Life cycle Keith Brown, principal consultant at GHD (Gutteridge, Haskins and Davey), considers some of the challenges faced by the development team working on the IAMs new Subject Specific Guideline (SSG) on Asset Decommissioning and Disposal Asset decommissioning and disposal have come into sharper focus with the need for a more complete awareness of whole asset life as part of early asset planning. For example, in the UK, whole asset life awareness is central to the requirements of Construction Design and Management Regulations (CDM), albeit from a safety perspective. There are high-profile instances of decommissioning and disposal, such as nuclear, with a mature and highly sophisticated industry engaged in this. Similarly, in recent years, the decommissioning and disposal of offshore oil platforms has raised awareness of some of the challenges that can be encountered with legacy assets. However, generic definitions for decommissioning and disposal have not been available in standard asset management reference material. With many different instances in practice, there is perhaps a natural tendency to focus on the technical challenges of the particular decommissioning and disposal tasks, but the Subject Specific Guideline (SSG) has to address the principles of decommissioning and disposal for any scenario, rather than be confined to specific examples. To do this requires consistent and truly generic definitions that unambiguously describe the start and finish points of decommissioning and disposal. Unless the scope of decommissioning and disposal can be precisely pinpointed, it is simply not feasible to plan the associated processes consistently and successfully, which inevitably creates scope for uncertainty and risk. This was completely new territory for the SSG development team, who faced the challenges of identifying the common characteristics that apply to any instances of decommissioning and disposal, and had to find a simple way to describe them. Asset states It is evident that defining a dynamic and variable process is more difficult than defining a static state. Therefore, the scope of the decommissioning and disposal processes were most readily defined by the conditions of the asset at the start and end of each process. These conditions are defined by a series of states to describe any asset throughout its full life-cycle. The term state refers to a stable condition that applies solely to the asset and is not dependent on what is being done to it, such as operating it, or conducting maintenance. Because a state is simply a passive condition of existence, an asset can only change from one state to another through some form of intervention, in that an asset cannot transition from the commissioned state to the decommissioned state without the application of external action to decommission it. It follows that the failure of a commissioned asset does not alter its state, it simply fails to function in its commissioned state. This distinction between passive/static states and the processes that lead to transitions between them is an important part of the definition of decommissioned, and disposed, and is explained in full in the SSG. Figure 1: Conceptual model of asset states An example of the change in state principle Asset decommissioning The significance of asset decommissioning becomes glaringly apparent when put in the context of the asset management system. Each event that decommissions or disposes of an asset irrespective of the size or function of the asset alters in some way the asset management system. This inevitably introduces a corresponding change in the operation of the asset management system, and the way it supports the achievement of the business aims. For example, the decommissioning of a standby asset removes the standby capability provided by that asset within the asset management system. Such changes must be managed within the asset management system to avoid adverse consequences. Even in examples where decommissioning may not entail a physical intervention with the asset, such as selling a standalone property from a managed estate, the decommissioning process must evaluate the implications of removing the asset from the estate. As well as evaluating the impact on the asset system and the asset management system, decommissioning must also address the process to be applied to achieve it. During the SSG development teams definition process of the asset states, it became apparent that decommissioning is not only relevant prior to an end-of-asset-life event, but can actually occur on multiple occasions through the assets life. This change in state constitutes the removal of some level of capability within the asset management system, so it has to be planned for and, where necessary, contingency measures applied to address the consequences. It is perhaps the case that decommissioning has been widely practised but not termed as such, which poses the question of whether its full potential impact has always been appreciated and taken into account. This is not to suggest that its impact is always significant; indeed, many instances of decommissioning are part of established practice and can be managed as local events with a good understanding of any implications, such that affected parties can be consulted. Unfortunately, this cannot be assumed in all instances, and it can involve assets with wide-ranging and complex interactions. The key point is to recognise that it constitutes a change in the capability of the asset management system and any change constitutes a potential risk that must be managed and controlled. This distinction between passive/ static states and the processes that lead to transitions between them is an important part of the definition of decommissioned and disposed, and is explained in full in the SSG Asset disposal It is potentially more complex than might be imagined for some assets to reach the disposed state. The consequence is that the disposal process can become vastly more protracted Disposal poses another set of challenges in respect of what it really means and how an organisation determines when it has been achieved. In developing the asset states, it was essential to determine absolute definitions for each state, such that they could be unambiguously applied. Disposal corresponds to the removal of all direct responsibilities and liabilities, but many disposal events do not necessarily fulfil these criteria. Some examples are quite subtle, others are more clear cut, both highlighting what can be the difficulty in completing the disposal of an asset. An example of residual obligations and liabilities is the retention of information about assets, transactions, operations, projects, and other events and has been relatively normal practice for many years, because there are established requirements, for example, finance and taxation. Another form of information retention concerns sales or transfers of assets in respect of what is declared at the time of the transaction. A retrospective claim regarding incorrect or withheld information at the time of the transaction may have to be defended, depending on the terms of the sale or transfer. A further factor in respect of future liability is that of land contamination, and in the example of the UK, the laws imposing the principle of polluter pays. Where an organisation has undertaken a process that resulted in land contamination, the subsequent sale of the land to another party will not automatically absolve the polluting organisation of liability. It is potentially more complex than might be imagined for some assets to reach the disposed state. The consequence is that the disposal process can become vastly more protracted before the requirements for the disposed state are satisfied, depending on the asset and the circumstances. Fortunately, the disposal of many assets is relatively simple and readily achievable, but in every instance incurs costs and consequences that must be taken into account. The asset states are a useful reminder of the need to plan for the achievement of all of them, because they all exist within the asset management system, and the organisation depends on the successful operation of the asset management system to succeed in its business. An example of the change in state principle Where the safe system of work requires the isolation of a lighting circuit to change a light, the consequence will be the loss of all lights on the circuit, which may prevent other operations and result in temporary loss of service or production. The intervention to isolate the lighting circuit renders it decommissioned, because it can no longer perform its designed function due to being taken out of its commissioned state in which it was previously operating.