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Riskmgt Notes

Riskmgt Notes

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Published by: api-3733731 on Oct 18, 2008
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The term "Risk" has been used in many different applications. It can be applied to safety and it can also be applied to business investment (business risk, project risk etc.). Risk normally refers to something that is "uncertain" and that uncertainty normally carries a loss or adverse effect. However, in the context of health and safety management, the meaning of "risk" mainly refers to risk of having accident, risk of having harms.

The term "risk management" in the context of safety is often used interchangeably with the term "safety management" by many people. Although they may mean the same thing to many people, there are in fact conceptual differences between the two. The major difference is that the terms\ue000 azard\u201d and\ue000 isk\u201d are put into perspective in the "risk management" concept.

Risk Management should be integrated with other elements of the management system to form a comprehensive health and safety management system. In such a system, "Risk Management" can be regarded as the "Process Safety Management", since it is regarded as the part of the management system that deals with the actual control of risks in the processes or activities of an organization.

The risk management concept emphasizes on the systematic identification, analysis and assessment of all hazards inherent in an activity so that effective measures can be established to control the risks. Without an understanding of what needs to be control, it

will be difficult for the management to take the right actions to combat with the health and
safety problems.
Legal Requirements on Risk Assessment

There is no explicit requirement on adopting risk management in the local legislation. However, the "General Duties" Clauses in the Factories and Industrial Undertakings Ordinance do in fact imply such a system. The Hong Kong Government is in the process of reviewing the existing occupational health and safety system in Hong Kong and it is foreseeable that such a system will be more explicitly enforced.

In the UK, "Risk Assessment" has been explicitly required in the\ue000 anagement of Health and Safety at Work Regulation\u201d as well as the ontrol of Substances Hazardous to Health Regulations (COSHH)\u201d.

"Risk management" is also widely promulgated by the Occupational Safety and Health Administration (OSHA) of the US in its "Guidelines on Workplace Safety and Health Programme Management. It is evident that the principles of "Risk Management" will become the guiding principles in the legislation of most advanced industrialized countries.

Some Definitions
The principles of Risk Management can be better understood by defining the following
terms within the context of Risk Management:
Safety Defined
The word "safety" in fact does not give too much meaning in safety management and
sometimes it can be quite misleading. The dictionary defines\ue000 afety\u201d as: "the quality of
being safe; freedom from danger or injury". However, in reality, attaining the state that is

qualified by this definition seems impracticable. There is no such thing as an absolute safe environment. It can be imagined that even if every known safety concept, standard, or regulation was applied in a given situation, there would still be the probability, however remote, of an injurious or damaging event occurring.

Therefore, the dictionary definition is not applicable and should not be used in the context of safety management. The word "safety" should be defined with such a meaning that reflects the reality. There are a number of such definitions by various academics and authorities. Some of these definitions are quoted on below :

U.S. National Safety Council --
"Safety" is the control of hazards to attain an acceptable level of risk.
Gloss and Wardle in Introduction to Safety Engineering --
"Safety" is the measure of the relative freedom from risks of dangers. Safety is the
degree of freedom from risks and hazards in any environment.
Willie Hammer in Occupational Safety Management and Engineering --
Safety is a matter of relative protection from exposure to hazards; the antonym to
Lowrance in Of Acceptable Risk : Science and the Determination of Safety --
Safety is a judgment of the acceptability of risk...... A thing is safe if its risks are
judged to be acceptable.

From the definitions quoted above, it is apparent that the word "safety" should only be define as a\ue000 elative and acceptable state\u201d for which the risks are judged to be acceptable. The terms"risk" and"hazards" are commonly used in the above quoted definition and they are in fact the key words in the context of risk management.

Hazards Defined
Hazards are defined as the "potential for harm or damage to people, property, or the
environment" and are the "source of risk".
Hazards include the characteristics of things and the "actions" or "inactions" of people.

They are the "base" of all safety concerns, whether it is occupational safety, product safety, environmental affairs, fire etc. In all of those fields of safety endeavor, virtually all activities are to deal with the possible actions or inactions of people and the characteristics of properties, equipment, machinery, or materials that present the potential for harm or damage.

Risk Defined

As mentioned above, risk means something uncertain and the uncertainty carries some adverse effects. In other words, risk is made up of probability of occurrence (uncertainty) and severity of consequence (adverse effects). Lowrance in Of Acceptable Risk : Science

and the Determination of Safety definesrisk as "A measure of the probability and
severity of adverse effects". By this definition, when we talk about risk, we are actually

talking about how likely will an adverse effect (harm) will be realized, and if it is realized, how serious (injuries, deaths etc.) will be the consequences. A classic example is the risk of an aeroplane crash. The probability of an aeroplane crash is extremely small (in terms of crash per total flying hours of all aeroplane). However, the consequence of the crash of an aeroplane will be catastrophic. The risk of traveling on aeroplanes can then be calculated by taking into account the two factors of probability and severity.

The Process of Risk Management
The risk management concept enables a systematic and realistic framework to be
established for accident prevention. It refers to the whole process of:

rhazards identification,
rrisk estimation,
rrisks evaluation,
rcontrol measures establishment, and
rimplementation of control measures.

This risk management process can be further divided into two distinct stages. The first stage concerns with the understanding of the "problems" (fact finding) while the second stage concerns with the "solutions" to the problems. The first stage encompasses the processes of hazards identification, and risk assessment.

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