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PRODUCT PAPER

MANAGEMENT SYSTEMS AND COMPLIANCEProduct and Service Paper Enterprise Risk Management Development

METHODOLOGY:

The development of an ERM system as proposed by Dynamic Risk is fact-based and method driven, relying for guidance on appropriate and selected elements of industry recognized asset management and certification programs such as Publically Available Specification 55 (PAS 55) “Standard for Optimized Management of Physical Infrastructure Assets”, International Standard of Operation (ISO) 55000 “Standard For Asset Management” and ISO 31000 “Standard for Risk Management - Principles and Guidelines.” (Refer to Figure 1. Enterprise Risk Management Development Process Diagram)

DESCRIPTION:

An enterprise risk management (ERM) system development comprises a series of processes and linkages that must encompass the present risk management framework and fit within the overall corporate and asset management system and developed safety culture. Dynamic Risk leverages previous risk management studies and models, integrity assessment results and inspection datasets in application with appropriate elements of the consensus industry standards to address the three key elements of pipeline safety: process safety, safety culture and asset management.

PRODUCT PAPER

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An ERM development includes the following elements:

• Operational Risk

• Risk management framework - An initial core system element; Asset management plan; Identification of threats; Assessment of risk.

• Risk register - Asset family risks are quantified within a risk matrix.

• Mitigation plan - Programs are designed to address the identified threats.

• Enterprise Risk

• Risk register integration - Corporate Risks are aligned with significant asset family risks.

• Dashboard - Summary presentation to identify for stakeholders the top integrated risks across all lines of business.

• Performance measuring - a means of measuring and quantifying levels of performance gaps.

• Continuous improvement - a means of incorporating “lessons learned”.

• Auditing - A means of menu driven reporting for purposes of compliance auditing.

• Investment planning - A consistent risk-based prioritization across all asset families to drive funding and investment.

• Emergency work - Allows for conditional changes within asset families that may drive the requirement for immediate mitigation response.

BENEFITS:

By assessing, managing and integrating risks from both Operational and Enterprise points of view, a pipeline operator can better manage risk and mitigation interdependencies and drive for consistency among all lines of business.

DELIVERABLES:

A fully developed ERM model that considers all lines of business, is driven by available information, knowledge, and analytics, and produces an overview of the enterprise risk through a dynamic dashboard presentation.

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PRODUCT PAPER

Risk Management Framework

Prior Studies

Available Data, Information , and

Knowledge

Corporate Risk Integration

Challenges and Constraints

USA Headquarters

10001 Woodloch Forest Dr Suite 250 The Woodlands, TX 77380

(832) 482-0606

Canadian Headquarters

Suite 1110 333 – 11 Avenue SW Calgary, Alberta, T2R 1L9

(403) 547-8638

ENTERPRISE RISK MANAGEMENT DEVELOPMENT PROCESS DIAGRAM

TASK 1 Situational

Analysis of Risk Management Practices and

Present Status

ReviewRisk Matrix

Identification of Asset threats

and Assessment of Risk

Align Corporate Enterprise Risks with Significant

Asset Family Risks

Address Identified Threats Within

the Risk Register

Identify Top Integrated Risks

Risk-Based Prioritization

Incorporate “Lessons Learned”

Across All Lines of Business

Menu Driven Reporting

Within a Particular

Asset Family

Within a Particular

Asset Family

Management Driven

Awareness

Assent Management

Plan

TASK 2 Operational Risk

Management Framework

TASK 3 Analytics to

Support Risk Register/

Operational Risk Register and

Mitigation Plan

TASK 4 Enterprise Risk

Matrix ERM RiskRegister Integration

TASK 5 Dashboard Visual

of ERM Results

TASK 6 Investment

Planning Process and Protocols

TASK 7 Auditing and Continuous

Improvement Process

Report Detailed Objectives

and Budget for Tasks 2-7

Risk Management Process Gaps

Status of Risk Management Process and Summary of

ERM Integration Constraints

Current Data, Information, and

Knowledge

Key Current Constraints and Inconsistencies