1. 2009 Standardization Conference SC18 Committee on Quality Standards Westminster, Colorado June 25, 2009 API Monogram Program Status Report W. Don Whittaker Manager Monogram Program/APIQR whittakerd@api.org Aaron Duke Audit Program Manager Monogram Program/APIQR dukea@api.org Laura Levandoski Associate Monogram Program/APIQR levandoskil@api.org

2. Program Status Fraud/Misuse Update Additional Agreements Workload Solutions / New Developments Monogram Program Status

3. Program Status

4. Organizational Structure

5. http://www.api.org/certifications/monogram

7. Monogram Applications Total Applications (June 2009) 774 New Facilities 128 License additions China – 544 USA – 72 India - 40

8. Monogram Program Licensees Total Licensees Total Licensees (June 2009) (June 2009) 2697 Licensees 69 Countries China - 977 US - 494 India - 170

9. Monogram Program Licenses Total Licenses (June 2009) 4429 Licenses 69 Countries China - 1503 US - 743 India - 313

10. API Q1 Applications Total Applications (June 2009) 198 Companies 31 Countries China - 46 USA – 46 Canada - 15

11. API Q1 Registration Total Registrations (June 2009) 537 Registrations 50 Countries China - 160 USA - 127 Canada – 33

12. ISO 9001 Applications Total Applications Total Applications (June 2009) 180 Companies 30 Countries China - 43 USA - 42 Canada - 15

13. ISO 9001 Registration Total Registrations (June 2009) 628 Companies 54 Countries China -164 USA - 164 Canada - 35

14. Program Growth Licensees/Licenses

15. Most Popular Licenses

16. Reaudits and Suspensions

17. Suspensions, Cancellations, and Withdrawals 178 Suspensions 210 Withdrawals 76 Cancellations Most Commonly Suspended Specs: 6D, 6A, 7-1 Most common reasons for Suspension: Audit Nonconformances, No Renewal Agreement, Non-Payment Most Commonly Cancelled Specs: 5CT, 6D, 6A Most common reasons for Cancellation: Audit Nonconformances, Failure to Provide Responses to Audit Nonconformances by Specified Date, Facility Closure Most Commonly Withdrawn Specs: 6A, 6D, 7 Most common reasons for Withdrawal: Facility closed, Facility request, Product(s) No Longer Covered by Specification

18. Average Days of Actions

19. Actions

20. Revised Specs [Effective in 2009] API Standard 600– Steel Gate Valves - Flanged and Butt-welding Ends, Bolted Bonnets 9/1/2009 API Spec 5LD – CRA Clad or Lined Steel Pipe 9/1/2009 API Standard 608 – Metal Ball Valves--Flanged, Threaded and Butt-Welding Ends 6/1/2009 API Spec 11E – Specification for Pumping Units 5/1/2009 API Spec 12B – Specification for Bolted Tanks for Storage of Production Liquids 3/31/2009 API Spec 12D – Specification for Field Welded Tanks for Storage of Production Liquids 3/31/2009 API Spec 12K – Specification for Indirect Type Oilfield Heaters 3/31/2009 API Spec 12F – Specification for Shop Welded Tanks for Storage of Production Liquids 3/31/2009 API Spec 12P – Specification for Fiberglass Reinforced Plastic Tanks 3/31/2009 API Spec 12J - Specification for Oil and Gas Separators 3/31/2009 API Spec 12L - Specification for Vertical and Horizontal Emulsion Treaters 3/31/2009 API SPec17J - Specification for Unbonded Flexible Pipe 1/1/2009

21. Fraud/Misuse Update

22. Handling Fraudulent Activity Minor Cases  Nonconformance letter - inaccurate license claims, misuse of monogram on documentation, sales, incomplete license numbers, websites Taking action on Fraud  Issue warnings  Periodic Audits (result of product falsely monogrammed)  C&D letter  Cancel current license & applications  2 year ban from the program  Add to website list of nonlicensees  Legal Investigation

23. Company A Case: Website displaying the API Monogram Actions: Sent email to remove the API Monogram within seven days – 3/10/09 They responded to remove API Monogram – 3/12/09 API Monogram was removed – 4/09/09 Company B Case: Website displaying API Monogram without the license no. Actions: Sent email to correct the website – 3/19/09 They responded to update website – 3/20/09 Website updated with the license no. – 3/31/09 Minor Cases

24. Company C Case: Received fake certificate from user Actions: Ask user if products were monogrammed Check website if fake certificate was displayed Discuss with OGC Send C&D letter Review their response to the C&D letter Listed on the Non-Licensed Organization (API Composite List) http://compositelist.api.org/NoticeRegardingNonLicensedOrganizations.asp Major Cases

25. Company D Case: Applicant website displaying fake certificate Actions: Check database for status Discuss with OGC Conduct investigation in China C&D letter sent by Chinese lawyers Review their response to the C&D letter Fake certificate removed from website Application withdrawn and given 2 years to re-apply Listed on the Non-Licensed Organization (API Composite List) http://compositelist.api.org/NoticeRegardingNonLicensedOrganizations.asp Major Cases

26. Additional Agreements

27. Alternative Marking Agreement

28. Guest/Host Program Definitions Host - a facility at which all manufacturing is performed Guest - a facility that has requested another organization to perform the manufacturing of a product on their behalf

29. Guest/Host Program Requirements Both Guest and Host must have an active monogram license The Guest must conduct an annual on-site second party audit of the Host A documented acknowledgment shall be provided to the purchaser that the product was “Manufactured for (Guest) under Agreement with (Host) located in (Host Location)” The license number includes GH (XXX-xxxx-GH)

30. Program Implementation New program requirements take effect November 1, 2009 April 20, 2009 – Letter sent to all clients and auditors involved in the Guest/Host program highlighting the main changes to the program April 22, 2009 – New Guest License issued to all active Guest Licensees with an October 31, 2009 expiration date New applicants will not be issued a Guest/Host license unless they meet new program requirements

31. Benefits Ensure all clients using the Monogram have an established quality management system and meet API Spec Q1 requirements Ensure the integrity of the API Monogram Ensure control over the API Monogram Mark

32. Workload Solutions & New Developments

33. Process Analysis

34. Automating client information updates Providing clients with a clear view of their current certifications Providing clients with a view into actions required of them Enabling Auditors to manage and view their audit schedules Allowing Auditors, Clients, and API to interact with each other about open Non-Conformance repots quickly and efficiently Creating and Managing Financial Invoices both from the Auditor and to the Client Facilitate the letter approval and response process via discussion boards The system will assist in:

35. Inputting information from documents and forms into client databases Scanning documents for database storage Printing, collating and stapling documents for group review and signoff Tracking and managing these tasks manually Mailing formal responses to clients via USPS or FedEx ($175K) The system will remove non-value added work

36. Information Update Current time expenditure: 593 actions at 4774 hours/year New time expenditure: 593 actions at 148.25 hours/year Estimated time savings: 96% decrease in processing time

37. Panel Processes Current time expenditure: 2190 hours/year New time expenditure: 500 hours/year Estimated time savings: 77% decrease in processing time

38. Quality Manual Processing Current time expenditure: 890 actions at 2225 hours/year New time expenditure: 890 actions at 445 hours/year Estimated time savings: 80% decrease in processing time

39. Client Main Page Audit Summary Page AAR Main Page Internal “Panel” Page

40. Current Solutions Internal SharePoint site Document Control Standardization of Communication (letters) Responses are reviewed with the audit packages Web driven workplace activities Web based data queries, providing better tracking, more and useful metrics Bottom line……..efficient, fast, responsive

41. New Developments

42. Client Site reported down or not operating API status changed to “Inactive” for 6 months During six month period – Renewal / Abbreviated audit After six month period – License “Withdrawn” and full initial audit will be required If, after 1 year for ISO site, a Stage 1 audit will be required Client Status

43. Report Nonconforming Product Report Nonconforming Product at “ncr.api.org”.

44. API strives to continually improve the value of the Monogram Program. As such, notify API of nonconforming Monogrammed products. Description of Nonconforming Product(s) Spec Pick list: Product Pick list: Manufacturer Pick list: If the manufacturer is not listed in the pick list above, please enter the company name below. _____________________________________ Date of Purchase: Number of Products Purchased: Number of Products Nonconforming: Date Nonconformance Discovered: Description of Nonconformance: Your Contact Information Company Name Contact Name E-mail Address Phone Number Comments:

45. API Certification Programs For more information: API’s Composite List: http://compositelist.api.org API Certifications Dept.: +1-202-962-4791 Don Whittaker: whittakerd@api.orgwhittakerd@api.org Aaron Duke: dukea@api.orgdukea@api.org Laura Levandoski: levandoskil@api.orglevandoskil@api.org