Pipeline Safety:

Management of the Office of Pipeline Safety's Enforcement Program Needs Further Strengthening

GAO-04-801: Published: Jul 23, 2004. Publicly Released: Jul 23, 2004.

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While pipelines are inherently safer to the public than other modes of freight transportation, pipeline accidents involving natural gas and hazardous liquids (such as gasoline) can have serious consequences. For example, a natural gas pipeline ruptured near Carlsbad, New Mexico, in 2000, killed 12 people, and resulted in $1 million in damages or losses. The Office of Pipeline Safety (OPS) administers the national regulatory program to ensure safe pipeline transportation. OPS uses its enforcement program, when safety problems are found, as one means to do so. This study reports on (1) the effectiveness of OPS's enforcement strategy and (2) OPS's actions for assessing monetary sanctions (civil penalties), among other things.

The effectiveness of OPS's enforcement strategy cannot be determined because the agency has not set goals for its enforcement program, fully defined its strategy, or established performance measures linked to goals that would allow an assessment of results. These are key elements of effective management. Without these elements, the agency cannot determine whether recent changes in its strategy are having the desired effects on pipeline safety. Over the past several years, OPS has placed priority on other areas--developing a new risk-based regulatory approach--and it believes these efforts will change the safety culture of the industry. OPS now intends to devote more attention to strengthening the management of the agency's enforcement program. In particular, OPS is developing an enforcement policy that will help define its enforcement strategy and has made some initial steps toward identifying new performance measures. However, OPS does not anticipate finalizing such a policy until sometime during 2005 and lacks a systematic approach for incorporating some of the key practices identified for achieving successful performance measurement systems. OPS has increased both the number and the size of the penalties it has assessed against pipeline operators over the last 4 years (2000 through 2003) following its decision to be "tough but fair" in assessing penalties. During this period, OPS assessed an average of 22 penalties per year, compared with an average of 14 per year for the previous 5 years (1995 through 1999), a period of more lenient enforcement. In addition, the average penalty amount increased from $18,000 to $29,000 over the two periods. While civil penalty use and size has increased, it is not clear whether this action will help deter noncompliance with the agency's safety regulations. Stakeholders expressed differing views: some thought that any penalty had a deterrent effect if it kept the pipeline operator in the public eye, while others told us that the penalties were too small to be effective sanctions. About 94 percent of the 216 penalties levied from 1994 through 2003 have been paid. However, OPS lacks effective management controls to assure that penalties are collected. For example, OPS does not routinely inform its collection agent of penalties it has assessed.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In July 2005, FAA began sending civil penalty collection reports to the Pipeline and Hazardous Materials Safety Administration's (formerly RSPA) office of chief counsel's staff, who then shares the reports with the Pipeline Safety Office of Enforcement and Program Performance (PHP, formerly known as OPS) staff. At that time, FAA sent two civil penalty reports to the chief counsel's staff, specifically a comprehensive report summarizing the status of all open pipeline civil penalty accounts and a report summarizing payments operators have made on civil penalties. Once PHP personnel receive the reports, they are able to update their enforcement tracking system and identify whether any civil penalties are overdue.

    Recommendation: To improve management controls over the collection of civil penalties and the public dissemination of information on enforcement actions, the Secretary of Transportation should direct the Associate Administrator, OPS, and the Administrator, FAA, as appropriate, to have FAA share its reports on collections with OPS so that OPS will know the status of civil penalty enforcement actions.

    Agency Affected: Department of Transportation

  2. Status: Closed - Implemented

    Comments: In response to this recommendation, the Pipeline Safety Office of Enforcement and Program Performance (formerly known as OPS) established standard operating procedures for informing FAA regarding proposed and assessed civil penalties in August 2004. These procedures require that pipeline safety staff notify FAA of proposed civil penalties and chief counsel staff notify FAA of assessed civil penalties.

    Recommendation: To improve management controls over the collection of civil penalties and the public dissemination of information on enforcement actions, the Secretary of Transportation should direct the Associate Administrator, OPS, and the Administrator, FAA, as appropriate, to have OPS inform FAA of all proposed and assessed civil penalties so that FAA can carry out its collection functions.

    Agency Affected: Department of Transportation

  3. Status: Closed - Implemented

    Comments: In the report, GAO cited the following as key practices for achieving successful performance measurement systems: (1) measures that are linked to program goals and that demonstrate the degree to which desired program results are achieved, (2) measures that address important aspects of program performance, and (3) measures that provide useful information for decision making. In response to this recommendation, OPS developed a plan for its enforcement program that establishes a set of measures for the program that meet these criteria. This plan was finalized in August 2005. For example, the plan establishes six measures of the extent to which the program achieves intermediate outcome goals (direct results) and three measures of the extent to which it achieves end outcome goals (ultimate results). These measures--along with additional new measures in the plan of the extent to which the program has completed various initiatives aimed at improving the management of enforcement efforts--address various aspects of performance and are designed to assist managers in making policy decisions about the program.

    Recommendation: To improve OPS's ability to determine the effectiveness of its enforcement strategy and make adjustments to this strategy as needed, the Secretary of Transportation should direct the Associate Administrator for the Office of Pipeline Safety to establish a systematic approach for designing performance measures that incorporates identified key practices.

    Agency Affected: Department of Transportation

  4. Status: Closed - Implemented

    Comments: In response to this recommendation, OPS developed a plan for its enforcement program that constitutes an overall strategy for enforcement. The plan establishes an overall mission for the program as well as a related set of goals and regulatory strategies. This plan was finalized in August 2005. The plan establishes 9 goals that identify the desired impacts of the program on pipeline safety and 14 regulatory strategies that it intends to employ to achieve these goals. For example, to help ensure that pipeline operators strive to avoid non-compliances, the program intends to severely deal with significant non-compliances and repeat offenses. In addition, the plan identifies a number of actions and initiatives to achieve each strategy. These include posting operator and industry compliance performance on the office's web site and developing more detailed guidance for making inspection findings, ranking the severity of accidents, and proposing enforcement actions and civil penalties.

    Recommendation: To improve OPS's ability to determine the effectiveness of its enforcement strategy and make adjustments to this strategy as needed, the Secretary of Transportation should direct the Associate Administrator for the Office of Pipeline Safety to fully define its strategy for achieving these goals.

    Agency Affected: Department of Transportation

  5. Status: Closed - Implemented

    Comments: In response to this recommendation, OPS developed a detailed plan for its enforcement program that establishes a set of goals for the program. This plan was finalized in August 2005. Specifically, the plan sets goals that identify the desired intermediate outcomes (direct results) and end outcomes (ultimate results) of the enforcement program on pipeline safety. For example, the program seeks to bring about improvements in various aspects of the safety performance of pipeline operators as evidenced by reductions in the severity of inspection findings and enforcement actions over time. OPS expects that progress in achieving these intermediate outcome goals will lead to progress in achieving end outcome goals, including reductions in the total number of accidents caused by non-compliance with pipeline safety regulations.

    Recommendation: To improve OPS's ability to determine the effectiveness of its enforcement strategy and make adjustments to this strategy as needed, the Secretary of Transportation should direct the Associate Administrator for the Office of Pipeline Safety to establish goals for its enforcement program.

    Agency Affected: Department of Transportation

  6. Status: Closed - Implemented

    Comments: According to the Office of Pipeline Safety on 6/23/05, the agency is currently posting all of its enforcement actions (i.e., Notice Letters and Final Orders, including Corrective Action Orders), on the OPS web site--consistent with its policy.

    Recommendation: To improve management controls over the collection of civil penalties and the public dissemination of information on enforcement actions, the Secretary of Transportation should direct the Associate Administrator, OPS, and the Administrator, FAA, as appropriate, to have OPS post all enforcement actions on its Web site, consistent with its policy.

    Agency Affected: Department of Transportation

 

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