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Dane Newton Senior Manager, Risk & Analysis 4 April 2017 Enhancing Rail Safety through Risk- based Regulation

Dane Newton - ONRSR

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Page 1: Dane Newton - ONRSR

Dane NewtonSenior Manager, Risk & Analysis

4 April 2017

Enhancing Rail Safety through Risk-based Regulation

Page 2: Dane Newton - ONRSR

Office of the National Rail Safety Regulator 2

ONRSR is a risk-based regulator

ONRSRRegulatoryApproachKeyprinciple–

Risk-basedregulation

CorporatePlan2016-19,Goal1‘Maintainandimproverailsafetythrougharisk-basedapproachto

regulation’

ONRSRRegulatoryActivities&Decisions

NationalONRSRFrameworkforRisk-basedRegulation

Page 3: Dane Newton - ONRSR

Office of the National Rail Safety Regulator 3

What is risk-based regulation?Theapplicationofa

systematicframeworkthatprioritisesregulatoryactivitiesanddeploymentofregulators’resourcesonan

evidence-basedassessmentofrisk

Baldwin&Black2007;Black2010

Whileregulatorshavealwaysmaderegulatorydesign,implementationandallocationchoices,partlytomanagelimitedresource,risk-basedregulationformalises

andprovidesconsistentstructuretothedecisionmakingprocess

Sparrow2000

Page 4: Dane Newton - ONRSR

Office of the National Rail Safety Regulator 4

> Better targeted and more efficient use of resource

> Greater consistency of regulatory decisions

> Increased objectivity, clarity and transparency of regulatory decisions

> Decision making that will stand up to greater scrutiny

Why be risk-based?

Page 5: Dane Newton - ONRSR

Office of the National Rail Safety Regulator 5

We Administer a Risk-based Law

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Office of the National Rail Safety Regulator 6

ONRSR’s Approach to Risk-based Regulation

> Developed based on research of good practice> Designed to fit ONRSR’s role as set out by law> Built recognising the co-regulatory framework

Focuses on the decisions ONRSR makes and what risk-based requirements should be applied

Page 7: Dane Newton - ONRSR

Office of the National Rail Safety Regulator 7

ONRSR’s Model for Risk-based Regulation

Page 8: Dane Newton - ONRSR

Office of the National Rail Safety Regulator 8

A model for risk-based regulation

Operators’riskmanagementactivities

Operators’safetyperformance

Risk-baseddecisionmaking

ONRSRactivities

1.Gatherregulatoryintelligence

2.Considerriskstorailsafety

3.Makeregulatorydecisions

4.Undertakeregulatoryactivities

Operators’activities

Page 9: Dane Newton - ONRSR

Office of the National Rail Safety Regulator 9

A model for risk-based regulation

1.Gatherregulatoryintelligence

2.Considerriskstorailsafety

3.Makeregulatorydecisions

4.Undertakeregulatoryactivities

Operators’riskmanagementactivities

Operators’safetyperformance

Risk-baseddecisionmakingIntelligence Decisions ActivitiesRisks

Risk-basedRegulation

ONRSRactivities

Operators’activities

Page 10: Dane Newton - ONRSR

Office of the National Rail Safety Regulator 10

Gather Regulatory Intelligence

Intelligence1.Gatherregulatoryintelligence

Risks2.Considerriskstorailsafety

3.Makeregulatorydecisions

Decisions Activities4.Undertakeregulatoryactivities

Risks

Operators’riskmanagementactivities

Operators’safetyperformance

2 431

Intelligence

Page 11: Dane Newton - ONRSR

Office of the National Rail Safety Regulator 11

Gather Regulatory Intelligence

• Notifiable occurrences• Monthly returns• Safety performance reports• Annual activity statements• Operator investigation reports

• ATSB investigation reports• Confidential reports (REPCON)• Coroner reports• Overseas investigation reports• Overseas intelligence reports

• Findings from audits• Findings from inspections• Findings from operational /

compliance investigations• Findings from field trips

OperatorReports

Accreditationactivities

Thirdpartyreports

Complianceactivities• Assessing applications for

accreditation / registration• Assessing applications for variation

of accreditation / registration• Reviewing Notifications of Change

Externalreporting

Findingsfromregulatoryactivities

2 431

Intelligence

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Office of the National Rail Safety Regulator 12

Gather Regulatory Intelligence2 431

Intelligence

Intelligence1.Gatherregulatoryintelligence

ExternalReports

Rail OperatorReporting

ATSBReports Occurrences

REPCON PeriodicData

CoronerReports

SPRs/AASs

InvestigationReports

1.Gatherregulatoryintelligence

Risks2.Considerriskstorailsafety

3.Makeregulatorydecisions

Decisions

Operators’riskmanagementactivities

Operators’safetyperformance

Activities4.Undertakeregulatoryactivities

Risks

Operators’riskmanagementactivities

Operators’safetyperformance

AccreditationActivities

ComplianceActivities

Variations Audits

Conditions Inspections

Not. ofchange

Investigations

Applications FieldTrips

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Office of the National Rail Safety Regulator 13

Consider risks to rail safety 2 431

Risks

Risks2.Considerriskstorailsafety

3.Makeregulatorydecisions

Decisions

Operators’riskmanagementactivities

Operators’safetyperformance

ExternalReports

Rail OperatorReporting

ATSBReports Occurrences

REPCON PeriodicData

CoronerReports

SPRs/AASs

InvestigationReports

AccreditationActivities

ComplianceActivities

Variations Audits

Conditions Inspections

Not. ofchange

Investigations

Applications FieldTrips

1.Gatherregulatoryintelligence

Activities4.Undertakeregulatoryactivities

Risks

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Office of the National Rail Safety Regulator 14

Consider risks to rail safety 2 431

Risks

Harmtopeople

Riskofoperators

Riskofactivities

Operatorriskfactors• Compliancehistory• Responsiveness• SMSmaturity• Size&scopeof

operationsHazardousEvents

• Derailment• Collision• Trackworker

struck• Passenger

falls

Riskofchanges

Riskofassets

Riskofrailsafetyworkers

Riskofoccurrences

Changeriskfactors• Novelty• Complexity• Interfaces• Consultation

Assetriskfactors• Age• Condition• Criticality

Page 15: Dane Newton - ONRSR

Office of the National Rail Safety Regulator 15

Consider risks to rail safety 2 431

Risks

RisksRisks2.Consider

riskstorailsafety

3.Makeregulatorydecisions

Decisions

Operators’riskmanagementactivities

Operators’safetyperformance

ExternalReports

Rail OperatorReporting

ATSBReports Occurrences

REPCON PeriodicData

CoronerReports

SPRs/AASs

InvestigationReports

AccreditationActivities

ComplianceActivities

Variations Audits

Conditions Inspections

Not. ofchange

Investigations

Applications FieldTrips

1.Gatherregulatoryintelligence

2.Considerriskstorail

safety

OperatorRiskFactors

RailSafetyWorkerRiskFactors

ChangeRiskFactors

AssetRiskFactors

Activities4.Undertakeregulatoryactivities

Page 16: Dane Newton - ONRSR

Office of the National Rail Safety Regulator 16

Make regulatory decisions

3.Makeregulatorydecisions

Decisions

Operators’riskmanagementactivities

Operators’safetyperformance

ExternalReports

Rail OperatorReporting

ATSBReports Occurrences

REPCON PeriodicData

CoronerReports

SPRs/AASs

InvestigationReports

AccreditationActivities

ComplianceActivities

Variations Audits

Conditions Inspections

Not. ofchange

Investigations

Applications FieldTrips

1.Gatherregulatoryintelligence

2.Considerriskstorail

safety

OperatorRiskFactors

RailSafetyWorkerRiskFactors

ChangeRiskFactors

AssetRiskFactors

Activities4.Undertakeregulatoryactivities

2 431

Decisions

Page 17: Dane Newton - ONRSR

Office of the National Rail Safety Regulator 17

Make regulatory decisions 2 431

Decisions

Tier3Decisions

Tier2Decisions

Tier1Decisions

PrincipalFocusofRisk-basedRegulation

• Decision-specificrequirementsapply

• E.g.Decisiontoaccreditarailoperator

SecondaryFocusofRisk-basedRegulation

• Genericrequirementsapply

• E.g.Decisiontodevelopnewsafetyguideline

NoRisk-basedRegulationRequirementsApply

• Involvesdecisionsofacorporatenature

• E.g.Selectingapublishingserviceproviderforcorporatereports

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Office of the National Rail Safety Regulator 18

Risk-based to what degree? 2 431

Decisions

Decisionswhere:• ThereislittlepotentialimpacttoONRSR’sabilitytomaintainand

improverailsafety• Takingarisk-basedapproachaddsnovalue• Theconsequenceofnottakingarisk-basedapproachisnegligible• Thecostoftakingarisk-basedapproachoutweighsthebenefitgained

Decisionswhere:• ThereisasignificantpotentialimpactonONRSR’sabilitytomaintain

andimproverailsafety• Takingarisk-basedapproachaddssignificantvalue• Theconsequenceofnottakingarisk-basedapproachcouldbe

catastrophicforrailsafety• Thebenefitgainedbytakingarisk-basedapproachoutweighsthecost

NotRisk-based

VeryRisk-based

Page 19: Dane Newton - ONRSR

Office of the National Rail Safety Regulator 19

Risk-based to what degree? 2 431

Decisions

NotRisk-based

VeryRisk-based

RiskConsiderationLevels

RCL-0 The decision does not need to be informed by consideration of risks to rail safety

RCL-1 The decision will be informed by an implicit consideration of risks to rail safety

RCL-2 The decision will be informed by implicit consideration of a pre-determined set of rail safety risk factors.

RCL-3 The decision will be informed by explicit consideration of a

pre-determined set of rail safety risk factors.

RCL-4 The decision will be informed by an explicit, qualitative assessment of risks to rail safety.

RCL-5 The decision will be informed by an explicit, quantitative assessment of risks to rail safety.

RCL-0 The decision does not need to be informed by consideration of risks to rail safety

RCL-1 The decision will be informed by an implicit consideration of risks to rail safety

RCL-2 The decision will be informed by implicit consideration of a pre-determined set of rail safety risk factors.

RCL-0 The decision does not need to be informed by consideration of risks to rail safety

RCL-1 The decision will be informed by an implicit consideration of risks to rail safety

RCL-2 The decision will be informed by implicit consideration of a pre-determined set of rail safety risk factors.

RCL-3 The decision will be informed by explicit consideration of a pre-determined set of rail safety risk factors.

RCL-4 The decision will be informed by an explicit, qualitative assessment of risks to rail safety.

RCL-5 The decision will be informed by an explicit, quantitative assessment of risks to rail safety.

RCL-3 The decision will be informed by explicit consideration of a pre-determined set of rail safety risk factors.

RCL-4 The decision will be informed by an explicit, qualitative assessment of risks to rail safety.

RCL-5 The decision will be informed by an explicit, quantitative assessment of risks to rail safety.

Page 20: Dane Newton - ONRSR

Office of the National Rail Safety Regulator 20

Make regulatory decisions 2 431

Decisions

3.Makeregulatorydecisions

Decisions

Operators’riskmanagementactivities

Operators’safetyperformance

ExternalReports

Rail OperatorReporting

ATSBReports Occurrences

REPCON PeriodicData

CoronerReports

SPRs/AASs

InvestigationReports

AccreditationActivities

ComplianceActivities

Variations Audits

Conditions Inspections

Not. ofchange

Investigations

Applications FieldTrips

1.Gatherregulatoryintelligence

2.Considerriskstorail

safety

OperatorRiskFactors

RailSafetyWorkerRiskFactors

ChangeRiskFactors

AssetRiskFactors

Activities4.Undertakeregulatoryactivities

Decisions

3.Makeregulatorydecisions

Tier3Decisions

Tier2Decisions

Tier1Decisions

RCL-0

RCL-3 RCL-4 RCL-5

RCL-2RCL-1

Page 21: Dane Newton - ONRSR

Office of the National Rail Safety Regulator 21

Undertake regulatory activities

Activities4.Undertakeregulatoryactivities

Operators’riskmanagementactivities

Operators’safetyperformance

ExternalReports

Rail OperatorReporting

ATSBReports Occurrences

REPCON PeriodicData

CoronerReports

SPRs/AASs

InvestigationReports

AccreditationActivities

ComplianceActivities

Variations Audits

Conditions Inspections

Not. ofchange

Investigations

Applications FieldTrips

1.Gatherregulatoryintelligence

2.Considerriskstorail

safety

OperatorRiskFactors

RailSafetyWorkerRiskFactors

ChangeRiskFactors

AssetRiskFactors

Decisions

3.Makeregulatorydecisions

Tier3Decisions

Tier2Decisions

Tier1Decisions

RCL-0

RCL-3 RCL-4 RCL-5

RCL-2RCL-1

2 431

Activities

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Office of the National Rail Safety Regulator 22

Regulatory activities2 431

Activities

• Cancellations / suspensions• Prosecutions• Statutory notices• Non-conformances• Education / safety improvement

projects

• Compliance audits• Compliance inspections• Operational / compliance

investigations• Field trips

Accreditationactivities Complianceactivities• Assessing applications for

accreditation / registration• Assessing applications for variation

of accreditation / registration• Reviewing Notifications of Change

• Rail safety report• Safety policies• Safety guidelines• Safety alerts• Enguage / Safety bulletins• External presentations

Enforcementactions ONRSRPublications

Page 23: Dane Newton - ONRSR

Office of the National Rail Safety Regulator 23

Undertake regulatory activities2 431

Activities

EnforcementActions

Publications

Cancellations /Suspensions

Policies

Prosecutions Guidelines

StatutoryNotices

SafetyBulletins

Non-conformance

SafetyAlerts

Education RailSafetyReport

4.Undertakeregulatoryactivities

AccreditationActivities

ComplianceActivities

Variations Audits

Conditions Inspections

Not. change Investigations

Applications FieldTrips

Activities

ExternalReports

Rail OperatorReporting

ATSBReports Occurrences

REPCON PeriodicData

CoronerReports

SPRs/AASs

InvestigationReports

AccreditationActivities

ComplianceActivities

Variations Audits

Conditions Inspections

Not. ofchange

Investigations

Applications FieldTrips

1.Gatherregulatoryintelligence

2.Considerriskstorail

safety

OperatorRiskFactors

RailSafetyWorkerRiskFactors

ChangeRiskFactors

AssetRiskFactors

Decisions

3.Makeregulatorydecisions

Tier3Decisions

Tier2Decisions

Tier1Decisions

RCL-0

RCL-3 RCL-4 RCL-5

RCL-2RCL-1

4.Undertakeregulatoryactivities

Operators’riskmanagementactivities

Operators’safetyperformance

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Office of the National Rail Safety Regulator 24

Example risk-based decision:Setting minimum interaction levels

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25

Minimum Interaction Levels

Office of the National Rail Safety Regulator

TheminimumfrequencieswithwhichONRSRundertakesauditandinspectionactivitiesonaccreditedoperatorsareknownas

MinimumInteractionLevels

ONRSRRailSafetyReport2015-2016

TheselevelsaresetannuallyaspartofthedevelopmentoftheNationalAudit&ComplianceWorkProgram

ONRSRRailSafetyReport2015-2016

Generalprinciple

Thegreaterthelevelofsafetyriskanoperatorexposesthecommunityto,thegreaterthatoperator’sMinimum

InteractionLevelwillbe

Page 26: Dane Newton - ONRSR

26

Setting Minimum Interaction Levels

Office of the National Rail Safety Regulator

Risk-based Regulation Requirements1. A semi-quantitative, explicit risk assessment will be undertaken to

inform Minimum Interaction Levels2. Scores will be assigned to operators to reflect the relative level of rail

safety risk they expose the Australian community to.3. Operators will be assessed against a range of risk factors covering:

§ Size, scope, complexity and diversity of operations§ Exposure to operational, organisational and asset-related change§ Responsiveness to regulatory intervention§ Safety performance§ Compliance history

4. ONRSR operational stakeholders will be involved throughout the assessment process

5. Operator Minimum Interaction Levels will be set based on the results of the risk assessment and the capacity of operational staff.

RCL-4

Page 27: Dane Newton - ONRSR

INPUTSMonthlyReturns

SMEInput

Notifiable Occurrences

Audit&InspectionFindings

ALCAMdata

SafetyPerformanceReports

Applications

Investigation Reports

NotificationsofChange

27

Setting Minimum Interaction Levels

Office of the National Rail Safety Regulator

PrioritisedsetofOperators

MinimumInteraction

Levelsassigned

OUTPUTSNational Audit&

ComplianceProgram

Branch Audit&CompliancePrograms

1.Gatherregulatoryintelligence

2.Assessoperators

againsteachriskfactor

InherentRiskFactors

DynamicRiskFactors

OccurrenceRiskFactors

ComplianceRiskFactors

3.SetMILsbasedonresultsofassessment

2.Considerriskstorailsafety

4.Undertakeregulatoryactivities

1.Gatherregulatoryintelligence

Intelligence Risks3.Makeregulatorydecisions

Decisions Activities

Applymixofqualitativeandquantitative

scoringcriteriatoeachoperator

(RCL-4)

4.DevelopAudit&CompliancePrograms

basedonMILs

Page 28: Dane Newton - ONRSR

Office of the National Rail Safety Regulator 28

Benefits of risk-based regulation

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Office of the National Rail Safety Regulator 29

BenefitsUltimately about improving rail safety> Better alignment between

regulatory activity and rail safety risk

> Making the best use of limited resources

> Increased transparency and better alignment between ONRSR and industry’s safety priorities

Page 30: Dane Newton - ONRSR

Questions?

Thank you