Cost and Risk Acceptance

2 Incorporate Safety Devices if identified hazards cannot be effectively eliminated or their associated risk adequately reduced to acceptable levels through system design, that risk should be reduced through the use of engineering controls and safety devices. These may include fixed, automatic, or other protective safety design and hazard limitation or control features or devices. Also, when applicable, provisions should be made for periodic functional checks and maintenance of any safety devices. 

Continuing with the example in Section 2.3.4.1, it has been determined that the design of the paint booth could not be changed sufficiently to eliminate or control the risk potential imposed by the hazardous chemical to an acceptable level. Also, requiring a paint booth operator to wear a new type of breathing apparatus carries 

Through proper and detailed consideration of the system safety order of precedence, the potential risk of the paint operation will be reduced to its lowest perceivable level and the risk acceptance, the next and last step, wiU be much easier to justify. 

S Risk Acceptance Realistically, even when operating in compliance with the minimum standards established by applicable safety and health regulations, there may still be some level of residual risk that must inevitably be accepted. How much risk is accepted or not accepted is a management decision. The outcome of that decision will be affected by numerous inputs and considerations, not the least of which is cost. 

In any discussion of risk management and risk assessment, the question of quantified acceptability parameters must be considered. Richard E. Olson (undated) provides the following discussion pertaining to quantitative risk assessment. 

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Figure 8.3 The labor costs for synthesis techniques are also often overlooked. The complexity and expense of developing sounds for various synthesis techniques varies widely. User learning difficulty can thwart acceptance of a promising new synthesis technique, and development costs and risks can stiffle a company s desire to commercialize a new technique. These hidden costs often dominate the success or failure of a synthesis technique in the market place, rather than the expressive power of the technique.

The 1999 ATP compehhon just closed. When the awards are announced in late summer, the ATP will be launching approximately 350 million in new R D. Hopefully, next year this amount will be a little higher. So I encourage you to approach us with your ideas. One change we have made this year is the acceptance of preproposals year round. We hope this process will reduce the cost and risk to companies of applying to ATP. ... 

The risk management techniques of the organization should be defined before any considerations of the philosophy of protection needs for a facility are identified. An organization that is capable of obtaining a high level of insurance coverage at very low expense, even though they may have risks, may opt to have a limited outlay for protection measures since it is not cost effective. In reality this would probably never occur, but serves to demonstrate influences in a corporate approach to protection levels and risk acceptance criteria. 

At the micro-safety level, system safety is a trade-off between safety cost and risk for eliminating or controlling known hazards. However, at the macrosafety level, system safety is more than just cost versus risk it is also a matter of safety culture, integrity, and ethics. Should an organization decide how much risk they are willing to pay for and then pass that risk to the user, or are they obligated to provide risk acceptable to the user ... 

Risk-Based Inspection. Inspection programs developed using risk analysis methods are becoming increasingly popular (15,16) (see Hazard ANALYSIS AND RISK ASSESSMENT). In this approach, the frequency and type of in-service inspection (IS I) is determined by the probabiUstic risk assessment (PRA) of the inspection results. Here, the results might be a false acceptance of a part that will fail as well as the false rejection of a part that will not fail. Whether a plant or a consumer product, false acceptance of a defective part could lead to catastrophic failure and considerable cost. Also, the false rejection of parts may lead to unjustified, and sometimes exorbitant, costs of operation (2). Risk is defined as follows ... 

The corrective action requirements fail to stipulate when corrective action should be taken except to say that they shall be to a degree appropriate to the risks encountered. There is no compulsion for the supplier to correct nonconformities before repeat production or shipment of subsequent product. However, immediate correction is not always practical. You should base the timing of your corrective action on the severity of the nonconformities. All nonconformities are costly to the business, but correction also adds to the cost and should be matched to the benefits it will accrue (see later under Risks). Any action taken to eliminate a nonconformity before the customer receives the product or service could be considered a preventive action. By this definition, final inspection is a preventive action because it should prevent the supply of nonconforming product to the customer. However, an error becomes a nonconformity when detected at any acceptance stage in the process, as indicated in clause 4.12 of the standard. Therefore an action taken to eliminate a potential nonconformity prior to an acceptance stage is a preventive action. This rules out any inspection stages as being preventive action measures - they are detection measures only. 

The basis of RHT is set out in Figure 3.4. Individual levels of accepted risk are said to be determined by the costs and benefits of risky and cautious behavior, as set out in box a. 

With the plant interview information, verification of the data, and the completion of the simple calculations, an experienced troubleshooter will develop a set of hypotheses for the root cause of the defect. After the hypotheses are established, a series of experiments need to be developed that accept or reject the hypotheses. Once a hypothesis is accepted via experimentation, then the next step is to develop a technical solution to remove the defect. Often more than one technical solution Is possible. The best technical solution will depend on the cost and time to implement the solution, machine owner acceptance, and the risk associated with the modified process. An accepted hypothesis must drive the technical solution. If a hypothesis is not accepted prior to developing a technical solution, then the troubleshooter may be working on the wrong problem and the defect may not be eliminated from the process. 

Insurance is accepting a small loss now (premium payment) to prevent a potentially larger loss in the future. If you take out a policy to protect yourself against a loss (such as theft), in a sense, you win if you are robbed. You were smart enough to protect yourself. On the other hand, if you paid the premium for 20 years and were never robbed, you still won because you transferred the risk at a small cost and gained peace of mind. Insurance is a way to transfer risk and worry to another so you come out ahead. No time is more important to transfer worry than when you retire. 

Development of a comprehensive and risk-based hazardous waste classification system, in which waste classes are defined in relation to types of disposal systems that are expected to be generally acceptable in protecting public health, would not obviate the need to establish waste acceptance criteria at each disposal site based on the characteristics of the site and engineered disposal facility and the properties of wastes intended for disposal therein. The primary purposes of a hazardous waste classification system are to facilitate cost-effective management and disposal of waste and effective communication on waste matters. 

More and more studies evaluating whether the HC5 values are protective for ecosystem structure and function are becoming available (Assumption 9 Emans et al. 1993 Solomon et al. 1996 Versteeg et al. 1999 Smit et al. 2002 Selck et al. 2002 van den Brink et al. 2002a Brock et al. 2004 Hose and Van den Brink 2004 Maltby et al. 2005). In general, all authors concluded that the SSD concept (in the form of an HC5) can provide a cost-effective risk evaluation to establish acceptable concentrations to set targets for pesticides in the aquatic environment (see Figure 4.5... 

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