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Regulatory Agencies

19.2.14

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 Aviation
National 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/Requirements
The 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, 1934


The 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 and
Blending 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 for
Import,
storage and refueling
Transport by ships/vessels in bulk
Transport by mechanically propelled vehicles
by road of class-A or B in bulk

Decanting from tank trucks in


unlicensed premises
Transport by pipeline
Refining and blending
Fabrication of tank trucks
Manufacture of safety fittings
Construction of tanks
Design of containers.

The Indian Explosives Act, 1884


The 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 1981

These 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, 1981
These 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 reexamination/ testing of the pressure
vessel and its fittings.

The Gas Cylinder Rules, 1981


The provisions of these Rules pertain to
the filling,
storage,
handling and
transportation of gases in gas cylinders
exceeding pressures of 1.5 kg/cm 2 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, 1948


The 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 wellwritten On-site Emergency plan
clearly defining the role of different

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 like


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

Environmental Legislation
Sustainable 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, 1910


In 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, 1984


These 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, InterGovernmental 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,1986
The 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, 1962


The 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, 1988


The 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 Directorate


Oil 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 Forests
NOC from State Pollution Control Board
Consent for discharge of trade effluents
Consent for operation of plants (in air pollution control
areas)
Authorization for handling hazardous waste in quantity
exceeding regulatory values.

Under Explosives and Petroleum Actsfrom CCE


License for manufacture, possession, use, sale,
transport and importation of explosives
License to import/store petroleum
License to carry petroleum by land
License for installing static and mobile pressure
vessels
License for filling and possession of gas cylinders
with compressed gases
License 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 Compliance
No 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 Agencies


Needless 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 selfdiscipline 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 nonpolluting.

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-

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 crossreferences to a particular provision of the regulation
are made for safety purpose.

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