Transportation of Dangerous Goods – Oversight Program Description and Delivery

From: Transport Canada

Fiscal Year 2017 to 2018

Table of Contents

Executive summary

For 2017 to 2018, the Transportation of Dangerous Goods (TDG) program spent $36,557,118 on priorities in the Departmental Results Report. Total oversight spending was $16,172,522.

The key areas of focus for the TDG program were:

  1. lithium batteries transported by air
  2. transloading activities from highway tanks to rail tank cars
  3. emergency shut-off systems
  4. recurring non-compliances in marine transport

The biggest internal change in TDG’s oversight program over the past few years is greater resources for inspections. As of April 1, 2017, the TDG Program had almost 90 inspectors, resulting in 120% more inspections in 2017 to 2018 than in 2013 to 2014.

The activities in TDG’s National Oversight Plan for 2017 to 2018 were expected to offset the known strategic and operational risks. However, resources would be redirected from activities in the National Oversight plan if a large-scale safety incident occurred.

During this time, the TDG program made a major change in the inspection cycles for TDG sites and means of containment (MOC) facilities. We expect benefits such as:

  • better integration in planning site and facility inspections
  • better transparency in planning and prioritization
  • better control over unplanned/reactive inspections
  • better resource planning and allocation
  • better knowledge of the TDG industry and better data quality

Introduction

The TDG program’s objective is to enhance safety in transporting dangerous goods by all modes of transport in Canada, as required by the Transportation of Dangerous Goods Act. The program:

  • develops safety regulations and standards
  • provides oversight and expert advice (such as through the Canadian Transport Emergency Centre (CANUTEC))
  • identifies threats to public safety and to enforcing the TDG Act and its regulations
  • provides guidance to help emergency responders and reduce the impact of transportation incidents involving dangerous goods
  • carries out strategic risk assessments and scientific research

The National Oversight Plan describes all oversight activities by the TDG program. These include:

Planned inspections

Each region creates an inspection plan based on TDG’s Inspection Prioritization Framework and policies approved by TDG’s Program Business Committee. TDG headquarters supports the inspectorate in planning, tracking and reporting on their oversight activities.

The plans identify TDG sites and means of containment (MOC) facilities for one of these types of inspection:

  • general compliance inspection
  • MOC facility inspection
  • compliance estimation program inspection

Reactive activities

Reactive activities are an important part of an inspector’s work. These activities allow the program to adjust to risks or issues that emerge during the year or are demand-driven. The TDG program does not know where or how many reactive inspections it will conduct. The types of reactive inspections are:

  • follow-up inspections
  • unplanned MOC facility inspections
  • triggered inspections
  • opportunity inspections
  • consignment inspections

Regulatory authorizations

TDG analysts process regulatory authorizations. These occur when a regulated party applies to Transport Canada to be allowed to do a regulated activity or to be exempt from it. Transport Canada may give permission by issuing a permit, license or certification.

The TDG program does not know how many regulatory authorizations its analysts will process. The regulatory authorization types are:

Quality control activities

The TDG program does quality control to ensure that the data in its inspection information system (used for planning and reporting) is correct. These activities are also training for managers and inspectors. The types of quality control activities are:

  • reviewing inspection reports
  • confirming compliance
  • cleaning data in the inspection information system

Enforcement actions and investigations

The goal of enforcement is to ensure immediate compliance when it is warranted, and in all cases, promote future compliance. TDG’s enforcement policy ensures uniform and nationally consistent enforcement, and complements Transport Canada’s enforcement policy. The types of enforcement actions are:

  • notice of infraction
  • detention notice
  • notice of direction to remedy non-compliance
  • notice of direction not to import or to return to place of origin
  • section 19 intervention / direction
  • tickets
  • prosecution
  • revoking a registration certificate assigned to a means of containment manufacturer or re-qualifier
  • directing the activation of Emergency Response Assistance Plans
  • revoking the approval of an Emergency Response Assistance Plan
  • recall or notice of defective construction, repair or testing of means of containment
  • protective directions

Education, outreach and awareness activities

The TDG Outreach and Awareness program enhances safety by:

  • encouraging industry to follow regulations
  • reducing the risk of specific safety issues
  • promoting TDG safety programs and services

Our education, outreach and awareness activities include:

  • training inspectors
  • responding to inquiries
  • presenting and distributing awareness materials
  • conducting community awareness sessions
  • using inspections to increase safety awareness
  • educating provincial and territorial inspectors during the annual TDG Blitz Inspection Campaign

Operating context

TDG’s oversight program saw a large increase in inspection resources in the last few years. The number of TDG inspectors increased to almost 90, as of April 2017. This resulted in 120% more inspections in 2017 to 2018 than 2013 to 2014.

The program made a notable policy shift by changing inspection cycles for TDG sites and MOC facilities to being risk-based. As a result, every known site and facility is inspected within a set period, with priority given to those that are the highest risk.

Industry overview: number of TDG sites and MOC facilities

There are 23,212 known commercial sites in Canada that handle, offer for transport, transport, or import dangerous goods. There are 1,767 registered MOC facilities in Canada and abroad. Many TDG sites remain unknown to the TDG program.

The totals above do not include the TDG sites or MOC facilities that are inspected by the Government of Alberta on the federal government’s behalf. In Alberta, provincial inspectors inspect TDG sites that transport by road or provincially-regulated railway. They also inspect highway tank facilities.

Industry overview: risk levels

The TDG program classifies all known TDG sites and MOC facilities based on how likely and how severe a release of dangerous goods would be from the facility.

For 2017 to 2018, the breakdown of the risk levels of TDG sites was:

  • very high risk: 0.7%
  • high: 7%
  • medium: 21%
  • low: 41%
  • unknown: 29% (the TDG program does not have enough risk-related information on 6,845 TDG sites to properly categorize them)

For 2017 to 2018, the breakdown of the risk levels of MOC facilities was:

  • very high risk: 1.4%
  • high: 7%
  • medium: 40%
  • low: 51%

The breakdown into risk categories varies greatly by region.

Industry overview: inspection history

The program regularly inspects very high risk and high risk TDG sites and MOC facilities. For example, in 2016 to 2017, the program scheduled inspections for 69% of all high risk TDG sites. However, overall, the TDG industry has not been heavily inspected. We improved this situation by implementing inspection cycles in 2017 to 2018.

TDG industry overview: transportation trends

The following data is from analysis done or reported in 2015.

The proportion of dangerous goods transported by mode is:

  • road: 69%
  • rail: 26%
  • marine: 4%
  • air: 1%

The most common dangerous goods transported in Canada are flammable liquids, such as petroleum crude oil, gasoline and fuel oils. These make up 77% of all dangerous goods transported by road.

Industry overview: safety trends

Part 8 of the TDG Regulations was amended in June 2016 to improve public safety and local response to emergencies. The changes meant that those responsible for dangerous goods must report more information to Transport Canada. The amendments also permanently banned shipments of lithium-ion batteries on passenger aircraft.

In 2015, 334 incidents involving dangerous goods were reported to Transport Canada. This was a 13.5% decrease from 2014, but a 10.1% increase from the 5-year (2011 to 2015) average.

Dangerous goods incidents caused 83 injuries, but no deaths in 2015. Two injuries were moderate and none were major.

The 5-year (2011 to 2015) annual average of deaths caused by dangerous goods incidents was 10. The 5-year annual average of injuries caused by dangerous goods incidents in the same period was 0.2 major injuries, 8.4 moderate injuries, and 19.2 minor injuries.

Risks and planning assumptions

The TDG Integrated Risk Management Framework outlines how TDG identifies, evaluates, treats and monitors all risks. This includes strategic level risks, operational risks (national and regional risk/priorities) and site or MOC facility-related risks.

The framework applies TDG’s risk management processes to inspections. The risk management solutions also form the basis of TDG’s National Oversight Plan.

Strategic risks

TDG’s Planning Environment Document for 2017 to 2018 identified 5 risks that threaten the program’s goals. The document also identified the conditions needed to overcome each risk.

The level of risk created by each of these threats is unacceptable.

  1. Risk of having an industry that does not follow the TDG regulations
    • Mitigation measures:
      • keep using the annual Compliance Estimation program to get a clear picture of where non-compliance is occurring
      • conduct risk-based inspections to find non-compliances
      • conduct follow-up activities to remedy non-compliances
      • conduct follow-up inspections where there is a high number and high severity of non-compliance
      • carry out enforcement to ensure immediate compliance in cases where it is warranted, and to promote future compliance in all cases
      • conduct education, outreach and awareness activities to ensure that the industry knows its legal and regulatory responsibilities
  2. Risk of public confidence falling in TDG’s ability to effectively promote safe transportation of dangerous goods
    • Mitigation measures:
      • conduct education, outreach and awareness activities to ensure that the industry knows its legal and regulatory responsibilities
      • make the public aware of the activities by the TDG program to promote public safety
  3. Risk of not having the ongoing resources to transform the organization
    • Mitigation:
      • align financial commitments and oversight activities
      • direct education, outreach and awareness activities towards TDG employees
  4. Risk of not being able to predict and address ongoing and emerging issues
  5. Risk of not having a quick and responsive system of TDG laws and regulations.
    • Mitigation: continue to address using the regulatory framework of the TDG program

Various initiatives across the TDG program also address these risks, not just the oversight component.

Operational risks

The TDG Program Business Committee (PBC) reviewed and approved 4 operational oversight risks that were identified in consultations across the regions and in headquarters. The TDG Risk Register tracks these risks and their treatment, as called for by the TDG Integrated Risk Management Framework.

The following risks, carried forward from 2016 to 2017, are national priorities.

  1. Failure of lithium batteries during transport, resulting in damage to the aircraft and/or personal injury.
  2. Transloading activities from highway tanks to rail tank cars done in violation of the requirements of standards from the Canadian Standards Association (CSA B620, B621 and TC148.77).
  3. Not being able to verify that emergency shut-off systems are working because daily or monthly testing and procedures have not been followed. Operators may not have information to use this safety feature. Failures can lead to release of liquefied petroleum gas or anhydrous ammonia.
  4. Recurring non-compliances with TDG regulations for marine transport.

The program gave an increased risk score to all TDG sites affected by any of the risks above. This increased the sites’ likelihood of inspection in 2017 to 2018 (see more on the risk scoring of TDG sites below).

These formal risk assessments or compliance strategies were developed to address some of the risks outside inspections:

  • a lithium battery compliance strategy in which:
    • 2 inspection/awareness campaigns were done from 2014 to 2016
    • awareness materials were created
  • a risk assessment of crude oil transloading sites which:
    • evaluated the risk related to crude oil transfer operations to ensure that the TDG program was using its inspection and oversight resources effectively to respond to changing patterns in the industry
    • identified 4 action items, including making these sites a priority for inspection
  • a risk assessment for recurring non-compliance related to TDG regulations for marine transport is being considered:
    • it would assess the risks related to undeclared or wrongly declared dangerous goods at marine ports

The TDG program also recognizes that there are risks with not knowing the full number of TDG sites, although the risks are undefined. Work continues to identify these unknown sites.

Inspection planning process

In 2017 to 2018, the TDG program implemented inspection cycles for TDG sites and MOC facilities. There are 6 key steps to take before choosing sites and facilities for inspection:

  1. Determine how many inspections to conduct. A list of inspectors and start dates is applied against the inspection planning formula, based on the inspectors’ experience level.

    • experienced inspectors (3 or more years in TDG) will conduct 85 inspections
    • trained (1 year to less than 3 years in TDG) will conduct 68 inspections
    • novice: (less than 1 year in TDG) will conduct 10 inspections

  2. Determine how to divide inspections between TDG sites and MOC facilities. TDG inspectors mostly inspect TDG sites, but also inspect many types of MOC facilities. A team of engineers at the Regulatory Affairs Branch are designated TDG inspectors. These inspectors only inspect MOC facilities, focusing on those needing specialized engineering knowledge.

    For 2017 to 2018, the Program Business Committee assigned 95% of inspections to TDG sites and 5% to MOC facilities. This allowed the TDG program to create inspection cycles for TDG sites and MOC facilities.

    Inspection cycle for TDG sites:

    • Very high risk: 1 year
    • High risk: 2 years
    • Medium risk: 5 years
    • Low risk: 8 years

    Inspection cycle for MOC facilities:

    • Very high risk: 1 year
    • High risk: 3 years
    • Medium risk: 12 years (adjusted to 8 years for 2018 to 2019 and beyond)
    • Low risk: 15 years (adjusted to 10 years for 2018 to 2019 and beyond)

  3. Assign a risk score to all TDG sites and MOC facilities.

    For TDG sites, we assess operational and site-level risk factors in the risk score for individual sites. For MOC facilities, we assess risks at the facility-level only. We then class TDG sites and MOC facilities as very high, high, medium or low risk.

    The inspection frequency is based on the assigned risk level (see the inspection cycles above). Risk scores are updated at least annually to account for new information.

  4. Identify the breakdown between planned and reactive inspection activities. In 2017 to 2018, 82% of all inspection activities were planned. The rest were reactive (unplanned) inspections. For these, a proportional breakdown was used to estimate the number of expected inspections. The breakdown was:

    • opportunity inspections: 8%
    • follow-up inspections: 3%
    • triggered inspections: 3%
    • consignment inspections: 2.5%
    • unplanned MOC facility inspections: 1.5%
  5. Identify all mandatory inspections. For 2017 to 2018, this included:
    • planned inspections for all sites/facilities in the very high risk category
      • The program introduced the risk tolerance concept in 2016 to 2017, identifying thresholds for unacceptable risks – these risks are reduced by annual inspections
    • planned inspections for all sites identified for the Compliance Estimation Program
  6. Select the sites and facilities for inspection by each region. Inspectors follow the overall inspection cycles but the order may be affected by factors such as travel distance, budget constraints, and distance to other priority sites.

Regulatory authorizations planning process

The TDG program regularly answers requests for regulatory authorizations from the TDG industry. Most of these activities are completely reactive. However, some proactive planning is done to address Emergency Response Assistance Plan (ERAP) approvals.

For 2017 to 2018, the estimated number of ERAP approvals were based on 4 factors. In all cases, however, ERAPs are given risk scores and ranked by them. The 4 factors were:

  1. ERAPs expiring in 2017 to 2018
  2. expected number of New ERAPs
  3. expected number of ERAPs needing changes
  4. reducing backlog (to address ERAPs that were previously approved without expiry dates)

Initiatives to strengthen oversight

This section outlines several strategic initiatives to strengthen oversight planning, delivery and reporting.

Implementation of inspection cycles for 2017 to 2018 (November 2016)

This approach is expected to result in benefits such as:

  • improved integration in the planning of site and facility inspections
  • improved transparency in planning and prioritization
  • improved control over unplanned/reactive inspections
  • improved resource planning and allocation
  • improved knowledge of TDG industry (and better data quality)

Revised TDG Inspection Prioritization Framework (2018 to 2020)

The TDG Inspection Prioritization Framework was approved in 2015, but improvements to the inspection planning process have made a substantial update necessary.

The new policy framework will have procedures that better define and respond to requirements for inspection planning and reporting. This will include updates to the risk score calculators for TDG sites and MOC facilities.

TDG Data Governance and Quality Control Working Group (April 2017)

The TDG program staffed a new data quality analyst position in each region.

A working group was created to improve the data collected in TDG’s databases, recognizing that the quality of the data directly affects the program’s analysis and business intelligence. Initially, the working group will focus mostly on inspection data.

Increasing knowledge of the TDG-regulated community

There is no requirement to register as a TDG-regulated party. This means a lack of knowledge about the full TDG-regulated community. This knowledge gap is an internal program risk.

External bodies, including the Auditor General, have also raised concerns about the safety risks in not having this knowledge.

Budget 2016 provided Transport Canada with $143 million over 3 years to sustain existing measures and to support new and expanded activities for rail and TDG. The funding helped improve systems for testing, classifying, registering and mapping dangerous goods and their movements, for better risk management.

Oversight delivery 2017 to 2018

The Canadian Center on Transportation Data (CCTD) will report on the delivery of the program’s planned inspections, reactive inspections and regulatory authorizations, as per the Oversight Transparency Integration Plan.

Organizational contact information

The TDG program welcomes your comments on this report.

Email: TDGNationalOversightPlan-PlanNationaldeSurveillenceTMD@tc.gc.ca

Annex A: Definitions

Required Field

Description

Oversight

How Transport Canada promotes, monitors or enforces compliance with our safety and security requirements.

Regulatory authorizations

Given when a regulated party (for example, a railway company or vehicle manufacturer) applies for permission to do a regulated activity, or be exempt from it. We may give permission in various forms, including a permit, licence or certification. Transport Canada does not control the number of regulatory authorizations per planning cycle.

Inspection

A documented, formal examination of industry compliance with Canadian transportation safety and security rules, regulations and requirements. Authorized Transport Canada officials record the results of each inspection. For the purposes of this document, audits are a type of inspection.

*Includes pre-site, onsite, and post-site inspection and oversight activities. Is complete when the inspector submits an approved inspection or oversight activities report. Does not include follow-up action, quality control checks or outreach activities.

Planned, risk-based inspections

All inspections Transport Canada initially commits to doing in a given planning cycle. The SO3 Management Board may authorize updates as needed.

*Include inspections that are announced (and expected), and those that are unannounced. Does not include:

  • estimated numbers of demand-driven activities, such as regulatory authorizations
  • “reactive” or “opportunity” inspections that happen because of a change in oversight

Follow-up activities

Arise from findings of an initial inspection. May include an on-site inspection, requests for more information, or enhanced monitoring.

*Do not include enforcement.

Other activities

Oversight activities that Transport Canada did not initially commit to in a planning cycle, and are not a follow-up to an inspection or audit.

Enforcement

Measures we use to enforce requirements and compel compliance. For example:

  • letters of non-compliance
  • directions or orders
  • ticketing
  • notices of violation
  • administrative monetary penalties
  • prosecutions
  • suspensions or cancellations of certificates or authorizations

Education, outreach and awareness

How we educate the public, and encourage people and companies to comply with the law (for example: industry conferences, air shows, training, web portal)

Quality control

How we ensure inspectors follow policies and procedures, and complete required documentation. Applies to an entire oversight activity, from inspection, to follow-up, to resolving non-compliance. Supervisors and managers are responsible for quality control.

Each program must have:

  • a documented, nationally consistent way of doing quality control
  • a procedure or set of procedures to ensure inspections follow approved standard operating procedures

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