Here’s how to obtain permission to operate hazardous equipment and plants in the country.
Vladimir Ovcharov and Tatiana Apatovskaya, SGS, Russia
Russia is the world’s second-largest producer and exporter of oil and therefore an attractive area for global investors and exporters of oilfield equipment. However, goods imported into Russia are liable to various national certifications and other permitting systems. They must be approved by the relevant Russian authorities in terms of compliance with national standards and rules, mostly focusing on safety characteristics. Thus, even if a product is well-known throughout the world and recognized as safe in the EU or any other country, the manufacturer still has to prove that it complies with Russian requirements, in accordance with Russian methodology. The availability of some conformity certificates may only facilitate the procedure of obtaining the appropriate Russian approvals, but this certificate alone would not be sufficient to cross the Russian border and to commission the installation in Russian territory.
To operate hazardous industrial facilities or equipment in the Russian Federation, the Rostekhnadzor Permit to Use is required. What are the requirements for companies that wish to apply for such a permit? How is the suitability to operate hazardous equipment assessed? What does it take to pass these assessments and ultimately obtain a license to operate? The present article will try to answer these questions.
ROSTEKHNADZOR’S ROLE AND OBJECTIVES
The industrial safety approval system has been regulated in Russia by a number of federal laws, in particular by the Federal Law “On Technical Regulation” No. 184-FZ, enacted Dec. 27, 2002, and by the Federal Law “On Industrial Safety of Hazardous Industrial Facilities” No. 116-FZ, enacted July 21, 1997.
Today, the permitting, inspection and supervision functions for industrial safety in Russia are entrusted to the Federal Agency for Environmental, Technological and Nuclear Supervision, abbreviated as Rostekhnadzor. From 2004 until recently, this agency had reported directly to the chairman of the Russian government. However, following the presidential election in May 2008 and the subsequent administrative reform (specifically Decree No. 404 issued May 29, 2008), Rostekhnadzor moved to the jurisdiction of the Ministry for Natural Resources and Environment.
Rostekhnadzor’s monitoring and supervision activities are focused on safe use of natural resources, on industrial safety, on safe use of nuclear power (except for military purposes), on safety of power and heat installations and networks (except for household purposes), on safety of hydraulic engineering, and on safety of explosive materials production, their storage and industrial usage.
Russia’s oil upstream is the second-most accident-prone sector supervised by Rostekhnadzor, Fig. 1. Obviously, Russian authorities pay very close attention to equipment supplied for this sector. In particular, major projects like the construction of the Eastern Siberia-Pacific Ocean pipeline as well as Sakhalin-1 and Sakhalin-2 are monitored closely with regard to operators’ compliance with Russian safety and environmental regulations.
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Fig. 1. Accident rates in Rostekhnadzor supervision areas.
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WHAT IS A ROSTEKHNADZOR PERMIT TO USE?
One of Rostekhnadzor’s management tools is the procedure established for all technical devices to be operated at hazardous industrial sites (i.e., at plants where fuel, explosives, flammable or toxic materials are produced, used, processed, stored or transported) and for hazardous equipment (e.g., cableways, lifts, pressure vessels). Operation requires a mandatory Industrial Safety Expertise assessment resulting in a Permit to Use. The Rostekhnadzor Permit to Use is required at the time of commissioning and throughout the service life of the equipment or plant in order to prove that it is operating within required safety parameters.
There are three types of Permits to Use:
A permit for one technical device is applicable if one needs to supply one piece of equipment to a specific customer in Russia. Such a permit is valid for the entire operation period of the device.
A permit for one consignment is applicable if one needs to supply a few technical devices within one shipment to a specific Russian customer. Such a permit is valid for the entire operation period of the consignment.
A permit for a line of technical devices is applicable if one intends to sell “homogeneous equipment” to more than one customer in Russia. Homogeneous equipment means technical devices with a single-application scope and design approach, similar materials and technologies. Such a permit is valid for five years. The five-year Permit to Use is often a good solution for suppliers willing to bid for a contract or to set up regular distribution in Russia.
It is notable that a complex industrial installation or a complete plant (e.g., a gas turbine power station to be installed at an oil field) requires a single permit for the entire installation, certifying that each of its components meets industrial safety requirements, before commissioning. This is because the components all realize interconnected technological functions. Still, due to a lack of coordination within the project team and also due to misunderstanding of Russian laws, it often occurs that each supplier of minor devices and components (e.g., rectification column, pressure vessels, valves) is obliged by the project contractor to obtain a Permit to Use for his device. In such cases, of course, when a permit for the entire plant needs to be obtained, the certification process will be duplicated.
OBTAINING A PERMIT TO USE
The overall procedure is defined in the Administrative Directive of Rostekhnadzor “with regard to issuance of Permits to Use for specific types of technical devices operated at hazardous production sites.”
To obtain a Permit to Use, documentation provided by the applicant (i.e., the equipment’s designer, manufacturer, supplier or operator) is reviewed by a Rostekhnadzor-licensed expert organization. This review can include drawings, the operating manual, strength calculations, test reports and available international and Russian certificates. This process is called Industrial Safety Expertise review. Its purpose is to verify conformity of the device to Russian safety norms relevant to specific application fields (e.g., for oil production or for the mining sector).
To specify the applicable Russian safety requirements, the product type should be identified in accordance with the Russian coding system. The Russian Product Classification (OKP) has been operating since Soviet times and, so far, has not been harmonized with any international system. The number of product categories at the most detailed level of OKP exceeds 36,800. Since 1991, OKP has coexisted with the Foreign Trade Classification (TNVED), which is the basis for the Russian customs tariff. The first six digits of TNVED coincide with Harmonized System (HS) codes. It is the OKP system that should be used for identification of the standards to apply within the Russian Federation. However, all export-import operations are subject to TNVED coding, which is used during customs clearance of imported goods.
The results of the Industrial Safety Expertise review are then compiled into an Expert Conclusion by the expert organization. If the equipment conforms to the relevant Russian norms and standards, the Expert Conclusion is submitted to Rostekhnadzor, which then issues the Permit to Use. If the equipment does not fully conform to the required standards, the permit may still be issued but will specify restrictions for using the device (“conditions of the use”). In these circumstances the decision would be at the discretion of Rostekhnadzor.
Permits to Use for imported equipment can be issued exclusively by Rostekhnadzor headquarters in Moscow, whereas Russian manufacturers may proceed through regional representative bodies of this federal agency. The Permit to Use is drafted on Rostekhnadzor template and signed by an agency deputy head.
CERTIFICATES REQUIRED BEFORE OBTAINING A PERMIT TO USE
To apply for a Rostekhnadzor Permit to Use, exporters may need to provisionally obtain a number of Russian certificates for some products.
Firstly, the application file to Rostekhnadzor should contain the GOST-R Certificate of Conformity or, alternatively, an official exemption letter in cases where the product is not subject to the mandatory GOST-R certification. The GOST-R certification system applies to most industrial equipment used in the oil industry. GOST-R Certificates of Conformity are issued by certification bodies accredited by Rostekhregulirovaniye (the Federal Agency for Technical Regulation and Metrology of Russia).
For measuring instruments that are components of the installation (e.g., pressure transmitters, temperature sensors, vibration detectors), so-called Pattern Approval Certificates need to be obtained. These are issued by Rostekhregulirovaniye based on results of tests performed by accredited State Scientific Metrological Centers. To avoid excess testing expenditures during the approval procedure, the project’s metrological expertise and detailed process documentation should be generated before application for a Permit to Use. Such expertise enables the investor to select the optimal range of measurement devices and methods. For example, instead of purchasing a measuring device that has never been used in Russia and therefore is not listed in the state register, it may prove more cost-effective to choose a supplier that has already passed through this time-consuming and costly procedure. On the other hand, one has to take into account that certain measurement devices have no effect on hazards. If proper reasoning is provided in the application to Rostekhnadzor, the Pattern Approval Certificate may not be required for these devices.
For electrical ex-proof equipment, the GOST-R Ex-Proof Certificate of Conformity should be obtained. It is issued by certification bodies that are properly accredited by Rostekhregulirovaniye. In case the device has already been certified according to other standards such as ATEX or the Canadian Standards Association (CSA), the verification process to obtain a Russian Ex-Proof Certificate can be limited to the review of documentation, without additional lab testing. If a range of ex-proof devices is to be delivered for a specific project, all those devices may be grouped by application scope. Thus only one Ex-Proof Certificate must be issued for the entire group.
PERMIT APPLICATION PITFALLS
Many procedures in the Russian verification system were copied from the West (especially the EU), and manufacturers face similar requirements for operation in their local market. Still, regarding conformity assessment in the oil sector there are various discrepancies between the standards employed in Russia and those in the West. Namely, different standards, rules and norms are set for, among others:
- Machine-building and construction designs and specifications
- Denomination, grading and classification of steels, alloys, plastic materials and rubbers
- Non-Destructive Testing (NDT) methods
- Methods of material testing, strength, stability and oscillation analysis.
Software for calculating materials’ strength according to Russian norms is based on the same formula as according to ASME. For example, inputs such as sizes, working temperatures and materials grades are treated the same. However, due to the fact that steel classification systems in Russia do not match with those in Europe and the US, European steel grades cannot be used in Russian formulas to calculate strength. As a result, the Western equivalent has to be found in the Russian grading system for steels and alloys. Unfortunately, not all of the steel grades have absolute Russian counterparts. In this case, the closest match has to be found by researching the chemistry, stress-strain properties and strength characteristics.
For some products, Russia has defined more stringent requirements than the West has for verifying product safety. This is partly due to specific Russian climatic conditions and partly because many Russian standards have not been reviewed since Soviet times. Testing procedures in Europe and in the US are often not compliant with Russian procedures. To cite some examples: in Russia, transformers have to be tested at −40°C (i.e., in conditions twice as cold as in Europe); according to Russian safety norms, 100% of joints have to be inspected by NDT methods, whereas there is no such need according to ASME due to different welding control methods.
In view of the above, Russian law provides some exceptions to Russian industrial safety requirements for technical devices manufactured outside of Russia. In this case, the Expert Conclusion submitted to Rostekhnadzor should contain detailed recommendations on additional activities required to guarantee equipment safety. For example, to comply with the requirement of 100% testing of joints, additional hydraulic or pneumatic testing can be conducted at the manufacturer’s site.
If there is convincing evidence of the calculations, or if alternative control methods used by the manufacturer are explicit, then additional testing may not be needed. For example, Russian norms specify the size and location of hatches and access panels required for pressure vessels to allow corrosion inspection inside the vessel. However, if there is proof of other effective control methods being used by the manufacturer, such as visual examination with a feeler gauge, then access panels may not be necessary.
The design of certain import equipment may be altered slightly to comply with Russian standards or safety rules.
There are cases in which Rostekhnadzor commissions Russian experts either to witness how a comparable installation operates in another country or to witness the testing or welding process at the manufacturer’s site. The objective is to reduce any additional testing.
Obviously, conformity assessment always requires investment. The objective of the device’s exporter and of the Russian expert organization is to jointly search for ways to minimize those expenses and to develop the most rational way to collect the missing data needed to prove conformity to Russian safety norms. This can be achieved by conducting additional testing or other means.
Today, costs of Industrial Safety Expertise services in Russia vary from 1% to 4% of either the equipment price or the total project value. Still, if a supplier intends to take part in a tender for a project in Russia, he or she should plan ahead and obtain preliminary quotes for relevant certificates and for the Permit to Use from a professional body so as to include the cost in the bidding price. Otherwise, there is the risk that once the project has been won, the anticipated profit will be lowered by the cost of the assessment and may not be sufficient to cover actual expenses.
TIME TO OBTAIN A PERMIT
The time required to draft an Expert Conclusion depends on the product’s complexity, but should not exceed three months after the full set of documents is provided. Further processing of the Expert Conclusion and registration of the Permit to Use in Rostekhnadzor takes a maximum of two months.
Nevertheless, in some cases the process of obtaining the Permit to Use can take up to one year. The duration depends to a great extent on the applicant’s ability to quickly collect the internal documents needed for verification. Until there is a full set of documents ready for review by an expert organization, the process cannot begin. The other factor affecting the process is the number and complexity of tests that may be required. The number of certificates the applicant has to obtain before applying for a Permit to Use must also be taken into account for planning.
Moreover, since all the documentation has to be submitted to Rostekhnadzor in Russian, provisions for the translation of the required documents (including operating and maintenance manuals) have to be made.
Finally, much depends on the qualification and experience of the expert organization that performs the Industrial Safety Expertise review. A lack of qualification might cause serious delays. Today, there are more than 2,000 expert organizations licensed to perform Industrial Safety Expertise reviews in Russia. According to Rostekhnadzor data, not more than 700 of them provide high-quality and objective expertise. And less than 100 of those deal with imported devices and installations.
To be licensed by Rostekhnadzor, an expert organization must have a certain number of certified experts in specific fields and must run its own testing facilities. On top of that, Industrial Safety Expertise review of import equipment requires the availability of qualified experts who are fluent in foreign languages and have in-depth knowledge of both national and international standards. Besides, it is preferable that the expert organization has close contacts with accredited product certification bodies and metrological expert organizations. When choosing an expert organization to obtain a Rostekhnadzor Permit to Use for a device or installation, one should always ask for the reference lists and judge whether this organization is experienced enough and able to provide guidance through the Russian regulatory environment. 
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THE AUTHORS
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Vladimir Ovcharov, based in Moscow, is Head of the SGS Competence Centre for Russian Product Certification and Industrial Safety Expertise, a global role he has filled since 2005. Within SGS Russia he manages the accredited Product Certification Body since 2005, the accredited Metrological Expert Organization since 2007 and the licensed Industrial Safety Expert Organization since 2008. He previously held key positions in a number of Russian research institutes for conformity assessment. Ovcharov graduated from the Moscow Institute for Chemical Technology in 1977. In 2000, he was awarded a Doctor of Science degree, and in 2004 he was enlisted as a corresponding member of the Russian Metrological Academy. He can be contacted at Vladimir.Ovcharov@sgs.com.
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Tatiana Apatovskaya is SGS Marketing Manager for Russia. Before joining SGS in early 2005, she was engaged in the market research industry, in particular managing consultancy projects for international clients focusing on Russian market entry and investment development. She can be contacted at Tatiana.Apatovskaya@sgs.com.
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