Risk and Opportunity Management Procedure

Doc. Code: PM-_______________-01 l Rev. No.: l Eff. Date: Page 1 of 3

1.0 Purpose

The purpose of this procedure is to define the risk and opportunity management principles and
guidelines with which Global Min-Met Resources, Inc., needs to comply. Global Min-Met Management
is expected to manage risks and opportunities structurally in accordance with this procedure.

2.0 Scope

This procedure applies to the entire business units and operations of Global Min-Met.

3.0 Definition / Abbreviation

3.1 Risk – an event with a combination of causes and consequence that could negatively affect
the achievement of an objective or specific process.

3.2 Opportunity – an event with a combination of causes and benefit that could bring positive
effect in the achievement of an objective of specific process.

3.3 Internal Risk/Opportunity – risk/opportunity that are derived from within the organization

3.4 External Risk/Opportunity – risk/ opportunity is derived from external source

4.0 Responsibility

Risk and Opportunity Management is primarily the responsibility of the Department Manager. Identified
R/O are acted upon according to the set guidelines in this Procedures Manual and is regularly reported
to the Top Management as part of each process/department’s KPM and during the Management
Review.

5.0 Procedure

Procedure Outline

5.1 identification of Risk and Opportunity

5.2 Assessment and Prioritization of Risk and

Opportunity

5.3 Responding to Risk and Opportunity

5.4 Monitoring and review Risk and Opportunity

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 Risk and Opportunity Management Procedure
Doc. Code: PM-_______________-01 l Rev. No.: l Eff. Date: Page 1 of 3

5.1 Identification of Risk and Opportunity

5.1.1 Global Min-Met recognizes that Risks and Opportunities could either be internal or
external risks and that the following are the possible sources of risks and
opportunities.

Acronyms Source Description

Change of government, national and local
I – POR Political Risk government policy, civil disturbance, internal
politics, riots, political uncertainties
Inflation rate, interest rate, foreign exchange,
II – ECR Economic Risk economic growth, shortage of supply, shortage of
manpower, recession
Cultural trends, demographics, community
III – SOR Sociological Risk expectations, local culture and influences, theft,
vandalism
Automation, communication, computerization,
IV – TER Technological Risk
equipment innovations, information technology
Permits & licenses, national and local
V – LER Legal Risk regulations/legislations, OSH standards, changes in
law, labor disputes
Environmental condition/protection, waste disposal,
Work Environment/
emission compliance, extreme weather, restrictions
VI – EIF Infrastructure/Facilities
and regulations at workplace, infrastructure and
Risk
facilities at workplace
Claims, disputes, contract agreement, liquidated
VII – COR Contract Risk damages, variation orders, payments, bonds,
insurances, change in design
Time schedule, cost, quality, environmental safety
VIII – CTR Construction Risk
& health, resources, constructability issues

5.1.2. Risks and Opportunities are established per department and recorded in the Risk and
Opportunity Register (Form No). The objective is to identify the R/O that could affect
the achievement of the set objectives, targets and deliverables of the Department and
its processes.

The following are the business units critical to Global Min-Met operation.

Processes Sub processes

Finance Accounting and Treasury
Business Development, Marketing and
Sales and Marketing
Sales

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 Risk and Opportunity Management Procedure
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HR, Warehouse, Procurement,

Admin and General Services
EHS
Engineering, QAQC,
Operations Maintenance, Production,
Installation, Logistics

5.2.2. Having the above processes and subprocesses in mind and the agreed objective of each
process, the specific risk/opportunity are identified. During identification, all possibilities must be
considered.

5.2 Assessment and Prioritization of Risk and Opportunity

5.2.1 The identified R/O are assessed in terms of severity and probability of occurrence.

Severity is the impact on the objective or process, assuming that the risk
materializes and the existing control measures fail.

Probability is defined as the likelihood that a given risk will occur within the time
frame or anytime during the business operation.

5.2.2 To systematically assess the severity and probability, the following table is adopted.

Numeric
Severity Probability
Value
1 Negligible Impact / Benefit Very Unlikely
2 Minor Impact/ Benefit Unlikely
3 Average Impact/ Benefit Likely
4 High Impact/ Benefit Very Likely
5 Very severe Impact/ Benefit Almost certain

5.2.3 Classification of the R/O is the value after multiplying the severity and probability as
represented in the table below.

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 Risk and Opportunity Management Procedure
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RISK MATRIX PROBABILITY RATING

1 2 3 4 5
  Very Very Very Very Very
Unlikely Unlikely Unlikely Unlikely Likely
1
SEVERITY RATING

         
2
           
3
           
4
           
5

         

5.3 Responding to Risk and Opportunity

5.3.1 Action to Risk

Risks classified as LOW (green) after considering the current control measures does
not need any action but still recorded for monitoring and re-evaluation on the next
review.

In the case of MEDIUM (yellow) risk, additional control measures should be

developed and implemented within the next six months.

HIGH (red) risk are risks that needs immediate action. Additional control measures
should be developed and implemented within the approved time frame but should
not be longer than three (3) months.

5.3.2 Actions to Opportunities

Opportunities classified as LOW (green) does not need any action but see to it that
the current control measures are observed. These opportunities are recorded for
monitoring and re-evaluation on the next review.

MEDIUM and RED opportunities are EXPLOITED making sure that the opportunities
are realized.

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 Risk and Opportunity Management Procedure
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Classification / Measures Needed R/O Color

Priority Level of
Factor Code
Risk / Opportunity
Current control measures are
Low enough but R/O retains under 1-6 Green
monitoring
Additional control measures are be
Medium developed and implemented 7 - 15 Yellow
(Within 6 months)
Immediate action required and
additional control measures are to
be developed and implemented no
High longer than 3 months. 16 - 25 Red

Control Measures are registered

thru the ROTP

6.0 Related Documents (Procedure, Policy, Forms, references)

___________ Risk and Opportunity Register

7.0 Review and Approval

REVISION HISTORY AND APPROVAL PAGE

Revision No. Brief Description of Change Effectivity Date
0 Origination

Name Signature
Originated by:

QMR
Reviewed by:
Plant Manager

Finance

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 Risk and Opportunity Management Procedure
Doc. Code: PM-_______________-01 l Rev. No.: l Eff. Date: Page 1 of 3

Approved by: President

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