Management Systems and Certification

1. Management Systems and Certification CANADIAN DIAMOND DRILLING ASSOCIATION (CDDA) WESTERN SAFETY GROUP May 22, 2009 Winnipeg, MB Presented by Bert Hettrich, International Certification Ltd.

2. IntroductionInternational Certification Ltd. • Canadian location of Kiwa International Cert • Accredited Registrar(ISO 9001, ISO 14001, OHSAS • 18001, ISO/TS 16949, ISO 17025, ISO 22000, and several others standards) • 2500+ Clients on 5 Continents(client range is from 2 employees to multi national corporations • with 10000+ employees) • International Certification Ltd.11518 Briar Drive, Coldstream, BC V1B2A5 • bert@iso-certification.com

3. Management Systems and Benefits Implementation of a Management System It’s not easy: What do others do?  some examples Relations with Regulators Options for CDDA CDDA Standard benefits CDDA Standard structure options CDDA certification scheme Next steps Today’s topics

4. In general, Management Systems (MS) can be grouped into two categories: informal MS and formal MS The ones that are formal are based on specific requirements, e.g. environmental management system (EMS), quality (QMS), safety (SMS), industry specific MS such API, ASME, AS9100 etc The ones that are informal, have no specific structure and can not easily be measured against specific criteria. As the effectiveness of formal management system is higher than the effectiveness of informal management systems, this presentation is focusing on formal management systems. Management Systems and Benefits

5. Management Systems and Benefits cont. The intent of a management system is to provide a tool for all levels of the organization to manage their tasks and to create additional benefits for the company and the company’s stakeholders. The extent of the application of the management system can be from someone filing paperwork in the office, to preparing core boxes to evaluating compliance with customer and legal requirements.

6. What are the benefits when investing into a management system? Management Systems and Benefits cont. • Improved performance (quality, safety, environment, financially, etc.) • Reduced liability • Competitive advantage • Improved compliance • Reduced costs • Fewer accidents • Employee involvement • Improved public image • Enhanced customer trust • Better access to capital etc.

7. Management Systems and Benefits Implementation of a Management System It’s not easy: What do others do?  some examples Relations with Regulators Options for CDDA CDDA Standard benefits CDDA Standard structure options CDDA certification scheme Next steps Today’s topics

8. Implementation of Management Systems Where does the implementation start? It starts with management commitment!  If the decision makers are not committed, if there is no vision for the company on where to go, the implementation will not be smooth; it will take a long time and will utilize excessive resources.

9. Implementation of Management Systems cont. And then we need a plan: Increase in benefits Do we develop our own system? Do we use a proven national or international standard as the basis? Do we use an industry specific standard as the basis? Do we use an industry specific standard that is based on a proven national or international standard?

10. Management Systems and Benefits Implementation of a Management System It’s not easy: What do others do? some examples Relations with Regulators Options for CDDA CDDA Standard benefits CDDA Standard structure options CDDA certification scheme Next steps Today’s topics

11. Example: Proven national or international standard as the basis? It’s not easy: What do others do? ISO 9001: Quality management system (QMS) ISO 14001: Environmental management system (EMS) OHSAS 18001: Safety management system (SMS) Canada’s National Plan of Action to Prevent, Deter and Eliminate Illegal, Unreported and Unregulated Fishing All DMCs (Dockside Monitoring Companies) in the country must now meet the DMP Quality Management System Standard, which was developed by the Canadian General Standards Board on behalf of Fisheries and Oceans Canada, and is based on ISO 9001 QMS….. http://www.dfo-mpo.gc.ca/npoa-pan/npoa-iuu-eng.htm

12. Example:Industry specific standard that is based on a proven national or international standard? It’s not easy: What do others do? Cont. Accommodation and Real Estate Services (ARES)is a division of Shared Services BC within the Ministry of Labour and Citizens' Services. Shared Services BC is the shared services provider for the Government of British Columbia, within which ARES provides accommodation and real estate services to government ministries and broader public sector customers and clients. The context for this policy (Environmental Stewardship) is provided by ARES’ commitment to environmental stewardship principles, which form an integral part of ARES’ strategic goals, objectives and green building performance targets for provincially funded facilities. PurposeTo confirm ARES’ continuing commitment to the responsible environmental management of its business; in particular, to: Maintain ISO 14001:2004 registration of its Environmental Management System (EMS) and to deliver high performance building solutions to its customers

13. It’s not easy: What do others do?Cont. Example:Do we use an industry specific standard that is based on a proven national or international standard? API Engine Oil Licensing and Certification System (EOLCS) A cooperative effort between the oil and additive industries and vehicle and engine manufacturers, EOLCS is a voluntary licensing and certification program designed to help engine oil marketers show that their products meet strict performance requirements…..www.api.org/eolcs Wood Products Quality Councilwww.wpqc.comhas developed the WOODMARK quality system standard that is based on ISO 9001 plus added some specifics for the value added wood manufactures (critical processes) plus added safety as a separate requirement. Companies that pass an independent 3rd party audit are allowed to use on the products a Woodmark quality label.

14. Example:Do we use an industry specific standard that is based on a proven national or international standard? It’s not easy: What do others do?Cont. Preservation Canada (formerly Canadian Institute of Treated Wood) is the national association representing the manufacturers of treated wood products across Canada and wood preservative producers in Canada and the United States. In the spirit of environmental responsibility and sustainable development, the members of Wood Preservation Canada have endorsed a set of principles to govern their attitude and action in environmental matters, including a commitment to “assess, plan, construct and operate facilities in compliance with all applicable regulations”. They have developed a self-regulation program under which plants are certified by the Canadian Wood Preservation Certification Authority (CWPCA). This program has been endorsed by Environment Canada, Health Canada and the Pest Management Regulatory Agency, Health Canada. http://www.woodpreservation.ca

15. Example:Do we use an industry specific standard that is based on a proven national or international standard? It’s not easy: What do others do?Cont. Transport Canada: Aviation Safety Canada has one of the most enviable safety records in the world. The market is ever changing. Rapid growth and globalization challenge our past practices, providing us with opportunities today to make improvements for the future. Transport Canada continues to make strides towards improving aviation safety. Our objective is safer skies, ultimately achieved through a proactive and integrated approach to accident prevention. Dynamic and proactive safety systems Transport Canada lets industry groups tailor the safety management system (SMS) within guidelines set out in the regulations, to meet their unique operating requirements, but expects the company to measure how well the system works. SMS is based on the idea that you can always find better ways to prevent hazards, so the system will always be changing. http://www.tc.gc.ca/civilaviation/aviationsafety/menu.htm

16. It’s not easy: What do others do?Cont. Summary: Everyone is doing something. The main drivers for implementation are: • making more money • demonstrating legal compliance (and getting off the radar of the authorities) • Customers / Shareholders / Banks / Insurances / Stakeholders / Stakeholders

17. Management Systems and Benefits Implementation of a Management System It’s not easy: What do others do?  some examples Relations with Regulators Options for CDDA CDDA Standard benefits CDDA Standard structure options CDDA certification scheme Next steps Today’s topics

18. There is no question: we have to fulfil all applicable legal requirements Relations with Regulators A formal Management System will define, beside other things, how we deal with fulfilling legal requirements and by getting benefits out of it at the same time. We can take a proactive approach and be to a certain degree involved in making decisions to what applies to us. Or we can wait until someone tells us how to do it.

19. Relations with Regulators Cont. in other words, e.g. for Safety We can use the money to put formal policies and procedures as part of our management system in place that prevent accidents and incidents or We wait until something happens and then we are forced to react with spending money for polices, procedures, lawyers, investigation experts, etc.

20. Management Systems and Benefits Implementation of a Management System It’s not easy: What do others do?  some examples Relations with Regulators Options for CDDA CDDA Standard benefits CDDA Standard structure options CDDA certification scheme Next steps Today’s topics

21. Options for CDDASafety Group Essentially two options: 1.) No changes to services provided to members 2.) Develop a Diamond Drilling Association specific standard that benefits all levels of members  “CDDA Standard”

22. Management Systems and Benefits Implementation of a Management System It’s not easy: What do others do?  some examples Relations with Regulators Options for CDDA CDDA Standard benefits CDDA Standard structure options CDDA certification scheme Next steps Today’s topics

23. CDDA Standard benefits The CDDA would - have more influence on what legislation is imposed on the diamond drilling industry and at what point - have a good marketing tool as there are measurable benefits for members of all levels - have more credibility and mining companies could require CDDA certification as a pre-requisite to do business - be able to access more statistical data from the management systems which would allow to determine new / additional / changed needs of the industry

24. Members would - be able to start with a CDDA management system that is tailored to the Diamond Drilling Industry - save lots of money as standard policies, procedures, tools and implementation aids would be available - able to implement the system in a shorter time - more likely be in compliance with all applicable legislation as more individuals / companies contribute to the “list of applicable legislation” - able to manage their performance more easily (safety, environment, quality) as the CDDA system includes procedures for performance indicators CDDA Standard benefits

25. Management Systems and Benefits Implementation of a Management System It’s not easy: What do others do?  some examples Relations with Regulators Options for CDDA CDDA Standard benefits CDDA Standard structure options CDDA certification scheme Next steps Today’s topics

26. CDDA Standard structure options There are two decisions that need to be made upfront: 1.) It needs to be decided on what should be covered with the standard (safety or environment or quality or finance or any combination of them) 2.) It needs to be decided how the program is monitored and measured (e.g. through auditing of the members  self declarations deteriorate over time and rarely work)

27. Example for a standard structure for a Safety ManagementSystem that is based on OHSAS 18001 and that includes specific Diamond Drilling requirements: CDDA Standard structure options Cont. Mines Branch e.g. CDDA specific Lanyard

28. Management Systems and Benefits Implementation of a Management System It’s not easy: What do others do?  some examples Relations with Regulators Options for CDDA CDDA Standard benefits CDDA Standard structure options CDDA certification scheme Next steps Today’s topics

29. CDDA certification scheme

30. The rules for certification would include CDDA certification scheme Cont. Time requirements for audits (auditor time per company): • Number of employees • Number of drills • Annual sales • others Levels of Certifications and rules for passing audits: • Number of employees • Number of drills • Annual sales • others Fee structure that could consider: • Number of employees • Number of drills • Annual sales • others Need for a transparent and measurable Certification Statute

31. Management Systems and Benefits Implementation of a Management System It’s not easy: What do others do?  some examples Relations with Regulators Options for CDDA CDDA Standard benefits CDDA Standard structure options CDDA certification scheme Next steps Today’s topics

32. Next steps • CDDA Safety Group to discuss the benefits for the members by providing them with (a) CDDA Standard(s) and CDDA Certification Scheme. • If yes, a working group has to establish these standards and the certification process around it. • An implementation package needs to be developed for the CDDA members.

33. Questions? Thank you for your participation. Bert Hettrich International Certification Ltd. e-mail: bert@iso-certification.com Phone: (250) 503 8502