ALARP cost benefit analysis

ALARP concept basically comes from the British health and safety system (Act 1974)- It is not in true sense a quantitative method, although cost—benefit analysis is often used to get ALARP. It is a challenging subjective method, as it requires duty holders and others to exercise their judgment very carefully. In risk analysis, three factors play important role, viz. trouble, time, and cost. The breakeven point in... 

Cost Benefit Analysis (CBA) Checklist http //www.hse.gov.uk/risk/theory/alarp check.htm. 

Because of poor communication, it had not been explained to the employee that even a minor injury would not justify the cost of resurfacing the entire parking lot. Sometimes a cost benefit analysis indicates that a risk, such as the uneven areas of the parking lot, must be tolerated as the cost of eliminating this relatively minor hazard outweighs the cost of a minor injury. I realize this is a rash statement, but it is very true. Cost benefit analysis must be done in some instances as an organization must determine what risks are in the As Low As Reasonably Practicable (ALARP) zone, and which can be tolerated. 

The UK Health and Safety at Work Act 1974 defined the concept of as low as reasonable practicable (ALARP). The ALARP principle is based on reasonable practicability, which simply means that hazard controls are implemented to reduce residual risk to a reasonable level of practicality. For a risk to be considered ALARP, it must be demonstrated that the cost in reducing the residual risk further would be grossly disproportionate to the benefit gained. Therefore, a risk assessment is conducted, and a cost-benefit analysis performed to determine how far to carry the hazard control. Of course, the challenge is deciding what is practical (e.g., cost, effort, time) balanced with how much benefit of lower residual risk the hazard control brings. Unfortunately, there is no standard method to demonstrate that the hazard control trade-off will meet ALARP. However, some of the following have been successfully used ... 

The final part of this ALARP assessment of the design investigates whether further reduction in risk would be cost-effective. Several potential enhancements were identified, the Severe Accident Mitigation Design Alternatives (SAMDA), but only one of these was taken forward in the generic AP 1000 because the others were not cost-beneficial based on ALARP principles. A quantitative cost-benefit analysis is applied to each of the SAMDA options, to show that its non-inclusion is ALARP for the APIOOO design proposed for the UK. 

For this particular ALARP assessment, it has been decided to attribute no benefit to the value of lost availability of the plant that is, to the value of lost electricity production. This is conservative, as far as the cost-benefit analysis is concerned, because such benefit would actually be very real. Otherwise, the benefit of any proposed additional design feature required to control a risk arises from three sources ... 

From review of the costs of each of the potential design improvements, it is apparent that there is only one candidate whose estimated cost is below the benefit threshold derived above, and thus requires an individual cost-benefit analysis self-actuating containment isolation valves would cost 22,000. However, the next three cheapest options have also been subjected to an individual cost-benefit analysis, in order to provide confidence that the ALARP case is robust and not susceptible to challenge that the cost estimates on which it is based are inaccurate or that the gross disproportion factor is still too small. 

To support the argument that the safety risk emerging from the system is ALARP, it is also necessary to demonstrate the practicability argument by carrying out a cost-benefit analysis to assess and compare the costs of any proposed changes to the system against the reduction in risk levels inclusive of the acceptance/rejection criteria. 

Furthermore, this information was used to support the supply chain s ALARP review, allowing consideration for how much it will cost for each top event to reduce the risk for an individual hazard from (say) lE-9/hr to lE-lO/hr and if the predicted costs are disproportionate, to justify a general statement that a detailed cost benefit analysis is not necessary for each top event. 

The ALARP or tolerability regions, where risk reduction is desirable. Risks are considered tolerable only if they are shown to be ALARP. This may require that risk reduction measures be evaluated by means of a cost-benefit analysis. 

ALARP requires cost-benefit analysis (i.e. simply meeting a risk target is not enough), which implies that a price needs to be put on the value of a human life in the explicit trade-off between safety and economics. Only the owner of the risk can make this decision. 

Ideally the design (i.e. the selection of components, the system architecture and the means of integration) should now be implemented in such a way as to ensure that the safety objectives are accomplished. The best route(s) to achieving the objectives must be chosen. Qualitative objectives and constraints will come into play here through the influence of the different stakeholders (especially the decision-makers who control the purse strings). A trade-off may be required in terms of a cost-benefit-analysis to ensure that certain hazards are indeed ALARP. 

For the sake of analysis the worst case conditions are usually analyzed for cost benefit decisions. In cases where the cost for any proposed recommendation is near or exceeds the potential remediation costs after the potential incident, the risk may be termed as low as reasonably practical (ALARP). 

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