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8/12/2019 Process Risk Management
1/29
AcuTech
Consulting,
Inc.
1999
A Risk-Based Approachto Process Risk Management
David A. Moore, PE, CSP
AcuTech Consulting, Inc.
100 Pine Street, Suite 2240
San Francisco, CA 94111
(415)772-5972
www.acutech-consulting.com
American Society of Safety Engineers
Bakersfield, California,ChapterAugust 4, 1999
8/12/2019 Process Risk Management
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AcuTech
Consulting,
Inc.
1999
In Todays Operating Environment
Management must make tougher decisions on
risks:
Acceptable risk - how safe is safe enough?
Due diligence - what price for safety?Risk management - what are the options to reduce risk?
Managing smart - what is the optimal solution
considering costs?
Regulatory-driven minimal efforts are not enough
8/12/2019 Process Risk Management
3/29
AcuTech
Consulting,
Inc.
1999
Underlying Critical Issues and Trends
Facing Corporations: Challenging economic situation given new world
economy
More competitive business situation in a fastermoving economy
More regulations and performance-basedrequirements to comply with for safety,
environment, health, and quality Regulations are not always specific as to
requirements leading to challenging decisions
8/12/2019 Process Risk Management
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AcuTech
Consulting,
Inc.
1999
Public Interest in Safety is Emerging
Health, Safety, and Environment are more
of concern to the public than ever before
More news coverage than ever and increasing
This is shaping public opinion and is setting
higher standards of care
It is an indicator of the new awareness of safety
More public involvement in risk decisions
8/12/2019 Process Risk Management
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AcuTech
Consulting,
Inc.
1999
Risk Tolerance Appears to be
Lessening The public and workers seem less tolerant
of risk
Past practices may be unacceptable today
The public expects minimal risk or even
demands zero risk
8/12/2019 Process Risk Management
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AcuTech
Consulting,
Inc.1999
Liabilities
Liabilities are increasing:
Higher potential for legal action
Higher jury awards for punitive damages
Measured against higher standard of care
More regulations to reference as precedent
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AcuTech
Consulting,
Inc.1999
What is Needed:
More sophisticated management of risk
A risk-based foundation for the safety
management system established
Integration of a risk management process
into the companys decision process
8/12/2019 Process Risk Management
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AcuTech
Consulting,
Inc.1999
Goals:
Reduce risk to acceptable levels considering
all stakeholders
Who are the stakeholders?
What is acceptable?
How is risk to be measured?
Provide a sound basis for making these
decisions
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8/12/2019 Process Risk Management
10/29
AcuTech
Consulting,
Inc.1999
Traditional Measures of Acceptability
Regulations
Industry practice
Company practice
Engineering judgement
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AcuTech
Consulting,
Inc.1999
Modern Measures of Acceptability
Regulations
Industry practice
Company practice
Engineering judgement
Risk-based decision making based onsystematic methods and risk criteria
including consideration of costs
8/12/2019 Process Risk Management
12/29
AcuTech
Consulting,
Inc.1999
From Reactive to Proactive
Develop a program for risk management
Train employees in risk principles
Address key risks using these methods
Make risk management a way of doing
businessimbedded in the culture of thecompany as a standard work process
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AcuTech
Consulting,
Inc.1999
Hazard Analysis Definition
A Hazard Analysis (HA) is acomprehensive study that:
identifies, and,
analyzes
the hazards of a process.
It is the front end of a risk assessment
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AcuTech
Consulting,
Inc.1999
Sequence of a Hazard Scenario
Initiating
Event
Intermediate
Events
Final
Event
Dependent Events
Operator
Overfills
Tank
Level
IncreasesInjury from
Release
Release
From
Tank
High LevelAlarm
Fails
OperatorFails to
Control
Personnelin the
Area
8/12/2019 Process Risk Management
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AcuTech
Consulting,
Inc.1999
Risk Assessment Process Flow
Diagram
System
Description
Accident
Severity
Estimation
ModifySystem
Accident
Likelihood
Estimation
Risk
Determination
Operate
System
Risk
Acceptance
Hazard
Identification
8/12/2019 Process Risk Management
16/29
AcuTech
Consulting,
Inc.1999
Techniques Commonly Used in
Hazard EvaluationCommonly Used Techs.:
Hazard & Operability
Study (HAZOP) Checklist Analysis
What-If
What-If /Checklist
Failure Modes &Effects Analysis(FMEA)
Other Techniques:
Event Tree Analysis
Fault Tree Analysis
Human Reliability
Analysis
Job Safety Analysis
8/12/2019 Process Risk Management
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AcuTech
Consulting,
Inc.1999
Benefits of Hazard Analysis
More complete awareness of hazards
Provides a structured and systematic examination of the
hazards of a process
Attempts to recognize all hazards
Employee participation
Gathers real input from the employees
Concerns are discussed and documented Team is more informed about hazards
Paramount to management/employee relationship
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AcuTech
Consulting,
Inc.1999
One Indicator of a Division
Between Employees and Management
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AcuTech
Consulting,
Inc.1999
Benefits of Hazard Analysis
Assists management in risk decisions
Basis to assess if risks are acceptable
Can be used to develop the most effective
strategy to reduce or eliminate risks
Provides a means to compare risks of different
designs or operationsWorst First risks can be defined and
addressed
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AcuTech
Consulting,
Inc.1999
Benefits of HA (contd)
Ultimate outcomes
Improved safety performance resulting in less
risk to the public, employees, property and theenvironment
Assists with regulatory compliance
Minimizes business interruptionImproves relations with the public and
employees
8/12/2019 Process Risk Management
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AcuTech
Consulting,
Inc.1999
EPAs Premise
The public has a right and need for knowledge:
chemical hazards they are exposed to
programs in place to prevent releases
emergency plans and procedures
The public needs to have:open and honest information from industry
reasonable levels of risk
Industry has a need to have:
the public informed of these hazards
a cooperative effort of emergency planning
trust of the community
Slide 21
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AcuTech
Consulting,
Inc.1999
Example of Risk Management
Challenge - Dilemma of EPA RMP Described the hazard, not the risk
Public may be misled by the presentation of worst case
and alternative case scenariosNot a risk assessmentonly one or two cases
No assessment of likelihood
Subjective rules for alternative cases
Recommended to prepare to understand risk moreexactly and to prepare for further communications
with the public
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AcuTech
Consulting,
Inc.1999
Slide 23
How Industry Sees Their Worst Case Scenario
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AcuTech
Consulting,
Inc.1999
Slide 24
You are here
How The Community Sees Their Worst Case Scenario
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AcuTech
Consulting,
Inc.1999
Slide 25
Its everywhere!!
How The Community Sees All Worst Case Scenarios
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AcuTech
Consulting,
Inc.1999
RMP Issues and Solutions:
Pressure will likely be put on companies that have:
The appearance of high exposure to the public
Actual high incident frequencies (including nuisanceproblems)
Multiple fatality or serious injury accidents
Incident which result in actual exposure to community
No or poor detection, mitigation, and emergencyplanning for worst case scenarios
Slide 26
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AcuTech
Consulting,
Inc.1999
RMP Issues and Solutions:
Develop a risk-based (vs. only minimum
regulatory based) risk management program
Risk-Based Decision-Making processes can beemployed to:
Determine the risk
Identify and evaluate the risk reduction options
Help management with the decision on best solution
Make more consistent and justified decisions
Manage public concerns
Slide 27
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AcuTech
Consulting,
Inc.1999
Conclusions
Risk Based Decision-Making is required intodays business environment
It involves a multitude of issues including:
A full evaluation of risk
The identification of options
The evaluation of the cost-effectiveness of options
Decision-making under uncertainty
Companies need to be prepared for a greaterdemand for better risk information
Slide 28
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AcuTech
Consulting,
Inc.1999
Contact Us...
Eastern Consulting Group116 Village Blvd, Suite 200Princeton, NJ 08540-5799
Tel: (609) 951-2211Fax: (609) 951-2281
Corporate Headquarters &Western Consulting Group
AcuTech Consulting, Inc.
100 Pine Street, Suite 2240San Francisco, CA 94111
Tel: 415-772-5972Fax: 415-772-5975
Canadian Consulting GroupAcuTech Consulting, Inc.
300-1055 West Hastings St.
Vancouver, BC V6E 2E9Tel: 604-609-6168Fax: 604-608-9880
http://www.acutech-consulting.com