Operational risk management assessment

April 29, 2002, Office of the Chairman, Joint Chiefs of Staff, states In the execution of the force s mission, all commanders should conduct a risk assessment, balancing exposure to contamination and other risks in light of joint task force priorities. This is essential to operational risk management. ... 

Risk assessment should be the cornerstone of an operational risk management system. 

The risk assessment process applies to all aspects of operational risk management—occupational safety, occupational health, environmental matters, product safety, all aspects of transportation safety, safety of the public, health physics, system safety, fire protection engineering, property damage and business interruption avoidance, and the like. 

Superior performers understand risks and have risk assessment and management provisions within their operations risk management systems. They are aware that not all risks are equal and that prioritization is necessary in the decision making for expenditure of funds. 

It should be established that risk assessments are the core of an Operational Risk Management System. 

This author proposes that risk assessments be established as the core of an Operational Risk Management System as a separately identified element, following shortly after the first element, which would be comparable to Management Leadership, Commitment, Demonstrated Involvement, and Accountability. 

In assessing the effectiveness of a safety and health program that is not in written form, auditors should follow the operational risk management system against which it was agreed that the audit would be made. 

An objective of the risk guidance tool is to develop a situational awareness of the potential for a loss-producing event. For a visual representation of the risk assessment, the risk guidance tool uses a color code. An example of the use of color is found in The US Navy s Operational Risk Management (ORM) Fundamentals ... 

Procedural controls, process controls, 98-99 Process controls, 96-100 active controls, 98 inherently safer approach, 97 mitigation techniques, 99 passive controls, 97-98 procedural controls, 98-99 safe operating limits, 99-100 Process definition, documentation, 102-104 Process design, documentation, 105 Process hazard analysis (PHA) risk assessment, 92-93 screening methods, 63 Process risk management decisions, documentation, 105-106... 

It has been argued that the use of uncertainty factors is equivalent to having decision making or risk management operating within the risk assessment. Others believe... 

Hazard and risk analysis is a vast subject by itself and is extensively covered in the literature [22]. In order to plan to avoid accidental hazards, the hazard potential must be evaluated. Many new methods and techniques have been developed to assess and evaluate potential hazards, employing chemical technology and reliability engineering. These can be deduced from Fault Tree Analysis or Failure Mode Analysis [23], In these techniques, the plant and process hazard potentials are foreseen and rectified as far as possible. Some techniques such as Hazards and operability (HAZOP) studies and Hazard Analysis (HAZAN) have recently been developed to deal with the assessment of hazard potentials [24]. It must be borne in mind that HAZOP and HAZAN studies should be properly viewed not as ends in themselves but as valuable contributors to the overall task of risk management... 

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