Managing Risk

PROGRESSIVE RISK ASSESSMENT

Les Smith
4/20/2006
 “Effective health and safety management
is not ‘common sense’ but is based on a
common understanding of risks and how
to control them brought about through
good management.”
— HSE, 1991

Version 21 April 2006 Slide 2

Legislation and OHSAS 18001/ANSIZ10

The law requires:

Legal compliance

Selected OHSAS
LAW 18001/Z10
Risk assessments

Training program

OHSAS/Z10 requires in addition:

Full hazards, risk review/assessment
Improvement program
Training needs assessment
Communications
System Audit, NCs, CAs
Management review
Version 21 April 2006 Slide 3
As an example, attendees at a series of recent risk assessment workshops
were asked the following questions regarding their professional background:

Please name the risk assessment technique (s) with which

you are most familiar.

The most common answer from all attendees by far was HAZOP.

How many have ever participated in a HAZOP (or similar

assessment)?

Less than twenty percent responded affirmatively.

(Of those answering yes) How many have participated in such

a study in the last year?

Less than five percent of the class answered affirmatively.

Version 21 April 2006 Slide 4

Methods of Risk Assessment

S Event Modeling •
T •HAZOP
R •FMEA
U •Fault Tree
C •Potential Problem Analysis
T •Group Risk Assessment
U •Structured What If? Technique (SWIFT)
R •Checklists
E •Simple Risk Assessment
Minutes TIME Weeks

Version
Risk Assessment

Quantitative Risk Assessment

Semi-Quantitative (GRA)
Complexity

Simple Risk Assessment

Frequency of Use

Version 21 April 2006 Slide 6

RISK ASSESSMENT
Risk Assessment...
z Process for measuring and ranking risks
z Helps to determine if systems, facilities
or activities are acceptable
z Aid to decision making

Version 21 April 2006 Slide 7

ITEM AND IMPACT IMPACT PROBABILITY PROB. RISK RISK BY RESID
CONCERN RATING RATING LEVEL CONTROLS WHOM? RISK
What could H/M/L How often H/M/L
H/M/L What can be BY H/M/L
What are go wrong as How does this How done to WHEN? What risk
the hazards a result of bad is likely is
What is minimize or
created by the
impact the overall
will still
the hazard? the eliminate exist after
the situation effect of occur? risk impact the impact controls
the impact & have been
described in from put in
impact? to probability happening?
the scope? ?
place?
occur?
QUESTIONS TO ASK WHEN DOING A TASK OR MAKING A CHANGE:

WHY WHAT HOW HOW WHY WHAT

AM I/WE COULD GO COULD LIKELY IS IT TO CAN I/WE DO ABOUT IT?
IS IT NOT
DOING IT WRONG? IT HAPPEN? OK?
AT ALL? AFFECT
ME/US
OR
OTHERS?

Version 21 April 2006 Slide 8

 GROUP RISK ASSESSMENT
Key Process Considerations
Establish High, Medium & Low parameters for probability and impact
- Avoid changes to probability values!
- Probability is very subjective
- Extensive debate will usually yield little improvement to the generic
criteria
- Use more rigorous methods for greater probability confidence.

Version 21 April 2006 Slide 9

RISK ASSESSMENT

Core Concept
„ If direct exposure leads to a certain severity, then
- Risk = Severity X Probability.
„ If probability is based on exposure, then
- Risk = Severity X Probability X Exposure

Version 21 April 2006 Slide 10

 Risk Criteria
RATING IMPACT PROBABILITY
High S Disabling injury, loss of body part or fatality. 1. Repetitive event
P Loss of function of facility for extended 2. At least once per year
period, with business consequences, major 3. Several times in the life cycle of a project
quality deviation. 4. Has happened frequently in similar circumstances
E Reportable violation, toxic release. 5. Greater than 50% chance of occurring.
D High repair cost (typically >$100K)

Medium S Medical aid injury. 1. Infrequent event

P Short duration loss of function, serious quality 2. May only happen occasionally (less than once per
deviation, medium business impact. year)
E Non-reportable spill, non-toxic release. 3. Has been observed in similar circumstances
D Moderate repair cost (typically $10K-100K) 4. 10 to 50% chance of occurring.

Low S First aid injury. 1. Unlikely event

P Brief interruption or minor quality deviation.
E Minor leak, non-toxic fugitive emission.
D Low repair cost (typically <$10K.)
2. Never happened to date
3. May happen less than once in 10 years
4. Has never been observed but is still felt to be a
possibility
5. Less than 10% chance of occurring.

S - Personnel Safety P - Business/Production E - Environmental D - Damage

Version 21 April 2006 Slide 11

GROUP RISK ASSESSMENT

Establish Risk Acceptance Criteria

Unacceptable
H 2 3 3 3
Risk
Impact M Risk Controls
2 2 3 2
Required
L 1 1 2 Acceptable Risk
1
(Some controls
L M H may still be
justified)
Probability

Version 21 April 2006 Slide 12

ITEM AND IMPACT IMPACT PROBABILITY PROB. RISK RISK BY RESID
CONCERN RATING RATING LEVEL CONTROLS WHOM RISK
What could H/M/L How often H/M/L
What are go wrong as H/M/L What can be ? H/M/L
How does this How done to BY What risk
the hazards a result of bad is likely is
What is
created by the
impact the overall minimize or WHEN? will still
the hazard? the eliminate the
exist after
the situation effect of occur? risk impact controls
impact & impact from have
described in the
to probability happening? been put
impact?
the scope? ?
in place?
occur?
QUESTIONS TO ASK WHEN DOING A TASK OR MAKING A CHANGE:

WHY WHAT HOW HOW WHY WHAT

AM I/WE COULD GO COULD LIKELY IS IT TO CAN I/WE DO ABOUT IT?
IS IT
DOING IT WRONG? IT HAPPEN? NOT
AT ALL? AFFECT OK?
ME/US
OR
OTHERS?

Version 21 April 2006 Slide 13

 10 Steps to Effective Risk Assessment

1. Make sure the risk assessment process is practical and realistic.

2. Involve as many people as possible in the process, especially those at risk.
3. Use a systematic approach to ensure all relevant risks and hazards are addressed.
4. Look at the big picture; don’t waste time on the obviously minor risks; and don’t
obscure the process in too much detail.
5. Start by identifying the hazards.
6. Assess the risks from those hazards, taking into account the effectiveness of the
existing controls;
7. Be realistic, not idealistic. Look at what actually occurs and exists in the
workplace and, in particular, include non-routine operations.
8. Identify who is at risk. Include all workers, including visitors, contractors and the
public.
9. Start with the simple methods, use more systematic methods as necessary.
10. Always record the assessment in writing, including all assumptions you make,
with the reasons why.
Version 21 April 2006 Slide 14
 "The greatest opportunity for the discovery
and correction of undesired deviations
takes place while the work is being
performed."
Edwin B. Flippo and Gary M. Munsinger, Management

Version 21 April 2006 Slide 15

SIMPLE RISK ASSESSMENT
Ask Fundamental Risk Questions

„ Why am I doing it at all?

„ What could go wrong?
„ How could it affect me?
- Others?
- Company?
- Customers? Etc.

„ How likely is it to happen?

„ What can I do about it?

Version 21 April 2006 Slide 16

SIMPLE RISK ASSESSMENT

Promote the process through...

„ General new hire orientations
„ Job specific/workplace orientations
„ Group safety meeting topics
„ Planned contacts
„ Observations
„ Critical topic promotions

Version 21 April 2006 Slide 17

SIMPLE RISK ASSESSMENT

Promote the Process

Ask th
eS imple R
Why - a isk Qu
m I do i estions
ng it al !
all?
What
- could
go wro
n g?
How - c
ould it
affect m
e o r o th
How - l ers?
ikely is
it to h ap
pen?
What -
can I do
about it
?

Version 21 April 2006 Slide 18

SIMPLE RISK ASSESSMENT

Promote the process through...

„ Bulletin board postings
„ Contests
„ Mailings

„ Leadership Example!
- Develop a Risk Culture

Version 21 April 2006 Slide 19

RISK ASSESSMENT

Risk Assessment Focus

Incident Investigation Focus

Version 21 April 2006 Slide 20

What to Investigate?
„ Investigate all accidents and incidents to identify those with
potential for serious or major loss.
„ Give special investigation attention to those with a high-potential
for loss - regardless of the severity of the actual loss that
occurred.

Serious or Major Injury

1

Minor Injury 10
Property Damage
30
Near-Misses

600

Version 21 April 2006 Slide 21

Investigating Near-Misses

• There are many more

incidents (near-
misses) than
1
accidents.
10 • Lessons learned from
near-misses are
30 free.
• The causes and
600 potential are
exactly the same.

Version 21 April 2006 Slide 22

 Risk Assessment

The trick is for the right people to

use the right tools at the right time,
each time!

Version 21 April 2006 Slide 23

Objectives: Build the risk culture and provide
the tools to...
z Identify and correct
sources of risk,
z Improve decision-
making, and
z Implement controls to
preserve the gains.

Version 21 April 2006 Slide 24

Version 21 April 2006 Slide 25
Visit us at:
www.dnvtraining.com
www.dnvcert.com

A copy of this presentation can be

downloaded at:
www.dnvtraining.com
Click on “News” and then “Events”
and look for the Title of this
presentation

Version 21 April 2006 Slide 26