The letter information below was sent from Tom Weber, TCC Chair. This is a cut and paste copy so please refer to the original letter if possible for all those involved in the process. I think it is important to keep everyone informed on the critical standard and since many of you are not on the voting list, you may not have received this information. Richard Norsworthy August 7, 2013 Dear Members of the Voting Pool for TG 360’s Proposed Revision to NACE SP0169, We have received the report from the Arbitration Board (AB) appointed to review the appeals on the proposed revision to SP0169-2007: http://www.nace.org/uploadedFiles/News/NACE_News/NACE%20SP0169-2007%20Arbitration%20Board%20Report%20July%202013.pdf The AB concluded that NACE technical committee procedures were properly followed through the revision, balloting, and appeals process. The AB included some recommendations following its conclusions in the report, and the TCC is reviewing these and will address them as appropriate through the proper NACE committees. Thank you for your participation and your patience through this process. Sincerely, Tom Weber TCC Chair

Arbitration Board Report Technical Coordination Committee NACE SP0169-2007 Proposed Revision “Control of External Corrosion on Underground or Submerged Metallic Piping Systems” Conclusion and Recommendations  It is the conclusion of the Arbitration Board(AB)that NACE procedures for document preparation and balloting were followed for SP0169-2007 Revision as outlined in the NACE Technical Committee Publications Manual.  The AB, upon a thorough examination of the extensive documentation provided by NACE headquarters,determined that the procedures and responsibilities of each party were fulfilled in accordance with the provisions of the NACE Technical Committee Publications Manual.  Balloting was conducted in accordance with Section 3 of the Technical Committee Publications Manual.  Appeals process was conducted in accordance with Section 12 of the Technical Committee Publications Manual.  The AB recommends that the NACE Standard TM0497review/reaffirmation/revision process be synchronized with that for SP0169; to facilitate the synergy of the content in the two documents. This process should commence at the earliest possible date. The AB further recommends that the NACE Board and/or the Technical Coordination Committee delay publication of the revised SP0169-2007 document so that this synchronized process can function as desired.  The AB recommends the NACE Board of Directors (through the Technical Coordination Committee) consider appointment of a panel of technical experts to examine the two different technical approaches represented with this revision balloting processand the potential impact on national pipeline security.  The AB recommends the NACE Board of Directors and/or the Technical Coordination Committee consider whether NACE Standards related to public health and safety should be handled with a specialized work process; with perhaps stronger input from regulatory agencies and scientific bodies. Items for Consideration  The AB feels it is incumbent with our review of this work process to make the following comments that are understood to be outside of our assignment.  The AB is concerned that the NACE Technical Committee Publications Manualhas no requirement for resolution of technical issues. While it does have provision for an appeal due to “alleged procedural infractions”; there is no provision for dealing with alleged technical errors.  The technical veracity of a Standard is reliant on the individual members in the voting pool.  Standards development and revision are a consensus process of those involved in voting. NACE standards and other international standards do not claim technical correctness, just a representation of a consensus of the voters.  The NACE Technical Committee Publications Manual states in Section 3.3.1.1 that “NACE SPs shall be methods of selection, design, installation, or operation of a material or system when corrosion is a factor... applying rules or procedures to achieve a scientific and engineering approach to a specific activity...”  How can NACE be assured that a Standard is consistent with appropriate science and engineering practices?  How can NACE be assured that the voting pool has a balanced representation from all industry segments? Perhaps there should be enhanced confirmation of voting member industry segments –user, supplier, etc. This may be particularly crucial in standards that affect public health and safety, and are used by regulatory agencies. Assignment  The TCC chair, in consultation with the Technology Coordinator, appointed a three-member AB comprised of technical committee members who were not members of the parent committee of the SP0169 task group. The TCC chair chose persons who have not been directly involved with the item under dispute, and who they believed to be fair, reasonable, and knowledgeable about procedures.  The TCC Chair advised the AB the Appeals process was to be directed only to alleged procedural infractions of the SP0169-2007 revision. The assignment was to focus solely on the allegations of procedural infractions submitted to the TCC Chair in written appeal letters.  The AB was to define the work process to be used in their deliberations.  AB work process was to include O Review NACE Guidelines for preparation of this document. O Review document preparation steps O Review document balloting and results steps O Review document appeals to TCC and NACE Board. O Interview STG and TG officers and appellants to better understand and validate the work processes of preparation, balloting, and appeals. O Arbitration Board was to prepare a report with conclusions and recommendations. Work Process  Details of the work process are contained in the Appendices. Following are the highlights.  Process for the proposed revision of SP0169-2007 started in March 2007 by Task Group (TG) 360.  Voting pool established via canvas in July 2009.  TG 360 canvass sent to Specific Technology Group (STG) 35/05/30 members.  Articles were published in Materials Performance regarding SP0169-2007 review process.  First ballot with proposed revisions executed in August-September 2009 with less than 2/3 approval.  Second ballot with proposed revisions executed in February - March 2010 with less than 2/3 approval.  Third ballot with proposed revisions executed in September 2010 with 86.7% approval and 24 negatives. Appropriate communication was executed to all negative voters. Seven negatives were resolved; but not enough to allow for publication.  Fourth ballot with proposed technical revisions executed in July-August 2011 with 90.2% approval and 17 negatives. Appropriate communication was executed to all negative voters.  Decision by TCC in February-May 2012 to publish the SP0169-2007 revision.  Four unresolved negative respondents appealed the TCC decision in February 2012.  Meeting with four appellants and relevant committee officers at CORROSION 2012.  NACE staff researched information from other standards organizations and ANSI and TCC chair provided a response to the appellants, but this did not resolve the appeals.  Proposed revision of SP0169 was on the NACE Board agenda in June 2012.  Four negative respondents appealed approval of the SP0169 revision to NACE Board in June 2012 based on alleged procedural violation of TCC Publications Manual; specifically Paragraphs 3.9.7.1, 3.9.7.2.6, and 3.9.7.3.  AB appointed in July 2012 to determine if NACE procedures were followed or violated in the SP0169 proposed revision. Meetings  The AB met at CTW/2012 to begin the review of procedures used to develop the proposed SP0169-2007 revised document.  The AB received a copy of all the documentation relative to the revision process; including appellant objections and the results of the balloting process.  The AB met with one appellant and the TG360 Chair for a short meeting at CTW/2012.  The AB met via teleconference on two occasions during the 4th quarter of 2012; additional communication occurred via e-mail within the AB.  The AB had communication with the appellants either directly or through NACE headquarters regarding our review process and the possibility of meeting with them.  The AB met with all appellants in one meeting at CORR/2013 in Orlando for discussion of their appeals; for confirmation of the substance of the appeals.  The AB met with the related TG officers, STG officers, and Technical Coordinator in a separate meeting at CORR/2013 for confirmation of the document review and balloting process. Respectfully Submitted, Arbitration Board Members Dannie Clarida Dannie Clarida – Chair Benjamin Chang Kenneth Tator

All, Just wanted to update everyone on what is going to happen at CORROSION 2013. There will be an Arbitration Board meeting on Tuesday (March 19) afternoon with the TG 360 Chair, TG 360 Vice Chair, STG 35 Chair, TMG C2 Technical Coordinator and the four Appellants to discuss the revision process used in the last revision of the SP0169. No one knows what the decision is or what has been discussed. The TG 360 meeting will be Wednesday (March 20) from 2:00 pm to 5:00 pm. You can look up the location and room for the meeting on the CORROSION 2013 website or in the program at Orlando. Hopefully, we will find out the status of the revision at this time and whether it will go forward or be further delayed. My hope is that it will be allowed to go forward as it is written. If not it may require further revision and re-balloting. I hope many of you will get to come to CORROSION 2013. It should be a very good event with many great papers and committee meetings. There are so many committees and meeting now, that it is difficult to attend all that are valuable. I would like to invite you to Pipeline Coatings, Corrosion Control and Cathodic Protection symposium. I will be involved two presentations that will be given on Wednesday (March 20) in room 230A in the . One is "Understanding Mesh Backed Coating Systems and Non-Shielding". As many of you know this has been a hot topic for many in the industry who do not fully understand the process by which such a coating could have adequate dielectric strength and be non-shielding to CP at the same time. This paper will explain the process by which the mesh backed coating system is non-shielding to CP when disbondments occur and electrolyte is present between the coating and the substrate. Many have rejected tape type products as a rule because of the many CP shielding issues in the 70's and 80's because of disbonded solid film backed tapes and have thrown the mesh backed coating systems into this same category. This paper and presentation will give the evidence and testing that shows these products have proven track record of 25 years in service with no reported cases of measurable corrosion under the rare disbondments that have occurred when adequate CP is available. Hopefully, this will answer many questions and concerns about these types of coatings and maybe lead to industry testing to better determine the CP shielding characteristics of the various types of pipeline coatings. Hope you can make it and bring your questions and comments either at the meeting or come to the Polyguard booth and I will answer them there! The other paper that I am involved with is Rosen and is titled "EMAT, Pipe Coatings, Corrosion Control and CP Shielding". It will also discuss many of the issues surrounding disbonded coatings and the problems with CP shielding that can lead to external corrosion and stress corrosion cracking on cathodically protected pipelines. This paper will also be in room 230A and will be at 3:15 pm to 3:40 pm. This one may have been left off of the schedule, but it should be on the final program. This paper will address the use of the EMAT tool that not only finds SCC, but also finds disbonded coating and can for the most part distinguish the type of coating being used. This is some great information that will allow companies to be proactive instead of reactive to these problems. Once they know they have disbonded coating, they can correct the problem before SCC of external corrosion becomes a problem unless they know the coating is Non-shielding to CP. I think this is one of the greatest new technologies on the market. Hope to see everyone there and please come by the TG 360 committee meeting to see what is going on. Also, come by the Polyguard booth and visit. We now have a great two-part epoxy for those who refuse to use the RD-6 coating system or want to coat irregular shaped components like valves, fitting, girth welds or re-hab. Thanks for your time and effort through the years and let me know if I can help with your coatings and CP issues. Richard Norsworthy Polygaurd Products, Inc. NACE International Corrosion Specialist