Guideline on Management of Contractor Hse

ABU DHABI NATIONAL OIL COMPANY

GUIDELINE ON MANAGEMENT OF CONTRACTOR HSE ADNOC-COPV1-04

HEALTH SAFETY AND ENVIRONMENTAL MANAGEMENT MANUAL OF CODES OF PRACTICE

VOLUME 1 : HSE ADMINISTRATION

HSE MANAGEMENT CODES OF PRACTICE Volume 1: HSE ADMINISTRATION

Version 1 June, 2004

COP G/L: MANAGEMENT OF CONTRACTOR HSE

Document No: ADNOC-COPV1-04 Page 2 of 85

RECORD OF REVISION

Revision No. Date Section/Page Reason

Copyright

The copyright and all other rights of a like nature in this document are vested in Abu Dhabi National Oil Company (ADNOC), Abu Dhabi, United Arab Emirates. This document is issued as part of the Manual of HSE Codes of Practice (the Manual) and as guidance to ADNOC, ADNOC Group Companies and independent operators engaged in the Abu Dhabi oil & gas industries. Any of these parties may give copies of the entire Manual or selected parts thereof to their contractors implementing HSE standards in order to qualify for award of contracts or for the execution of awarded contracts. Such copies should carry a statement that they are reproduced by permission of ADNOC, and an explanatory note on the manner in which the Manual is to be used.

Disclaimer

No liability whatsoever in contract, tort or otherwise is accepted by ADNOC or any of its Group Companies, their respective shareholders, directors, officers and employees whether or not involved in the preparation of the Manual for any consequences whatsoever resulting directly or indirectly from reliance on or from the use of the Manual or for any error or omission therein even if such error or omission is caused by a failure to exercise reasonable care.

All administrative queries should be directed to the Manual of HSE Codes of Practice Administrator in: Environment Health & Safety Division, Exploration & Production Directorate, Abu Dhabi National Oil Company, P.O. Box : 898, Abu Dhabi, United Arab Emirates. Telephone : (9712) 6023782 Fax: (9712) 6668089 Internet site: www.adnoc.com E-mail:[email protected]




Document No: ADNOC-COPV1-04 Page 3

CONTENTS Page I. PURPOSE............................................................................................................ 5 II. DEFINITIONS....................................................................................................... 5 III. EXISTING LAWS................................................................................................. 7 1. INTRODUCTION.................................................................................................. 8

1.1 Objectives ................................................................................................... 9 1.2 Background ................................................................................................ 9 1.3 Scope ........................................................................................................ 10

2. OVERVIEW........................................................................................................ 11 2.1 Contract Phases and HSE Planning ....................................................... 11 2.2 Planning for HSE: Timing and scope ..................................................... 11 2.4 Company and Contractor HSEMS........................................................... 15 2.5 Joint HSEMS and COMAH Report Preparation...................................... 16

3. PLANNING AND INVITATION TO TENDER..................................................... 18 3.1 Objectives ................................................................................................. 18 3.2 Outline Scope of Work or Services......................................................... 18 3.3 Contract Scope, Schedule and Strategy ................................................ 21 3.4 Contract HSE Assessment ...................................................................... 22 3.5 Contract HSE Specification..................................................................... 23 3.6 Contractor Prequalification ..................................................................... 25

4. THE TENDER PERIOD...................................................................................... 27 4.1 Objectives ................................................................................................. 27 4.2 Contractor's HSE Plan ............................................................................. 27 4.3 HSE Costs................................................................................................. 28 4.4 Incentive Schemes for HSE..................................................................... 28

5. EVALUATION AND CONTRACT AWARD........................................................ 30 5.1 Objectives ................................................................................................. 30 5.2 Evaluation ................................................................................................. 30

6. MOBILISATION ................................................................................................. 31 6.1 Objectives ................................................................................................. 31 6.2 Kick-off Meetings ..................................................................................... 31 6.3 Mobilisation .............................................................................................. 34 6.4 Pre-execution Audit ................................................................................. 34

7. EXECUTION ...................................................................................................... 35 7.1 Objectives ................................................................................................. 35 7.2 Supervision............................................................................................... 35 7.3 Competence Assurance .......................................................................... 36 7.4 Inspection and HSE Auditing/Reviews................................................... 37

8. DEMOBILISATION ............................................................................................ 39 9. CLOSE-OUT ...................................................................................................... 40 10. REFERENCES................................................................................................... 41 APPENDIX I: CONTRACTOR HSE PREQUALIFICATION .................................... 42





APPENDIX II: PREQUALIFICATION HSE EVALUATION GUIDELINE (POINTS SYSTEM) ........................................................................................... 48

APPENDIX III: HSE RESPONSIBILITIES FOR GROUP COMPANY AND CONTRACTOR KEY PERSONNEL .................................................. 53

APPENDIX IV: HSE PLAN GUIDELINE FOR MAJOR CONTRACTS .................. 56 APPENDIX V. HSE PLAN GUIDELINE FOR SMALL CONTRACTS ................ 75 APPENDIX VI CONTRACT EXECUTION HSE AUDIT GUIDELINES ............... 80





I. PURPOSE The purpose of these Guidelines is to:

define the minimum HSE objectives to be met at each stage of a contract

develop a strategy for proactive management of Contractor HSE highlight the benefit of effective proactive approaches, particularly prior

to tendering and mobilisation

describe a planned approach to Management of Contractor HSE that will ensure a continuing improvement in HSE performance for all contractor activities

describe the role and responsibilities of key personnel in contractor HSE management.

This document is targeted principally at Contract Holders and Group Company and contractor personnel tasked with planning HSE in contracts, with tender preparation, evaluation, award and subsequent contractor management.

The approach described in this document is one of many possible ways of dealing with management of contractor HSE. The approach and guidelines are not mandatory and Group Companies may follow different methods, provided that they can demonstrate that their chosen approach is at least as effective as that described in this guideline.

II. DEFINITIONS A glossary of commonly used terms in HSE is given in the ADNOC CoP document HSE Definitions & Abbreviations [Ref. 1]. Any additional terms used specifically in the context of this document are defined below.

Contract A formal business agreement detailing the terms and conditions for the supply of products or the provision of services.

Contractor A firm which has entered into a legal contract to supply services or material to Company (Group Company). (The term is also frequently applied to suppliers who are available to provide services but are not currently in a contractual relationship with Company [Group Company]).

Contracts Board A Committee of Senior Company Staff which ensures the implementation of the Company's contracting principles and objectives.

[1] ADNOC Manual of Codes of Practice: Guideline on HSE Definitions & Abbreviations, ADNOC-COPV1-05





Contract Holder Person within the Contract Sponsor's department who is responsible for managing all aspects of the Contract as regards the Contractor and all Company (Group Company) departments concerned.

Contract Manager The person named in the contract to represent the Contractor in respect of the contract and to be responsible for the management of the contract.

Contractor Representative The person appointed in writing by the Contract Manager to supervise the execution of the contract activities.

Contractor Site Representative The person appointed in writing by the Contract Manager to assist the Contractor Representative in supervising the execution of the contract activities on a given site.

Contract Sponsor The department, section or function that has budget and management authority to execute the Contract.

Contractor's HSE Plan A contractor's proposal as to how he intends to implement the HSE requirements as outlined initially by the Group Company. For the selected contractor, this becomes the plan on which the HSE terms in the contract are based.

HSE Plan A formal document showing how it is intended to manage the hazards determined. It is usually drafted initially by the Group Company. It should be recognised that in many situations, particularly for larger contracts, this HSE Plan will effectively form a significant part of the COMAH Report

Group Company HSE Adviser An HSE specialist responsible for providing line management with current HSE guidance on technical and human matters, including where appropriate, advice on techniques, equipment, HSE auditing, training, incident investigation, emergency procedures; the Adviser's responsibilities do not include HSE performance in the line.

Group Company Representative The person appointed in writing by the Contract Holder to supervise the execution of the contract activities.

Group Company Site Representative The person appointed in writing by the Contract Holder to assist the Group Company Representative in supervising the execution of the contract activities on a given site.





Procurement Term used to cover the whole cycle of activities which need to be performed to acquire and deliver to a user an item of material or a service, from conception of the need through design, purchasing, storage and delivery to ultimate disposal.

Scope of work The description in established parameters of the work required to achieve the objectives of a project or activity.

Tender Board Synonym for Contracts Board, but with more emphasis on tendering as the process to achieve contracts.

III. EXISTING LAWS Relevant UAE legislation applicable to the subject of this Guideline is described in the ADNOC CoP document HSE Administration Systems [Ref. 2].

[2] ADNOC Manual of Codes of Practice: Code of Practice on HSE Administration Systems, ADNOC-COPV1-01.





1. INTRODUCTION This document identifies and describes the activities associated with the management of contractor HSE by ADNOC Group Companies within the formal framework of a contract, both prior to and after award. The specific objectives and mandatory requirements for each phase are stated, and thereafter guidelines are provided as an aid to achieving the objectives. The appendices provide illustrative examples of guidelines for the principal features of each phase. The extent to which these guidelines are applied will be influenced by the scale and HSE criticality of the contracts.

This document sets out guidance on how to achieve the same or higher HSE standards as those required by ADNOC Group Companies for their own operations. It is based on a planned approach with attention being paid to the early project phases. This is to provide early awareness of the HSE issues that need to be included by the Contract Holder in the tender documents. It is targeted principally at Contract Holders and personnel tasked with planning HSE in contracts, with tender preparation, evaluation and subsequent contractor management. It contains the following chapters:

1. Introduction A basic introduction to the objectives, background and scope of coverage.

2. Overview An overall picture of the sequence of phases involved, planning the work, the HSE issues involved and the links with HSE MS.

3. Planning and Invitation to Tender

The main steps necessary in the Group Company's definition of HSE requirements in the contract and the prequalification of contractors.

4. Tender period The HSE proposals expected in the contractor's bid in response to the tender documents and the clarification of these proposals.

5. Bid evaluation and contract award

The assessment of the contractor's HSE Plan against the required criteria.

6. Mobilisation The contract kick-off, assessment of the contractor's HSE performance during the mobilisation phase and pre-execution audit.

7. Execution HSE monitoring and supervision of the contractor during contract execution.

8. Demobilisation HSE monitoring of the contractor during demobilisation.

9. Close-Out The reporting and feedback of Group Company and contractor HSE performance.





1.1 Objectives

The overall objectives of this document are:

Ensure that contractors meet or exceed ADNOC HSE standards Adherence to hazards and effects management process

All hazards to the health and safety of the contractor's personnel, ADNOC and Group Company staff and the public, to the environment and to the assets of the contractor, ADNOC, Group Companies or public should be: identified, assessed systematically and eliminated where possible controlled through formal procedures and planning methods covered by contingency plans in place to deal with identified

consequences of potential loss of control.

Mutual HSE awareness Both the contractor and the Contract Holder should be mutually aware of both parties' minimum obligations to manage HSE and these obligations should be within mutually agreed contractual terms.

Means to monitor the contract HSE management The means to monitor the contract HSE management system (HSEMS) should be mutually defined, understood, accepted and agreed by both parties as contractually binding.

Equal attention to H, S and E Controls in place for hazards and effects management

The controls necessary for the management of hazards and effects should be in place and working. Where they are not, this should be speedily remedied or in extreme cases, work should be stopped.

Ensure clarity between Contract Holder and Contractor regarding responsibilities

1.2 Background

A large part of ADNOC Group activities depend on contractors to carry out a wide variety of works and the majority of these are carried out in and around workplaces of relatively high risk. Efforts to achieve the required HSE standards must often overcome problems of language, culture, inhospitable environments whilst meeting the UAE and National Laws.

Analysis of contractor HSE performance in the ADNOC Group shows improvement, however, of particular concern is the rate of serious incidents in road transport activities.

The past approach to management of contractor HSE has tended to concentrate on monitoring/control of HSE activity after contract award, where reactive measures in response to incidents and inspections predominated.





This document provides guidelines for a more proactive approach with 'upfront' HSE management by means of more focused attention during the initial project phases, i.e. during tender evaluation and mobilisation as an immediate objective and even earlier phases as an objective for the future. This shift of approach is represented in Figure 1.1.

Also, it is anticipated that ADNOC Group of Companies will undertake 'Partnering' arrangements with contractors in which shared common objectives are to be met. These contracts usually have a long-term nature which emphasises the need for early identification of clear HSE objectives from the onset and inclusion of these in the contract.

Figure 1.1 HSE activity phasing for contracts

1.3 Scope

This document covers health, safety and environmental issues for all types and forms of contract services within the ADNOC Group of Companies.

The extent to which these guidelines are applicable depends on the level of HSE risk that is incumbent to the contract services under consideration. In turn, this will influence the extent to which the full details presented in Chapters 3 through 9 of these guidelines may need to be applied.





2. OVERVIEW

2.1 Contract Phases and HSE Planning

The influence and inclusion of HSE issues in the preparation of tender and contract documents and the subsequent HSE management of a contractor can be described within the context of an identifiable series of phases:

planning and invitation to tender tender period bid evaluation and contract award mobilisation execution demobilisation close-out. The chapters of this document follow this chronological sequence of events in contractor management. Each of the phases and the corresponding key HSE contract activities are shown in summary in Figure 2.1 and expanded in detail in subsequent chapters. The detailed guidance in the appendices follows the standard set of headings for HSE management with a further heading to cover those general issues of the work activities themselves.

2.2 Planning for HSE: Timing and scope

The main HSE activities of each phase together with the way in which the responsibilities for these activities are divided between the Group Company and the contractor are shown in Table 2.1.

The emphasis on HSE considerations in the early phases is for the following reasons:

to improve contract HSE definition and awareness to provide early identification of HSE issues for inclusion in the tender

documents

to provide a framework before contract award for continued performance of HSE to agreed standards in subsequent execution

to (re)confirm that contractors can fulfil HSE obligations, partly based on past HSE performance.

There are two main points to be considered in determining the application of HSE issues:

the extent of the HSE coverage required the importance of specific HSE issues.





HSE close outReport

Definition

Prequalifycontractors

Maintain same levelof vigilance as

during execution

Monitor HSE planimplementation and

performance

Confirm HSE plan Hold local kick-offmeeting

CONTRACT AWARD

Review tender

Contractor preparesHSE plan

Assessment of each contract

Finalise tender document

Establish contractscope / schedule /

strategy

Feedback to Register of Approved Contractorsfor prequalification of

contractors

PLANNING AND INITIATION TO TENDER

TENDER PERIOD

EVALUATION AND CONTRACT AWARD

MOBILISATION

EXECUTION

DE-MOBILISATION

CLOSE-OUTHSE close out

Report

Definition

Prequalifycontractors

Maintain same levelof vigilance as

during execution

Monitor HSE planimplementation and

performance

Confirm HSE plan Hold local kick-offmeetingConfirm HSE planHold local kick-off

meeting

CONTRACT AWARD

Review tender

Contractor preparesHSE plan

Assessment of each contract

Finalise tender document

Establish contractscope / schedule /

strategy

Feedback to Register of Approved Contractorsfor prequalification of

contractors

PLANNING AND INITIATION TO TENDER

TENDER PERIOD

EVALUATION AND CONTRACT AWARD

MOBILISATION

EXECUTION

DE-MOBILISATION

CLOSE-OUT

Figure 2.1 Management of Contractor HSE: overall flowchart





Table 2.1 Management of Contractor HSE: key targets and Group Company and contractor activities

Phase Target Group Company Contractor Planning and Invitation to tender

Major hazards identified with assurance that they can be managed Confirmation of major hazards with outline targets criteria and methods for control Confirmation that prequalified contractors can achieve targets Review of previous HSE record of contractors HSE tender evaluation criteria specified and agreed with Tender Board

Qualitative HSE assessment of the work HSE sensitivities Hazard identification /quantification Health risk assessment Environmental impact assessment HSE policies and approach Group Company/contractor dialogue

Group Company/contractor dialogue Respond to prequalification Discuss HSE responsibilities and staffing

Tender period

Contractor preparation of HSE Plan in accordance with Group Company criteria/input

Respond to clarification requests Meetings and site visits

Prepare contract HSE Plan Clarification requests Meetings and site visits

Evaluation and contract award

Confirmation that contractor HSE Plan will meet Group Company criteria Agreement with contractor on methods to be used, performance measurement criteria and audit/review strategy

Evaluate bids Clarifications Meetings Finalise contractor's HSE Plan

Respond to clarifications Meetings

Mobilisation Confirmation that contractor's HSE Plan has achieved pre-execution targets

Kick-off meeting Confirm contractor's HSE Plan activities Supervision Pre-execution audit

Kick-off meeting Confirm contractor's HSE Plan activities Supervision Induction Training Meetings Inspection Pre-execution status achievement

Contd next page





Phase Target Group Company Contractor Execution Assurance and

verification that contractor systems are performing in line with contractor's HSE Plan Milestone reviews

Supervision Meetings Promotion of HSE issues HSE performance review Investigation of incidents Auditing

Supervision Inspection Induction Training/Drills Meetings HSE performance review Investigation of incidents Auditing Correction of defects

Demobilisation

Management of final activities

Supervision Supervision

Close-Out Analysis and feedback of Group Company and Contractor HSE performance

Close-out report Feedback for future contract HSE Plans/clauses

Close-out report and feedback (to own management)

The material presented in the remaining chapters of this document is sufficiently extensive and detailed to cover large contracts, for example, major engineering/procurement/construction (EPC) contracts, which involve significant elements of all the phases outlined above in table 2.1. The appendices similarly contain further details that could be relevant to such contracts and, in some circumstances all of the items listed may need to be considered.

For small contracts, and those where the extent of planning work is much less, the need for such a comprehensive coverage will be correspondingly reduced. However, even for small or short duration contracts, HSE planning must not be ignored or treated superficially. In such cases, the work is likely to include the use of basic practices (e.g. scaffolding, welding, excavating, erecting formwork, etc) and the contractor should be able to demonstrate good general HSE management in each of these basic practices. In addition, the contractor should be able to understand and carry out hazard assessment when these practices are put together in different combinations, particularly in association with the hazards of the workplace (e.g. working in confined spaces, over water, etc) and live plant (e.g. presence of H2S, isolating electrical systems, etc).

Preparations for contracts, large or small, must include the same systematic process of hazard identification, assessment, control and recovery, together with the evidence that a system is in place to manage these hazards. In a major project this HSE Plan will be a comprehensive document. In the other extreme, e.g. for the one-man contract undertaking a simple repetitive task, a short pro-forma completed to show that the hazards are recognised and understood is likely to be adequate.





2.4 Company and Contractor HSEMS

A typical Group Company HSEMS will describe the elements of the Group Company's management system as they apply to HSE (Part 1) and the detailed breakdown of business processes into the HSE-critical activities (Part 2). For an operation-specific situation, these two parts are translated into a demonstration of the HSEMS in action (as part of the COMAH report). Refer to ADNOC CoP document HSEIA Requirements [Ref. 3]. Where such operations require contracted work or services, the COMAH report must show how the Group Company manages contractor HSE and how the contractor achieves HSE management of his own workforce and his subcontractors.

Major contractors providing services to Group Companies must be able to demonstrate that they already have an HSEMS and are prepared to contribute to the COMAH report. Whilst it is not intended that their HSEMS should be identical to that of the Group Company, it should exhibit the same degree of application and assurance of safe operations. A contractor familiar with the guidelines as provided in the ADNOC Group Guideline HSE Management System Guidelines [Ref. 4] and who uses these as the basis for his own HSEMS should be able to align immediately with this requirement.

Smaller (minor) contractors, who may not have a formalised HSEMS, must still have a basic understanding of managing HSE in their operations and be prepared to provide a simple but effective management system.

Service contracts are often used as a means of executing work. Initially such contracts often have no defined scope beyond a general description of the services, skills, plant, etc that the contractor must be able to provide. However, the ability of the contractor to mange HSE on a job-by-job basis is an essential requirement. For example, he should be able to make hazard assessments, apply and enforce controls to manage residual HSE hazards and effects, apply local HSE legislation correctly, respond effectively to emergency situations, etc. These abilities must be demonstrated prior to contract award.

In Group Company operations, the HSE-critical activities represent those activities for which the principles of hazards and effects management must be applied and documented as part of the HSEMS. For work contracted out, these same principles should be applied to the activities carried out by the contractor. General contractor HSE management principles, (such as his approach to hazard assessment, use of PPE, HSE inspection of plant and equipment, etc), are included in this document.

Throughout this document, reference is made to the 'HSE Plan' which essentially defines the combination of the HSEMS and a description of how the HSE-critical activities are to be managed. The term 'HSE Plan' has deliberately been retained for a wider understanding of management of contractor HSE, particularly with smaller contractors.

[3] ADNOC Manual of Codes of Practice: Code of Practice on HSEIA Requirements, ADNOC-COPV1-02.





An important component of the HSE Plan is the demonstration how the Group Company and the contractor intend to link their organisations for the purpose of HSE management of the contract. This is particularly important for large and long-term contracts and it should be recognised that in these situations, this HSE Plan will effectively form a significant part of the COMAH report.

When the Group Company clearly defines the HSE requirements, the contractor can then provide the necessary details of his management system and demonstrate how he intends to fulfil the requirements. The way that this occurs in a typical contract is shown in Figure 2.2.

Guidelines for headings and contents for an HSE Plan for major contracts are given in Appendix IV, with those for smaller contracts, such as office services, in Appendix V.

2.5 Joint HSEMS and COMAH Report Preparation

In major projects under circumstances that represent significant HSE risk, it may be necessary to combine the contractor and Group Company systems to form an effective overall HSEMS for the planned operation. To achieve this it is necessary:

for the Group Company to provide the contractor with details of the hazards and hazardous operations which the contractor will encounter

for the Contractor to describe his HSEMS and how he will manage HSE-critical activities identified by the Group Company and those additional activities, critical to HSE performance and known to the contractor, which are inherent in undertaking the specified work

to complete the HSE hazards and effects register and activities catalogue with the contractor ensuring that this is compatible with that of the Group Company

to complete the COMAH report with joint input to prepare a monitoring and audit plan to audit the COMAH report and joint HSEMS. Typically, the various parts of the joint HSEMS and COMAH report, as jointly prepared by contractor and Group Company, must be expected to have relative input from both parties.





Outline of corporate HSEMS

Typical approach to hazards & effects management, sample procedures, etc.

Detailed contract specific HSEMS

Hazard & effects management process developed

List of method statements for development

HSEMS for cont ract

Hazard & Effects management process for development by contractor

Joint HSEMS meets requirements

Hazards & effects assessment meets requirements

Proposals for method statements acceptable

Detailed hazards & effects assessment

Detailed method statements & work instructions

Prequalification

Invitation to tender

Tender period

Contract evaluation & award

Pre-mobilisationPre-execution

Contract HSE Plan Development ContractorGroup Company

rporateProcess

Task

Quality (HSE) System Key:

Outline of corporate HSEMS

Typical approach to hazards & effects management, sample procedures, etc.

Detailed contract specific HSEMS

Hazard & effects management process developed

List of method statements for development

HSEMS for cont ract

Hazard & Effects management process for development by contractor

Joint HSEMS meets requirements

Hazards & effects assessment meets requirements

Proposals for method statements acceptable

Detailed hazards & effects assessment

Detailed method statements & work instructions

Prequalification

Invitation to tender

Tender period

Contract evaluation & award

Pre-mobilisationPre-execution

Contract HSE Plan Development ContractorGroup Company

rporateProcess

Task

Quality (HSE) System Key:

CoCo

Figure 2.2 Development of contract HSE requirements

Clearly the above will vary significantly from contract to contract. The level of complexity, detail and degree of completeness will ultimately require the sanction of the Contract Holder who must satisfy himself on behalf of the Group Company that all appropriate aspects have been considered and action taken.





3. PLANNING AND INVITATION TO TENDER

3.1 Objectives

The HSE activities carried out during the planning and invitation to tender phase fall under the following headings:

determine the HSE impacts on scope, schedule and strategy for the contracts required

assess HSE content of each contract confirm suitability of contract scope, schedule and strategy against HSE

assessments

prepare HSE-related contract documents prequalify potential contractors for HSE suitability, having reviewed their

past HSE performance

prepare the outline contract with appropriate milestone hold points. Ahead of any finalised contract scope, Group Companies may consider dialogue with potential bidders to discuss possible contractor involvement, especially the technical and other difficulties that might influence HSE performance. Clearly at this stage no discussion on cost issues and/or possible award is appropriate.

The sequence of activities is shown in Figure 3.1.

3.2 Outline Scope of Work or Services

The starting point for the planning of contractor HSE management is the definition of work or services in sufficient detail to identify the major hazards and HSE impacts. This activity must be done by the Group Company and should be determined from a separate appraisal of the business area and activities themselves. The work should include aspects such as:

type of activities location of site(s) and the workplace timing and sequence personnel plant and equipment used materials and consumables. Experience gained from previous projects should be utilised by reference to:

close-out reports from similar projects formal records of previous HSE performance by contractors on similar

projects

similar activities in relevant and/or nearby countries





HSE audits carried out in recent years on relevant activities general background information on planned areas of operations. Definition of work or services should include requirement for an HSEMS from which specific tasks and targets with clear deliverables by the contractor (and, where relevant, the Group Company) can be derived.

It should therefore address the main elements of an HSEMS as follows:

Leadership & commitment

Define how senior management set personal examples, demonstrate involvement and participation, communicate to employees, etc on HSE.

Policy & Objectives

Define the policy statements on HSE that are to be observed.

Organisation, Resources & Competence

Define the formal structure for organisation, allocating resources, defining communications and responsibilities on HSE issues between the Group Company and the contractor, setting minimum competence levels and training requirements in HSE expected on the project for Group Company and contractor staff and specifying documentation control.

Evaluation & Risk Management

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

Planning, Standards & Procedures

Describe how the controls for hazards and effects management are to be implemented, develop a comprehensive listing of HSE standards and procedures applicable to the project, describe change management proposals and emergency response procedures.

Implementation & Monitoring

Define how HSE performance is monitored, the criteria for HSE performance and how corrective action is to be taken.

Audit & Review Define the basis under which internal and external HSE auditing and management reviews will be conducted.





DefinitionIdentify workscope

Make an HSE assessment for each contract

Finalise HSE aspects forcontract documents

Finalise HSE aspects forinclusion in variation order

Obtain final approval for bid list

Review/modifyschedule

Establish notional contract strategy

SCREEN POTENTIAL CONTRACTORS FOR

SUITABILITY Previous experience Previous reports

Review HSE assessment against contract schedule

and strategy

BASED ON THE HSE ASSESSMENT

Define scope of contractors HSE Plan Identify pertinent HSE regulations for the contract Agree Opco supervision strategy Identify and schedule Opco/contractor training needs Determine extent of prevailing influence Incorporate HSE related costs in contract Fix minimum pre-execution requirements Hold pre-tender meeting if considered necessary

Agree HSE bid evaluation criteria andobtain tenderboard endorsement

DRAW UP POTENTIALBIDDER LIST FROM LIST OF APPROVED

CONTRACTORS

For main contractor For sub-cintractor(s)

Is contract schedule and strategy

suitable?

SCREEN POTENTIALCONTRACTORS FOR

HSE SUITABILITY

Previous experience Previous reports Questionnaire Visits, interviews, audits

Are potentialcontractors

prequalified?

Can anexisting contract

be used?

Take this into account during HSE assessment

BASED ON THEHSE ASSESSMENT

Determine scope for (supplementary) HSE plan

Upgrade current regulations Determine need foradditional supervision(Opco & contractor)

Ditto training

Yes

No

NoYes

s No

DefinitionIdentify workscope

Make an HSE assessment for each contract

Finalise HSE aspects forcontract documents

Finalise HSE aspects forinclusion in variation order

Obtain final approval for bid list

Review/modifyschedule

Establish notional contract strategy





Review HSE assessment against contract schedule

and strategy





Agree HSE bid evaluation criteria andobtain tenderboard endorsement


CONTRACTORS



CONTRACTORS


Is contract schedule and strategy

suitable?


HSE SUITABILITY



HSE SUITABILITY


Are potentialcontractors

prequalified?

Can anexisting contract

be used?

Take this into account during HSE assessment




Ditto training




Ditto training

Yes

No

NoYes

s No

YeYe

Figure 3.1 Management of Contractor HSE flowchart: planning





3.3 Contract Scope, Schedule and Strategy

The contract scope identifies those project activities that will be contracted out. For each contract, a short but comprehensive description of the work should be produced, from mobilisation to demobilisation.

A contract schedule should be developed with due consideration of the HSE issues involved, paying particular attention to allowing adequate time for mobilisation/demobilisation. The contract schedule should highlight HSE issues that require special emphasis in later contract phases.

The contract strategy adopted can be the single most important strategic management decision of a project. The factors to be considered in formulating the strategy include:

number of contracts (and hence the number of Group Company - contractor interfaces)

availability of suitable existing contracts (e.g. service, call-off, etc) contractor resources and skills Group Company supervision resources and skills Group Company/contractor responsibilities local environment contract/project schedule competitive situation UAE and National Laws & Regulations prevailing influence Prevailing influence allows the Group Company to impose its own HSE

requirements. In contrast, negligible influence only allows the imposition of relevant UAE and National HSE Laws & Regulations.

The interfaces between Group Company and contractor is an area that needs careful review and clear definition. The following two examples illustrate the problem:

Example 1: a small contractor uses Group Company-owned mobile access equipment for electrical modifications on various sites. Responsibility for ensuring the maintenance of the equipment and the competency of the personnel using it should be defined.

Example 2: An EPC contract for the expansion of a plant requires the new facilities to be brought on stream with no interruption to production on the existing plant. The Group Company/contractor interfaces are likely to be complex on start-up and the scope must specify the format and type of detail required for the start-up stage.





A primary consideration in determining strategy is the extent to which project management is relinquished to the contractor. For HSE issues this will be particularly important for those aspects associated with project organisation and communications.

Contract strategy should consider provisions for delay or forfeit of contract payments pending results of HSE audit findings and satisfactory completion of action items. Non or late submission of key HSE Plans and documents should be linked to contract payments.

3.4 Contract HSE Assessment

A structured, formal HSE assessment should be developed for each anticipated contract. The details should be formally recorded with future actions identified and, wherever possible, action parties nominated. This will comprise elements of the HSEMS, together with aspects associated with the particular activities of the work, described in 3.2 above.

The main objective of the formal assessment is to generate a plan that incorporates all Group Company and contractor HSE aspects relevant to the contract workscope. This plan will ultimately provide the framework for the contractor's HSE Plan.

The main headings of the assessment are:

carry out HSE hazards and effects management process Follow the process of identifying, assessing and controlling HSE hazards and establishing methods for recovery in the event of loss of control. If the contract relates to a development project then the hazards and effects management process will be underway and the hazards already identified will be added to those identified as project-specific and will be included in the project hazards and effects register. If the contract relates to a common or recurring activity then the Contract Holder can access the hazards and effects register for that activity.

identify the applicable HSE Laws & Regulations and Group Company standards and procedures

identify the Group Company's HSE project organisation/interfaces and define supervision requirements, roles and responsibilities (see Appendix III for key personnel)

examine carefully areas where critical time schedules and resource limitations may call for extra attention to HSE

determine communication needs including scope and schedules for meetings

identify minimum induction and training requirements: for both Group Company and contractor. Prepare a training schedule, paying particular attention to training needs for exceptional activities.





Whilst major hazards associated with the operational phase of the project will have been identified earlier, the assessment at this stage will build up the level of detail and should involve the people who will participate in the project.

The suitability of the notional contract scope, schedule and strategy should then be confirmed against the HSE assessment.

At this stage, It may be appropriate to have dialogue with potential bidders as a further means of ensuring comprehensive coverage of HSE issues in the contract HSE assessment.

3.5 Contract HSE Specification The HSE assessment results may now be translated into a specification for inclusion in the tender as follows:

define the scope of the HSE Plan and in particular the hazards to be addressed

identify the HSE Laws & Regulations and Group Company standards and procedures that will be applicable to the contract

define the Group Company/contractor interfaces and the Group Company supervision strategy

identify and schedule Group Company and contractor training requirements

determine the minimum 'pre-execution' requirements. Appendix IV and V provide guidelines for defining the requirements of an HSE Plan for major and small contracts respectively (also refer to section 2.4).

The tender HSE documentation should be compiled, with due attention to the following:

Group Company responsibilities It is the Group Company's responsibility to ensure that the tender documents comprehensively cover the HSE requirements for the contract. Assumptions that the contractor already knows the issues are dangerous. Time must be spent to make comprehensive, clear and concise tender documents. Knowledge about hazards already identified by the Group Company must be passed on to bidding contractors.

Minimum requirements The hazardous activities that need addressing by the contractor should be listed by the Group Company. Selection of these activities should be based on due consideration of the known exposure and frequency presented by these hazardous activities.

Contractor responsibility The contractor must have independent responsibility for his own HSE Plan, but tender documents must make clear provision for the Group Company to perform HSE audits on the contractor in order to confirm compliance.





Contractor reporting Clearly identified reporting requirements regarding HSE performance during contract execution.

Contractor performance Provision for the suspension of work if the contractor does not observe the HSE requirements and, in particular at mobilisation, to withhold permission to start execution and hold payments until a satisfactory pre-execution audit has been achieved.

Special HSE provisions Where special HSE provisions are to be provided which require separate identification/pricing in the bid, the tender documents should specify these clearly and identify where the bidding contractor is to price for them.

In preparing his bid, the contractor must demonstrate compliance with such requirements by preparing his own HSE Plan within the Group Company framework. Bidding contractors must be allowed the freedom to use industry HSE standards if they are equivalent to or exceed the Group Company's standards. The Group Company must ensure the availability of expertise and resources to evaluate the proposed alternative standards.

The tender documents must permit the flexibility for the contractor to take on ownership of his HSE responsibilities in order to retain the ability to manage the contract effectively.

Short lead times for tender preparation could compromise the establishment of a sound basis for HSE management.

The following aspects should be considered:

use standard contracts, where possible ensure adequacy of document coverage make the documentation appropriate for the contract without

unnecessary bureaucracy

specify any constraints on the methods of working identify where concurrent Group Company operations could be

impacted

take account and state the limits of the Group Company's prevailing influence.

This last aspect is of special concern in mobilisation and demobilisation phases and influence can be exerted by ensuring that these phases are adequately covered in the HSE Plan. In some instances the ability to exercise influence may be limited (for example when work is being carried out in a yard or factory where only a small percentage of the contractor's workload is for the Group Company).





3.6 Contractor Prequalification

The general practice for selecting contractors is through the competitive tendering process. In the prequalification stage, potential contractors are screened to establish that they have the necessary experience and capability to undertake the contract in question. Only those meeting the necessary HSE criteria should be included on the prequalified list. A formal historical record of the HSE performance of all contractors previously employed should be maintained by the Group Company for use at tender prequalification.

Prequalification is usually achieved by issuing a standard format document for the contractor to complete, supported where necessary by historical performance records. It may be necessary to review the content of standard format document and to add or emphasise requirements specific to the contract.

Of special importance is the management by contractors of their subcontractors and the need for the main contractor to demonstrate his understanding and commitment to having full responsibility in this area.

Appendix I provides guidelines for an HSE prequalification questionnaire. This questionnaire is directed towards establishing the status of the contractor's HSEMS.

A points system method, which minimises subjective judgement, may be used to evaluate contractors' submissions. Contractors who achieve a predefined acceptable score will then be judged to have met the HSE pre-contract requirements. Appendix II provides guidelines for a points evaluation system.

Group Companies should aim to be fully satisfied that contractors, eventually invited to bid, can perform the work to the required HSE standards.

When prequalifying new or unknown contractors, it will may be necessary to arrange for inspection visits to the contractor's base site (with particular emphasis being placed on ensuring that the contractor has the resources and management structure to meet the Group Company HSE standards). Where considered necessary, the contractor's existing sites should be audited to verify that he can achieve the HSE standards proposed for the new contract.

Exclusion of a contractor from a bid list may be necessary as a result of his unsatisfactory HSE record. The contractor should be clearly informed of the deficiencies in his HSE management performance and that inclusion in subsequent bid lists will require improved HSE performance.

Contractor prequalification as described above is necessary for large or specialised contracts where new contractors or existing contractors must be vetted with respect to their capabilities to manage HSE matters against a particular scope of work.

For more routine contracts it is likely that a Group Company will maintain a 'Register of Approved Contractors' whereby contractors are registered once considered capable of undertaking certain types of work effectively, including the management of the HSE aspects. The contractors are initially reviewed or





prequalified in a manner similar to that described above. Once the Group Company is satisfied that the contractors have the necessary systems in place to manage certain types of contracts satisfactorily they are permitted to bid for these.

It is important to maintain a Group Company-wide system that can record up-to-date details on the HSE performance of these contractors on contracts awarded to them. This system should also prompt the initiation of periodic HSE reassessments of contractors who have not been successful in bidding to ensure that HSE information is current.

In large Group Companies, where a contractor may be working for a number of functions, it will be beneficial to assign a focal point within the Group Company to oversee the activities of that particular contractor in terms of work undertaken, resources available, potential over-commitment. The Group Company focal point must be fully familiar with the contractor's structure, the intended spread of resources and ultimately his HSE performance. The Group Company focal point is also in a position to provide Group Company management with an assessment of status before commitment to any particular strategy involving that contractor.





4. THE TENDER PERIOD

4.1 Objectives

The HSE activities carried out in the tender phase fall under the following main headings: a. contractor's preparation of his HSE Plan in accordance with the b. framework provided by the Group Company c. Group Company responses to contractor's HSE clarification requests. d. Copies of queries and replies should be circulated to all contractors. e. Clarification meetings which may be held with contractors individually or in

groups. All such meetings should be recorded by the Group Company. f. Site visits by contractors (as necessary).

All meetings and visits should be recorded by the Group Company. The lead times for tender response should be sufficient for tenderers to provide a sound basis for HSE management.

4.2 Contractor's HSE Plan

The principal activity in this phase is the preparation of the HSE Plan by the contractor. For a major contract this will probably form a significant part of the COMAH report (refer to Section 2.4).

The HSE Plan must cover all contract phases from mobilisation to demobilisation and should provide a clear indication of the policies, procedures, standards, etc to be adopted during each phase of the contract.

The contractor should use as the basis for his HSE Plan the Group Company contract HSE documents as described above in Chapter 3. However, as part of his submission, the contractor is required to state his own proposals within the framework described. In particular, the contractor should:

Develop his own hazard assessment of the work described for the contract

Define his execution proposals. The contractor should confirm his proposed use of policies, procedures, standards, etc and show that these comply with Group Company requirements or add to them where he believes the contract guidelines are insufficient.

Demonstrate familiarity with the type of work involved Confirm his understanding that the Group Company standards and

guidelines represent minimum standards.

These guidelines are designed to indicate the key features of the HSE Plan but are not necessarily exhaustive. The contractor may add to the list where needed. Conversely, some items in these guidelines may not apply to some contracts.





4.3 HSE Costs

The main objective should be to provide a clear means of assessing the weight each contractor is giving to HSE in his submission and for him to demonstrate that he has allocated sufficient resources to implement the HSE Plan satisfactorily.

The tender documentation should, where possible, provide a mechanism to allocate costs of implementing HSE requirements and for the contractor to indicate these costs separately. However, care should be exercised to ensure that separated HSE costs are not included here for work which should be carried out as part of normal good practice.

HSE pricing would normally be expected for such items as:

audits meetings induction and training medical facilities, first-aid training, Medevac, safety equipment waste disposal incentive schemes personal protective equipment (PPE) emergency resources health surveillance journey management in logistics.

4.4 Incentive Schemes for HSE

Incorporating an incentive scheme for HSE, involving additional payment in a contract, needs very careful consideration. It can absorb a significant degree of effort to administer and the longer term effectiveness can be questionable.

To be effective such a scheme should:

not discourage or suppress the reporting of incidents be proactive and therefore reward effort, e.g. audits and follow-up rather

than 'after the event' statistics

ensure that incentives are enjoyed and valued by the personnel who are in a position to influence the performance and maintain the systems

be culturally adapted to the local environment. A contract which has no incidents may reflect a considerable effort by personnel and a good HSEMS; on the other hand it can equally indicate a period of good fortune.





With a better definition of what is expected from contractors in terms of the HSE Plan, it is easier to link contractual payments to the satisfactory development of the HSE Plans and the subsequent adherence to them. This, together with a more objective end-of-contract rating against the plan (used in evaluations for future work), is an effective long-term incentive for the contractor.





5. EVALUATION AND CONTRACT AWARD

5.1 Objectives

The evaluation phase should:

Evaluate thoroughly each contractor's HSE Plan. This evaluation should check that the HSE Plan achieves the minimum acceptable standards, including reference to proposed key personnel competencies, subcontractors, manning levels, plant and equipment resources, etc.

Clarify each contractor's HSE Plan where necessary and record all clarifications for inclusion in contract

Establish the costs included in each bid for HSE activities Evaluate and provide rating and comparison of HSE aspects in the bids

to determine acceptability on HSE requirements.

5.2 Evaluation

The main focus of the HSE evaluation is the contractor's HSE Plan although other aspects of the bid should be scrutinised. In particular, aspects of the contractor's execution plan may be inconsistent with his stated intent regarding the fulfilment of HSE requirements and may need clarification (including site visits).

It is important to establish the current status of the contractor's preparedness for HSE in the contract and to ascertain if further action is necessary on his and the Group Company's part before proceeding. In this regard, the Group Company should assess HSE costs and resources required for a specific contractor as well as those stated in the contractor's bid. Such Group Company requirements vary depending on the preparedness and HSE competence of the contractor.

Where a tender is considered, even though it has HSE deficiencies, the Group Company should include an estimate of the cost of additional Group Company or contractor resources and the time needed to bring performance up to standard and take this into consideration when evaluating bids.

The extent of the evaluation of HSE depends on the degree of HSE requirements for the contract but will have been determined by the level of work in the previous phases.

Appendix II describes a guideline evaluation method for prequalification based on a points system. This method may also be followed for tender evaluation by utilising the expanded headings in the Group Company contract HSE documentation.





6. MOBILISATION

6.1 Objectives

In the mobilisation phase the principal activities are as follows:

Hold kick-off meeting (Group Company and contractor jointly) Commence mobilisation (contractor) Review and finalise the contractor's HSE Plan (Group Company and

contractor jointly)

Commence induction and training (Group Company and contractor jointly)

Supervise, inspect and monitor progress (Group Company) Fulfil pre-execution milestone requirements (contractor) Hold pre-execution HSE audit (Group Company). Prior to mobilisation, it is likely that the full HSE Plan is known only to the principal members of the Group Company's and contractor's project management teams. During mobilisation the HSE Plan has to be implemented by the management of both the Group Company and the contractor. Depending on the circumstances, additional Group Company supervisory staff may be required to allow rapid set-up and implementation of the HSE Plan. The resources required at this stage should not be underestimated.

During mobilisation the Group Company must ensure that the contractor sets up a method of operation that is in accordance with the HSE Plan. It is at this stage that the implementation and ownership of the HSE Plan by the contractor begins and this needs careful control. Aligning all these interests requires the introduction of a good working relationship between Group Company and contractor and between contractor and subcontractors. The effective transfer of HSE responsibilities to any subcontractors, particularly if their activities are difficult to monitor (e.g. transportation), is particularly important.

The HSE activities that will be implemented during mobilisation are indicated in Figure 6.1.

6.2 Kick-off Meetings

An HSE kick-off meeting should be held with the contractor immediately after contract award and before the execution of any work. For a new contractor, the kick-off process should include both Group Company Contract Holder and the contractor's local management.

If the contractor mobilises locally at the worksite, the kick-off meeting can similarly be held locally. If not, it may be necessary to hold the initial kick-off meeting at the contractor's base office, subsequently authorise mobilisation of his key personnel to site and follow up with a further local kick-off meeting.





The local meeting should be held immediately prior to the start of any work. It should ensure that the contractor's workforce and supervisors are aware of the site hazards of the operation detailed in the scope of work and are familiar with HSE working procedures, rules and regulations, alarms and signals, emergency communications and procedures.

Additional topics to be covered should include:

Confirmation of the HSE Plan to be implemented Confirmation of contractor employees' competence in HSE Confirmation of HSE performance objectives Distribution and explanation of the Group Company HSE policy

statement, basic HSE rules and work procedures

Confirmation of the scope and schedule of activities to pre-execution milestone, HSE meetings, audits and reviews

Group Company and contractor contingency plans Contact with third parties to ensure their role in emergency response

plans is known

Confirmation that HSE induction and training plans are in place Briefing of subcontractors on HSE requirements Incident reporting and investigation procedures. The meeting may be structured as an HSE workshop, with participation by both Group Company and contractor management.

At the same time as the kick-off meeting, the opportunity should be taken to check the physical evidence that HSE systems are in place, for example:

HSE equipment Communications Environmental protection Health hazard identification and assessment, medical facilities,

Medevac procedures

HSE awareness and promotional material HSE documentation manuals. The kick-off meeting should not be used as an opportunity to raise new HSE issues that should have been covered in the contract documentation.





Figure 6.1 Management of Contractor HSE flowchart: mobilisation

Contract Award

Contractormobiliseslocally?

Hold kick-off meeting locally

Yes

NoYes

Has the contractor met the specified milestone

requirements?

Hold kick-off meeting at contractors base office

MOBILISATION REMOTE FROM WORKS VICINITY

Company: Review HSE plan Monitor pr-execution status Supervise, inspect, audit

Contractor: Contract HSE plan Fulfill pr-execution procedure

All: Commence (or continue) induction and training Attend progress meetings

MOBILISATION LOCAL TO WORKS VICINITY




Contractor (and sub-contractor(s))mobilise key personnel and equipment

to vicinity of works

Continue mobilisation

Pre-execution HSE audit

Proceed to execution

No


Contract Award

Contractormobiliseslocally?


Yes

NoYes

Has the contractor met the specified milestone

requirements?

Hold kick-off meeting at contractors base office

















Contractor (and sub-contractor(s))mobilise key personnel and equipment

to vicinity of works

Continue mobilisation

Pre-execution HSE audit

Proceed to execution

No






6.3 Mobilisation

Once mobilisation activities have commenced, the Group Company should begin its supervision, monitoring, inspection and audit functions of the contractor's pre-execution activities to ensure the contractor's HSE Plan is being implemented.

The Group Company supervisory function should ensure that the contractor has deployed his supervisory staff and is implementing the briefing and training that are required for his supervisors and employees.

During the early part of the mobilisation phase it is likely that all personnel (Group Company and contractor) assigned to the project will attend an employee HSE orientation programme.

During mobilisation the contractor should finalise the HSE Plan. He should incorporate the agreements reached with the Group Company at the kick-off meeting. The final HSE Plan for the contract will then be produced.

Progress meetings should then be used as the formal method of reviewing HSE implementation.

6.4 Pre-execution Audit

At this stage of the mobilisation (known also as milestone zero) an audit against the contractor's HSE Plan should be completed to determine whether the contractor has achieved the necessary targets stated in the HSE Plan and whether mobilisation can be considered complete.

Achievement of HSE Plan targets should represent the first milestone of the project to which first stage payments may be associated. A contract clause reserving the right to terminate on failure to meet this milestone should be considered.

The extent of the audit will again depend on the size and complexity of the contract. For a small contract an audit may be conducted by means of a simple checklist. For a large and complex contract a more analytical approach may be required.

If the audit proves to be unsatisfactory then the status of the contractor's progress should be carefully reviewed. The options available at this stage are:

Minor deficiencies - For relatively minor deficiencies the contractor should be requested to implement corrective action and the audit repeated. It may be possible to allow this to take place in parallel with initiating the execution phase.

Serious omissions - In the more serious omissions the option of withholding permission to proceed or even terminating the contract may be necessary.





7. EXECUTION

7.1 Objectives

Under the contract, the responsibility for proper supervision of the contractor's personnel on HSE matters rests with the contractor himself. However, the Group Company Representative should ensure that contractor's supervision complies with the requirements defined in the contractor's HSE Plan.

Such checks should include confirmation of the following:

The contractor's line management commitment to the HSE issues Reinforcement of the HSE targets as defined in the contractor's HSE

Plan

The provision of training as needed for specific contractor employees The regular checking and review of the contractor's performance by the

Group Company Contract Holder

The contractor's monitoring of the quality, condition and integrity of his plant, equipment and tools

The contractor's holding of daily toolbox meetings and regular HSE meetings (minimum-weekly)

The contractor's implementation of exercises and drills of contingency plans with maintenance of an effective audit trail, including follow-up and close-out of action items

Monitoring of the contractor's incident investigation and follow-up Performance of HSE inspections/audits and reviews of the contractor's

activities (including contractor's internal HSE control system)

Any deviations from the HSE Plan formally assessed and approved. 7.2 Supervision

The Group Company's commitment to sound working practices in HSE matters should be visibly demonstrated in contract execution by providing a representative or representatives from line management to fulfil the HSE obligations of the Group Company as described in the contract.

Where there is access to Group Company HSE advisers or specialists, then it is important that the role of the adviser is understood to be indeed that of an adviser. The Contract Holder or Group Company Representative(s) may seek advice, support or services from an HSE Adviser on a routine or periodic basis but the responsibility for HSE matters on the contract must remain unmistakably with the assigned Contract Holder or Group Company Representative(s).

The extent of supervision will depend on the local circumstances and nature of the work. If the worksite is on or close to operating plant, more supervision may be required than, for example, on a new construction site. However a





balance must be struck: too much instruction and direction by the Group Company tends to relieve the contractor of responsibilities stipulated in the contract.

Demonstration of the Group Company's commitment to sound HSE management should be provided by:

Verification that all HSE-related clauses in the contract are being complied with

Regular and random site inspections by both the Contract Holder and the Group Company Representative(s)

Attendance at regular HSE meetings with the contractor Follow-up of all incident reports Prompt provision of resources and advice for HSE matters Not cutting corners on costs for HSE aspects of the work Regular evaluation reports of the contractor's HSE performance Measures to promote improvements in HSE performance In extreme circumstances exercise of the right to curtail or suspend

work for HSE reasons.

An HSE audit and review programme should be prepared, stating specifically what is expected of the Group Company Representative(s) in ensuring that the HSE Plan is finalised and adhered to, together with details of how the performance of the Group Company Representative(s) is to be measured.

In certain circumstances it may be necessary to provide additional HSE specialist personnel to ensure the requisite level of supervision.

7.3 Competence Assurance

During execution of the work the Group Company should monitor the competence assurance and associated training programme of the contractor and ensure that it meets the requirements of the HSE Plan. Where necessary the Group Company should also determine any additional needs which may occur as a result of local circumstances. Monitoring by the Group Company should include confirmation of the contractor's commitment to the following:

Adherence to the contractor's personnel recruitment criteria Demonstration of personnel qualifications, ability and skills Provision of the necessary induction courses. Such courses should

make personnel fully aware of the nature of the potential work hazards, instruct them in the use of protective and emergency equipment and explain/practise emergency drills.

Training of contractor's personnel in the standards and procedures to be followed





Completion of the necessary HSE, first-aid, survival and job-related training (particularly permit-to-work system (PTW) and house rules) required by law and Group Company practices prior to starting work and the provision of certificates to that effect

Provision where appropriate for contractor's personnel to attend on-going HSE courses (preferably as mixed groups of Group Company and contractor staff)

Availability of HSE documents, instruction and information leaflets and newsletters with special attention to use of local language and simple visual messages.

7.4 Inspection and HSE Auditing/Reviews

Inspection and auditing provide the methods for monitoring contractor HSE activities. Regular inspections provide the day-to-day means of checking compliance with contract requirements. Auditing provides the more formal and comprehensive assessments of adherence to the written framework of the contract (the contractor's HSE Plan).

The contractor will have defined in his HSE Plan his own audit/review plan for his work and that of his subcontractors. The documented evidence of these audits should be available to the Group Company together with the follow-up action taken.

Inspections should be used to cover such aspects as:

Compliance with PTW system Operational condition of HSE equipment HSE features on plant and equipment Reliability, serviceability and maintenance of work tools and equipment Emergency and contingency plan readiness and drills including use of

firefighting equipment and first-aid

Correct use of protective equipment Employee HSE awareness and demonstrated use of safe work

practices.

The effectiveness of inspections can often be enhanced by the use of unannounced spot checks and involvement of the contractor's responsible supervisory personnel.

Inspection and auditing is the primary responsibility of the contractor. However, Group Company supervisory staff should be tasked to monitor the implementation of the contractor's HSE Plan and ensure that the contractor's systems are in place. In doing so, however, it must be clear to the contractor that the responsibility for management of HSE is his.





Auditing practices may be used to examine specific technical areas in more detail or to provide in-depth HSE management assessments (e.g. the contractor's internal HSE controls). Further details on auditing are given in the ADNOC Group Guideline Manual for ADNOC-led HSEMS Audits [Ref. 5].

The findings of all inspections and audits together with follow-up reports should be fed back to the contractor's site and office management. Effectiveness of audits may be enhanced by linking contract payment to completion of audit action items.

Appendix VI provides a list of reference headings which can be used to derive topics for audit evaluations.

[5] ADNOC Group Guideline Manual for ADNOC-led HSEMS Audits, January 2002.





8. DEMOBILISATION The contractor's HSE Plan continues to be the vehicle for monitoring his HSE activities in this phase. Two new areas figure prominently:

Site restoration Waste management and disposal. The contractor's HSE Plan should be reviewed as a first step before work commences. Due consideration should be taken of any similar activities with mobilisation, the problems encountered and solutions found.

The Group Company should continue to monitor the contractor's performance against his plan, including attention to incident reporting. It is important to maintain vigilance on HSE matters to the very end of the contract.





9. CLOSE-OUT The close-out report provides the formal method of providing feedback to Group Company management and for recording a concise history of the contract for future use.

The report should derive the majority of its content by extracts from factual documentation collected during the entire duration of the contract. The analysis and summary at the conclusion should address the following:

Assess the effectiveness of the contractor's HSE Plan Identify those areas unanticipated in the plan, how they were overcome

and the future approach to be taken

Highlight successful positive aspects that should be used in the future Provide a concise analysis of both the Group Company's and the

contractor's HSE performance for discussion with the contractor's management for means of improvement

Provide input information on the contractor for Group Company bid list to identify actions needed in assessments for future tenders.

The HSE close-out data should be recorded and fed back into the Register of Approved Contractors or another easily accessible form for future reference. A formal record of HSE performance should be kept on each contractor and be fully discussed with the contractor's management.





10. REFERENCES 1. ADNOC Manual of Codes of Practice: Guideline on HSE Definitions &

Abbreviations, ADNOC-COPV1-05

2. ADNOC Manual of Codes of Practice: Code of Practice on HSE Administration Systems, ADNOC-COPV1-01.

3. ADNOC Manual of Codes of Practice: Code of Practice on HSEIA Requirements, ADNOC-COPV1-02.

4. ADNOC Group Guideline HSE Management Systems, January 2002.

5. ADNOC Group Guideline Manual for ADNOC-led HSEMS Audits, January 2002.





APPENDIX I: CONTRACTOR HSE PREQUALIFICATION





APPENDIX I. CONTRACTOR HSE PREQUALIFICATION

General guidelines for preparation of questionnaire 1 The questionnaire should cover the information required to assess the extent to

which HSE and its management are organised by the contractor. 2 The contractor should be advised to cover all (including support) activities and

not just those conducted on ADNOC or Group Company sites. 3 The questionnaire should be completed by contractor line management. 4 Emphasis should be placed on the need for complete answers substantiated by

supporting documentation as far as is practicable. Responses and any supporting documentation must relate specifically to the policy and organisational arrangements of the company that would be the signatory of any contract.

5 Submissions should be assessed by a scoring mechanism that can be used in the evaluation process.

6 If necessary, follow-up discussion with the contractor's management may be needed.

7 The contractor should be encouraged to identify where he exceeds Group Company requirements an

Guideline on Management of Contractor Hse

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