ChevronTexaco Pipeline Company

Operational Excellence Process Documentation

18 Contractor Safety Management Program

Contractor Safety Management Plan OE Process: Expectations Met: Linkages to other OE Processes: 6.1, 6.2 Third Party Services

PLT Sponsor: Process Owner: Document Control

Marty Bowin Eileen McGrath Provide the following information: Author: Eileen McGrath Date Documented: July 2, 2003 Date Revised: January 31, 2005 Date Issued:
No / Min. Process Process Deployed BIC / WC Process Process Developed Process Reviewed

Status:

Process Design: (definitions) Summarize current process design:

Good

Satisfactory

Less Than Satisfactory

Process Effectiveness: Good (definitions) Summarize current process effectiveness:

Satisfactory

Less Than Satisfactory

A new process is currently being implemented to meet the OE requirements for Third Party Services. Deficiencies in the previous program were identified, and a new Contractor Safety Management (CSM) Program has been developed. This was rolled out to contractors and employees in late 2004. Training will continue in the first quarter of 2005. The program was rolled out to a small group of contractors (34) that were identified in a risk ranking conducted by the team that put together the CSM Program. These contractors perform the high and medium risk work and have high to medium spend. The second phase of the roll out will occur in late 2005. The second phase of contractors will be high risk and low spend. These are the only contractors that will be included in the CSM program at this point. Each year the list of contractors will be evaluated to be sure the needs are being met. The following document outlines the details of the CSM program that have been developed. CTPC is currently in the process of implementing this program. This process is being used in other business units within CVX and has proven to be successful.

Resources (Person/Yrs): Resources ($Ms): Comments:

2 Person-Years per year (CTPC) $250,000

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Operational Excellence Process Documentation

Scope, Purpose and Objectives Scope The area of coverage is the Pipeline Company. This document is applicable when any affected contractors are being considered for work and are part of the CSM Program. This document covers how the contractors involved in the CSM Program will be handled. There are many contractors who will be exempt from the CSM Program and their current procurement contractual obligations will continue to apply. Purpose This document describes how ChevronTexaco Pipeline Company (CTPC) will evaluate, select, monitor and communicate their Health, Environment and Safety (HES) expectations to the contractor workforce. This process, when fully implemented, will create focus and drive step change improvement in contractor safety performance. Objectives: The objective of the Contractor Safety Management Program is the development of an incident free work environment, by creating a systematic approach to managing contractors and making them aware of the risks associated with working on CTPC properties. This is an accomplished implementing the following systematic program that; identifies the required involvement and accountability of contractor management and their employees. OE Processes Procedures Procedures Overview or Summary The Contractor Safety Management Plan is intended to set forth the procedures pursuant to which CTPC evaluates the HES performance of independent contractors performing services at CTPC locations as well as the tools to provide general guidance to our contractors regarding job safety. Contractors, however, remain responsible for performing their day-to-day operations safely with all due regard for people, property and the environment. Information and guidance provided by ChevronTexaco personnel are intended to supplement, not replace, the contractors' own safety and environmental policies and programs. The safety of our employees and contractors is a core value at CTPC. We want everyone who comes to a CTPC site to understand our commitment to their safety and the environment. This program is a foundation for establishing how CTPC will work with our contractors to achieve our goal of Incident Free Operations. The following Procedure section outlines the facets of the CSM Program. Procedures Details

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Operational Excellence Process Documentation

All aspects of the Contractor Safety Management program are documented in detail in the CTPC Contractor Safety Management Plan. This document includes the Leadership and Accountability for the CSM Program, and the four steps that comprise the framework of the CSM program. The four steps that make up the framework of the CSM program are listed below: 1. 2. 3. 4. Planning Qualification and Selection Pre-job planning and work in Progress Post job

This document resides on the CSM web-site, with the following link. http://wwwctpc.chevrontexaco.net/csm/process_documents/csit%20stripped%206_5_04rev4 .doc

Practices: (if applicable)

Resources, Roles and Responsibilities: People: Many CTPC employees have a role in the CSM Process as part of their regular job responsibilities. However, there are job responsibilities that exist in CTPC that specific to the CSM Program CSM Coordinator: The CSM Coordinator is responsible for the overall management of the CSM program. They will be interfacing with the contractors management and safety personnel concerning compliance with safety procedure and standards and company safety policies and initiatives. They will manage the list of contractors and interface with the CSLT. They will collect, monitor and analyze contractor safety performance data and work with the contractors to improve their safety rating. This person is responsible for the day to day support of the CSM application and program management. This person will facilitate and participate in the CSLT meetings. Contractor Safety Management Team (CSLT): The CSLT is responsible for the governance of the CSM program. They will make all decisions on changes to the program. They will be responsible for addressing any specific issues that arise with the contractors, and will monitor the working relationship portion of the contractors grade. CSLT will determine the metrics for which the contractors will be held accountable. The CSLT will forecast work load requirement and

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Operational Excellence Process Documentation

contracting needs for the following year. They will review all the details surrounding misleading data supplied by contractors. This team will meet quarterly. There will be a CSLT Liaison who will participate on both the CSLT and OELT.

Management Sponsors: Management Sponsors will have assigned contractors they are required to interact with that contractors management. The purpose of the Management Sponsor is to work at a Management level to improve the safety performance of the contractor. Management Sponsors are required to meet with their contractors twice a year, make 4 job site visits per year and follow up on any incidents. They will be responsible to close out any audit findings with their contractors. Procurement The Procurement group has several functions. They are responsible for providing the annual spend data for each contractor to the CSLT. They will be responsible for modifying the contracts of those contractors who will be in the CSM program.

The Roles and Responsibilities of each job function are documented on the web-site at the following address: http://wwwctpc.chevrontexaco.net/csm/process_documents/CTPC_Roles_Responsibilities.x ls

Leadership Practices and Accountability

Practice
Communicate commitment to contractor safety to employees & contractors

Details
The CTPC President will issue an annual communication. The CTPC President will issue a letter to core contractors annually. Include at a minimum, statements on vision, expectations, and desired behaviors.

Conduct periodic reviews of HES results and activities. Set annual targets for improvement of metrics.

The CSLT Liaison will ensure that the Pipeline Leadership Team (PLT) reviews results quarterly at their meetings. Results and activity indicators to be reported to PLT: a. Workforce TRIR b. Workforce DAFWR c. Leadership involvement Each core service contractor (see Attachment C Core Contractors) will be assigned a Management Sponsor who will follow the guidance established in Attachment D Management Sponsor Guidance.

Create a forum for communication between all service contractors and ChevronTexaco which will

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Operational Excellence Process Documentation
maintain an ongoing dialogue discuss concerns, improvement opportunities, etc.

Annual recognition will be established at the Contractor Awards Luncheon. Award criteria and the process are described in Attachment E Annual Contractor Award Process. This will begin in 2005 Best practice sharing sessions and annual communication of expectations occurs at the Annual Engagement Meetings. Contractor Improvement Teams will be developed and will meet to discuss OE related issues. Teams are led by a CVX work owner and have a management sponsor assigned. A mechanism for anonymous feedback is provided through external web site at http://www.chevrontexaco.com/pipelinecsm/

Measurement and Verification Measurement The CTPC CSM Program in being implemented in 2005. An opportunity was identified to improve the existing system. The effectiveness of the system can not be determined until the end of 2005. The following are some measures will be tracked to determine that this OE Process is effective in meeting its stated Purpose (expected results): Contractor Days Away from Work Cases and Rate Contractor Recordable Incident Rate Average HES Ratings of contractor being used Number of Field Feedback Forms completed Number of Audits completed CSMP training or refresher attendance RCA Quality Review completion Number of Management Sponsor visits Verification The following Verification steps will be conducted at the first annual review to ensure that the Contractor Safety Management Plan is effective in meeting the objectives: 1. The Process Owner will review the measurement criteria to determine if the newly implemented system met their targets. 2. The Process Owner will review, verify, and document that the measures selected are adequate to determine the effectiveness of this OE Process. 3. The OE Process Administrator will perform an initial assessment or gap analysis for this OE Process to ensure all of the five Components are identified and included in the design and compliance with Corporate and Pipeline expectations. This initial assessment or gap analysis will be communicated to the Process Owner. 4. A Quality Fitness Review will be conducted on this OE process to determine the effectiveness.

Continual Improvement Evaluation 5

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Operational Excellence Process Documentation

1. An initial assessment or gap analysis for this OE Process will be performed by late 2005 to ensure all of the five Components are identified and included in the design. 2. A Quality Fitness Review will be completed after implementation by December 2005 to verify that plan is complete and appropriate. Improvement The following Continual Improvement steps will be conducted to identify opportunities to improve the Components of this OE Process: 1. At least annually, the OE Process Owner will review this OE Process and assess its performance in meeting its Purpose, Scope and Objectives and identify improvements in the OE Process. The review will be documented. The OE Process Owner will include any input from other OE Processes related to this OE Process and results from any other internal or external OE Reviews. Other reasons for review and possible update include: new and/or changed policies, management of change issues, receipt of corporate audit results, undesirable results, and others as appropriate. 2. At least annually, the OE Process Owner will meet with the OE Leadership Team to review the results from the above step. 3. Based on the reviews, the OE Process Administrator will incorporate improvements into the OE Process and will follow other defined procedures to ensure all improvements are implemented.

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Operational Excellence Process Documentation

Attachments are all located on the CTPC CSM Web-site at the following link: http://www-ctpc.chevrontexaco.net/csm/index.htm Attachment A Glossary Attachment B Scorecard Example Attachment C Core Contractors Attachment D Management Sponsor Guidance Attachment E Annual Contractor Award Process Attachment F Contractor Improvement Team Charter Attachment G Contractor Improvement Team Contacts Attachment H Vendor Add Process Attachment I Risk Assessment Matrix Attachment J Contractor Audit Process Attachment K Contractor Audit Protocol Attachment L Working Relationship Guidance Attachment M Mitigation Plan Guidance Attachment N Contract HES Addendum Attachment O Vendor Reduction and Removal Process Attachment P Emergency Contractor Usage Flowchart Attachment Q Drug and Alcohol Addendum Attachment R Project Safety Plan Template Attachment S Short Service Employee Form Attachment T SSE Variance Form Attachment U Pre-Tour / Tailgate Checklist Attachment V HES Representative Guidance