Safety Management




GUIDE FOR MAJOR HAZARD FACILITIES: SAFETY MANAGEMENT SYSTEMS



Safe Work Australia is an Australian Government statutory agency established in 2009. Safe Work Australia consists of representatives of the Commonwealth, state and territory governments, the Australian Council of Trade Unions, the Australian Chamber of Commerce and Industry and the Australian Industry Group.

Safe Work Australia works with the Commonwealth, state and territory governments to improve work health and safety and workers’ compensation arrangements. Safe Work Australia is a national policy body, not a regulator of work health and safety. The Commonwealth, states and territories have responsibility for regulating and enforcing work health and safety laws in their jurisdiction.


1 .    INTRODUCTION


Under the WHS Regulations, operators of major hazard facilities (MHFs) must establish and implement a Safety Management System (SMS) that must be used as the primary means of ensuring the safe operation of the MHF.

A SMS is a comprehensive and integrated system for managing health and safety risks at a major hazard facility.

This Guide provides an overview of what a SMS must contain to comply with the requirements of the WHS Regulations. It is not intended to provide detailed guidance on how to set up a SMS for the first time.

This guidance has been prepared for the operator of a MHF who is responsible for preparing the safety case and coordinating the necessary work prior to applying for a MHF licence or renewal. Most facilities applying for a MHF licence will already have an established SMS. If you are in this position, this guidance will help you identify any gaps between the current SMS at your facility and the WHS Regulations.

However, some facilities may not have a comprehensive SMS in place at the time of applying for a MHF licence e.g. where an operator is applying for a MHF licence for the first time. If you are in this position, the information in this Guide should be supplemented by reading more comprehensive material on the subject to assist you in establishing a compliant SMS. See Appendix C for a recommended list.

This Guide forms part of a set of guidance material for MHFs that includes information on:

        Notification and Determination

        Safety Assessment

        Developing a Safety Case Outline

        Preparation of a Safety Case

 Safety Case: Demonstrating the Adequacy of Safety Management and Control Measures

      Information, Training and Instruction for Workers and Others at the Facility

        Providing Information to the Community

        Emergency Plans.

1.1   What do the Regulations require?

The operator of a determined MHF must establish and implement a SMS for the operation of the

MHF. The SMS must:

   be comprehensive and integrated with respect to adopted control measures in relation to the occurrence and potential occurrence of major incidents at a MHF

   be implemented, so far as is reasonably practicable, and used as the primary means of ensuring the safe operation of a MHF

      have sufficient focus on major incident safety which includes planning and operations

    comply with all of the requirements prescribed in regulation 558 and Schedule 17, including that the SMS must be documented and readily accessible to persons who use it

        cover the whole facility defined within the Safety Case

     be continually reviewed and revised so that the SMS remains current and effective.

The SMS should not be a pure paperwork system; rather it should reflect the overall safety culture and practical operation of the facility, and should be consistent with the assessment of risk gained from the Safety Assessment.


All persons involved in the operation of a MHF should have knowledge of the SMS prepared for the facility.

Further details of the requirements under the WHS Regulations are set out in Appendix A and definitions of terms used in this Guide are set out in Appendix B.

1.2   Components of a Safety Management System

The main components of Safety Management Systems correspond with the structural elements of a generic management system specified in AS/NZS 4804:2001 – Occupational health and safety management systems (see Figure 1). Key components include:

        establishing the context 

        commitment and policy 

        planning and prioritising

        implementation 

        measurement and evaluation 

        review and improvement 


2 .    CONSIDERATIONS FOR DEVELOPING A NEW SMS


This section provides an overview of the issues that should be considered by new MHF operators.

2.1    Planning

When establishing a SMS for a MHF where a SMS does not exist, matters that should be considered include the:

  information required e.g. background understanding and explanation of what is needed for those who will be involved in developing and implementing the SMS

    people to be involved e.g. a mix of people and roles for the various stages of system development and implementation

      allocation of time for the various tasks involved. These timeframes should not be underestimated

        technique(s) to be used

  documentation of the development process, such as consultation

        documentation of outcomes such as safe work procedures and worker training materials.

2.2    Establishing the SMS

The SMS of a determined MHF must provide a comprehensive and integrated system for the management of all aspects of controlling the risk of major incidents at the facility.

Establishing a SMS involves developing and implementing SMS procedures. For most MHFs, this stage will also involve considerable consultation. It is recommended that operators in this position seek assistance from someone familiar with what is involved (such as consultants) due to the large amount of work required at this stage.

There are some off-the-shelf SMS packages available that may assist in developing a SMS. However, since these are often generic, a certain amount of work is still usually required to tailor the package to suit the particular MHF’s operations.

The hazard identification, safety assessment and risk management required by regulations 554– 556 provides operators with a clear understanding of what controls are needed to prevent major incidents occurring at a facility, while regulation 559(2) requires all implemented control measures to be adequately supported by the SMS so that they will function effectively each and every time they are needed. The operator therefore needs to check that each control measure in relation to major incidents is adequately supported by relevant systems within the SMS. In practice this is generally not as daunting as it may sound, since most control measures are supported by a few common SMS elements. For example:

  The reliability of all safety instrumented systems (SIS) is assured by a maintenance and inspection program or critical function testing (CFT).

   The reliability of procedural control measures is assured by including them in a competency based training and assessment program (CBTA).

Some means of ensuring that systems work together and that links between systems are not broken should be provided when setting up a new SMS. Some operators do this by regular programmed reviews of all documents within the SMS. Some operators with electronic document systems ensure that links between documents are always maintained by providing hot links between them.


2.3   Implementing the SMS

Once the SMS procedures have been developed, they then need to be implemented by people who have the appropriate skills and knowledge. Training packages should be developed to explain the SMS and delivered to all workers involved in implementing the SMS. The time and effort involved in fully implementing the SMS should not be underestimated and you should avoid delaying the development of the SMS.


3 . CONSIDERATIONS FOR FACILITIES THAT ALREADY HAVE A SMS


Most determined MHFs may already have some form of SMS in place at the time they first provide notification of the facility. In general, the task of establishing a SMS that complies with the WHS Regulations is an easier task for these facilities than for those developing a SMS for the first time, as the task is primarily one of conducting a gap analysis between their current SMS and the regulatory requirements and then making the necessary revisions or additions.

Particular attention should be paid to the requirements in Schedule 17 of the Regulations. It is also advisable to check:

     that systems are actually implemented in practice and before the regulator conducts any verification

        that all engineering and procedural controls are covered by the usual support systems, including CFT and CBTA

  whether emergency plans cover all potential major incidents identified in the safety assessment.



4 .    ESTABLISHING THE CONTEXT


The first step in preparing the SMS is to evaluate and understand both the internal and external environment that the MHF operates in, as this can significantly influence the design of the SMS.

Evaluating the MHF's external context may include:

    the social and cultural, political, legal, regulatory, financial, technological, economic, natural and competitive environment, whether international, national, regional or local.

    key drivers and trends having an impact on the objectives of the organisation

        relationships with, and values of, external stakeholders.

Evaluating the MHF's internal context may include:

    governance, organisational structure, roles and accountabilities

   policies and objectives, and the strategies that are in place to achieve them

   capabilities, understood in terms of resources and knowledge (e.g. capital, time, people, processes, systems and technologies)

  information systems, information flows and decision-making processes (both formal and informal)

        relationships with, and values of, internal stakeholders

        the MHF's culture

        standards, guidelines and models adopted by the MHF

        the form and extent of contractual relationships.

4.1   Elements of the SMS

Establishing the context will lead to the SMS including a number of elements that address the following:

      higher level system needs including policies, objectives and structures to achieve those objectives

 day-to-day safe operation including operating procedures, work permitting and maintenance management

 longer term safety of the facility including risk management, emergency planning, asset integrity management and management of change

personnel-related systems including recruitment, worker induction and training, consultation, contractor selection, and management and training

the effectiveness of the SMS including performance monitoring, auditing, incident investigation and continuous improvement

    administrative procedures such as document control.

Different operators have different ways of organising these elements. For example, asset integrity management is treated by different operators as a part of the maintenance management system, an aspect of the risk management system or a stand-alone system. Depending on the complexity of the operations at a facility and the way elements are grouped, a SMS may vary from 12 to 30 principal elements and may include an array of underlying sub-systems, documents, procedures and forms.

Table 1 details a list of common elements that are likely to be present at most MHFs. In many cases the structure of the SMS is influenced by the practices of the broader organisation relevant to the MHF.


5 .    COMMITMENT AND POLICY


The operator of a MHF should define its safety policy and ensure commitment to its SMS. While often generic, the safety policy and the organisational commitment to achieving it set out the framework for the SMS and how it will be followed at the MHF.

5.1   Safety policy and safety objectives

A health and safety policy that sets out a high level statement detailing the operator’s broad aims for the safe operation of the facility should be created. Policy statements, or Charters in some cases, are usually expressed in general terms (see Example 1 below). The policy is intended to inform all stakeholders, including workers and others, that safety is an important part of all operations and should be reinforced through periodic review and involvement of management.

The policy objectives should be as specific as possible and quantified where possible, as it is easier to measure performance against clear and quantified objectives.

5.2   Commitment

A MHF’s success at fulfilling its safety policy and achieving its safety objectives is usually proportional to the organization’s commitment to achieving those goals amidst all the other goals competing for its attention, and hence the importance of clear commitment to those safety objectives starting at senior management level.

Regular review of safety performance and performance against the safety objectives at management level reinforces the importance of safety to the organisation’s success. While management are required to demonstrate commitment through their actions and involvement, all workers need to be involved for the system to be fully functional and integrated. Everyone at the facility should be aware of the influence that their action or inaction may have on the effectiveness of the system.

5.3   Planning

The ‘planning’ stage of safety management is the work performed to define the scope, boundaries and performance objectives of specific SMS components. Many MHFs achieve this by setting standards for various SMS elements. These standards are different to the performance standards specified in Schedule 17. For example, one of the ways a MHF can achieve its policy objective of “providing a safe work place and safe systems of work” is to have an effective Work Permit system.


System standards are often specified by the parent business or undertaking of many MHF operators. The local MHF operator then has the simpler task of developing a specific local procedure or work instruction in some cases that meets the requirements of the standard and the requirements of the WHS Regulations.

Some other aspects of the SMS that could be considered during planning are:

 emergency planning, including the development of pre-incident plans

  development of engineering standards for application in particular services throughout the facility and pre-emptive risk studies.

6 .    IMPLEMENTATION


The implementation part of the SMS is the group of elements directly involved in the day-to-day operation of the facility. Examples include:

        operating procedures

        maintenance procedures

        direct work management, including work permits

        emergency exercise programs

        asset integrity programs

        contractor management and the CBTA systems.

For the purposes of this Guide, this section is divided into the headings for sub-sections in Schedule 17.

6.1   Organisation and personnel

The WHS Regulations require all SMSs to contain systems that ensure the facility has people with appropriate responsibilities and necessary skills to implement the procedures and other activities contained in the SMS.

The SMS must also define the roles and responsibilities of individuals to ensure the safe operation of the facility, and the overall means of ensuring they have the necessary knowledge and skills to enable them to perform their allocated tasks and discharge their allocated responsibilities.

Typically these systems could include role statements for all positions of responsibility, a system for defining the skills necessary for all positions (e.g. skills matrix), a training management system complete with specific training modules, and a record keeping system that keeps track of skills gaps and the need for refresher training and upgrades (see Example 3).

There are a number of other personnel and human factor issues that could impact on safe operation. MHFs may decide to include systems that address these factors as part of their SMS, for example:

        management of knowledge

        competency assurance

        staff turnover

        changes in skills or knowledge

        clarity of command structures and responsibilities

        handling workloads

        fatigue and shift work

        communications

        handling disputes.


6.2   Operational controls

The operational controls required by the WHS Regulations include all processes and procedures impacting directly on safe operation of plant. For most MHFs, this group of elements is likely to make up the majority of the SMS.

Operational controls likely to be of particular importance to MHFs are the processes and procedures for:

        operating plant and equipment

        maintaining the integrity of that equipment

        permitting work

        starting up plant or commissioning

        shutting down plant or de-commissioning

        achieving safe isolation of equipment

        controlling abnormal conditions

    identifying, handling, and reducing or eliminating human error, including procedural checks

        error reporting

        alarm handling procedures

 fault-tolerant procedures and processes for improving compliance with procedures.

6.3   Duties of operators

The SMS must include a description of the policies and procedures that the operator proposes to use to comply with the WHS Act and the following:


    Division 3 of Part 9.3 of the WHS Regulations (Duties of operators of determined MHFs – Management of risk)

   Part 9.4 of the WHS Regulations (Licensed MHFs – Risk management)

      Part 9.5 of the WHS Regulations (Consultation and Workers’ Safety role).

Although not specified in the regulations, MHFs may also choose to extend the SMS component to check and ensure compliance with other relevant obligations under the Regulations, such as Chapter 7 – Hazardous Chemicals.

The documented procedures and other SMS components that are relied upon to meet obligations under Chapter 9 of the Regulations must be clearly identified with an annotation or cross-reference identifying the specific provision being complied with.

6.4   Management of change

The SMS must contain formal procedures for planning and managing ‘modifications’ (as defined in Appendix B) at the facility. These are commonly referred to as ‘Management of Change’ (MoC) process. This is an essential element of a robust and comprehensive SMS, as changes can introduce new major hazards or potential major incidents and can increase the risk arising from existing hazards. There should also be effective management of all changes in the facility including operational, organisational, procedural and equipment changes.

Regulations 559 and 569 require the safety assessment, emergency plan and safety management system to be reviewed, and if necessary revised. The MoC procedure should ensure that these reviews will happen every time a relevant change is proposed.

The MoC process at most MHFs manages more than the health and safety concerns of a proposed change.

The MoC system should at least:

    define the type of change to which it applies. For many MHFs, the system applies to anything other than ‘like for like’ replacement

  require consultation with all workers or their representatives likely to be affected by the change

   ensure that the proposal for change is reviewed for all health and safety implications by people sufficiently knowledgeable to make informed judgments in their areas of expertise, such as operations or maintenance

    ensure that the proposal is reviewed and approved before it is implemented

  ensure that necessary follow-up activities arising from the change are completed in time, for example updating drawings, equipment registers, procedures, training modules, etc.

6.5   Design principles and standards

The SMS must contain an element that documents the design principles and engineering standards that the operator is relying on to ensure safe operation of the facility. Since most standards change over time, the system needs some means of ensuring that it is kept up-to-date.

‘Design principles’ can take many forms and may include technical, engineering or management principles developed or applied by the operator. Examples include:

        principles for the management of human factors

  standards for development or implementation of operating procedures

        design principles for control rooms and alarm systems

        engineering design standards

        fire protection standards

        maintenance standards

        loss control principles

        ‘layers of protection’

        process control systems.

These are often captured in Basis of Design documents for new facilities, but may be harder to collect and document for older facilities. They should be consistent with the approach to risk reduction and safety management in the facility’s Safety Case.

The specification of engineering standards should be more detailed than a simple generic statement such as “Flammable liquids storage facilities conform to AS 1940”. Many MHFs use corporate-wide engineering standards which can include quite specific details, for example what type of valves are permitted or preferred in certain services, when certain types of level gauges are permitted, mandated or forbidden, and rules for setting alarm set points for various services.



7 .    MEASUREMENT AND EVALUATION


The next SMS elements of the continuous improvement cycle are those involved with measurement and evaluation. It is through measurement and evaluation that the MHF operator knows what elements of the SMS elements are effective.

The two main aspects of this element are:

     measuring or monitoring the performance of specific aspects of the SMS

  evaluating or judging if the performance is sufficient to achieve the function that the system or control is intended to achieve.

Clause 7 of Schedule 17 of the WHS Regulations makes mandatory a number of requirements for performance monitoring at a MHF. Clause 8 of Schedule 17 also requires auditing of SMS performance against the performance standards set by the operator.

7.1   Performance monitoring

The operator must have a system in place for monitoring the performance of both SMS elements and control measures.

This involves developing:

 performance standards that are sufficiently detailed for measuring the effectiveness of all aspects of the SMS

     performance indicators for measuring the effectiveness of control measures, including indicators of the failure of any control measure.

In setting performance standards operators should consider the following questions:

     How will I know that this particular SMS system is working effectively?

    Alternatively, what will tell me that the system is not working?

As an example, almost all MHFs have a formal incident investigation system within their SMS. A common performance measure for the system is the length of time taken to fully complete an investigation, and may have a performance standard of ‘No outstanding incident investigations > X days’, where X is based on some historical evidence of how long an incident investigation should take. While this is a useful measure for showing if the investigation system exists, it gives no indication of how good the investigations are, or whether they are effective in achieving their purpose or identifying direct and underlying causes of incidents so that action can be taken to prevent similar occurrences in the future. A more meaningful performance measure might result from an independent review of the investigation and a rating given for causes being identified and relevant follow-up action items being developed.

Similar thinking is required for developing performance indicators for control measures with appropriate targets. Since control measures tend to be more concrete when compared with SMS elements, assigning performance indicators for control measures may be an easier task than assigning performance standards. It is possible that indicators may be for a group of controls rather than an individual control. However, it is also possible that more than one may be required for a particular control.

Performance indicators should be defined for all control measures, which enable the MHF operator to measure, monitor or test the effectiveness or failure of each control measure. However, it is not necessary to define a separate indicator for each and every control measure individually i.e. it is possible to define an indicator for a group of control measures. Pressure safety valves (PSVs) are an example of such a group (see Example 4). It may also be necessary to define more than one indicator for a control measure or group of control measures. The operator should also determine the method for reporting performance against these indicators and corrective actions to be taken in the event of failure of controls and in the event of the indicators not meeting performance targets.

Performance indicators should measure the performance of control measures and also how well the management system is monitoring and maintaining them. Performance indicators for control measures therefore overlap with the performance standards required for the SMS. Some performance standards for engineered control measures may be adopted from manufacturer's recommendations. However, operators should determine if these are appropriate to the specific conditions of their facility. Performance indicators take many forms and can be quantitatively or qualitatively expressed. In practice, having an effective maintenance system such as a system for testing critical functions is the only practical way to monitor performance of individual control measures.


7.2   Audit

Auditing is the most commonly used means for operators to check the performance of SMS elements against their performance standards. The SMS of a MHF must include a system for managing these audits (e.g. qualifying auditors, scheduling, documenting results and tracking recommendations).

Auditing should look at both implementation and functionality of the systems, that is:

  Does the MHF have a system that meets the required standard?

  Does the MHF follow its own system procedures and are they effective?

Persons unfamiliar with auditing should refer to a recognised standard such as AS4801 or SafetyMAP (see reference section at Appendix C).



8 .    REVIEW AND IMPROVEMENT


The SMS should include some means for the operator to formally review SMS performance and develop improvements based on the results of the review. There are many different ways to review safety performance, but it often consists of reviews by the management committee with health and safety representatives and often assisted by technical specialists.

The review committee is likely to examine data from the operator’s performance monitoring system on a regular basis. Some performance indicators may be activity measures and some should be effectiveness measures. The review should identify any gaps, consider what factors might be causing or contributing to those gaps and assign follow-up action items to close any gaps.

If an activity measure shows that a particular system is not being used in the required situations, review by management should consider why that would be happening. For example:

        Are people unaware the system is required in those situations?

        Is the system too cumbersome?

        Are human factors involved?

The actions needed to improve performance may be quite different if effectiveness measures are found to be deficient. For example, if the data showed that the system was being used but incorrectly or that the safety matters that system was meant to manage were breaking down despite personnel using the system as specified, the system may need to be revised.

The safety review system may also include other matters to generate improvements, including incidents at similar facilities in Australia or overseas, or new and emerging issues that may be relevant to the facility’s operation.

The system should also provide a means of prioritizing action items and improvements, with higher priority being given to higher risk issues. Progress on action items should be formally tracked.

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