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Regulatory Agencies19.2.14

Since petroleum industry is a hazardous industry, a number of regulations have been framed by various statutory /regulatory authorities in the country. to safeguard the interest of workers, public and environment.Sustainable development and environmental safeguards are important societal issues.

These regulations specify minimum mandatory requirements to be complied by the industry.

The industry should take these regulations in the right spirit and be fully committed in their compliance.

These regulations should not be considered contrary to the interest of business and hindrance.

Regulatory/Statutory Agencies

Following is a list of various regulatory/statutory agencies having jurisdiction over the petroleum industry:

Central Pollution Control Board (CPCB) under the Ministry of Environment & Forests.

State Pollution Control Board under the Ministry of Environment of the State of the Respective state.

Chief Controller of Factories of the respective State (CIF) under the Ministry of Labour

Chief Controller of Explosives (CCE), Ministry of Heavy Industries, Dept. of Explosives Chief Inspector of Boilers of the respective state (CIB) under the Ministry of Labour Chief Electrical Inspector of the respective state (CEI) under the Ministry of Power

Director General of Civil Aviation (DGCA) under the Ministry of Civil AviationNational Airport Authority of India. Tariff Advisory Committee (TAC) under the Association of Insurance Companies Bhaba Atomic Energy Commission (BARC) under Ministry of Atomic Energy Director General Mines Safety (DGMS) under the Ministry of Mines

Regional Transport Authority (RTA) under the Ministry of Surface Transport Director General of Dock Safety (DGDS) under the Ministry of Shipping International Maritime Organization (IMO) under United Nations. Maritime means connected with the sea, especially in relation to seaborne trade or naval matters: Oil Industry Safety Directorate (OISD) under the Ministry of Petroleum and Natural Gas.

Various Regulations/RequirementsThe different agencies listed above have framed various regulations under their purview. Needless to say that over the years, these regulatory agencies have played a significant role in promoting industrial safety and environmental protection in the hydrocarbon industry. Important regulations are briefly discussed below:

Petroleum Act, 1934The statutory requirements of petroleum are governed by Petroleum Act, 1934 and Petroleum Rules, 1976 under the jurisdiction of Chief Controller of Explosives. These rules deal with the safety guidelines / regulations for import, transport,storage,refining, blending means to combine or mix together two substances.testing of petroleum and its fractions/hydrocarbons.

Under the Petroleum Act, the petroleum products are classified into Class-A having flash point below 23 degrees Celsius,Class -B with flash point between 23 to 65 degrees Celsius and Class -C having flash point between 63 to 93 degrees Celsius. Petroleum products with flash point above 93 degrees Celsius are exempted petroleum and do not fall under the purview of petroleum rules.

The Petroleum Rules, 1976 detail the procedures and safety norms to be observed for approval of containers, import, delivery and dispatch, loading,transport,storage,refining andBlending means to mix or to combine together two different substances.blending of petroleum and requirement for storage and safety distances,

testing and maintenance of pipelines, electrical apparatus and degree of safety, license/ approval procedures.Under these rules, license is required forImport, storage and refuelingTransport by ships/vessels in bulkTransport by mechanically propelled vehicles by road of class-A or B in bulk

Decanting from tank trucks in unlicensed premisesTransport by pipelineRefining and blendingFabrication of tank trucksManufacture of safety fittingsConstruction of tanksDesign of containers.

The Indian Explosives Act, 1884The compressed or liquefied gas filled in containers under pressure are notified by the Government of India as explosives and brought under the purview of Explosive Act, 1884 in 1938. The Chief Controller of Explosives administers the statutory provisions of this Act. Various rules framed under the Act are contained in:

Indian Explosive Rules 1981These Rules regulate the manufacture, possession, use, sale, transport and export/import of all types of explosives used for various purposes like mines/rock blasting, crackers, etc.

The Static and Mobile Pressure Vessels (SMPV) (unfired) Rules, 1981These Rules stipulate various safety guidelines for the storage and transport of compressed and liquefied gases filled in pressure vessels (exceeding 1000 liters capacity) at a pressure exceeding 1.5 kg/cm2 15 degrees Celsius or 2.0 kg/cm2 at 55 degrees Celsius.

Under these rules the storage and transport vessel should be designed for the specific gas, maximum operating temperature and working pressure, proper material of construction, capacity, shape, size etc., according to IS 2825 or any other approved code.

The Chief Controller of Explosives should approve its design/drawings. The vessel should be fabricated by an approved fabricator and installed as per the safety distances stipulated in the rules. The rules call for periodic re-examination/ testing of the pressure vessel and its fittings.

The Gas Cylinder Rules, 1981The provisions of these Rules pertain to the filling, storage, handling and transportation of gases in gas cylinders exceeding pressures of 1.5 kg/cm2 at 15 degrees Celsius or 2.5 kg/cm2 at 50 degrees Celsius.

The rules regulate the manufacture of cylinders, valves and regulators; marking, stamping and colour coding of cylinders;

import of gas cylinders; storage, handling, transportation and use of gas cylinders; testing of cylinders and the procedure for appointing the competent person authorized to undertake the testing and inspection of gas cylinders.

The Factories Act, 1948The provisions of this Act contained in different chapters on Health, Safety and Welfare are administered by the Chief Inspector of Factories (CIF) in the respective state. Each state has its own Factories Rules. The Act was revised in 1987 to include hazardous chemical factories and some other amendments brought in the Factories Rules of many states in 1995.

The Factories Act makes the occupier of a factory fully responsible for providing and maintaining the plant and the systems of work that are safe and without risks to the health and safety of workers and general public. Declaring Safety Policy of the organization.Providing the Material Safety Data Sheet (MSDS) of each hazardous chemical.

General responsibilities of the occupier are listed below: Declaring Safety Policy of the organization. Providing the Material Safety Data Sheet (MSDS) of each hazardous chemical.Every factory should have a well-written On-site Emergency plan clearly defining the role of different persons in case of any emergency.

The plan should be rehearsed every year and updated from time to time. Disclosure of information to workers, public and authorities. This should include declaration of dangers/ health hazards and measures to overcome such hazards.

A safety committee having equal representation of workers and management should be in place. The meeting of this committee should be held at least every quarter. To maintain limits of exposure of chemicals and toxic substances below the limit prescribed under the rules. Medical check-up of workersonce before employment, then once every six months for health status in case of specific hazards.

Setting up a Medical/Occupational Health Centre suitably equipped with equipment and qualified medical personnel. Inspection, testing, examination and certification of equipment and vessels, etc., by competent persons approved by CIF.

Permit to Work system should be in place with approved safety and rescue equipment. All work associated with entry or work into confined spaces, working at heights, hot work, cutting and welding, excavation and other dangerous activities should have predetermined safe work procedure and should be undertaken under a written work permit signed by a qualified supervisor.

Provide adequate fire protection system as per rules. An emergency communication systemalarm, siren, etc., should be in place and everybody should know what to do in case of an alarm.

Safety Manual containing the different safety procedures applicable to the installation should be available to the workers.

Providing Personal Protective Equipment to workers depending on the nature of hazard involved.

Display necessary precautionary notices and instructions at prominent places to educate and warn the workers and visitors against hazard involved.

Appointing a qualified Safety Officer in the premises as per rules.

Providing welfare amenities likedrinking water facilities, washing facilities, mess room, toilets, etc. Sending any accident report and notice of any poisoning or occupational disease.

Environmental LegislationSustainable development and environmental management are important issues for the development of society.

Keeping this in view, Government of India enacted the various environmental legislations related to industrial projects/ activities. These include:

A. The Water (Prevention and Control of Pollution) Act, 1974

B. The Water (Prevention and Control of Pollution) Cess Act, 1977

C. The Air (Prevention and Control of Pollution) Act, 1981

D. The Environment (Protection) Act, 1986

The Environment (Protection) Rules, 1986

Manufacture, Storage and Import of Hazardous Chemicals Rules, 1989.

Hazardous Wastes Management (Management and Handling) Rules, 1989 Environmental Clearance of Project Notification, 1994

Chemical Accidents (Emergency Planning, Preparedness and Response) Rules, 1996.

Biomedical Waste (Management and Handling) Rules, 1998.

E. The Public Liability Insurance Act, 1991 and the Public Liability Insurance Rules, 1991.

The Indian Boilers Act, 1923.

The central government and the state governments independently, except Jammu and Kashmir where this Act does not apply, frame the Act. Each state has its own boilers regulations.

It is obligatory for an owner to get his boiler registered under this Act.

Chief Inspector of Steam Boilers in the state is the registering authority.

The Act stipulates requirements for safety of steam boilers and steam pipes.

For the purpose of the Act, a boiler means any closed vessel exceeding 22.75 liters in capacity which is used exclusively for generating steam under pressure and includes any mounting or other fittings attached to such vessel which is wholly or partially under pressure when steam is shut off.

A Steam Pipe under the Act means any pipe through which steam passes from a boiler to a prime mover or other user if the pressure at which steam passes through such pipe exceeds 3.5 kg/cm2 above atmosphere or such pipe exceeds 254 mm in internal diameter.

These regulations cover the design, construction and workmanship of boilers and connected mountings, fittings and piping. The regulations specify the stages and procedures for inspection of new boilers and inspection frequency of boilers in operation. The regulations also lay down procedure for testing and qualifying welders who are to work on boilers.

As per the Act the owner should provide qualified person(s) to take charge of a boiler(s). A second class boiler attendant can take charge of a single boiler or battery of three boilers, the total heating surface of which does not exceed 150 sq. meters. A first class boiler attendant can take charge of a battery of boilers, the total surface area of which does not exceed 700 sq. meters. A proficiency engineer should be appointed for boilers larger than the above sizes

.The following acts/omissions are treated as cognizable offence under the Act: If it is not registered or not having the valid certificate. Operating the boiler at pressure higher than that allowed in the certificate. Absence of duly qualified boiler attendant. Carrying out structural alteration, addition or renewal in or to a boiler without prior sanction of Chief Inspector.

Failure to report any accident to boiler or steam pipe to the Inspector within 24 hours.Tempering with safety valves.Allowing a person to go inside the boiler without effecting disconnection.engraving of registry on a boiler.

The Indian Electricity Act, 1910In exercise of the powers conferred by Section 37 of the Indian Electricity Act, 1910, the Central Electricity Board formulated the Indian Electricity Rules (I.E. Rules) in 1937 followed by amendments in 1956. The objective of the I.E. Rules is to regulate the generation, transmission, distribution and use of electricity in a safe manner.

The provisions of these rules are enforced in each state by the Chief Electrical Inspector of the state. It is mandatory that all the electrical installations should conform to the requirements of the Indian Electricity Rules.

The I.E. Rules do not stipulate specific requirements of electrical equipment and lines and due to this, the interpretation of the rules by electrical inspectors vary from state to state. Also, the I.E. Rules do not cover the special requirement for electrical equipment in hazardous locations encountered in petroleum installations.

The Oil Mines Regulations, 1984These regulations were framed under Section 57 read with Section 59 of the Mines Act, 1952 and enforced in 1984 in the oil industry. Consequently, All the oil and gas exploration, Drilling, Production and transportation facilities Including general safety and health education are governed by these regulations under the competent authority of the Director General of Mines Safety (DGMS). Although the basic safety requirements are stipulated in Oil Mines Regulations, 1984, the specific requirements for certain systems like work permit,Fire fighting facilities, etc. are not fully covered.

The Indian Aircraft Rules, 1937 In exercise of the powers conferred by Sections 5,7.8 and 9A of the Indian Aircraft Act, the Aircraft Rules were framed in 1937, which were amended several times; the latest edition was updated in 1985.

An installation, which is in proximity to the aerodromes, is covered under the purview of these rules.

The relevant rules in case of statutory clearance for the design of tall structure and buildings are framed under provision 9A of the said act.

It is mandatory that clearance be obtained from the National Airport Authority of India, under the Ministry of Civil Aviation while planning to construct any tall structure or building.

Air warning lights as stipulated in the Rules to be complied with by owners of such buildings. The owner has to forward the layout drawings showing the elevation details, dimensions and other details of structures/buildings in the prescribed format and submit to the nearest Aerodrome Officer.Only after the receipt of approval, the construction can be taken up.

International Maritime Organization (IMO). It was originally known as IMCO, Inter-Governmental Maritime Consultative Organization established in 1948 as a specialized agency of United Nations, which was later changed to IMO to reflect its wider functions. IMO primarily works for development of maritime regulations and standards for promoting maritime safety and prevention of pollution from ships. These regulations and standards are

Convention on the safety of life at sea in 1974 (SOLAS74).

International convention for prevention of pollution from ships in 1973/78 (MARPOL 73/78).

Convention on standards of training, certification and watch keeping for seafarers, 1978 (STCW 78).

These conventions formed an important vehicle for the development and international spread of knowledge, recommendations, codes of practice and protocols regarding maritime safety throughout the world.

A wide range of topics covering all maritime activities for handling different types of dangerous goods are dealt in the publications from these conventions and seminars. However, adoption and implementation of these regulations are not uniform in all parts of the world.

Dock Workers (Safety, Health and Welfare) Act,1986The Dock Workers (Safety, Health and Welfare) Regulations were framed in 1990 under the above mentioned Act. Factory Inspectorate does not have jurisdiction on the ports and docks. Director General of Dock Safety enforces safety requirements at ports/docks where crude and petroleum products moving through ships and barges are handled.Barges means flat bottomed freight boat

Atomic Energy Act, 1962The Atomic Energy Rules were framed in 1971 (revised in 1996) under the Atomic Energy Act, 1962. Under these rules, Atomic Energy Regulatory Board, AERB under Bhaba Atomic Energy Commission, regulates the use of any radioactive source in the country. Radioactive sources are used in many petroleum installation in radiography equipment, x-ray machines, nucleonic level gauges and smoke detectors.

The use of any radiation (radioactive) source including its storage, handling, transportation and disposal must comply with the statutory requirements of AERB. Any installation using radiation sources must have an Athorized Radiological Safety Officer (RSO), trained, validated and certified by Radiation Protection Service Division of Bhaba Atomic Energy Commission.

The RSO liaisons with AERB on all matters concerning radiation sources.Motor Vehicles Act, 1988The transportation of hazardous products by road is governed by Central Motor Vehicles Rules, framed in 1989 (amended in 1993), enacted under the Motor Vehicles Act, 1988.

Salient features of the rules include:Educational qualifications of drivers of goods carriages carrying dangerous or hazardous goods. Every driver of such vehicles must have passed the mandatory three days training course from a recognized school in addition to having his heavy vehicle driving license.

Every vehicle carrying hazardous goods must display mark of the class label appropriate to the type of dangerous goods. The vehicle should be marked with emergency information panel at three places on the vehicle. This panel contains products technical name, UN identification number, HAZCHEM code, emergency phone no., etc.The vehicle must have a TREM card-transport emergency card available in the drivers cabin.

Every vehicle carrying hazardous goods must be equipped with the prescribed safety equipment for preventing fire, explosion or escape of hazardous goods.

Every such vehicle should be fitted with a spark arrester and A Techograph (an instrument to record the lapse of running of the vehicle, time speed maintained, acceleration/deceleration, etc.).

Responsibilities of consignee, transporter and driver.

Oil Industry Safety DirectorateOil Industry Safety Directorate, OISD, is an advisory body under the Ministry of Petroleum and Natural Gas. Set up in 1986 after Bhopal disaster, the directorate advises the oil and gas industry in India on all matters of health, safety and environment.

All public sector (PSU) oil companies are members of OISD.Private oil companies can also become members in case they desire. Unlike other regulatory agencies, OISD helps the member oil and gas companies to enhance their level of safety through self-regulation.

OISD has published a number of standards/recommended practices in siting of petroleum installations, operating philosophies, inspection, maintenance, fire protection, etc. It is obligatory for the member companies to use these standards and recommended practices for new installations and installations in operation. Many other statutory agencies like CCE and others cite OISD standards/ recommended practices in their procedures and requirements.

OISD has also published guidelines for internal and external safety audits. Based on these guidelines, formal safety audits of oil/gas installations of various PSUs under Ministry of P&NG are conducted periodically by an external team under the leadership of OISD. Petroleum organizations can use these guidelines for their own internal audits. OISD has also made a model disaster management plan that can be used by an installation as guideline for developing its own disaster/ emergency management plan.

Tariff Advisory Committee TAC.TAC is an advisory body formed to regulate rates, terms and conditions of business of general insurance companies in India. TAC approves and monitors various fire fighting facilities and electrical installations in the industry. Fire Protection Manual first brought out in 1903 by Calcutta Fire Association was revised, updated and issued by TAC in 1982 in two parts Part I and II. These manuals lay down guidelines for design and operation of private fire fighting facilities to be maintained by the industry. These guidelines have been used extensively in petroleum installations. Based on the degree of compliance to the recommendations of these manuals, TAC advises the rebates in the insurance premiums. TAC makes periodical inspections of those installations where rebates have been given.

Under Explosives and Petroleum Actsfrom CCE License for manufacture, possession, use, sale, transport and importation of explosives. License to import/store petroleum

Under Factories Actfrom CIF Permission to construct, extend or take into use any building as a factory Approval of site and building plans Approval of site (only for hazardous process units) by State Site Approval Committee Certificate of stability of factory building Application for registration and notice of occupation Application for License/Renewal of license of a factory

Under Environment Protection Actfrom MOEF and State PCBs: Notification of site in respect of hazardous chemicals Environmental Impact Assessment Environmental Clearance from Ministry of Environment and ForestsNOC from State Pollution Control BoardConsent for discharge of trade effluentsConsent for operation of plants (in air pollution control areas)Authorization for handling hazardous waste in quantity exceeding regulatory values.

Under Explosives and Petroleum Actsfrom CCELicense for manufacture, possession, use, sale, transport and importation of explosivesLicense to import/store petroleumLicense to carry petroleum by landLicense for installing static and mobile pressure vessels License for filling and possession of gas cylinders with compressed gasesLicense for transporting cylinders filled with compressed gas

Other Approvals/Permissions/Clearances Besides the above, permissions/approvals/clearances/ consents from other agencies listed below have to be taken: Certificate of authorization for use of boilers from the states Chief Inspector of Boilers. Certificate of authorization for use of electrical equipment from states Chief Electrical Inspector. Public Liability Insurance by owners handling hazardous substances. Authorization from BARC (under the Ministry of Atomic Energy) for use of equipment/instruments u

Regulatory ComplianceNo doubt, the various regulations as discussed above go in a long way to increase the industrial safety standards, which is very important for hazardous industry like petroleum operations. But the regulations will be useful and bring results only when they are implemented in the right spirit. It is the responsibility of the owner/occupier of an installation and their authorized officials to ensure that the requirements of various regulations are fully complied with.

Besides taking the necessary approvals, permissions, consents and clearances from the concerned authorities and maintaining the conditions specified therein, it is also required by some of these agencies to send them regular reports of compliance. In the recent past, the law has put lot of accountability and liability on the part of senior management of an organization in the compliance of various regulations. Non-compliance can attract heavy penalties, sanctions, and closure of the installation.

The owner/occupier and other officials may even be put behind the bars in serious violations. Even the public awareness about the safety hazards and environmental pollution from industrial activities has increased significantly over time. It is very easy these days for any person to file a PIL (public interest litigation) suing an organization for violation of any regulatory requirement.The affected organization may get involved in lengthy litigation costing lot of money, harassment and loss of image and reputation.The management of every installation therefore should ensure that the required regulations are fully complied with.

Limitations of Regulatory AgenciesNeedless to say that over the years the regulatory agencies have played a significant contribution in the promotion of industrial safety in the petroleum industry in India. With due respects to their role, it may be worthwhile to look into some of the inherent limitations of these agencies. And this is the most important reason why organizations should have voluntary own self-discipline and regulation to have a high level of safety standard. Some limitations are:

Minimum Requirements: Most of the regulatory agencies lay down rules / regulations which are the minimum basic requirements that are very important in the safe design and operation of industrial units. They do not go into details of so many other requirements pertaining to safe management of an installation. For example, sound and safe engineering practices are equally important but are not addressed in these requirements.Change is Slow Technological developments and social awareness bring in new problems and challenges to the industry.

Adequate protection of society against new technological hazards would depend upon the speed with which these regulatory agencies can identify the new problems and change the rules. Since the provisions of these agencies cover a wide spectrum of industry and any amendment has to go through a lengthy legislative procedure, the statutory and law enforcing

Agencies are generally slow in updating their rules and requirements to keep pace with technological and social changes. Some of the requirements set forth in the regulations long ago may not be relevant in the present context. For example, Factory Act, since its inception in 1948, underwent amendments only in 1954, 1976 and in 1987.

Petroleum Rules were last revised in 1976. Environment Protection Act came into being only in 1986. The Indian Electricity Rules and Indian Boiler Regulations have not seen any revision for more than 15 years.

Inadequate Infrastructure Many regulatory agencies do not have adequate facilities and manpower to monitor and control the safety performance of the industry on a continuous basis. For example, the number of Boiler Inspectors and Factory Inspectors in most states is far less than required to undertake regular and meaningful inspection visits to a large number of industrial units under their jurisdiction. Further, with the background and training that

Any Factory Inspectors have, their visits to factories are restricted to checking basic amenities like first-aid boxes, machine guards, personal protective equipment, drinking water and canteen facilities, etc. They probably do not have the right training and background for identifying many serious process hazards, which may not be so obvious. It is only after Bhopal disaster that some improvements with respect to quantity and quality of inspectors in these agencies have taken place.

Nominal Penalty for Violations Some regulatory agencies provide for penalty to the industry for violating the rules and compensation to the worker in case of injuries and fatalities. Though in the recent past there have been some changes in the amount of these penalties and compensations, still these are nominal in most cases, with the result that there is little pressure on the industry compelling them to spend money in making an installation inherently safer and non-polluting.

It appears, under the present situation, that the companies would prefer to violate some of the safety rules and pay the penalty rather than implement these rules by additional investment. The logic may, however, look very strange, but it is a reality in some cases where the management is not fully committed and lacks in self-discipline to make the installation safe and non- polluting.

In contrast to this, very heavy penalties and sanctions are imposed for violation of health, safety and environment regulations in USA, Europe and Japan.

General and Subjective Provisions

Certain provisions of regulatory agencies are very general and subjective in nature. This leads to ambiguities and confusions in their interpretations by users and the inspectors. Besides, it is observed that a large number of cross-references to a particular provision of the regulation are made for safety purpose.