Management risk

Once risks have been identified, understood, and evaluated they must be managed. 

RISKS AT THIS LEVEL DISAPPEAR OR ARE GREATLY MITIGATED WHEN PROJECTS ARE BASED ON REALISTIC EXPECTATIONS AND ACHIEVABLE GOALS. 

Even when the assumptions are realistic the economic studies must be complemented with sensitivity analysis to determine the impact of uncontrollable variances in the basic assumptions. 

Wishful thinking is not compatible with successful projects. Projects driven by greed are usually based on over-optimistic cost estimates, schedules, and marketing projections. They definitely are not the right project and will be doomed from the start. 

It is up to the Venture Manager to inject a dose of common sense and a healthy detachment to the initial decisionmaking discussions with the business groups and corporate management. That participation would insure the selection of the right project. 

Risk management lies at the root of all process safety work. Risk is composed of the following four elements  

The relationship between the first of the above three terms is shown in Eqn 1.1. 

The first and most important step in any RMP is to identify the hazards because, unless hazards are identified, consequence and likelihood reduction cannot be implemented. Not only is HAZID the most important part of any risk analysis, removal of hazards is almost always the best way of reducing risk, and it is the only way in which risk can be reduced to zero. Reductions in the consequence and frequency terms—the second and third elements of Eqn 1.1—can only reduce risk they cannot eliminate risk entirely. 

Equation 1.1 is linear it gives equal value to changes in the consequence and frequency terms, implying a linear trade-off between the two. For example, according to Eqn 1.1, a hazard resulting in one fatality every 100 years has the same risk value as a hazard resulting in 10 fataUties every 1000 years. In both cases the fatality rate is 1 in 100 years, or 0.01 fatalities per year. But the two risks are not perceived to be the 

The same way of looking at risk can be seen in everyday life. In a typical large American city around 500 people die each year in road accidents. Although many efforts are made to reduce this fatality rate, the fact remains that this loss of life is perceived as a necessary component of modern life, hence there is little outrage on the part of the public. Yet, were an airplane carrying 500 people to crash at that same city s airport every year, there would be an outcry. Yet, the fatality rate is the same in each case, that is, 500 deaths per city per year. The difference between the two risks is a perception rooted in feelings and values. 

In sum, risk evaluation involves the deliberative effort to characterize risks in terms of acceptability and tolerability. Such contexts often imply that neither the risks nor the benefits can be clearly identified. Multiple dimensions and multiple values are at work and have to be considered. Finally, risk evaluations may shift over time. Notwithstanding large uncertainties, decisions need to be made. It may well be possible at a certain point in time to agree whether risks are acceptable, tolerable, or intolerable. When the tolerability or acceptability of risks is heavily contested, that too is highly relevant input to the decision-making process. 

Risk management starts with a review of the output generated in the previous phases of interdisciplinary risk estimation, characterization, and risk evaluation. If the risk is aeeeptable, no further management is needed. Tolerable risks are those where the 

Find the most cost-effective way to make the risk acceptable or tolerable 

Use experts to find valid, reliable and relevant knowledge about the risk 

Involve all affected stakeholders to collectively decide best way forward 

4 Risk Management and Some Notes on Toxic Compounds that can be Found in Indoor Spaces 

Since any material must be assessed in the context of the system, there is no truly benign materials and nothing is risk free and risk can be managed , i.e., a toxic material can provide significant benefits and may pose little risk when used properly . For example use of damp-proofing on the exterior of a preserved wood foundation that has an inherently toxic chemical provides moisture control and substantial benefits, but does not pose a high risk to the occupants [7]. 

Overall risk assessment rests on three factors  

Exposure assessment is a necessary component in understanding the hazard involved by exposure to naturally (i.e., radon) or non-naturally existing toxicants (i.e., chemicals emitting from construction materials) [12]. However, the other two (toxicity and dose-response assessments) are the next two important factors to know. 

Certainly one should consider the fact that this is a general list and each indoors is unique and a specific indoors may have always have different toxics. 

Establishment of a risk-based waste classification system requires that one or more levels of acceptable risk be specified. A determination of acceptable risks depends on societal values, and is a task appropriately left to governmental policy makers and the public. As a result, this Report will not attempt to select or justify specific values for acceptable risk. However, in Sections 6 and 7, values of 

Near Miss Incident Risk Management and Assessment 

Occupational health and safety has evolved in an effort to cope with the complexities of modem industry and the risks that accompany manufacturing, mining, transportation, and other activities. 

Much development has been in the field of risk management, which considers probabilities of undesired events occurring and enables action plans to be put in place to prevent and reduce the possible losses that could occur. 

This chapter endeavors to simplify the risk management approach and give the reader an overall idea as to the various components of risk management and how they combine to form a comprehensive management strategy. 

Risk assessment is a vital part of the near miss incident reporting and remedy system (NEMIRR) process and helps one determine the potential probability, frequency, as well as the potential severity of loss of a near miss incident. It helps predicts what could have happened under slightly different circumstances. 

Most developed countries have developed their own guidelines and practices for risk assessment. The Society for Risk Analysis and its flagship journal. Risk Analysis An International Journal, serve as an academic forum to share the rapidly advancing sciences in the field. Also, the importance of these sciences and then-applications and development is found in the curricula of most major universities. 

The greatest challenges for successful risk management of pharmaceuticals in the environment are the following  

In 2006, McKinsey did a global survey to imderstand how companies manage supply chain risks (Muthukrishnan and Shulman, 2006). Some of the key findings from the McKinsey survey are listed below  

The most frequently reported risk management actions in the McKinsey survey are as follows  

96% of the companies believe their business operations are exposed to the natural disasters but less than 20% are really concerned about their financial impact. 

Out of the 25 most costly disasters in the world, between 1970 and 2008, none occurred before 1987, and two-thirds of them occurred since 2001. 

Probability of Material Event Potential Business Impaot of That Event = Value Network at Risk 

As companies build value networks, they also need to build a risk 

Preparing for risk in the extended supply chain is everybody s business. Established procedures, a control room or a control tower for visualization of global operations, and practiced drills are a necessity. This combination allows the organization to spring to action when a situation arises. 

Risks from contaminated land arise from pollutant linkages that present unacceptable risk to receptors. The purpose of risk management it to make changes that remove these unacceptable risks. This can be done in different ways the source of contamination may be removed or reduced the pathway by which contaminants reach the receptor may be broken or attenuated or the receptor can be removed or modified. 

Both the risk reduction and the management objectives for the site as a whole may support a set of sub-objectives for zones on the site that have either a particular risk profile or a land management requirement. For larger sites, a number of different remedial objectives may have to be adopted for different site zones, so that the most effective and cost-efficient management option is implemented for the site as whole. 

Full evaluation of qualified risk management options should be based on selection criteria that have been thoroughly checked, expanded if needed and agreed with the site stakeholders. To allow an overall evaluation, it is advisable to set out a system for scoring and weighting the conclusions for individual and unrelated criteria. Formal cost-benefit appraisal may be required to either separate close contenders or to support initial conclusions. 

It is important to obtain as many possible viewpoints on the short-listed options, as this will increase confidence in the decision making process. In this regard, it may be helpful to do one or more pilot studies, depending on the options that are short-listed and the confidence that can be attached to their performance from experience on similar sites. This not only allows assumptions about performance to be tested, but also the collection of site-specific data. Although a pilot may be costly and take valuable time, it may still be justified by the increased confidence it can bring to project costs and timings. 

Risk management actions can extend from more simple measures to the very extensive and complex. In all cases, however, it is essential to follow a formal and documented management system. Without this rigour, the confidence of all stakeholders and the value of the land to society and to its owner may be prejudiced. 

However, a thorough incident investigation into such an apparently simple accident could lead to the discovery of significant and subtle deficiencies in the overall management program that could, in turn, lead to ways of improving process safety. 

Evidence as to whether an opposite, top-down effect may apply is hard to come by, i.e., whether improvements in process safety lead to matching improvements in occupational safety. Many process safety professionals feel that such a trend does exist although it is difficult to prove. 

The consequences of that hazard should it occur (safety, environmental, and economic)  

Facilities are continually subject to changes to increase efficiencies, improve operability and safety, accommodate technical innovations, and implement mechanical improvements. Additionally, on occasion, temporary repairs, connections, bypasses, or other modifications may be made due to operating necessities. Any of these changes in operations, procedures, site standards, materials, equipment, facilities, or organizations can introduce new hazards and must be evaluated and managed to ensure that risks arising from these changes remain at an acceptable level. 

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The project "Non-Invasive Inspection within an Asset Risk Management Strategy" is another joint industry project, funded by EC-THERMIE, representing the current trend towards onstream (non-invasive) inspection in combination with risk-based inspection philosophies to establish component condition. In this project, industry and authorities participate aiming at a beneficial use of today s NDT without sacrificing on safety. 

Regulation for the Management of Extremely Ha rdous Substances State ofDelaware, Department ofNatural Resources and Environmental Control, Sept. 25,1989 Extremely Hazardous Substances Risk Management A.c% Tide 7, Chapt. 77, July 19, 1988. 

U.S. Environmental Protection Agency, Risk Management Programsfor Chemical Accidental Release Prevention Proposed Rule Tide 40, Part 68, Subpart B, of the Code of Eederal Regulations (40 CER 68), Federal Register 54212 (Oct. 20,1993). 

There are a multitude of governmental requirements for the manufacture and handling of isocyanates. The U.S. Environmental Protection Agency (EPA) mandates testing and risk management for TDl and MDl under Toxic Substance Control Administration (TSCA). Annual reports on emissions of both isocyanates are required by the EPA under SARA 313. 

REIST Aerosol Science and Technology, Second Edition RHINE, TUCKER Modeling of Gas-Fired Furnaces and Boilers and Other Industrial Heating Processes ROSSITER Waste Minimization Through Process Design SAMDANI Safety and Risk Management Tools and Techniques in the CPI... 

API Publ 761, Model Risk Management Plan Guidance for Exploration and Production Facilities—Guidance for Complying with EPA s RMP Rule (40 Code of Federal Regulations 68), 2nd ed., August 1997... 

Greenberg, El. R. and J. J. Cramer. 1991. Risk Assessment and Risk Management for the Chemical Process Industry. Van Nostrand Reinhold, New York. 

Van der Schaaf, T.W. 1996. PRISMA A Risk Management Tool Based on Incident Analysis, International Conference and Workshop on Process Safety Management and Inherently Safer Processes, Center for Chemical Process Safety of the American Institute of Chemical Engineers, New York. 

Risk Management Program Rule (RMP)—Emergency Response Program EPA 40 CFR part 68.95... 

Though occasionally a time consuming exercise, a well-performed PHA can be a source of satisfaction and may be required by the OS HA Process Safety Management Standard or the EPA Risk Management Program Rule. It is important members actively participate and lively interaction is promoted during the sessions. 

Are materials subject to the requirements of the OSHA Process Safety Management Rule (29 CFR 1910.119) or the EPA Risk Management Program Rule (40 CFR 68) ... 

Does the EPA Risk Management Program (RMP) apply to this facility ... 

Was the facility required to submit a risk management plan to the EPA ... 

Accidental Release Prevention Reqnirements Risk Management Programs nnder Clean Air Act Section 112(r)(7), Federal Register, Vol. 61, No. 120,Jnne 20, 1996. 

Risk analysis is the process of gathering data and synthesizing information to develop an understanding of the risk of a particular enterprise. Risk analysis usually involves several of the five risk management activities shown in Figure 1. CPI companies have many possible applications... 

Covernment and regulatoi y decisions. Sometimes these decisions are based on some type of quantitative risk analysis, and they provide some guidance on society s expectations with regard to risk management. In some cases these decisions will also include some kind of cost-benefit analysis. The current political climate in the United States may encourage more extensive use of risk analysis in the establishment of future regulations. 

George L. Head, The Risk Management Process, Risk and Insurance Management Society, Inc., New York, NY, 1978. 

Vernon H. Guthrie and David A. Walker, Enterprise Risk Management, Proceedings of the 17th International System Safety Conference, Orlando, EL, 1999. 

D. C. Elendershot, Risk Guidelines as a Risk Management Tool, Process Safety Progress 15, 4 (Winter 1996), 213-218. 

This is poor risk management. Applied to a turboexpander in eritieal serviee it translates into bad business praetiee. This segment will deseribe three baste strategies appropriate for turboexpanders (and indeed all rotating maehinery). The ehoiee of strategy should not be left to the manufaeturer. It needs to fit the operator s speeifie appli-eation and eomfort level. The manufaeturer s resourees and teehnieal expertise should be used to support the deeision proeess by providing relevant information. 

Versteeg, M. F. 1987 External Safety Policy in the Netherlands an approach to risk management. In Proceedings of the Technical Committee Meeting, Status, Experience, and Future Prospects for the Development of Probabilistic Safety Criteria, Vienna, 27-31 January. 

Wright, C. J. 1989 Product Liability - The Law and Its Implications for Risk Management. London Blackstone Press. 

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