Proceedings of the 2012 9th International Pipeline Conference IPC2012 September 24-28, 2012, Calgary, Alberta, Canada

IPC2012-90237

DEVELOPMENT AND IMPLEMENTATION OF AN OPERATIONAL RISK MANAGEMENT FRAMEWORK ALIGNED WITH ISO 31000
David Weir Enbridge Pipelines Inc. Edmonton, Alberta, Canada Susan Urra Enbridge Pipelines Inc. Edmonton, Alberta, Canada

ABSTRACT The International Standards Organization (ISO) standard 31000 (Risk Management Principles and Guidelines) provides guidance on the development of a systematic approach to managing risk within an organization. Using ISO 31000 as a guide, Enbridge Pipelines has enhanced its existing releasefocused risk-informed decision-making approach and risk management process. The development of this enhancement has involved engagement of all levels of management and staff, and has required consideration of corporate cultural change, staff communication and training, development of performance measures, and management reporting. This paper provides a high level overview of the ISO 31000 standard as it pertains to its use in the development of the Enbridge Pipelines operational risk management framework, the roadmap for implementation of the framework, and discusses the challenges, successes, learnings, and early results of implementing the framework in a large multi-national pipeline company. INTRODUCTION Enbridge initiated its operational risk management program in 1999 with the development of an indexed mainline risk assessment model and supporting processes. The indexed model was developed by internal subject matter experts who chose those release likelihood conditions of most significance to the Enbridge liquid pipeline system and the consequence of a loss of containment. Risk results generated from the indexed model enabled the identification of the highest ranked relative pipeline sections and risk controls or treatments for these pipeline sections were considered. To be able to demonstrate risk reduction for these pipeline sections using the relative risk assessment model, the risk treatments must correspond to

parameters or conditions that are directly measured by the model. Figure 1 provides a high level overview of the annual process used to support the indexed risk assessment model.
Define or Refine Model Collect Data Generate & Evaluate Results Select Top Risk Areas Identify Risk Control Execute & Track Risk Control

Measure Effectiveness and Continuous Improvement

Figure 1 High Level Indexed Risk Assessment Model Process All the process steps in the figure above: model refinement or definition, data collection, generation of risk assessment results and evaluation of these results to identify those pipe sections with the higher relative risk scores, are performed by one group in Enbridge Pipelines. This group also facilitated discussion of potential risk control measures for these higher relative risk areas, and the selection of mitigations was limited to those that have direct relationship to the assessment of likelihood or consequence by the model. In addition, the Enbridge Pipelines Operational Risk Management group was responsible for tracking identified risk control measures and activities to completion but there was no clear and adhered to process in place for ensuring accountability for the execution of risk mitigation activities across the different functional areas. The execution of the annual process of updating the indexed risk assessment model and generating risk results identified a number of shortcomings related to both the characteristics of the model and the risk management process, including: 1. The process for data collection for the risk assessment model was not as rigorous as it needed to be. Data

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governance and stewardship processes were not in place to ensure that the data received from data owners was accurate, complete, and up to date. Data quality and completeness issues eroded the credibility of the risk model. The indexed risk assessment model doesnt take into consideration other measures that are performed to reduce risk that may not be included in the model. Using the indexed model process, the risk reduction achieved by risk control activities outside of the model is unknown and they are not reflected in the annual process of evaluating risk levels. The indexed risk assessment model does not provide a means to identify significant or unacceptable risk. The indexed risk assessment model only provides relative risk results and hence, the results of the model only allow comparison of one pipe section to another. The risk scores have no meaning outside of the model (for example, to be conveyed to management) and are difficult to display and explain. By having one group responsible for most aspects of the indexed risk assessment model process, there was an understood assumption that this one group was thus managing release risk on behalf of the organization. As a result, there was limited engagement from some of the functional areas that manage aspects of release risk and most of the functional areas did not use the risk assessment results as input into their risk informed decision making processes. The group responsible for the indexed risk assessment model and its associated processes spent the majority of its time on a) developing and making revisions to the mainline risk assessment algorithm and b) performing the data collection required to support the model. Less time was spent on evaluating the risk assessment results to determine top risk areas, identification of risk control measures, and tracking these measures to completion. From a management perspective, the business processes associated with identifying risk mitigation are of greater importance and higher value because they are inputs into risk informed decision making and ensure that the higher risk areas (and thus risk exposures) are being addressed. Because of this reduced focus on the risk mitigation part of the risk management process, the indexed risk assessment model and the overall risk management process lost credibility with management. The annual process of calibrating the risk assessment model algorithm made it impossible to directly compare risk assessment results year over year. It was not possible to provide management a clear picture of risk reduction achieved or of the effectiveness of risk reduction measures that were implemented from year to year.

To address these shortcomings and enhance the capability to manage release risk within the organization, Enbridge Pipelines senior management sponsored the development of a risk management framework based on ISO 31000 (Risk Management Principles and guidelines). DEFINITIONS (EXTRACTS FROM ISO 31000) Risk Risk is the effect of uncertainty on objectives. Risk is often characterized by reference to potential events and consequences, or a combination of these. Risk Management Coordinated activities to direct and control an organization with regard to risk. Risk Management Framework Set of components that provide the foundations and organizational arrangements for designing, implementing, monitoring, reviewing, and continually improving risk management throughout the organization. Risk Management Policy Statement of the overall intentions and direction of an organization related to risk management. Risk Owner Person or entity with the accountability and authority to manage a risk. Risk Management Process Systematic application of management policies, procedures, and practices to the activities of communication, consulting, establishing the context, and identifying, analyzing, evaluating, treating, monitoring and reviewing risk. Establishing the Context Defining the external and internal parameters to be taken into account when managing risk, and setting the score and risk criteria for the risk management policy. External Context External environment in which the organization seeks to achieve its objectives. Internal Context Internal environment in which the organization seeks to achieve its objectives. Risk Assessment Overall process of risk identification, risk analysis, and risk evaluation.

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Risk Identification Process of finding, recognizing, and describing risks. Consequence Outcome of an event affecting objectives. Likelihood Chance of something happening. Risk Analysis Process to comprehend the nature of risk and to determine the level of risk. Risk Criteria Terms of reference against which the significance of risk is evaluated. Risk Evaluation Process of comparing the results of the risk analysis with risk criteria to determine whether the risk and/or its magnitude is acceptable or tolerable. Risk Treatment Process to modify risk. Risk Control Measure that is modifying risk. Monitoring Continual checking, supervising, critically observing or determining the status in order to identify change from the performance level required or expected. ISO 31000

in Figure 2 and a brief overview of each element is described below. Risk Management Principles The ISO 31000 standard provides 11 risk management principles all of which have been adopted by Enbridge for inclusion in its risk management framework. Risk Management Framework At Enbridge Liquid Pipelines, senior management supports the development and implementation of the risk management framework. The framework encapsulates all functional areas responsible for release risk management, and the roles and responsibilities for these areas are identified. Processes have been established for monitoring and reviewing the framework to identify areas for improvement. Risk Management Process The risk management process is an integral part of management, embedded in the culture and practices, and tailored to the particular application. A proper definition of the risk management process includes a) goals and objectives, b) roles and responsibilities for the risk management process, c) risk assessment methodologies, d) monitoring and review activities, e) a communication plan, and f) training. Companies that successfully define, execute and implement the elements outlined above typically have success implementing a risk management framework. To achieve this success, the goals and objectives of the risk framework are known throughout the organization, and the roles and responsibilities for each functional area are defined and communicated. The frequency and method of performing risk assessments is documented, and the entire process is subject to monitoring and review. The ISO 31000 standard describes each of the risk processes which are briefly outlined below. Risk Criteria Risk criteria are the links to the goals and objectives of the pipeline organization. They provide measureable metrics in order to evaluate the progress toward each objective. The tangible linking of the risk criteria to measurable objectives is imperative to good risk practices. Risk criteria include specific metrics for safety, environment, and business performance. Establish the Context The organization establishes the context in which risks are managed. Enbridge Pipelines is focused on addressing release risk. Hence, the context for the risk management framework and supporting models, programs and procedures is centered on managing release risk.

Figure 2 ISO 31000 Framework The ISO 31000 standard outlines the relationship that exists between risk principles, the risk framework and risk processes. The interrelationship among these elements is shown

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Risk management results are an input into risk-informed decision making. Risk informed decision making is used by a pipeline organization to achieve its pipeline integrity and safety objectives. Use of risk management may provide opportunities to reduce and/or eliminate threats, and prepares a company by reducing the impact of adverse effects if an incident occurs. The intent is to manage risks appropriately in alignment with the companys objectives. The first step in moving toward risk-informed decision making is to properly understand the context in which risks are managed, and in the case of Enbridge Pipelines, this context incorporates all aspects of release risk. Risk Assessment Risk assessment consists of three processes: Risk Identification, Risk Analysis, and Risk Evaluation. Risk Identification Risk identification requires an operator to identify a comprehensive list of risks based on those events that may affect the achievement of objectives established by the organization. Identification of risks includes a determination of the sources of the risk (i.e. threat) and the potential consequences of these threats. Risk Analysis Risk analysis is the development of an understanding of identified risks that considers the causes and sources of risk (threats), their likelihood of occurrence, and their consequence. Models used to analyze and assess risk can be qualitative, semi-quantitative, or quantitative in nature, each having an increasing level of rigor and requiring an increased level of welldefined data. The analysis incorporates the effectiveness of existing risk controls. Risk Evaluation Risk evaluation compares the risk estimates (results from the analysis) to the established criteria and determines how severe the risk is relative to the organizations tolerance for risk defined when the context was established. In addition, driving characteristics are examined and understood so that decisions about risk treatment can be initiated. Risk Treatment The purpose of risk treatment activity is to reduce the risk to a tolerable level. Risk treatment involves selecting one or more options for modifying risks and implementing those options. Risk mitigation is performed in compliance to regulations and company standards regarding acceptable levels of risk.

Monitor and Review The more that risk management and the risk management framework are integrated into the overall riskinformed decision making processes of the organization, the closer the relationship between risk monitoring and overall company monitoring. Risk monitoring ensures and demonstrates compliance with regulations, and that treatment plans are implemented and risk controls working as intended. Regular reports are submitted to management on the status of the entire risk management system, the status of risk reduction that is being achieved by the implementation of risk treatment projects and activities, and any issues with the effectiveness of risk controls. Communication and Consultation The communication and consultation step informs decision makers of the outcome of the risk process and helps build consensus across the organization about the magnitude of significant risks. The communication plan covers the entire risk process from establishing the context through mitigation, and includes monitoring and review activities. Stakeholders and functional areas are consulted to a) help establish context, b) ensure that the interest of stakeholders are understood and considered, c) help ensure that risks are adequately identified, d) bring different areas of expertise together for analyzing risks, e) ensuring that different and diverse views are appropriately considered when defining risk criteria and evaluating risks, and f) to secure endorsement and support for a treatment plan DRIVERS FOR CHANGE Enbridge recognized that recent incidents plus heightened public awareness about pipelines and measures required to alleviate concerns of public and environmental impacts in the event of a pipeline release necessitated a review and strengthening of its release risk management processes and practices. In addition internal demands and increased expectations for release risk management have placed additional emphasis on the requirements for identifying, assessing, and reporting on risk reduction achieved from all release risk management activities and projects undertaken within the organization. As a result, senior management directed the establishment of a release risk framework based on ISO 31000. This framework is intended to strengthen the existing risk management communication and practices within the organization and ensure that release risk management is thoroughly incorporated into the organizational decision making processes. Enbridge recognized that not only does a framework or management process need to be put in place but also the tools and techniques used to identify and manage risk needed review and revision. To this end the indexed risk assessment mainline

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model is being replaced with a new semi-quantitative risk assessment model and risk assessment matrix. REGULATORY CONSIDERATIONS Recent U.S. and Canadian regulatory communications or expectations have identified a number of improvements including: The need for accurate pipeline-specific risk assessments leveraging more quantitative assessment techniques [2]. Rigorous, systematic approach or methodology [2,4]. The approach or methodology will also be comprehensive and proactive in managing risks [3]. Approach or methodology that evaluates and manages the risks associated with all hazards, and the development, implementation, and communication of preventative, protective and mitigative measures for identified hazards and risks [3,4]. Data validation, including better handling of missing or suspect data [2]. Development and use of risk analysis methods able to support effective decision making [2]. Need for robust processes or approaches to select risk treatment measures [2]. Data quality assurance / quality control to ensure accuracy, completeness, and currency of data input into the risk assessment models. (Missing or inadequate data can introduce significant uncertainty into the risk analysis; decision-making based on missing or poor data does not adequately account for this uncertainty) [2]. Company records must adequately reflect each pipelines physical and operational characteristics [4]. The Risk Management Framework developed by Enbridge Pipelines that is aligned with ISO 31000 is a formalized process and methodology based on a recognized risk assessment standard that addresses and manages the regulatory considerations noted above. The framework identifies the approach or methodology to be employed from threat and consequence identification and validation, through data collection and risk assessment and evaluation, to identifying and implementing appropriate risk control measures to manage the risk. Touch points with all business areas managing aspects of release risk within the auspices of the framework are documented. Lastly, the framework is subject to internal and external audit and review to ensure that all of its processes, commitments and expectations are being met. FRAMEWORK OVERVIEW The Enbridge Pipelines risk management framework integrates release focused risk-informed decision-making across engineering, integrity, and risk functions to support the day to day pipeline operation. The development and implementation of the framework has the support of the senior management responsible for these business areas.

The intent of the framework is to encapsulate all business areas responsible for release risk management in the same framework such that the risk reduction achieved by their efforts is measurable and enables direct comparison so that optimization of risk control measures in reducing pipeline risk can be accomplished. The touch points or interfaces that each business area has within the framework as well as their roles and responsibilities are clearly defined. The business area that stewards the risk management framework is also a participant with defined roles and responsibilities. The development of the risk framework requires a rethink of the processes used to manage release risk within the organization. Major processes that required development or required revision include threat and consequence identification and tracking, management of change, escalation processes, risk treatment tracking, and training and communication. The risk treatment tracking tool catalogs and tracks all of the release risk mitigation activities being undertaken within the organization. Risk reduction performance measures are identified using this tracking tool. The tool also provides a means for management as well as functional areas and individuals to get the full picture of all planned risk reduction activities. The framework needs access and use of a number of tools to be successful, including a mainline risk assessment tool that enables identification of significant or unacceptable risk (and of insignificant acceptable risk), understanding of the risk reduction achieved by each and every risk reduction measure performed by the organization, key performance indicators to measure the success of the framework, and tools to track the risk treatment projects and activities being undertaken throughout the organization to manage release risk. Lastly, the framework requires the establishment of communication strategies and training programs. RISK MANAGEMENT FRAMEWORK SCOPE The Enbridge Pipelines Risk Management Framework is being developed and implemented in stages as follows: Stage 1 Mainline, Release Risk Focused Stage 2 Facility, Release Risk Focused Stage 3 Human Factors Stage 4 Gathering Systems, Release Risk Focused Stage 5 Pipeline Lifecycle Risk Management The mainline component of the framework is being developed in 2011/12. Facilities, Human Factors, and Gathering Systems are to follow between 2012 and 2014. Pipeline lifecycle risk management will incorporate risk informed decisions in the development, design and construction of new pipeline and facility assets. The implementation of the risk management framework also considers the integration of other release risk management practices managed by functional areas throughout the organization as well as its incorporation into existing management systems.

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ENBRIDGE RISK MANAGEMENT FRAMEWORK DEVELOPMENT AND IMPLEMENTATION STRATEGY The strategy for developing and implementing the Enbridge Pipelines Risk Management Framework has three consecutive phases with specific outcomes for each phase as illustrated in Figure 3.

Questions related to both the current state and the envisioned future state of the risk management framework were developed to focus discussion during facilitated meetings or workshops. The intent of both the survey and developed questions was to ensure that a clear and complete picture of the current state of release risk management could be ascertained for the organization. 2. Document Review A review of existing documentation on policies, procedures, process and techniques was performed in advance of the on-site facilitated gap analysis meetings. The review provided an understanding of the documentation gaps existing between the current documentation set and that required by ISO 31000. 3. Development of Gap Analysis Plan The gap analysis plan identified key individuals and organizational units to be interviewed as part of the gap analysis. 4. Execution of Gap Analysis The gap analysis was executed by performing facilitated planned interviews and meetings. 5. Document the Gaps and Develop the Risk Management Framework Development Plan The risk management framework development plan was based on the findings of the gap analysis and the requirements outlined in ISO 31000 Risk Management Principles and Guidelines. The gap analysis provided input into the development and implementation of the risk management framework as well as helped to identify which processes need to be developed or enhanced in order to meet the requirements of ISO 31000. DEVELOPMENT OF THE RISK MANAGEMENT FRAMEWORK A project plan for development of the risk management framework was defined based on the results of the gap analysis. The plan was based on the execution of a series of facilitated workshops. The main objective of these workshops was to provide a communication forum to stakeholders to learn and understand the requirements of ISO 31000 as well as to discuss how the implementation of the risk management framework may impact their current risk management practices and processes. These workshops provided an opportunity to start building stakeholder engagement in preparation for alignment with ISO 31000.

Figure 3 Risk Management Framework development and implementation Phase 1 Gap Analysis A gap analysis is performed to assess the current level of release risk management engagement in the organization, document the risk management processes and procedures already in place, and identify gaps. Phase 2 Development of the Risk Framework Results of the risk management framework gap analysis are used to define the development requirements for the risk framework. Phase 3 Implementation of the Risk Framework Once the risk management framework has been developed and approved by senior management it is implemented. The implementation involves refinement of existing processes, development of new processes, and cultural change within the organization that will be accomplished through communication and training. GAP ANALYSIS The gap analysis involved an in-depth review of the current risk management programs, processes, and techniques, and a review of the current formal and informal risk management practices across the functional areas of Engineering. Operations, and Integrity. The approach for executing the gap analysis involved the following sequence of steps: 1. Development of Gap Analysis Survey and Questions The gap analysis survey included a number of questions intended to identify the relationship that each functional area expected to have with the risk management framework and involved identifying RACI elements (responsible, accountable, consulted and informed) for each of the ISO 31000 processes.

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The development plan included the execution of four workshops, each one addressing key elements of the risk management framework. Table 1 presents the scope of these four workshops aligned with the elements of the ISO 31000 Framework. A brief description of each workshop is provided after the table.
ISO 31000 Framework Element 4. Framework 4.2. Mandate and commitment 4.3. Design of risk management framework 4.3.1. Understanding the organization and its context 4.3.2. Establishing risk management policy 4.3.3. Accountability 4.3.4. Integration into organizational processes 4.3.5. Resources 4.3.6. Internal communication and reporting 4.3.7. External communication and reporting 4.4. Implementing risk management 4.4.1. Framework implementation 4.4.2. Process implementation 4.5. Monitoring and review 4.6. Continual improvement 5. Process 5.2. Communication and consultation 5.3. Establishing context 5.3.1. General 5.3.2. External context 5.3.3. Internal context 5.3.4. Context of risk management process 5.3.5. Risk criteria 5.4. Risk assessment 5.4.1. General 5.4.2. Risk identification 5.4.3. Risk analysis 5.4.4. Risk evaluation 5.5. Risk treatment 5.5.1. General 5.5.2. Selection of risk treatment options 5.5.3. Preparing and implementing risk treatment plans 5.6. Monitoring and review 5.7. Recording the risk management process Workshop # 1 1 1 1 1 1 1 1 1 4 4 4 3 3 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 3 3

Workshop #3 Focused on Risk Monitoring, Record Retention and Continual Improvement Workshop #4 - Aimed at establishing an Implementation Plan for the Risk Management Framework. The results from the four workshops facilitated the capture of key components required in the development of the risk management framework and incorporated into the risk management framework processes, procedures, and documentation. FINDINGS FROM THE RISK MANAGEMENT FRAMEWORK DEVELOPMENT Several challenges were encountered early in the risk management framework development related to the pace of change currently underway within the organization including significant initiatives and cultural change. These challenges included getting business function commitment and focus, conflicts and perceived redundancy with other initiatives, and difficulty in getting the right people to the table. In a change effort as extensive as the risk management framework implementation one would have expected resistance from business area silos concerned with losing their decision-making autonomy. For this effort, this was not the case; strong support for the development of the framework was received from all functional areas and all levels of management. Risk Management Framework Focus To address the challenges that occur in the early stages of the risk management framework development, focus was placed on the following: 1. Focus the development of the Risk Management Framework on the management of release risk resulting from pipeline loss of containment 2. Integrate release risk-related activities focusing on three key functional areas in Enbridge Pipelines: Engineering, Operations and Integrity. 3. Align risk management framework with the international best practices of the ISO 31000 standard. The result was the vision for the risk management framework is represented by Figure 4.

Table 1 Workshop Planning for Risk Management Framework Development Workshop #1- establishing the foundational elements upon which the risk management framework is built and addresses the Mandate and Commitment, Policy and Accountability, and Resources required for implementing the Risk Management Framework. Workshop #2 - Focused on Risk Assessment and Risk Treatment.

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of a new semi-quantitative mainline risk assessment tool and a risk matrix. New and Refined Process, Procedure or Technology The workshops reviewed existing processes and focused discussion and effort on identifying those processes requiring refinement and new processes or procedures that are required to support the risk management framework. The development of several new processes related to integrating all aspects of release risk management in Enbridge Pipelines into the risk management framework was also identified and effort is being taken to develop these processes. A requirement to procure a software tool was identified that will track risk treatments, from their identification through to their implementation and deployment plus manage workflow elements of communication and reporting related to these treatments. Enbridge is currently evaluating software solutions. Figure 4 Enbridge LP Risk Management Framework vision Roles and Responsibilities The Enbridge Pipelines Operational Risk Management group was assigned stewardship of the risk management framework with the following roles and responsibilities: Communication role on matters related to the Risk Management Framework Responsible for the implementation, effectiveness measure and continual improvement of processes within the scope of the Risk Management Framework Report on Risk Management Framework performance and identifying areas requiring improvement Promote awareness of the requirements of the Risk Management Framework throughout the organization It was established that some of the key functional areas included in the scope of the risk management framework have a risk owner role with accountability for supporting the execution of activities in the risk management framework. This role includes: Producing and maintaining accurate and updated information - accountability on quality of data input Making risk information available to stakeholders active role in risk identification and communicating risk treatment completion Proactively defining and executing risk treatment actions active role in risk identification and accountability on risk treatment execution Risk Criteria and Risk Assessment Tools The workshops provided an opportunity and forum to present, validate and obtain consensus around the development Risk Management Framework Effectiveness Measures The measurement of the risk management framework effectiveness was designed around key performance indicators to be reviewed quarterly. The requirement for internal reviews and audits was allocated to the compliance and audit groups. These two continuous improvement mechanisms are meant to evaluate: how well the risk management policy is being followed the adequacy of performance indicators the competencies of risk management resources the appropriateness of resources available for risk management activities. RISK MANAGEMENT FRAMEWORK MATURITY PATH There are several key elements that determine the maturity of a risk management framework. Table 2 describes the elements being used by Enbridge Pipelines in designing its Risk Management Framework. Elements Process Description The core of an effective Risk Management Framework is the ability to effectively identify, quantify, visualize, prioritize and mitigate risks. The Risk Management Framework is an instrument for establishing a risk based culture throughout the organization. Factors determining the maturity of the risk based culture are: Levels of executive sponsorship and support Capacity of cross-functional teams to

Organization

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Knowledge

Technology

evaluate and mitigate risks through identification of risk treatment options Fulfilling the risk management framework functional areas roles and responsibilities in relation to Risk Management throughout the organization. The level of risk-related knowledge and expertise across the organization directly affects the performance of risk management framework activities and risk-informed decision-making affecting the quality, granularity and timing of risk data, risk results and risk response planning. The capability to collect, normalize, and manage data from all parts of the organization and maintain consistency in the way that data is collected and presented for risk-informed decision making relies on technology. The capability to automatize risk-related activities in the risk management framework enables actionable intelligence defined as relevant and timely data presented in the proper context.

IMPLEMENTATION OF THE RISK MANAGEMENT FRAMEWORK Preparing an implementation plan for a risk management framework requires the definition of several inter-related subplans to be appropriately scheduled in order to optimize management of change. As the steward of the risk management framework, Operational Risk Management has a lead role in the implementation of the framework. Communication Plan An internal communication plan was developed in conjunction with the Public Affairs department that defines the goals and objectives of communication, the targeted audience, and the key messages. A tactical plan for roll out of communication activities is also a part of this plan. Training Plan Training aims to support the achievement of several objectives related to stakeholder behavior and competencies in relation to the risk management framework. These objectives can be summarized as: Increase awareness about risk management practices Create or increase engagement among stakeholders in relation to their roles and responsibilities in relation to the risk management framework Increase competencies on the execution of risk management activities Support the development of a risk culture across the organization The tactical plan to implement the communication and training plans includes the use of a toolkit made of the following training methodologies: Lunch & Learns, Intranet articles, internal workshops and team meetings, newsletters, executive videos, web-based and collateral material and celebration of success gatherings. Resource Plan The owner of the implementation plan is the Operational Risk Management department. As owner, this department needs sufficient competence, resources, authority, and management support for the successful implementation of the risk management framework. The remaining functional areas have accountability for execution of risk management activities in the risk management framework. These functional areas are responsible for allocating resources as appropriate to support the risk management framework implementation. Second-tier documentation On completion of the high-level, Tier 1 document that establishes the approach to execute risk management activities in Enbridge following ISO 31000 guidelines, more in-depth, Tier 2 procedures and documentation is required. This in-depth

Table 2 Key elements of Risk Management Framework Maturity The four elements described in Table 2 are interrelated and their effectiveness is maximized if they are developed and/or evolve together. There are five evolution stages for each maturity element. 1. Ad-hoc: Activities are randomly executed, without structure or direction: no practices or framework in place. 2. Informal: The organization loosely executes activities: informal practices in place. 3. Formal Process / Inconsistent Control: A framework of execution is established but the quality of execution is inconsistent: processes and / or a framework exist but are inconsistently used. 4. Consolidated: Through a continuous improvement process, the organization starts achieving consistency and effectiveness: the framework exists and is consistently used. 5. Optimization: The level of execution of activities are best in class: best in class framework performance Based on these stages of evolution Enbridge Pipelines expects the development and implementation of the LP risk management framework to allow the organization to walk the maturity path from informal practice to best in class risk management framework performance. Once the elements and the stages of maturity have been defined, the roadmap strategy describes the steps required to enable evolution.

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documentation includes the roles and responsibilities (i.e. touch points) of all functional areas managing release risk within the risk management framework. Development of new processes and tools Identification of new work processes or process enhancement will trigger the need for the development of several tools to facilitate the integration of data, risk-related communication among functional areas, tracking of risk mitigation activities, etc. RISK MANAGEMENT FRAMEWORK IMPLEMENTATION PLAN The implementation plan for establishing the risk management framework in Enbridge Pipelines has three phases: 1) Establish a Formal Risk Management Framework, 2) Consolidate the Risk Management Framework, and 3) Optimize the Risk Management Framework. An overview of the goals and objectives for each of these phases is outlined below using categories of process, people, and tecnology. Phase 1: Establish a Formal Risk Management Framework Process: Develop a formal risk management framework (Tier 1 document) Emphasizes risk management as a continuous task throughout the different functional areas Identifies documented, repeatable processes for risk identification, assessment, and mitigation tracking as well as planning, information distribution, and reporting about the risk management framework performance. Identifies stakeholder needs, constraints and assumptions. In addition processes prescribe the distribution of progress status and reporting at a summary level. People: Establish roles, responsibilities, skill requirements, and skill development for all the individuals involved in the execution of activities related to the risk management framework. Develop basic and comprehensive training and provide as appropriate to stakeholders Established awareness and risk culture changes and improvements start to develop across the organization. Tools and Technology: Acquire tools and technologies to support the risk management framework Maintain risk data in a structured format that can be regularly analyzed, reviewed, and revised to ensure real-time assessment. Develop risk (threat and consequence) capture tools

Develop tools to track and report on risk treatment status and results achieved

Phase 2: Consolidation of the Risk management Framework Process: Consolidate and integrate processes so that there is consistency in execution through all the functional areas. Utilize lessons learned information for risk identification, response, and control. Identify and review potential risk sources. Risk identification, assessment and mitigation plans are integrated across the multiple functional areas to minimize the collective risk. Metrics are collected and analyzed for types of risk and success in mitigation. Risk-related information is integrated in performance reporting on the risk management framework effectiveness. Variance and trend analysis plus performance review meetings are conducted. Communication management processes and techniques are integrated with an organizational structure. People: Improvements in both individual skills and team capabilities are integrated to perform effectively and a level of competency is established. A complete training program is implemented for risk stakeholders. Performance objectives incorporate risk management framework activities in individual staff roles. Organization rewards and recognizes effective performance on the activities and decision making related to the risk management framework. Critical resources are coordinated and leveraged across the different functional areas. There is cross-functional familiarity and participation in risk management activities and decision making. Good understanding of benefits of implementing risk. Transparency and awareness are consolidated. Senior management promotes, supports and has demonstrable proof that the risk management framework adds value. Tools and Technology: Tools are mature and application is consistent. Attention shifts from execution to improvement. Development of tools to communicate performance indicators.

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Phase 3: Optimization of the risk management framework Process: The risk management framework is optimized and sustained for continuous improvement. Best in class practice focuses on optimization and continuous improvement. Consistency in achieving key performance indicators Tools and Technology: Automation of tasks related to the risk management framework allows the development of capability to mine information, enabling actionable intelligence defined as relevant and timely data presented in the proper context and capacity for risk knowledge transfer. People: The organization has a systematic communications and human resource management system that is optimized and sustained for continuous improvement of the risk management framework. Senior management strives for economic risk based optimization of resource allocation and decision making. A formal training program with Internal/External Mentors/Trainers is made available. High competency across the organization that is recognized by industry peers. CONCLUSION Enbridge Pipelines has internally developed a release-risk focused risk management framework based on the requirements of ISO 31000. This framework encapsulates all of the functional areas and processes involved in the management of

release risk into a common framework to assess release risk, identify risk treatments to address this risk, and report or communicate on the current state of release risk and how this risk is being managed. Implementation of the framework has commenced and it is anticipated that, as with the framework development, issues and challenges will arise with its implementation. At the conclusion of the framework implementation, Enbridge will have a best in class effective and efficient process based on the internationally recognized ISO 31000 standard to manage its release risks. REFERENCES [1] ISO 31000, Risk Management Principles and Guidelines, International Standards Organization, 2009, Ref ISO 31000:2009(E). [2] Mayberry, Alan, Pipeline Risk Assessments and Recordkeeping, Presentation at Pipeline Hazardous Materials and Safety Administration (PHMSA), Improving Pipeline Risk Assessments and Record Keeping Workshop, July 21 st, 2011, Arlington Virginia [3] National Energy Board, Notice of Proposed Regulatory Change (NOPRC) 2011-01 Management Systems, Letter to: Oil and Gas Companies under the Jurisdiction of the National Energy Board and Interested Parties, January 21 st, 2011. [4] Pipeline and Hazardous Materials Safety Administration (PHMSA), Pipeline Safety: Establishing Maximum Allowable Operating Pressure or Maximum Operating Pressure Using Record Evidence, and Integrity Management Risk Identification, Assessment, Prevention and Mitigation, Advisory Bulletin, Docket No. PHMSA-2010-0381, January 2011.

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