2007 Petrochemical Security Summit South Shore Harbor Resort & Conference Center

1. 2007 Petrochemical Security Summit South Shore Harbor Resort & Conference Center R. Ronald Sokol, C.S.P. Executive Director Contractors Safety Council of Texas City

2. Presentation Topics • Update on Safety Council Security Consortium (SCSC) Activities • Brief overview of SCSC and the components of the contractor background screening program • Review current performance of contractor background screening program • Introduce the Integrated Contractor Management System (ICMS)

4. Safety Council Security Consortium • Who are we and when did we begin? • What is our purpose? • What programs do we administer? • What effect have we had on the contractor background screening process? • What benefits do we provide to industry?

5. Who are we and when did we begin? • Organized August 2005 • Informal structure • Meet on an as-needed basis • 14 Members integrated with Vendor Services provided by First Advantage • Major Markets Served: Beaumont, Baytown, Texas City, Brazosport, Lake Charles, Houston, Mobile, New Orleans, East Texas, Texas Panhandle, Austin, Shreveport, Chicago, Charleston, WV, Tennessee Valley

7. What is our purpose? • Purpose: Establish reciprocal industry standards for consistent, systemic, contractor screening and identity verification process • Mission Statement: Provide the highest level of security for councils, owners and contractors by adhering to a reciprocal, quality background screen process

8. What is our purpose? • Goals/Objectives: Develop contractor background screening solution to meet the following Petrochemical Industry objectives: • Create Reciprocal Solution • Create Cost Savings for Industry • Reduce Time to Hire • Deliver Quality Product • Compliance with FCRA • Owner Auditing Capability • Establish Vendor requirements

9. Vendor Requirements Include: • Control over adverse action • Adhere to all FCRA regulation including site inspection requirement • ISO 9000 certified • Procedure to purge data • Verification and confirmation of accurate records through an audit process • Mandatory audit/review of agents and results • Separation of data gathering and grading process

10. Cost of Noncompliance • Cost of noncompliance is high • Federal Trade Commission (FTC) fines • Choice Point fined $15M Jan. 2006 • Lawsuits due to failure to protect personal information/data

11. What programs do we administer? Level 1 – Social Security Verification (SSV) Program which links a government issued photo identification to the consumers social security number Level II – Background Screening Program • Background Check Graded (BCG) provides a numeric score based upon the consumers criminal history over the most recent 7 year period

12. Brief History of Background Screening Programs: 2002: • Concept Planning with Southeast Texas Plant Managers Forum (SETPMF) • Basic Package Program approved • Pilot Program launched 2003: • Proof of Concept validated • Social Security Verification (SSV) Program • OwnerPass introduced 2005: • Background Check Graded • Safety Council Security Consortium (SCSC) formed

13. Level I Security Assessment • Identity Verification • Authorization granted by consumer to SCSC members • Social Security Verification Process (SSV) • Purpose: match government issued photo identification to Social Security number for identity verification. Reports are returned in the following status: • Approved – Name and SSN Match • Rejected – No Record Found • Provisional – No Match, Deceased, SSN Invalid • Error – Number outside of Social Security Administration (SSA) Matrix

14. Results of SSV program • ~350,000 SSV conducted-no expiration on SSV • Rejected/Provisional status account for approximately 12% of searches • Failure rates currently less than 1% • Safety Council is considered the end user in this process and handles FCRA compliance issues • SSV is reciprocal with SCSC members • Best Practice in certain areas ties SSV to SSA, local Law Enforcement, F.B.I., District Attorney

15. SSN SEARCH STATISTICS (3.6%) (.6%) (7.7%) (88.1%) 352,366 Total

16. Signage from CSCTC • Offense is a Felony with punishment of up to 10 years in prison and a $10,000 fine

17. Level II Background Screening Program • Safety Council: Background Check Graded (BCG) • Contractor screening package • Prior Background Check • Database of contractor background screens • OwnerPASS • Plant Owner access to contractor background screens

18. Background Check Searches Safety Council (Website): • Ordering and order status portal • Client relationship with Contractor Packages and Reports Available: • Background Check Graded (BCG) • Prior Background Check Report • A La Carte Search Reports (sample) • Federal Search • Prior Employer Verification • Motor Vehicle Report, etc.

19. Background Check Graded: 1) Background Check Graded – Components: • Social Security Verification • County Criminal Searches • Motor Vehicle Report • Patriot Act Search • Graded Package Result Report

20. Background Check Graded: Social Security Report • Processed through Experian • Inquiry Does Not Adversely Affect Credit Rating County Criminal Report • Criminal search performed in jurisdiction of current residency • Convictions, Pending, Outstanding Warrants & Deferred Adjudication • Felony and Misdemeanors where available in highest court Motor Vehicle Report • Processed by State where Consumer is Licensed

21. Background Check Graded: Patriot Act Search • Database Search of Office of Foreign Assets Control • Designated Nationals • Terrorists • Drug Traffickers • Blocked Persons

22. Program Components: Grade:Charge/Conviction Type: 00 – Clear record 01 – “non-violent” misdemeanors (not on list) 02 – “violent” misdemeanors (included on list) 03 – “lesser” felonies (not on graded list) 04 – felonies in “03” and misdemeanors in “02” 05 – “higher” felonies (included on list) 06 – felonies in “05” and misdemeanors in “02” 07 – Patriot Act “hits”

23. Grading Scenario

24. Graded Package Result

25. GRADED PACKAGE RESULTS

26. GRADED PACKAGE RESULTS

27. COUNTY CRIMINALAVERAGE TURN AROUND TIME Blue = 2006 Pink = 2007

28. Prior Background Check 2) Prior Background Check: • Tool for Contractor Reciprocity and Owner Review • Report Available Within Seconds • Eliminates redundant screens • Creates cost savings • Available to Contractors & Owners • FCRA letter of notification sent to consumer

29. Prior Background Check Sample

30. Prior Background Check When to Order: • Council Notification • When Ordering the Background Check Graded • Review of Council’s Training History • Applicant/Employee Badge

31. Ala Carte Searches 3) Ala Carte Searches • SSN Verification • County Criminal Search • State Criminal Search • Federal Criminal Search • Prohibited Party Search • Prior Employer • Education Verification • MVR and others upon request

32. Fair Credit Reporting Act Compliance Phase 1 • Prior to Ordering Searches • Provide Disclosure to Consumer • Obtain Authorization from Consumer • Keep Authorization on File for Five Years

33. Fair Credit Reporting Act Compliance Phase 2 • Pre-Adverse Action Process • Provide Copy of Report to Consumer and • Provide Summary of Rights to Consumer • Allow Reasonable Amount of Time for Consumer to Dispute Information • Adverse Action Process • Provide Notice of Adverse Action to Consumer

34. FCRA Web Module Set Up Process: • Customize Letters or Use Vendor’s Standard Letters (Pre-Adverse & Adverse Action) • Name and Title of Person Signing Letters • Letters can be customized to use your Company Logo • Web Users allowed Access to FCRA Web List

35. What is the effect of the contractor background screening process? • Over 215,945 Workers Background screened • Over 141,510 Background Checks graded • Over 3,300 Contractor companies enrolled in process • Over 75 Plant Owners participating in process • Program is growing in new market areas and additional owners are participating in existing market areas

36. What is the effect of the contractor background screening process? Reciprocity Example: • Previous Model: • 1 worker x 4 employers per year • $60 screening event per employer ($60 x 4) • $240 per worker per year x 100,000 workers • $24 million in screening costs • Current Safety Council Model: • 1 worker x 4 employers per year • $60 first time screening event ($12 x 3 additional) • $96 per worker per year x 100,000 workers • $9.6 million in screening costs

37. Reciprocity for Contractor Background Screening Cost Savings to Industry: Year 1: $14.4 million! ($24 M - $9.6M = $14.4M) Year 2: $33.6 million! ($48M - $14.4M = $33.6M)

38. What benefits do we provide to industry? • Identity Verification Services • Background Screening services by qualified vendor • FCRA Compliance • Reciprocity • Cost Savings • More secure workplace • Development of new products (i.e. Integrated Contractor Management System)

39. ICMS: Benefits for Safety Council • Consolidated data source on trainees • Streamlines reciprocity “look-up” process • Effective solution to more positively ID students and assure demographic credentials are associated with an authenticated individual/trainee

40. ICMS: Benefits for Contractors • Consolidated data source for current and future workforce • Convenient, web-based data source to qualify and assess “ready to work” workers • Effective tool to manage contract worker compliance requirements for owner sites

41. ICMS: Benefits for Owners • Consolidated resource to monitor training, security, fit-for-duty worker compliance at corporate and plant level • Effective tool to manage contractor company compliance (PQF, certifications, etc.) • Flexible solution that allows for customized Owner requirements, at corporate and/or plant level • Allows for data links with additional “qualified” 3rd party providers