ENVIRONMENTAL MANAGEMENT

AND TECHNOLOGY

WEEK 8
ENVIRONMENTAL RISK
MANAGEMENT

Last Updated:November 21, 2020 © LMS SEGi education group 1

 LEARNING OBJECTIVES

 Able to understand the definition of “risk”.

 Able to understand the environmental risk management
practices.

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 LEARNING OUTCOMES

 Able to identify the aspect/practices of environmental risk

management.

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RISK
 Definition of Risk

• Risk can be defined as the “combination of the frequency

of occurrences of harm, and the severity of that harm”.

• Other way of defining – ‘product of the probability or

likelihood of a hazard resulting in an adverse event, times
the severity of the event.

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 DEFINITION OF RISK
• Risk = Probability x consequences

Probability Damage Consequences Health

-Amount of equipment (fire/explosion)
-Damage mechanism - Inherent tendency to ignite
-Appropriateness of -Quantity that can be
inspection released
-Current equipment -Ability to flash to a vapor
condition -Possibility of auto ignite
-Nature of process -Engineering safe guards
-Equipment design -Effect of high-pressure
operations
-Degree of exposure to
damage
Consequences
-Quantity and toxicity
- Ability to disperse
under typical process
condition
- Detection and
mitigation system
- Population in
vicinity of release

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 RISK - DEFINITION

• Interaction between the severity of an event and the

likelihood of the occurrence of the event
• .
• “Low” and “high risk” are considered a qualitative
assessment of a risk.

• A low risk scenario may involve a very severe outcome

(e.g. multiple fatalities, significant environmental impact)
but a very low frequency of occurrence.

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 RISK PERCEPTION

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 RISK PERCEPTION

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 Difference of perception between professionals
and non-professionals

Non-professionals professionals

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 Influential Factors for Risk Perception (1)

• Journalism (Television, newspapers, radio, internet etc.)

• Active risks acceptance
• Cars: One of the highest risk in urban society.
However nobody wants to give it up. Similar things:
smoking, bungee jumping

• Passive risks acceptance

• People tends to be sensitive for passive risks (e.g.,
passive smoke, waste dumping, nuclear power plant
etc)

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 Influential Factors for Risk Perception (2)

Lower risk Higher risk

Positive Passive
Well known Not known
Under control Controlled by somebody
Long term Short term
Naturally occurred Man-made
Equal to others Why only I
Obvious Potentially
Famous Not so famous

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 Trick? Prejudice?

• Annual death by car accident in Japan is 10,000 = fully

loaded 747 (Super Jumbo) crashes twice a month

• Annual death by smoking= Three fully loaded 747

crashes every day

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 General Characteristics For Degree of Risk Perception

• Sudden and sensational news bring fear (SARS,

Bombing in London, Earthquake)

• Positive actions permit 10 to 100 times risk

comparing to that was not agreed beforehand

• People can accept higher risk if they were

informed properly  people needs risk
communication

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 How is Risk Assessment Developed

• Established by researchers studying risk of

nuclear-related industries

• Then, it is expanded to chemicals

Since it was government-oriented, the structure of
logic is to convince people for safety.

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 Cost to prevent risk/cost by accident

cost

Sum of cost

Cost by
Cost to accident
prevent risk

Optimum risk by risk 18

Last Updated:November 21, 2020

considering cost
© LMS SEGi education group
 Cost to prevent risk/cost by accident, optimum
range
cost

Cost by
accident

Cost to
prevent risk

risk
Optimum range of risk
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 Risk and cost: process of decision making

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 Risk Management - Definition
• Risk can never be entirely eliminated, as all
decisions involve risk; even deferring a decision
involves risk.

• involves establishing where a risk falls in terms of

likelihood and impact and then developing an
organizational strategy to manage the risk.

• It is a systematic approach to setting the best course

of action under uncertainty by identifying, assessing,
understanding, acting on and communicating risk
issues (Treasury Board of Canada, 2001).

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 Risk Assessment - Definition

• Risk assessment is the process of converting

uncertainty into risk (Winpenny, OECD, 1995).
It entails:
• Analysing the initiating events and the routes

(pathways) through which the effect occurs

• Specifying the size and severity of the risk

• Estimating probabilities and expected values.

it?

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 Example: Environmental Risk Management
(Australia Based)
• Introduction

• Environmental Risk Identification and Analysis

• Existing Owned/Controlled Property

• Property Transfer

• Lender Liability

• Fiduciary Liability

• Natural Resource Damages

• Personnel Protection

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 Example: Environmental Risk Management
(Australia Based)

• Operations Management
• Pollution Prevention
• Hazardous Waste
• Environmental Site Assessments
• Environmental Audit System
• Emergency Planning

• Financial Administration
• Accounting for Contingencies
• Emerging Issues Task Force
• Tax Implications

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 Example: Environmental Risk Management
(Australia Based)

• Environmental Risk Financing

• Environmental Impairment Liability Insurance
• Environmental Directors and Officers Liability Insurance
• Environmental Title Insurance
• Contractual Risk Transfers
• Financial Responsibility Requirements

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 Example: Environmental risk management
related to contaminated land management

• Environmental Site Assessment

• Source > Pathway > Receptor
• Source – leaking tank/pipe
• Pathway – groundwater, drain
• Receptor – Human and Ecological
• Site Remediation objectives
• To protect human health and the environment
• To enable redevelopment
• To limit potential liabilities
• To repair or enhance previous remediation work

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 REFERENCES

 Ken Fukushi (2005). Hazardous substances

management in groundwater. Southeast Asia
International Joint Research and Training Program for
Groundwater Treatment Technologies and Advanced
Membrane Processes.
 RIMS Environmental Committee, ‘Applying the Risk
Management Process to Environmental
Management”,Risk Management, Februrary 1994

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 REFERENCES

 Fisal B.. ‘Risk Management in Engineering”, Jurutera,

June 2011
 Razalli Mohd. R. ‘An Introduction to Risk Management”,
Jurutera, June 2011
 The Management of Environmental Risk Factors which
Impact on Human Health. Draft National Framework
(Policy) on Environmental Health JTS September 2009

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 REFERENCES

• Cameron.L. ‘Environmental Risk Management in New

Zealand – Is There Scope to Apply A More Generic
Framework? New Zealand Treasury Policy Perspectives
Paper 06/06, July 2006
• Nathanail Paul.C, Bardos Paul R. “ Reclamation of
Contaminated Land” (2004). John Wiley & Sons Ltd.
• Jurutera, June 2011. Page 10&26
• Cameron L. (July 2006). “Environmental Risk
Management in New Zealand – Is there Scope to Apply
A More Generic Framework?. New Zealand Treasury
Policy Perspectives Paper 06/06

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