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What does it mean to be compliant?

Published by , Editor
Oilfield Technology,

James Steven, DNV GL, explains why ‘being compliant’ has much deeper resonance and reverberations for the global oil and gas sector and goes way beyond a tick box exercise.

Put in its simplest and broadest terms, compliance refers to a company demonstrating that all of the legal laws and regulations with regards to how they manage the business, their staff, and their treatment towards their consumers, have been satisfied. Essentially, the concept of compliance is to make sure that corporations act responsibly.

As an inherently hazardous industry, ‘being compliant’ has much deeper resonance and reverberations for the global oil and gas sector and goes way beyond a tick box exercise. Likewise, understanding perceptions of ‘compliance’ can differ, leaving stakeholders exposed to financial, technical and even reputational risk they may not be aware of.

In being compliant, it is important to know what you are trying to demonstrate compliance with. This can encompass a multitude of factors, it is essential to develop and follow a robust roadmap that clearly shows the impact on existing and new products or project developments.

Additionally, there are a number of key issues to address to mitigate risk to the integrity of hazardous area installations, whether that be regulatory (dependent on country requirements) or functional (includes environmental management). Indeed, this could be a combination of the two, to ensure safety of personnel and the plant, as well as operational delivery and reputation.

Is what I’ve got sufficient?

There is a common misconception that by simply receiving a report following an inspection or survey, means compliancy has been achieved. Wrong. It’s crucial to understand the detail on that document to know exactly what has or has not been fulfilled on both the functionality and regulatory front. This will ensure nothing falls through the gap or is waylaid - there may be major repercussions in the long-run if an outstanding task isn’t acted upon.

A division of responsibilities commonly exists between the supplier and the end user. However, it is often assumed that just because a reputable supplier has been contracted, that all compliancy needs will automatically have been carried out and that no further action is required from the end user. This creates a great deal of disconnect across the value chain.

In all cases, it is canny to comprehend the purpose of the equipment being used and the criteria it needs to be checked against for installation, as well as during its operational life. For instance, during installation, it is imperative to know that it’s fit for the intended purpose and this assessment should be easily demonstrated.

Figure 1. DNV GL can support all aspects of compliance, from liaising with suppliers to developing qualification plans and compiling verification certification.

A problematic area at the moment is around EU directive compliance. Whilst the titles of some post-Brexit legislation will change, this remains law and is unlikely to be overhauled for some time yet. Current frameworks must therefore be adhered to as they set out how to comply with the directive. There is no grey area here or reason not to follow what is expected.

Compliancy does not mean complacency

Achieving compliancy with a directive, for instance, the Offshore Directive created in 2013, does not mean zero-risk of a future incident or that safety no longer needs to be a cause for concern. It just means that the stated criteria was met at that particular time. It is simply a legislative requirement and not a safety endorsement. No company can hide behind this documentation.

Regulations, such as COMAH (Control of Major Accident Hazards), DSEAR (Dangerous Substances and Explosive Atmospheres Regulations) and PUWER (the Provision and Use of Work Equipment Regulations) for the UK and EU exist alongside technical standards (API, ISO, IEC, etc) to strengthen the safety and technical case for more specific compliancy assessments. Declarations of compliance mean nothing without the backbone of technical or safety assessments and assurance.

Another contentious area is when and when not to use a Notified Body. The conformity process for each directive details when a Notfied Body can be used. However, some directives (e.g. ATEX 2014/34/EU) prohibit the use of a Notified Body when not required to do so by the directive.

Notified Bodies are not allowed to issue documentation as compliance. However, as customers want to have a validation they do approach organisations which are Notified Bodies to provide this confirmation. This process is defined as ‘voluntary certification’, which is not recognised in the event of an incident and provides no legal protection as would have been provided had this been done in a Notified Body capacity. In some cases, these documents have been handed out like certificates which is a clear breach of the directive. This is also another case of checking and knowing what the document states and how this helps compliance.

Figure 2. Compliance is demonstrated based on the correlation between what is required and what is actually provided.

When looking to determine compliance it is important to have a clear plan and roadmap, which may answer the following questions:

  • What am I trying to comply with?
  • What does the documentation actually mean?
  • What does it prove?
  • What am I actually trying to demonstrate?
  • Have I recorded it in the right way?

Hazardous area installation

Quite often, particularly on larger projects, some contractors will be utilised who have just a rudimentary or limited knowledge of the task they are performing. Just because they have a general understanding of a skill doesn’t mean that this extends to comprehending the full extent of the implications their activities have. For hazardous installations, additional competencies are vital to not only perform the work but also to understand the relevance of what is being achieved. Though technically possible, using one qualified inspector to review multiple vendors or activities can cause issues. After all, quality cannot be ‘inspected’. Likewise, the demands of a particular location or environment needs to be factored along with the consequence of defects created during transportation, for example, with pre-assembled units moving from the manufacturing to the fabrication site.

Failure to consider the implication for factors such as potential transportation impacts and other environmental changes can introduce potential defects post final inspection and testing. Because of that, virtually every project coming into the North Sea from abroad, is either having a significant amount of rework, or having significant notices and improvements issued by the regulatory authorities for failure to comply with equipment requirements. This adds exorbitant cost and months of delays to projects aiming for first oil. Ensuring these types of risks have been identified and that steps for ensuring these can be determined/mitigated have been implemented, will significantly reduce the potential impacts to costs, duration and reputation.

Early engagement

Inspection should be the last line of defence not the first one. It should go without saying that traceable records are imperative and accuracy is crucial. Knowing what you need to achieve in the beginning will help make the process work soothly and more efficiently. DNV GL can support all aspects of this service from liaising with suppliers to developing qualification plans and compiling verification certification.

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