SMEP HSE Audit Procedure

Shell Malaysia Exploration & Production
Sarawak Shell Berhad

Sabah Shell Petroleum Company Limited
SMEP HSE Audit Procedure
Document No. EP- EP201111200010
Business Control Document – Procedure
Res t rict ed
Rev is ion No. 01
Date of Issue: May 2012

SSB / SSPC
SUMMARY OF SCOPE
This procedure is issued to
 define the types of audit carried out in SMEP;

 establish a programme for these audits; and
 establish a process on how to execute and close-out of SMEP HSE audit findings, specifically ISO
14001:2004 and OHSAS 18001:2007 internal audit
for continuous improvement of the HSE Audit Process in SMEP.
© Copyright
This Document is the property of SSB/SSPC. All rights reserved. Neither the whole nor any part of this document may be
disclosed to others or reproduced, stored in a retrieval system or transmitted in any form by any means (electronic,
mechanical, reprographic recording or otherwise) without prior written consent of the Copyright owner.
Disclaimer
The relationships shown in this document are for UIA Region organizational maintenance and planning purposes and are
not intended to create legal or corporate authority incompatible with or superseding the underlying corporate governance
and structure of participating companies, including for example, authorities of the board of directors, individual directors or
executive officers of any particular company.
DOC. NO.: REVISION: 01 Date: May 2012 CUSTODIAN: ECCN: NOT SUBJECT TO EAR Page:
EP201111200010 UIA/S/M NO US CONTENT Page 2 of 16
Org. Doc. No.: HSSE.MS.PR.010 PRINTED COPIES ARE UNCONTROLLED
SSB / SSPC
SSB / SSPC
REVISION CHANGE DETAILS
Rev. No. Date Details of Revision

0 Nov 2011 First Issue
01 May 2012 Update:

The Non Conformance Report Form
Insert:
Definition of non-conformance and opportunity of improvement.
SSB / SSPC
TABLE OF CONTENTS
1. INTRODUCTION ..................................................................................................................... 6
2. OBJECTIVES ........................................................................................................................... 6
3. SCOPE.................................................................................................................................... 6
4. TYPES OF HSE AUDITS ........................................................................................................... 7
5. DEFINITION ............................................................................................................................ 7
6. RESPONSIBILITIES & ACCOUNTABILITIES ............................................................................... 9
8. AUDIT PROGRAM .................................................................................................................. 12
9. TOOLS.................................................................................................................................... 12
10. RELATED DOCUMENTS .......................................................................................................... 13
11. REFERENCES .......................................................................................................................... 13
12. APPENDIX .............................................................................................................................. 13
APPENDIX A: INTERNAL AUDIT NOTES FORMAT .............................................................................. 14
APPENDIX B: ISO 14001:2004 & OHSAS 18001:2007 INTERNAL AUDIT REPORT ............................ 15
APPENDIX C: NON CONFORMANCE REPORT FORMAT ................................................................... 16
SSB / SSPC
1. INTRODUCTION
The purpose of HSE auditing is to verify the existence and effectiveness of internal controls intended to
manage HSE risks and comply with the Group ‘Health, Security, Safety, the Environment and Social
Performance (HSSE & SP) Policy and Commitment’, Group HSSE & SP Control Framework requirements
and HSE related standards identified in the Business Annual HSE Assurance Statements.
This procedure is use to assess and appraise HSE controls on a continuing basis in conformance to
HSSE & SP Management System Control Framework on Assurance and ISO 14001:2004 and OHSAS
18001:2007 accreditation requirements.
The results of HSE audits are managed in order to reduce risks and improve processes, support external
reports, inform management on reviews and report the compliance status to stakeholders, audit
committees, SMEP HSE-SC and Business Assurance Committees (BAC) at the Business level.
2. OBJECTIVES
a) To define, implement, maintain and improve a process for managing the programme of SMEP HSE
Audits to fulfil the relevant Group Control Framework, Assurance Protocol and ISO 14001:2004
and OHSAS 18001: 2007 requirements.
b) To establish, maintain and execute HSSE Self-assessments in support of the SMEP HSSE Assurance
Plan.
3. SCOPE
This procedure describes the planning, execution and closeout of internal audits, HSSE & SP Self
Assessment as a continuous improvement of the HSE audit process. The audits and reviews carried out
within the SMEP HSSE Assurance Plan are provided by SMEP HSSE team with support from the
respective business/asset teams.
This is achieved by carrying out HSE Audits and HSSE & SP Self Assessments in order to determine :
a) The effectiveness of the SMEP HSE MS in fulfilling the SMEP Company’s HSSE policy, objectives
and performance criteria;
b) Compliance with relevant legislative or other requirements;
c) Compliance with Business Annual HSE Assurance Statements;
d) Compliance with ISO14001:2004 and OHSAS:18001:2007 requirements; and
e) Opportunities for lateral learning and the sharing of best practices across SMEP.
SSB / SSPC
4. TYPES OF HSE AUDITS
The following types of HSE audits are available in SMEP:
4.1 HSE MS audit;

 Technical safety audits (includes HSE):
 Facility operations HSE audits;
 Services - Seismic HSE audits;
 Services - Well engineering HSE audits;
 Campaign - Seismic HSE audits;
 Campaign - Well engineering HSE audits;
 Facility pre-start-up HSE audits.
4.2 Specialist Audits:

 Aviation audits;
 Marine audits;
 Transport and logistics audits;
 Diving audits;
 Project design implementation HSE audits;
 Occupational health audits;
 Environmental audits;
 HSE management of contractors.
4.3 HSSE Self Assessment

 Health Check
 WHM Assessment
5. DEFINITION
Business Annual HSE Assurance Statements: Statements regarding assurance of compliance to HSE
and related standards made annually by SMEP OU through the accountable Directorates to the Shell
Group Executive.
HSSE Assurance Plan: An outline of the various forms of appraisal, which will take place over a stated
time frame, to provide assurance regarding the effectiveness of a risk based control framework.
Aviation Audits: These audits are carried out by audit personnel from Shell Aircraft International on
behalf of EP and address operators of fixed and rotary wing aircraft, offshore helidecks and the
management of aviation services by SMEP.
Campaign – Well Engineering HSE Audit: Includes the completeness and effectiveness of
implementation of the HSE MS for drilling operations, prior to or soon after mobilisation of a well
engineering campaign(s).
Diving Audits: These audits shall apply to contractor provided services and the management of these
services provided by SMEP. Audit Teams shall be led by or include a diving specialist recognised by the
centre of excellence for diving.
Environmental Audits: An audit that is restricted in scope to elements of environmental management

e.g. to assess implementation of Global Control Framework for Environment) in Company or JV
operations. These audits shall be led by or include an environmental specialist recognised by the UI or
qualified Environmental auditor.
SSB / SSPC
External Audit: Audits performed by relevant certification bodies, authorities and PETRONAS on the
SMEP HSE MS implementation.
Facility Operations HSE Audit: Includes the effectiveness of the HSE MS as implemented for a facility
and as documented in an HSE Case or HSE Plan.
Facility Pre-Start-up HSE Audit: Typically takes place prior to the start of commissioning. For a project
subjected to a project design implementation audit in an organisation, which has a HSE MS, an
operations readiness audit may be considered more appropriate.
HSE Audit Programme: An HSE Audit Programme is the risk-based combination of Internal and
External HSE Audits that is planned to take place over a stated time frame, which in aggregate with
Self-Appraisals provides assurance that the HSE MS is effective. The HSE Audit Programme is an
important part of an overall Assurance Plan.
HSE Management of Contractors: Although this topic is covered in some depth in the scope of the
standard HSE audits, OU specific circumstances may occasionally justify a more concentrated
assessment of contractor management by means of dedicated audits.
HSE MS Audit: Tests the completeness and effectiveness of implementation of the HSE MS at either one
or more of the following SMEP business/locations. An HSE MS gap analysis review is appropriate
when significant shortfalls are already recognised. This type of review will assess what is in place and
proposed corrective actions.
HSE Tracking System: A web based tracking system for the management of actions arriving from HSE
audits included in the HSE Audit Programme. Fountain is used for tracking.
ISO 14001:2004 and OHSAS18001:2007 Internal Audit: An audit to verify the effectiveness of
implementation of ISO 14001:2004 EMS and OHSAS18001:2007 OHSMS in SMEP.
Non-conformance(NC) –A non fulfillment of a requirement; a nonconformity can be any deviation from

relavant work standard, practices, procedures, legal requirements, etc and management system
requirements
Oppurtunity for Improvement (OFI) – recommendations for improvement related to relavant work
standard, practices, procedures, legal requirements, etc and management system requirement.
Management Review: This element of the HSE MS, is also referred to as ‘Review’, and is a review
process conducted by management, and which considers the suitability and effectiveness of their own
HSE MS. It is a form of Self-Appraisal. It may draw on the results of independent appraisals (for
example, HSE audits) or other Self-Appraisal techniques (for example, HSE performance monitoring) .
Marine Audits: These audits shall be carried out by STASCO on behalf of EP and address marine
activities offshore. Activities included shall be marine logistics support and offshore vessels such as
Floating Production, Storage and Offloading (FPSO) unit and loading tankers.
Occupational Health Audits: An audit that is restricted in scope to elements of occupational health
management e.g. to assess implementation and compliance to the requirements of Health Manual in
Shell HSSE & SP Control Framework.
Project Design Implementation HSE Audit: Typically, at the end of detailed design or during the early
phases of construction. The focus will be the management of HSE-related issues through the design
SSB / SSPC
process, in particular, the establishment of the technical integrity in the Approved for Construction (AFC)
design, and HSE Case.
Permit to Work Audit: Refer to SMEP PTW Procedure.
HSSE Self Assessment: HSSE Self Assessment is the process whereby staff within a business review the
application of all or part of their own management system. It encompasses, but is not limited to, the use
of checklists for routine inspections, or the appraisal process, which supports the submission of the HSE
annual letter. Whilst Self-Appraisal forms an important part of the overall process of providing HSE
assurance, Self-Appraisals should be differentiated from and are not a substitute for HSE audits and vice
versa.
Services - Seismic HSE Audit: Includes the completeness and effectiveness of implementation of the HSE
MS for the seismic operation, as documented in the relevant HSE Plan (or Case).
Services – Well Engineering HSE Audit: Includes the completeness and effectiveness of implementation
of the HSE MS for drilling operations, as documented in the relevant HSE Case(s).
Transport and Logistics Audits: These audits shall address both SMEP contractor provided logistics and
transport services together with the management of these services not addressed under aviation audits
and marine audits.
6. RESPONSIBILITIES & ACCOUNTABILITIES
The roles and responsibilities described below are the most critical used in this procedure:
Business Leader
 The business leader is responsible for ensuring that the Line Manager of Auditee and Auditee has
completed all actions in the audit activity.
 Establish, maintain and execute HSSE & SP Self Assessments in support of the Business HSSE & SP
Assurance Plan.
Line Manager of Auditee

 The manager of the person being audited and is responsible for ensuring that the Auditee has
completed all actions in the audit activity.
 Define and monitor the follow up actions from audits and self-assessments until they are
implemented and closed out.
 Provides support to the Audit Team in execution of the audit.
Auditee
 Person in the organisation being audited who is responsible for the timely and satisfactory
completion of all actions arising from the audit;
 The Auditee is expected to coordinate the completion of actions with the ‘action parties’ and the
Assurance Coordinator.
Action Party
 The person(s) assigned to actions necessary to implement agreed corrective actions arising from the
audit.
Audit Facilitator
 Person assigned by Auditee to make arrangements for conducting of the audit including facilities,
timetables and logistics.
SSB / SSPC
HSE Advisor*
 Business HSE representative assigned to an asset or location having direct access to senior
management.
 Maintain a schedule of HSE audits/inspections and participate in the review of findings from
audits.
 Support the assigned line in audit process.
 Monitor the audit findings until completed.
*may be appointed as audit team member or audit leader.
HSE Audit Leader

 When assigned to the execution of an audit, reports (directly or indirectly) to SMEP HSSE Assurance
Team Leader or to an Audit Manager;
 Leads the Audit Team and manages the audit delivery process to achieve stated deliverables,
according to the scope and time / cost estimate in agreed TOR;
 Ensures full compliance with EP HSE audit standards in all steps of the audit process.
 Verifies the audit findings close out
HSE Audit Team Member

 When assigned to the execution of an audit, reports (directly or indirectly) to SMEP HSSE Assurance
Team Leader or to an Audit Manager;
 Provides support to the HSE Audit Leader in execution of the audit.
Audit Team Member

 Provides support to the HSE Audit Leader in audit execution.
 Prepares audit checklist and audit report.
SSB / SSPC
Internal Audit on ISO 14001:2004 and OHSAS18001:2007

No Items
Assurance Facilitator
Audit Team Member
SMEP HSE Systems,
SMEP HSE & SD

Reporting Leader
Assurance and
Audit Leader
HSE Advisor
Manager
Sponsor
Auditee
1 Establish audit plan √ √ √
2 Prepare audit schedule √ √ √
3 Notify the auditee &HSE Line √
Advisor about the schedule
6 Assign auditors to scheduled √
audit
7 Support audit teams √ √
8 Prepare audit TOR √
9 Prepare audit checklist √
10 Prepare audit report/ summary √ √
11 Monitor and Assses audit √ √ √ √ √
findings
12 Prepare audit findings √
presentation pack to HSE-SC
13 Upload the audit findings to √ √
Fountain Assurance
14 Monitor and Follow-up Audit √ √
Findings
15 Coordinate Close out Audit √
Findings
16 Present audit findings to HSE-SC √
17 Appraise the overall audit process √
7. HSE AUDIT REQUIREMENT
7.1 Competency
The levels of competencies in HSE audits are defined in Group Control Framework ‘Competence
Assurance of HSSE Critical Positions’. For ISO 14001:2004 and OHSAS18001:2007 auditor
competency minimum requirements. The auditor had attended management system lead assessor or
internal audit course by accreditated training provider.
7.2 HSE Audit Process

The HSE Audit Process minimum requirements are:
1. An annual SMEP HSE Assurance Plan, including HSE audit and supported by HSSE & SP Self
Assessment processes, shall be maintained to provide assurance that all the elements of the SMEP
HSE MS are in place and effective.
2. Determination of the frequency, depth, class (internal or external) of HSE audits required shall be
risk-based.
3. An effective reporting process shall be maintained which provides quarterly and annual HSE audit
status and progress reports to the asset HSE Meeting and SMEP HSE-SC.
4. The results of this audit and findings closeouts shall be documented.
SSB / SSPC
7.3 Conduct HSE Audits

The minimum requirements are:
1. The Terms of Reference (TOR) for each audit shall be agreed between the Auditee and Audit Leader
and documented before the start of the audit.
2. All observations and guidance notes for effective coordination of the audit activities shall be
recorded in the Internal Audit Notes form (refer Appendix A).
3. Audit summary, audit findings, recommended corrective and preventive actions, action parties and
target close-out dates are recorded in the Internal Audit Report and Non-Conformance Report
forms (refer Appendices B and C respectively). Audit findings, recommended actions and progress
in closing actions shall also be recorded and maintained in the HSE Tracking (Fountain Assurance)
System accessible for review by relevant parties.
3. The reports of all HSE Audits shall be provided to or made accessible to the relevant SMEP
Business Managers and SMEP HSSE & SP Manager.
4. Contractors working under their own management system shall have HSE audit process and
schedule for audits, which includes audits carried out by auditors independent of the operation.
7.4 Follow-up HSE Audit Findings
1. The HSE Tracking (Fountain Assurance) System shall be used for recording audit reports, findings
and recommendations and for monitoring the approval and closeout of actions.
2. An effective control process shall be maintained to ensure that audit findings are assessed,
recorded and prioritised in accordance with the risks identified;
 Corrective actions, which properly address the relevant audit finding and associated control
weakness, are identified;
 Responsible managers and action parties are assigned to actions;
 Target completion dates for action closeout are promptly agreed;
 Completion dates shall be as soon as practicable and commensurate with the risks rating;
 Actions associated with findings are tracked to final and demonstrable closeout; verified by the
audit leader directly or indirectly i.e. auditor verification after audit closeout at a timeline
agreed between the auditee and the auditors.
 Authorities for the review, approval and closeout of HSE audit actions addressing findings of
different risk rating shall be in accordance with Fountain Assurance requirements.
3. Best practices identified and key lessons learned shall be shared with all relevant locations and
assets.
8. AUDIT PROGRAM
i. SMEP Annual HSSE & SP Plan
9. TOOLS
i. Shell HSSE & SP Control Framework Assurance Protocol;

ii. HSSE Self Asssessments ;
iii. OHSAS 18001:2007 Internal Audit Checklist;
iv. ISO 14001:2004 Internal Audit Checklist;
v. ISO 14001:2004 and OHSAS 18001:2007 Internal Audit Report;
vi. Location HSSE Regulatory Compliance Register.
SSB / SSPC
10. RELATED DOCUMENTS
i. SMEP HSSE & SP Plan

ii. Shell HSSE &SP Control Framework Manual, Specification and Assurance Protocol
iii. SMEP HSE Evaluation of Regulatory Compliance
11. REFERENCES
i. EP 2005-0180 HSE Auditing Standard (to be phased out by 2013 and replaced with Shell
Group Control Framework)
ii. Group Control Framework Manual, Specification and Guide for Performance, Monitoring and
Reporting
iii. Group Control Framework Manual and Guide for Exception to Group HSSE & SP Requirement
iv. Shell Internal Audit
12. APPENDIX
i. APPENDIX A: INTERNAL AUDIT NOTES FORMAT

ii. APPENDIX C: ISO 14001:2004 & OHSAS 18001:2007 Internal Audit Report
iii. APPENDIX C: NON CONFORMANCE REPORT FORMAT
SSB / SSPC
APPENDIX A: INTERNAL AUDIT NOTES FORMAT
Sarawak Shell Berhad/ Sabah Shell Petroleum Company Limited
INTERNAL AUDIT NOTES
AUDIT TITLE:
AUDIT SCOPE:
VENUE:
AUDIT DATE:
No Ref Item to be Investigated Remarks
SSB / SSPC
APPENDIX B: ISO 14001:2004 & OHSAS 18001:2007 INTERNAL AUDIT REPORT
Sarawak Shell Berhad/ Sabah Shell Petroleum Company Limited
INTERNAL AUDIT REPORT
Audit No. : Date of Report:
Title :
Location : Audit date(s) :
Audit team :
Auditee :
Persons seen :
AUDIT SUMMARY
(attached additional pages if required)
1. Number of NCR's raised: - - (attach NCR forms)
2. Critical/Major failures :-
3. Conclusions
4. Recommendations
5. Observations: attached form
Report by Lead Auditor Acknowledged by Auditee
Signed:.................................... Signed:....................................
Name, Indicator: Name, Indicator:
Date: Date:
Date of follow-up audit:
Distribution:
SSB / SSPC
APPENDIX C: NON CONFORMANCE REPORT FORMAT
Sarawak Shell Berhad/ Sabah Shell Petroleum Company
ISO 14001:2004 and OHSAS 18001:2007

Audit Ref.No: Audit Date:
Classification of Finding: NC (Non-Conformance)/OFI (Opportunity for Improvement)

Fountain Assurance RAM Classification : Serious/High/Medium/Low/Compliance
Section 1 - Details of non-conformity

a. Standard /Requirement:
b. Finding
c. Objective evidence
Auditor: …………………………….. Acknowledged by Auditee: ………………

( )
Section 2 - Root cause
Section 3 - Corrective action plan
Section 4 - Preventive Action Plan
Action Parties:
Target completion date:
Section 4 - Verification
Verified by: ……………………….. NCR Close Out:  Yes /  No

( )
Date: Date:

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Shell Malaysia Exploration & Production

Sarawak Shell Berhad

SMEP HSE Audit Procedure

Document No. EP- EP201111200010

Business Control Document – Procedure

Rev is ion No. 01

Date of Issue: May 2012

This procedure is issued to

 define the types of audit carried out in SMEP;

for continuous improvement of the HSE Audit Process in SMEP.

REVISION CHANGE DETAILS

Rev. No. Date Details of Revision

01 May 2012 Update:

4. TYPES OF HSE AUDITS

The following types of HSE audits are available in SMEP:

4.1 HSE MS audit;

4.2 Specialist Audits:

4.3 HSSE Self Assessment

Environmental Audits: An audit that is restricted in scope to elements of environmental management

Non-conformance(NC) –A non fulfillment of a requirement; a nonconformity can be any deviation from

Permit to Work Audit: Refer to SMEP PTW Procedure.

6. RESPONSIBILITIES & ACCOUNTABILITIES

Line Manager of Auditee

HSE Audit Leader

HSE Audit Team Member

Audit Team Member

Internal Audit on ISO 14001:2004 and OHSAS18001:2007

SMEP HSE Systems,

SMEP HSE & SD

7. HSE AUDIT REQUIREMENT

7.2 HSE Audit Process

7.3 Conduct HSE Audits

7.4 Follow-up HSE Audit Findings

i. SMEP Annual HSSE & SP Plan

i. Shell HSSE & SP Control Framework Assurance Protocol;

10. RELATED DOCUMENTS

i. SMEP HSSE & SP Plan

i. APPENDIX A: INTERNAL AUDIT NOTES FORMAT

APPENDIX A: INTERNAL AUDIT NOTES FORMAT

Sarawak Shell Berhad/ Sabah Shell Petroleum Company Limited

INTERNAL AUDIT NOTES

No Ref Item to be Investigated Remarks

APPENDIX B: ISO 14001:2004 & OHSAS 18001:2007 INTERNAL AUDIT REPORT

Sarawak Shell Berhad/ Sabah Shell Petroleum Company Limited

INTERNAL AUDIT REPORT

Audit No. : Date of Report:

Location : Audit date(s) :

1. Number of NCR's raised: - - (attach NCR forms)

5. Observations: attached form

Report by Lead Auditor Acknowledged by Auditee

Date of follow-up audit:

APPENDIX C: NON CONFORMANCE REPORT FORMAT

Sarawak Shell Berhad/ Sabah Shell Petroleum Company

ISO 14001:2004 and OHSAS 18001:2007

Classification of Finding: NC (Non-Conformance)/OFI (Opportunity for Improvement)

Section 1 - Details of non-conformity

Auditor: …………………………….. Acknowledged by Auditee: ………………

Section 3 - Corrective action plan

Section 4 - Preventive Action Plan