Element A5

Element A5
 COMMON RISK MGT STRATEGIES

 4 BROAD CATEGORIES
 Avoidance
 Reduction
 Retention
 Transfer of risk

 Or 4 T’s
 Terminate
 Treat
 Tolerate
 transfer

Element A5
 RISK AVOIDANCE

 Usually considered at planning stage

 To avoid substantial costs

 = changing to radically diff and

sometimes more expensive methods to
avoid risk

 Avoidance of one risk may introduce exposure to

another
 E.g. avoid risk assoc. with use of chem’s by
purchasing pre treated components.
Element A5
 RISK REDUCTION

 R/A process = likelihood and severity

 REDUCTION strategy concerned with

reducing these 2 variables.

Element A5
 RISK REDUCTION

 Through Organisational Planning

 Organisation
 Task
 Individual

 Organisation
 Re-design the task
 Ergonomics, automation
 Education / training
 Promote pos culture / behaviour

Element A5
 RISK REDUCTION

 Organisation cont…
 Planning
 Minimise exposure – suppliers etc
 Salvaging
 Trained personnel / equip
 E.g. to deal with flood / fire
 Contingency and Emerg planning

Element A5
 RISK REDUCTION

 Through H+S control measures

 Physical safety devices
 Locks / alarms / guarding
 Sprinklers etc
 Automation
 Reduce exposure to hazards
 Procedural controls
 Permits to work, GHK, Storage

Element A5
 RISK RETENTION

 With knowledge
 Active risk retention – “self insurance”
 Potential losses funded by company

 Retail Stores – don’t insure chain for fire – cost is

more than losing one store

 Claims MGT – settling claims automatically up to a

certain value directly – injuries
 Keeps insurance costs down
 Controls costs

Element A5
 RISK RETENTION

 Without knowledge
 Oversight or inertia
 Failing to ID or evaluate risk
 Failing to keep adequate cover

Element A5
 RISK TRANSFER

 Transfer of activities / supplies to

another org.
 Specialist contractors / manufacturers

 Assignment of financial or legal

responsibility to another org
 Insurance – risks transferred in full or parity
 E.g. 3rd party or fully comp

 Organisation has zero to full cover

 Or transfers liability for damage by contracts

Element A5
 OPTIMUM SOLUTION

 Based on relevant risk data

 Selection depends on
 Available data
 Perspective of tolerability
 Ability to withstand loss

 Should be consistent with corp

objectives

Element A5
 OPTIMUM SOLUTION

 Factors to be considered
 Aspirations of stakeholders / organisation
 Legal or other constraints
 Influenced by law
 Financial objectives
 Cash budgeting or liquidity
 Worker related issues
 Ethical considerations

Element A5
 OPTIMUM SOLUTION

 Factors to be considered
 Aspirations of stakeholders / organisation
 H+S aspirations of org will influence corp perspective
of tolerance

 Legal or other constraints

 PUWER 98 – the need for guards
 Contractual obligtions
 Employers liability insurance
 Strict liability for escape (RYLANDS)

Element A5
 OPTIMUM SOLUTION

 Factors to be considered
 Financial Objectives
 H+S Prac must aim to reduce potential losses but
 Balance need by keeping costs in proportion
 Transferring risks may outweigh expected losses
 Insurance Co’s and Contractors want to make a profit!!

 Cash Budgeting and Liquidity

 Transfer to Ins Co
 E.g. fire. – Property and conseq. Loss
 Large co’s don’t always have access to reserve funds

Element A5
 OPTIMUM SOLUTION

 Factors to be considered
 Worker related issues
 Frequent acc’s
 Associated costs
 Lower morale
 Reduced efficiency
 Also legal obligations

 Ethical considerations
 People must matter
 Not purely financial / legal grounds
 Balance needed

Element A5
 OPTIMUM SOLUTION

 Effectiveness of proposed solution

 Avoidance
 Removes risk
 Significant cost
 Commercial impact

 Tolerating
 Effective only where low risk

Element A5
 OPTIMUM SOLUTION

 Effectiveness of proposed solution

 Transfer
 Variability in effectiveness

 Reduction (self mgt)

 For risks that relate to main op of org
 Day to day prod processes

Element A5
GENERAL PRINCIPLES OF PREVENTION

 MHSWR 99 Reg 4

 Categories of control measure

 Technical
 Equip, materials
 Procedural
 Policy, stds, org
 Behavioural
 Info, training, PPE, Supervision
 Reliance on this only is weakest of controls

 Use all 3 with emphasis on technical – create safe workplace –

support with proc and beh.

Element A5
 GENERAL HIERARCHY OF CONTROL

 HSG 65

 Eliminate
 Reduce
 Isolate
 Control
 PPE

 Short term measures may be applied until further

controls arranged

Element A5
 GENERAL HIERARCHY OF CONTROL

 Practicability
 Cost is not an issue if legal requirement is practical
 E.g. guarding machines

 SFAIRP
 Balance cost agianst risk

Element A5
 COST BENEFIT ANALYSIS

 HSE –
 For new legislation – prepare CBA
 Considers resources to be used and saved from
society s a whole

 E.g. –
 Costs to Ind. Offset by money that Ind./Ins./Society
saves
 Asbestos
 Reduction in fatalities etc.

Element A5
 RISK CONTROL COST DECISIONS

 Direct Costs (capital costs)

 Control systems (eg sprinklers)
 Labour / materials
 Maint of plant
 Additional MGT and Sup
 Security systems
 First aid prov.
 training

Element A5
 RISK CONTROL COST DECISIONS

 Direct benefits
 Reduction in insurance premiums
 Grants –regional development

 Industry Costs
 Interference to production – installation
 Loss of production – training
 Industry benefits
 Fewer losses
 Improved relations

Element A5
 BREAK EVEN ANALYSIS

 Estimates min turnover to cover costs

 F = fixed cost
 V = variable cost per unit
 P = selling price per unit

F 40K
--------- ------------
1–V/P 1 – 2 / 10 = 50K B.E.Point

Keep costs to minimum to finance loss

prevention

Element A5
 SAFE SYSTEMS OF WORK

 Integration of –
 People
 Equipment
 Materials in the correct working
 Environment

 PEME

 To provide safest possible conditions in specific work

area

Element A5
 SAFE SYSTEMS OF WORK

 HASAWA Sec 2

 Requires provision and maintenance of plant and

 Systems of work that are SFAIRP –

 SAFE and without RISK

Element A5
 SAFE SYSTEMS OF WORK

 SSOW –
 From formal consideration of all hazards and controls
involved in particular task

 Hazard potential (risk) = LOW

 + CONTROLS ARE SIMPLE

 = work instruction informal (verbal ok)

Element A5
 SAFE SYSTEMS OF WORK

 Hazard potential (risk) = HIGH

 + CONTROLS ARE COMPLEX

 = SSOW MUST BE FORMAL (Written)

Element A5
 SAFE SYSTEMS OF WORK

 Development of SSOW

 Assess the task

 ID hazards and assess risks
 Define safe methods
 Implement
 Monitor and review

Element A5
 SAFE SYSTEMS OF WORK

 Assess the task

 Task analysis – step by step review
 All aspects considered and recorded in writing to
ensure nothing overlooked

 How, Where, What

 Controls
 Adequate? Used correctly?
 Error considerations

Element A5
 SAFE SYSTEMS OF WORK

 ID hazards and assess risks

 MHSWR Reg 3 – Suitable and sufficient R/A

 Where significant risk ID’d through general R/A

 Formal SSOW required
 Eliminate hazards at source

Element A5
 SAFE SYSTEMS OF WORK

 Define safe methods

 Persons in control ID’d

 Specify responsibilities
 ID competent persons
 ID need for PPE, Special equip, guards / barriers
 Adequate emergency procedures
 Fire, spillage etc
 Emergency aid / rescue methods

Element A5
 SAFE SYSTEMS OF WORK

 Define safe methods cont…

 Check SSOW against 3 main criteria :

 It should adequately control hazards

associated with risk
 Should comply with company stds
 Should comply with legal stds

Element A5
 SAFE SYSTEMS OF WORK

 Implement

 Once developed and agreed

 Communicate

 Monitor and Review

Element A5
 PERMIT TO WORK SYSTEMS

 A formal written system

 Controls certain types of work that have high hazard

potential
 Hot work
 Confined spaces
 At height
 Pressure vessels
 Excavations

Element A5
 PERMIT TO WORK SYSTEMS

 HSE – PTW for non productive work

only

 Ensure proper action

 ID people, nature, timing of work
 Confirm hazards removed (where poss)
 Confirm work started and finished safely

Element A5
 PERMIT TO WORK SYSTEMS

 Pre printed forms

 Specify location and boundary of work

 Formally sign off on completion of work

 Fully monitored and records kept

Element A5