Not all licensees or non-operating partners in the energy industry are fully aware of their obligations under Regulation 5 of the Safety Case Regulations when it comes to Installation Operator requirements.

In addition to creating a potential regulatory exposure, licensees may be missing an opportunity to seek sufficient assurance the appointed operator is capable in all regards of installation operatorship and that key risks are being effectively managed.

Regulation 5 awareness is typically better where a 3rd party contracting firm is appointed on behalf of the licensees to perform the duties of Installation Operator. What is less well known is that this duty ‘falls jointly on all the partners in any license’. This means that there is an obligation on all non-operating JV partners to assure capability of the operator, even when the appointed operator is also a licensee. This duty equally applies to appointed Well Operators.

What is a Regulation 5 Audit?

One way to meet the Regulation 5 obligation is to carry out an audit of the Installation Operator or Well Operator. Such a ‘Regulation 5’ audit provides feedback on the overall capability to meet Installation Operator requirements. The audit will normally focus on key aspects of Major Accident Hazard management as a test of meeting the ‘Relevant Statutory Provisions’. Credit can of course be taken from ‘Opcoms’ and ‘Techcoms’, however, these arrangements rarely get under the bonnet to fully understand the risk picture.

With an established background in independent assurance and working with firms to implement strategic improvement, Scapa Energy consistently undertakes Safety Case Regulation 5 (Reg 5) audits on behalf of our clients.

The graphic below illustrates the Scapa Energy framework for delivering Regulation 5 Audits.

Operator capability diagram


These audits provide independent assurance to all licensees that they are fulfilling requirements of Safety Case Regulations and the relevant statutory provisions. The process also allows identification of themes or areas of risk that may have common factors such as resourcing, ageing asset risks, or management system effectiveness.

Equally, the Reg 5 audit provides the opportunity to highlight areas of leading practice, which in turn can be shared to all partners.

What are the Regulation 5 duties of a licensee?

In more detail, Regulation 5 of the Safety Case Regulations places a specific duty on the licensee to:

  • Ensure that any operator appointed by the licensee is capable of satisfactorily carrying out the functions and discharging the duties of the operator under the relevant statutory provisions.
  • Take all reasonable steps to ensure that any operator appointed by or in respect of the licensee carries out the functions and discharges the duties of the operator under the relevant statutory provisions.

The HSE Guidance goes on to say;

Being capable includes having the technical and managerial ability to do the job, as well as being adequately resourced, both financially and in having sufficient numbers of competent staff.

It also states that:

These duties fall jointly on all the partners in any licence. Even if they are not all active in pursuing the goals of a licence, they will need to agree and put in place a management system to ensure these duties are discharged.

In practical terms, the actual scope of the Regulation 5 audit is mutually agreed with all licensees, and targeted to specific areas of interest, concern, or potential risk.

The real value is realised during the engagement phase, where actionable insight is created from visiting offshore installations, engaging with key persons, and analysing sample populations of data.

Partner Assurance

Given the differing roles licensees carry out across JV operations, many partners have varying relationships that often see one partner act as an operator on one licence and take on a non-operator role in another, while their partnering firm may have the inverse relationship.

Whilst this may appear as a complexity, the independent Reg 5 assurance approach creates mutual benefits for all partners, developing a clear, holistic picture for all stakeholders.

Partner Assurance allows pools of companies to come together and do a multi-company audit on one another’s behalf, through the independent assurance of regulatory experts like Scapa Energy. Through this approach, costs of the audit can be shared across partners with one intervention. Scapa Energy has previously worked in this way with many current clients.

A multi-asset, Partner Assurance audit is also highly effective at unearthing deeper insights, with wider trends made visible because of project scale. This approach has proven to be highly effective in supporting all operator and non-operator partners achieving their Regulation 5 duties on a wider, multi-role level.

The Safety Case Regulations and supporting guidance can be downloaded free here.