Fact Sheet: The NEB’s Audit Process

  • The National Energy Board uses a risk-informed approach to evaluate regulated companies, their facilities and activities on an ongoing basis to determine appropriate compliance oversight.
  • We look at potential hazards to people and the environment posed by a facility based on a number of criteria including its location, type, age, past incidents and operating history.
  • We also look at historical information on the company’s management of these hazards collected through previous compliance monitoring activities.
  • The extent of regulatory oversight is linked to company performance.
  • Audits are one of the tools the Board uses to assess compliance with its regulatory requirements.
  • The NEB conducts at least six comprehensive audits of NEB-regulated companies each year.
  • Audits are an effective tool to proactively detect and correct non-compliances before they become issues.
  • Each of the NEB Audits focus on one of six required areas of a company’s management system, which include Safety, Environmental Protection, Integrity, Pipeline Crossings and Public Awareness, Emergency Management and Security.
  • Companies are audited against the legal requirements of the National Energy Board Act (NEB Act) and its associated regulations. Other applicable legislation and standards including the Canada Labour Code and Canadian Standards Association Z662 (Oil and Gas Pipeline Systems), as well as any conditions contained within applicable Board certificates or orders enforced by the Board (collectively, Legal Requirements).
  • The NEB audits are performed using a standardized audit protocol. The protocols are based on the management system and protection program requirements. The protocols are divided into management system sub-elements and are used to verify that a company is meeting their Legal Requirements.
  • This protocol is made available to companies and the public to promote transparency and understanding of the Board’s audit process.
  • Following the Board’s review of a company’s management system and protection programs, the Board will issue an audit report containing its findings.
  • The NEB requires companies to be compliant with 100% of the regulatory requirements of each of the Management System sub-elements being assessed.
  • If a part of a company’s program is found to be deficient with respect to any regulatory requirement, the entire sub-element will be found in non-compliance.
  • A finding of non-compliance may not necessarily mean that there is an immediate hazard, however a corrective action is required in order for the Company’s system to remain safe.
  • Once the Board has issued the audit report, the audited company is required to develop and implement a Corrective Action Plan to address any identified non-compliances for Board approval.
  • The Corrective Action Plan must be developed based on risk, with high risk issues being addressed as quickly as possible. The NEB tracks the corrective action plans to ensure they are completed and effective in addressing the non-compliances found in the audits.
  • The NEB posts all audit reports, as well as any corrective action the company is required to take on the NEB website.
  • If, during the course of any audit, any safety concerns are identified the Board will take immediate action.
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