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2010; Risk Management Workshop Rev.1.1


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The Risk Management Workshop & Brainstorming for PT. Berau Coal Operations

2010; Risk Management Workshop Rev.1.1

  1. 1. A risk management workshop<br />PT. Berau Coal<br />
  2. 2. Workshop Overview<br />Objectives<br />Why the need for Risk Management?<br />Introduction of Risk Management Terms<br />Hazard Identification & Awareness <br />Overview of Risk Assessment Methodologies<br />PT. Berau Coal Risk Assessment Procedure<br />
  3. 3. Objectives<br />To introduce risk management terms & methodologies.<br />To provide an understanding of the need for risk management.<br />Refresh hazard identification principles.<br />To introduce a Risk Assessment Methodology to be adopted at PT. Berau Coal [PTBC].<br />To ensure key personnel are familiar with risk assessment methodologies & can perform/assist in conducting team based risk assessments for the operations.<br />
  4. 4. Why need formal Risk Management?<br />Duty of Care<br />Greater Community Care<br />Legal Requirement<br />Company or International Standard Requirement<br />Good Business Process Sense<br />
  5. 5. Duty of Care<br />Risk Assessment is a basic management tool & a fundamental process in meet to PTBC - Duty of Care;<br />To provide safe systems of work & a working environment whereby employees are not exposed to hazards & risk.<br />Expected of “reasonable” employers and employees<br />
  6. 6. Greater Community Care<br />No Accidents/Disasters<br />No Damage to the Environment<br />No Impact on Natural Aesthetics<br />Solid Citizenship<br />Community Confidence & Longevity of Support<br />
  7. 7. Legal Compliance<br />Risk Assessments are a statutory requirement in Indonesia, as inferred in the Minister of Mines & Energy Decree No. 555.K/26/M.PE/1995 regarding Occupational Health & Safety in General Mining.<br />The Minister of Manpower Decree No.PER.05/MEN/1996 [regarding Occupational Health & Safety Management System].<br />Indonesian Act No.1/1970, Article 9.<br />
  8. 8. Comply to Internal & International Standards<br />OHSAS 18001: Clause 4.3.1- <br />Hazard Identification, Risk Assessment & Risk Control<br />The organization shall establish and maintain procedures for the ongoing identification of hazards, the assessment of risks, and the implementation of necessary control measures.<br />The organization shall ensure that the results of these assessments and the effects of these controls are considered when setting its OH&S objectives. <br />The organization shall document and keep this information up to date.<br />
  9. 9. Makes a good Business Sense<br /><ul><li>Demonstration of Corporate Governance and Due Diligence.
  10. 10. Reduction in Loss (personnel, property, health, environment).
  11. 11. Maximizing Profit and to Prevent the Loss.
  12. 12. Increased Community Perception.
  13. 13. Shareholder confidence.</li></li></ul><li>The True Cost of Loss<br />Economic Aspect; Direct Costs & Indirect Costs<br />Insured Costs - Injury, Illness, Health, Damage, etc.<br />$ 1<br />Uninsured Costs - Product & Material Damage, Plans & Building Damage, Legal Costs, Emergency Supplies, Cleaning Site, Production Delays, Temp Labour, Fines, etc.<br />$8 - $36<br />Iceberg Theory by ILCI; 1985 <br />
  14. 14. Incident Ratio<br />Major [LTI/Fatal]<br />1<br />Minor [FA/MA]<br />10<br />Property Damaged<br />30<br />Near Miss<br />600<br />At Risk Behavior & At Risk Conditions<br />20.000<br />Year of 2008,<br />1<br />2 [3]<br />285<br />2145<br />≈ 2000<br />Dec ‘09 – Jan ‘10,<br />0<br />2<br />64<br />1128<br />???<br />Frank E. Bird ratio; 1982 <br />
  15. 15. “Focused”VS “Shot-gun” approach<br />What are the Benefits of Risk Management?<br />
  16. 16. What are the Benefits of Risk Management?<br /><ul><li>More effective decisions
  17. 17. Efficient allocation of resources
  18. 18. Increased standard of accountability
  19. 19. Creativity & innovation in management
  20. 20. Increased capacity to manage competing issues
  21. 21. Flexibility in meeting objectives
  22. 22. Transparent decision making</li></li></ul><li>Any Question?<br />
  23. 23. Risk Management Terms<br />Risk Management <br />Risk Assessment <br />Hazard<br />Risk<br />
  24. 24. Risk Management<br />The systematic application of management policies, procedures & practices to the tasks of identifying, analyzing, assessing, treating & monitoring risk.<br />The process of dealing with Risk associated with PTBC operations, which includes: <br />Risk Assessment,<br /> Risk Decision Making,<br /> Implementation of Risk Controls.<br />
  25. 25. Risk Management Process<br />
  26. 26. THE RISK MANAGEMENT PROCESS AS/NZ 4360:1999 <br />Establish the Context<br />Identify Risks<br />Communicate & Consult<br />Monitor & Review<br />Analyse Risks<br />Assess Risks<br />Evaluate Risks<br />Treat Risks<br />
  27. 27. Risk Assessment<br />Risk Assessment is an element of the risk management process & is conducted as part of an effective way to manage risks encountered in daily operations.<br />Using sound concepts to detect Hazards and eliminate the Risk they pose.<br />
  28. 28. HAZARD<br /><ul><li>A hazard is defined as any condition, activity, object, substance or force that exists within the working environment with the potential to cause injury, negatively affect health, or negatively impact on the environment.
  29. 29. Source of danger</li></li></ul><li>RISK<br /><ul><li>The New Shorter Oxford Dictionary; 1993, defines risk as “[exposure to] the possibility of loss, injury or other adverse circumstances”.
  30. 30. Risk is the presence of uncertainty [chance] whether an event, incident, activity, condition or situation will happen, and is measured in terms of the likelihood & consequence.</li></li></ul><li>Hazard Identification<br />
  31. 31. Hazard & Risk<br />Risk<br />Exposure to danger<br />E.g. Uncontrolled fire & loss of assets, personal injury, air & water pollution<br />Hazard<br />Source of Danger<br />E.g. Chemical, Flammable Liquid<br />CAUSE<br />EFFECT<br />
  32. 32. Hazard & Risk<br />CAUSE<br />EFFECT<br />
  33. 33. Hazard & Risk<br />CAUSE<br />EFFECT<br />
  34. 34. Hazard & Risk<br />CAUSE<br /><ul><li>Effect???</li></li></ul><li>Hazard & Risk<br />CAUSE<br /><ul><li>Effect???</li></li></ul><li>Visible Hazard,<br />Those readily seen, heard, smelt, tasted or otherwise sensed.<br />Hidden Hazard,<br />Those not readily seen without prompting or more detailed searching.<br />Developing Hazard,<br />Those which get worse over time, may not be detected without measurement.<br />Characteristics of Hazards<br />
  35. 35. Chemical, e.g. toxic substances, dust particles,<br /> fire/fumes.<br />Biological, e.g. viruses, micro biological organisms.<br />Mechanical, e.g. machinery, equipment,<br />tools, conveyors.<br />Physical, e.g. noise, ionising radiation, lighting, <br />thermal stresses, vibration.<br />Type of Hazards<br />
  36. 36. Type of Hazards<br />Electrical-Shock; electrical burns, static electricity.<br />Fire & Explosion-Flammables; reactive substances, explosive substance, stored pressure.<br />Gravitational-Lifting; falling objects, fall from height.<br />
  37. 37. Ergonomic, e.g. restricted space, <br />manual handling, repetitive handling.<br />Psycho-social, e.g. shift patterns, <br />job organisation, intimidation.<br />Behavioural, e.g. non-compliance to standards, <br />lack of skills, new or unusual tasks.<br />Environmental, e.g. uncontrolled emissions, <br />contamination of air, ground or water.<br />Some Forgotten Hazards<br />
  38. 38. HAZID Workshop<br />
  39. 39.
  40. 40.
  41. 41.
  42. 42.
  43. 43.
  44. 44.
  45. 45. Any Question?<br />
  46. 46. Overview Methodologies<br />Different types & when they are used<br />Behavioural<br />Team based<br />Qualitative<br />Quantitative<br />Time<br />Trouble<br />Cost<br />Physical Difficulty<br />Assessment<br />of the<br />Risk<br />
  47. 47. Risk Assessment<br /><ul><li>In general terms, a suitable method should exhibit the following characteristics:
  48. 48. it should be defensible & appropriate to the system/risk under consideration;
  49. 49. it should provide results which enhance the understanding of the risk & how it can be controlled;
  50. 50. it should be capable of used by a variety of persons in a manner that is traceable, repeatable & verifiable.</li></li></ul><li>Behavioral<br />JSA<br />Qualitative<br />Quantitative<br />Spectrum Risk Assessment<br />
  51. 51. Behavioral Risk Assessment<br />Application of a risk based way of thinking to any task or situation [integrated in the culture]<br />Characteristics of these tools/techniques,<br /><ul><li>Apply both on & off-the job.
  52. 52. Applicable to tasks/situations at any level of risk.
  53. 53. Supports & compliments more formal techniques.
  54. 54. Are simple, paper work free & easy to maintain.</li></li></ul><li>Behavioral Risk Assessment<br />Success Factors<br /><ul><li>Simple process/framework - e.g.,</li></ul>Thinksafe SAM [Spot the hazard, Assess the risk, Make the change]<br />Take 5 [WMC]<br />PASS [Positive Attitude Safety Systems]<br />STOP [Step Back, Think, Observe, Proceed]<br /><ul><li>Hazard Identification skills; physical & behavioral</li></li></ul><li>Job Safety Assessment<br />Best known tool on workshop floor<br />Also known as Critical Task Analysis,<br /><ul><li>Breaks a task into the discrete steps,
  55. 55. Identifies potential hazards arising from the step, and,
  56. 56. Determines the controls to remove/reduce the hazard.</li></ul>Most JSA tools/techniques are very similar<br />Some include a Risk Ranking Step<br />Either,<br /><ul><li>Formal; paper based, one person or small group.
  57. 57. Informal; effectively a behavioral tool.</li></li></ul><li>Job Safety Assessment<br />Typical applications:<br /><ul><li>Input for the development/review of Safe Work Procedures, SOP, IK, etc.
  58. 58. Infrequent tasks where no SOP exists e.g., Shutdown
  59. 59. Where a task or work environment has changed</li></ul>Unacceptable risk [or inadequate control] may trigger a more formal risk assessment.<br />
  60. 60. Qualitative Risk Assessment<br />More formal & structured risk analysis,<br />Need consider that everything within the scope is considered<br />Otherwise “you don’t know what you don’t know”<br />Demonstration of Duty of Care obligation<br />Provides basis for,<br />Control Management Plans <br />Risk reduction [Control Improvement] plans<br /> I.e., an understanding of the things that can save/cost a lot of incidents/injuries/business disruption /money/negative community disruption<br />
  61. 61. Qualitative Risk Assessment<br />Most commonly used form of formal risk assessment. Team Based-Brainstorming.<br />More user friendly for participants than quantitative assessment techniques <br />Process is subjective<br />Some semi-quantitative data e.g., incident rates<br />Multitude of techniques & hybrids developed & used by industry <br />Easy to develop customized/company tool<br />More formally based<br />Less subjective based on technical data<br />
  62. 62. Spectrum Risk Assessment<br />Behavioral<br />JSA<br />Qualitative<br />Quantitative<br /><ul><li>Thinksafe
  63. 63. Take 5
  64. 64. Safety Huddles
  65. 65. Hazard Cards
  66. 66. HIRA
  67. 67. WRAC
  68. 68. WARA
  69. 69. HAZID
  70. 70. HAZAN
  71. 71. Fault Trees/Event Trees
  72. 72. HAZOP
  73. 73. FMEA</li></ul>Subjective<br />Objective<br />Perception Based<br />Information Based<br />Soft<br />Hard<br />
  74. 74. PTBC Risk Assessment Procedure<br />Scoping/Establishing Context<br />Select Risk Assessment Team<br />Conduct Workplace Inspection<br />Conduct the Risk Assessment<br />Ongoing Management Review<br />Consultation & Communication<br />
  75. 75. THE RISK MANAGEMENT PROCESS AS/NZ 4360:1999 <br />Establish the Context<br />Identify Risks<br />Communicate & Consult<br />Monitor & Review<br />Analyse Risks<br />Assess Risks<br />Evaluate Risks<br />Treat Risks<br />
  76. 76. Scoping/Established Context<br />What,<br />Objectives of risk assessment <br />Boundaries of risk assessment; equipment, operation & systems<br />Nature of hazards or associated risks<br />Why,<br />Define the purpose & the expected outcomes; risk registers, action plans<br />Who,<br />Define requirements for the team; technical expertise, experience<br />Identify & notify participants in the team<br />Allocate & define roles; Team Leader, Team Members, Facilitator<br />How,<br />Define risk assessment method; HIRA<br />When,<br />Define timetable, venue & final presentation deadline<br />
  77. 77. The Risk Assessment team should be a combination of the following:<br />-Operational personnel; e.g., Fitters, Maintenance Technicians;<br /> - Technical; e.g., Engineers, Specialist; and<br /> - Management; e.g., Supervisor, Superintendent, Manager.<br />Selecting Risk Assessment Team<br />
  78. 78. Facilitator<br />Set up the exercise based on the scoping;<br />Introduce the team to the scope and risk assessment methodology;<br />Keep the process on track;<br />Promote creative thinking in determining applicable controls;<br />Resolve any conflicts and help reach consensus;<br />Ensure the objectives of the risk assessment are met.<br />Team Roles<br />
  79. 79. Team Roles<br />Team Leader<br />Act as the Client liaison;<br />Provide support where necessary to the Facilitator;<br />Make any logistical arrangements;<br />Assign tasks for collection of relevant information to Team Members'<br />Resolve any conflicts within the Team;<br />Assist the Client in the review of the risk assessment results.<br />
  80. 80. Team Roles<br />Team Member<br />Input skills & experience into the exercise;<br />Understand the potential & actual hazards of the area concerned;<br />Have an understanding of current controls in place to prevent/reduce risk;<br />Contribute their knowledge to achieve a successful outcome.<br />
  81. 81. Ideally, the nominated Risk Assessment Team should conduct a site visit prior to the commencement of the formal risk assessment. <br />The purpose of this visit is to familiarize all members of the team with the physical aspects and to assist in identifying hazards. It is important to consider all types of hazards & not just the obvious physical ones. <br />Conduct a Work Place Inspection<br />
  82. 82. Any Question?<br />
  83. 83. STEP 1. Introduce the scope<br />STEP 2. Analyse the Subject. Breakdown into<br />Components (Process, Activities, Products, Services etc.)<br />STEP 3. Identify Hazards & “unwanted events”<br />STEP 4. Determine Inherent Risk Value. ‘Maximum Reasonable’ <br />consequences & likelihood<br />STEP 5. Determine Existing Controls & Assess Adequacy<br />STEP 6. Determine Residual Risk Value. (Re-assess Consequence & Likelihood <br />based on existing controls) <br />STEP 7. Propose additional controls if level of risk is not reduced to acceptable level.<br />STEP 8. Develop Risk Reduction Action Plans<br />STEP 9. Compile Risk Assessment Report<br />
  84. 84. Risk Control<br />Injury<br />Incident <br />Occurred<br />Identifying Risk<br />Basic Caused<br />Losses<br />Domino theory by Peter Drucker & ILCI; 1985 <br />
  85. 85. STEP 1. Introduced the Scope<br />The Facilitator should start the Risk Assessment Process off by reviewing the Scope, confirming it is fully understood by all Team Members. <br />The roles of the Team Members, Team Leader & Facilitator should be reiterated. <br />The method to be used should then be discussed in as much detail as is needed for the Team Members to reach a common understanding of the process. <br />
  86. 86. STEP 2. Analysed the Subject<br />The process, system, plant/equipment, operation or work area that is the “subject” of the assessment should be analyzed & broken down into definable sections, components or functional groups [processes, operating areas, activities, products etc.]. <br />If a visit to the workplace has been conducted, it will assist the team in recalling a mental picture of the subject. Any information collated prior to the risk assessment should also be available for reference.<br />
  87. 87. STEP 3. Identify Hazards & “unwanted events”<br />The Facilitator should assist the Team to identify all the possible hazards [energy sources] associated with the individual sections, components or functional groups. <br />Prompts may be used to assist in focusing attention, such as hazard/energy guides. <br />It is not essential that every single hazard or resulting incident be identified for a successful risk assessment. However it is crucial that significant impacts are identified.<br />
  88. 88. STEP 3. Identify Hazards & “unwanted events”<br /><ul><li>Gravitational;e.g. lifting, falling objects, fall from height, slip trip & fall.
  89. 89. Ergonomic;e.g. restricted space, manual handling, repetitive handling.
  90. 90. Psychosocial;e.g. shift patterns, job organisation, intimidation.
  91. 91. Behavioural; e.g. non-compliance to standards, lack of skills, new or unusual tasks.
  92. 92. Environmental;e.g. uncontrolled emissions, contamination of air, ground or water.</li></ul>Hazard Types:<br /><ul><li>Physical; e.g. noise, ionising radiation, lighting, thermal stresses, vibration.
  93. 93. Chemical; e.g. toxic substances, dust particles, fire/fumes.
  94. 94. Biological; e.g. viruses, micro biological organisms.
  95. 95. Mechanical; e.g. machinery, equipment, tools, conveyors.
  96. 96. Electrical; e.g. shock, electrical burns, static electricity
  97. 97. Fire & Explosion; e.g. flammables, reactive substances, explosive substance, stored pressure</li></li></ul><li>STEP 3. Identify Hazards & “unwanted events”<br />Once hazards are listed determine possible unwanted events. This can be done through:<br /><ul><li>Brainstorming;
  98. 98. Checklists
  99. 99. Personal & organizational experience [Incident Reports];
  100. 100. Audits or physical inspections;
  101. 101. Benchmarking industry experience [local or overseas];
  102. 102. Judgmental-consensus, speculative/conjectural, intuitive;
  103. 103. History, failure analysis;</li></ul>The potential unwanted incidents or events can then be recorded in a Risk Register.<br />
  104. 104. STEP 4. Determine Inherent Risk Value. <br />“Risk” is the combination of the likelihood of a hazard occurring & the potential consequences if it occurs.<br />For each potential incident/event, the likelihood of the incident occurring & the maximum reasonable consequences must be determined to identify the “risk”. <br />This must be done without consideration of any controls that might be in place or that are being considered as the focus here is on the hazard itself. This is called the Inherent Risk Value. <br />
  105. 105. STEP 4. Determine Inherent Risk Value. <br />Determine Likelihood<br />
  106. 106. STEP 4. Determine Inherent Risk Value. <br />Determine Consequence<br />
  107. 107.
  108. 108. Identify all of the existing controls which are currently in place to prevent or reduce the likelihood and/or consequences of the unwanted event. These controls will consist of:<br /><ul><li>Elimination,
  109. 109. Engineering,
  110. 110. Substitution,
  111. 111. Administrative/Procedural,
  112. 112. and PPE. </li></ul>STEP 5.Determine Existing Controls & AssessAdequacy<br />
  113. 113. Hierarchy of Controls<br /><ul><li> Eliminate[by good design, different method etc.]
  114. 114. Substitute[using less hazardous alternative]
  115. 115. Engineering controls[guards, barriers, </li></ul> ventilation, fail-safes, alarms, shut-downs etc.]<br /><ul><li> Administrative controls[work procedures, rules, </li></ul> training, management procedures, inspections etc]<br /><ul><li> Personal Protective Equipment
  116. 116. Emergency Response[required for high consequence risks]</li></ul>BEST<br />Safety Management System<br />LEAST EFFECTIVE<br />
  117. 117. STEP 5.Determine Existing Controls & AssessAdequacy<br />The team must also consider if these existing controls are effective in controlling the risks. <br />If any “extreme” risks have been identified which have ineffective controls & are considered to pose an immediate threat to personnel it may be necessary to immediately notify the responsible manager so that he or she is made aware of the situation.<br />The existing controls should then be recorded in the risk register.<br />
  118. 118. STEP 6. Determine Residual Risk Value. <br />After identifying & assessing the effectiveness of the Existing Controls, the Team should determine the consequence & likelihood of the unwanted event with the current controls in place. <br />This is required to determine the “Residual Risk” [the risk that remains after the existing or current risk treatment measures or controls have been considered]. The same process should be used as detailed before, using the Risk Criteria. <br />The Residual Risk should then be recorded in the Risk Register.<br />
  119. 119. STEP 6. Determine Residual Risk Value. <br />
  120. 120. STEP 6. Determine Residual Risk Value. <br />By recording both the inherent & residual risk values, it assists to demonstrate the reduction of risk. This can also be used to measure whether Duty of Care obligations have been met in regard to exposure of hazards.<br />When the Residual Risk has been determined as being either “Extreme” or “High”, the Team must further review the controls to identify what actions are required to improve their level of effectiveness or develop additional controls to further reduce risk.<br />
  121. 121. STEP 7. Additional controls if level of risk is not reduced to acceptable level.<br />Consider Risk Control Options <br /><ul><li>Start with Most Serious Risk First
  122. 122. Refer to preliminary Hazard Analysis Causes</li></ul>Does Benefit Outweigh Risk<br />Communicate with Senior management if required<br />Integrate Into Planning<br />Accept No Unnecessary Risks<br />Make Risk Decisions at the Proper Level<br />Accept Risk if Benefits Outweigh the Cost<br />
  123. 123. STEP 8. Develop Risk Reduction Action Plans<br />Once the risk assessment is completed the Team should review the risk assessment [both process & results] against the scope to ensure the expected outcomes have been achieved. This should include a final check that all of the recommended controls have been recorded.<br />The final part of the risk assessment process is to develop a Plan for Residual Risks determined to be unacceptable. <br />If required by the Client, the Team should also develop an action plan that may include responsibilities & time frames for the implementation & monitoring of the actions required. <br />
  124. 124. STEP 9. Compile Risk Assessment Report<br />The Risk Assessment Report should contain all the details of the risk assessment & acts as a permanent record of the results.<br />A report on the risk assessment must be compiled & provided to the Client within the specified time. This report should include:<br /><ul><li>List of Team Members
  125. 125. Overview of process
  126. 126. Copy of scope
  127. 127. Dates & venue
  128. 128. Risk Assessment Record form
  129. 129. Recommendations for new or amended controls
  130. 130. Draft action plan (if required)</li></ul>It is the responsibility of the Team Leader to finalize the report & present it to the users.<br />All changes resulting from the risk assessment process must be notified & communicated to the workforce.<br />
  131. 131. Risk Control<br />
  132. 132. Risk Management Summary<br /><ul><li>There are risks to be managed in all work.
  133. 133. Everyone is responsible & accountable for managing the risks in their work.
  134. 134. Employees should be encouraged & supported by their managers to manage risks.
  135. 135. ASDAM provides a framework or systematic approach for making decisions about how best to manage risks.
  136. 136. Legislative requirements & the political, social & economic environment need to be taken into account when managing risks.
  137. 137. Action taken to manage risks should be integrated with (not be separate from) existing systems & processes.
  138. 138. Effective risk management depends on good quality information.
  139. 139. Risk Management is everyone’s business; is part of business as usual;
  140. 140. The process for managing risk is logical & systematic & should become a habit.</li></li></ul><li>
  141. 141. Walk the Talk;<br />Trust the Worthy;<br />and Living Example.<br />Thank you and Have a Safe Work<br />