Enterprise Capital - Risk Categories

ERM Objective: To Protect and Grow our Enterprise Capital within our
Risk Appetite
Enterprise
Capital Element
Our People

Sub Elements

Considerations

People Management

Capability
Experience & Track Record
Availability of people (incl Mobility)
Industrial Relations
Compliance
Culture
Location based specifics (NZ / Africa / PNG)

Safety & Health

Safety Essentials
Other critical (class 1) events
Staff welfare and wellbeing
Hazardous environment / operations
Interfaces with public

Our Assets

Plant & Equipment

Availability in the marketplace / lead time for orders

Specialised / unique plant
Price volatility
Productivity & Availability
Client inspection process / getting plant onsite
Theft / Security / Damage / Maintenance
Geographic location inefficient working etc
Transportation
Fuel escalation and quantities

Our Intellectual
Property

Design

Responsibility for design - is it part of our responsibility / scope

of works / novated to us?
Design scope growth
Approval process (stakeholder involvement)
Variations (Recoverability of costs)

Technical
Estimation

Technical elements of the project scope / geotechnical etc

Site Conditions / Engineering / Services / Defects
Completeness of cost estimate items
Accuracy of rates & quantities used in estimates

Programme

Ability to achieve: construction led end date or client led /

Contractual end date usually SRA driven
Achievability of production rates / Late or Defective Materials
Delivered
Inclement weather allowances and nonworking time (incl
restrictions on working hours)

Enterprise
Capital Element

Sub Elements

Considerations
Are there client led approval times / design development times /
ITP approvals in the programme?
Is the resource chart achievable (ramp up requirements)?

Systems & Processes

EPCM process / Are we working to our processes or the clients

Does LCPL have proven ability / processes to operate in the
prospective sector / project?

Quality

Quality Assurance process and requirements

Quality Control

Information
Technology

Access to systems (including Performance of Systems)

Client requirements to systems our knowledge / immediate
productivity
Data integrity (Duplication of data / systems)
Unique / Bespoke systems Support Requirements
Disaster recovery

Our
Relationships
with our Clients
& Partners

Client

Key drivers for the client (time / cost / quality)

Potential for scope to be expanded / reduced?
Clarity of client objectives & scope
Experience / Track Record with client
Nature of relationship - are we working directly with the client,
or via a Managing Contractor / Engineering Procurement
Construction (EPC) arrangement?
Interface risk in a capital investment programme.

Partner

Cultural fit
Location
Interests contract / strategic market / client / LCPL
Contract agreement gaps
Experience & Track Record

Supply Chain

Is the supply chain known?

Head Contract backed to backed (where required)?
Quality Assurance requirements
Offshore Supply
Transportation
Completion plan requirements / operational manuals

Our Reputation

Brand & Reputation

Client & Market expectations (incl Potential Future Clients)

Market clarity (LHL vs LCPL vs sub-brand)
Government relations

Communications

Marketing
Corporate Communications / Public Relations

Our Licence to

Regulatory

Legal requirements
Required permits / licenses / certifications

Enterprise
Capital Element
Operate

Sub Elements

Considerations
LCPL / LHL requirements
Bribery and Corruption
Contractual Terms & Conditions

Environment

What Environmental standards do we have to comply with?

Erosion & Sediment Control / Environmental Damage
Natural Events

Stakeholder &
Community

Noise
Disruption
Action / Community Groups / Local Business Disruption
Social Media

Our Balance
Sheet

Crisis Management

What are the likely Crisis Events?

Profitability

Procure to pay process

Foreign Exchange
Commercial risks (Terms & Conditions in head contract and
subcontracts)
Unapproved revenue
Overhead levels

Liquidity

Under claims / Overclaims

Cash-flow forecasts / milestone payments

Investment

CFROI returns
Economic profit
Sovereign risk

Capital

Capital requirements

Securities

Performance bond / Parent Company Guarantees / Letters of

Credit
Availability of Debt
Cost of debt / interest rates
Counterparty credit risk clients and key supplier financial
strength