Surviving The Global Economic Crisis - Risk Management Main ...Document Transcript
GOVERNMENT RISK MANAGEMENT VOLUME 10, ISSUE No 19, SEPTEMBER 2009
Surviving The Global Economic S P O NS O RED BY
Crisis - Risk Management
Main Roads WA
SEPTEMBER 2009 – MARCH 2010
Business Continuity: Crisis Management 1 day
WorkSafe Accredited Occupational Safety & Health Representative Training 5 days
Bunbury Regional Training - Psychological Injury Claims 1 day
Minimising Impact, Maximising Outcomes
Understanding Your Self Insurance Cover ½ day
Business Continuity: Effective Testing 1 day
Project/Contract Risks ½ day
GRM Conference 1 day
WorkSafe Accredited Occupational Safety & Health Representative Training 5 days
Risk Management Fundamentals ½ day
Business Continuity Management Fundamentals 1 day
Project/Contract Risks ½ day
For registration for any event, please register online at:
September 2009 grM 1
Message from the Manager RiskCover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Editor
2009 Western Australian Government Risk Jim Hodges
Management Conference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Derek Fowler
Main Roads WA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Miriam Fisher
Making Our Roads Safer Kirsty Wilson
Surviving The Global Economic Crisis - Risk Management . . 7 Insight Communication
Government And Individual
Risk Management Broken!! . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 The Editor
Bridging The Gap Between Emergency Management of Western Australia
and Business Continuity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 The Forrest Centre
221 St Georges Terrace
Perth WA 6000
Department of Agriculture and Food . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Best Public Sector Leadership For Injury Prevention And Management
All articles, information and
feedback can be directed to:
Overcoming Obstacles to Senior Management Susan Weary, Editor
Telephone: 9264 3227
Buy-in on Business Continuity Management . . . . . . . . . . . . . . . . . . . . 18 Facsimile: 9264 3966
Critical Case Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Cover Shot:
Liability For Negligent Exercise Of Statutory Powers Main Roads WA
RiskCover coordinates the production of GRM and
welcomes feedback about the magazine and any new
issues that could be covered .
Agencies are invited to submit articles about their own
risk management experiences .
MeSSage froM The
W estern Australian Government agencies continue
to integrate risk management thinking into
all aspects of their business with a strong focus
on operational and project level risks, whilst still
continuing to develop a strategic approach to risk
management. This strategic approach brings into focus
a potential disconnect at a whole-of-government level,
in that most planning and reporting is primarily at the
agency level, reinforcing a silo mentality, which will
contribute to whole-of-government inefficiencies.
The concept of ‘joined up government’ requires that there
are long-term strategic directions set at a whole-of-
government level, which then cascade down to the strategic
plans and operational activities of agencies. A failure to
have consistency between the high level government
directions and priorities, and the strategic plans of individual
agencies, may lead to a highly fragmented public sector
which is not focused on the State’s key priorities.
Tackling this issue from a risk management perspective,
may provide an approach which helps to identify, evaluate
and prioritise the key issues that need to be reflected in
all levels of government planning. The high level risk
issues identified at a whole-of-government level, can be
reflected at the agency planning level, as strategies that not
only focus on achieving
“Government must objectives, but also on
managing the risks.
also identify and The importance of a risk
approach is not to be risk These factors require government to prioritise its services
averse, but to develop a based upon sound rationale, and to consider the risk
good understanding of potential of delaying or not delivering services to required
evaluate those risks the issues to enable the levels. Government must also identify and evaluate those
successful delivery of risks which may impact on the successful delivery of services.
goals and objectives. A
A robust approach to risk is therefore essential at
which may impact risk profile assists with the
all levels of government, to achieve a higher degree
prioritisation of what is
important for Government, of certainty of success when seeking to capitalise
and the agencies which on opportunities, and to deliver key services.
on the successful are required to deliver
on these priorities.
delivery of services.” The Government is focused
on developing the means
to ensure better outcomes
for the people of Western Australia, and improved services,
without burdening agencies with ever increasing demands.
The demands on government are increasing and becoming
more complex, and with tighter economic conditions, this
puts greater pressure of service delivery.
September 2009 grM 3
2009 Western Australian
Government Risk Management
5th November 2009
Burswood Convention Centre
Grand Ballroom 2
Great Eastern Highway, Burswood
“Managing Risk to achieve organisational objectives”
The Conference aims to provide Directors, Executive Officers,
Managers, Risk Management Officers, Auditors and other staff with:
Awareness and understanding of key risk management issues which are
having actual or potentially adverse material impacts on Government
Practical support in risk management at the strategic and operational levels, to
increase organisational effectiveness and the successful achievement of business
objectives or goals
Networking opportunities for agency representatives to share experiences in
implementing and using risk management as a tool to assist their agency in
achieving its goals
A diverse group of speakers will present on a wide range of Risk Management
issues, with the primary goals of demonstrating case studies of experiences with
Risk Management, increasing delegate skills and knowledge of Risk Management
practices, and enhancing cross-agency relations
The program this year includes:
• Dr Chris Perryer - Director International Programs - UWA
• Mr Ivan Deveson - Chairman - Committee for Economic Development
• Mr Rob Redenbach - Special Forces & Police Trainer
• Dr Keith Suter - Economic & Social Commentator
• Mr Ross Holt - Chief Executive Officer - LandCorp
• Dr Ruth Shean - Commissioner - Office of Public Sector Standards Commission
• Ms Jo Harrison-Ward - Chief Executive Officer - FESA
Please register online at
or contact RiskCover on (08) 9264 3806 for more information .
MAIN ROADS WA
MAkINg OuR ROADS SAFER
M ain Roads WA has embarked on a challenging
and innovative program of various initiatives
to target the increasing road toll and start a
un-cushioned impact at a speed of more than 30km/h. Even
relatively low speeds can kill or seriously injure, unless
the vehicle and the road and roadside environment take
new era for road safety on the State’s roads. account of the physical vulnerability of all road users.
Increased vehicle usage, coupled with changes in The Road Network Services Directorate within Main Roads
acceptance of driver behaviour and road configurations, WA has taken on the challenge of retro-fitting treatments
has prompted the need to improve the safety of the to the existing road network to address the elements of the
Western Australian road network to reduce the road toll. Safe Systems approach now accepted throughout Australia.
This incorporates innovative demonstration projects that will
WA’s Road Safety Council recently released the Western influence future road safety. Main Roads WA has a ‘Vision
Australian Road Safety Strategy ‘Towards Zero’, which Zero Logical Framework’, which was developed by the New
states that human death and suffering resulting from Perth Bunbury Highway Safe Systems Working Group.
crashes on roads are no longer considered inevitable.
The strategy looks at addressing the road system in a The four cornerstones of road safety are:
sustainable way that considers the limitations of humans,
1. Safe Road and Roadsides,
saving the most lives and preventing the greatest number
of serious injuries for every dollar spent. Towards Zero 2. Safe Road Use,
incorporates the Safe Systems, which recognises two 3. Safe Speeds
key limits of people using the road system. These are:
4. Safe Vehicles.
• we all make mistakes (and some of us take risks); and
Consequently, the key challenge is to design
• there are physical limits to the amount of force the road to prevent the possibility of death and
our bodies can take before we are injured. serious injury by designing for ‘safe’ crashes.
To assist with this challenge, Main Roads WA’s Road
Safety Investigator attended the ‘Achieving Ambitious
The Safe Systems Road Safety Targets’ tour in 2008, which involved visits
approach recognises that to three countries where the road toll was either low
even with a focus on
“Increased vehicle prevention, road crashes
(Norway, Sweden and the Netherlands), or where there
had been a dramatic decrease in recent years (France).
will occur, so the road The tour looked at Safe Systems models, and showed
usage, coupled with system must be designed a preference for a focus on interventions that provide
to be more forgiving of maximum impact. Main Roads WA is establishing a
human error and attempt Safe System Audit process and has conducted a trial
changes in driver to manage crash forces Safe System Audit as part of this development.
to survivable levels.
Popular and successful components of Safe Systems
behaviour and road Installing Safe Systems programs are demonstration projects, innovative
treatments to suit all crash median treatments to prevent head-on crashes, cost
types due to funding
configurations, has or project constraints
effective 2 + 1 road installations, innovative traffic
calming treatments, separation of traffic classes and
is not always feasible. Intelligent Transport Solutions for crash patterns.
prompted the need to Consequently, Main
Roads WA has focused
Safe System Projects in WA
improve the safety...” priority crash types for Main Roads WA is using Safe Systems on two
every project as the road major projects to ensure that the objectives are
engineering solutions considered and improvements made to the projects,
being implemented will be important in achieving the road to make them more forgiving of human error. This
safety aspiration. will result in a safer road for all road users.
There is a need to find solutions that ensure crash energy is
The New Perth Bunbury Highway project established
kept within human tolerances for serious injury and death.
a Safe Systems Working Group, which has resulted in
The System is based on the understanding that the changes to the design of the Highway. As part of their
human body is vulnerable and unlikely to survive an work, a logical framework has been developed.
September 2009 grM 5
Research was also undertaken to
determine the crash types that
are likely to be expected on the
Lancelin –Cervantes Road to
prioritise available funding.
The five year crash history was
compared for similar rural roads to
determine crash types, and showed
that Single Vehicle Run off Road
crashes was the major contributor
to casualty crashes on the rural state
road network, followed by intersection
rear ends and head on crashes.
Additionally, the horizontal alignment is
a significant factor in Single Vehicle Run
off Road crashes. A range of engineering
improvements are being considered
for Indian Ocean Drive, including: Fitzgerald Street
• audible edge lines;
• minimum sealed Travel Speeds section of the Insurance Commission
shoulder width of 1.0m; of Western Australia’s 2008 Road Safety Awards.
• wire Rope Safety Barriers for curve < 3000m radius;
Each day, 25,000 vehicles use the road, along with
• rehabilitation tracks to rehabilitate back a significant around 1,500 pedestrians crossing in the area to access
distance from the proposed road reserve/fence line local businesses and shops. Of the 173 crashes recorded
or back to a junction in the tracks to discourage over the past five years, five involved pedestrians.
uncontrolled access from Indian Ocean Drive;
The project involved installing speed cushions on
• sealing the aprons at parking bays to
Fitzgerald Street to reduce speeds from 60km/h to
reduce the occurrence of rubble/rocks being
30km/h in an area of high pedestrian activity to
dragged onto Indian Ocean Drive;
improve pedestrian and road user safety in the area.
• intersections being
treated with pre- The trial was funded through the Road Safety Council,
deflection or speed and was a joint initiative between the Town of Vincent,
“The project reduction device (eg.: the Office of Road Safety and Main Roads WA.
‘blister island’) to reduce
involved installing approach speed of
Engaging local road users and community members
in project development was complemented
traffic on the side road;
by a communication strategy that raised
speed cushions on • installation of right awareness in the wider community.
turn pocket pavement
Fitzgerald Street to markings at intersections The initial stage of the after study has found that a speed
to assist with the reduction has been achieved, with vehicles travelling
at actual speeds of 30km/h to 40km/h. The review
reduce speeds from delineation through
of travel speeds and driver behaviours will continue
until mid 2009, with information gathered being
60km/h to 30km/h • review layouts at
used in developing guidelines for future projects.
with regard to not
in an area of high providing four-way
In the short term the ‘success’ of the
project will be evaluated against:
pedestrian activity...” on the type of vehicles • a reduction of the operating speed
using driveway such limit that is self regulating;
as farm machinery); • improvements in general driver behaviour; and
• provision of overtaking lanes. • a broad assessment of the feedback
received during the trial period.
Demonstration projects with stakeholder engagement have
become critical in addressing speeds on metropolitan roads, In the long term, success will be measured against
and in particular, key distributor roads to the Perth CBD. the reduction achieved in the number and severity
of crashes occurring within the precinct area and
One demonstration project involved reducing speeds a sustained reduction in operating speeds.
on Fitzgerald Street in North Perth, which won the Safe
A similar project is set to commence on Beaufort detailed site inspections, video survey, traffic counts, detailed
Street, another key distributor road, in June 2009 with analysis and plotting of crash data, investigation of any
variable speed signs being placed in an area of high proposed medium or long term treatments, research of
pedestrian activity as a trial to lower travel speeds from documented innovative treatments to address predominant
60km/h to 40km/h during peak pedestrian periods. crash types, development of an agreed treatment and the
formulation of a cost estimate and benefit cost ratio (BCR).
The street carries around 40,000 vehicles per
day, and incorporates local businesses; a hotel; A new initiative being trialed as part of this project
shopping centre precinct; on street parking is the formulation of a Focus Group, made up
and bus bays on both sides of the road. of a number of people from fields such as:
A Stakeholder Reference Group including community and • Behavioural expert (Curtin University);
business representatives, local government, Main Roads WA • Local Government representative (IPWEA);
and other agencies sees the trial as a key safety initiative.
• Police (Major Crash Unit);
Variable speed signs will be installed at various • Office of Road Safety;
places on Beaufort Street. When entering the area
• MRWA Standards Manager;
from adjoining roads, motorists will see either static
signs displaying ‘New Variable Speed Limit Ahead’, • MRWA Road Safety Investigator; and
or electronic speed signs displaying the speed limit • MRWA Traffic Manager.
warning them to slow down. Outside peak pedestrian
times, the existing 60km/h limit will apply. The group meets for a one day workshop (3-4 times a
year) to consider/discuss safety improvement options for
The trial will run for 18 months to allow the full impact of locations by utilising the different skills and knowledge of
the works to be assessed with an ‘after’ study, which will be the invitees. Main Roads WA presents information such
followed by implementation of an appropriate speed limit. as traffic volumes; turn movements; crash information;
intersection layout plans; photos and video survey
Future Initiatives results. The group considers probable causes of the
issues, examines a broad range of potential treatments
Another key activity is micro-analysis of intersections,
and concludes with a recommendation of treatments
which involved identification and compilation of the top
(standard or innovative) for further investigation.
100 worst sites list based on fatal and hospitalisation
crashes only, within the metropolitan area. From this, the A report will be developed for each of the 20 intersections
top 20 intersections were identified for micro-analysis. detailing treatments considered, treatment proposed and
cost. The report then justifies funding submissions to
This involves researching the Main Roads WA record
develop and deliver the improvements through various
system to determine the nature of complaints received,
funding programs such as Blackspot and Safer Roads.
Recognising design for road safety is not
just the responsibility of Main Roads
WA has been a significant component
within implementing the Safe Systems
strategy in WA. Collaboration between
a wide range of stakeholders on these
varying projects provides an excellent
basis from which to form treatments
to improve the safety of road users.
Safe Systems sees that everyone’s
help allows Sustainable Solutions
to be identified. Main Roads WA is
committed to going to extraordinary
lengths, implementing the preferred
directions and striving towards improving
Fitzgerald Street safety and reducing the road toll.
Further information regarding
“...striving towards improving safety this article can be obtained by
contacting Mr Craig Wooldridge,
and reducing the road toll.” Main Roads WA by email:craig.
September 2009 grM 7
SuRVIVINg THE gLOBAL ECONOMIC
CRISIS - RISk MANAgEMENT
gOVERNMENT AND INDIVIDuAL
What is the global Economic Crisis? Australia is, however, part of the G20, a similar group
of financial chiefs from Argentina; Australia; Brazil;
History maintains that for every peak, there must be Canada; China; France; Germany; India; Indonesia;
a trough. Therefore when the bust hit Australia last Italy; Japan; Mexico; Russia; Saudi Arabia; South Africa;
year after a period of boom, we had no right to be South Korea; Turkey; the United Kingdom; the US
surprised. This is a typical part of the economic cycle. and the EU which has held several summits since, in
which in-depth discussions have taken place to direct
To sum up, the crisis was initiated following a collapse of the
respective governments of each participating country
US subprime mortgage market. Subprime is the practice of
on what could be done to manage the impending
extending credit to people who would otherwise not have
financial risk of the serious global economic crisis.
access to the credit market. When this collapsed, investment
companies folded as loans were not being repaid, leading
to ordinary businesses folding as they were unable to find Risk Management to Survive the
investors, pushing up interest rates, which led to decreased Crisis – What is the Australian
spending, unemployment, and, eventually, recession. A
country or countries are considered to be in recession if it
experiences two consecutive quarters of negative growth. As a result of these meetings, the Federal
Government established three measures –
How Has the Crisis Affected Australia?
1. guarantee on deposits
At first it seemed Australia may fall beneath the radar
of the US-led crisis, and although the country remains Applicable from the date of Prime Minister, Kevin
relatively well-off in comparison with many, as time Rudd’s press release on 12 October 2008, the guarantee
passes and the Australian economy moves through each was an assurance made by the government that
stage of the crisis, the blow is becoming more difficult to
weather with high interest rates leading to decreases in
retail sales, and increases in the unemployment rate as
businesses can no longer afford to employ their staff.
It was predicted that the unemployment rate in
Australia would increase by 7% by June 2010,
which equates to around 800,000 lost jobs.
The reality of the economic crisis hitting Australian
shores became apparent last year. A media release issued
by Prime Minister, Kevin Rudd, on 12 October 2008
opened with the ominous sentence - “Global financial
markets are experiencing some of the most challenging
conditions ever witnessed. In recent days, as global financial
conditions have deteriorated markedly, governments
around the world have taken unprecedented steps to
guarantee the liabilities of their financial systems.”
The unprecedented steps the government would take
“Global financial markets
were heavily influenced by talks held in a meeting held
by the G7 a week later. The G7 comprises of finance
ministers from the US, UK, Japan, Germany, France, Italy
are experiencing some
and Canada who attend regular meetings to discuss the
economy on a national and international level. Though
Australia is not included in the G7, the Federal Government
of the most challenging
considered solutions proposed by ministers at the meeting
and adopted many as part of its own risk management conditions ever witnessed.”
strategy for dealing with the global economic crisis.
100% of eligible deposits would be safe. This move the Australian financial system. In addition, these
was made to ensure Australia retained international measures will assist Australia’s financial institutions
market confidence in loans made through Australian weather the global financial turbulence.”
financial institutions, thereby decreasing competition.
Several other countries have a cap on deposits, but Additional Federal government Measures
under the Australian Government’s Financial Claims
Scheme, deposits held in Australian-owned banks, In addition to these measures, the Rudd government
Australian subsidiaries of foreign-owned banks, introduced the country’s first economic stimulus package
building societies and credit unions will be guaranteed in December 2008 for pensioners, carers, families and
for a three year period, after which the Scheme will first-home-buyers in an attempt to counteract the
be revised and the cap reviewed. Australia currently decrease in retail sales. The stimulus indeed boosted
has no limit on the amount of deposit made. spending over the Christmas period, and a second
$42 billion stimulus was recently introduced gradually
The guarantee applies to all types of deposits over a period of months, further increasing spending
(both retail and wholesale), and include savings; amongst those who received the cash handout.
passbook and cheque accounts; pensioner deeming
accounts; term deposits; mortgage offset accounts; The Government has also spent money on other projects
farm management accounts; first home savers such as improving general infrastructure and schools,
accounts and retirement savings accounts. as well as home insulation (to help cut air-conditioning
and heating costs), which has led to both improvement
2. guarantee of term funding for institutions in these areas as well as promoted job growth.
As quoted in his statement, Prime Minister,
Kevin Rudd explained the reasons behind the
Have These Measures Worked?
second guarantee – “The Australian Government As previously stated, retail sales and unemployment
will also guarantee wholesale term funding in Australia have declined, but the blow suffered has
of Australian incorporated banks and other been relatively soft. The stimulus has indeed increased
authorised deposit-taking institutions (ADIs).” the retail trade, with the Australian Bureau of Statistics
“The Government will offer the guarantee in reporting an increase in sales of 2.2% in March 2009 from
return for a fee in respect of eligible non-deposit February’s 2% fall. Combined with the decrease in petrol
debt obligations of Australian ADIs and foreign prices and the Reserve Bank’s stalling of interest rates,
subsidiary banks operating in Australia.” has meant the recession has been relatively mild for the
Australian economy thus far. Jobs in the retail sector have
This move was taken to enable Australian institutions remained relatively secure overall, with retail sales steadily
to raise funds overseas increasing by 6.3 per cent over the past 12 months.
and restore confidence
“...the Rudd in the credit market. Importantly, the world’s three largest credit rating
agencies, Standard & Poor’s, Moody’s Investor’s Services
3. Purchases of and Fitch Ratings), have recently evaluated the latest
government Residential Mortgage budget and declared Australia’s AAA credit rating secure,
Backed Securities a very good sign for Australia and foreign investor
introduced the from non-ADI lenders confidence. This followed the release of Rudd’s second
budget for the period of 2009/2010, in which a deficit of
On the other hand, to $57.59 billion was forecast, however a return to surplus
country’s first safeguard non-ADI lenders, was predicted to be achievable in at least six years.
the third major step the
government took aimed at However, the Opposition stresses that the increase in
economic stimulus ensuring these institutions spending has been a knee-jerk response to the global
retained the funding to financial crisis, and that once the money has been spent
survive. This decision it is likely the public will begin to rein its spending in and
package in was made in conjunction learn to become thriftier due to the large Budget deficit.
with the Governor of the It could easily be argued that this is something we all, as
individuals, could and should have been doing a lot earlier.
December 2008...” Reserve Bank of Australia,
the Chairman of the
The Rudd Government has achieved much to soften
the blow Australia has felt in response to the credit
crunch. But should the economy stabilise significantly
as well as the Secretary to the Treasury.
in days to come, the repercussions and fallout in the
As Kevin Rudd announced in his statement of 12 wake of the crisis will require much time and energy
October 2008, “Collectively, these measures will before Australians can truly move on with confidence.
reassure Australian depositors that their deposits
are safe and that they can have full confidence in
September 2009 grM 9
Risk Management to Survive the Crisis
– What Can We as Individuals Do?
While financial insecurity is the foremost fear in the majority
of minds, optimists and several notable economists perceive
the recession as a good opportunity for the community
to become more practical-minded, a chance for those
of us who live in a consumerist society to become more
aware of our spending and readdress our finances.
That being said, there are many steps we can take as
individuals to help cushion our personal blow.
• Pay off as many existing non-tax deductable debts,
loans or other repayments as possible. Cut-backs in
other areas of life can always be made and reducing
monthly bills will greatly aid family or individual
budgets, making other bills more manageable.
• Become more creative in entertainment and holiday
ideas. Rent videos and subscribe to free online news
and lifestyle newsletters. Opt for camping trips at one of
Western Australia’s many beautiful forest or parklands,
rather than pay for airfares and hotels overseas.
“...economists perceive the
• Get your hands dirty. Instead of paying for someone
to do your gardening, cleaning, washing, plumbing
etc, roll up your sleeves and do it yourself. The
recession as a good opportunity
internet is an amazing (and cheap) resource to
help you discover easy and affordable ways to
unclog your own shower head for example. for the community to become
• Mend clothes, or donate them to organisations such as
the Good Samaritans or St Vincent de Pauls. If the items
are too threadbare, recycle them into rags. Make use of more practical-minded...”
the aforementioned second-hand clothes shops to find
bargains for yourself while supporting a worthy cause.
• Buy local produce. If growing your own seems too much
of a mission, buy local. Whether at the local market
or major shopping centres, help keep the Australian
economy afloat by buying Australian-owned and made.
• Study. Learn new skills to improve your knowledge-
base and eventually your financial prospects. Taking up
the occasional night class on using Excel or MYOB can
dramatically open up job opportunities and promotion
within your current workplace. Stay-at-home parents
can use their spare time to produce items which
could later be sold at school fetes or local markets.
Take out Home and Contents, Vehicle, Medical/Dental and
Pet insurance. Turbulence in the economy can often have
an unpredictable knock-on effect on security and health.
It may seem your money is disappearing into a vacuum,
but should an emergency arise you will find the
benefits reaped are much higher in the long run.
riSk ManageMenT Broken!!
S ince the global economic meltdown there
have been numerous articles written,
presentations made and workshops run focusing
“Economic crises are in essence slow motion governance/
institutional failure crises”, and that “there remains
a business culture resistant to modern controls and
on whether risk management is broken. responsibilities, but in these uncertain times there needs to
be greater accountability to avoid future financial crises”.
An interesting development and indeed a curious twist
in looking for someone or something to blame for what The other aspect to all of this is that the management
appears to simply be poor management decisions. As with of risk is not a precise science and anyone portraying
any major incident there is always a period of looking it as such is only setting themselves up for failure. It is
for someone to blame, which is of course human nature. important to remember past history is only an indicator
However in this case risk management itself is being of what has happened in the past, it is not a complete
blamed as a key driver of the global financial crisis. assessment of what could happen in the future. This is
why it is so important to have the right people involved
Historically, the economic cycle goes through booms in the assessment of the risks, those who know the
and busts, the only things that vary are the duration business, its processes and what could go wrong.
and size of the respective cycles. This time around,
the bust has been significantly bigger because of the The key for managers is to use risk assessment
business practices of some sectors of the financial information to help inform their decision making. A risk
markets. Dare we suggest that management has failed assessment in isolation is not conclusive as it needs to
not risk management? Certainly it appears reasonable to be considered along with the opportunities or benefits of
suggest that management have failed in their risk taking the activity, the organisations goals and its motivators.
decisions - it is not the risk management the process that
is broken but more management attitude to risk taking. In short, risk management itself is not broken but more
specifically those people who should be using risk
In the boom times it is easy for management to get information have either failed to do so or chosen to take the
caught up in their own successes and take a somewhat risk to capitalise on an opportunity. As we have seen with
more laissez faire attitude toward risk taking. No matter the current financial crisis, the opportunity perceived has
which risk management methodology some organisations not materialised, if they did in fact exist in the first place,
have used, the risk information generated has been and the risks should have been known and managed.
largely ignored, as the greed factor has taken over.
A risk management culture needs to be driven from
It is obvious in hindsight that many organisations, both the top with clear commitment from the Managing
private and public, have in fact been going through the Director or Director General and it is essential to
motions of managing risks, simply going through the maintain a balance between opportunity and risk. Senior
process for compliance purposes or to satisfy questions executives and Boards must also take a more active
from key stakeholders. It is fair to say that management role in communicating their commitment and using
have failed to use risk information to inform their decisions. risk information to make well informed decisions.
It appears that to many managers the risk management
process has been an end in itself, in that as long as the
organisation could tick all the boxes ie. having a risk
management policy, a risk register and the like, then the
organisation was managing its risks. However, it is evident
risk-based decision making has not been widespread
across many organisations. This indicates that many
organisations have actually failed to embed thorough
risk thinking into the culture of the organisation.
It is also fair to ask what has happened to controls
assurance, audits and for that matter corporate governance,
since these are all mechanisms put in place to mitigate
the manifestation of risks. But, like risk management,
these practices are only as good as the people doing
them. It appears that when business is booming people
tend to put less emphasis on the checks and balances,
perhaps believing that things will not go wrong. There
“...risk management itself is
is a clear correlation between increasing returns and the
amount of risk taking - sometimes to a dangerous point
being blamed as a key driver of
where the amount of risk taken has appeared to become
irrelevant. The former vice-president of the World Bank the global financial crisis...”
and European Commission auditor, Jules Muis says,
September 2009 grM 11
Bridging The gap
I n a major incident such a cyclone, bush fire, chemical
spillage or gas explosion, when a large section of
a community is impacted it requires public sector
such as fire, bomb threat, accidents and natural disasters,
provision of first aid assistance and emergency evacuation.
Such requirements are typically driven by occupational
agencies and private industry to work together to safety and health regulations and code of practices.
minimise disruption to the community, businesses
and services, and to recover as quickly as possible. EM practitioners generally tend to have backgrounds in
security, law enforcement, military, fire fighting, facilities
Effective response to disasters requires Emergency management, occupational safety and health and other
Management (EM) and Business Continuity Management public sector emergency response agencies. Their skills set
(BCM) disciplines to work together, yet there is often typically includes an understanding of the human impact
a lack of understanding of the roles and linkages of disasters, safety and security, hazmat, and first aid.
between the two. This often leads to gaps in emergency
response and business continuity planning. BCM on the other hand, is organisation specific and
aims to restore critical business activities within pre-
determined timeframes defined by the business. BCM
Characteristics of EM and BCM typically encompass IT disaster recovery planning,
The priority of EM is the protection of life, property and business continuity planning and crisis management.
environment. EM may be community or workplace focused. The approach is business impact driven, ie. resumption
Community focused EM deals with large scale incidents of business activities are prioritised according to the
impacting the community and is usually well rehearsed perceived severity of the impact of the disaster to the
and well understood by the public authorities, various organisation over time. Activities that have unacceptable
government agencies and organisations responsibility for impacts are restored first whilst others are deferred.
the state’s critical infrastructure. Typically, an ‘all hazards’ and
multi-agency approach is BCM practitioners generally tend to have backgrounds
taken to prevent, prepare, in business management, operations, audit, information
respond and recover from technology, and risk management. Their skills set
“BCM typically disasters. EM requirements typically include an understanding of the business
in public sector are impact of disasters, business processes and work flow,
mandated by legislation supply chain interdependencies and technology.
encompass IT disaster such as the Emergency
Management Act 2005 and gaps between EM and BCM
Local Government Act 1995.
When an emergency such as an explosion, building
recovery planning, fire or chemical spill occurs, the priority is protection
Workplace focused EM
comes under the general of lives and property. It is about getting people out
‘duty of care’ obligations safely, tending to the injured, search and rescue, and
business continuity of employers and facilities preventing the spread of the fire or spill. Once these
owners to protect anyone are tended to, the focus shifts to business continuity
on their premises and – how do we resume critical business activities and
planning and crisis ensure that arrangements return to business-as-usual as quickly as possible.
are in place to respond
It is not uncommon to find that organisations with strong
to potential emergencies
EM practices often do not have BCM, and vice versa. It is
management.” that might occur. This may
unusual to find organisations that have in place both good
include procedures for
EM and BCM arrangements, although this is beginning to
responding to emergencies
change with greater awareness of EM and BCM.
The dichotomy in EM and BCM practices may partly be
due to the nature of the industry and the inherent risks that
organisations in different industries are used to dealing with.
Procedures for responding to emergencies are generally
well established and practised in process industries such as
mining, water treatment and petrochemical. They typically
have teams of people trained as first responders to deal
with emergencies until professionals from emergency
services arrive. They often work closely with public sector
agencies on emergency management and planning, and
are often involved with the community through bodies
such as the Local Emergency Management Committee
(LEMC). However, these organisations tend to focus their
emergency planning on breakages to their process flow
(e.g. ‘what if this pump breaks’) rather than on issues of
business continuity (e.g. ‘what if we cannot deliver gas’).
The opposite usually holds true for many organisations
in the service industry such as banking, insurance, real
estate and professional services that characteristically
operate in an office environment. Responsibility for
emergency management is often relegated to ‘building
management’, which more often than not, does nothing
more than facilitate building evacuation. Issues that have
anything to do with staff are referred to the Human
Resources (HR) department, never mind that most HR
Photo courtesy of the National Security personnel are not trained or ill equipped to deal with
Capability Development Division, traumatic situations. These organisations, nevertheless,
may have in place strategies and arrangements
for the backup and recovery of critical data and
infrastructure, and continuity of business operations.
“The key to bridging the gap is Bridging the gap
Every disaster requires emergency management and
every disaster causes some kind of business impact. The
first to recognise the ‘response relationship between EM and BCM is symbiotic, and truly
resilient organisations and communities require both.
continuum’, that all disaster Response continuum
The key to bridging the gap is first to recognise the
response progresses through ‘response continuum’; all disaster responses progress
through three phases – emergency, continuity and recovery.
three phases – emergency, The emergency phase refers to the period when an
incident poses an immediate threat to life and safety.
Irrespective of whether you operate on an oil platform
continuity and recovery.” or in an office block, plans and procedures must be in
place for responding to life threatening emergencies. It
means providing staff the knowledge and skills needed
to protect themselves and others, and to safely remove
themselves from the threatening environment.
September 2009 grM 13
The continuity phase is initiated after the emergency phase for businesses to access a network of expertise on emergency
and when business interruption occurs as a result of the management and to form a better understanding of the limitations
incident. This phase focuses on managing the consequences and resources of public sector agencies. Likewise, it allows public
of the incident (eg. interruption of services to customers) sector agencies to better understand private sector risks, priorities,
rather than on managing the incident itself (eg. putting out requirements and dynamics of business continuity. Overall,
the fire). This may include relocating staff to work from an everyone, including the community, gains through pooling of
alternative premise, redirecting communication links with expertise and information, better communications, coordinated
customers, restoring critical data and IT services to users. response and recovery efforts, and sharing of training opportunities.
The recovery phase is concerned with bringing operations Cross-disciplinary skills
back to normal in the long term. Restoring and rebuilding
damaged or destroyed records, equipment, facilities and Building resilient organisations and communities requires
premises are key activities undertaken in this phase. cross-disciplinary skills to be brought together. Whilst job
It also deals with the long term impacts on employees specialisation is necessary to ensure competency in emergency
and their families, taking care of the psychological management, occupational safety and health, security and
needs of those traumatised by the disaster and bringing business continuity, it could also potentially hinder an
the workforce back into normal operations. organisation’s timely response to emergencies since overlaps and
misunderstanding of roles and terminologies inevitably occurs.
The emphasis placed on each phase varies with the
nature of the industry or work performed in the Education thus plays an important role. Knowledge and
organisation. For example, the response arrangements proficiency in EM is a logical extension to the skills set of
for a museum will emphasise the emergency (evacuating the business continuity manager, and vice versa for the
people and limiting damage to collections) and recovery emergency manager. The more they know and understand
(restoration of damaged collections) aspects. The what the other does, the better able they are to narrow the
museum may be closed for as long as it takes to recover gap that traditionally separates the two disciplines.
and restore the collections, and business continuity
becomes secondary along the response continuum. Joint Exercises
Traditionally, EM and BCM exercises tend to be held independent
In the case of a bank, the core focus is on business
of each other. For example, building management may conduct
continuity as soon as life and safety issues are taken care
an emergency evacuation drill, a chemical plant may run an
of. The business impact to the bank and its stakeholders
emergency response exercise for a gas leak or a public sector
increases in severity the longer the interruption lasts,
authority may carry out a cross-agency simulation of an air
hence the motivation to resume critical activities
crash. These exercises are seldom carried out with consideration
quickly, sometimes within hours of a disaster.
of the impact on businesses and the processes needed to
Understanding the restore critical business activities and services to customers.
response continuum and
“Building resilient relating this to the nature
Similarly, BCM exercises generally tend to assume that emergency
response will somehow take care of itself, and the majority of
of the industry or business
employees will escape the emergency unscathed, will make
allows the organisation
themselves available and will be mentally capable of carrying out
to deploy the appropriate
business continuity tasks immediately following a disaster. Such
organisations levels of resources and
assumptions are misleading and give a false sense of assurance
skills sets towards EM
that the business continuity plan would indeed work in a disaster.
and BCM planning.
Joint exercises where EM and BCM processes are tested
and communities Public-Private concurrently help to identify gaps in the response continuum
Partnership and build a better understanding of the inter-linkages
Developing public-private between EM and BCM. Industry-wide exercises involving
partnerships (PPP) helps public sector agencies and private sector businesses provide
requires cross- to forge closer ties between opportunities for participants to test their planning assumptions
emergency response and response strategies under realistic scenarios.
agencies, public sector
organisations and private
disciplinary skills...” businesses. PPP provides
an excellent platform
Truly resilient organisations and communities require EM
and BCM to work seamlessly. BCM takes off from where
EM ends, and although they have a different focus and
objectives, and require different skills set, they are part of
the same response continuum. Whilst a ‘merger’ of these
disciplines is unlikely and unnecessary, it is imperative that
professionals in EM and BCM understanding the linkages
between the two and that each develops a minimum level
of proficiency in the other in order to bridge the gap.
Photo courtesy of the National Security
Capability Development Division,
“...resilient organisations and
communities require EM and
BCM to work seamlessly.”
September 2009 grM 15
AgRICuLTuRE AND FOOD
BEST PuBLIC SECTOR LEADERSHIP FOR INJuRY
PREVENTION AND MANAgEMENT
O n October 24, 2008 The Department of Agriculture
and Food (DAFWA) received recognition
at the Safe Work Australia Week safety award
Applying Risk Control Measures
DAFWA has a diversity of risk exposure across the work
ceremonies, by being adjudged ‘Best Public Sector its staff perform. The Department demonstrated a strong
Leadership for Injury Prevention and Management’. commitment to minimising risk of injuries using a variety
of processes to identify hazards and manage the risks.
DAFWA is a diverse organisation, both geographically
and functionally, with approximately 1,700 employees. These measures include:
The head office in South Perth has approximately 650 • application of job hazard analysis and development
staff and while the majority are administration and policy of work instructions for technical work tasks;
officers, it is also a centre for crop breeding activities with
• use of a risk assessment matrix process
glasshouses and a plots area devoted to early stages of trials.
for agricultural chemicals;
There are five regional offices at Bunbury, Albany, • manual handling risk assessments and
Northam, Geraldton and Kununurra with a range of reviews in targeted injury areas;
district offices within each of the five regions. Staff in
• continuous improvement to design and
these offices are actively involved in a variety of research
purchase of machinery eg. elimination of
programs, natural resource/ salinity management and
nip points on seeding machinery;
development work with farmers, often on their properties.
• monitoring of health surveillance data eg.
There are also a number of research stations/ organophosphate blood tests and skin cancer screening;
farms (some in remote areas of the state) which
• checking of workplace machinery and equipment
are used for crop trials and animal research.
changes for effectiveness in consultation with users
eg. manual handling aids in plant breeding;
• maintaining a risk assessment emphasis in
A safety culture has been developed at DAFWA by training courses eg. driver training, and piloting
identifying roles and responsibilities for all levels of prior to implementation with managers, staff and
management and staff and integrating Occupational OSH reps. The value of the training is promoted
Safety and Health (OSH) into departmental processes. in both a work and home environment;
The vital element that has been the driver to achieve
a safety culture has been senior management
commitment in demonstrating ‘safety leadership’.
This has included:
• financial support of initiatives agreed in annual OSH
strategies and prioritising safety in capital expenditure
decisions eg. $190,000 for conversion of windmills to
solar powered pumps to eliminate falls from height risk;
• executive/ senior management support
and participation in OSH related training
programs eg. driver training.
The continued monitoring of OSH programs such From left to right
as mandatory training, inspections, and policy John Titterington, Minister,
meetings involving executive leadership has been Mike Marsh, Jon Dodd,
fundamental in making improvements. Monique Kubank, Karen
Hayes, Phil Taylor, Ian
Longson, Emma Bluett and
• procurement systems that
monitor application of OSH
requirements for service
contractors and purchase of new
machinery and equipment taken
on through the tender process;
• developing an early intervention
injury management program;
• implementing a health
and wellness program.
Review and Evaluation
Extensive consultative mechanisms
have been put in place by setting up a
departmental OSH Policy Committee
(established in 1997) with regional OSH
reps, management representation and
chaired by a member of the Executive.
Skin cancer check
This has been complimented by having
local OSH Committees or staff meetings
with an OSH component in all districts
across WA and organisational areas within the head office. Outcomes Achieved
A number of significant outcomes have been achieved
The organisation has been able to review and integrate OSH
during the previous 10 financial years as a result of the
and Injury Management with other departmental systems
Department’s successful programs which include:
and continuously improve by implementing the following:
• decreased the number of claims and lost time
• quarterly performance
injuries (LTIs) by 54% and 65% respectively;
reporting on injury
“The vital element rate trends and • reduced its LTI incident and frequency
lead indicators; rates by 65% and 62% respectively;
that has been the • quarterly review of • reduced the average number of days lost from a
progress with agreed peak in 1999/00 of 48.9 to 15.4 days on 2007/08;
driver to achieve OSH initiatives • two out of the last three years there has been no
and outcomes; Severe LTI (time lost greater than 60 days);
a safety culture • annual review of driver • reduced actual total annual claims cost from a peak
safety statistics; $596,000 in 1998/99 to $156,000 in 2007/08.
has been senior • incident data monitored
Since DAFWA was recognised for its Workplace
for any repeat injuries
Driving Safety Program in 2001 it has been used
management for activities where risk
as a case study by the Office of Road Safety for
industry and by RiskCover for the Public Sector.
have been put in place;
• internally targeted The Department has extended the application of its
reviews of the OSH systems to other organisations it works with in its
demonstrating application of collaborative research programs. It has also provided support
OSH systems; to groups set up to improve OSH within the agricultural
‘safety leadership’.” • bi - annual review of
industry, such as Farmsafe Alliance and Chemcert.
all policies by the OSH The Department’s achievements have come from a
Policy Committee; consistent focus over an extended period of time – it
• auditing OSH functions using the WorkSafe Plan has been no overnight success. To get the engagement
Assessment tool every 4 years since 2000. of managers and staff in OSH requires a demonstrated
commitment from the organisation – senior management
at DAFWA have provided that commitment. The rewards
have not just been financial - they have provided a broader
positive impact on the quality of life of departmental staff.
September 2009 grM 17
DAFWA LTI Duration Rate 1998/99 – 2007/08
98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08
DAFWA Workers Compensation costs 1998/99 – 2007/08
This graph shows current actual cost of claims including estimates
98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08
DAFWA injury data1998/99 – 2007/08
98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08
Workers Comp Claims 94 89 68 56 43 72 58 55 53 41
Lost Time Injuries(LTIs) 43 37 29 21 19 27 17 21 27 15
Frequency Rate (No of LTIs
13 11.1 8.8 6.8 6.3 9.0 5.5 7.0 8.7 4.9
per million hours worked)
To Senior ManageMenT
Buy-in on BuSineSS
G etting senior executive buy-in and commitment
continues to be the biggest obstacle to getting
an organisation’s business continuity management
While it may be effective, driving BCM from a compliance
perspective, however, is not necessarily the most desirable
method, and often leads to a tick-in-the-box mentality
(BCM) programme off the ground and sustaining it on rather than a true desire for a workable plan. Compliance
an ongoing basis. The challenge for BCM leaders is with BCM requirements does not guarantee that strategies
twofold — first, to secure commitment to get the BCM will indeed work or that employees will be capable of
programme underway, and secondly, to sustain the responding effectively when disaster strikes.
BCM programme on an ongoing basis at all levels of Things which are not picked up by audit but are nonetheless
the organisation once plans have been implemented. important may be overlooked. As such, this motivator
should be used sparingly and not be over-emphasised.
BCM leaders can use five core motivators to achieve
buy-in and commitment. These motivators are not good management practice
mutually exclusive but complementary to each other,
and when used appropriately and at the right time, may This motivator appeals to the sense that BCM is part of
be just what is needed to get senior executives going. good corporate governance and is therefore the prudent
thing to do. Minimising the impact of operational
disruptions, building resilience to failure and having the
Motivators ability to respond effectively should the unexpected occur,
Compliance all make good business sense. It would be hard to argue
against a case for good corporate governance, but one
Someone once advised not to waste time trying to work with must bear in mind the myriad of issues, initiatives and
those who are not keen on agendas that are competing for the same limited pool of
business continuity because resources, money, time and senior executives’ attention.
‘they will come running back
“Can you afford to you when audit knocks It is not enough to only espouse the notion that BCM is
on their doors’. In itself, this good management practice. It has to be demonstrated.
perhaps is not good advice, An effective approach to motivating senior executives into
but the need for compliance action is to have them participate in a tabletop exercise.
with regulatory, audit or Such an exercise often provides some eye-openers for
not to do it if your fiduciary requirements participants — the underestimation of the damaging
is usually a very strong consequences to the business of an outage, the current
motivator for senior state of unpreparedness in dealing with major incidents,
executives. Non-compliance and the mistaken assumption that the organisation will
with regulations often carries have the management capacity and capability to deal
peers or competitors significant consequences
for the organisation.
with the outage as it happens. It will very quickly become
evident to the executives that preparing for the unexpected
This could include public is all about prudent management and duty of care.
censure, financial penalties,
embarrassment and even What are the competitors doing
curtailment or loss of
are doing it?” licence. Audit outcomes
This brings to bear the pressures from peers and
competitors, and raises the question, ‘Can you afford
are reported to senior-
not to do it if your peers or competitors are doing it?’
level audit committees
When disaster strikes, the organisation that is better
and the board, and habitual non-compliance with
prepared to meet delivery deadlines and customer
requirements reflects negatively on the executives.
expectations through more resilient operations and
September 2009 grM 19
that is better able to recover quickly clearly has the increase in senior executives’ interest in BCM when
advantage. Can senior executives afford to sit by notice is given of an impending BCM audit or a visit
nonchalantly knowing full well that their competitors from the regulators. This presents the BCM leader with
are developing and enhancing their BCM capabilities? an opportunity to help the executive avoid some pain
by introducing the appropriate BCM framework and
In some instances, peer pressure within an organisation processes, and get others onboard with the programme.
can also serve as a good motivator. Work with those who
want to work with you on the BCM programme, and
others will follow. Generally, managers do not want to
be perceived as being uncooperative and they certainly While the motivators could get senior executives into
do not want to be left behind. This is usually a good action, it remains the task of the BCM leader to provide
motivator as senior executives generally do not want to the necessary leadership to sustain the attention
be perceived as lagging behind the rest of the pack. and efforts on business continuity. The five core
motivators are complemented by five core reinforcers
Impact on bottom line that focus on the actions of the BCM leader.
This motivator considers the impact of BCM on
the organisation’s performance and business
Reinforce the message
opportunities. Would a BCM programme help to To keep BCM on the front-burner, the BCM leader should
win more contracts, pay fewer charges, make more use every opportunity to reinforce the message. This may
money or make more efficient use of resources? take the form of drawing senior executives’ attention to
current events that have BCM implications, highlighting
In the financial services industry, large corporate clients lessons learned from past incidents, and encouraging
are increasingly demanding their bankers provide their participation in BCM workshops and exercises.
evidence of robust business continuity arrangements as
a condition of doing business. In some countries, public Keep a dossier of BCM war stories — newspaper clippings,
sector procurement policies require suppliers wanting video clips, articles, photographs, anything that can be used
to do business with government to have robust BCM to illustrate the application of BCM. Executives who have
arrangements. These are very strong motivators for faced a disaster in their current or previous organisations,
organisations to get their BCM programmes in shape. or have witnessed one that happened to a close associate
tend to take BCM more seriously. Get them to share
What is in it for you? their experience. They make good opinion leaders.
The final motivator personalises BCM by using the stick- Track and report incidents that occur in the organisation
and-carrot principle — what to the executives on a regular basis, and highlight the
is in it for the executive in business impact and lessons learned. This helps to reinforce
“An executive way of gain or avoidance of
pain? This motivator builds
the message that incidents occur more regularly than
executives tend to think, and it pays to be prepared.
on the previous four by
may want to appealing to the personal
Look for and use leverage
stakes that executives may
demonstrate good have in BCM. People are Take advantage of the circumstances to get senior
more likely to act when executives excited about business continuity when
risk management they have an economic or a BCM-related issue presents itself. Any of the
emotional interest in the motivators described earlier provide good leverage,
and corporate actions that they take. but one must keep a lookout for opportunities and
exploit the situation when conditions are right.
governance practices An executive may want
to demonstrate good Sometimes it takes a serious incident to hit an organisation
in BCM in order risk management and before executives take heed about BCM. On one hand,
corporate governance this is shutting the gate after the horse has bolted,
to get ahead of practices in BCM in but it is also the time when the BCM voice is heard
order to get ahead of his the loudest and when people are most receptive to
his peers...” peers, meet a personal making changes to their attitudes and behaviour.
performance objective or
The BCM leader could also use the time when there
simply to look good to
are personnel changes in the senior executive team
his boss, but whatever
to get a fresh mandate on BCM. A new director may
the personal agenda is, it is also good for BCM.
turn out to be a staunch supporter of BCM, or a major
The converse, pain avoidance, may work well too in obstacle to BCM may be removed with the departure of
some instances. It is not uncommon to see a sudden a senior executive. Times of organisational change can
often provide opportunities for repositioning BCM.
Compare and organisation. This lets everyone know where everyone else
“Sometimes it takes benchmark stands. No manager wants to be flagged as lagging behind.
Compare and benchmark Demonstrate value
the organisation vis-à-vis
peers and competitors in Any BCM leader needs to constantly demonstrate the
a serious incident to various aspects of BCM. value that they bring to the organisation. Step up to the
While the CEO may not plate at every opportunity, take charge and demonstrate
aspire for the company to leadership before, during and after an incident. Make
be in the top for BCM, he BCM visible and let senior executives see BCM in action.
hit an organisation certainly does not want to be This helps them to appreciate the value of BCM and
anywhere near the bottom to reinforce their commitment to the programme.
either. Benchmarking is an
excellent way to find out All too often, departmental heads and their staff
before executives take where the company stands have a silo mentality: ‘this is what we are responsible
and where it wants to be, for and everything else is for others to take care of’.
and it gives a good basis When an incident occurs, this cannot work. Incident
for identifying gaps and response requires cross-disciplinary coordination
heed about BCM.” promoting the BCM agenda. across a broad spectrum of expertise, cutting across
organisational functions and reporting lines. Given the
It is also possible to role of BCM, this is an opportune time for the BCM
benchmark the BCM leader to step in and take control of the situation.
programme against established BCM standards such
as BS25999, regulatory requirements, or good practices Go for the quick wins and make a visible difference
guidelines such as those published by RiskCover or early in the process. Apply the 80/20 rule. Do not spend
the Business Continuity Institute (BCI). This gives months trying to perfect everything in the plan before
the empirical evidence to back any assertion for implementing it. Remember that BCM is an iterative
greater commitment to the BCM programme. process — push out what is ready, test it, and then
improve on it. Provide 80 per cent of the deliverable
A scorecard to keep track of progress of each business area within 20 per cent of the time allotted. Senior executives
is also a good tool to help keep BCM in check within an lose patience when they do not see results quickly.
September 2009 grM 21
Continue to chip away
People often lament that getting senior executive buy-in
and commitment on BCM is much like pushing spaghetti
uphill. It can be extremely frustrating and discouraging
to do all the work only to be let down due to the lack of
senior management resolve to commit resources to BCM.
However, the fact that anyone has been asked to
look into BCM or to justify why BCM is required is
half the battle won. Perhaps some senior executives
need more convincing than others — they have more
pressing priorities, or they have other personal agendas.
The challenge for the BCM leader is to persevere
and build the BCM programme one block at a time.
Work with those who are keen and committed, and
work on those who need more encouragement.
Education is key, and the BCM leader needs to continually
raise the profile of BCM among senior executives, as
well as awareness of the threats and consequences of
business interruptions. Clarify what BCM is and dispel
“Education is key, and the BCM
misconceptions about BCM. Many today still think that
they have their entire organisation covered because they
have an IT disaster recovery or emergency response plan. leader needs to continually
raise the profile of BCM
among senior executives...”
CRITICAL CASE REVIEW
LIABILITY FOR NEgLIgENT EXERCISE OF STATuTORY POWERS:
STuART V kIRkLAND-VEENSTRA  HCA 15
A recent article in this magazine (GRM Vol 8 Issue
17 July 2008, pp. 5-7) discussed the complex and
uncertain legal area of when public authorities may be
Significance of absence of
power to apprehend
found liable for the negligent exercise or non-exercise French CJ held that, in the particular circumstances, no
of statutory powers. More particularly, the difficulty relevant duty of care was owed by the police officers to Mr
in predicting the circumstances in which a duty of Veenstra or to his wife because, on the facts, “the critical
care arises in a statutory context was illustrated by statutory power conferred by section 10, which was in the
the differing approaches adopted by courts in New end the foundation of the duty of care in the circumstances
South Wales and Victoria in respectively Hunter of the case, did not exist” (). More particularly, the
Area Health Service v Presland (2005) 65 NSWLR 22 Chief Justice held that the police lacked the power of
and Kirkland-Veenstra v Stuart  VSCA 32. apprehension conferred by section 10, and so fell under
no duty of care in relation to the exercise of that power,
In the former case the Hunter Area Health Service was held
because the power could be exercised only if the officers
not to owe a duty of care, and so not be amenable to an
had formed a subjective belief on reasonable grounds that
action in negligence to Mr Presland when deciding whether
Mr Veenstra was mentally ill and likely to attempt suicide.
to detain him as an involuntary patient under New South
Wales’ Mental Health Act 1990. By contrast, in the Kirkland- The trial judge had accepted the testimony of the police
Veenstra case it was held that police officers had fallen under officers that they did not think that Mr Veenstra was
a duty to a person who had recently contemplated suicide mentally ill and that they had not come to the view that
(and who did commit suicide subsequent to his contact he was likely in the short term to attempt suicide. Those
with the officers) to exercise care in considering whether to findings had not been challenged and the Chief Justice
exercise their power under section 10 of Victoria’s Mental accepted that the officers were entitled reasonably to form
Health Act 1986 to apprehend a person “who appears to be the view which they did. As French CJ observed at :
mentally ill” if the police officer “has reasonable grounds
“The fact that a person has decided to commit suicide
for believing that … the person has recently attempted
may indicate deep unhappiness or despair. It does
suicide or … is likely by act or neglect to attempt suicide”.
not mean that the person is mentally ill within the
meaning of [the Mental Health Act]. Mr Veenstra’s
Outcome of High
“...no relevant Court appeal
rational and cooperative responses observed by the
officers supported their opinion. The facts as found
exclude the possibility that the officers had formed
The article noted that the
the belief, after their conversation with Mr Veenstra,
High Court had granted
that he was likely, shortly, to attempt suicide.”
special leave to appeal in the
statutory power to Kirkland-Veenstra case and It followed that the pre-conditions for the exercise by the
concluded with the hope that officers of the Mental Health Act’s power of apprehension
that decision would provide had not been satisfied and that therefore there could be no
clarity in this difficult area. In liability in the respect of the failure to exercise that power.
the event a unanimous High
Court (Stuart v Kirkland- Crennan and Kiefel JJ agreed that, as neither police officer
which a common law Veenstra  HCA 15, had formed the view that Mr Veenstra was mentally ill,
per French CJ, Gummow, the officers had no power to apprehend him and that,
Hayne, Heydon, Crennan accordingly, there was “no relevant statutory power to
and Kiefel JJ) on 22 April which a common law duty could attach” (at ).
2009 overturned the decision
duty could attach.” of the Victorian Court of
Appeal, thereby reinstating
the original dismissal of
the action by the trial
judge. However, their approaches were not unanimous.
September 2009 grM 23
No duty to “rescue” of being rescued. An obligation to rescue would arise
“...the question was Gummow, Hayne and
only where there existed some factor or combination
of factors (going beyond simply an ability to assist and
Heydon JJ, on the other
whether there existed hand, declined to determine
harm being foreseeable if assistance was not given)
giving rise to a relationship creating such an obligation.
“a relationship whether the apprehension
In the context of the exercise of statutory powers, the
power in section 10 was, on
between the authority the facts, available to the question was whether there existed “a relationship
defendant police officers, but between the authority [here the holder of statutory
[here the holder of came to the view that, even power] and the class of persons that, in all the
if it had been available, a circumstances, displays sufficient characteristics
statutory power] power to avert or minimise answering the criteria for intervention by the tort of
harm to those contemplating negligence” (at , citing Graham Barclay Oysters
and the class of self-harm was not of itself Pty Ltd v Ryan (2002) 211 CLR 540 at 596-7).
persons that, in all sufficient to give rise to a
duty in the officers to take
Those characteristics included, among other things,
the degree and nature of control which could be
the circumstances, reasonable care to protect
exercised over the relevant risk of harm, the degree of
Mr Veenstra from harm.
vulnerability of those in relation to whom a power could
displays sufficient Their Honours emphasised be exercised, and the consistency of the asserted duty of
characteristics...” that the law recognised care with the intent and terms of the relevant statute.
no general duty to rescue
In this case, the police officers had knowledge of, but did
a person, even though
not control the source of, the risk to Mr Veenstra. The
the person was capable
source of the risk was Mr Veenstra himself. This absence of
control was seen as “of critical significance” . The fact of What can be drawn from Stuart
the officers’ arguable ability to apprehend Mr Veenstra was
not sufficient to distinguish the position of the police officers v kirkland-Veenstra?
from the position of any ordinary passer-by seeing a person While the High Court’s decision was unanimous and there
in danger, as “the passer-by can almost always do something was general agreement in principle as to the principles
that would reduce the risk of harm” (at ). In short, the to be applied by a Court when determining whether
circumstances of the interaction between the officers and a person or body vested with statutory powers will be
Mr Veenstra fell within the ordinary principle that a person held liable in damages for a negligent failure to exercise
fell under no duty to endeavour to rescue a third party. such powers, the application of those principles remains
uncertain. On the same facts, three judges would have held
… or was there a duty to rescue? that a negligent failure by Victorian police to apprehend a
suicidal mentally ill person would not have given rise to
Crennan and Kiefel JJ, while agreeing that no duty of
an entitlement to damages; two judges were of the view
care arose in the circumstances of this case, nevertheless
that a damages entitlement might well have arisen.
contemplated the possibility that a duty of care to Mr
Veenstra might have arisen had the Mental Health Act It is clear that government agencies and officers vested
authorised his apprehension. Like Gummow, Hayne and with statutory powers cannot assume that, from a risk
Heydon JJ, they acknowledged that “[t]he common law management and liability perspective, a decision not
generally does not impose a duty upon a person to take to exercise a power carries with it some benefit which
affirmative action to protect another from harm” (at ). is lost when the power is exercised. Any power must
be exercised in accordance with the relevant statute or
However, without expressing a final view on the issue,
regulations and in the knowledge that, subject to the terms
they saw merit in the argument, accepted by the majority
of any statutory protection, there is always the potential
of the Victorian Court of Appeal, that where a statute
for civil liability if reasonable care is not taken - whether
(and they clearly had in mind the Mental Health Act)
in the exercise or in the non-exercise of that power.
“provides significant and special measures which may
be seen to be directed towards the risk of harm to a
class of persons or property” (at ), there existed
an element of control which resulted in a relationship
between the repository of the power and the protected
person sufficient to give rise to a duty of care.
In other words, had the police officers been empowered
to apprehend Mr Veenstra, Crennan and Kiefel JJ, unlike
Gummow, Hayne and
Heydon JJ, may have
concluded that a duty of
“Any power must care was owed to him; ie
may have concluded that the
officers would be liable in
the tort of negligence to Mr
be exercised in Veenstra’s estate and widow
had they unreasonably failed
to exercise that power.
the relevant statute
July 2008 grM 25
The Forrest Centre
221 St Georges Terrace
Perth WA 6000
Telephone: 9264 3333
Facsimile: 9322 1557
The material contained in this publication is provided as general information only. If you have particular
circumstances requiring specific opinion please refer the matter to the author of the relevant article.