Nonconformance reporting: Accountability in maintaining standards

AMERICAN PETROLEUM INSTITUTE 

 On Oct. 20, 2024, the American Petroleum Institute (API) celebrated a landmark achievement — the 100th anniversary of its first published standard. What began as a response to World War I supply challenges —the need for uniform pipe sizes, threads and couplings—has evolved over the past century to a burgeoning portfolio of more than 800 standards, comprehensive guides that enhance safety, efficiency and environmentally responsible industry practices around the world. 

Fig. 1. API's Monogram logo.

An outcome of this standards-driven approach is the API Monogram Program (Fig. 1), a globally recognized licensing and certification system. The API Monogram Program recognizes organizations that are capable of manufacturing products that conform to applicable API standards and specifications. Additionally, they must operate according to a quality management system that is compliant with API Spec Q1, a globally recognized quality management standard for the oil and natural gas industry.   

The effectiveness of API standards and the Monogram Program depends not only on the technical rigor of the standards but also on organizations meeting the requirements of the standards. Recognizing this, API developed the Nonconformance Reporting (NCR) system. This essential tool identifies and gives API the ability to address nonconforming products and processes, safeguarding the integrity of the oil and natural gas industry. This system, like API’s standards, continues to evolve, advancing operational safety and efficiency in a rapidly changing energy landscape. 

SAFEGUARDING QUALITY 

Accuracy and consistency are critical in our industry, where even minor deviations from good practices can create significant risks. NCR is central to maintaining this trust, allowing stakeholders to report nonconforming products or processes, a step that can lead to organizations initiating corrective actions. In this way, the NCR system plays an important role in safeguarding the integrity of industry practices.  

NCR 101: SAFEGUARDING THE INDUSTRY 

NCR applies to nonconformances that arise from a range of sources, whether production errors, management system failures or simply deviations from technical specifications. When such issues arise after the delivery of the product, stakeholders—licensees, end-users and even anonymous sources—are encouraged to report them to API, so that they can be addressed quickly and corrective actions can be taken, Fig. 2. This broad reporting base increases the likelihood of identifying nonconformances at any stage, from manufacturing to in-the-field usage, helping to prevent more significant issues from developing.   

Fig. 2. Collaboration fosters a culture of continuous improvement.

 In this way, NCR acts as a proactive quality control tool. By providing ongoing oversight, NCR increases the opportunity to address nonconforming products and processes. Each report submitted through the NCR process helps API and its licensees continuously refine their practices, improve quality and strengthen the credibility of the API Monogram Program. The process promotes accountability, encouraging the entire supply chain to adhere to the same high standards. This collaborative approach fosters a culture of continuous improvement, a signature objective for API that continually elevates quality, safety and reliability. 

TYPES OF REPORTING 

The NCR system accommodates different types of reporting, increasing the opportunities to identify and address nonconforming products and services. The types of reporting include: 

Self-reporting:  

As a condition of receiving an API Monogram license, manufacturers agree to notify API in a timely manner if they have evidence or information that indicates that their products displaying the API Monogram do not meet API’s requirements. Monogram licensees often pursue the Monogram designation because of its strong association with quality and excellence, a promise to customers of the integrity of their products. As a result, licensees proactively report nonconformances, many of which are inadvertent but nonetheless need correction. This allows the API auditor to follow up on the facility’s corrective action, ensuring that appropriate steps were taken to address the nonconformity in accordance with the facility's procedures and the requirements of the relevant standards.  

Third-Party reporting.  

The NCR system also allows third-party reporting. This includes reports submitted from industry stakeholders, end users and former employees, among others. These external sources can be helpful in identifying issues that might otherwise go unnoticed, especially when a company is unaware of a nonconformance. As part of the reporting process, API keeps contact information confidential, a protective measure that encourages participation.  

Reports can be submitted via the NCR website (ncr.api.org/ncr.aspx).  

HOW THE NCR PROCESS WORKS 

Once an NCR is submitted, an API investigation coordinator reviews it to confirm that it involves a licensed or registered facility and identifies the products and/or Quality Management System (QMS) processes involved. Keep in mind, this entire process applies only to Monogram licensees and APIQR Registered organizations and their products and associated services. It is an important benefit for end-users, who purchase equipment or services from API licensed or registered organizations. If necessary, API may request additional information to clarify the nonconformance or better understand the circumstances. 

Following this, API conducts a thorough investigation into the nonconformance. This includes gathering evidence, reviewing previous audits and scheduling a new audit, if necessary, to further evaluate the issue, Fig. 3.  

Fig. 3. Audits help verify the validity of an NCR.

Depending on the audit findings, API may recommend corrective actions, which can range from minor adjustments to major corrective measures. Corrective measures may include revamping manufacturing processes, adjusting product designs, revising management system procedures and product recalls or customer notification.  

Once the investigation is complete, API informs the nonconforming party of any changes to their license or registration status, if applicable. The findings and actions are logged, and the issue is officially closed once the necessary steps have been taken.  The reporter is also notified when the case is closed.  

BUILDING TRUST, ADVANCING EXCELLENCE 

The NCR system is an important tool for maintaining safety, quality and trust in the oil and natural gas industry. By empowering a broad range of stakeholders to report nonconformances—whether through self-reporting or third-party reporting—the system helps identify and ensure potential issues are addressed before they escalate into larger problems. 

For API Monogram licensees, the NCR system provides an opportunity to demonstrate their commitment to excellence and continuous improvement. For others, including those outside the industry, it reinforces the trust that API Monogram licensees and APIQR registrants are held to the requirements in API standards, contributing to a safer and more reliable industry. 

As API embarks on its second century of setting globally recognized standards, the NCR system will continue to play a vital role in ensuring compliance. By promoting accountability and fostering a culture of improvement, NCR remains central to API’s mission of advancing safety, efficiency and environmentally responsible industry practices.