Regulatory regime

Since petroleum industry is
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.

REGULATORY/ STATUTORY AGENCIES:
The list of various regulatory/statutory
agencies having jurisdiction over the
petroleum industry are:

 Central Pollution Control Board ( CPCB)
under the Ministry of Environment and Forests

 Respective State Pollution Control Board
(SPCB)under the Ministry of Environment and
of the State

 Oil Industry Safety Directorate (OISD) Under the
MoPNG
 Chief Controller of Factories (CIF) of The Respective
State Under The Ministry Of Labor.

Chief Inspector of Boilers (CIB) of the respective State
under the Ministry of Labour

 Chief Controller Of Explosives (CCE) , Ministry of
Heavy Industry, Dept of Explosives.

 Chief Electrical Inspector (CEI) of the respective state
under the Ministry of Power.
 Director General of Civil Aviation ( DGCA) under The
Ministry of Civil Aviation, National Air Port 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 of Mines and 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

VARIOUS REGULATIONS / REQUIREMENTS:
The different agencies have framed various
regulations under their purview to promote
industrial safety and environmental
protection in the hydrocarbon industry.

PETROLEUM ACT , 1934

The statutory requirements of the
petroleum are governed by petroleum
Act, 1934 and petroleum Rules 1976 under
the jurisdiction of chief controller of
Explosives.

Petroleum Rules of 1976 deal with the safety
guidelines / regulations for :

Import
Transport
Storage
Refining
Blending
Testing of Petroleum/ products

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 of petroleum,
 testing and maintenance of pipelines,
 Transport by pipelines

Transport by ships/vessels in bulk

Construction of tanks

 Design of Containers

 Manufacture of Safety Fittings etc.

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.

Various rules under this Act are:

(1) INDIAN EXPLOSIVES RULES, 1981

These rules regulate the manufacture,
possession, use, sale, transport & export
/ import of all types of explosives used
for various purposes like mines / rock
blasting etc.

(2) THE STATIC AND MOBILE PRESSURE
VESSELES (SMPV) RULES, 1981

These rules stipulate various safety
guidelines for the storage and transport
of compressed and liquefied gases filled
in pressure vessels.

(2) THE STATIC AND MOBILE PRESSURE VESSELES
(SMPV) RULES, 1981 (Cont……..)
Under these rules, the storage & transport vessel
should be designed for specific purpose (gas / oil)
, maximum operating temp. & pressure, correct
material of construction, capacity, shape, size etc.
according to IS 2825 or any other approved code.
The Chief Controller of Explosives should approve
the same.
The vessel should be fabricated by an approved
fabricator and should be installed as per the safety
distances stipulated in the rules. The pressure
vessels & its fittings should be tested on regular
basis.

(3) THE GAS CYLINDER RULES, 1981
These rules pertain to the filling, storage,
handling & transportation of gases in gas
cylinders exceeding pressures of 1.5kg/cm2 at
15C or 2.5kg/cm2 at 50C
The rules regulate the manufacture of
cylinders, valves & regulators, marking,
stamping and colour coding of cylinders,
storage, handling, transportation of gas
cylinders, testing of cylinders and also the
procedure for appointing competent person
authorized to undertake the testing &
inspection of gas cylinders.

THE FACTORIES ACT, 1948
The provisions of this act are
administered by the Chief Inspector of
Factories in the respective state.
Each state has its own factories rules.
The act was revised in 1987 to include
hazardous chemical factories. Some
amendments were brought in the
factories rules of many sates in 1995.

The Factories Act make the occupier of a
factory fully responsible for maintaining
the plant and providing the systems of
work that are safe and without any risks
to the health and safety of the workers
and general public.

The general responsibilities of occupier of a
factory are:
 Declaring safety policy of the organization
 Providing the Material Safety Data Sheet
(MSDS) of each hazardous chemicals
 Every factory should have a well written on-
site Emergency Plan, clearly defining the role of
different persons in case of an emergency.
 The Emergency Plan should be updated from
time to time.
 To maintain the limits of exposure of
chemicals and toxic substances ( below the
limit prescribed under the rules) .

 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.
 Medical checkup of the workers once before the
employment and once every six months for health
status in case of specific health hazards.

Setting up of medical / occupational health center
equipped with equipment and qualified medical
personnel.

 Inspection , testing, examination and
certification of equipment, vessels etc. by
competent persons approved by CIF ( Chief
Controller of Factories).
 Permit to work system should be in place with
approved safety and rescue equipment. All work
associated with entry or work in confined
spaces, working at heights, hot works, 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 system – alarm,
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 the 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 accidental report and notice of any
poisoning or occupational diseases

ENVIRONMENTAL LEGISLATION:
Sustainable development and environmental
legislation are important issues for the
development of the society.

GOI enacted the various environmental
legislations related to industrial projects/ activities
as below:

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

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

 The Air (Prevention and Control of Pollution)
Act, 1981
 The Environment ( Protection) Act, 1986
 The Environment ( Protection) Rules , 1986
 Manufacture, Storage, and Import of
hazardous chemicals Rules, 1989
 Hazardous Waste management
( management and handling) Rules, 1989

 Biomedical Waste (management and handling)
rules, 1998

 The Public Liability Insurance act, 1991 and
the public liability insurance rules, 1991

The Water (Prevention and Pollution) Act,
1974:
This is enforced by SPCBs & by CPCB in Union
Territories. It guides the industries as below:
(1)To obtain consent from SPCB/CPCB by making
an application giving details of all information
regarding manufacturing processes, raw
materials used, effluent characteristics,
generation sources and quantities, water
pollution control facilities/ treatment.
(2) To comply with the specific standards for
effluent treatment and disposal.
(3) Renewal of consent

The Water (Prevention and Pollution) Cess
Act, 1977 including Cess Rules:
This is enforced by SPCBs & by CPCB in Union
Territories. The obligations of the industry
include:
(1)To have provision of meters to measure water
consumption and treated waste water disposal.
(2) To submit returns stating monthly water
consumption, quantity of waste water treated
along with the analysis of water.
(3) To make payment of Cess as per the rates. On
fulfillment of all conditions, some rebates in the
cess are allowed. Higher rebates indicate better
performance.

The Air (Prevention and Control of
Pollution) Act, 1981 including Rules:
This is enforced by SPCBs & by CPCB. The
obligations of the industry include:
(1) To obtain consent from SPCB/CPCB by
making an application detailing all the
information about manufacturing processes, raw
materials used, generation of air pollutants &
pollution control facilities provided.
(2) To comply with stipulated standards for
pollutants like SPM, SO2, NO2, ambient air quality,
noise levels etc.
(3)To submit returns to SPCB/CPCB

Environment ( Protection) Rules, 1986:
This is enforced by MoEF. The obligations of the
industry include:
(1) To comply with the emission standards.
(2) To submit yearly environmental statement to
SPCB/CPCB.
(3)To analyze emissions for specific pollutants
and submit regular returns to SPCB/CPCB
(4) To use of best technology for pollution
control.
(5) To maximum Reuse & Recycle of resources.
(6) To have facility for treatment of waste water.

Manufacture, Storage & Import of Hazardous
Chemicals Rules, 1986:
This is enforced by State Factory Inspectorate
along with SPCB/CPCB. The obligations of the
industry include:
(1) To identify major hazards and take preventive
measures.
(2) To demonstrate safe operation/emergency
preparedness while handling hazardous chemicals.
(3)To ensure proper labeling of containers.
(4) To prepare onsite emergency plan & conduct
mock drills regularly.
(5) To disseminate information related to hazardous
chemicals to people of vicinity.

Manufacture, Storage & Import of
Hazardous Chemicals Rules, 1986:
(Cont……..)

(6) To prepare safety reports in case of exceeding
threshold quantities of hazardous chemical
storage.
(7) To notify sites in case of use of hazardous
chemical storage exceeding threshold quantities.

The Hazardous Wastes(Management &
Handling) Rules, 1989 : Enforced by
SPCB/CPCB.
The responsibilities of the Companies are:
(1)To obtain an approval letter for handling of
hazardous wastes.
(2)To submit all information including quantity ,
waste category, generation rates & safety
precautions in handling, transportation safety,
treatment procedures and disposal methods to
SPCB/CPCB & maintain records
(3) To comply with the norms set in approval letter.
(4) To of hazardous wastes generation, treatment &
disposal & submit yearly returns.

Bio-Medical Waste(Management & Handling)
Rules 1998 : Enforced by SPCB/CPCB.
(1)To ensure that bio medical waste is handled
without any adverse effect to human health &
environment
(2) To have biomedical waste treatment facility.
(3) To have facility for segregation & labeling of
wastes .
(4) To submit report about categories and quantities
of wastes handled & maintain records.
(5) To report any accident during handling &
transporting of wastes.

The Public Liability Insurance Act, 1991 :
To provide relief to affected persons by
accidents involving hazardous chemicals. The
rules empower the District Collector to verify
accidents & provide relief.
(1)To draw an insurance policy.
(2) To contribute to relief fund.
(3) To follow the orders of DC in case of accident.
(4) To do correct labeling of containers & follow
safety precautions during handling/ transportation
of hazardous chemicals

THE INDIAN BOILERS ACT, 1923
The Central Government and the State
Government independently, except Jammu and
Kashmir where this act does not apply, frame the
act .
Each state has its own boilers regulations & the
owner of boiler (a closed vessel exceeding
22.75l capacity used exclusively for steam
generation under pressure) has to register his
boiler under this act. Chief inspector of steam
boilers in the state is the registering authority.
The act stipulates requirement for safety of
steam boilers and steam pipes(254 mm – internal
dia).

THE INDIAN ELECTRICITY ACT, 1910
Formulated by The Central Electricity Board.
The objective of the I.E rules (1937,1956) is
to regulate the generation, transmission,
distribution and use of electricity in a safe
manner.

The rules are enforced in each state by the
Chief Electrical Inspector of the state.

THE OIL MINES REGULATIONS,
1984
All oil and gas exploration , drilling,
production and transport facilities including
general safety and health education are
governed by these regulations under the
Director General of Mines and Safety (DGMS).

THE INDIAN AIRCRAFT RULES, 1937
An installation, which is in the proximity of the
Aerodromes, is covered under the purview of
this rule.

It is mandatory that clearance be obtained from
the National Air Port Authority of India, under the
ministry of civil aviation, while planning to any
tall structure or building.

 Airwarning lights are stipulated in the rules to
be complied with by owners of such buildings.

INTERNATIONAL MARITIME
ORGANISATION:
Some important milestones achieved are:

 Convention on the safety of life at sea in 1974

• International convention for prevention of
pollution from ships in 1973/78

• Convention on standards of training,
certification and watch keeping for sea farers,
1978

DOCK WORKERES (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 any
jurisdiction on the ports and docs. Director
general of Dock safety enforces safety
requirements at port/docks where crude and
petroleum products moving through ships and
barges are handled.

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 Bhabha Atomic Energy
Commission, regulates the use of any
radioactive source in the country.

ATOMIC ENERGY ACT, 1962 (Cont…….)
Radioactive sources are used in many petroleum
installation in radiography equipment, x-ray machines
and smoke detectors.

The use of any radiation (radioactive) source including
its storage, handling transportation and disposal must
comply with the statuary requirements of AERB.

Any installation using radiation sources must have an
authorized Radiological Safety Officer ( RSO) trained
validated and certified by radiation protection service
division of Bhabha Atomic Energy Commission.

The RSO liaisons with AERB on all matters concerning
radiation sources.

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
requirement at ports/ docks where crude and
petroleum products moving through ships and barges
are handled.

MOTOR VEHICLES ACT, 1988

The transportation of hazardous products by
road is governed by Central Motar Vehicles act,
1988, salient features of the rules include:

Educational qualifications of the drivers of the
goods carriages carrying dangerous or
hazardous goods.

Every drivers of such vehicles must have
passed mandatory three days training course
from a recognized school in addition to having
his heavy vehicle driving license.

MOTOR VEHICLES ACT, 1988 (Cont……)
Every vehicle carrying hazardous goods must display mark of the
class label appropriate to the type of dangerous goods.

The vehicle should be marked emergency information panel at three
places on the vehicle.

His panel contains products technical name. UN identification
number, HAZCHEM code. Emergency phone number etc.

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

The vehicle should be fitted with a spark a spark arrester and a tech
graph
( an instrument to record the lapse of running of the vehicle, time,
speed maintained, acceleration/ declaration et

OIL INDUSTRY SAFETY DIRECTORATE:

•Oil industry safety directorate , OISD is an advisory body under the
ministry of petroleum and natural gas.

•Set up in the 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 the level of safety through self regulation.

•OISD has published a number of standard/ recommendations
practice in sitting of petroleum operation , philosophies, inspection,
maintenance, fire protection etc.

OIL INDUSTRY SAFETY DIRECTORATE: (Cont….)

•It is obligatory for the member companies to use these standard and
recommended practices for new installations and installation in operations.

•Many other statuary agencies like CCE and other CITE OISD
standards/recommended practices in their procedure 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 guidelines for developing its own disaster/
emergency management plan.

TARRIF ADVISORY COMITEE:

Tariff advisory committee, 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 fighting 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 part 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 makes periodical inspections of those installations where rebates have
been given.

PERMISSIONS AND APPROVALS FOR NEW PROJECTS:
Before setting up any oil or gas installations, the folowig statuary
approvals/permission have to be taken by the organization.

Some of these approvals/ permission are also applicable for undertaking a major
expansions or revamp of existing installations.

UNDER FACTORIES ACT-FROM 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/ renewals f license of a factory.

UNDER ENVIRONMENT PROTECTION ACT- FROM MOEF AND STATE
PCB’S

•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 operations of plants ( in air pollution control areas)

•Authorization for handling hazardous waste in quantity exceeding regulatory
values.

UNDER EXPLOSIVES AND PETROLEUM ACTS- FROM 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 filling and possession of gas
cylinders with compressed gases

License for transporting cylinders filled with compressed gas

OTHER APPROVALS/PERMISSIONS/CLEARANCES

Beside the above, permissions, approvals/clearances consent from other
agencies listed below have to be taken

Certificate of authorization for use of boilers from the state’s chief electoral
inspector

Public liability insurance by owners handling hazardous substances

Authorization from BARC (under the ministry of atomic energy) for use of
equipment/ instruments using radiation sources.

REGULATORY COMPLIANCE:

No doubt, as various regulations 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, permission, 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, and closure of installations.

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 casting lot of
money harassment and loss of image and reputation.

The management of every installation therefore should ensue 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 reasons why
organizations should have voluntary own self discipline and regulation to have
ahigh 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
operations 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 amendments has to go through a lengthy legislative procedure, the
statuary 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 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 and 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 in most states is far less than
required to undertake and meaningful inspection visits to a large number of
industrial units under their jurisdiction.

Further, with the background and training that many factory inspectors have,
their visits to factories are restricted to checking the basic amenities like first
aid boxes, machine guards, personnel protective equipment, drinking water and
canteen facilities, etc.

They probably do not have right training and background for identifying many
serious process hazards, which may not be obvious.

It is only after Bhopal disaster that some improvements withy respect to
quantity and quality of inspectors in these agencies have taken place.

NOMINAL PENALITY FOR VIOLATIONS:

Some regulatory agencies provide for penalty to the industry for violating the
rules and compensation to the workers 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 a little pressure on the industry compelling them to spend
more money in making an installation inherently making an installation
inherently safer and non-polluting.

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 mentioned.

Regulatory regime

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