE

) whi

ch d

escr

ibes

in d

etai

l you

r co

mpa

ny

appr

oved

HSE

wor

king

pra

ctic

es r

elat

ing

to y

our

wor

k ac

tivi

ties

? (I

f the

ans

wer

is Y

ES

plea

se

atta

ch a

cop

y of

sup

port

ing

docu

men

tati

on.)

b)H

ow d

o yo

u en

sure

tha

t th

e w

orki

ng p

ract

ices

an

d pr

oced

ures

use

d by

you

r em

ploy

ees

on-s

ite

are

cons

iste

ntly

in a

ccor

danc

e w

ith

your

HSE

po

licy

obj

ecti

ves

and

arra

ngem

ents

?

(ii)

Equ

ipm

ent

cont

rol a

nd m

aint

enan

cea)

How

do

you

ensu

re t

hat

plan

t an

d eq

uipm

ent

used

wit

hin

your

pre

mis

es, o

n-si

te, o

r at

oth

er

loca

tion

s by

you

r em

ploy

ees

are

corr

ectl

y re

gist

ered

, con

trol

led

and

mai

ntai

ned

in a

saf

e w

orki

ng c

ondi

tion

?

(iii

)La

nd a

nd M

arin

e Tr

ansp

ort

Safe

ty

a)W

hat

arra

ngem

ents

doe

s yo

ur c

ompa

ny h

ave

Man

agem

ent

for

com

bati

ng r

oad

and

vehi

cle

inci

dent

s, a

nd m

arin

e tr

ansp

ort

inci

dent

s?

Sect

ion 6

: Im

ple

men

tation a

nd P

erfo

rmance

Monitori

ng

Res

ponse

s

(i)

Man

agem

ent

and

perf

orm

ance

mon

itor

ing

of

a)W

hat

arra

ngem

ents

doe

s yo

ur c

ompa

ny h

ave

wor

k ac

tivi

ties

for

supe

rvis

ion

and

mon

itor

ing

perf

orm

ance

?

b)W

hat

type

of H

SE p

erfo

rman

ce c

rite

ria

are

used

in y

our

com

pany

; giv

e ex

ampl

es

c)W

hat

arra

ngem

ents

doe

s yo

ur c

ompa

ny h

ave

for

pass

ing

on a

ny r

esul

ts a

nd fi

ndin

gs o

f thi

s su

perv

isio

n an

d m

onit

orin

g to

you

r:•

base

man

agem

ent

•si

te e

mpl

oyee

s?

14


(ii)

HSE

per

form

ance

ach

ieve

men

t aw

ards

a)H

as y

our

com

pany

rec

eive

d an

y aw

ard

for

HSE

pe

rfor

man

ce a

chie

vem

ent?

(iii

)St

atut

ory

noti

fiab

le in

cide

nts

/a)

Has

you

r co

mpa

ny s

uffe

red

any

stat

utor

y da

nger

ous

occu

rren

ces

noti

fiab

le in

cide

nts

in t

he la

st fi

ve y

ears

(s

afet

y, o

ccup

atio

nal h

ealt

h an

d en

viro

nmen

tal)

?(A

nsw

ers

wit

h de

tail

s in

clud

ing

date

s, m

ost

freq

uent

typ

es, c

ause

s an

d fo

llow

-up

prev

enta

tive

mea

sure

s ta

ken.

)

(iv)

Impr

ovem

ent

requ

irem

ent

and

proh

ibit

ion

a)H

as y

our

com

pany

suf

fere

d an

y im

prov

emen

t no

tice

sre

quir

emen

t by

the

rel

evan

t na

tion

al b

ody,

re

gula

tory

bod

y fo

r H

SE o

r ot

her

enfo

rcin

g au

thor

ity

(inc

ludi

ng S

PD

C o

r an

othe

r Sh

ell

Ope

rati

ng C

ompa

ny) o

r be

en p

rose

cute

d un

der

any

HSE

legi

slat

ion

in t

he la

st fi

ve y

ears

? (I

f you

r an

swer

is Y

ES

plea

se g

ive

deta

ils.

)

(v)

HSE

per

form

ance

rec

ords

a)H

ave

you

mai

ntai

ned

reco

rds

of y

our

inci

dent

s an

d H

SE p

erfo

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EVALUATION OF BASE HSE PRE-QUALIFICATION QUESTIONNAIRE

General guidelines for scoring and evaluation:1. Contractor’s response to the questionnaire should be evaluated by attaching a score to the selected response

for each category. The scoring system adopted in the internal logic of the Contractor HSE Evaluation System(COHSEE) is as shown below:

16


HSE Plan Documentation (Sections 1 to 5, 7 and 8)

A B C D

0 3 6 10

Performance and Experience Factors (HSE Incidents) (Section 6):

0 7 14 20

• Evaluation of the completed questionnaire requires discretion and judgement on the part of the Contract Holder. Acceptancecriteria will vary according to Contract HSE risk.

• For low HSE-risk contracts, ‘A’ responses on a number of questions may not disqualify the contractor outright provided theitems are not considered critical HSE requirements by The Contract Holder. If such a contractor is awarded the contract,assurances should be received that the ‘A’ items will be rectified.

• For high risk contracts demanding robust HSE controls, ‘A’ responses should normally disqualify the contractor from beingincluded in a pre-qualification list. Any elements rated so must be highlighted as a qualification on the tender if it is tobe so considered.

• An evaluation that includes 50% of ‘C’ and 50% of ‘B’ should be acceptable provided all responses relating to the managementof the major hazards recorded in the HSE Specification are rated ‘B’ or above.

2. Responses should be evaluated against recorded standards such as found in the HSE Reference Manual andthe HSE Specification.

3. Evaluations should be recorded and maintained in the event that the evaluation is challenged at a later date.4. Contract Holders should complete the evaluation and should ensure the Contract Sponsor endorses the

evaluation and the Contract Analyst/Contract Engineer accepts the evaluation.5. Feedback to the Contractor of the evaluation is encouraged but must first be cleared with CSE-PPS/QP. The

total pre-qualification evaluation model or proforma should NOT be released to the Contractor.6. All HSE pre-qualification shall be processed through COHSEE.

WARNING:A questionnaire such as this relies upon contractor honesty and integrity to be effective. If the responses areconsidered ‘inappropriate’ then the questionnaire should be verified by personal inspection of the contractor’soperations. Note this may only be practicable for ‘high risk, high cost’ contracts.

The evaluation process should be aware that honest reporting, especially of HSE performance statistics canresult in an honest contractor’s performance appearing worse that a dishonest contractor. For example, contractorA reports all near misses, FAC’s, MTC’s. LTI’s diligently and has extensively educated their work force to reportagainst a wide range of hazards. Contractor B only reports when it suspects it is obliged to. Its employees areonly aware of and therefore only report against major safety hazards. In this situation, the LTIF, TRCF and overallHSE performance of A will appear to be worse than B. However, it is clear that A is the preferred contractor.

A similar situation could occur if contractor A always undertakes high-risk work in difficult locations andtherefore incurs incidents, despite working hard to avoid them. Contractor B only undertakes lower risk workwhere the Client takes greater responsibility for HSE management and so has a near perfect incident record.Awarding the high risk, remote location work to B would be a mistake.

These and other similar problems must be considered during the evaluation. No operation is perfect, but someoperations try harder to improve than others.

17


Template 2: Base HSE Pre-qualification questionnaire evaluation

Section 1: Leadership and Commitment

Commitment to HSE through leadership: Item (i) - a) to c)

A B C D

No commitment from HSE disciplines delegated Evidence of active senior Evidence of a positivesenior management to line managers – no management involvement HSE culture in senior

direct involvement by in HSE aspects management and atsenior management all levels

Section 2: Policy and Strategic Objectives

HSE policy documents and availability: Items (i) – a) to c) and (ii) – a) to b)

A B C D

No written HSE policy. A policy statement exists HSE policy establishes HSE Policy with clearlybut not in a widely responsibility for HSE, established responsibility distributed document. but is not widely and accountability; is

distributed. distributed to all employees; and is prominently displayed.

A ‘satisfactory’ HSE Policy contains all the basic elements that can be found in the SPDC HSE Policy.

Section 3: Organisation, Responsibilities, Resources, Standards and Documentation

HSE communication and meeting programmes: Item (i) – a) to c)

A B C D

None. Periodic HSE meetings HSE meetings performed In addition to ‘C’for special operations on a regular basis at employees are assignedonly. management and topics to discuss on a

supervisor level. rotational basis. Effective management review of the entire structure.

Staff HSE training Item 3(ii)

No specialised staff HSE training assigned to HSE training applied to HSE training giventraining. a specific person on Management but not formally to all relevant

location. comprehensively covered. staff on their respective responsibilities.

Employee orientation and training programme: Item 3(iii) - (a) - (d)

No formal programme. Verbal instructions on Employee handbook All under ‘C’ togethercompany procedures only. provided and supervisor with: follow-up Basic orientation booklet outlines, explains and observation of the (or similar) provided for demonstrates new employee’s worknew employees, but no employee’s job. included.on-the-job orientation by Safe practices andsupervisor. emergency duties are

explained to theemployee.

Specialised training: Item 3(iv) - (a) to (b) and 3(v)

No HSE training On-site basic training HSE training is given for Formal HSE training established. conducted occasionally. specialised operations, but programmes have been

no routine training developed in all areasconducted. and are conducted on a

regular basis. Retrainingperiods are established.

Subcontractors: Item 3(vi) - (a) to (c)

No written arrangements. Written arrangements in HSE arrangements HSE arrangements existplace for basic HSE incorporated in HSE in a handbook form, matters only. manual but not in a distributed to all

format which is distributed employees,to all employees. subcontractors,

subcontractor employees,and are enforced. Follow-up audits held withdiscussion/feedback tomanagement andemployees.

Standards : Item 3(vii) - (a) to (c)

No HSE standards Basic HSE standards Contractor has written Contractor has a systemavailable. exist. HSE standards to cover of specifying,

all hazardous operations. monitoring complianceand updating standards.

18


Section 4: Hazards and Effects Management **

Hazards and Effects Assessment : Item 4(i)

A B C D

Company’s HSE system Company’s HSE system Company’s HSE system Company’s HSE system does not include hazards refers to the need to includes methods for the has a comprehensive setand effects assessment. assess hazards and effects assessment of major of methods for the

but has no comprehensive hazards and effects. assessment of all HSEstructure to carry this out. hazards and effects and

applies them to all itscontracts withdocumentation.

Exposure of the workforce: Item 4(ii)

Company does not actively Company advises the Company has formal Company has a set ofadvise the workforce nor workforce of the major methods for monitoring formal methods formonitor exposure. hazards that they are exposure to the major monitoring exposure to

likely to be exposed to hazards. all foreseeable hazardsbut only monitors (linked to its hazards andexposure randomly. effects assessment

method) and appliesthem to all contracts.

Potential Hazards (chemical, physical and biological hazards such as noise, radiation, vapours,fumes, temperature extremes, etc.): Item 4(iii)

Company makes no Company provides Company distributes Company maintains aprovision for advising the information to workforce information to individuals database of the propertiesworkforce about properties in the workplace on in the workforce at start of all potential hazardsof potential hazards. properties of potential of their involvement encountered and has

hazards but has no on-site. formal methods ofactive follow-up. information distribution

to all personnel andtrains its workforce inhandling, etc.

Personal protective equipment : Item 4(iv)

Basic PPE provided to PPE requirements PPE requirements Procedures in place topersonnel but no corporate formally assessed but formally assessed with assess all PPEprocedure for assessing little effort made to spot checks on usage. requirements, monitorindividual needs. ensure correct usage. and enforce usage and

replacement needs. Stockinventories monitored,kept above demandlevels. Training in useprovided where needed.

19


Waste management: Item 4(v)

Company has no formal Company has general Company has procedures Company has a formalmethods for the control of procedures for waste for the disposal of each of system for wastewaste. disposal. the main categories of management (including

site wastes but makes no identification andprovision for minimising classification), whichenvironmental impact. actively seeks to

minimise environmentalimpact.

** This section of the evaluation should relate directly to the HSE Specification. The example shows chemicals and waste fordemonstration purposes only. The specific hazards of the Scope of Work should be assessed using similar criteria. Section 3-(iv)b) in the pre-qualification questionnaire considers hazards commonly encountered in general operational Scope of Works.

Section 5: Planning and Procedures

HSE or operations manuals : Item 5(i) - (a) and (b)

A B C D

No HSE procedures Basic HSE procedures Contractor has written Contractor hasavailable. exist. HSE procedures to cover procedures to cover all

all hazardous operations. HSE precautions, typicalContractor HSE Planrequirements with asystem of updating anddissemination toemployees.

Equipment control and maintenance : Item 5(ii)

No defined program to Plan relies on outside A written programme In addition to ‘C’,identify or evaluate sources, i.e. company outlining supervisory periodic inspectionshazardous practices and inspections. Supervisory guidelines, conducted by top equipment conditions. inspection of equipment responsibilities, management or by teams

confined to worksite frequency and follow-up of specialists.personnel only. is in effect.

Road and Marine Safety Management : Item 5(iii)

No special attention paid Importance of road and Company has a general Company has a completeto road and marine safety marine safety management strategy strategy and set of plansas an area of hazardous acknowledged but left to with some procedures and procedures coveringactivities. core business managers/ for its component issues. vehicles, marine craft,

supervisors to enact drivers, quartermastersindividually. and operations

management.

20


Section 6: Implementation and Performance Monitoring

Management and performance monitoring of work activities : Items 6(i) and 6(ii)

A B C D

No system for formally Performance monitoring Company has a system for Company has amonitoring HSE in a few areas carried out. monitoring HSE comprehensive system for performance. performance in key areas. monitoring performance

in all areas with feedbackto employees forimprovement and hasreceived awards for HSEachievement.

Statutory notifiable incidents / dangerous occurrences and improvement requirements andprohibition notices: Items 6(iii) and 6(iv)

More than one occurrence One occurrence of a major Occurrences relate to No occurrences in theof major incident in last incident in the last minor incident(s) only. last five years.five years. five years.

HSE Performance records (Latest year injury rate comparison to contractor’s three preceding yearsaverage) : Item 6(v) - (a) to (d)

Contractor supplied Rate is not improving. Shows only minor rate Rate steadily improvinginsufficient information to improvement. by more than 20 perestablish rate or rate cent per year.increases.

Criteria for absolute performance +

Rate over 200 per cent Rate under 200 per cent Rate under 120 per cent Rate better than that ofthat of SPDC. that of SPDC. that of SPDC. SPDC.

Incident Investigation and reporting : Item (vi) (a) to (c)

Findings not generally Findings communicated Findings communicated As in ‘C’ but with thecommunicated. to key personnel only via to all employees via addition of details of

limited company internal specific company notice. implication formemo or similar media. improving HSE

performance.

+ Care should be exercised when comparing performance statistics.

21


Section 7: Auditing and Review

Auditing: Item 7(i) - (a) to (c)

A B C D

Audit process is cursory Company HSE documents Company HSE documents As in ‘C’ butonly – HSE documents are include reference to include details of how additionally specifiesnot explicit about auditing. auditing but there are no auditing is to be management’s role in

specific details about implemented with audit and follow-up onscheduling and coverage. schedules/coverage for the action items.

key areas.

Section 8: HSE Management – Additional Features

Membership of Associations : Items (i) and (ii)

A B C D

No memberships. Company has Company is a member of Company is an activemembership of at least at least one HSE participant in at leastone association but with association. one HSE association.no prominence given to HSE.

22


CONTENTS

LEVEL 1: INSTRUCTIONS TO CONTRACT HOLDERS 2

1 Introduction 2

2 Scope 42.1 Deliverables 4

2.1.1 Reports 42.2 Responsibilities 4

3 Contractor HSE Management System (HSE MS) 5

4 Effective period 5

5 Review and improvement 5

1

SPECIFICATION FOR CONTRACT HSE REQUIREMENTS

2


LEVEL 1: INSTRUCTION TO CONTRACT HOLDERS

INTRODUCTION

This Specification details the minimum HSE requirements in contracts. It provides the full statement of HSErequirements to be applied by the Contract Holder, and identifies the responsibilities of the SPDC ContractHolder and the Contractor in making and complying with the HSE Specifications respectively. The structure ofthis Specification relative to where it fits into the tendering and contract delivery process is shown in Figure 1.While the Level 1 part provides instructions and general guidance to the Contract Holder, the Level 2 partcontains inserts that will go into the phases of the contracting process identified in Table 1 below:

Table 1: Level 2 HSE Specification Documents

Contract Phase Documents Containing LEVEL Document Summary2 HSE ‘Inserts’

Tendering (Before Award) • Instructions to Tenderers Invitation To Tender (ITT)

• Forms of Tender (FoT) package including proposed

• Contract Document * generic contract document(proposed, generic)

Contract (After Award) • Contract Document * Contract(final, signed)

The Level 2 Document goes in here and here.

This Specification will guide the Contractor in preparing the Preliminary Contract HSE Plan for the contractand provide the basis for the Contract Holder’s evaluation of this plan.

It is worth reiterating here that the Level 2 model document is an integral part of the Contract. It resides inthe (Proposed AND Final) Contract document. As such, it is automatically part of the “Invitation To Tender”(ITT) package.

}}

3


Figure 1: Structure of HSE Integration into Tendering and Contract Delivery

NB: HSE inserts into the above documents are as follows:1. Forms of Tender: Contract HSE Plan Template and General Specification of HSE Requirements2. Contract: General Specification of HSE Requirements

Notes to tenderers

Instructions to tenderers

Appendices to Form ofTender (HSE & others)

Form of Tender no.3

Form of Tender no.2

Forms of Tender no.1

General Specification of HSE requirements

Scope of work

Articles of agreement

Form of agreement

Instruction to tender

These documents tell the tenderer:

1. The rules of the game to tender.

2. The documents and forms sent to him for completion (Form of Tender and Propsed Contract).

3. The required action from the tenderer (ie. to fill in the Form of Tender and submit as his bid).

Tender Documents

Invitation to tender package (ITT)ITT package includes the contract (or more precisely, the “proposed” contract in its generic form.

In theory the tenderer could request a change to the “proposed” contract).

Forms of Tender

These forms elicit information from the Contractor for evaluation of his HSEcapacity.

Contract

All contractual HSE obligations of a generalnature go into the “General Specificationof HSE Requirements”.

4


2 SCOPE

The attached Level 2 Model Document “General Specification of HSE Requirements” applies in all respectsto all contracts, except those categorised as Low-Risk by the Contract Holder. For Low Risk Contracts, theContract Holder, after written approval of his Line/Asset Manager, may exercise his discretion in determiningwhat aspects of the specification are applicable. Though the Contract Holder may consult the Line HSE Co-ordinator to establish this risk level, the ultimate responsibility resides with the Contract Holder in linewith SPDC 99-031a.

This model document replaces the HSE Section of all Shell contracts. Accordingly, the HSE section of all Shellcontracts shall be found in “Section V”. This is why this document bears the designation of “Section V”.

In the preparation of the tender documents, the Contract Holder must customise Part 2 of the General HSERequirements, that is, the General HSE Specification. This requires Hazards to be listed and additional applicableStandards to be stated. In addition, the Contract Holder must ensure that expressions of HSE Requirementsspecific to the particular work in question are adequately included in the Scope of Work and other parts of thecontract documents.

2.1 DeliverablesImplementation records of compliance with this specification shall be kept. Accordingly, the Contractor shallprovide the following:

• Preliminary Contract HSE Plan, as part of Tender submittal (refer to Level 2 Section 2.6a);• Contract HSE Plan after Contract Award (refer to Level 2 Section 2.6b); and• Appointment of Key Personnel, including HSE Advisers (refer to Level 2 Section 2.4 a-c).

2.1.1 ReportsShell Staff: Non-compliance with this Specification shall be notified, investigated, and reported in line withSPDC HSE-P12.Contractors: Non-compliance shall be reported to the Contract Holder.

2.2 ResponsibilitiesLine/Asset Managers are responsible for ensuring that the activities they control are managed in accordancewith the requirements of this Specification. In the event that circumstances prevent compliance with thisSpecification, Line/Asset Managers shall seek step-out approval in line with SPDC HSE P-11 procedure.Contract Sponsors are responsible for ensuring that the requirements of this Specification are reflected in thedocuments for which they are responsible.Contract Holders are responsible for communicating this Specification to Contractors, and for ensuring that,the requirements are adhered to while making and exercising their contracts. Where a compelling need arises tooperate outside this Specification the Contract Holder shall seek Step-Out Approval in line with SPDC 99-031aprocedure. It is the responsibility of the Contract Holder to provide, or have the Contractor provide (whererelevant), the deliverables (2.1) and Reports (2.1.1).Contractors are responsible for ensuring that they comply with this Specification while working under theircontracts.

3 CONTRACTOR HSE MANAGEMENT SYSTEM (HSE MS)

The Contractor should provide a concise description of its HSE Management System (HSE MS). Its HSE MS isthe total of all of its established, generic policies, programs, procedures, standards, etc. that it uses to manage itsHSE performance. It is not intended that each policy, program, procedure, standard, etc. be attached or describedindividually. Rather, the key elements of the Contractor’s HSE MS should be described to provide SPDC withthe assurance that it meets the minimum requirements of the ‘Guidelines for the Development of HSE SubManagement Systems and HSE Cases’ SPDC 99-022.

4 EFFECTIVE PERIOD

This specification shall remain in effect throughout the life of the contract.

5 REVIEW AND IMPROVEMENT

The Contract Holder shall systematically verify that the requirements of the Specification are being met by theContractor, and shall report any non-compliance and follow-through with appropriate sanctions, during the wholeeffective period. It is emphasised here that what is required is to HAVE A SYSTEM TO VERIFY COMPLIANCEthat goes beyond reporting non-compliances or casual observations pertaining to same. It is equally importantto demonstrate the effectiveness, consistency and integrity of this SYSTEM.

This specification shall be reviewed as necessary by SPDC’s HSE-CON, but no less frequently than every fouryears. Constructive comments and feedback from all practitioners, Shell Personnel and Contractors alike, arewelcome at any time. Contractor feedback should preferably be routed through their Contract Holders. Suchfeedback will be reviewed upon receipt and a decision will be communicated back to the provider as to whetherthe feedback will result in a review and update of the existing specification and when this will occur.

5


CONTENTS

LEVEL 2: MODEL DOCUMENTS AND TEMPLATES 3

PART 1: GENERAL HSE REQUIREMENTS 5

1 HSE PERFORMANCE REQUIREMENTS 5

2 CONTRACTOR HSE MANAGEMENT SYSTEM 52.1 Leadership and Commitment 52.2 Policy and Strategic Objectives 52.3 Organisation and Responsibilities 52.4 Manpower Resources and Competence Assurance 62.5 Hazards and Effects Management 72.6 Planning 82.7 Standards, Procedures and Document Control 92.8 Implementation and Monitoring 92.9 Audit 102.10 Management Review 10

3 PERFORMANCE MONITORING 10

4 REPORTING 10

5 HSE REFERENCE MANUAL 10

6 GENERAL HSE SPECIFICATION 11

7 PARTICULAR HSE SPECIFICATIONS 11

PART 2: GENERAL HSE SPECIFICATION 12

General HSE Specification 13

1.0 Hazard Assessment 13

2.0 Contract HSE Requirements 13

3.0 Sub-Contractors 14

4.0 HSE Training 14

5.0 Pre-Mobilisation Requirements 155.1 HSE Kick-Off Meeting 155.2 Contract HSE Plan 15

6.0 Pre-Execution Requirements 15

1


2


7.0 Site Restoration 16

8.0 Performance Monitoring and Reporting 16

9.0 HSE Incidents 16

10.0 Exclusions and Exceptions 16

11.0 Compliance with HSE Specification 16

12.0 Applicable HSE Standards 23

Additional security specifications 27

3


LEVEL 2: MODEL DOCUMENTS AND TEMPLATES

HSE insert in contract document: “General specification of HSE requirements”

Section V of all contract documents is the “General HSE Requirements”. For “Low Risk” contracts, an abbreviateddocument titled “General HSE Requirements for Low Risk Contracts” is provided as a separate model documentfor plug-’n-play use.

The structure of the General HSE Requirements; how it interrelates with other aspects of the contract; andhow it establishes linkages with other contractually binding HSE documents is shown below:

Figure 2: Structure of General Specification of HSE Requirements (Section V of Contract Document)

Hierarchy of Documents

• Contract Document

• “General HSE Requirements”

• HSE Reference Manual

• “General HSE Specification”

• “Particular HSE Specification” (Applicable Standards)

Part 1: General HSE Requirements

1. HSE Performance Requirements

2. Contractor HSE Management

3. Performance Monitoring

4. Reporting

5. HSE Reference Manual

6. General HSE Specifications

7. Particular HSE Specifications

Part 2: General HSE Specification

1. Hazard Assessment

2. Contract HSE Requirements

3. Sub-Contractors

4. HSE Training

5. Pre-Mobilisation Requirements

6. Pre-Execution Requirements

7. Site Restoration

8. Performance Monitoring and Reporting

9. HSE Incidents

10. Exclusions and Exceptions

11. Compliance with HSE Specification

12. Applicable HSE Standards

*Additional Security specifications

HSE referenceManual

Scope of Work(Detailing Statements of a HSE Nature)

General Terms and Conditions (coveringHSE Statements)

Schedule of Prices(Where this mayimpact on HSE)

Other ContractSections affectingHSE

Technical standardsDEPsManagement SystemsDocumentsER Manuals andProcedures, etc.

4


SECTION V

GENERAL SPECIFICATION OF HSE REQUIREMENTS

5


PART 1: GENERAL HSE REQUIREMENTS

1. HSE PERFORMANCE REQUIREMENTS

The Contractor shall be responsible for managing all HSE aspects of its Work. As a minimum, all Contractorsshall satisfy the requirements expressed in this “General HSE Requirements” document.

2. CONTRACTOR HSE MANAGEMENT SYSTEM

An HSE Management System (HSE MS) is the total of the policies, programs, systems, procedures, standards,controls, etc. used to manage HSE activities. Contractors shall have in place an HSE MS that includes, at aminimum, the following elements.

2.1 Leadership and CommitmentContractor senior management shall provide strong, visible leadership and commitment to HSE management by:

• Allocating adequate resources for HSE management;• Attending and chairing HSE meetings;• Promoting HSE issues in company communications;• Conducting workplace HSE inspections personally.

2.2 Policy and Strategic ObjectivesContractor senior management shall define and document its HSE Policy and strategic objectives and ensure thatthey:• Are consistent with those of Shell;• Are relevant to the organisation’s activities, products and services;• Are consistent with, and are of equal importance to its other business policies and strategic objectives;• Are publicly available;• Commit the Contractor to meet or exceed all relevant regulatory and legislative requirements;• Commit the Contractor to reduce the risks and hazards to health, safety and the environment to levels which

are as low as reasonably practicable; and• Provide a framework for setting and reviewing HSE objectives and targets that commit the Contractor to

continuous efforts to improve HSE performance.

The Contractor’s HSE Policy shall be produced in an easy to read format in the working languages of staff andthe workforce, endorsed and dated by the Contractor’s senior executive, and communicated to all employees andother relevant parties.

2.3 Organisation and ResponsibilitiesContractor management shall develop a network of HSE-dedicated meetings/committees to review andcommunicate current HSE issues to all levels within its organisation (in accordance with Section 2.8a). Thesemeetings/committees shall interface with business management meetings/committees at the same level of theorganisation.

Contractors shall define the responsibility for developing and maintaining the HSE MS, and for establishingHSE accountabilities at each level of the organisation. Contractors shall ensure that all employees are aware of,and understand, their HSE Policy and HSE management requirements, as well as their individual roles andresponsibilities with respect to HSE management. HSE shall be the responsibility of line management at alllevels of the Contractor’s organisation, and it shall not be delegated to HSE Advisers.

2.4 Manpower Resources and Competence AssuranceContractors shall allocate sufficient resources at all levels to effectively manage HSE. Contractors shall ensurethat all employees (including sub-contractors) are competent to perform their work tasks, that relevant HSEtraining is provided, and those HSE requirements are incorporated into competency assessment and assuranceprogrammes. Contractors shall provide competent supervision for each individual.

a) Contractor Key PersonnelContractor HSE Adviser(s), Contractor Representative(s) and Contractor Site Representative(s) shall be classifiedas Key Personnel under the contract. As such, the Contractor shall propose individuals to fill these positions,subject to the approval of the Contract Holder.

The role of HSE Advisers shall be facilitating/advisory in nature. HSE Advisers shall not be responsible forline management and supervision. The Contractor shall define the role and responsibilities of the HSE Advisersin the Contract HSE Plan.

b) Requirement for HSE AdvisersContractors shall provide HSE Adviser(s) as described in this section. Unless otherwise specified in the HSESpecification (Section Va), a minimum of one HSE Adviser shall be provided per Area Asset Team in which thecontract is operating. The HSE Adviser(s) shall visit each location on a regular basis and remain a sufficientlength of time to fulfil the duties defined in the Contract HSE Plan.

The total number of HSE Adviser(s) employed by the Contractor and deployment of them for any individualcontract shall be defined in the Contract HSE Plan.

Contractor Management shall, at all times throughout the duration of the contract, be able to demonstratethat Line/Line/Asset Managers and supervisors have ready access to sufficient numbers of suitably knowledgeableand qualified HSE Advisers. Particular attention should be given during start-up of the contract and themobilisation/demobilisation phases.

In the case of a Lump-Sum contract (also including EPC, turnkey, etc.), one HSE Adviser may provide supportfor a maximum of two contracts in an Area Asset Team, subject to written authorisation from the ContractSponsors.

c) Minimum Competence for HSE AdvisersHSE Advisers shall be knowledgeable in specific relevant safety techniques and have a working knowledge ofthe legal and contractual health, safety and environmental requirements that must be met. They must have theability to communicate effectively at all levels of the Contractor’s organisation.

All HSE Advisers shall demonstrate competence in the following areas:• Ability to communicate effectively in written and spoken English;• Ability to conduct HSE audits;• Training ability in incident prevention;• Ability to conduct incident investigations and identify underlying causes;• Knowledge of health requirements, rules and regulations, and ability to monitor compliance;• Knowledge of environmental requirements, rules and regulations, and ability to monitor compliance and

identify ways of reducing environmental impact;• Be fully conversant with techniques used in the management of hazards and advising on suitable measures

which can be used for preventing and ultimately recovering from accident situations;• Be able to facilitate and develop Contract HSE Plans;• Be fully conversant with Shell HSE documents and emergency procedures.Contractors shall confirm in the Tender document that they will provide HSE Advisers that satisfy the minimumcompetence requirements.

6


7


Attendance at the following Shell courses or approved equivalent is mandatory for all HSE Advisers: • NISP Contractor Staff Competence Development Program Level 3 CDP Level-3• Journey Management Seminar (Land and Marine) JMS -L&M

Notes:• Refer to ‘Procedure for HSE Awareness, Training and Competence HSE P-26, for information on these

courses.• An HSE Adviser holding higher qualifications not currently recognised by Shell may be exempted from some

of the above requirements subject to the exemption provisions of Procedure for HSE Awareness, Training andCompetence HSE P-26.

At a minimum, Contractor’s HSE Advisers shall be qualified in accordance with either of the followingrequirements:

1. Professional HSE AdviserEach HSE Adviser shall have a minimum of five- (5) year’s work experience, of which at least two years shall havebeen as an HSE Adviser. Work experience must be related to the activities to be carried out under the terms ofthe contract.

Alternatively the HSE Adviser shall have a minimum of two years work experience and be a member of anindependent internationally recognised Professional Institution per the list below:• IOSH – Member of the Institute of Occupational Safety and Health.• DIPSM – Diploma in Safety Management, or Member of International

Institute of Safety Management.• RSP – Registered Safety Professional.• NISP – Nigerian Institute of Safety Professionals• Other – per Approved List held by HSW-SYST

2. HSE Adviser (seconded from Line Management)Contractor’s Line Managers who are seconded to HSE may be acceptable as HSE Advisers provided the proposedindividuals have a minimum of three (3) years experience, with a satisfactory track record, on Shell contracts at sitesupervisory level. Work experience must be related to the activities to be carried out under the terms of the contract.

Note:Proposed individuals who do not satisfy the criteria of three years experience on Shell contracts at site supervisorylevel may be acceptable, subject to review and approval by Shell’s HSW-SYSC (HSE Certification). In all cases,whether professional, seconded, or otherwise, the acceptance of the HSE Adviser is subject to Shell’s approval.

2.5 Hazards and Effects ManagementContractors shall conduct assessments of all work and services within its area of responsibility to identify HSEhazards and effects, evaluate the significance of these HSE effects, assess the adequacy of existing controls, anddevelop / implement management plans to minimise these effects to the extent practicable.

a) Detailed Hazard AssessmentFor each contract, the selected Contractor shall conduct a detailed hazard assessment prior to or in conjunctionwith its development of the Contract HSE Plan. The detailed hazard assessment shall use a formal structuredsystem to identify the hazards associated with the work and to assess their potential effects. It shall also evaluatethe adequacy of existing controls and identify and recommend additional methods for managing / minimisingthe HSE risks.

8


2.6 PlanningContractors shall develop HSE management plans that allocate sufficient human, physical and financial resourcestoward improving HSE performance. If relevant, Contractor line management shall include additional items thatare relevant to a specific activity, operation or work team concerned. Contractor shall communicate the contentof these plans to its employees.

Contractors shall develop HSE objectives, targets, and quantitative indicators to monitor its company-wideHSE performance. If relevant, Contractor line management shall establish additional HSE objectives and targetsthat are relevant to a specific activity, operation or work team concerned.

Contractors shall develop appropriate emergency response plans, and procedures to notify SHELL and relevantexternal parties, in order to effectively respond to HSE emergencies and incidents.

In response to the “General Specification of HSE Requirements” (Section V), the Contractor shall develop aPreliminary Contract HSE Plan as part of its Tender submission. If awarded the contract, the Contractor shalldevelop a Contract HSE Plan to describe the specific actions that will be taken and the specific programs andprocedures that will be implemented by the Contractor to manage hazards associated with a particular contract.SPDC 99-031d ‘Guidelines for the Content and Assessment of Contract HSE Plans’ provides additional guidanceon the development of Contract HSE Plans.

a) Preliminary Contract HSE PlanThe Contractor shall develop a Preliminary Contract HSE Plan that addresses the hazards identified in the HSESpecification (Section Va) and those identified through its own preliminary hazard analysis. The PreliminaryContract HSE Plan shall cover the contract phases from mobilisation through demobilisation and site restoration,and clearly indicate the specific procedures and standards to be followed during each phase of the contract.

In its Preliminary Contract HSE Plan the Contractor shall:• Describe its HSE Management System;• Demonstrate its full understanding of the requirements in the HSE Specification (Section Va);• Demonstrate that it has independently identified and assessed the hazards / risks anticipated during the

execution of the contract;• Describe how it will manage the specific hazards / activities anticipated during the execution of the contract;• Describe how compliance with Shell’s requirements will be measured and achieved; and

b) Contract HSE PlanAfter conducting a detailed hazard assessment of the work, the selected Contractor shall develop a Contract HSEPlan by adding additional details to its Preliminary Contract HSE Plan, and correcting any errors or deficienciesthat have been identified.

In its Contract HSE Plan the Contractor shall:• Update the information in its Preliminary Contract HSE Plan as required;• Incorporate the information from its detailed hazard assessment;• Identify all HSE-related activities to be performed during the contract, including the identification of action

parties and specification of completion dates;• Provide the number of HSE Advisers to be employed on the contract, including a description of their roles,

responsibilities and deployment; and• Provide a description of Contractor’s HSE audit, inspection and monitoring programs for the contract.The Contractor shall obtain Shell’s approval of the Contract HSE Plan prior to the commencement of work. Theapproved Contract HSE Plan shall become part of the contract documents. The Contractor shall obtain formalapproval from the Contract Holder for any proposed deviations or amendments to the Contract HSE Plan.

9


2.7 Standards, Procedures and Document ControlContractors shall review HSE legal requirements, SHELL HSE standards and international HSE standards, andincorporate these requirements in developing and updating their HSE MS. Procedures shall be developed in orderto manage HSE documents through their entire lifecycle.

Contractors shall develop and implement appropriate business and operational controls to ensure that theirHSE critical activities comply with the requirements of their HSE MS and shall consider operational activities,management of change (including Permit to Work), task verification and workplace inspection. Contractorsshall ensure that sub-contractors working on their behalf are made aware of, and comply with, the requirementsof the Contractor’s HSE MS and Shell’s HSE requirements.

2.8 Implementation and MonitoringContractors shall establish and document HSE monitoring programmes and procedures for data collection,interpretation and maintenance. Contractors shall compile company-wide HSE reports for staff, and shall co-ordinate communications with internal and external stakeholders on HSE issues. Contractors shall report HSEdata to SHELL on a monthly basis or as defined elsewhere in the Contract in accordance with the “GeneralSpecification of HSE Requirements” (Section V) and the Contract HSE Plan.

Contractors shall maintain records as necessary to document the implementation of the HSE ManagementSystem.

a) HSE meetingsThe Contractor shall hold regular HSE meetings at different levels of the organisation on the following basis, ata minimum:• Corporate management Quarterly• Departmental/Area management Monthly• Work-site management Weekly• Team supervision Weekly “HSE topic” meetings

These HSE meetings shall be recorded (commensurate with the level). A procedure for the follow-up of itemsreported during HSE meetings shall be developed and applied, and all deficiencies corrected in a timely manneraccording to the degree of concern.

b) Toolbox talksToolbox talks shall be held by each work team at individual work sites before commencement of the day’s activitiesand again just prior to non-routine activities. They shall concentrate on the risks of the work being undertakenand the precautions necessary to ensure a safe, healthy and environmentally acceptable working day. The risksassociated with the work being undertaken shall be discussed together with the potential risks posed by othergroups who may be working in the vicinity. The toolbox talk shall be led by the work-site supervisor of the teamand shall be given in a language that all members of the team can understand. The work site supervisor shallselectively test proper understanding by team members of hazard controls and recovery provisions. It is notnecessary to record or keep notes of toolbox talks, but Contractor line management shall monitor them on amonthly basis to check their effectiveness.

The work site supervisor shall be able to communicate with his subordinates.

c) IncidentsContractors shall establish and document incident notification, investigation, and reporting and follow-upprocedures. Such procedures will include notification of Shell and relevant external parties of HSE incidents.

10


d) Non-compliancesFor non-compliances, Contractors shall define accountabilities and develop procedures to:• Notify SHELL and other relevant parties, including external parties;• Determine and report the causation sequence and likely root cause(s);• Establish a plan of action that includes measures to restore compliance as quickly as possible, prevent recurrence,

and evaluate and mitigate any adverse HSE effects;• Implement corrective or preventive actions that are appropriate for the nature of the non-compliance;• Apply controls to ensure that any corrective or preventive actions have been completed and are effective; and• Revise businesses controls document to incorporate actions to prevent recurrence, record changes, and

communicate changes to relevant parties.

2.9 AuditContractors shall develop and implement an HSE audit programme and audit follow-up process (ref. s2.5).

2.10 Management ReviewContractor’s senior management shall annually review performance against their company-wide HSE objectivesand targets. In addition, Contractors shall regularly review their HSE MS, HSE policies and HSE strategicobjectives to ensure their continuing adequacy and effectiveness.

Contractor line management shall review and update HSE management controls, as appropriate.

3.0 PERFORMANCE MONITORING

Contractor shall work in accordance with, and regularly monitor its HSE performance against, the Contract HSEPlan. When performance deviates from the Contract HSE Plan, the Contractor shall notify the Contract Holderand shall implement remedial actions to correct the situation in a timely manner.

Contractors shall conduct regular HSE inspections of its work sites, industrial areas, camps and messingfacilities. Planned audits shall also be performed to review HSE management and procedural aspects of itsoperations.

Contractors shall develop an annual HSE audit and inspection plan / schedule to be included in the ContractHSE Plan. It shall ensure that an effective system is in place for monitoring the follow-up and implementationof inspection and audit action items.

Shell reserves the right at any time to independently audit / review / inspect Contractor’s facilities, equipment,procedures and HSE management systems against the requirements of the contract. The Contractor shall fullyco-operate with Shell in such audits and reviews, and shall implement recommendations in a timely manner atits own cost.

4.0 REPORTING

Contractor shall report to Shell all findings emerging from Management Reviews, Audits, Inspections and otherPerformance Monitoring arrangements in a format and frequency to be agreed with the Contract Holder wherethis is not covered in the reporting template of the “General HSE Specification”.

5.0 HSE REFERENCE MANUAL

Contractor shall fulfil all requirements of the Shell HSE Reference Manual and subsequently revised versions of same.

6.0 GENERAL HSE SPECIFICATION

Contractor shall conduct all work in fulfilment of the “General HSE Specification”.

7.0 PARTICULAR HSE SPECIFICATIONS

In addition to the “General HSE Requirements”, Contractor shall fulfil all other requirements of a HSE natureas expressed in any part of the Contract. Non-fulfilment of ANY HSE requirement stated in the Contract shallconstitute a breach of contract and shall be recorded and sanctioned accordingly.

11


12


PART 2: GENERAL HSE SPECIFICATION

Notes for Usage: This General HSE Specification empowers the Contract Holder to determine the HSE requirements applicableto the Contract by selecting from a default list of requirements. It is divided into two parts: General HSESpecification and the Applicable Standards. The Applicable Standards define the Particular HSE Specificationfor the Contract.

The General HSE Specification will form the basis for the Contractor’s Preliminary Contract HSE Plan, andwith the finalisation of this Plan after award, it will be applied from Mobilisation, through Execution, to CloseOut. Thus, the Contract Holder will prepare the General HSE specification for inclusion in the:- Proposed Contract Document as part of the Invitation To Tender package; and subsequently in the - Contract Document.

13


GENERAL HSE SPECIFICATION

All Work or Services shall conform to the General HSE Specification. In case of conflict between the ParticularHSE Specification and the General HSE Specification, unless otherwise expressly stated herein, the ParticularHSE Specification shall prevail.

The Contract Holder shall review the General HSE Specification and modify the text where appropriate asindicated in Italics.

1.0 HAZARD ASSESSMENTThe Company has identified the following potential groups of hazards associated with the work to be performedunder this contract:

HAZARDS LISTING (Hazard Table)

HSE-MS documents & HSE CASE HAZARD & EFFECT Registerdocuments available from the HSE and Aspect Tables (Locations)web page

* Corporate HSE-MS Part 5

* Geomatics HSE MS Part 5

* Seismic HSE MS Part 5

* Medical HSE MS Part 5

* Office HSE MS Part 5

* Catering HSE MS Part 5

* Well Services HSE MS Part 5

* Well Engineering HSE MS Part 5

* Production Workshop HSE MS Part 5

* Marine Maintenance HSE MS Part 5

* Civil HSE MS Part 5

* Production Chem. Lab HSE MS Part 5

* Utilities HSE MS Part 5

* Pipelines HSE Case Part 5

* Logistics HSE Case Part 5

* Production Facilities HSE Cases Part 5 See HSE Manual/Cases

* Production Terminal HSE Cases Part 5

Contract Holder, in accordance with the Procedure for Managing HSE in Contract (SPDC 99-031a), shall performa structured Hazard Assessment to identify the hazards associated with the execution of the contract; the Contractorwill further develop this Hazard Assessment. Contract Holder to insert list of hazards identified for this contract.The Contractor shall note that the above list of hazards (in the Hazard table) is not exhaustive and Contractorshall perform its own hazard analysis during Tender preparation. For Call-Off contracts the Contractor’s HazardRegister shall include every possible hazard in the Scope of Work in ANY Shell Location.

2.0 CONTRACT HSE REQUIREMENTSThe Contractor shall, at a minimum, comply with Shell’s HSE requirements as set out in the Contract, particularlythe requirements of the HSE Reference Manual. Contractor shall develop its own work procedures specific to thenature of its operation, addressing the management of HSE hazards. Where Contractor’s standards exceed those

GENERAL HSE SPECIFICATIONS

of Shell, the higher standard shall prevail, and Contractor shall advise Shell in all such instances.The Contractor shall develop and implement an HSE Management System (HSE MS). An HSE MS is a system

of policies, programs, procedures, standards, etc. that the Contractor uses to manage its HSE performance.

The HSE MS shall ensure that the Contractor: • Has an effective HSE Policy and supporting programs, procedures and standards in place that are aligned to

and compatible with Shell’s;• Manages its activities in line with Shell’s HSE Policy;• Complies with the Local, State, and Federal Legislation of Nigeria regarding Petroleum exploration and

production, and Shell’s internal requirements;• Sets HSE objectives and targets;• Measures, records, appraises and publicly reports its HSE performance;• Identifies the hazards associated with its work activities; and• Implements appropriate procedures and controls to minimise any potential adverse HSE effects.

Contractor shall develop a Preliminary Contract HSE Plan as part of its Tender submittal to verify that all hazardsassociated with the work or services have been identified and that adequate control and recovery measures havebeen determined. If awarded the Contract, the Contractor shall carry out a complete detailed analysis of all hazardsand develop a Contract HSE Plan. Minimum Contractor requirements for developing a Preliminary ContractHSE Plan and a Contract HSE Plan are provided in the ‘Guidelines for Content and Assessment of Contract HSEPlan’ (SPDC 99-031d) and in the Template for a Contract HSE Plan within the ‘Forms of Tender’ package.

3.0 SUB-CONTRACTORS

Contractor shall ensure that all sub-contractors working on its behalf comply with the requirements of thiscontract HSE Requirements.

Contractor shall:• Identify to the Contract Holder all sub-contractors, vendors and suppliers to be employed in the execution of

the contract; and• Demonstrate HSE management and control in each subcontractor organisation• Specify how subcontractors will be integrated into the Contractor’s HSE MS, paying particular attention to

the responsibilities for, and ownership of, the management of transport activities and how one subcontractorservices multiple contractors.

4.0 HSE TRAINING

Contractor shall provide a mandatory HSE Induction training programme for its entire workforce at work siteand at a minimum, HSE training for Contractor Personnel in accordance with the Minimum HSE TrainingRequirements stated in Appendix-III. Contractor Personnel who can provide evidence of having alreadycompleted Company-approved HSE training courses prior to commencing work on this Contract shall not berequired to repeat such training, except for the purposes of refresher training as detailed in the Specification forHSE Training stated in Appendix-III. Shell shall make available, at the request of the Contractor, a list of currentlyapproved third party training courses.

Notwithstanding the references in Shell’s Specification for HSE Training to courses being either mandatoryor compulsory, courses selected from the list in Appendix-III (including any required refresher training) shall beconsidered mandatory for all Contractor Personnel in the Target Populations that satisfy the conditions detailed.The cost of attending the HSE training courses, including refresher courses, transportation to and from courses,

14

SPECIFICATION FOR CONTRACT HSE REQUIREMENTS GENERAL HSE SPECIFICATIONS

attendance time of personnel, accommodation and messing during courses, and all course fees, for ContractorPersonnel including consultants and vendors, shall be borne by the Contractor. Contractor shall maintain an up-to-date list of all personnel employed under the Contract, the training coursesthey have attended and the dates of attendance.

Contract Holder to insert the following (all column references refer to columns in Appendix - III):1. insert ‘YES’ in column D for Courses that must be attended by Target Population:2. extend Target Population by specifying additional personnel in column E or clarify the application of Target

Population by specifying further details in column E; and3. specify when training must be completed by inserting a schedule date in column F.

5.0 PRE-MOBILISATION REQUIREMENTS

5.1 HSE Kick-Off MeetingAn HSE Kick-Off meeting shall be held on * not later than two weeks after Effective Date.At a minimum the Contractor’s Manager, Contractor’s Authorised Representative and Contractor’s senior HSEAdviser shall attend.• Contract Holder to specify timing of HSE Kick-Off meeting - suggest phrases like ‘not earlier than one week

before Contract Commencement Date’, ‘not later than one week after Effective Date’, etc. Ref: Guidelines forHSE Kick-Off meetings (SPDC 2000-031).

5.2 Contract HSE PlanContractor shall note that NO activity on the Company concession area or at Site may be commenced until theCompany has approved the appropriate sections of the Contract HSE Plan.• Contract Holder to identify Sections of the Contract HSE Plan requiring approval prior to commencement of

mobilisation.• Contract Holder to insert any additional contract-specific HSE requirements that must be completed prior to

mobilisation.• Call-Off Contracts Only: Contract Holder should include any freshly identified hazard in the Contract HSE

Plan as Revised Contract HSE Plan for that service to be performed by the Contractor that executing the worksor services Called-Off.

6.0 PRE-EXECUTION REQUIREMENTS

When the Contractor indicates readiness to commence the Work or Services (excluding mobilisation and design)the Company shall conduct a Pre-Start-Up Audit. Upon satisfactory closeout of the audit, the Company shallissue to the Contractor an HSE Certificate (Appendix – I) confirming compliance. The Contractor shall notcommence the Work (excluding mobilisation and design) until the Company has issued the HSE Certificate. Ifthe Pre-Start-Up Audit is unsatisfactory, the Contract shall be terminated.

Contract Holder to insert any additional contract-specific HSE requirements that must be completed priorto commencement of execution (or Commencement Date), including any reduced pre-execution requirementsfor Low-Risk Contracts. Contract Holder shall also insert hereunder any pre-callout or split mobilisationrequirements. Contract Holder should, for Unsatisfactory Pre-Start-Up Audit:

a) Minor Deficiencies:i. Contractor to implement corrective actions and audit repeated.ii. Contractor to implement corrective actions while the execution of the work can commence (Only if the deficiency does not constitute a significant risk hazard)

15

SPECIFICATION FOR CONTRACT HSE REQUIREMENTSGENERAL HSE SPECIFICATIONS

b) Serious Omission:i. The Contract Holder shall withhold permission to proceed and reappraise the Contractor’s

HSE compliance.ii. The Contract Holder shall consider the option of terminating the contract.

7.0 SITE RESTORATION

Upon completion of the Work or Services, the Contractor shall satisfactorily restore the Site, including any areasof the Company concession area and any premises thereon, used by the Contractor to perform the Work or Services.

Upon completion of the restoration of the Site, the Contractor shall apply for certification of such restoration.The Company shall certify satisfactory completion by the issuance of a Site Restoration Certificate (Appendix - II).• For contracts that do not include requirements for site restoration, the Contract Holder should amend this

section as appropriate and indicate that a Site Restoration Certificate (Appendix - II) is not required.

8.0 PERFORMANCE MONITORING AND REPORTING

The Contractor shall regularly monitor its HSE performance and shall complete and submit the ‘Health and Safety Statistics Monthly Return’ form (Appendix - IV) to the Contract Holder before the 7th day of eachcalendar month.

9.0 HSE INCIDENTS

The Contractor shall report and investigate all work-related HSE incidents in accordance with Shell’s ‘IncidentNotification, Investigation, Reporting and Follow-up’ Procedure (HSE P-12). All near misses shall be investigatedand reported for the purpose of disseminating lessons learnt from them. All incident reports and investigationsshall be routed through the Contract Holder.

The Contractor’s Line Manager and HSE Adviser, if any, may be requested to attend a review by a ShellIncident Review Committee. If so requested, the Contractor’s Line Manager shall be required to present theresults of the Contractor’s investigation.

The Contractor shall develop an effective follow-up procedure to implement the recommendations of itsincident investigations, and where applicable those of the Shell Incident Review Committee.

10.0 EXCLUSIONS AND EXCEPTIONS

All exclusions and exceptions to the documents listed in this document (General HSE Specification) are providedin (Appendix - V).

11.0 COMPLIANCE WITH HSE SPECIFICATION

Compliance with the requirements of this General HSE Specification shall be a fundamental condition of theContract. The Company shall have the right to terminate the Contract forthwith for any breach of the HSESpecifications. Compliance with this HSE Specification is required for all Work or Services performed under theContract within the Shell Companies in Nigeria (SCIN), unless otherwise expressly amended in (Appendix - V)from the Effective Date of the Contract.

If the Contractor fails to comply with the latest approved Contract HSE Plan or the HSE Specification, then

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17


the Company shall be entitled, without prejudice to any other remedy afforded by the Contract or by law, toapply a sanction.

• Contract Holder is expected to exercise his discretion to apply the appropriate sanction.

APPENDIX I – HSE CERTIFICATE


Contract Title


Sub-Contractors

Contract Plan Activity Date Completed Exceptions

Contract HSE Arrangements Endorsed

Kick Off Meeting Held

HSE Workshop Held

Residential Camp Accepted

Industrial Site Accepted

Vehicle/Plant Accepted

Training Completed

Pre-Start Audit Completed

Essential Audit Items Completed

Site Security Plan Approved

Medical Retainership Verified All Medical Fitness Certificate for all employees engaged under this CONTRACT shall be provided by the Clinic/Hospital verified by the Contract Holder.

**Authenticity of Documents Verified

Notes

HSE CERTIFICATE

On behalf of the Contractor I confirm that the activities stated above have been carried out and we are capable of performing the work in a safe, healthy and environmentally responsible manner.



We hereby agree that the HSE status of this Contract allows work to proceed, subject to the above exceptions.


SPDC Contract Holder

SPDC Company Site Representative

**Contract Holder shall verify the authenticity to all relevant certificates/documents for this contract workactivity and keep auditable assurance.

18


APPENDIX II – SITE RESTORATION CERTIFICATE


Contract Title


Sub-Contractors

Site Restoration Activity Date Completed Exceptions

SITE RESTORATION CERTIFICATE

On behalf of the Contractor I confirm that the activities stated above have been carried out and we have restored the sites according to the Contracr Requirements.



We hereby agree that the HSE status of this Contract allows the Contractor to Demobilise subject to the above exceptions.




Demobilisation Date Approved

Requirement for Isolation of Facilities (telecoms, electricity, water) notified to SPDC

Residential Camp Inspection Completed

Office Inspection Completed

Industrial Area Inspection Completed

Worksite Inspection Completed

All SPDC Assets handed over to SPDC

All Outstanding materials handed over to SPDC

Summary file of Contract Waste Log handed over to SPDC

Notes Contract Holder to insert relevant References to Shell Standards andContract HSE Specifications for restoration requirements

*At Contract Holder’s discretion

19


APPEN

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20


APPENDIX IV – HEALTH AND SAFETY STATISTICS – MONTHLY RETURN

From Contractor: to SPDC Contract Holder (for confirmation and signature), then to HSX-PLGD(for input into database).

CONTRACT NUMBER:

NAME OF COMPANY:

RETURN FOR THE MONTH OF:

Number of EMPLOYEES WORKING ON CONTRACT:

Number of MAN-HOURS worked (including any overtime) in the month:

Number of FATALITIES & PERMANENT DISABILITIES in the month:

Number of LOST WORKDAY CASES in the month: (LWC)

Number of RESTRICTED WORK CASES in the month: (RWC)

Number of MEDICAL TREATMENT CASES in the month: (MTC)

Number of FIRST AID CASES in the month: (FAC)

Number of NEAR MISSES in the month: (NMs)

Number of OCCUPATIONAL ILLNESSES in the month: (TROI)

Number of CALENDAR MAN-DAYS LOST due to SICKNESS ABSENCE

Number of Recordable Incidents in the month which are NOT included above: (TRC)

Number of: NON-ACCIDENTAL DEATHS in the month: (NAD)

Number of: ROAD TRAFFIC ACCIDENTS in the month: (RTA)

MONTHLY LOGISTICS STATISTICS NO. OF VEHICLES/CRAFTS KM/MILEAGE DRIVEN

Vehicles above 3500 kg gvw

Personnel Carriers (Land)

Light Marine Vessels (LMVs)

Tug Boats (incl. self-propelled Barges)

Specialised vehicles (specify Land/Marine)

Names of INJURED PEOPLE ABSENT FROM WORK OR ON RESTRICTED WORK during the month:

NAME DATE

WAS CERTIFIED UNFIT ON



Names of previously injured people, CERTIFIED FIT TO RETURN TO WORK during the month, following an LTI absence or aperiod of restricted work.

NAME DATE

RETURNED TO WORK ON

RETURNED TO WORK ON

RETURNED TO WORK ON

Signed by Contractor: Signed by Contract Holder:

Position in Company: Reference Indicator:

Date: Date:

NOTES: All returns should relate to the previous calendar month only. The average may be taken as the total number of employees when fluctuations occur. Where in doubt please consult SPDC’s HSE Department(HSE-CON).

21


DEFINITIONS:

Fatality (FTL) A fatality is a classification of a death resulting from a Work Injury, or OccupationalIllness, regardless of the time intervening between injury/illness and death.

First Aid Case (FAC) Any one-time treatment and subsequent observation of minor scratches, cuts, burns,splinters, etc., which do not ordinarily require medical care by a physician. Suchtreatment and observation are considered First Aid even if provided by a physician orregistered professional personnel.

Lost Time Injury (LTI) Lost Time Injuries are the sum of Fatalities, Permanent Total Disabilities, PermanentPartial Disabilities, and Lost Workday Cases. Note, if, in a single Incident 20 peoplereceive lost time injuries, then it is accounted as 20 LTI’s (not 1 LTI).

Lost Workday A Lost Workday Case is any reportable injury other than a Permanent Partial Case (LWC) Disability which renders the injured person temporarily unable to perform any Regular

Job or Restricted Work on any day after the day on which the injury was received. Inthis case “any day” includes rest day, weekend day, scheduled holiday, public holidayor subsequent day after ceasing employment. (This definition deviates from OSHAguidance that considers restricted work as a lost workday case).A single Incident can give rise to several Lost Workday Cases, depending on the numberof people injured as a result of that Incident. It is a Lost Time Injury.

Medical Treatment A Medical Treatment Case is any reportable injury that involves neither LostCase (MTC) Workdays nor Restricted Workdays but which requires treatment by, or under the

specific order of, a physician or could be considered as being in the province of aphysician.Medical Treatment does not include First Aid even if this is provided by a physicianor registered professional personnel.

Near Miss A Near Miss is an Incident, which resulted in no injury, illness, damage, product lossor harm to the company reputation.

Occupational Illness An Occupational Illness is any work-related abnormal condition or disorder, otherhand one resulting from a reportable injury, caused by or mainly caused by exposureto environmental factors associated with the employment. It includes acute and chronicillness or diseases, which may be caused by inhalation, absorption, ingestion, or directcontact.Whether a case involves a reportable injury or an occupational illness is determinedby the nature of the original event or exposure, which caused the case, not by theresulting condition of the affected employee. Injuries are caused by a single event.Some exceptions exist such as malaria and food poisoning which are classified asOccupational Illnesses. Cases resulting from anything other than a single event areconsidered occupational illness.

Non-accidental death Any case of death of a person either:- where there is no identifiable incident or trauma involved, or- that is the result of an apparent suicide.

Permanent Partial Permanent Partial Disability is any work injury which results in the complete loss,Disability (PPD) or permanent loss of use, of any member or part of the body or any permanent

impairment of functions of parts of the body, regardless of any pre-existing disabilityof the injured member or impaired body function. It is a Lost Time Injury.

22


Permanent Total Permanent Total Disability is any work injury that incapacitates an Employee Disability (PTD) permanently and results in termination of Employment. It is a Lost Time Injury.Restricted Work A Restricted Work Case is any work injury which results in a work assignment afterCase (RWC) the day the Incident occurred that does not include all the normal duties of the person’s

Regular Job. The restricted work assignment must be meaningful and pre-establishedor a substantial part of a Regular Job.

Road Traffic An Incident which has involved a vehicle and which has resulted in actual InjuryAccident (RTA) and/or Damage (Loss) Assets, the Environment or the Company’s reputation. For the

purpose of SPDC’s Incident Reporting procedures, windscreen damage caused by thrownup road debris e.g. stone chips shall not be statistically reportable unless more seriousdamage or personal injuries occur as a result.

Risk Assessment The Risk Assessment Matrix (RAM) is a tool that standardises qualitative riskMatrix (RAM) Rating assessment and facilitates the categorisation of risk from threats to health, safety,

environment and reputation. The matrix axes, consistent with one definition of risk, areConsequences and Likelihood. For different applications different overlays can be used.(Shell Group Risk Assessment Matrix 2000).

For more detail and definitions refer to the ‘Procedure for Incident Notification, Investigation, Reporting andFollow-up’ (HSE P-12).

APPENDIX V – RELEVANT EXCLUSIONS, EXCEPTIONS AND ADDITIONAL PARTICULARSTANDARDS

S/n Document I.D Description Version Date

Contract Holder to insert (in the above table) details of all relevant exclusions and exceptions to the documentslisted in the Particular HSE Specification, and details of any additional contract-specific HSE standards; seeclauses 10.0 and 11.0 hereof. All qualifications originating from exceptions and exclusions must be inserted intothe Contract specifications by the Contract Holder before the Contract is signed.

23


12.0 APPLICABLE HSE STANDARDS

The Contractor is required to comply with both their own and Company standards whichever is more stringent.The Contractor shall be deemed to have full knowledge of and shall comply with the requirements of the HSEProcedures and Specifications referred to in sections A to E hereunder. Copies of these documents are availablefrom the Contract Holder. The Contractor shall note that the rightmost column has been used to identify (by atick ✓ ) those HSE documents considered by the Company to be particularly relevant to this Contract.

Document ID Document Title Version Tick if (✓ )Date Relevant

A: POLICIESHierarchy of SPDC HSE Policies

SPDC HSE and Community Statements Aug’98

SPDC Health, Safety and Environment Policy Aug’98

SPDC Policy Statement on Halons

SPDC NO Smoking Policy

Emergency Response Policy

SPDC Alcohol and Drug Policy Mar’97

SPDC Transport Policy Aug’98

SPDC Statement of Security Policy Jan’99

Whistle Blowing Policy

Information Security Policy Apr’99

B: STANDARDSEngineering Standard Work Procedures

Well Services

Well Engineering

Civil Engineering

Others: Contract Holder to insert dept’s

24


Corporate Land Transportation Guide

TMS 01.30 HSE Standard for Land Transport

TMS 01.33 Journey Management Standard

TMS 01.32 Manpower Standard

TMS 01.31 Vehicle Standard

TMS 01.41 Land Transport Procedure Applicable to SPDC Staff and Contractors

TMS 01.61 Guidelines for Managing Land Transport

Corporate Marine Transportation Guide

HSE Standard for Marine Transport

SPDC 2000- Journey Management Standard May’00064

Standing Instruction to Masters Jun’00

Pre-mob Inspection checklist.

Guidelines on the Use of Petrol Engines in Marine Operations - 15/12/00Approved by PDD 15/12/2000

Specifications on Crew Standard

C: PROCEDURESHSE P-04 Procedure for Evaluation and Registration of Environmental Aspects

HSE P-05 Procedure for Internal HSE communications

HSE P-06 Procedure for External HSE communications

HSE P-08 Procedure for HSE Data Reporting and Record Keeping

HSE P-10 Procedure for Reporting and Recording of Non-Compliances with HSE-Critical Legislation and Policies

HSE P-12 Procedure for Incident Investigation, Notification, and follow-up

HSE P-13 Procedure for HSE Management Review

HSE P-14 Procedure for Evaluation and Registration of Hazards

HSE P-15 Procedure for Evaluation and Registration of Health Aspects

HSE P-17 Procedure for HSE Audit

Emergency Response

SPDC 99-173 SPDC Contingency Plan and Procedures

SPDC 99-174 SPDC Blow-out Contingency Plans and procedures

SPDC 99-175 Oil/Chemical Spill Contingency Plan and procedures

Oil Spill Response Guide- East

SPDC 99-176 SPDC Corporate emergency Response Telephone Directory

25


D: GUIDELINESContractor Management Guide

SPDC 99-031a Procedure for Management of HSE in Contracts

SPDC 99-031b Guidelines for HSE Pre-Qualification of Contractors

SPDC 99-031c Specification for Contract HSE Requirements

SPDC 99-031d Guideline for Content and Assessment of Contract HSE Plan

SPDC 99-031e Guidelines for Monitoring of HSE in Contracts

SPDC 99-031f Guidelines for Contract HSE Close-Out

SPDC 99-031 Human Factors Considerations in Contractor ManagementAppendix A

SPDC 99-031 Security Considerations in Contractor ManagementAppendix B

SPDC 2000- Guidelines for Contract HSE Kick-Off Meetings 031

Other Guidelines

SPDC 95-072 Document Management Control & Document classification May’00

SPDC 99-022 Guidelines for Development of HSE Sub management System and Jun’99HSE Cases.

SPDC-E Waste management Manual Mar’99

A Guide to Domestic Waste

Security

Access Control Guidelines

Guidelines for use of External security

EP-95 000 Series Documents

EP-95-0110 Management of Contractor HSE Sep’95

26


E: HSE REFERENCE MANUALHSE S-01 Personal Protective Equipment

HSE S-07 Scaffolding and Access Standards

HSE S-09 Excavation Standards

HSE S-10 Roadworks Standards

HSE S-14 General Electrical Safety standards

HSE S-16 Machinery and Tools standards

HSE S-17 Blasting and Painting standards

HSE S-18 Asbestos: See Health, Safety and Environment Policy

HSE S-19 Ionising Radiation Standards

HSE S-20 Explosives Standards

HSE S-21 Hazardous Substances M19 Standards

HSE S-22 Material Handling Standards

HSE S-24 Industrial compressed Gases Standards

HSE S-25 High Pressure Water Jetting

HSE S-26 Cutting and welding Standards

HSE S-28 Working in Confine Space M07 standards

HSE S-29 Diving and ROVS M18 Standards

HSE S-31 Exploration M11 standards

HSE S-36 Office Safety standards

HSE S-38 Laboratory Safety standards

HSE S-41 Safety Signs and Colours Codes standards

HSE S-43 Workshop & Industrial Safety

HSE S-46 Shelf Life of Food items Standards

HSE S-47 Medical fitness standards

HSE S-48 Minimum field Accommodation Standards

HSE S-49 Minimum Standards for Survival Swimming

HSE S-52 Vessels, Pipelines and Equipment M08 standards

HSE S-53 Electrical Safety Rules M13

F: HSE MS MANUALS AND HSE CASES (See HSE web page for HSE Manuals and Cases)

Contract Holder to delete those documents that are not applicable and should insert the Standard Work Proceduresdocuments related to this contract work type.

GENERAL HSE SPECIFICATIONS

27


ADDITIONAL SECURITY SPECIFICATIONS

Contract Holder to insert if applicable from SPDC 99-031 Appendix B- Security Considerations in ContractorManagement.

Generic Clauses:1. The CONTRACTOR’S attention is drawn to his responsibility for Security Practices and Statutory

requirements relating to Shell’s ‘Security Policy’ and ‘Guidelines On The Use Of External Security Agencies’,Shell Policy on Access Control, and Shell’s ‘Guidelines on The Use of Force’. The CONTRACTOR isdeemed conversant with the requirements of these Shell Policies, Procedures, and as well as the ‘Rules forGuidance in the Use of Firearms by the Police’ as contained in NPF Force Order 237.

2. Notwithstanding the infrastructure measures taken by Shell, in addition to those taken by the LocalAuthorities to enhance the security of personnel and assets involved in the contract, the Contractor shall besolely responsible for the security of its personnel and assets including its sub-contractors.

In addition to (2) above, the Contractor shall perform all duties in accordance with the contract Site Security Plan. 3. The Contractor shall ensure that her personnel and that of any sub-contractor abide by the security policy

and other guidelines and instructions that may be issued from time to time by Shell in connection with theperformance of the contract.

4. The Contractor shall use local staff from the local community where the contract is to be executed for securityduties unless he can demonstrate to Shell that such is reasonably not possible.

5. Shell shall have the right to conduct a Security Audit of the contractor at any time to ensure that all relevantcontractual requirements relating to security, or of a security are fulfilled

Special Clauses:6. The Contractor is responsible for its own security contingency planning and emergency response, e.g. kidnap,

extortion, civil unrest and emergency evacuation.7. The Contractor shall have a formal system for the management of security that is in line with Shell’s Statement

of General Business Principles and that ensures Shell’s post-contract operations are not adversely affectedeven in the long-term. This management system shall be documented, fully implemented and effective inachieving the aims and objectives of the Contractor’s Security Policy. The Contractor shall demonstrate toShell that this system is working to the satisfaction of Shell as a condition for Shell agreeing to thecommencement of the work.

8. The Contractor shall ensure that the security systems of its Sub-Contractors and suppliers are in line withits own. Contractor can allow its sub-contractors to apply their own procedures when Contractor hasdemonstrated to the satisfaction of Shell that these systems are in line with those of the Contractor andShell. This however, shall not relieve the contractor from the sub-contractor’s failure to exercise propersecurity procedures.

9. The Contractor shall inform Shell of the names of sub-contractors and obtain Shell’s written acceptance priorto their engagement.

Scope of Work Insert:1. Security staff provided by the Contractor shall guard, patrol, and respond to incidents, including static

surveillance.2. The Contractor shall provide appropriate physical protection measures, including the installation and

supervision of a perimeter fence to prevent unauthorised access to the Contract site

LEVEL 2: GENERAL HSE SPECIFICATION FOR LOW RISK CONTRACTS

Notes for Usage: This General HSE Specification streamlines the contract HSE requirements for the Contract Holder, but alsoincludes a responsibility to carry out a HEMP exercise to an appropriate level of detail.

The General HSE Specification is the basis for the Contractor’s Preliminary Contract HSE Plan, and with thefinalisation of this Plan after award, it will be applied from Mobilisation, through Execution, to CloseOut. Thus, the Contract Holder will prepare the General HSE specification for inclusion in the:

- Proposed Contract Document as part of the Invitation To Tender package; and subsequently in the - Contract Document.

This General HSE Specification applies to Scopes of Work that are Low Risk. Depending on the Contract Holder’sassessment of the risk exposure and management control requirements, this specification may be used as a stand-alone document, thus obviating the need for a Contract HSE Plan e.g. in the case of a Secretarial Services Contract.

1

GENERAL HSE SPECIFICATIONS FOR LOW-RISK CONTRACTS

CONTENTS

1.0 Introduction 3

2.0 Hazard Assessment 3

3.0 Contract HSE Requirements 3

4.0 HSE Briefing 4

5.0 Performance Monitoring and Reporting 4

6.0 HSE Incidents 4

7.0 HSE Reference Manual 5

8.0 Compliance with General HSE Specification 5

9.0 Particular HSE Specifications 5

10.0 SPDC HSE Policy 5

2


1.0 INTRODUCTION

All contract work presents some level of HSE risk. However, certain contracts present sufficiently low HSE riskthat they may be classified as Low-Risk Contracts. The determination as to whether a contract is low-risk shallnot be made based on the monetary value of the contract, rather it shall consider the Scope of Work or Servicesto be provided and the specific activities to be undertaken. Abbreviated HSE contracting procedures may befollowed for contracts determined by the Contract Holder to be low-risk.

For Low-Risk Contracts, the following minimum requirements apply:

2.0 HAZARD ASSESSMENT

For office-based contracts the following minimum risks are identified:• Fire• Road traffic within the Shell Industrial Area (IA), Residential Area (RA) and Main Office Area (MOA)• Smoking, Alcohol and Drugs• Noise limits during work hours • Occupational Health Risks• Working at height

The Contract Holder shall include in the contract associated risks for Contractor Staff who has to travel to or visitShell Production Facilities on Land, Swamp or Offshore locations.

• All risks associated with Driving Motor Vehicles• All risks associated with Water Borne Operations

3.0 CONTRACT HSE REQUIREMENTS

Contractor shall, at a minimum, comply with Shell’s HSE requirements as set out in the Contract, particularlythe requirements of the HSE Reference Manual. Contractor shall provide a written description of the policies,programs, standards, and procedures that make up its HSE Management System (HSE MS).

Contractors is required to manage HSE in line with Shell’s HSE Policy, which is attached as Appendix A.

Contractor is required to comply with both its own and Shell’s standards whichever is more stringent.

Contractor shall be deemed to have full knowledge of, and shall comply with, the requirements of Shell’s HSEProcedures and Specifications referred to in this section:

• SPDC Drugs and Alcohol and Policy• Procedure for Incident Investigation, Notification, and Follow-up (HSE P-12)• SPDC NO Smoking Policy

3


For Contractor staff travelling to or visiting SPDC Production Facilities on Land, Swamp or Offshore locationsthe additional risk shall be managed by adhering to the manuals and guidance documents listed below: (ContractHolder to select/insert as applicable)

• Corporate Land Transportation Manual (Ref. TMS 01.00).• Corporate Marine Transportation Manual.• Relevant Standard in the HSE Ref. Manual (Contract Holder to insert)• Site HSE requirements

4.0 HSE BRIEFING

A HSE Briefing shall be held on * not later that two weeks after the effective date. The briefing shall cover:

• SPDC HSE Policy• SPDC NO Smoking, Alcohol and Drug Policies.• SPDC guidelines on Night Driving/Sailing.• Mandatory Toolbox talk and Job Hazard Analysis.• Office Safety (response to fire, emergencies, noise limits during work hours)• Location general Safety requirement (with emphases on the location HSE specifications) • Requirement to report all incidents (Near miss, Unsafe Acts / conditions).• Security requirements (Security Considerations in Contractor Management SPDC 99-031 Appendix B)• Site visit requirement (Location HSE induction)

5.0 PERFORMANCE MONITORING AND REPORTING

Contractor shall regularly monitor its HSE performance, and complete and submit the ‘Health and Safety StatisticsMonthly Return’ Form (Appendix - I) to the Contract Holder before the 7th day of each calendar month. Contractorshall report to Shell all findings emerging from Management Reviews, Audits, Inspections and other PerformanceMonitoring arrangements in a format and frequency to be agreed with the Contract Holder where this is notcovered in the reporting template of the “General HSE Specification”.

6.0 HSE INCIDENTS

Contractor shall report and investigate all work-related HSE incidents in accordance with Shell’s Procedure for Incident Investigation, Notification, and Follow-up (HSE P-12). All incident reportsand investigations shall be routed through the Contract Holder.

Contractor’s Line Manager and HSE Adviser may be requested to attend a review by Shell’s Incident ReviewCommittee. If so requested, the Contractor’s Line Manager shall be required to present the results of theContractor’s investigation.

Contractor shall develop an effective follow-up procedure to implement the recommendations of its incidentinvestigations, and where applicable those of Shell’s Incident Review Committee.

4


7.0 HSE REFERENCE MANUAL

Contractor shall fulfil all requirements of the Shell HSE Reference Manual and subsequently revised versions of same.

8.0 COMPLIANCE WITH GENERAL HSE SPECIFICATION

Contractor shall conduct all work in fulfilment of the “General HSE Specification”. Compliance with therequirements of this General HSE Specification shall be considered a fundamental condition of this Contract and,as such, the Company shall have the right to terminate the Contract forthwith for any breach of the HSESpecification.

Compliance with this General HSE Specification is required for all Work or Services performed under theContract within any Shell operation and location, unless otherwise expressly amended, from the Effective Dateof the Contract.

9.0 PARTICULAR HSE SPECIFICATIONS

In addition to the “General HSE Specification”, Contractor shall fulfil all other requirements of a HSE nature asexpressed in any part of the Contract. Non-fulfilment of ANY HSE requirement stated in the Contract shallconstitute a breach of contract and shall be recorded and sanctioned accordingly.

10.0 SPDC HSE POLICY

SPDC has:• a systematic approach to HSE management designed to ensure compliance with the law• sets targets for improvement and measures, appraises and reports performance• achieve continuous improvement in HSE performance• requires Contractors to manage HSE in line with this Policy• requires Joint Ventures under its operational control to apply this Policy and uses its influence to promote it

in its other Joint Ventures• includes HSE performance in the appraisal of all staff and rewards accordingly

SPDC HSE and Community Statement SPDC and its Contractors will• give the highest priority to the Health, Safety and Security of Employees, Contractors and Members of the

Public• continually assess Environmental Impact and reduce it to a level as low as practicable• be sensitive to the needs of Communities

All SPDC and Contractor Employees will plan and perform their activities in compliance with this statement.IF YOU BELIEVE A JOB CAN NOT BE DONE THIS WAY IT SHALL NOT BE STARTED ORCONTINUED.

5


The Statement Implies That SPDC WILL

• participate openly in regulatory development• integrate Risk Management in the business• have Supervisors responsible for compliance with standards• have Employees and Contractors who are competent to perform their job in line with Policy• have Staff and Contractors maintain dialogue with Stakeholders• work in partnership with Host Communities on Community Development projects• ensure progress is measured against plans

Ron M. van den BergManaging DirectorAugust 1998

6


7


APPENDIX I – HEALTH AND SAFETY STATISTICS – MONTHLY RETURN

From Contractor: to SPDC Contract Holder (for confirmation and signature), then to HSX-PLGD(for input into database).

CONTRACT NUMBER:

NAME OF COMPANY:

RETURN FOR THE MONTH OF:

Number of EMPLOYEES WORKING ON CONTRACT:

Number of MAN-HOURS worked (including any overtime) in the month:

Number of FATALITIES & PERMANENT DISABILITIES in the month:

Number of LOST WORKDAY CASES in the month: (LWC)

Number of RESTRICTED WORK CASES in the month: (RWC)

Number of MEDICAL TREATMENT CASES in the month: (MTC)

Number of FIRST AID CASES in the month: (FAC)

Number of NEAR MISSES in the month: (SEVERITY 0)

Number of OCCUPATIONAL ILLNESSES in the month: (TROI)

Number of CALENDAR MAN-DAYS LOST due to SICKNESS ABSENCE

Number pf NON-INJURIOUS (SEVERITY 4 OR 5) INCIDENTS in the month whichare not included above:

Number of: NON-ACCIDENTAL DEATHS in the month: (NAD)

Number of: ROAD TRAFFIC ACCIDENTS in the month: (RTA)

MONTHLY LOGISTICS STATISTICS NO. OF VEHICLES/CRAFTS KM/MILEAGE DRIVEN

Vehicles above 3500 kg gvw

Personnel Carriers (Land)

Light Marine Vessels (LMVs)

Tug Boats (incl. self-propelled Barges)

Other vehicles/Vessels

Names of INJURED PEOPLE ABSENT FROM WORK OR ON RESTRICTED WORK during the month:

NAME DATE




Names of previously injured people, CERTIFIED FIT TO RETURN TO WORK during the month, following an LTI absence or aperiod of restricted work.

NAME DATE

RETURNED TO WORK ON

RETURNED TO WORK ON

RETURNED TO WORK ON

Signed by Contractor’s Signed by Contract Holder:

Authorised Rep.:

Position in Company: Reference Indicator:

Date: Date:

NOTES: All returns should relate to the previous calendar month only. The average may be taken as the total number of employees when fluctuations occur. (Where in doubt, clarification should be sought from SPDC’sHSE Department - HSE-CON).

8


DEFINITIONS:

Fatality (FTL) A fatality is a classification of a death resulting from a Work Injury, or OccupationalIllness, regardless of the time intervening between injury/illness and death.

First Aid Case (FAC) Any one-time treatment and subsequent observation of minor scratches, cuts, burns,splinters, etc., which do not ordinarily require medical care by a physician. Suchtreatment and observation are considered First Aid even if provided by a physician orregistered professional personnel.

Lost Time Injury (LTI) Lost Time Injuries are the sum of Fatalities, Permanent Total Disabilities, PermanentPartial Disabilities, and Lost Workday Cases. Note, if, in a single Incident 20 peoplereceive lost time injuries, then it is accounted as 20 LTI’s (not 1 LTI).

Lost Workday A Lost Workday Case is any reportable injury other than a Permanent Partial DisabilityCase (LWC) which renders the injured person temporarily unable to perform any Regular Job or

Restricted Work on any day after the day on which the injury was received. In thiscase “any day” includes rest day, weekend day, scheduled holiday, public holiday orsubsequent day after ceasing employment. (This definition deviates from OSHAguidance, which considers restricted work as a lost workday case).A single Incident can give rise to several Lost Workday Cases, depending on the numberof people injured as a result of that Incident. It is a Lost Time Injury.

Medical Treatment A Medical Treatment Case is any reportable injury that involves neither Lost WorkdaysCase (MTC) nor Restricted Workdays but which requires treatment by, or under the specific order

of, a physician or could be considered as being in the province of a physician.Medical Treatment does not include First Aid even if this is provided by a physicianor registered professional personnel.

Near Miss A Near Miss is an Incident, which resulted in no injury, illness, damage, product lossor harm to the company reputation.

Occupational Illness An Occupational Illness is any work-related abnormal condition or disorder, otherhand one resulting from a reportable injury, caused by or mainly caused by exposureto environmental factors associated with the employment. It includes acute andchronic illness or diseases, which may be caused by inhalation, absorption, ingestion,or direct contact.Whether a case involves a reportable injury or an occupational illness is determinedby the nature of the original event or exposure, which caused the case, not by theresulting condition of the affected employee. Injuries are caused by a single event.Some exceptions exist such as malaria and food poisoning which are classified asOccupational Illnesses. Cases resulting from anything other than a single event areconsidered occupational illness.

Non-accidental death Any case of death of a person either:- where there is no identifiable incident or trauma involved, or- that is the result of an apparent suicide.

Permanent Partial Permanent Partial Disability is any work injury which results in the complete loss,Disability (PPD) or permanent loss of use, of any member or part of the body or any permanent

impairment of functions of parts of the body, regardless of any pre-existing disabilityof the injured member or impaired body function. It is a Lost Time Injury.

Permanent Total Permanent Total Disability is any work injury that incapacitates an EmployeeDisability (PTD) permanently and results in termination of Employment. It is a Lost Time Injury.

9

DEFINITIONS continued:

Restricted Work A Restricted Work Case is any work injury which results in a work assignment afterCase (RWC) the day the Incident occurred that does not include all the normal duties of the person’s

Regular Job. The restricted work assignment must be meaningful and pre-establishedor a substantial part of a Regular Job.

Road Traffic An Incident which has involved a vehicle and which has resulted in actual InjuryAccident (RTA) and/or Damage (Loss) Assets, the Environment or the Company’s reputation. For the

purpose of SPDC’s Incident Reporting procedures, windscreen damage caused by thrownup road debris e.g. stone chips shall not be statistically reportable unless more seriousdamage or personal injuries occur as a result.

Risk Assessment The Risk Assessment Matrix (RAM) is a tool that standardises qualitative risk Matrix (RAM) Rating assessment and facilitates the categorisation of risk from threats to health, safety,

environment and reputation. The matrix axes, consistent with one definition of risk, areConsequences and Likelihood. For different applications, different overlays can be used.(Shell Group Risk Assessment Matrix 2000).

For more detail and definitions refer to the ‘Procedure for Incident Notification, Investigation, Reporting andFollow-up’ (HSE P-12).


10


APPENDIX VI – LOW HSE RISK DECLARATION FORM

* See definition of LOW HSE RISK in Section 6 of ‘Procedure for Management of HSE in Contracts (SPDC 99-031a)


Contract Title


Sub-Contractors

Work Location

Work Description

LOW HSE RISK DECLARATION

Name of Contract Holder Date Ref. Ind. Signature

S/n ASSESSMENTS BY CONTRACT HOLDER

01 Are all tasks in this Scope of Work known?

02 Are the inherent hazards of this work activity identified and listed?

03 Is transportation part of this work activity?

04 If No.3 above is YES, - Have the relevant Transportation Standards including journey management been discussed with the contractor?

05 Have all hazards been analysed?

06 Is the overall risk level classified as ‘LOW’?

IndicateYes or No

Remarks/ Exception

I confirm that I have analysed the hazards associated with this Scope of Work and hereby declare that this is a LOW RISK Contract.

NOTES:

Name of Contract Sponsor Date Ref. Ind. Signature

Ref:SPDC Risk Assessment Matrix (RAM) Ref: Section 6 of Procedure for Management of HSE in Contracts (SPDC 99-031a).

CONTENTS


1 Purpose 2

2 Content and assessment of contract HSE Plans 32.1 Scope 32.2 Description 3

2.2.1 General 32.2.2 Preliminary Contract HSE Plan 32.2.3 Contract HSE Plan 4

2.3 Roles and Responsibilities 62.3.1 Contractor 62.3.2 Contract Holder 6

2.4 References 6

3 Terms, definitions and abbreviations 7APPENDIX I: Flow chart – HSE management of contracts 8

LEVEL 2: TEMPLATES AND MODEL DOCUMENTS 9

TEMPLATE - Contract HSE Plan 9

TABLE OF CONTENTS 10

1.0 Contractor HSE Management System (HSE MS) 11

2.0 Contractor Project-Specific HSE Plan 112.1 Leadership and Commitment 112.2 Policy and Strategic Objectives 112.3 Organisation, Responsibilities, Resources, Standards and Documentation 112.4 Hazards and Effects Management 162.5 Planning and Procedures 162.6 Implementation and Performance Monitoring 192.7 Audit, Review and Inspection 20

HSE PLAN PROFORMA FOR LOW-RISK (SMALL) CONTRACTS 21

1

GUIDELINES FOR CONTENT AND ASSESSMENT OF CONTRACT HSE PLANS

2



1 PURPOSE

SPDC’s ‘Procedure for Management of HSE in Contracts’ SPDC 99-031a requires Contractors to develop ContractHSE Plans that detail how HSE risks will be managed throughout the life of each contract. The Contract Holderthen reviews the Contractor’s Contract HSE Plan for completeness. The minimum HSE requirements to beincluded by a Contractor in the Contract HSE Plan are identified in the HSE Specifications C-1 and C-2 of SPDC99-031c.

The Contract HSE plan is the document which details how HSE will be managed by the Contractor throughoutthe Contract Period. It is the document that will be used to monitor the Contractor’s HSE while exercising thecontract. The guidelines assist both the Contractor and Contract Holder in the preparation and assessment ofContract HSE Plans.

The guidelines advise a two-stage approach for developing a Contract HSE Plan:1) Once the Contractor has received the invitation to tender he will prepare a Preliminary Contract HSE Plan,

based on the contract HSE Specification provided in the tender documents by SPDC.2) The successful Contractor’s HSE plan will be assessed by the SPDC Contract Holder and any required additions

or improvements will be discussed at the HSE Kick-Off Meeting. Following agreement at the kick off meeting,the Contractor will revise and update the Preliminary Contract HSE Plan into the substantive Contract HSEPlan.

A flow chart for the Management of Contracts that gives a step by step guide through each stage of the contract,indicating the actions to be taken by both SPDC and the Contractor is provided in Appendix A.

The guidelines are split into two levels: the ‘Instructions To Staff’ and ‘The Model Documents and Templates’.The former explains the basic concepts and how they are to be applied, while the latter provides the standardisedformats for applying the Level 1 concepts. The Level 2 documents provide two useful appendices:

• A template of the requirements for a Contract HSE Plan. This template will be included in the ‘Forms ofTender’ to guide the Contractor in the preparation of the Preliminary Contract HSE Plan.

• A proforma of the requirements for a Low Risk Contract HSE Plan is also provided and will be included inthe ‘Forms of Tender’ for Low Risk Contracts.

These guidelines for the Content and Assessment of Contract HSE Plans will promote a consistent quality approachto HSE Management across all SPDC Contacts, and will ease the task of Contract HSE Plan Preparation andAssessment for both the Contractor and Contract Holder. Accordingly, the guidelines are designed to assistContract Holders and Contractors alike in the development and assessment of Contract HSE Plans (refer toAppendix A, boxes ‘A’, ‘B’ and ‘C’).

3


2 CONTENT AND ASSESSMENT OF CONTRACT HSE PLANS

2.1 ScopeA Contract HSE Plan is required for each SPDC contract, except those determined by the Contract Holder tobe Low-Risk Contracts. These guidelines provide the recommended format and specify the content of ContractHSE Plans.

2.2 Description2.2.1 GeneralThe Contract HSE Plan should be developed in two parts. The first part should describe the policies, programs,standards, and procedures that make up the Contractor’s HSE Management System (HSE MS). The second partshould be a description of the specific actions that will be taken, and specific programs and procedures that willbe implemented by the Contractor to manage the HSE hazards associated with the particular contract. The secondpart should cover all contract phases from mobilisation through execution, demobilisation and site restoration.

As a basis for developing its Contract HSE Plan, the Contractor should use the SPDC contract HSE documentsas detailed in the HSE Specification (C-1 or C-2 of SPDC 99-031c) of the contract. However, the Contractorshould state its own proposals within the framework described in these guidelines.

In particular, the Contractor should:• Develop its own hazard identification, assessment, controls and recovery measures required for the work

described in the contract;• Demonstrate familiarity with the type of work involved and the hazards anticipated;• Define its execution proposals (Contractor should confirm its proposed use of policies, procedures, standards,

etc. and show that these comply with SPDC’s requirements or add to them where it believes the contractguidelines are insufficient);

• Confirm its understanding that the SPDC requirements represent minimum standards.The Contract HSE Plan is a ‘living’ working document, which may require updating as the contract progressesto rectify identified failings from audits / inspections and reflect changes in the work scope.

This guideline indicates the key features of the Contract HSE Plan, but is not necessarily exhaustive. Usersshould select from these guidelines those sections which are most appropriate to their needs and which are mostrelevant to the particular contract, and may add sections where required.

The guidelines have been produced to record best practice and to provide help and assistance on how SPDC’srequirements can be achieved. The guidelines contain no mandatory requirements and are intended as referencematerial, which may reduce the amount of work required to implement the requirements.

2.2.2 Preliminary Contract HSE PlanThe Preliminary Contract HSE Plan is required for the Contractor to:Give the Contract Holder the assurance that the Contractor has the capability (understanding, organisation,programs, standards, and resources) to achieve the required standards of HSE;• Demonstrate a full understanding of the requirements in the HSE Specification (CM-S1);• Demonstrate that it has independently identified and assessed the hazards / risks anticipated during the

execution of the contract;• Demonstrate the ability to manage the specific hazards / activities anticipated during the execution of the

contract;• Outline how compliance with SPDC’s requirements will be measured and achieved and to provide a schedule

for completion of the required actions.

4


2.2.2.1 Content and FormatThe Procedure for Management of HSE in Contracts (SPDC 99-031a) requires the Contract Holder to definethe scope of the Contract HSE Plan as part of the HSE Specification (C1 or C-2 of SPDC 99-031c). It specifiestopics that require addressing at a minimum. A list of contents for a Contract HSE Plan is provided in the Level2 ‘Template - Contract HSE Plan’.

Some items in the templates may be provided at a lower level of detail or omitted completely at the TenderStage, depending on the nature of the work to be performed and at the discretion of the Contract Holder.However, in doing this, the Contract Holder should be satisfied that the items will be fully addressed, coveredelsewhere, or for some reason justifiably omitted during the tender stage for the particular contract.

2.2.2.2 AssessmentThe ‘General Specification of HSE Requirements’ provided in the tender documentation defines SPDC’srequirements for HSE management and forms the basis against which the tenderer’s Preliminary Contract HSEPlan will be assessed.

The Contract Holder is responsible for assessing the Preliminary Contract HSE Plan as part of the tenderevaluation and shall ensure that all work undertaken by the Contractor is in accordance with the HSE Specificationand SPDC’s HSE Policy. As such the Contract Holder must be assured that the Contractor has the knowledge,procedures, plans and resources in place to manage the anticipated hazards and activities and to meet SPDC’sHSE requirements.

Any omissions or defects in the Preliminary Contract HSE Plan should be noted. Where these deficienciesare such that the Preliminary Contract HSE Plan fails to give the Contract Holder the assurance that theContractor will be able to meet the contractual HSE requirements, then the Contractor should be notified andasked to identify the reasons for the deficiencies. The results of the evaluation will form part of the ContractHolder’s presentation to the Tender Board prior to the award of contract.

Where there will be a substantial amount of sub-contracting, the Contractor shall include the Subcontractor’sContract HSE Plan prepared by the subcontractor. This HSE plan shall be evaluated to verify the suitability ofthe Subcontractor for the scope of work subcontracted to it.

2.2.3 Contract HSE PlanOnce the contract has been awarded, and after performing a detailed hazard assessment, the selected Contractorshould further develop the Preliminary Contract HSE Plan into the Contract HSE Plan. Any outstandingdeficiencies should be corrected, incorporating any further information received or discussed during the HSEKick-off Meeting and/or HSE Workshop, and feedback received from SPDC.

The Contract HSE Plan should list all HSE-related activities to be performed during the contract, includingaction parties and completion dates, in order to assure the Contract Holder that the Contractor is able to executethe work in line with SPDC’s HSE requirements.

The Contract HSE Plan should:• Indicate how the requirements defined in the HSE Specification will be achieved;• Provide for the identification and assessment of hazards associated with the work, as well as the development

of measures (personnel, training, tools, equipment, etc.) necessary to control the associated hazards, and recoverfrom a loss of control;

• Specify a schedule for implementing the above.

The scope of the Contract HSE Plan should also cover those activities executed by sub-contractors, vendors andsuppliers. The Contractor is contractually obliged to meet the requirements of the agreed Contract HSE Plan.The Contract HSE Plan also provides a basis for audit by the Contract Holder and can be used to set up amechanism for incentives.

5


2.2.3.1 Content and FormatThe scope of the Contract HSE Plan should as be defined in the HSE Specification (C1 or C2). The format shouldgenerally conform to the Level 2 document ‘Template - Contract HSE Plan.’ It is a working document and shouldbe as direct, concise and uncomplicated as possible. The key features in achieving this will be consistency and clarity.

Where appropriate the Contract HSE Plan should include:• Planning charts (indicating milestones and schedules for meetings, training, inspections, audits, drills and

exercises);• Checklists and diagrams;• Summary of hazards and controls;• Action items in the Contract HSE Plan should be summarised on a project planning activity chart.

If not already available, a plan for producing procedures or other controls required to manage the major hazardsshould be included. This plan should show the required procedures that must be available before the workcommences.

2.2.3.2 AssessmentThe Contract Holder should evaluate the Contract HSE Plan confirming the following:• Is the Plan complete, compared with the scope of the Contract HSE Plan as defined in the HSE Specification?• Is the format and presentation ‘user-friendly’ and easy to follow? • Does it follow the template contained in this document?• Have the hazards associated with the work been identified and assessed?• Have the controls to manage these hazards been identified?• Does the Contract HSE Plan specify all the steps to be taken by the Contractor to meet the requirements of

the HSE Specification?• Where there is a substantial Subcontractor involvement planned, has such involvement been fully defined

with a bridging HSE Plan prepared by the Subcontractor fully satisfying the requirements of this guideline?• Does the Contract HSE Plan include a schedule (timetable) and responsibilities for implementing the various

measures and steps to be taken?

Any deficiencies are to be reviewed with the Contractor and the Contract HSE Plan revised accordingly. Whereany item is omitted or not sufficiently detailed, then the Contract Holder should assure himself that adequateprovision exists for that item elsewhere, or that it has been covered by other means.

2.2.3.3 EndorsementThe ‘Procedure for Management of HSE in Contracts’ (SPDC 99-031a) requires the Contract HSE Plan to beendorsed by the Contract Holder prior to the start of work. The endorsement is a confirmation by the ContractHolder to the Contractor and the Contract Sponsor, that he is satisfied that the Contract HSE Plan fully meetsthe requirements of the HSE Specification. This is achieved by issuing the HSE certificate to the Contractor, inaddition to counter-signing the Contract HSE Plan. The importance of this endorsement and its successfulimplementation can be enhanced by attaching a specific milestone payment to it., such as mobilisation to site.

The Contract HSE Plan is a ‘live’ document and any subsequent modifications should be treated as variationsto the original endorsement and accordingly documented and approved in the same manner as the originalendorsement.

In specific situations it may be necessary to approve / endorse part of the Contract HSE Plan, particularlywhere projects cover a number of years and it is neither practical nor appropriate to approve the latter parts ofthe Contract HSE Plan. In these circumstances it is often more advantageous to approve the first year of theContract HSE Plan in detail and the later years only in outline. Final approval of the later years is given whendetailed amendments are made to the Contract HSE Plan per an agreed interval. These approval milestones wouldthus form part of the Plan.

6


2.3 Roles and Responsibilities2.3.1 ContractorThe Contractor is required to develop a Preliminary Contract HSE Plan as part of its tender submission. Afterthe contract is awarded, the selected Contractor is required to update and implement a Contract HSE Plan.

2.3.2 Contract HolderThe Contract Holder is responsible for evaluating the adequacy of the Preliminary Contract HSE Plan of eachContractor submitting a tender for the Scope of Work. Contractors submitting deficient Preliminary ContractHSE Plans may require counselling by the Contract Holder. The Contract Holder is responsible for workingwith the selected Contractor to ensure that a complete and workable Contract HSE Plan is developed, endorsedby the Contract Holder, and implemented.

2.4 References

Management SPDC Corporate HSE Management System Manual SPDC HSE MSSystemPolicy Health, Safety and Environmental Policy -

Contracting Policies and Procedures Manual CPPMProcedure Procedure for Management of HSE in Contracts SPDC 99-031aSpecification Specification for Contract HSE Requirements SPDC 99-031cGuideline Contractor Management Guide CMG

HSE Reference Manual HSE RMMonitoring HSE in Contracts SPDC 99-031e

Reference documents used in the writing of these Guidelines and which may be consulted for more informationare listed below:

Shell International Management of Contractor HSE EP 95-0110Exploration and Production (SIEP)International Environmental Management Systems - ISO 14001Organisation for Specification With Guidance for Use Standardisation

3 TERMS, DEFINITIONS AND ABBREVIATIONS

CompanyThe Shell Petroleum Development Company of Nigeria Limited

ContractorThe party to a contract with the Company providing work, equipment, material, services (including consultingservices) and manpower. ‘Contractor’ shall be read to also include ‘sub-contractor’ and parties providing supportto contractors and sub-contractors (for example, parties providing services or otherwise involved in the activity).

Sub-ContractorRefer to ‘Contractor’

Contract HSE PlanContractor’s proposal as to how it intends to implement the HSE requirements as outlined initially by the Companyin the HSE specification of the proposed contract. For the selected Contractor, this becomes the plan on whichthe HSE terms in the contract are based.

Contract SponsorOn behalf of the Company, overall single point responsibility for the integrity management of the contract fromstrategy definition to closeout (through initiation, pre-qualification, tendering, award, mobilisation, executionand demobilisation). Responsible for the supervision of the Contract Holder.

Contract HolderAppointed by and on behalf of the Contract Sponsor and accountable for the activity management of the contract(with respect to commercial, legal, contractual, financial, technical, operational, Quality Assurance and HSE)and verification that the control mechanisms are in place throughout the execution of the contract. To be namedin the contract document. Responsible for the supervision of the Company Representative(s) and Company SiteRepresentative(s).

HSEHealth, Safety and Environment

Low-Risk ContractA contract for work which the Contract Holder has classified as low-risk after performing an HSE assessment(refer to ‘Procedure for Management of HSE in Contracts’, SPDC 99-031a).

SHOCSafe Handling of Chemicals

7


8


APPENDIX I – FLOW CHART - HSE MANAGEMENT OF CONTRACTS

Prepare Preliminary Contract

HSE Plan

Submit with Tender

documents

FinaliseContractHSE Plan

CONTRACTOR ACTIVITY

BOX A

BOX B

BOX C

INITIATIONPHASE

TENDER PHASE

EXECUTION PHASE

REVIEW PHASE

CompleteRequired

Training/Procedures

StartWork

ImplementContractHSE Plan

Amend/UpdateContractHSE Plan

EndWork

Contractor Register

PrequalifyRegisteredContractors

Invitationto

Tender

EvaluateTendered Contract

HSE Plans

COMPANY ACTIVITY

Review and Endorse Contract

HSE Plan

Prepare HSE Monitoring Programme

Award Contract

Monitor PerformanceAgainst Contract

HSE Plan

EndorseAmendments to

Contract HSE Plan

ReviewContract HSEPerformance

ConductHSE

Assessment

Define HSE

Specification

Conduct Pre-Start

HSE Audit

AuthoriseStart

of Work

9


LEVEL 2: TEMPLATES AND MODEL DOCUMENTS

TEMPLATE – CONTRACT HSE PLAN

User guidance notesThis template is to be inserted in the Form of Tender after the HSE Specification. The Contract Holder shoulduse this template as the basis for his contract document preparation to define the format and scope of the ContractHSE Plan. The scope and contents of the Contract HSE Plan should be specific to each individual contract, andshould reflect the nature of the work to be performed and the specific hazards presented by the work. The ContractHolder should also use this template when evaluating the adequacy of a Contract HSE Plan.

As this template is incorporated in the ‘Forms of Tender’ it is intended that Contractors use it to developtheir Preliminary Contract HSE Plan. Specific Contractor requirements for Contract HSE Plans are identifiedin the HSE Specification (C-1 and C-2 of SPDC 99-031c).

Some items in the templates may be provided at a lower level of detail or omitted completely at the tenderstage, depending on the nature of the work to be performed and at the discretion of the Contract Holder.However, in doing this, the Contract Holder should be satisfied that they will be fully addressed, coveredelsewhere, or for some reason justifiably omitted during the tender stage for the particular contract.

During the preparation of the contract HSE documentation it is important to make a clear distinction betweenpolicy, procedures and plans. This will improve the effectiveness of each of these. Procedures and plans in particularare commonly confused.

Policy A policy is a brief statement of belief and intent.

Procedures Procedures (including standards, rules and regulations) are methods of work which shall befollowed.

Plan A plan is a schedule of actions to be taken to achieve a desired state. The actions should bespecific (as opposed to generic statements), measurable, have target dates for completion andhave an identified action party.

TABLE OF CONTENTS

1.0 Contractor HSE Management System (HSE MS)

2.0 Contractor Project-Specific HSE Plan2.1 Leadership and Commitment

2.1.1 Leadership and Commitment2.2 Policy and Strategic Objectives

2.2.1 HSE Policy Statement2.3 Organisation, Responsibilities, Resources, Standards and Documentation

2.3.1 HSE Organisation2.3.2 HSE Professionals2.3.3 Sub-Contractors2.3.4 HSE Communications2.3.5 HSE Meeting Programme2.3.6 HSE Promotion and Awareness2.3.7 HSE Competence Requirements2.3.8 Employee Orientation Programme2.3.9 HSE Training (General)2.3.10 HSE Training (Professionals)2.3.11 HSE Legislation2.3.12 HSE Standards

2.4 Hazards and Effects Management2.4.1 Methods and Procedures for Hazards and Effects Management2.4.2 Assessment of Exposure of the Work Force 2.4.3 Handling of Chemicals2.4.4 Hazard and Effects Management and Assessment of PPE Requirements

2.5 Planning and Procedures2.5.1 Basic HSE Rules2.5.2 Emergency Response Procedures2.5.3 HSE Equipment and Equipment HSE Inspection2.5.4 Occupational Health2.5.5 Environmental2.5.6 Road Transport

2.6 Implementation and Performance Monitoring2.6.1 HSE Performance2.6.2 Incident Investigation

2.7 Audit, Review and Inspection2.7.1 Availability2.7.2 Scope2.7.3 Coverage2.7.4 Effectiveness2.7.5 Follow Up

10


11


TEMPLATE

1.0 CONTRACTOR HSE MANAGEMENT SYSTEM (HSE MS)

In this section, the Contractor should provide a concise description of its HSE Management System (HSE MS).Its HSE MS is the total of all of its established, generic policies, programs, procedures, standards, etc. that ituses to manage its HSE performance. It is not intended that each policy, program, procedure, standard, etc. beattached or described individually, rather, the essential elements of the Contractor’s HSE MS should be describedto provide SPDC with the assurance that it meets the minimum requirements of the ‘Specification for ContractHSE Requirements’ (SPDC 99-031c).

To the extent possible, it is recommended that the Contractor’s description of its HSE MS in this sectionshould follow the outline provided in ‘Specification for Contract HSE Requirements’ (SPDC 99-031c).

2.0 CONTRACT-SPECIFIC HSE PLAN

This section of the plan should describe how the Contractor shall apply its established, generic programs tomanage its activities on the specific contract. The Contractor should identify the contract-specific work activitiesit will perform and the anticipated HSE hazards associated with the work. The Contractor should clearly describeits plan for minimising the potential effects of these anticipated hazards. The plan should identify specificdeliverables, targets, performance measures, monitoring programs, etc. When possible, responsibilities shouldbe clearly assigned and completion dates specified.

The contract-specific section of the Contract HSE Plan should contain only measurable, quantifiable, contract-specific actions that will be taken during the life of the contract. The following outline is suggested.

2.1 Leadership and Commitment2.1.1 Leadership and Commitment2.1.1.1 Commitment to HSE through leadershipProvide a list of Contractor senior management and a schedule for their participation in HSE activities relatedto the contract (meetings, inspections, audits, etc.).

2.2 Policy and strategic objectives2.2.1 HSE Policy Statement2.2.1.1 GeneralProvide Contractor’s written HSE Policy.Provide a schedule of meetings or other activities where line management will participate in the communicationand implementation of Contractor’s HSE Policy relative to the contract.

2.3 Organisation, responsibilities, resources, standards and documentation2.3.1 HSE Organisation2.3.1.1 Key PersonnelPrepare an organisation chart showing personnel responsible for the implementation of HSE objectives. Providejob descriptions showing each team member’s HSE competencies, responsibilities and function.

2.3.1.2 Contract Objectives/AccountabilityHSE objectives to be defined in an action plan and Contractor to indicate what he will do to ensure the objectivesare met.

12


2.3.1.3 Manning/CommunicationsProvide a statement/plan showing how HSE issues are communicated between SPDC, Contractor and sub-contractor (interfaces for all phases to be identified).

2.3.1.4 Corporate Structure/ResponsibilitiesIdentify the individuals charged with HSE responsibility at middle/senior management and board member level.Provide a plan/schedule indicating provision for specialist HSE advice to line management as required.

2.3.2 HSE Professionals2.3.2.1 Reporting and Follow UpIndicate the reporting relationship with line management (reference 3.1.1, organisation chart) and provideevidence of how line management follows advice offered.

2.3.2.2 HSE DepartmentProvide a statement indicating the involvement of the HSE department:– preparing and monitoring departmental action plans;– formulation and suitability of HSE rules;– inspections and audits;– promotional material;– training;– sub-contractor assessment;– health risk assessment, performance monitoring and surveillance;– environmental monitoring;– support incident investigation.

The involvement of Contractor’s management in preparing and implementing:– emergency manuals and plans;– training for fire fighting teams, first aid proficiency; etc.;– emergency drills/exercises;– protective equipment.

2.3.3 Sub-contractors2.3.3.1 ManagementIntegration of sub-contractors in HSE Plan, provide and implement a policy requiring sub-contractors to besubject to the same levels of HSE standards.Implement a verification system to check the implementation of sub-contractor HSE standards.

2.3.3.2 Identification and VettingProvide a list identifying sub-contractors/vendors/suppliers to be employed in the execution of the contract.Provide a method statement of vetting those still to be identified, and to maintain a list of approved sub-contractors.

2.3.4 HSE Communications2.3.4.1 Coverage/AwarenessDemonstrate that suitable lines of communication to handle HSE issues are in place in an emergency (refer Section 5.2).Identify and detail what has been prepared with respect to those organisations that would be expected to providesupport in a major incident, and that those organisations are aware of their roles and requirements.

2.3.4.2 External LinksDemonstrate the ability to communicate with all workers in the event of an emergency, taking into account ofthe diversity of languages.

2.3.5 HSE Meeting Programme2.3.5.1 SchedulingProvide a project schedule for HSE meetings including:– SPDC/Contractor HSE meetings;– Contractor safety meetings;– craft specific HSE meetings;– tool box meetings.Procedure required to maintain records of personnel attendance.

2.3.5.2 Management ParticipationProvide a statement indicating how management is visible to employees in HSE management activities, objectivesetting and monitoring and showing support for stated policies and objectives.

2.3.5.3 HSE Meeting StructureProvide typical agenda for meetings and state target attendance and meeting formats.

2.3.5.4 Follow Up ActionsDocument the follow up actions.

2.3.5.5 CommunicationDemonstrate that:– results of HSE activities are communicated to all;– meeting programme is consistent with the rest of management structure;– meetings recorded;– a structure to differentiate between health, safety and environmental issues.

2.3.6 HSE Promotion and Awareness2.3.6.1 TechniquesDemonstrate that appropriate communication techniques are used to make personnel aware of HSE issues andto consider any language/literacy problems. Typical examples include:– personal contact;– notice boards;– newsletters.

2.3.6.2 PerformanceContractor shall provide HSE performance boards.

2.3.6.3 Promotional MethodsIndicate methods for promotion of HSE, e.g.:– small ‘give-aways’ with HSE message;– competitions.and demonstrate that HSE activities are an intrinsic part of running a business.

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2.3.7 HSE Competence Requirements2.3.7.1 Fitness of PersonnelConfirm the medical fitness from a recognised and approved medical facility of all proposed employees for thecontract.

2.3.8 Employee Orientation Programme2.3.8.1 ApproachProcedure for on-the-job orientation for supervisory staff and follow-up of all new employees at the site.

2.3.8.2 New EmployeesProvide a system to ensure that new employees are adequately trained and are coached to improve their workingpractices.

2.3.9 HSE Training (General)2.3.9.1 Contract StandardsProvide a statement on the current standard of work force and training requirements to meet the contractrequirements.

2.3.9.2 Established Training ProgrammeProvide a table showing all courses (including refresher training), participants (including defined groups andtarget density) and schedule for the contract:– HSE induction;– job procedures (Permit to Work, fire fighting, scaffolding);– road safety;– marine transport safety;– health (first aid, use of PPE);– auditing;– incident investigation and reporting;– HSE meetings;– environmental protection/awareness;– supervisory training;– specialised training as necessary;– on the job training;– emergency planning.Provide Details of training facilities and demonstrate availability of suitably qualified trainers.

2.3.9.3 Formalised ProgrammeMatrix showing records of employees who have been through the programme, qualifications gained and theextent of coverage of training courses.Statement indicating that employees are trained before starting work and that training covers those joining asa contract is being implemented.Plan showing the related timing of the courses and a mobilisation curve.

2.3.9.4 Supervisors ParticipationStatement indicating that supervisors are required to brief and debrief staff before and after training courses.

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2.3.10 HSE Training (Professionals)2.3.10.1 SelectionContractor is required to have a plan for the level of support to be provided by competent HSE personnel throughoutthe contract and to indicate in a statement the criteria used to select HSE supervisory staff.

2.3.10.2 TrainingTraining received by HSE professionals to conform to SPDC and Contractor requirements.

2.3.10.3 QualificationsDetails of knowledge and experience of Contractors’ HSE professionals. The knowledge and experience shouldconform to the requirements of the work being executed and satisfy the minimum requirements of the HSEReference Manual.

2.3.11 HSE Legislation2.3.11.1 CoverageProvide a list including:– applicable legislation;– Government, national and international codes;– SPDC regulations, codes and standards;– Contractors identification of regulations, codes and standards;– state hierarchical precedence.

2.3.11.2 WaiversIndicate procedure for seeking waivers. Company HSE Adviser’s/Discipline Head approval required.

2.3.12 HSE Standards2.3.12.1 AvailabilityList of own work procedures specific to the nature of its operation. Procedures to address management of majorhazards. Contractor is expected to have an HSE manual/handbook containing their HSE procedures, standards,rules and regulations.

Standards to be in line with SPDC requirements.Provide evidence that procedures are familiar to all personnel and are available in working languages

2.3.12.2 Control/AuthorisationDemonstrate a document management system indicating:– controlled documents– regular updates– level of approval– procedure for deviations– responsibility for authorisation

2.3.12.3 CoverageReference to national and international standards. Set minimum requirements on Health, Safety & Environmentissues.

2.3.12.4 Permit to WorkProvide details on the use and implementation of Permit to Work systems to be used when working in SPDCand own facilities.

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2.4 Hazards and effects management

2.4.1 Methods and Procedures for Hazards and Effects Management2.4.1.1 CoverageCarry out hazard identification and assessment using SPDC identified hazards as a starting point and any additionalhazards identified by the Contractor. Hazard analysis work sheets to be included for identified hazards. Analysisin preliminary form where appropriate. Ensure coverage of all parts of contract with assessment for specific scopeand location of the contract.

2.4.2 Assessment of Exposure of the Work Force to Hazards and Effects2.4.2.1 Experience and AwarenessDevelop assessment of the scope and degree of exposure of work force to hazards using the hazards and effectsmanagement process ‘HEMP’ (refer to HSE P-04, 14, and 15) or equivalent contractor process.

From the assessment of hazards, identify risk reduction measures to control and recover, including:– work methods and work site procedures– emergency response plans– exposure reduction methods

2.4.3 Handling of Chemicals and Other Potential Hazards2.4.3.1 CoverageDemonstrate the availability and distribution of guidance / information on the safe handling of chemicals (SHOC)likely to be encountered in the contract and proposals for confirming adherence to guidance during the contract.Refer to SHOC cards. Demonstrate the availability and distribution of guidance/information on other potentialhazards.

2.4.4 Hazard and Effects Management and Assessment of PPE Requirements2.4.4.1 Hazard Assessment / PPE RequirementsIdentify all processes that require the use of PPE. Statutory requirements also to be identified.

Procedure in place for recording issue, inspection, replacement and adequacy of stock for PPE.

2.4.4.2 PPE Instruction / TrainingIdentify PPE requirements for all personnel, provide demonstration of instruction and training and evidence aprocedure for checking its use.

2.4.4.3 Renewal/ReplacementSchedule and criteria for renewing PPE and for re-certification. Identify organisation and person responsible forpayment.

2.5 Planning and procedures

2.5.1 Basic HSE Rules2.5.1.1 AvailabilityDemonstrate that a set of rules is available to all employees tailored to the contract:– New employees to be given a copy before starting work– Method of discussion and verification of understanding– Structure and frequency for updating and disseminating rules

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2.5.1.2 CoverageRules to cover:– hazards likely to be encountered;– basic house keeping and hygiene;– signals encountered on site.

2.5.2 Emergency Response Procedures2.5.2.1 CoverageIdentify potential emergency scenarios (refer Section 4.0) and procedures to use in such scenarios. Examplesinclude:– fire drills;– H2S evacuation;– first aid;– radiation leak;– man lost;– storm;– blow-out;– MEDEVAC;– environmental spill (oil, chemicals).

Recovery procedures in place to be activated in the event of an emergency scenario (reference to SPDC guidelines).

2.5.2.2 Emergency DrillsIndicate on a plan the measures to orient personnel and produce a schedule of drills and testing. Drills to becarried out without warning demonstrating preparedness for response. Procedure required for follow up of drillsand exercises.

2.5.3 HSE Equipment and Equipment HSE Inspection2.5.3.1 HSE EquipmentList all HSE equipment to be used on the project identified by type, capacity and references to standards (asrequired). Requirement of test certification to be identified. Equipment to include (typically):– ambulance– Self Contained Breathing Apparatus (SCBA)– vehicle safety equipment– PPE.– gas analysers

2.5.3.2 Critical Items for HSE InspectionList of critical items for HSE inspection. Procedure for performing HSE inspection on tools including thoseprovided personally by employees, unsafe tools to be removed from site. Equipment to include (typically):– vehicles;– powered hand tools;– excavation equipment;– scaffolding;– lifting equipment;– hand tools;

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2.5.3.3 ScheduleClearly identify in a schedule the frequency of inspection, responsible party and the location of the inspection,e.g. site, stores, etc.

2.5.4 Occupational Health2.5.4.1 Facilities AvailableEstablish an occupational health programme to identify, assess and control hazards. Provide an evaluation of localmedical facilities required to be provided by Contractor. Provide evidence of adequate provision for supply ofdrugs and medication. To be sufficient for day to day needs and consistent with SPDC’s health programme.

2.5.4.2 StaffingDetails to indicate availability of adequately trained, experienced staff and access to medical facilities (Company,SPDC, Government).

2.5.4.3 Contingency PlansPlan to allow for incidents beyond the capability of site facilities.

2.5.4.4 Accommodation and Catering FacilitiesDetails and statement indicating that the facilities meet acceptable hygiene standards (Government and SPDC).Maintain rules and promotional material for maintaining cleanliness - appropriate to Contractors work force(clarity and language).

2.5.4.5 Hygiene and House KeepingProcedure regarding on-site cleanliness and maintenance.

2.5.5 Environmental2.5.5.1 AwarenessState environmental policy indicating commitment to environmental protection. Cover environmental issuesincluding:– waste management (hazardous and non hazardous);– spillage/discharges;– chemical management (refer Section 4.3)– sewage.

2.5.5.2 ControlIdentify potential environmental hazards and develop protection/contingency plans. Procedures required forhandling materials and performing operations that may damage the environment.Demonstrate implementation of SPDC’s Waste and Chemical Management Manuals.Targets to progressively reduce materials known to harm the environment.Define line management and employee responsibility for environmental protection.

2.5.5.3 Monitoring and RestorationMaintain records of quantities/types of all wastes and to provide plans for restoration of site to pre work condition.

2.5.6 Road and Marine Transport2.5.6.1 Drivers - Competence and SelectionStatement indicating physical capabilities, qualities, experience, medical checks and driving tests required fordrivers, including specialist skills (terrain, community knowledge, and first aid).Quartermasters and MEAs - Competence and Selection

2.5.6.2 Vehicle and Marine Craft SpecificationMatrix indicating the types of motor vehicles and marine craft to be used on the contract, testing and maintenancefrequencies.

2.5.6.3 Operations ManagementJourney management system, compliant with SPDC system. System to establish justification for journey,awareness of route, verifications of driver and marine crew standards and realistic schedules.

2.5.6.4 ContractingDemonstrate that sub-contractors implement SPDC’s road and marine transport standards and it is implementedwith the same importance as their main activity.Procedures in place for all transport activities.Policy in place for no sub-contracting without written permission from SPDC.Monitoring, control and review mechanisms included in contracts.

2.6 Implementation and performance monitoring2.6.1 HSE Performance2.6.1.1 MeasurementPlan to measure HSE performance, including:– performance indicators;– HSE incentive schemes;– achievement of milestones;– clearance of action items;– compliance with HSE regulations by selective testing (e.g. road safety).

Plan to include gathering data and use of reactive statistical indicators:– LTIF/TRCF (Lost Time Injury Frequency / Total Recordable Case Frequency);– numbers of first aid and minor injuries;– material losses;– vehicle incidents - Road Traffic Accident Frequency (RTAF);– marine transport incidents;– journey management rate (km covered/total man hours);– environmental spills;– occupational illness (lost time occupational illness frequency, total occupational illness frequency, total

occupational illness severity);– sickness absenteeism;– noise exposure frequency;– exposure to toxic chemicals (exposure potential).

2.6.1.2 Feedback/AnalysisAvailability and use of performance records, to provide feedback/review/discussion at HSE meetings.Disciplinary measures enforced resulting from non-compliance of HSE rules/regulations.Presentation of findings to work force.

2.6.1.3 Comparison of PerformanceComparison of performance with other similar contract work (other companies, SPDC contracts).

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2.6.2 Incident Investigation2.6.2.1 CoverageReporting procedure in place for the contract for incident and near miss investigation and reporting coveringinjuries to and time lost by personnel, health incidents (disease, exposures to hazardous substances), environmentalincidents (spills, releases, contamination, etc.), safety equipment failures, loss of capital equipment and materialloss.

2.6.2.2 MethodsDetails of incident investigation method to determine and; correct primary and root causes (are the incidentinvestigation teams led by the relevant managers?).Procedure for follow-up and dissemination of learning points. Methods to be used for collecting incident statistics.

2.7 Audit, review and inspection2.7.1 AvailabilityMatrix showing annual HSE audit and inspection plan. Demonstrate that a procedure is in place for monitoringthe follow up and implementation of inspection and audit action items is in place.

2.7.2 ScopeCompliance with the Contract HSE Plan including:– HSE management;– departmental personnel;– technical personnel;– sub-contractors;– journey management;– occupational health;– unsafe acts;– audit training;– environmental performance/compliance;– own activities and those of sub-contractors.

2.7.3 CoverageSchedule for full contract duration (dates, duration, composition of team, etc.).Involvement of personnel in audit/inspection teams from outside the location (Contractor internal, joint SPDC/Contractor and use of sub-contractor personnel).

2.7.4 EffectivenessDetails on the involvement of corporate management in review of findings, discussion of the findings with thepersonnel on the contract, at HSE meetings.

Details on how the lessons learned are used to improve the operations and implementation throughout theorganisation.

2.7.5 Follow UpMethods for the numerical treatment of findings.Frequency of review of implementation progress.System for rejecting audit findings properly authorised and documented.

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HSE PLAN PROFORMA FOR LOW RISK (SMALL) CONTRACTS(To be inserted in the Forms of Tender for Low Risk Contracts in place of the Contract HSE Plan Template. The approved plan will also be a contractual obligation.)

Category Item Plan DetailsGeneral

CompanyProjectContract Number / TitleContractor NameSite LocationCompany Contract Holder / Representative(s)Contractor Manager / Contractor Representative(s)

Hazard AssessmentDescription of Contract ScopeExpected Hazards Identified (including adjacent operations, etc.)Alternatives ConsideredProcedures to be Followed for Hazard Control (list documents or describe details here)Access/Escape Provisions (alarms, muster points, etc.)Competence Standards for Contractor’s PersonnelStandards for Contractor’s EquipmentTraining Requirements (including site HSE induction)

Job/Services DescriptionContractor’s Personnel AssignedContractor’s Equipment/consumables/services assignedCompany’s Personnel AssignedCompany’s Equipment/consumables/services assignedSubcontractor DetailsResponsibilities/Interfaces DefinedPPE and any Special HSE Equipment to be usedWorking Hours/Job DurationSite Description/LimitsPTW Provisions ApplicableConditions for Suspending Work (e.g. weather, adjacent site operations, etc.)Arrangements for Site Supervision

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CONTENTS


1 Purpose 2

2 Guidelines for Monitoring HSE in Contracts 32.1 Scope 32.2 Related Standards 52.3 HSE Kick-Off Meeting 5

2.3.1 Objectives 52.3.2 Attendees 62.3.3 Deliverables 62.3.4 HSE Workshop 6

2.4 Endorsement of Contract HSE Plan 72.5 Pre-Execution Audit 7

2.5.1 Follow Up 82.6 Monitoring Implementation of the Contract HSE Plan 8

(The HSE Monitoring Programme)2.6.1 Monitoring Methods 82.6.2 Amendments to Contract HSE Plan and HSE Monitoring Programme 102.6.3 HSE Consequence Management 10

2.7 Contract Performance Report 102.7.1 Continuous Reporting 10

2.8 Guidance on Audits, Inspections, HSE Meetings, Toolbox Talks 112.8.1 Audits 112.8.2 Inspections 112.8.3 HSE Meetings 122.8.4 Tool Box Talks 14

3 Glossary of Terms, Definitions, Abbreviations 153.1 Glossary of Terms, Definitions, Abbreviations 15


4 Appendices – Model Documents And Templates 154.1 Appendix I Suggested Agenda for an HSE Kick-Off Meeting 164.2 Appendix II – Example of an HSE Monitoring Programme (HMP) 194.3 Appendix III – Contract HSE Plan Monitoring Check-Sheets 23

4.3.1 Minor Contract HSE Plan Monitoring Check-Sheet 234.3.2 Major Contract HSE Plan Monitoring Check-Sheet 24

1

GUIDELINES FOR MONITORING HSE IN CONTRACTS


1 PURPOSE

A primary task of SPDC Contract Holders is to monitor the Contractor’s HSE management against the ContractHSE Plan. This document provides the Contract Holder with methods and examples of the monitoring processthrough all contract stages, from Kick-Off to Performance Reporting.

The Level 1 part gives guidance to Contract Holders, Site Supervisors, Client Representatives, and ProjectManagement Inspectors on how to monitor contractor HSE performance against the HSE specifications, theContract HSE Plan, and the requirements of the Contract Management Plan (CMP). The latter is a mandatoryrequirement of the Procedure for Management of HSE in Contracts SPDC 99-031a. It also provides guidanceon the content of the HSE section of the Contract Performance Report, that is a mandatory requirement of theContracting Policies and Procedures Manual (CPPM).

The Level 2 part provides model documents and templates to use in monitoring Contract HSE Performance.These documents and templates are to be used at the Mobilisation and Execution Phases of the Contract and theevents where they will be used, such as the HSE Kick-Off Meeting, will be specified in Level 1. Furthermore,the Level 2 appendices provide guidance and examples to assist the Contract Holder to carry out his monitoringactivities.

These appendices include:• A suggested Agenda for the HSE Kick-Off Meeting that will prompt the Contract Holder to discuss ALL

aspects of HSE Management.• An example of a HSE Monitoring Programme (HSE-MP) that can be used as a model on which the Contract

Holder should base his contract monitoring activities.• Guidance notes on Audits, Inspections, HSE Meetings and Toolbox Talks provide practical advice to Contract

Holders on how to deploy these tools in contract HSE management.

Adherence to these guidelines will enable SPDC monitor the quality of contractor HSE performance in a structuredmanner, and indicate appropriate action to improve performance.

The Contractor HSE Evaluation System (COHSEE) is formatted to incorporate these model documents andtemplates and facilitate the production of consistent and comparable reports, while archiving HSE performancerecords. The Contract Holder and Company Representative(s) shall use COHSEE in the monitoring of ContractorHSE.

The guidance follows the chronological sequence of events in contract management as defined in the ‘Procedurefor Management of HSE in Contracts’ SPDC 99-031a.

It refers to the following aspects of the Contract Management Roadmap (CMR):• HSE Kick-Off Meeting (HSE Workshop);• Endorsement of Contract HSE Plan;• Pre-Mobilisation Audit;• Monitoring Implementation of HSE Requirements (The HSE Monitoring Programme);• Contract Performance Report.

Contractor management and in particular, the Contractor Manager, Contractor Representative(s) and ContractorSite Representative may benefit from exposure to these guidelines.

2


2 GUIDELINES FOR MONITORING HSE IN CONTRACTS

2.1 ScopeThese guidelines have been produced to record best practice and to give help and assistance to achieve therequirements of the ‘Procedure for Management of HSE in Contract’. It provides general guidance for all contractedactivity within SPDC’s operations. Because of this not all of the issues covered will be relevant for all contracts.Users should select from these guidelines, those sections which are most appropriate to their needs and that aremost relevant to their particular contract. For this reason, the guidelines can not be definitive. The omission ofan issue from a guideline should not be taken to imply that the issue is unimportant and can be neglected.

Central to the monitoring of HSE in contracts is the lead-document that defines the contractor’sobligations, namely “General Specification of HSE Requirements” (Level 2 part of SPDC 99-031c. Thisis also Section V of the model contract). Please familiarise yourself again with the content of thisdocument as placed in your contract.

The guidance assumes that all aspects of the Planning and Invitation to Tender stage; the Tender Period stageand the Evaluation and Contract Award stage have been correctly completed. An effective HSE Assessment musttherefore have been conducted, an appropriate HSE Specification placed in the contract, and finally a ContractManagement Plan put in place and working. Effective pre-qualification of contractors should have been completedand appropriate personnel assigned to the contract commensurate with the HSE risk involved in the contractedwork. The guidance therefore only covers the stages of the Contract Management Plan highlighted in red inFigure 2.1.

3


Figure 2.1. HSE Management of Contracts Flowchart

4



Management Plan



HSE Assessment&

HSE Specification

Pre-qualify Potential Tenderers

(if required)

Finalisetender

document

Contractor prepares preliminary Contract

HSE plan

Reviewtender

Contract Award


and performance


during execution


Feedback to Work Category Custodian for

update of register & future pre-qualification

CLOSE-OUT

DE-MOBILISATION

EXECUTION

MOBILISATION

TENDER PERIOD





2.2 Related StandardsBusiness control documentation to be read along with these guidelines is listed below.

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Management system SPDC Corporate HSE Management System Manual SPDC 99-025

Policy Health, Safety and Environment Policy, and Commitment SPDC 1998To Health, Safety and The Environment

Procedure Procedure for Management of HSE in Contracts SPDC 99-031a

Contracting Policies and Procedures Manual CPPM 2000

Procedure for Evaluation and Registration of HSE P-04Environmental Aspects

Procedure for Evaluation and Registration of Hazards HSE P-14

Procedure for Evaluation and Registration of HSE P-15Health Aspects

Procedure for HSE Awareness, Training and Competence HSE P-26

Specification Specification for Contract HSE Requirements SPDC 99-031c

Guidelines Guidelines for Content and Assessment of Contract SPDC 99-031dHSE Plans

Guidelines for HSE Pre-Qualification of Contractors 99-03-1b

Guidelines for Evaluation and Registration of Hazards SPDC 99-055

Reference documents used in the writing of this document and to be consulted if more information is requiredare listed below.

SIEP EP 95 0000 series Management of Contractor HSE. EP 95-0110

Shell Safety and Health Enhanced Safety Management. October 1989Committee

SPDC Waste Management Manual April 1996

Waste Management Manual April 1996

Occupational Health Management Guidelines October 1996

2.3 HSE Kick-Off MeetingThe HSE Kick-Off Meeting is the first formal meeting between the Contract Holder and the contractor in theContract Management Plan following the award of the contract. It may be the first and only time that ContractHolder and contractor management meet formally to discuss occupational health, safety and environmentalprotection. It is therefore vital that the Contract Holder approaches the meeting well prepared and that thecontractor leaves the meeting with a clear indication of SPDC’s commitment to sound HSE performance.

2.3.1 ObjectivesThe HSE Kick-Off Meeting has a number of objectives:• To demonstrate to the contractor, SPDC management commitment to HSE;• To establish that the contractor fully understands the risks within the work scope and is capable of executing

the Contract HSE Plan as submitted with their tender;• To ensure that systems in place to manage risk are suitable and sufficient to meet standards;• To highlight areas for improvement in the Contract HSE Plan and agree on action to remove deficiencies.

The kick-off meeting does not replace the pre-mobilisation inspection. Whilst the Contract Holder should chairthe meeting and steer the agenda the contractor should be encouraged to contribute positively to the meeting.

Only by allowing the contractor to contribute will the Contract Holder be able to establish at this stage, personalconfidence in the capabilities of the contractor.

2.3.2 AttendeesThe Contract Holder should chair the meeting. If the contractor is new to SPDC, then the Contract Sponsorshould be present. It is recommended that the Company Representative and Company Site Representative arepresent and should the work scope include activities on or close to major SPDC assets, a representative of theAsset Holder should be present. The Contractor Senior Management should represent the contractor, supported,when possible, by the Contractor Representative, Contractor Site Representative and site HSE Adviser/ ‘SafetyOfficer’. Where possible the meeting should be held on or near to site, not in remote offices.

2.3.3 DeliverablesThe minutes of this meeting, signed by Contract Holder and Contract Senior Management are the only formaldeliverables from this meeting. The meeting may result in a finalised HSE Plan but this is unlikely. Any actionagreed at the meeting must be clearly ‘minuted’, with Action, Action Party and Target Date for completionclearly stated. The Contract Holder should ensure these actions are completed to standard and on time, preferablyprior to start of any physical work on siteRefer to Appendix II of Level 2 for an example of an Agenda for a HSE Kick-Off Meeting.

2.3.4 HSE WorkshopThe Contract Holder may choose to hold an HSE Workshop prior to the start of the contract in which oneelement could be the HSE Kick-Off Meeting. An HSE Workshop is a valuable exercise if:• the risks within the contract are high to extreme (C3+ using the Risk Assessment Matrix -RAM);• both SPDC and contractor have to work closely together to manage the systems for controlling risk;• when a contractor is working on a high-risk SPDC facility, e.g. a flow-station;• the risks are still not clear even after the completion of the tendering stage;• if the work scope has changed since award of contract;• if variations to contract have been agreed which were not considered in all the previous stages.

An HSE workshop is an interactive session in which both SPDC and contractor should contribute if it is to besuccessful. For contractors with no previous experience of SPDC HSE requirements a workshop is a usefulmechanism to introduce the contractor to the details of SPDC’s HSE systems. If however the workshop requiresSPDC to teach the contractor basic HSE skills, then the effectiveness of the HSE pre-qualification system shouldbe questioned as this is not the correct role of the workshop and a Contract Holder should not find themselvesin this position.

The content of the workshop is entirely at the discretion of the Contract Holder. If formal guidance isrequired then refer to the ‘Guidelines for Contract HSE Kick-Off Meetings’ – SPDC 2000-XXX. Should theContract Holder require assistance with a workshop then a line HSE Adviser should be consulted.

If the HSE Kick-Off Meeting is held on site the opportunity should then be taken to conduct a site inspection.

This inspection should consider such items as:• condition and location of equipment• facilities for communication• potential environmental impact of the operation• facilities for occupational and clinical health control• HSE awareness amongst site staff and employees• availability of HSE promotional materials• site HSE documentation

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2.4 Endorsement of Contract HSE Plan‘Guidelines on the Content and Assessment of Contract HSE Plans’ for both large (High to Medium HSE Risk)and small (Low HSE Risk) contracts are provided in SPDC 99-031d. The reader should refer to this documentfor details on the format, content and depth of information required in a Contract HSE Plan.

The purpose of endorsement of the Contract HSE Plan is to ensure that the contractor has addressed all therequirements of the HSE Specification. The HSE Kick-Off Meeting may trigger changes in the Contract HSEPlan, or alterations to the work scope if new hazards and risks are considered. This stage allows the ContractHolder to endorse the Contract HSE Plan against the work scope that is actually going to be executed.

The Contract Holder should ensure the Contract HSE Plan agrees with the format described in SPDC 99-031d and that the standards to be applied meet or exceed those of the HSE Specifications.

Particular attention should be paid to two subjects that have often historically been poorly managed andcaused considerable friction between SPDC and contractors: HSE consequence management and site restoration.See section 2.6.3 for guidance on these issues.

A signed copy of the Contract HSE Plan shall be available at key sites and in the Contractor’s main office. Inaddition a signed copy shall be placed in the contract file.

2.5 Pre-Execution AuditHow to execute an audit is not discussed in this guidance. The reader should contact their line HSE Adviser forguidance on audit execution or HSX-SYSA for further assistance.

The HSE Monitoring Programme should start with a pre-mobilisation audit. The main body of work shouldnot be initiated until the requirements of the pre-mobilisation audit have been met. For some contracts it maynot be possible to carry out a pre-mobilisation audit at a single point in time. This often occurs with longmobilisation periods. It may then be necessary to specify a list of audits / checks / verifications to be completedduring the mobilisation period. The Contract Holder must approve each of the checks before subsequent actionscan be started. For example, the contractor cannot start transporting material until drivers have been certifiedand vehicles have passed inspection checks. In such a situation, the pre-mobilisation audit may consist ofsatisfactory completion and approval by the Contract Holder of driver training and vehicle inspection beforethe field site is audited and fieldwork begins. Mobilisation payments may be attached to specific pre-mobilisationrequirements.

The pre-mobilisation audit should focus on the pre-execution requirements as stated in the contract and theHSE Specification, and the general capability of the contractor to meet and maintain the required standards ofHSE during the execution of the contract. It should be built around the standards specified in the HSE Specificationand in the Contract HSE Plan. It should provide the Contract Holder with confidence that the contractor inthe field understands these standards and that the systems put in place by the contractor will ensure these standardsare met. These systems should be robust enough to ensure that failure to meet standards will be quickly recognisedeither by the contractor’s own systems or by the Company Site Representative.

Any action agreed to close any recognised deficiency in the HSE Plan or HSE systems should be verified inthe field and at contractor’s offices during the audit. Too often Contract HSE Plans and their remedial actionplans, which are acceptable on paper, have been found to be lacking in the field. The pre-mobilisation auditshould provide the Contract Holder with the confidence that this is not the case.

Additional guidance on pre-mobilisation meetings and equipment inspections can be found in SPDC pre-mobilisation meeting and inspection guide - Document No. CESW 97-001. All pre-mobilisation of logisticsequipment shall be carried out by SSX-LOG (SPDC Logistics Department) in accordance with the Land andMarine Transport Guides.

Successful and completion of the Audit shall be noted in the HSE Certificate to be issued to the contractoras required by the HSE Specification Appendix A.

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2.5.1 Follow UpSubsequent to the pre-mobilisation audit or any inspection in support of the audit, the main findings should bediscussed with the contractor’s site and office management. This will help to avoid misunderstandings and aidthe implementation of the inspection / audit recommendations. Depending on the assessed severity of theserecommendations their implementation may become pre-requisites for advancing to the next stage of the contract.

The Contract Holder should agree with the contractor a procedure for monitoring the implementation ofthe inspection / audit findings. The contractor may undertake the administration of such a procedure with regularstatus reports presented at the contract review meetings.

Effective follow up of inspection / audit findings is a prime indicator of management commitment. As aconsequence it is important that all actions are followed up and cleared in a satisfactory manner.

Actions should have specific action parties, completion dates and be measurable i.e. worded in a way whichis sufficiently specific that it is clear what is required and whether or not it has been done. In particularrecommendations with no definite actions should be avoided e.g. ‘review ........’consider......’

2.6 Monitoring Implementation of the Contract HSE Plan (The HSE MonitoringProgramme)The monitoring programme should be adapted to suit the length and nature of the contract. For short durationcontracts monitoring should be weighted to the earliest stages of the work if it is to have significant influenceon the remainder of the contract. As the contract duration gets longer then monitoring can be spread throughoutthe contract period. It is however still desirable to have a significant monitoring effort in the early stages as thiswill have the most benefit over the life of the contract.

In addition, the monitoring programme should take account of the level of HSE systems ‘maturity’ of thecontractor i.e. for the same scope of work, a more experienced contractor may need less monitoring than one whois new to working with SPDC. The monitoring programme should be periodically reviewed during the contractand revised according to findings of audits and inspections. If performance and compliance is found to be good,it may be possible to reduce the frequency of monitoring. However if performance is poor it may be necessaryto increase monitoring activities. It may also indicate a need to increase direct SPDC supervision and allocatemore resources to the contract if the work is to carry on in a safe manner.

An effective monitoring programme will take account of these factors and will blend the various approachesto determine the most effective approach. All monitoring programmes should be agreed with the contractorprior to their execution. The HSE Kick-Off Meeting is the recommended time to clarify and agree theprogramme with the contractor.

An example of a monitoring programme is given as Appendix III. The reader should also refer to the ‘Procedurefor Management of HSE in Contracts’ SPDC 99-031, Table 5.3 where a template for an HSE Monitoring Plan(HSE-MP) is provided.

2.6.1 Monitoring MethodsThe management of any activity requires monitoring and verification to ensure that activities are carried out andstandards are achieved. The contractor is expected to have a framework for monitoring and verification of theactivities covered by the contract. The Contract Holder, in turn, is expected to have a framework for verificationto ensure that the contractor has adequate control over its activities. This framework is documented in the HSEMonitoring Programme for each contract

Effective control requires a process of monitoring through observation and / or measurement of what is actuallyhappening, comparison with specified requirements, feedback and where necessary correction. To be effective,the monitoring must be performed at several different levels of detail.

Table 2.6 lists a range of methods from ‘one-to-one auditing’ through to ‘formal review’.

8


Table 2.6: Levels of Monitoring

Method Objective

Unsafe act auditing • A measure of how well individuals understand basic HSE standards. • A demonstration of management commitment to detail.

Supervisory checks • A demonstration of management commitment to HSE.• A reinforcement of the role of the supervisor.

HSE inspection • A management check to ensure standards are being achieved.• Non compliance is recorded and remedial action instigated.• Localised improvements may result from an inspection.

HSE audit and • A management activity carried out by the Contract Holder or his appointed performance evaluation Representative(s) to ensure that agreed HSE management systems are in place, using the Contractor commensurate with the risk, and compliant with standards laid down in theHSE Evaluation system HSE Specification of the Contract.(COHSEE) • Trends in poor HSE management performance are identified

• Instances of non-compliance are recorded and remedial/corrective/preventive action instigated.

• Contract wide improvements may result from an audit.

HSE Review • A management assessment that all HSE planning requirements being taken to manage HSE is suitable and sufficient to ensure business objectives are being met.

• Current systems are challenged and new systems suggested if consideredbeneficial.

• Recommendations are recorded and remedial action and improvement programs agreed.

• A complete change of approach towards HSE management may result from a review.

Monthly Contract • Considered good practice for both commercial and HSE monitoring.Review Meetings • Should review the results of all the above monitoring methods plus results of any

performance indicators reported during the contract. • A formal agenda should be set and minutes recorded. • The first meeting should be chaired by the Contract Holder thereafter the

Company Site Representative. However, frequent attendance by the ContractHolder is to be encouraged.

• The Contractor Senior Management should be present plus any other parties, both SPDC and contractor who are directly influenced by the subject(s) under discussion.

• It is preferable for the meetings to be held on site.

A clear distinction should be made between an audit and an inspection in the monitoring programme. An auditis a review of management controls to ensure a requirement is met, whereas an inspection seeks to identify specificdeficiencies in meeting the requirement. As an example, an inspection might note that a vehicle has a defectiverear light, and require it to be fixed. An audit would seek to establish if there is a defect reporting system whichwould ensure that such deficiencies are identified, reported and corrected in a timely manner.

Although SPDC representatives may carry out unsafe act auditing, hardware inspections and supervisorychecks, they are primarily the responsibility of the contractor. The main emphasis of the inspection, and audits,performed by the Contract Holder (or his representatives) should be to verify that the contractors’ systems forUnsafe Act Auditing, hardware inspections, supervision checks etc. are in place and being implemented effectively.

In order to encourage improvement in contractor performance, it is desirable that SPDC’s responses to

9


deviations from the HSE Specification and the Contract HSE Plan are predictable and consistent. This requiresclear standards against which the contractor is monitored, transparent criteria for assessing performance and aconsistent procedure for deciding upon the appropriate response when non-compliance is found.

2.6.2 Amendments to Contract HSE Plan and HSE Monitoring ProgrammeWork scopes are rarely static and changes are inevitable, especially in long duration contracts. The ContractHolder should have in place an agreed procedure for amendments to both the Contract HSE Plan and the HSEMonitoring Plan. The procedure for the Contract HSE Plan should include the contractor so that no changes aremade without their knowledge and agreement. As the Contract HSE Plan is a contractual document, majoralterations may require a variation to contract to be agreed.

The HSE monitoring programme is an internal SPDC programme but changes should, as a matter of courtesybe communicated in advance to the contractor within a reasonable period.

The management review procedure for Contract HSE Plans is discussed in SPDC 99-031a.

2.6.3 HSE Consequence ManagementIt is possible to introduce into the contract quantified consequence management measures for deficiencies inexecuting the Contract HSE Plan. This is discussed in more detail in the ‘Specification for Contract HSERequirements’ SPDC 99-031c. This is different from outright violations which gives the Contract Holder theright to determine the Contract.

Consequence management measures, especially when positively reinforced with substantial incentives, havebeen found to focus contractor management attention on improving HSE performance even if the sanction is‘small’. If this is an option considered worthwhile by the Contract Holder then the details of the system shouldbe clearly stated in the contract. HSE defaults should be linked to clear and agreed standards of performance andfailure to achieve standard should be demonstrable. For example, failure to clear all remedial actions within thepreliminary Contract HSE Plan by the agreed target date may trigger HSE default. Enforcing consequencemanagement measures for defaults that are not linked to clear and agreed standards, and that are not part of acontractual agreement, could place SPDC in a difficult legal position and so should not be attempted withoutwritten Tender Board approval.

Incorporating an incentive scheme for HSE involving additional payment in a contract also needs very carefulconsideration. It can absorb a significant degree of effort to administer and the longer-term effectiveness may bequestionable. Incentives schemes for HSE need to be constructed in such a way that they are not short term andtransitory. The Contract Holder may set up a points-based incentives system to encourage consistent positiveHSE performance, or adopt the recommendation in SPDC 99-031a to use calibrated progress on the SIEP HSEMS Self-Assessment Questionnaire (SAQ) for this purpose.

2.7 Contract Performance Report2.7.1 Continuous ReportingIn order to allow for continuous monitoring of contractor HSE performance the Contract Holder should ensurethat audit reports (see HSE Monitoring Plans) are produced by COHSEE software. The reports enable the ContractHolder to identify weaknesses in a contractor’s performance and agree with the contractor improvement programsand changes needed to boost HSE performance. This includes changes to the Contract HSE Plan and theContractor’s HSE MS. Serious performance deficiencies shall be formally reported in writing to the ContractSponsor and the supporting Contract Analyst/Engineer.

HSE-CON shall review the contents of the CMG based on monitoring feedback from Contract Holders. Itis important that any difficulty in interpreting or understanding the requirements of the CMG documents shouldbe reported to HSE-CON for consideration in the review. It is recommended to e-mail these laterally applicableimprovement recommendations to HSE-CON.

10


2.8 Guidance on Audits, Inspections, HSE Meetings, Toolbox Talks2.8.1 AuditsHSE Audits, their objectives, scope and detail are discussed in detail in a range of documents provided by theHSE MS Implementation Team (HIT) and are available on the HSE MS Homepage of the SPDC web. In thisdocument, auditing will be discussed only insofar as it relates to the Contract Management Plan.

An audit does not just recognise deficiencies in HSE systems, it should try and establish why those deficienciesexist and then recommend solutions to remove the systemic problems. Audits should not result in a list of minordeficiencies. For example, ‘..fire extinguisher 6 was found out of date, two tyres on the crew cab vehicle werefound to be defective..’. It should result in a shorter list of systemic faults that if solved, will prevent these minordeficiencies occurring again. For example, ‘..the system for inspecting and maintaining emergency equipment isnot 100% effective. Management should review this system to ensure single point accountability for all emergencyequipment and audit the system regularly to maintain its effectiveness..’.

Audits within the Contract Management Plan should cross reference back to the HSE Specification andContract HSE Plan. These documents should specify the systems to be in place based upon risk and should detailthose systems. The audit should establish whether those systems are in place, are suitable and sufficient and areperforming to standard.

A programme of audits should cover all activities under the contract but should focus initially on high-riskactivities. The scope and frequency of the audits in the programme should increase as the risk within the activityincreases. This may result in certain high-risk activities being audited monthly, whilst low risk activities are onlyaudited annually. The Contract Holder should decide on an appropriate audit schedule on the basis of experience,knowledge of the scope of work and the contractor’s HSE maturity. Where audits reveal serious deficiencies inHSE systems then the frequency of audit may have to be increased until the systems are found to be effective.

A small team involving staff from one or more of the following groups should execute the audit:• Contract Holder and his support team;• Line staff involved in work planning and supervision (such as construction supervisors);• HSE Advisers in the line.• Staff from the corporate HSE department or from Occupational Health and Hygiene

Audit teams should not be so large as to intimidate. Four is an effective number to work with. All contractsshould be audited at least once a year. Where projects are of six months or less duration, then the HSE auditsshould be scheduled to occur early in the project life cycle to gain most benefit. In the case of contracts that areof less than three months duration then the pre-mobilisation audit may be the only formal audit. These schedulesshould increase as the risk within the contract increases.

Audits conducted by line staff not directly involved with the contract and from a different function are oftenreferred to as ‘cross-audits’. A programme of cross-audits is generally considered beneficial especially for contractsextending to over one year.

2.8.2 InspectionsA programme of inspections should cover all contractor work sites and residential camps. For short contracts itmay not be practicable to visit all sites, therefore priority should be given to those where the greatest HSE riskexists. For longer contracts (three months and above) all sites should be visited. The schedule of inspections shouldbe recorded on the HSE Monitoring Plan and communicated to the contractor.

In addition the contractor should carry out his own inspections as detailed in the HSE Specification and theContract HSE plan.

An individual or a small team may carry out inspections. Use of an individual to inspect usually results inconsistent application of standards but is slower that using a team. A team brings the benefit of differentperspectives, which can ensure no standards are missed.

11


Staff involved are likely to be:-• Contract Holder and his support team;• Line staff involved in work planning and supervision (such as construction supervisors);• HSE Advisers in the line.

In line with the requirements of visible management commitment, inspections should not always be delegatedto Company Site Representatives and HSE Advisers alone.

Inspections should be used to cover such aspects as:• compliance with procedures (journey management) and systems (permit-to-work);• availability, condition and use of personal protective equipment;• the contractors systems for ensuring compliance and auditing;• condition and maintenance of tools, equipment, hardware and facilities;• emergency preparedness and drills including the use of fire fighting equipment and first aid;• employee hazard / HSE awareness and demonstrated use of sound work practices;• presence and quality of supervisors.

Involving contractor’s supervisory personnel can often enhance the effectiveness of inspections. The intention ofinspections is not to ‘catch people out’ but to systematically measure compliance to standards. A formal checklistis therefore an invaluable tool for ensuring consistency in inspections.

2.8.3 HSE MeetingsSupervisors are expected to communicate information to the workforce on a regular basis and effectivecommunication improves supervisor / employee relations. Most communication can be conducted on an informalbasis but there is critical information that must be communicated in a formal manner to ensure all workersreceive it. HSE information is critical to the Health and Safety of employees and the protection of the environment.Therefore formal HSE meetings are required.

There are a number of messages that can be transmitted through meetings, and it must be recognised thatmany of the non-verbal messages may be the ones that are the most memorable and effective. For instance, voicetone, inflection, body language, eye contact and hand gestures all form a part of the transmitted message.Supervisors should be aware that their message might be lost if the chosen communication method is inappropriatefor the target audience.

As an example, a monotone voice coupled with a relaxed posture and limited hand gestures will often bereceived as a message that is not important. In some extremes, the verbal message may be in direct conflict withthe non-verbal messages. The supervisor should remember the adage “actions speak louder than words” whencommunicating with employees. The verbal message may be correct, but the supervisor’s actions may negate thegood intentions. Be sure to reinforce the verbal messages with correct actions. Informing employees of the correctprocedure and then personally following that procedure are good ways to transmit information in a clear andpositive fashion.

HSE meetings ensure effective communication of HSE messages from management to workforce and fromworkforce to management.

The objectives of HSE meetings should be to:• convey HSE information to all employees;• obtain feedback from employees;• get participation and commitment to the HSE programme;• encourage communication and debate;• seek ways to eliminate unsafe practices and unsafe acts;• resolve any concerns or problems that emerge.

12


HSE meetings are most effective if held on a regular basis and conducted by the local team leader or supervisor.To be most effective, not more than 20 people should participate and ample time should be allowed for questionsand answers at the end of each meeting. The questioning will improve the receipt, acknowledgement andunderstanding of the HSE messages being communicated. Items of concern raised by employees during themeeting should be documented and followed-up within time frames either set by management or agreed duringthe meeting. HSE meetings provide a forum for interaction in a group and enhance the leadership role of thesupervisor. Participation is therefore a vital component of visible management commitment. Where sub-contractors are part of the work group they should be included.

HSE meetings should be conducted according to the following standards:• Cascaded set of HSE Meetings should interlock from Contract Holder down to the employees of the smallest

sub contractor;• Should be conducted at least once per month;• Should be scheduled to allow all employees to participate in at least one meeting per month;• A minimum of 40 minutes should be allotted for each meeting (more frequent meetings of a shorter duration

are acceptable provided the length of time allocated for meetings is no less than 40 minutes per month;• Should be documented with date and location of meeting recorded;• Should contain a signed attendance register;• Should list topics discussed and action items agreed along with action parties and target dates.

Items that cannot be resolved at the meeting and action items of particular importance should be brought to theattention of the Contract Manager and then the Contract Holder. If the Contract Holder can not resolve theissue then the issue should move up the hierarchy of SPDC HSE meetings until it is resolved. Issues can be takenvia the line management to the HSE Steering Committee with Director approval.

A procedure for the follow-up of items reported during HSE meetings should be made available and followed.A follow-up procedure for items raised during HSE meetings is recommended so that items are resolved in asystematic manner. The follow-up procedure should take into account the risk involved in the issue, the timespan required to correct the deficiency and the level of resources required.

HSE meetings should be monitored to ensure that planned meetings do take place. The Contract Holdershould demand evidence of meetings through copies of minutes and wherever possible should strive to attendcontractor HSE meetings. A report of the number of HSE meetings conducted versus the number planned willgive Contract Holders an accurate assessment of the quantity of meetings taking place. In addition to the quantityof HSE meetings, the quality should also be measured through personal attendance at least once per quarter.

There are several ways of measuring the quality of an HSE meeting in addition to attendance and subjectiveopinion. One such method is a scoring worksheet such as shown in the Figure below. If completed by an unbiasedperson (i.e. one with no vested interest in the outcome of the scoring) it can prove to be a useful aide to judgingmeeting quality. Note that all measurements must be based on clear and common standards.

For example, where the guideline recommends an unbiased person to measure the quantity of meetings:• the number of meetings that were planned should be calculated and recorded• the number of actual meetings should be measured by actual count and divided by the number of meetings

planned.

13


Number of Meetings Planned 10

Actual Number Conducted 7

% Compliance 70%

2.8.4 Tool Box TalksToolbox talks provide the forum for spoken communication between a supervisor and one or more employeesjust before a task is started. As the talk is informal, there are no stipulated requirements for an agenda or formeeting minutes. However, supervisors are expected to make note of the toolbox talk and topic in a site logbook.

Toolbox talks are recognised as an effective way to improve HSE performance by increasing awareness ofhazards, discussing controls and agreement of emergency procedures. Effectiveness of the Toolbox talk diminishessignificantly with the length of time between the task and the meeting. It is essential to conduct a Tool box talkjust prior to starting a task to ensure workers understand the hazards and are adequately prepared. The supervisorshould lead the toolbox talk by motivating the employees, telling them about the task, showing them what isexpected and testing their understanding. The tests of understanding can be through oral questions and by thesupervisor requesting a demonstration from the employees. This is known as the “Motivate, Tell, Show, Test andCheck” way of task instruction.

Toolbox talks should be conducted according to the following standards:• Should be conducted before beginning any medium, high or extreme risk task. This will ensure the workers

are aware of all aspects of the task; the HSE implications and the role they are to play should problems occur.• Should be conducted each time a new task is about to be started.• Should cover hazards associated with the task, controls of those hazards and the recovery plan.• The supervisor should use the “Motivate, Tell, Show, Test and Check” way to ensure understanding of the

task.• Should be recorded in a daily log.

Factor Possible Awarded CommentsPoints

Agenda issued 5

Agenda followed 10

Employee attendance 15

Coverage of at least one formal 15topic during the meeting

Visual Aids used to reinforce 10the message

Follow-up to previous meeting 10recommendations

Discussion of major group 15concerns

Time taken for meeting 10

Minutes issued 10

Note: This sample is for illustrative purposes only. The sample is representative of those commonly used in industry, it may notbe ideal for all organisational applications.Figure 1. HSE Meeting, Quality

14


3 GLOSSARY OF TERMS, DEFINITIONS AND ABBREVIATIONS

3.1 Glossary of Terms, Definitions, Abbreviations

‘Audit’ An independent review of an HSE Management System to ensure compliance tostandards. Source EP 96-2003

‘Communication’ The effective transmission and reception of messages‘HSE Inspection’ A review by one or more individuals of activities or facilities or equipment on site

against recognised standards in order to highlight areas of non-compliance. ‘HSE Meeting’ The direct and formalised contact between contract supervisor and two or more

employees for the purpose of HSE communication‘Messages’ Information that can be transmitted and received.‘Toolbox talk’ Direct contact between a supervisor and employees on the job site for the purpose of

communicating an HSE message related to the task at hand


4 Appendices – Model Documents And Templates

Appendix I: Suggested Agenda for an HSE Kick-Off MeetingAppendix II: Example of an HSE Monitoring ProgrammeAppendix III: Contract HSE Plan Monitoring Check-Sheet

15


4.1 Appendix I – Suggested Agenda for an HSE Kick-Off Meeting

The depth and complexity of the HSE Kick-Off will be directly related to the risk involved in the contract. The higherthe risk, the more complex and detailed should be the meeting (refer Guidelines for an HSE Kick-Off Meeting,SPDC 2000-031).

HSE Kick-Off Meeting Agenda

Contract Number:

Contract Title:

Contractor:

Contract Sponsor: Ref. Ind.

Contract Holder: Ref. Ind.

Contract Manager:

Date:

Location:

Attendees:

S/n Name Company Designation

Start time:

IntroductionAll personnel to be introduced. The contractor to be appraised of SPDC’s organisation and systems of work.Documentation required for meeting to be issued including a copy of SPDC’s HSE Policy and HSE ReferenceManual (unless already issued).

Organisation and reporting responsibilitiesThis will cover the reporting and communication requirements for the duration of the contract. It will also coverthe circulation of documentation, meeting minutes, follow up of action points and the arrangements for futuremeetings.

16


Contract HSE SpecificationThe requirements of the HSE Specification to be clarified. In particular contractor’s attention to be directed torequirements for:• HSE Management System;• HSE Advisers;• HSE Meetings;• HSE Audits;• HSE Standards (from the HSE Standards Manual for general standards and from work scope specific

documentation for detailed standards);• HSE Training.

Contractors full understanding of the HSE Specification to be established.

Hazards Specific to This ContractUnder this item the major hazards that are specific to this particular contract as detailed in the HSE Assessmentand HSE Specification should be discussed and methods for controlling the risk relating to these hazards agreed.It should be clear that increasingly sophisticated systems have to be in place as risk increases.

In particular the following hazards where relevant should be discussed:• control of transportation (land, marine, air – RWF/FWF)• journey management• working in rain• any heavy lifts, particularly if over live equipment• work in the vicinity of high voltage cables• work at heights• tie-ins to live equipment• entry into confined spaces• any work which is new to the Contractor or for which he has no experience• any work not covered by the HSE Reference Manual

The Contract HSE PlanUnder this heading the Contractors tendered pre Contract HSE Plan should be discussed and any requiredmodifications to raise it to the standard required meeting the project objectives agreed. Clearly defined action,action parties and realistic target dates should be established. The objective of this item is to ensure that the finalendorsed Contract HSE Plan will cover all major hazards referred to above, complies with the standards of HSEP-04, 14, and 15, and is agreed to and accepted by the Contract Holder and Contract Manager. Arrangementsfor ensuring its implementation should also be discussed and agreed.

The Control and Arrangements for sub-contractorsUnder this item, the means for approving and controlling sub-contractors should be agreed. Normally it wouldbe expected that all sub-contractors should be subject to the same HSE standards as the main Contractor, includingsuch items as induction courses, training, inspection and audit. Requirements for HSE mentorship ofsubcontractors should be discussed and agreed.

The Pre-Mobilisation RequirementsUnder this item the matters that should be in place prior to work starting should be confirmed. These should bein accordance with those contained in the HSE Specification.

17


They need not all necessarily be in place immediately but could be phased over a period of time, for example:• Prior to the start of the construction of the base camp, all site personnel will be required to have attended a

basic HSE induction course and their relevant skills training assessed.• Prior to the main works starting all site personnel will have attended a site-specific HSE induction;• The build up of first-aiders will match the build up of the labour force, such that at least 10% of the workforce

will always be trained in first aid.

The Date and Arrangements for the Pre-Mobilisation AuditThis will cover the administrative arrangements for the audit. In particular it should identify the following:• Who is responsible for producing the notes and actions items arising from the audit?• How and when the action items will be followed up,• What material/evidence the contractor will be required to produce or support his claims.

HSE Monitoring ProgrammeThis should discuss the specific arrangements put in hand for this particular contract, particularly related toinspections, audits and meetings. The HSE Monitoring Programme template should be discussed and agreed.

Any other Business

Self evident

End time:

18


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22


4.3 Appendix III – Contract HSE Plan Monitoring Check-Sheets

4.3.1 Minor Contract HSE Plan Monitoring Check-Sheet

CONTRACT NO. CMIS REF. NO.

CONTRACT TITLE

Description of Activity

23


HSE-MS ITEMS CONTRACTOR PROVISIONS PERF. IND.

1. CEO and Safety Officer to attend kick-off meetings Minutes of meetings.

2. CEO to attend site HSE meetings Minute of meetings.

3. The Safety Officer will attend all HSE meetings in Minute of meetingsthis contract.

1. Provide Contractor written HSE Policy Show HSE Policy

2. Show when Contractor management will brief staff on *Show schedule & HSE issues related to the contract. topics for briefing.

1. Contractor shows who is responsible for HSE in respect Show letter or chart.of this contract.

2. A letter listing members of this contract work team Show list of names

3. Contractor shows schedule of HSE events in a one day List of schedule work (form 07:00hrs to 18:00hrs) for this contract. showing HSE events.

1. Contractor shows list of all that could go wrong during Show list of hazardsthe course of this contract work. (hazard register)

2. Contractor shows list showing what to do to prevent Show list of controlthings from going wrong during the course of this measures.contract work

3. Contractor shows list of required PPEs. *Show list of PPEs.

4. Contractor demonstrates the use of PPEs to work force. *Site briefing report

5. Contractor to use SPDC PTW/WHIS Completed PTW

1. Contractor to carry out HSE induction to staff *Site interviews.on site

2. Contractor briefs staff on Emergency Response *Site interviews.Procedures

3. Contractor staff compliance with SPDC waste *Site interviews.management procedure.

4. Contractor compliance with SPDC driving/Marine Show SPDC’s permitoperation competence

5. Contractor journey management system Show control.

6. Medical Certificate of fitness for all staff. Show certificate.

7. Work site < 50 staff & Low/Medium Risk activity: *Site inspectionsSPDC Standard Drug approved list First – Aid box and one First Aider.

8. Work site > 50 staff & Low/Medium Risk activity: *Site inspections.SPDC Large Standard Drug approved list First – Aid box and one First Aider.

9. Work site > 50 staff & High Risk activity: SPDC *Site inspectionsLarge Standard Drug approved list First – Aid box and one Industrial First Aider

Leadership &Commitment.

Policy & StrategicObjectives*(Hand written)

Organisation,Responsibilities,Resources, Standards& Documentation.

Hazards & EffectsManagement.

Planning &procedures

24




Implementation andperformancemonitoring.

*(Hand written)

Auditing and Reviews

1. Contractor report of Unsafe Acts/Conditions

2. Contractor prompt report of HSE incidents Report time <0.5hr

3. Contractor report HSE violations Report time <1hr

4. Contractor report reports man-hours worked Man-hour report

1. Contractor reviews on the reported Unsafe acts/ Contract close-outconditions report.

2. Contractor Reviews on reported near-misses Contract close-outreport.

4.3.2 Major Contract HSE Plan Monitoring Check-Sheet

CONTRACT NO. CMIS REF. NO.

CONTRACT TITLE

Description of Activity

1. Contractor management HSE commitment very visible Time response to HSEissues < 24hrs.

2. Senior managers perform internal audit/inspections of Show scheduleswork site Show reports

3. Senior Managers to chair site HSE meetings Show rosterShow reports

4. Project, HSE managers Safety officer to attend kick-off Minutes of meetingmeeting.

5. Contractor senior personnel work site inspection visit Inspection reports

6. Contractor senior personnel work site HSE meeting. Minutes of meeting

7. Contractor management to encourage HSE feedback Staff recognitionby staff on HSE feedback.

8. Contractor promotes visible positive HSE Culture at Site interviewsall levels.

1. Written HSE Policy, Dated and Signed by the Chief Show HSE PolicyExecutive

2. Written & laminated (2x3inch) HSE Policy statements specific to this contract: (Signed by the CEO) and worn by Site Staff.a) On NO night sailing Show Signed laminated

policy.b) On NO night driving Site interviews/verificationsc) On the use of seat belts in vehicles Site interviews/verificationsd) On the use of Life vest Site interviews/verificationse) No use of uncertified divers Site interviews/verificationsf) All staff must have the necessary HSE competency Site interviews/verifications

to workg) On NO Alcohol and Drugs on Work / Camp Sites. Site interviews/verificationsh) On recognition for good HSE practice. Site interviews/verificationsi) HSE violations are unacceptable Site interviews/verifications

Leadership &Commitment

Policy & StrategicObjectives

25


3. Contractor to distribute Contract site HSE policy to all Site interviews/Verifications staff on site

4. Show when Contractor management will brief staff on Show schedule & topics for HSE issues related to the contract. briefing

1. Contractor to prepare organisation chart clearly showing Show organisation chartpersonnel responsible for HSE objective implementation in this contract.

2. Contractor shows the relevant HSE competence per job Show job description- Noteposition in this contract the HSE competency

3. Contractor appoints dedicated HSE professional(s) as the Named in (1) above & Note HSE adviser(s) focal point to facilitate HSE issues in this the HSE competencycontract.

4. Contractor to demonstrate compliance to manning levels Show competence of jobcompetence requirements. position incumbents & match

against job specific

5. Contract appoints HSE focal points within the team Show HSE focal points in thestructure to drive routine team day to day HSE organisational chartobjectives ( Minimum competence NISP level 2)

6. Main Contractor & sub-contractor staff minimum Site interviewsHSE competence NISP level 1.

7. Contractor to establish communication links on HSE issues as:a) Direct access to emergency service Site verificationb) Nearest Hospital Site verificationc) Contractor’s medical centre Site verificationd) Site ambulance Site verificatione) Shell (MEDEVAC) Duty Supervisor or Emergency Site verification

Commander

8. HSE adviser should have a minimum competence of Show in organisationNigerian Inst. Of Safety Professional (NISP) Level 3 chartor equivalent, and reporting relationship to Top Management, preferably the Chief Executive Officer.

9. Main Contractor to show plan how HSE work related Show chart on HSE issues will be communicated to Shell and her communication links.sub-contractors

10. Main Contractor to demonstrate that sub-contractor Show sub-contractoris subject to Shell HSE standards. HSE Plan and the Perf. Inds.

Site interviews/Verifications

11. Contractor to show plan how HSE communications Show HSE communicationwill be cascaded to the staff in respect of this contract. plan (schedules & events).

12. Contractor to list all HSE schedule of events Show list of events

13. Contractor to implement all HSE programmes Minutes of meetings

14. Contractor to carry out induction training for Induction training report.new employees

15. Contractor’s documentation of good work procedures Show work procedures.for every work activity


Policy & StrategicObjectives

Organisation,Responsibilities,Resources, Standards& Documentation

26


16. Contractor to demonstrate knowledge of relevant Show list of legislation.legislation

17. Contractor HSE manager to approve execution for Response time <24hrsProject HSE issues missed out by contractor in the bid.

18. HSE Promotion and Awareness - Techniques Personal contract - VerifyShow Notice-boards/Poster

19. HSE Promotion and Awareness - Performance Show - Display HSE data at work site

20. HSE Promotion and Awareness - Promotion methods Verify – HSE incentiveprogrammes at work site.

21. HSE Promotion and Awareness – Part of the business Site Interviews Plus < 24 hrsresponse time on HSE issues.

22. Contractor to develop comprehensive handbook for Show handbook new staff during the induction training.

23. Contractor to develop programme for on-the-job Show programmeorientation for the sib-team site supervisors/foremen.

24. Contractor to develop programme for quick Show programme &identification/address of additional competence schedule for checks.required during contract execution. Show plan to meet gap.

1. Contractor to demonstrate knowledge and awareness Show hazard register.of all the Hazards in respect of this contract

2. Contractor to demonstrate capability to manage the Show Task Hazard Control identified hazards in this contract. Sheet (THCS)

3. Contractor to have SHOC cards for all chemicals Show chemical list and SHOC Cards.

4. Contractor to develop staff work schedules that meets Show the schedule exposure limits of each specific chemical hazard timing of exposure per

chemical. Show records of staff exposure per chemical.

5. Contractor to demonstrate process for determining the Show procedure tomost suitable PPE per identified hazard. determine the right PPEs.

6. Contractor to show procedure in place for recording Show procedure to issues, inspection, replacement and adequacy of stock reflect: - mini stock level,for PPE. - time replacement interval.

7. Provide demonstration instruction and training for the Show procedure & who touse of PPE in respect of this contract. provide the training.

8. Show the schedule and the numbers of PPEs requiring Show schedule /users andre-certification and their due dates. the due dates.

9. Show procedure and who is responsible for Show a single linere-certification PPEs responsibility

10. Contractor to demonstrate management control of Show completed PTWHSE Risk at task level with an attached copy of the

relevant THCS


Organisation,Responsibilities,Resources,Standards &Documentation

Hazards & EffectsManagement

27


1. Contractor to demonstrate that every task in this Show contract activitiescontract has written work procedure, available at work list with the relevantsite for staff use. THCS

2. Contractor to demonstrate management of HSE Show change controldeviations. procedure & the single

line responsibility.

3. Contractor to demonstrate that the Induction Show content of HSEprogramme covers every HSE hazards likely to be induction programme.covered on site.

4. Contractor to put in place procedures to identify and Show list of emergencies manage major potential emergencies Show response procedure

5. Contractor to demonstrate contingency plans allowed Show contingency planfor in emergency situation

6. Contractor to demonstrate high level of staff awareness Reports of un-scheduleof all contingency plan drills carried out.

Site interviews

7. Contractor to list out plan drills and the schedule for Planned drills reportstest frequency. and match against

schedules.

8. Contractor to list all HSE equipment to be used in the Show listproject (list to cover Name, Serial number, Make/Model with relevant certificate) N/B Equipment to carry the correct colour code.

9. Contractor to develop procedures for inspecting each of Show Insp. Procedure.the listed HSE equipment in (8) above and show Show Insp. Schedule.inspection schedule. Show Insp. Reports.

10. Contractor to list critical equipment items for Show critical items list.inspection, (list to cover Name, Serial number, Make/Model with relevant certificate

11. Contractor to develop maintenance schedule for the Show maintenance. listed critical equipment items. Schedule.

Show maintenance. Report.

12. Contractor list HSE feedback systems Show list

Pre-employment Medical Examinations Show med. Cert. Foremployment

Periodic Medical Examinations Show latest fitness cert.

Pre-employment/Periodical Audiometry Test. Covered in (13) above.

Medical certificate of food handlers Show certificate.

Fumigation of Workplace Show schedule + latestcertificate of work done.

Catering Inspections Show report + schedules

Noise Survey/ Personal Noise Monitoring Show Noise map + latestnoise monitoring report.

Planning &procedures

OH


28


Chemical Monitoring Show list of Staff potentiallyexposed.Show sampling schedule Show latest report

Radiation Monitoring Show list of Staff potentiallyexposed.Show reading schedule Show reports to date

Notification of Work related Illnesses Show wkly reports (data)

Health Promotion Lecture Show schedules PlusSite Interviews

23. Work site > 100 staff & High Risk activity: SPDC *Site inspections/interviewsStandard approved site clinic, An Industrial Nurse or medical doctor.

24. Site Ambulance *Site inspections

25. Trained First Aiders *Site inspections/interviews

26. Clinic Ergonomics *Site inspections/interviews

27. Work site (work stations) Ergonomics *Site inspections/interviews

28. Medical Care (Preventive) List programmes *Site interviews.

29. Medical Care – clinical medicine Verify medical centre.

30. Contractor to produce the list of vehicles/drivers & Show list vehicles/craftsMarine Crafts/Crew. The drivers and crew must have Show vehicle particulars.SPDC permit Show driver’s/crew names

and permit numbers.

(a) Driver’s competency: Light vehicles Show Nigerian. Driver’slicence For LMV, ShowQM’s/MEA’s certificate of Competency.Show SPDC Driving Permit

(b) Crew competency: Light Marine Vessels (LMV) Check validity at work site

31. (a) Driver’s competency: Heavy vehicles. Show Nig. DrivingSee Land transport manual Part 3 – TMS 01.3 Licence, Show certificate

(b) Crew Competency: Heavy Marine Vessels (HMV) of Competency. ShowSPDC’s permitCheck validity at work site

32. Contractor to maintain compliance to vehicles Verify pre-mobbed list at specifications in this contract. work site.

33. Contractor compliance with vehicles/Craft Show work reports plusmaintenance schedules Verify report at work site

34. Journey management system Verify IVMS at pre-mob(For vehicles) Siteinspections. Verify Journeylogbooks/Plan.Showmileage report. Enginerunning hours (for Craft).


Planning & procedures

Transportation

29


35. Contractor meets all vehicle/Craft specifications Verify at pre-mobin this contract. Verify at Pre-start audit.

Verify at operational bases

36. Contractor ensures sub-contractor compliance to Show reportstransportation specifications in this contract. Site/Base inspections.

1. Contractor delivers HSE requirements on target Show reportsSite interviews/Verification

2. Contractor demonstrates implementation of HSE Show past recipients.incentives scheme. Site interviews

3. Contractor achieves HSE milestones Show reportSite interviews/Verifications

4. Contractor delivers the required training & on schedule Show training reportsSite interviews/Verifications

5. Contractor execute the correct numbers of audits Show audit reportsShow close-out reports

6. Contractor HSE statistic performance reporting on:

i.) LTIF/TRCF Display on site HSE board

ii.) Numbers of first-aid and minor injuries Show weekly report.

iii.) Material losses Show weekly report

iv.) Vehicle/Marine Craft incidents Show weekly report

v.) Spillages Show weekly report

vi.) Occupational illnesses Show weekly report

vii.) Sickness absenteeism. Show weekly report

viii.) Noise exposure frequency Show report

ix.) Exposure to toxic chemicals (exposure potential) Show weekly report

7. Contractor demonstrates availability of HSE feedback Show records with dates,records Feedback actions taken to

address recorded reports.

8. Contractor demonstrates effective management of Show No. reported HSE incidents incidents

Show No. of incidentsinvestigated to date.

9. Contractor demonstrates how HSE incidents learning Show system of feedback topoints are cascade to staff. staff. & Site interviews.

10. Contractor documents and manage all reported Unsafe Show records of reports

acts/conditions

1. Contractor to demonstrate compliance to audit Show scheduleschedules with the Names of auditors Show reports with dates

2. Contractor to demonstrate effectiveness of HSE Show track recordsfollow-up tracking system Show close-out action items

3. Contractor demonstrate compliance with HSE Plan including:

a) Recovery plan for every HSE event slip – backlog of Show how new plan fitsHSE events (HSE management) into main Contract HSE Plan

b) Staff preparedness to cope with HSE contingency plans Site interviews.c) Close out plans for reported UAA/Conditions & Near Show records & closed items

misses


Transportation

Implementation andperformancemonitoring.

Auditing and Reviews

30


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CONTENTS


1 Purpose 2

2 De-Mobilisation 22.1 Scope and Objectives 22.2 De-Mobilisation Responsibilities 42.3 Contract HSE Performance Close-Out 4

2.3.1 Objectives 42.3.2 Close-Out Issues 42.3.3 Final Reporting 52.3.4 Site Restoration 5

3 Glossary of terms, definitions and abbreviations 63.1 Glossary of Terms, Definitions, Abbreviations 6


4 Appendices – Model Documents And Templates 6

4 APPENDICES – Model Documents And Templates 64.1 Appendix I – Template for Contract HSE Performance Report 64.2 Appendix II – Site Restoration Certificate 9

1

GUIDELINES FOR HSE PERFORMANCE CLOSE-OUT REPORTING


1 PURPOSE

This document exists to guide the Contract Holder in co-ordinating the HSE aspects of De-mobilisation andin preparing the Contract HSE Performance Close-Out Report. De-mobilisation and close-out are defaultactivities in the Contract Holder’s Contract Management Plan and the Contractor’s Contract HSE Plan. Bothactivities shall be fulfilled as part of the HSE Specification.

Level 1 of this document gives guidance to Contract Holders, and Company Representatives on the HSEaspects of de-mobilisation and close-out. It maintains the link between this last phase of the contract and theHazards and Effects (HEMP) controls of the contract; the HSE specifications to be exercised; and requirementsto fulfil both the Contract HSE Plan and the Contract Management Plan (CMP).

Contract Performance Close-Out is also a mandatory requirement of the Contracting Policies and ProceduresManual (CPPM).

The Level 2 part provides two model documents: one for Contract Performance Reporting Performance; andthe other for Site Restoration (same as in the ‘General Specification of HSE Requirements’). Both documents aredesigned for the use of the Contract Holder.

2 DE-MOBILISATION

2.1 Scope and ObjectivesThe object of de-mobilisation is to ensure that, as in mobilisation, agreed procedures, standards and guidelinesrelevant to implement HSE risk controls are followed. The Contract Holder should ensure that issues relatingto post-contract liability are taken into account and addressed.

During this phase it is important to identify the hazards associated with de-mobilisation and determine therisk management controls to be applied. Where necessary, the Contract HSE Plan should be revised to incorporatenew or unexpected hazards.

In general, this guidance covers the stages of the Contract Management Plan highlighted in red in Figure 2.1.

2


Figure 2.1. HSE Management of Contracts Flowchart

3



Management Plan



HSE Assessment&

HSE Specification

Pre-qualify Potential Tenderers

(If required)

FinaliseTender

Document

Contractor prepares preliminary Contract

HSE Plan

ReviewTender

Contract Award


and performance


during execution


Feedback to Work Category Custodian for update of register and future pre-qualification

CLOSE-OUT

DE-MOBILISATION

EXECUTION

MOBILISATION

TENDER PERIOD





2.2 De-Mobilisation ResponsibilitiesAs stated above, the Contractor’s Contract HSE Plan shall be used to manage the de-mobilisation of the contract,taking into account whatever revisions and updates that are necessary.

The Contract Holder and his appointed Representative(s) should remain alert to the increased probabilityof incidents as the project infrastructure and contractor HSE management structures are being dismantled withpeople moving off the project to new assignments. Assurance should be obtained that the appropriateorganisational structures remain intact until associated activities have been completed.

These should include• Emergency response• Site restoration• Waste management and disposal• Security clearance, including retrieval of access permits and identity cards

Due consideration should be taken of any learning points from mobilisation, the problems encountered, andsolutions found.

The Contract Holder and the Contractor Representative should continue to monitor performance againstthe plan, including attention to incident reporting. It is important to maintain vigilance on HSE matters to thevery end of the contract. In some instances, labour disputes over end-of-contract pay has been implicated as alatent failure in incidents. The Contract Holder should pay attention to these aspects and manage themappropriately.

The close-out report should be made after all activities have been completed.

2.3 Contract HSE Performance Close-OutIn this final phase, the Contract Holder conducts a joint evaluation of the Contractor’s and Shell’s HSEperformance while exercising the contract. The Contractor HSE Evaluation system will be used to generate theClose-Out report based on the continuous performance reports (HSE MP and Audits) fed into the system.

The final HSE performance report is a distillation of the regular contract HSE monitoring process and theend of contract review. To ensure contractor buy-in, it may be necessary to hold a close-out meeting where allparties are represented under the chairmanship of the Contract Holder. Thus, throughout the contract, thecontractor’s performance should be monitored against the Contract HSE Plan and any deviations, positive ornegative, annotated for reference in the Close-Out report.

In preparing the report, there should be sufficient flexibility to take account of mutually agreed changes tothe Contract.

2.3.1 ObjectivesThe objectives of the Close-Out report are:• To establish the HSE performance of the Contractor and Shell on the substantive contract, and to use this a

reference for future contracts;• To capture learning points for improvement of the HSE management systems of Shell and the Contractor; • To fulfil the requirements of the HSE Specification; and• To comply with the procedures stipulated in the CPPM.

2.3.2 Close-Out IssuesWithin the HSE Close-Out report the analysis and summary of conclusions should address:• Quality of the original Contract HSE Plan and its relevance to the overall contractor(s) performance, stipulating

what was learned and how future contracts should be structured.• Highlighting positive aspects of learning and how they can be applied in the future. This learning should be

shared with the contractor.• Incorporation of any new hazards into the hazard identification and evaluation process for future contracts.

4


• Analysis of both Shell and the contractor’s HSE performance for mutual improvement.• Information on the contractor to be added as a reference for the client bid list and which may provide advice

for improvements in assessing future tenders.

The contractor should be reminded that his overall performance and HSE record will be taken into account whenbeing considered for future work.

2.3.3 Final ReportingThe Contract Performance Report forms part of the overall Contract Close Out Report forwarded to the CMISCustodian as stipulated in the CPPM. This formal appraisal ensures evaluation against a fixed standard so allowingSPDC to compare individual contractor’s performance in a systematic manner. Appendix 1 of Level 2 providesa template for the Contract Holder’s use in preparing the HSE Close-Out report.

The Contract Holder, having had direct contact with the contractor during the execution of the work scope,and being aware of all aspects of HSE performance during the contract, is responsible for completing the reportand forwarding it to the CMIS Custodian. Additionally, through the COHSEE interface with CMIS, theContractor’s HSE Close-Out report is accessible to the CMIS Custodian for use in updating the overall ContractPerformance Report.

For purposes of integrity management, the Contract Sponsor is ultimately responsible for the accuracy of theClose-Out report and so should be consulted and informed of the detail within the report especially if an‘unsatisfactory’ rating is given. This feedback is part of the continuous improvement process in contractormanagement.

The report should derive the majority of its content by from the continuous performance reporting in COHSEE,as well as other factual documentation collected during the life of the contract.

The analysis within the report should aim to address the following:• assess the effectiveness of the contractor’s application of the Contract HSE Plan;• identify those areas unanticipated in the Contract HSE Plan, how they were overcome and recommend a better

approach for the future;• highlight successful positive aspects that should be repeated in the future;• provide a concise analysis of both SPDCs and the contractors HSE performance for discussion with the

contractor’s management allowing both to improve;• provide updated information on the contractor’s actual HSE performance for future improvements in the tender

process and in particular, the HSE pre-qualification process.• Any HSE measures which have been successfully applied in the contract which maybe of benefit to future

contracts and are not written into the CMG should be reported to HSE-CON for insertion at the next CMGreview as part of the continuous improvement process.

A copy of the Close-Out report should be held in the contract file.

2.3.4 Site RestorationSite restoration should be considered at the HSE Assessment stage and should form part of the HSE Specificationand Contract HSE Plan. Contractor responsibility to return sites to a standard approved by SPDC should be clearwithin the contract in line with SPDC 99-031c.

Requirements for disposal of waste at the end of the contract should also be included in the Contract HSEPlan in line with SPDC’s Waste Management Guidelines. Line HSE Advisers may be contacted to provide detailedadvice, while HSE-ENV may be contacted for specialist advice.

Appendix 2 of Level 2 is the template for Site Restoration extracted from the HSE Specification C-1. It is tobe completed by the Contractor and approved by the Contract Holder. This Site Restoration Certificate and theHSE Close-Out report from COHSEE are the concrete deliverables from the Contract HSE Performance Close-Out process.

5


3 GLOSSARY OF TERMS, DEFINITIONS AND ABBREVIATIONS

3.1 Glossary of Terms, Definitions, Abbreviations

‘Audit’ An independent review of an HSE Management System to ensure compliance tostandards. Source EP 96-2003

‘Communication’ The effective transmission and reception of messages‘HSE Inspection’ A review by one or more individuals of activities or facilities or equipment on

site against recognised standards in order to highlight areas of non-compliance. ‘HSE Meeting’ The direct and formalised contact between contract supervisor and two or more

employees for the purpose of HSE communication‘Messages’ Information that can be transmitted and received.‘Toolbox talk’ Direct contact between a supervisor and employees on the job site for the purpose

of communicating an HSE message related to the task at hand


4 Appendices – Model Documents And Templates

Appendix I: Template for Contract HSE Performance ReportAppendix II: Site Restoration Certificate

4.1 Appendix I – Template for Contract HSE Performance ReportSuggestions to aid completion of the template are provided in italics in the ‘comment’ column. The rating canbe ‘U’ = Unsatisfactory, ‘J’ = Just Satisfactory or ‘F’ = Fully Satisfactory. If ‘Unsatisfactory’, the reason for therating should be given in the ‘comments’ column. If an item is not assessed it will be assumed that the item israted ‘Fully Satisfactory’ unless otherwise indicated. Comments should be kept as brief as possible.

NB: The Contractor HSE Evaluation System (COHSEE) includes a Close-Out Performance module that aggregatesthe performance on the HSE MP, the Structured Audit, and incidents data from the Electronic Incident Notification System(EINS) into one comprehensive report.

Contractor HSE Performance Report

CONTRACTOR

CONTRACT NUMBER

CONTRACT TITLE

CONTRACT DESCRIPTION

DATES OF CONTRACT

6


SUBJECT RATING COMMENT

Leadership and Commitment Did management promote a strong HSE culture?Were sufficient resources allocated to manage HSE?Were all deficiencies cleared promptly and effectively?

Implementation of HSE Policy Was Policy communicated and enforced?

Implementation of Contract Was the Contract HSE Plan followed and updated as required?HSE Plan

Effectiveness of HSE Were the resources provided adequate?Organisation Did all systems perform to standard?

Did the organisation learn from mistakes?

Employee HSE Induction and Completed to standard and on time?Training

Sub-Contractor HSE Did sub contractors perform to the same standard as theManagement contractor?

Were efforts made to improve when deficiencies were noted?

HSE Personnel: Competence Were personnel competent?Did they provide effective training and advice?Did management respect their role?

HSE Meetings Was a cascaded hierarchy of meetings in place, effective and attended by all personnel?

Tool Box Talks Were these conducted to standard?

Driving/Journey Management Were all vehicles to specification?Was journey management followed and controlled?

Quality of Contractor’s HSE Was documentation available, comprehensive, in correct languages Manual and Documentation and used?

Emergency Response Procedures Were all credible scenarios supported by procedures?Were procedures tested and improved when found lacking?

Safety Rules/Job Instructions Were correct rules in place based upon job hazard analysis?

Accident Investigation Were all incidents investigated to standard?Procedure

Implementation of HSE Were the requirements of the Manual followed and incorporated Standards Manual in to contractor standards?

Briefly summarise major contraventions of standards

FAT Describe in detail any fatalities (cross reference to reports), comment on contractor response to investigation recommendations

LTIF Brief comment on reasons for LTIs. Comment on contractorresponse to investigation recommendations

TRCF

Man-hours worked / Total workforce

Maintenance and Control of Was equipment maintained and capable of completing the work?Plant

Maintenance and Control of Was equipment maintained and capable of completing work? Other Equipment

Camp Facilities / Hygiene Were standards maintained?Were there any outbreaks of illness?

7


Site Restoration Completed to the standard required?

Waste Management Conducted according to standard?

HSE Audits Summarise the main findings and conclusions

HSE Inspections Summarise the main findings and conclusions

Management Review Was this carried out?Was this a ‘learning’ organisation prepared to improve?

Data Compiled By Reviewed By

Date

Recommendations on Future Use of Contractor

Unconditional Conditional Not to be used again(list conditions below) (list reasons why)

Contract Holder Contract Sponsor

Name: Sign: Name: Sign:

Date_____________________ Date_____________________

8


4.2 Appendix II – Site Restoration Certificate

9



Contract Title


Sub-Contractors

Site Restoration Activity Date Completed Exceptions

SITE RESTORATION CERTIFICATE

On behalf of the Contractor I confirm that the activities stated above have been carried out and we have restored the sites according to the Contract Requirements.



We hereby agree that the HSE status of this Contract allows the Contractor to Demobilise subject to the above exceptions.

Name Date Ref. Ind Responsibility Signature



Demobilisation Date Approved

Requirement for Isolation of Facilities (telecoms, electricity, water) notified to SPDC

Residential Camp Inspection Completed

Office Inspection Completed

Industrial Area Inspection Completed

Worksite Inspection Completed

All SPDC Assets handed over to SPDC

All Outstanding materials handed over to SPDC

Summary file of Contract Waste Log handed over to SPDC

Notes

This page left intentionally blank.

10


CONTENTS

LEVEL 1: HUMAN FACTORS IN CONTRACTOR MANAGEMENT 2

1 Introduction 2

2 Use of this Document 2

LEVEL 2: HUMAN FACTORS CONTROL TABLE 3

1

HUMAN FACTORS CONSIDERATIONS IN CONTRACTOR MANAGEMENT

2


1. INTRODUCTION

High proportions of accidents in Industry have Human Error as one of the causation factors. Human Error isoften a consequence of other influences, for example poor equipment design, insufficient training, and poorcommunication among others. Good management throughout a contract can control many of these influencingfactors, thus reducing the incidence of Human Error events.

This appendix contains advice to Contractors and Contract Holders on measures that should be implementedduring the contract term, to reduce the likelihood of Human Error.

2. USE OF THIS DOCUMENT

This document is to be used during the HSE Kick-Off meeting to emphasise Human Factors considerations thatwill apply during the contract. It summarises basic issues in Human Factors Engineering that the ContractHolder needs to bring up at the HSE Kick-Off meeting so they can be discussed and integrated into the ContractHSE Plan as applicable.

Detailed Human Factors and Occupational Health specifications are subsumed in the HSE Specificationscontained in the Contractor Management Guide (CMG) and incorporated into the contract.

3


LEVEL 2: HUMAN FACTORS CONTROL TABLE

Activities to Control Control Measures

Training: Inappropriate or • Never allow untrained staff to carry out hazardous tasksinsufficient training is a • Examination of competency should follow trainingmajor factor in Human • Issue Certificates of competency to ESSENTIAL HSE activity staff.Error incidents • Use ‘on-the-job’ training and testing

• Arrange toolbox talks particularly before non-routine activities• Arrange refresher training for Key HSE functions.• Correct anyone doing something that is wrong and demonstrate the

correct way• Provide training and regular exercises for potential emergency situations• Use this training philosophy:-

Tell me and I will forget

Show me and I will remember

Let me do it and I will understand

Communication: • Keep all forms of communication as simple as possible.Misunderstanding verbal or • Maximise the use of pictures or diagrams where appropriate.written requests, instructions • Discuss and explain important HSE related procedures, instructions or procedures is also a major or requests.factor in Human • Regularly ask the question Do you understand?Error incidents. • HSE-critical activity should be written down and communicated verbally

to ensure understanding• In verbal communications if you doubt the recipients understanding ask

them to repeat back.• Be aware that low-grade staff may have limited communication or

language skills. Do not assume they understand- show them and checkunderstanding.

• Instructions and procedures should only be changed in accordance with achange management procedure to guard against increasing risk due to the change.

• Use the KISS Philosophy in Communications• Keep It Simple Stupid!

Design: Often badly designed • Use ergonomic assessment in design of plant and equipmentplant and equipment has • Consider hazards to erection crews during the design phase – minimiseresulted in operators having risky construction operations.accidents or health problems • Locate indicators where they can be easily seen, and design them to be due to difficult access, bad easily readable.operating position, poor • Don’t locate operational equipment in inaccessible positions- think of howinformation displays etc the operator might reach and use it.

• Involve Operators in design assessment and approval.• Design and fit clearly readable equipment labels in a prominent location

on or adjacent to the item.• Ensure adequate lighting is made available in plants and on construction

work sites.• Carry out ergonomic assessment of staff workstations.

Remember the average human being is between 5’6" and 6’0" tall – not a 3’0"tall being with 8’0" arms.

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Construction: The Construction • Implement the approved Contract HSE Plan and HSE case requirements.stage is arguably the most • Working level risk assessments and method statements must be a way dangerous phase of a contract, of life.requiring control of a large • If an activity looks dangerous, stop and review the method.multi-skilled workforce, and • Don’t allow staff to take risks.movement of heavy plant • Remember Murphy’s Law:- If it can happen it probably will.and equipment.

Operation: Oil and Gas Plant • Implement the controls from hazard analysis and risk assessment in detail.Operation requires strict • Ensure that the Contractor has intimate knowledge of the location layoutManagement controls, and and the hazardous zone delimitation.skilled Managers and Operators. Operational accidents can be catastrophic.

Working Environment: A bad • Carry out Hazard assessments of temporary office and workshop working environment can accommodation and implement controls.greatly affect performance, • Provide well-designed office furniture and equipment.concentration and can result • Assess and provide adequate lighting and environmental in staff health problems. control equipment.

• Carry out ergonomic assessment of computer workstations.• Provide easily accessible food and drink facilities.• Provide sufficient toilet facilities.• Keep all areas clean and tidy.• Assess work site environmental conditions during task analysis and

implement appropriate control measures.• Provide approved personal protective equipment (PPE) to staff who

require them for their work.• Plan in a rotational working pattern for work in extreme conditions to

allow rest periods.

Living Environment: In • Clean comfortable living accommodation should be provided on or close circumstances where staff are to the work location.required to live away from • For long term assignments recreational facilities should be made available.home the accommodation and • Respond positively to complaints regarding living accommodation. rest facilities become an important part of life.Dissatisfaction with these facilities can cause stress and impair performance.

Motivation: A workforce that • Attention to all the above control activities will assist in maintainingis not motivated has been positive confidence and build cohesion.demonstrated to result in an • Encourage the team spirit of the work crews.increase in HSE related • Encourage project ownership by discussing progress and successes in incidents. meetings and toolbox talks.

• Praise/reward good performance of both work teams and individuals whenproject goals are achieved


HSE Culture: Lack of attention • Managers must visibly demonstrate commitment to high HSE Standards.to HSE issues indicates a poor • HSE must be made an integral part of work.HSE Culture with an attendant • Managers must talk to the workforce on HSE issues, at meetings, manager poor HSE performance. Poor walkabouts etc.HSE Culture is a Management • Respond positively to HSE issues.failure. • Do not ignore bad practice – teach the correct way to do things safely.

• Persistent or malicious HSE rule breaking should be penalised.• High standards of HSE should be rewarded.

Morale: Morale and integrity • Proper treatment of the contractor’s staff by the contractor, especially of staff exercise a strong paying COMPLETE and fair wages as and when due.influence on HSE performance • Providing to the letter the contractual obligations to staff under the as well as the overall contract, particularly medical treatment under the medical retainership performance of the contract. scheme.Dampened morale will increase the difficulties in managing the contract and set the scene for an incident.

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TABLE OF CONTENTS


1.0 Introduction 2

2.0 Security Management in Contracts 2

3.0 Role of Security Department 3

LEVEL 2: MODEL DOCUMENTS, TEMPLATES AND FLOWCHARTS 4Appendix I – Security clauses in Contracts 4Appendix II – Contractor understanding of Security Requirements 5Appendix III – SPDC Information Security Policy 7Appendix IV – SPDC Statement of Security Policy 9Appendix V – Contractor Security Plan Guidelines 11Appendix Va – Security Incident Reporting Procedure 13Appendix Vb – Security Incident Report Form 14Appendix VI – Guidelines on Use of External Security 15Appendix VII – Security Emergency Flowcharts 24

1

SECURITY CONSIDERATION CONTRACTOR MANAGEMENT

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1.0 INTRODUCTION

In general, security risks associated with contractor activities have been linked with the security challenges ofthe Niger Delta. To manage this situation it is necessary to establish security considerations in contracts at theplanning stage so that applicable controls, implications, and recovery plans are incorporated in the contract andexercised from initiation to completion. There is also an increasing realisation that a linkage exists betweensecurity risks and HSE risks, and that the making and exercising of contracts provides an opportunity to addressand manage both streams of risks holistically. This approach of using the same medium of contractor managementfor the management of both security risk and HSE risk extends the application of the HSE MS into the contractor-related aspects of security management.

This document provides guidance on how to apply security principles and practices to contracts and contractormanagement. It also provides model documents for the Contract Holder to use in managing security, recognisingthat this is a line responsibility.

Relevant reference documents relating to Security Management have been reproduced as Appendices as well asgeneric flowcharts for various security emergency scenarios. It is the Contract Holder’s responsibility to determinethose that are applicable to his contract and to ensure that they are woven into the contract and exercised continuously.Guidance notes are also provided to explain where and when the various Level-2 Appendices are to be applied.

2.0 SECURITY MANAGEMENT IN CONTRACTS

Though the scope of this guidance document is centred on personal security and asset protection, the ContractHolder is challenged to extend its import to physical countermeasures and general security awareness where thisis applicable to the particular contract in view. Security management here concerns personnel and asset protectionand how this is integrated in the course of exercising the contract. An example of this integration is theincorporation of security measures into journey management for land, marine and air transport journeys. It doesnot cover the functions of security operations, intelligence gathering and intelligence evaluation all of which areexercised by the Security Department of SPDC. It also excludes information protection issues other than theprotection of IT hardware as these are separately addressed in the security provisions within the Articles ofAgreement of the contract.

The starting point for security management is risk analysis. Depending on the complexity, magnitude, location,and mitigating circumstances of the contract in view, the Contract Holder shall conduct a security risk analysisbefore preparing the specifications for the contract. The results of this risk analysis, translated into requisite controls,shall be included in the contract specifications and captured as executable activities in the Contract HSE Plan.

These security exposure controls may include:- Physical security infrastructure- Specific asset protection measures- Travel security- Access and exit control (including personnel identification, issuance and withdrawal of ID cards, etc.)- Personnel screening- Recruitment from indigenous communities- Security awareness training- Communication facilities and protocols- Security emergency drills- Legal indemnity for security breaches- Liaison with law enforcement agencies

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The Security Clauses in the Level 2 documents provide generic security management clauses for the ContractHolder to select from in making his contracts. This is not an exhaustive list. Particular specifications arisingfrom security risk assessments may be added here. The other model documents also exist to give general guidanceand may be modified for use in a particular contract.

3.0 ROLE OF SECURITY DEPARTMENT

SPDC’s Security Department is the process owner for Security Management. This process ownership coverspolicing and security operations, intelligence gathering, analysis and evaluation, liaison with law enforcementagencies, expert security advice, security warnings, and security notifications. This also includes co-ordinationof all security emergency response in SPDC.

Responsibility for security management, from a business integrity and business controls point of view, restswith the line. To this extent, it is the Contract Holder’s responsibility to identify the security aspects andimplications of the contract in view, and to engage Security Department for professional input in identifyingthe security threats and developing appropriate controls to manage them. Security Department may also becontacted to participate in HSE Kick-Off meetings and to support HSE and Security audits depending on thesensitivity of the particular contract.

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LEVEL 2: MODEL DOCUMENTS, TEMPLATES AND FLOWCHARTS

Each model document and template is preceded by a description of what it is, how it is to be applied in thecontract, and where it fits into in the documentation of the contract.

APPENDIX I – SECURITY CLAUSES IN CONTRACTS

Description Security Clauses in Contracts is split into three parts: Generic Clauses, Special Clauses,and Scope of Work inserts.

Application The Generic Security Clauses are to be inserted in the space provided in the HSESpecification by the Contract Holder where applicable.The Special Clauses are to be inserted in the space provided in the HSE Specification bythe Contract Holder where applicable.The Scope of Work inserts are to be included in the contract scope of work whereapplicable by the Contractor Holder.General Note: The HSE Specifications incorporating the HSE Clauses selected by theContract Holder form part of the Specimen Contract Document that is included in theTender Package. This enables the Contractor to understand the HSE and S requirements inthe contract that is being put to tender.

Generic Clauses1. The CONTRACTOR’S attention is drawn to his responsibility for Security Practices and Statutory

requirements relating to Shell’s ’Security Policy’ and ’Guidelines On The Use Of External Security Agencies’,Shell Policy on Access Control, and Shell’s ’Guidelines on The Use of Force’. The CONTRACTOR is deemedconversant with the requirements of these Shell Policies, Procedures, and as well as the ’Rules for Guidancein the Use of Firearms by the Police’ as contained in NPF Force Order 237.

2. Notwithstanding the infrastructure measures taken by SPDC, in addition to those taken by the LocalAuthorities to enhance the security of personnel and assets involved in the contract, the Contractor shall besolely responsible for the security of its personnel and assets including its sub-contractors.

In addition to (2) above, the Contractor shall perform all duties in accordance with the contract site SecurityPlan. 3. The Contractor shall ensure that her personnel and that of any sub-contractor abide by the security policy and

other guidelines and instructions that may be issued from time to time by SPDC in connection with theperformance of the contract.

4. The Contractor shall use local staff from the local community where the contract is to be executed for securityduties unless he can demonstrate to SPDC that such is reasonably not possible.

Special Clauses5. The Contractor is responsible for its own security contingency planning and emergency response, e.g. kidnap,

extortion, civil unrest and emergency evacuation.6. The Contractor shall have a formal system for the management of security that is in line with SPDC’s Statement

of General Business Principles and that ensures SPDC’s post-contract operations are not adversely affectedeven in the long-term. This management system shall be documented, fully implemented and effective inachieving the aims and objectives of the Contractor’s Security Policy. The Contractor shall demonstrate toSPDC that this system is working to the satisfaction of SPDC as a condition for SPDC agreeing to thecommencement of the work.

7. The Contractor shall ensure that the security systems of its Sub-Contractors and suppliers are in line with itsown. Contractor can allow its sub-contractors to apply their own procedures when Contractor has demonstratedto the satisfaction of SPDC that these systems are in line with those of the Contractor and SPDC. This however,shall not relieve the contractor from the sub-contractor’s failure to exercise proper security procedures.

8. The Contractor shall inform SPDC of the names of sub-contractors and obtain SPDC’s written acceptanceprior to their engagement.

Scope of Work Insert1. Security staff provided by the Contractor shall guard, patrol, and respond to incidents, including static

surveillance.2. The Contractor shall provide appropriate physical protection measures, including the installation and

supervision of a perimeter fence to prevent unauthorised access to the Contract site.

APPENDIX II – CONTRACTOR UNDERSTANDING OF SECURITY REQUIREMENTS

Description This document obtains the Contractor’s signed confirmation that all the SecurityManagement requirements, including policies, guidelines, procedures, and infrastructureis clearly understood.

Application This declaration form is to be included in the ‘Forms of Tender’ and returned with theContractor’s Tender Package for evaluation. Thereafter, it will be incorporated into theContract.It is an assurance mechanism to facilitate the Contract Holder’s demonstration of theintegrity of security risk management controls before commencement of the contract.

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CONTRACTOR UNDERSTANDING OF SECURITY REQUIREMENTS

D E C L A R A T I O N

We confirm that we have read and understood SPDC’s ’Security Policy’ and ’Guidelines on the Use of ExternalSecurity Agencies’, and the ’Access Control Procedure’.

We hereby declare that we agree to abide by the requirements set out above.

We hereby appoint:

Mr/Mrs/Miss __________________________________ who is our Authorised ContractorSite Representative as the person who will be responsible for ensuring those security practicesare observed during the execution of the CONTRACT.

Signed:

Authorised Contractor Representative:

Date:

Contractor’s Name:

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APPENDIX III – SPDC INFORMATION SECURITY POLICY

Description The SPDC Information Security Policy underpins the contractor’s responsibility tomanage information assets with the same degree of care and protection as tangible.

Application The SPDC Information Security policy will form part of the ‘Forms of Tender’ to informthe Contractor of SPDC’s expectations on the subject. This will ensure that the Contractorunderstands these expectations and adopts them as he prepares his tender submission. Also, within the Articles of Agreement there are Sections dealing with Secrecy, ProprietaryInformation and other matters relating to information security and information assetsprotection.

7


The Shell Petroleum Development Company Of Nigeria Limited

INFORMATION SECURITY POLICY

It is SPDC’s policy that all information used and generated in carrying out business activities,

shall be managed as a corporate asset and be safeguarded accordingly so as to stimulate

continuous business improvement and innovation.

Information security and access rights shall be defined and documented.

Data Custodians (Asset Holders) shall enforce information security standards, ensure the

integrity of data within their area of responsibility and comply with all statutory requirements

and shell Group Code of Practice for Information Security Management.

B.R.H. Anderson

Managing Director, SPDC of Nigeria Ltd.

15th April, 1996

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APPENDIX IV – SPDC STATEMENT OF SECURITY POLICY

Description The SPDC Statement of Security Policy commits the Contractor to manage security in thecourse of the contract in accordance with the contents of the policy. This includesguidelines on rules of engagement and the imperative to respect Human Rights.

Application The Statement of Security policy will form part of the ‘Forms of Tender’ to inform theContractor of SPDC’s expectations on the subject. This will ensure that the Contractorunderstands these expectations and adopts them as he prepares his tender submission. Compliance with it is mandatory. The Contract Holder will monitor for compliancerecognising that it is one of the documents referenced in the HSE Specifications of theTender Package and the Contract.

9


The Shell Petroleum Development Company Of Nigeria Limited

STATEMENT OF SECURITY POLICY

It is SPDC’s policy to identify, evaluate and manage the security risks to personnel, property,information and business image arising from malicious practices, crime, civil disorder, actsof terrorism or armed conflict.

Implications of this Policy:

The implications of this Policy with respect to risks to personnel and property are:

(i) If sufficient physical threats exist against our people and property, we would expectthe forces of law and order of the State to give us appropriate protection. The rightto use force rests with the State. In pursuance of the mission and objectives of thesecurity management system, line management will draw on the services of SPDC’ssecurity department and, through the latter, the support of the SPDC SupernumeraryPolice Unit and the Nigeria Police Force as required.

(ii) In extraordinary circumstances, particularly where the lives of personnel are at risk,or where Key National Facilities are under threat, SPDC recognises that thedeployment by the Government of sections of the Nigerian Armed Forces may benecessary for as long as is required to restore and maintain law and order, if protectioncannot be achieved by other means.

(iii) This policy will be pursued in compliance with SPDC’s Guidelines on Use of ExternalSecurity, insofar as SPDC is able to exercise control.

(iv) In pursuing this policy, SPDC will do all it can to ensure that human rights arerespected.

Ron van den Berg, Managing Director1st November 2000

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Security Policy1st November 2000

APPENDIX V – CONTRACTOR SECURITY PLAN GUIDELINES

Description The SPDC Statement of Security Policy commits the Contractor to manage security in thecourse of the contract in accordance with the contents of the policy. This includesguidelines on rules of engagement and the imperative to respect Human Rights.

Application Contractor Security Plan Guidelines provides a menu of the minimum requirements foreffective site security in a contract. This particularly applies to contracts executed in fieldlocations where the contractor has to rely solely on his own security arrangements.

Plan shall include but not be limited to the following: • Access and exit control to/from the project site Correct/appropriate

• Where necessary, installation of perimeter fencing and lighting of project site to preventunauthorised access and to ensure operational integrity, as well as supervision of thefence.

• Security incident response procedures (see flowcharts in Appendix VII)

• Arrangements with local law enforcement agency on response to and management ofdisruptive actions that may potentially affect the progress of the contract to becommunicated through the Contract Holder to SPDC Security Department.

The Contract Security Plan will be endorsed by the Contract Holder at the Kick-OffMeeting before the commencement of the contract. In Contracts where the security risk issignificant the Contract Security Plan will be reviewed by a Security Adviser from SPDC’sSecurity Department who shall be invited by the Contract Holder to participate in theHSE Kick-Off meeting.

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CONTRACTOR SECURITY PLAN GUIDELINES

Contract No:_________________________________

Objectivesi. Deploy resources to ensure adequate security cover throughout the duration of the contract.ii Transparent business controls with respect to material, personnel and equipment inventory, and the

movement of these at contract sites.iii Training and awareness to reinforce and improve the level of security preparedness of all persons engaged

in the execution of the contract.iv Protection of persons and assets deployed in delivering the contract, including plans, procedures and

activities designed to foster greater security.

Proceduresi. All staff shall be issued with and made to wear identity cards at all timesii Movement registers shall be maintained for staff and for visitors with time, mission and destination columns

provided.iii Training programmes, seminars or courses shall be organised for the singular purpose of educating staff and

improving their level of security consciousness.iv. High-level information management shall be emphasised.v. Company vehicles are to be fitted with appropriate security devices or appliancesvi. Working in isolation shall not be allowed.vii. Cases of security defaults and/or lapses shall be thoroughly investigated and appropriate action taken.

Strategiesi. The Contractor shall provide day and night guards at the project site.ii. Contractor shall appoint a Security focal point for each project.iii. Material/equipment and personnel inventory shall be taken on a daily basis at the close of each day’s activities.iv. Contractor focal point shall ensure the establishment of a fluid working interface with SPDC sponsor

department/Security department.v. Contractor shall provide regular surveillance at site especially in areas that a considered volatile.vi. Head count shall be undertaken at the beginning and end of each day’s work.

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APPENDIX Va – SECURITY INCIDENT REPORTING PROCEDURE

Description Appendix Va and Vb detail how and to whom security incidents are to be reported whileexecuting the contract.

Application Contract Holders shall insert in their Scope Of Work whenever applicable the securityincidents reporting requirements in Appendices Va and Vb.These reporting requirements shall be discussed further during the HSE Kick-Offmeeting.

SECURITY INCIDENT REPORTING PROCEDURE

A security incident that occurs during the exercise of the contract shall be reported as follows:

1st Level Report (Verbal)

S/NO Name Designation Location Tel. No.

1

2

3

4.

Be sure to supply the following details:

• Name of caller• Location of caller• Nature of incident• Description of the situation or incident• Actions already taken (if any), and actions to be taken urgently (if any)• Projected incident potentials (aspects, impacts)• Identity of principal players (where possible)• Any other information relevant for the containment of the incident.

It is imperative to emphasis that important details of any incident are helpful tools for guarding against re-occurrence. Employeesare therefore encouraged to observe unfolding events and take mental pictures of incidents as they occur or when first noticed.Key issues that should guide the thought processes of employees include identification of the flash point of any incident(s),principal actors, and the contributing factors that culminated in the incident.

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APPENDIX Vb – SPECIMEN INCIDENT REPORT FORM

2nd Level Report (Written)

NAME OF CONTRACTOR:

CONTRACT NO:

S/NO. Description Remarks

01 Nature of Incident

02 Potential cause(s)

03 Incident description

04 Estimated no. of persons involved

05 Exact Location

06 Principal Actors

07 Equipment/Materials affected

08 Victims (if any)

09 Incident controlled?

10 Suggested remedy

11 Future precaution

Reporter’s Name Contractor Site Supervisor:

Sign: Sign:

Date: Date:

cc: Contract Holder, Company Site Representative

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APPENDIX VI – GUIDELINES ON USE OF EXTERNAL SECURITY

Description This guideline is a mandatory requirement with which every SPDC contractor mustcomply. It states when and how state external security forces are to be engaged inaccordance with the law.

Application This guideline is to be discussed during the HSE Kick-Off meeting. It is the ContractHolder’s responsibility to ensure that its contents are understood and applied by theContractor.

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SPDC GUIDELINES ON USE OF EXTERNAL SECURITY

Signed as received and Understood:Position:

Contents: Guidelines on the Use of External SecurityAppendices A, B.

Approved: Ron van den BergManaging Director

Rev 19th July, 1999

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1.0 INTRODUCTION

Security is an integral part of the overall corporate business. It is not only concerned with physical protectionactivities but is also part of business planning, with responsibilities in the line which include:

• Identification and evaluation of threats and vulnerabilities• Risk assessment (threat and vulnerability = level of risk)• Introducing and managing appropriate levels of protection against malicious and criminal activities.

This policy replaces that on the same subject dated 6th May 1997 that is hereby withdrawn.

Security PolicyIt is SPDC’s policy to identify, evaluate and manage the security risks to personnel, property, information andbusiness image arising from malicious practices, crime, civil disorder, acts of terrorism or armed conflict.

Implications of this Policy with respect to personnel and property are:(i) If sufficient physical threats exist against our people and property, we would expect the forces of law and order

of the State to give us appropriate protection. The right to use force rests with the State. In pursuance of themission and objectives of the security management system, line management will draw on the services ofSPDC’s security department and, through the latter, the support of the SPDC Supernumerary Police Unitand, the Nigeria Police Force as required.

(ii) Where the lives of personnel are at risk, SPDC recognises that the deployment of Nigerian Armed Forces bythe Government in support of the Police and civil authorities may be necessary for as long as is required torestore law and order, if protection cannot be achieved by other means.

(iii) SPDC and it’s contractors will not operate in an environment where the continuous deployment of NigerianArmed Forces is required to comply with the above policy statement, except where deployment is requiredby the Government for the protection of key national facilities.

(iv) This policy will be pursued in compliance with this document, insofar as SPDC is able to exercise control.(v) In pursuing this policy, SPDC will do all it can to ensure that human rights are respected.

Implementation:• security risks shall be identified and documented for all essential activities and work locations.• security plans shall be developed in consultation with SPDC’s security advisers describing the security

arrangements and how they are to be managed:• contractors shall be responsible for arranging and managing their own security and must comply with the

“Use of Force” and other security guidelines as issued by the SPDC’s Security Department.

17


SPDC Guidelines on Use of External Security.Rev 19th July, ’99

2.0 OBJECTIVE

SPDC’s security policy recognises that security can never be absolute and protective measures can never be appliedin one standard form. This guideline therefore emphasises site security as a line responsibility. It also emphasisesthe paramount importance of compliance by line departments and their contractors with SPDC’s securityguidelines, under all circumstances. The objectives of this guideline are therefore to:i) Provide departments and their contractors with basic guidelines on the best way to manage security at their

specific work sites.

ii) Encourage closer liaison between Security, other departments, and their contractors who engage externalsecurity services for the protection of Company activities.

3.0 MINIMUM PHYSICAL SECURITY STANDARDS FOR FACILITIES

Where the services to be provided involve the design and construction of new facilities, such security measuresmust conform with the Security Improvement Design Measures (SIDM) as outlined in SPDC’s Security Designmanual. Topics covered in the SIDM include:

• Fencing• Gates• Locks• Lighting• Intruder Detection Systems

4.0 SECURITY AGENCIES

4.1 Private Security Services4.1.1 Local Watchmen/Guards (Unskilled/Semi-skilled):These are usually indigenes of the community and are unarmed. They should only be engaged for barrier/gateservices and guarding of sites where equipment is stored.

4.1.2 Licensed Security Services (Skilled):These organisations employ the services of trained civilian guards who are unarmed. They will operate as in 4.1.1above.

4.2 Government Security Agencies4.2.1 Supernumerary Police (SPY)SPDC uses the services of the Supernumerary Police for the protection of property owned or controlled by theCompany, in accordance with the Police Act of Nigeria and with the authority of the Inspector General of theNigeria Police Force (NPF).

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SPDC Guidelines on Use of External Security.1. Rev 19th July, ’99

Every SPY Police officer:(a) is appointed in respect of the area of the Police province or, where there is no police province, the police

district or police division in which the property which he is to protect is situated(b) is employed exclusively on duties connected with the protection of that property;(c) has the powers, privileges and immunities of a police officer in the police area in respect of which he is

appointed;(d) is, subject to the restrictions imposed by paragraphs b and c above, a member of the force for all purposes

and is accordingly subject to the provisions of the Police Act and in particular the provisions relating todiscipline.

4.2.2 The Nigeria Police Force (NPF):This is the recognised Federal Government law enforcement agency, which has the primary responsibility ofmaintaining law and order and ensuring security of the life and property of all the people in Nigeria. Each Stateis under the command of a Commissioner of Police. The States have area commands and divisional headquartersheaded by Area Commanders and Divisional Police Officers (DPO’s) respectively.

4.3 Use of Government Security Agencies4.3.1The services of the Nigeria Police Force (NPF) may be engaged through the Divisional Police Officer responsible for the area in which SPDC activities are being carried out. Duty allowances are payable tosuch detachments of the NPF. The appropriate rates are obtainable from the Security Department.

4.3.2SPDC or any contractor working, or about to work for SPDC will not engage the services of any Armed Forces,for the protection of SPDC facilities and work locations or, for the protection of transportation to and from suchfacilities and locations. However, in the event of a serious security incident which the NPF are unable to control,the Armed Forces may be brought in at the instigation of Government to help to restore law and order. SPDCpersonnel, contracting firms and contractors working for SPDC must pull out of the area until an amicableresolution of the crisis is achieved. Under no circumstances shall SPDC personnel or contractor staff operatein an environment where the continuous deployment of Nigerian Armed Forces is required to complywith the SPDC Security Policy, except where deployment is required by the Government for theprotection of key national facilities.

5.0 USE OF FORCE

5.1 IntroductionLike all Shell Companies, SPDC has the responsibility to protect the health and safety of their employees andalso to safeguard the investment (e.g. plant, buildings, etc.) of their shareholders. SPDC has always agreed thatthe right to use force rests with the State. If sufficient physical threats exist against our people and property wewould expect the forces of law and order of the State to give us appropriate protection. In such circumstancesShell managers would be expected to liaise with National, Regional and Local Authorities as appropriate on suchmatters.

19


SPDC Guidelines on Use of External Security.1. Rev 19th July, ’99

5.2 Use of ForceIf armed NPF are assigned to guard SPDC facilities, their presence alone may be sufficient to deter illegal acts.However, if the threats are sufficiently high they may have to use force to protect people and property. In suchcircumstances they must be given clear and unambiguous instructions and training, by the Divisional HeadSecurity in SPDC, or his delegate prior to deployment, on when and how force may be used and that specificallythey must:

• respect human dignity and the human rights of all persons• attempt non-violent means first; only use force when necessary• use only the minimum force required, and keep it proportional to the threat• operate strictly within the law and the authority given to them to use force• minimise damage and injury• report any use of force as soon as possible to their site supervisor who has responsibility for the NPF personnel.• render medical aid to injured persons, including offenders• be told that they will be accountable for any excessive use of force

Armed NPF must be issued with pocket-sized cards detailing the requirements for the use of force. A sample format is at Appendix A.

5.3 FirearmsAs a general rule the carriage and use of firearms is restricted to law enforcement authorities and armed forces;the former to maintain internal law and order and the latter to defend the national interests against externalaggression. Consequently, where armed protection against violent crime is necessary for the preservation of lifeand property, SPDC will inform the National Law Enforcement Authorities.

The security risk conditions in Nigeria make it necessary for SPDC to have armed protection under certaincircumstances. In such cases, SPDC uses NPF personnel for such duties.

5.4 Armed NPFShould armed NPF be used, the following minimum standards must be applied, in consultation with the NigerianPolice Authorities.

• Criteria to identify the individual’s suitability to carry and use firearms• definition of weapon type and type and quantity of ammunition, allowing for differentiated use of force and

firearms• defined safety and maintenance rules for both weapons and ammunition• defined custody, issue and return procedures for both weapons and ammunition• defined Rules of Engagement and individual’s responsibilities and accountability• training standards, records and individual certification of competence• incident reporting and investigation procedures.

All Armed NPF personnel are expected to:• be selected individually as suitable for using a weapon• be trained to the appropriate standard, with refresher training and live firing at least every 6 months• carry a personal copy of the Rules of Engagement and be checked for understanding of it before each armed

duty.

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5.5 Rules of EngagementSPDC does not have direct control of the NPF. NPF works to Force Order 237 for the use of firearms, which isat Appendix B.

6.0 NOTIFICATION OF INCIDENT

6.1 All security incidents, which occur on work sites, must be reported immediately by the security officer tothe sponsor department, who must in turn notify the Security Department.

6.2 A formal report of the incident must be made by the superior officer in writing to the Security Departmentwithin 24 hours of occurrence. The report should state the date, time, place, nature of incident and actiontaken or required.

6.3 The incident must also be promptly reported to the Divisional Police Officer of the NPF in whose jurisdictionthe work site is located.

7.0 ACCOUNTABILITY FOR THE USE OF FORCE AND FIREARMS

7.1 Superior officers shall be held responsible for the actions of the police personnel under their command if anindividual the superior officer knew or should have known of abuses but failed to take concrete action.

7.2 Officers who refuse unlawful superior orders shall be given immunity.7.3 Officers who commit abuses of these rules shall not be excused because they were following superior orders.

8.0 AFTER THE USE OF FIREARMS

8.1 Medical Aid is to be rendered to all injured persons.8.2 The relatives or friends of injured persons are to be notified.

9.0 COMMUNITY AFFAIRS, SAFETY, HEALTH, ENVIRONMENT & SECURITY (CASHES)GUIDELINES

Every external security agency engaged must adhere to SPDC CASHES guidelines as highlighted below:

i) Security duties are to be undertaken in a manner which ensures the health and safety of SPDC staff, contractorpersonnel and third parties and which considers the protection of the environment.

ii) Recreational swimming is prohibited in creeks, ponds or any other open water at or near SPDC facilities.

iii) Security personnel who are assigned to protect swamp and water-borne facilities must have a swimmingcertificate issued by SPDC, unless granted special dispensation by Management.

iv) All persons must wear life vests on water-borne facilities.

v) Open fires in, or close to SPDC facilities or locations, are prohibited.

21



10.0 GENERAL GUIDELINES

These Guidelines are mandatory for all security agencies whose services may be engaged. Copies of the appendicesin weatherproof pocket-sized form must be provided to every Policeman or security guard engaged by SPDC orits contractors.

11.0 RESPONSIBILITY

The most senior Shell or contractor representative (where there is no Shell presence) on site, shall have ultimateresponsibility for the implementation of these policies and guidelines.

22



APPENDIX ’A’ – GUIDELINES TO EXTERNAL SECURITY PERSONNEL ON DUTY IN SPDCLOCATIONS/FACILITIES

1. You must always operate strictly within the law and the authority given to you. You must respect all SPDCrules and regulations. In particular, you must adhere to the Force Order No. 237 “Rules of Guidance in theUse of Firearms by the Police” if you are empowered to carry a weapon.

2. You have a responsibility to prevent crime, e.g. piracy, armed robbery, theft, etc., to ensure the safety andsecurity of personnel and property within SPDC facilities.

3. You should act as a deterrent to intending or potential saboteurs or thieves who pose a threat to SPDC peopleand property.

4. You must ensure that all persons entering SPDC locations and facilities are authorised to do so.

5. You must report promptly to base any case of community disturbance in your area of operation.

6. You must never be involved in roadblocks or any other unauthorised activities that will tarnish the Company’simage.

7. You must always be polite in any interactions involving Host Communities, SPDC staff, their spouses anddependants.

8. You must always seek clarification from a senior Police Officer when in doubt.

9. You must not engage in recreational swimming around SPDC facilities.

10. Any act of indiscipline of any sort on your part will be subject to disciplinary action.

11. You must attempt non-violent means of deterring illegal acts first; only use force when necessary.

12. You must attempt to minimise damage and injury and render aid to any injured persons.

13. In the event of any use of force, it should be reported as soon as possible, to a supervisor. A written report isrequired to be submitted within 12 hours of the incident.

14. On no account must firearms be used on any person who may be engaged in protesting anddemonstrating against SPDC.

15. You must respect and protect human dignity and uphold the human rights of all persons.

23



APPENDIX ’B’ – FORCE ORDER NO. 237RULES FOR GUIDANCE IN THE USE OF FIREARMS BY THE POLICE

Orders for Opening Fire:

1. General RulesIn all situations, the minimum force necessary should be used. Firearms must only be used as a last resort.

The weapon must always be made safe, i.e. no live ammunition is to be carried in the breech or, in the caseof an automatic weapon, the working parts are to be forward; unless an order is given to carry a live round in thebreech, or the intention of the policeman is to open fire.

2. ChallengingA challenge (by shouting “Stop, or I fire”) must be given before firing, unless -

(a) To do so would increase the risk of death or grave injury to the policeman or any other person;(b) The policeman and others are under armed attack.

3. Opening FireA Police Officer may use firearms under the following circumstances:

(a) When attacked and his life is in danger and there is no other way of saving his life.(b) When defending a person who is attacked and he believes on reasonable grounds that he cannot otherwise

protect that person being attacked from death.(c) When necessary, to disperse rioters or to prevent them from committing serious offences against life and

property. Note that 12 or more people must remain riotously assembled beyond a reasonable time, after thereading of the proclamation, before the use of firearms can be justified.

(d) If the policeman cannot, by any other means, arrest a person who takes to flight in order to avoid arrest:provided the offence with which he is charged or has been convicted of, is a felony or misdemeanour.

.

APPENDIX VII – SECURITY EMERGENCY FLOWCHARTS

Description The flowcharts provided in Appendix VII describe in generic terms the preferred way to respondto various security emergencies.

Application It is the responsibility of the Contract Holder to ensure that the Contractor receives a briefingon the use of the security response flowcharts during the HSE Kick-Off meeting. This willprovide the means for exercising the Contractor’s responsibility in the Scope of Work that detailsthe reporting requirements for security incidents among others.

24



SECURITY EMERGENCY RESPONSE

LABOUR CRISIS

25


Start

Labour Crisis

NO

NO

YES

YES

NOYES

Threat to Life and Property?

Site Supv. informsPolice on Guard

on Site

Site Supervisordialogue

with Workers

Reach Compromise?

Site Supervisor inform SPDC

Contract Sponsor

Contract SponsorAlert SPDC

Security

Issue Resolved?

Safeguard Materials & Equipment,

Close Site

Proceed with Normal Project

Activities

StopOperation

Inform Contractor

Management

SECURITY GENERAL EMERGENCY PLAN

26


Start

Stop Operation

NOYES Is situation onsite normal?

Is there a strike or civil disturbance?

Go to Labour

Crisis FC

Go to Strike

FC

Adhere to security strategies and procedures in the Security Plan.

Ensure maintenance of good communiaction network with SPDC contract sponsor.

Go to Community

Disturbance FC

Is there labourcrisis?

Is there community disturbance?

NO

NOYES

YES

YES


STRIKE / CIVIL DISORDER

27


Start

NO

NO

YES

YES

Strike?

Civil Disorder that affects

site operations?

Contractor informs SPDC

Contract Sponsor

Site Supervisordetermines best way to suspend site works before commencement

of strike action

Continue Operation

StopOperation

YES

Inform SPDCContractSponsor

Will site workers

participate?

Site Supervisor suspends site operations

Security Guards/ Police secure materials

and equipment

SECURITY EMERGENCY RESPONSE COMMUNITY DISTURBANCE

28


Start

NO

NO

NO

YES

YES

YES

YES

CommunityDisturbance

on site?

Is communitydisturbance outside

the premises?

Site Supervisor inform project site personnel.

Remain calm and abstainfrom exchange of words.

First person to sight crowd should alert site supervisor. All

workers on site to be alerted.

Continue Operations

StopOperation

Site Supervisorto inform contractor

Site Supvervisor to dialogue with comm.

Thu Clo

Contractor to inform SPDC Contract Holder to

investigate incident

CompromiseReached?

Inform SPDCSecurity Dept.

Site Supvervisor informs SPDC

Contract Sponsor

All Personnel on site to follow

security instructions

SPDC Contract Sponsorinteract and respond

Is crowdviolent?


STEALING/THEFT

29


Start

NO

NO

YES

YES

Thefton site?

Continue Operations

Gates to be closed and thorough search conducted by guards;

surroundings to be combed

StopOperations

NO

SPDC Contract Holdertakes necessary

action e.g. investigate incident. Report to SPDC

Security Dept.

Report to SiteSupervisorand Police

Site Supervisorinforms SPDC

Contract Holder

Arrest culprit if identified and hand over to Police.

Inform SPDC Security Dept.

Stolen Item Found?

Outside SitePremises?