Safety and Environmental-Management Requirements for Offshore Operations

5. Operating procedures (§ 250.1913) – This element requires operators to develop and implement written operating procedures that provide instruction for conducting safe and environmentally sound activities involved in: initial startup; normal operations; all emergency operations; normal shutdown; startup following a turnaround or after an emergency shutdown; and bypassing and flagging out-of-service equipment. This element also requires operators to discuss the safety and environmental consequences of deviating from the operating procedures and the hazards presented by the chemicals used in the operations.  

6. Safe work practices (§ 250.1914) – This element requires operators to develop and implement written safe work practices designed to minimize the risks associated with operations, maintenance, modification activities and the handling of materials and substances that could affect safety or the environment. This element also requires operators to document contractor-selection criteria and obtain and evaluate information regarding the contractor's safety record and environmental performance

7. Training (§ 250.1915) – This element requires operators to establish and implement a training program so that all personnel are trained in accordance with their duties and responsibilities to work safely and are aware of potential environmental impacts. The training must address: operating procedures; safe work practices; emergency response and control measures; stop-work authority; ultimate work authority; the employee-participation plan; reporting unsafe working conditions and recognizing and identifying hazards; and constructing and implementing JSAs.

SEMS Elements (continued)

8. Mechanical integrity (§ 250.1916) – This element requires operators to develop and implement written procedures that provide instructions to ensure the mechanical integrity and safe operation of equipment through inspection, testing and quality assurance. The mechanical-integrity program must encompass all equipment and systems used to prevent or mitigate uncontrolled releases of hydrocarbons, toxic substances or other materials that may cause environmental or safety consequences. 

9. Pre-startup review (§ 250.1917) – This element mandates that the commissioning process must include a pre-startup safety and environmental review for new and significantly modified facilities. The process must ensure that: the construction and equipment are in accordance with applicable specifications; safety, environmental, operating, maintenance and emergency procedures are in place and are adequate; safety and environmental information is current; hazards-analysis recommendations have been implemented as appropriate; training of operating personnel has been completed; and programs to address management of change and safe work practices are in place.

10. Emergency response and control (§ 250.1918) – This element requires the operator to implement emergency response and control plans. The emergency response and control plans must include an emergency action plan; an emergency control center; and training and drills incorporating emergency response and evacuation procedures.

11. Investigation of incidents (§ 250.1919) – This element requires operators to establish procedures for investigating all incidents with serious safety or environmental consequences and implementing a corrective-action program. The investigation must address: the nature of the incident; the factors that contributed to the initiation of the incident and its escalation/control; and the recommended changes identified as a result of the investigation. 

12. Auditing (§ 250.1920) – This element requires operators to perform an independent audit of the program within two years of the initial implementation of the SEMS program and every three years afterward. An accredited auditor service provider must perform the independent audit. The audit plan must be submitted to the Bureau of Safety and Environmental Enforcement at least 30 days before the audit, and the bureau reserves the right to modify the list of facilities that a facility proposes to audit. The operator is required to submit the audit report and a plan for addressing any of the deficiencies identified to the bureau for review and approval within 60 days after completion of the audit.

13. Recordkeeping (§ 250.1928) – This element requires operators to ensure that all documents are maintained and kept for six years, except for certain documents that need only be kept for two years.  The operator must maintain a copy of all SEMS program documents at an onshore location and make them readily available to the Bureau of Safety and Environmental Enforcement upon request. 

14. Stop-work authority (§ 250.1930) – This element requires operators to ensure the capability to immediately stop work that is creating imminent risk or danger and grant all personnel the responsibility and authority, without fear of reprisal, to stop work or decline to perform an assigned task when an imminent risk or danger exists.

15. Ultimate work authority (§ 250.1931) – This element requires operators to have a process to identify the individual with the ultimate work authority at the facility and over the entire operation.  The operator must ensure that all personnel clearly know who has UWA and who is in charge of a specific operation or activity at all times. This element also requires that the operator give the individual with the UWA the authority to pursue the most effective action necessary in that individual's judgment for mitigating and abating the conditions or practices causing an emergency.

6. Employee-participation plan (§ 250.1932) – This element requires management to consult with its employees on the development, implementation and modification of the SEMS program and develop a written plan of action for how the employees will participate in the SEMS program. This element also requires management to ensure that employees have access to sections of the SEMS program that are relevant to their jobs.

17. Reporting unsafe working conditions (§ 250.1933) – This element requires operators to implement procedures for all personnel to report unsafe working conditions and post a notice that contains the reporting information at the place of employment in a visible location frequently visited by personnel.

Enforcement

As part of its enforcement authority, the Bureau of Safety and Environmental Enforcement will evaluate an operator's compliance with the SEMS standard, including whether the program addresses all required elements and is effectively protecting worker safety and health and the environment. 

These evaluations may be random or based upon an operator's prior performance and compliance history (30 CFR § 250.1924).  

If the inspector identifies safety or non-compliances issues, the Bureau of Safety and Environmental Enforcement may direct an offshore operator to conduct an audit of its SEMS program. This is in addition to the audit required under Section 250.1920, and the operator will be responsible for all of the costs associated with this audit (30 CFR § 250.1925).  

If the inspector finds a violation of any safety regulations or determines that an operator's SEMS program is not in compliance with regulatory requirements, the Bureau of Safety and Environmental Enforcement may issue the operator an "incident-of-noncompliance" (INC) citation and significant civil money penalties, and may rescind an operator's lease or permit entirely (30 CFR § 250.1927).  

These enforcement mechanisms can have a greater impact on the operator's business than those issued under the Occupational Safety and Health Act of 1970. 

Depending on the severity of the violation, the operator will be issued either a "warning" or "shut-in INC."  These classifications are similar to the "serious" and "other-than-serious" classifications issued under the OSH Act, except the Bureau of Safety and Environmental Enforcement has the authority to stop operations for a "shut-in INC" until a violation is corrected.  

 ➤ A "warning INC" is issued when the violation is not severe or life-threatening. The operator will be expected to correct the violation within a reasonable amount of time specified on the INC – typically within 14 days.  

 ➤ A "shut-in INC" is issued when the violation is severe or life-threatening or when the suspension of operations will be in the national interest. The operator must correct the violation before it will be allowed to continue the operations in question.  

The bureau can issue civil money penalties of up to $40,000 per day against the operator if: 1) the operator fails to correct the violation in the reasonable amount of time specified on the INC; or 2) the violation results in a threat of serious harm or damage to human life or the environment (30 CFR §§ 250.1403; .1404).  

By contrast, under the OSH Act, an employer can incur civil money penalties of $7,000 per day for "failure-to-abate" violations, as well as $7,000 for "serious' and "other-than-serious" violations. 

Appeal Process

The Bureau of Safety and Environmental Enforcement will notify the operator, via a letter, of the amount of the proposed civil penalty calculated, and the operator will have 30 days to request a meeting with a reviewing officer, submit information or pay the penalty (30 CFR § 250.1404).  

At the end of the 30 calendar days or after the meeting and submittal of additional information, the reviewing officer will review the case file and issue a decision on the amount of any final civil penalty, the basis for the civil penalty and instructions for paying or appealing the civil penalty (30 CFR § 250.1408).  

This process is similar in some respects to an informal conference held with an OSHA area director, in which the employer tries to resolve the matter before litigation ensues.  

The Bureau of Safety and Environmental Enforcement also can initiate probationary or disqualification procedures against an offshore operator (20 CFR § 250.1927). 

A lease or permit can be cancelled, after notice and an opportunity for a hearing, if: 

(1) The continued activity probably would cause serious harm or damage to life, property, the environment or national security or defense; 

(2) The threat of harm or damage will not disappear or decrease to an acceptable extent within a reasonable time; 

(3) The advantages of cancellation outweigh the advantages of continued activity; and 

(4) The suspension has been in effect for at least five years or the termination of suspension and lease cancellation are at the request of the lessee.

Finally, the Bureau of Safety and Environmental Enforcement may refer a matter to the Department of Justice for criminal prosecution if there is evidence that an operator knowingly or willfully violated any provision or regulation of the act, or any lease term, license or permit issued pursuant to the act.  

The operator should evaluate the risks associated with accepting an INC or civil money penalty as written. Much like under the OSH Act, an operator has the right to challenge an INC, the civil money penalties or both, and request a hearing before an administrative law judge (30 CFR § 250.1472).  

Whereas an employer has 15 days to challenge the validity of a citation under the OSH Act, the operator has 30 days to challenge the validity of a final INC and civil money penalty or 10 days to challenge the validity of the civil money penalty only.  

The operator also has the right to appeal any final decision or order issued by the administrative law judge to the Interior Board of Land Appeals within 60 days after receipt of said decision or order (30 CFR § 290.3).  

Michael T. Taylor is a partner in the Washington, D.C., region office of Jackson Lewis LLP and focuses his practice exclusively on workplace safety and health law. Nickole Winnett is an associate in the Washington, D.C., region office and is a member of the firm's Workplace Safety and Health practice group.