RISK MANAGEMENT

RISK MANAGEMENTRISK MANAGEMENT

Parichart Visuthismajarn, Dr. phil., Asst.Prof.Parichart Visuthismajarn, Dr. phil., Asst.Prof.

Faculty of Environmental ManagementFaculty of Environmental Management

Prince of Songkla UniversityPrince of Songkla University

ENVIRONMENTAL RISK ASSESSMENTSession 8

ObjectivesObjectivesRisk management definitionRisk management definition

Approaches to risk managementApproaches to risk management

Aspects of risk managementAspects of risk management

Principles & challenges of risk managementPrinciples & challenges of risk management

Risk TradeoffsRisk Tradeoffs

Impact of perceptionImpact of perception

Urban air pollution Urban air pollution

Remedial action risk management processRemedial action risk management process

Use of risk management in the militaryUse of risk management in the military

Labeling systems for risk management (DOT, NFPA)Labeling systems for risk management (DOT, NFPA)

Management systems – ISO 14001Management systems – ISO 14001

Environmental audit processEnvironmental audit process

Qualitative risk management systems, several examplesQualitative risk management systems, several examples

Risk managementRisk management

Risk Management is reducing risks to an acceptable Risk Management is reducing risks to an acceptable level, which is?level, which is?– Zero risk? – no risk is acceptable – unrealisticZero risk? – no risk is acceptable – unrealistic– Acceptable risk? – who defines what is acceptableAcceptable risk? – who defines what is acceptable– De Minimus and De “Manifestis” RisksDe Minimus and De “Manifestis” Risks

de minimus, that is trivial risksde minimus, that is trivial risks– Often considered less than 1 in 1,000,000 riskOften considered less than 1 in 1,000,000 risk

de “manifestis” that is obnoxious riskde “manifestis” that is obnoxious risk– Controlled without regard to cost; risk greater than 1 in 1000Controlled without regard to cost; risk greater than 1 in 1000

Risk Assessment complicates management by exposingRisk Assessment complicates management by exposing– Uncertainty and variabilityUncertainty and variability– Differences in stakeholder understanding and perceptionsDifferences in stakeholder understanding and perceptions

multiple perspectives make consensus building difficult multiple perspectives make consensus building difficult

Depiction of risk vs. regulatory Depiction of risk vs. regulatory acceptabilityacceptability

Autenreith, Risk Assessment

European Commission European Commission DefinitionDefinition

Risk management Risk management is the process of weighing is the process of weighing policy alternatives in the light of the result of a policy alternatives in the light of the result of a risk assessment(s) and of other relevant risk assessment(s) and of other relevant evaluations, and, if required, of selecting and evaluations, and, if required, of selecting and implementing appropriate control options implementing appropriate control options (including, where appropriate, (including, where appropriate, monitoring/surveillance activities).monitoring/surveillance activities).

Source: EC Commission on Harmonization, 2000

source: www.iupac.org/publications/ ci/2001/march/

How Risk Management fits into How Risk Management fits into the processthe process

: www.fao.org/WAICENT/faoinfo/economic/ esn/risk/risktext.htm

Why assess if not to manageWhy assess if not to manage

Risk Assessment calls for decision makingRisk Assessment calls for decision making– Action with uncertainty, but this calls for answers toAction with uncertainty, but this calls for answers to

What is an acceptable riskWhat is an acceptable riskHow clean is cleanHow clean is cleanWhat controls should be usedWhat controls should be usedWhich receptors and resources should be protectedWhich receptors and resources should be protected

Risk Management, to be effective should Risk Management, to be effective should include:include:– Benefits and costsBenefits and costs– Technological alternatives, Technological alternatives, – Societal valuesSocietal values

Risk Management is policy drivenRisk Management is policy driven

Risk management allows use Risk management allows use while preventing unfavorable while preventing unfavorable

effectseffects

: www.aist.go.jp/NIRE/eco_tec_e/ hyouka_e.htm

Company wideCompany wideRohm & HaasRohm & Haas

• One purpose of One purpose of performing a risk performing a risk assessment in assessment in an industrial an industrial setting is to setting is to understand how understand how to better to better management the management the risksrisks

http://www.rohmhaas.com/rhcis/environmental/images/flowchart.jpg

By ordering risks into logical and consistent zones managers can identify high risks

Higher risks should require more attention in the form of re-engineering to reduce risk components

: www.capcis.co.uk/maininfo/ news102.html

Using a simple matrix allows Using a simple matrix allows priority setting for risk priority setting for risk

managementmanagement

Risk management Risk management In the U.S., many agencies are responsible for managing riskIn the U.S., many agencies are responsible for managing risk– Environmental Protection AgencyEnvironmental Protection Agency– Food, Drug, and Cosmetic AgencyFood, Drug, and Cosmetic Agency– Occupational Safety and Health AdministrationOccupational Safety and Health Administration– Departments of Transportation, Agriculture, Energy, DefenseDepartments of Transportation, Agriculture, Energy, Defense– Consumer Product Safety CommissionConsumer Product Safety Commission– Nuclear Regulatory CommissionNuclear Regulatory Commission– Federal Emergency Management AgencyFederal Emergency Management Agency

Risk Management involves evaluating and controlling either the Risk Management involves evaluating and controlling either the hazard or sources of exposure with input from:hazard or sources of exposure with input from:– Science, Politics, EconomicsScience, Politics, Economics– Competing risksCompeting risks– Social norms such as equitySocial norms such as equity

Environmental management Environmental management methodsmethods

Economic Economic InstrumentsInstruments

Indirect RegulationIndirect Regulation Direct Direct RegulationRegulation

Emissions tradingEmissions trading

Deposit-refundDeposit-refund

Consumption Consumption feesfees

Performance Performance bondsbonds

Grants, loansGrants, loans

Tax reliefTax relief

Subsidy RemovalSubsidy Removal

Government spendingGovernment spending

InformationInformation

Publicizing behaviorPublicizing behavior

Reporting Reporting performanceperformance

EducationEducation

StandardsStandards

RegulationsRegulations

InspectionsInspections

PenaltiesPenalties

The hazard pathway can help The hazard pathway can help identify risk management identify risk management

opportunitiesopportunitiesTraditional Hazards

Human activities, natural events

Modern HazardsDevelopment activities

Emissions

Dispersion and TransformationEnvironmental Concentration

Air Water Soil Food

ExposureDose and Target Organ Dose

Health EffectsSubclinical effects, Morbidity, Mortality

Adapted from Briggs et al, 1996

Transition of Modern vs. Transition of Modern vs. Traditional hazards Traditional hazards

http://globe.lead.org/lead/session/okinawa/pres/gurinder/index.htm

Risk = Hazard x ExposureRisk = Hazard x Exposure

If this is true, then risk management is a If this is true, then risk management is a function of reducing or eliminating:function of reducing or eliminating:– HazardsHazards– ExposureExposure– Consequences (harm) of expsoureConsequences (harm) of expsoure

Risk management must be formulated in Risk management must be formulated in the context of the culturethe context of the culture– Socio-economicSocio-economic– Socio-politicalSocio-political

Exposure reduction is a Exposure reduction is a management optionmanagement option

A pathway must A pathway must exist for exposure exist for exposure to occur, traveling to occur, traveling through air, water, through air, water, soil, foodsoil, food

The pathway The pathway allows allows contaminantscontaminants to to go from the go from the source to the source to the receptorreceptor

http://www.mmr.org/irp/genprog/riskinfo/undexpos.htm

Risk ManagementRisk Management

Involves decision-making that Involves decision-making that incorporates:incorporates:– Prioritizing risksPrioritizing risks– Determining acceptable level of riskDetermining acceptable level of risk– Determining resources to reduce Determining resources to reduce

risks to an acceptable levelrisks to an acceptable level– Determining the greatest benefit for Determining the greatest benefit for

the resources to be expendedthe resources to be expended– PlanningPlanning– ImplementingImplementing– Monitoring and evaluating Monitoring and evaluating

effectivenesseffectiveness

Management systems approach Management systems approach may helpmay help

Align business objectives and risk goalsAlign business objectives and risk goals– This requires defining them firstThis requires defining them first

Identify and assess risksIdentify and assess risks– These may be resources (human, physical assets, These may be resources (human, physical assets,

ecological, etc.ecological, etc.

Develop alternatives to reduce or avoid riskDevelop alternatives to reduce or avoid risk

Set priorities of alternativesSet priorities of alternatives– Prepare cost benefit analysesPrepare cost benefit analyses

Implement chosen alternativesImplement chosen alternatives

Check effectiveness, Check effectiveness,

Review objectives and goalsReview objectives and goals

Risk assessment & Risk assessment & management integrated management integrated

systems frameworksystems framework

Corporate Corporate objectivesobjectives

EHS EHS policiespolicies

Site Site specific specific goalsgoals

Driving Driving forcesforces

Analytical Analytical boundariesboundaries

Worker

Public

Ecological

Consumer

Financial

Likelihood

Magnitude

Eliminate

Reduce

Respond

Communicate

Threshold criteria

Benefit estimation

Cost estimation

Time sensitivity

Benefit to cost ratio

Resource allocation

Schedule milestones

Independent review

Continuous improvement

DefineObjectives

IdentifyResources,Assess Risk

Develop riskReduction &

Avoidance Alt.

PrioritizeOpportunities

Implement &Review Results

Adapted from Autenrieth

Approaches to risk Approaches to risk managementmanagement

Probability Severity MatrixProbability Severity Matrix

Adapted from Autenreith, Risk Assessment

Avoidance Measures:

Fatalities avoidedInjuries avoidedIllnesses avoidedEcological Damage avoidedProperty Loss avertied


Adapted from Autenreith, Risk Assessment


Hierarchy of industrial controlsHierarchy of industrial controlsControl at the sourceControl at the source– SubstitutionSubstitution– EliminationElimination– Engineering controlsEngineering controls– Process changeProcess change

Control the pathwayControl the pathway– Exhaust ventilation at the point of emissionsExhaust ventilation at the point of emissions– Protective barriers Protective barriers

Control at the level of the personControl at the level of the person– Personal protective equipmentPersonal protective equipment– TrainingTraining– Administrative controls (shift rotation, limited hours of exposure)Administrative controls (shift rotation, limited hours of exposure)

Risk Management Risk Management ConsiderationsConsiderations

Technical practicability of optionsTechnical practicability of options– Availability of technology, Availability of technology, – Practical feasibility of relevant production or processing Practical feasibility of relevant production or processing

methods,methods,– Legal or regulatory constraints, Legal or regulatory constraints, – Potential difficulties involved in control, inspection and/or Potential difficulties involved in control, inspection and/or

compliance determinations,compliance determinations,

The economic and social costs and benefitsThe economic and social costs and benefits– cost of available or alternative technology, cost of available or alternative technology, – expected benefits/effectiveness, expected benefits/effectiveness, – distribution of benefits and costs,distribution of benefits and costs,– preferences expressed by stakeholders.preferences expressed by stakeholders.


Management considerationsManagement considerations

A number of tools may be used for considering these A number of tools may be used for considering these factors and specific emphasis has been placed on factors and specific emphasis has been placed on economic analyseseconomic analyses– cost-benefit analysiscost-benefit analysis– cost-effectiveness analysiscost-effectiveness analysis

Economic and social analyses have strengths and Economic and social analyses have strengths and limitations, and discussing their value goes far beyond the limitations, and discussing their value goes far beyond the scope of this document. scope of this document. Suffice it to say that the risk assessment results should Suffice it to say that the risk assessment results should provide an essential input into economic analysesprovide an essential input into economic analyses– And these analyses should be conducted with the same rigour as And these analyses should be conducted with the same rigour as

risk assessmentsrisk assessments– to foster consistency between public health and socio-economic to foster consistency between public health and socio-economic

approaches.approaches.


The optimal decisionThe optimal decision

Based on the best available scientific and technical Based on the best available scientific and technical information;information;Determined primarily by human health and environment Determined primarily by human health and environment quality considerations,quality considerations,– With sensitivity to social, cultural, legal and political With sensitivity to social, cultural, legal and political

considerations;considerations;

Give priority to preventing avoidable risksGive priority to preventing avoidable risks– not just controlling them;not just controlling them;

Select options that are feasibleSelect options that are feasible– with benefits reasonably related to their costs;with benefits reasonably related to their costs;

If appropriate, apply the Precautionary Principle;If appropriate, apply the Precautionary Principle;Incorporate a built-in monitoring, surveillance and review Incorporate a built-in monitoring, surveillance and review mechanism.mechanism.


Cost-Benefit AnalysisCost-Benefit Analysis

It was stated earlier that It was stated earlier that – Without benefits no risk is worth takingWithout benefits no risk is worth taking– With benefits risk may be worth takingWith benefits risk may be worth taking

How can CBA be used to evaluate How can CBA be used to evaluate environmental policies, for a given project:environmental policies, for a given project:– Determine all impactsDetermine all impacts– Determine the value of impactsDetermine the value of impacts– Calculate net benefitCalculate net benefit

Concerns with Cost-Benefit AnalysisConcerns with Cost-Benefit Analysis– Not everything can be valued in economic terms Not everything can be valued in economic terms

Cost Benefit AnalysisCost Benefit Analysis

Schools of thought differ on CBA’s applicabilitySchools of thought differ on CBA’s applicability– Economic growth is essential to environmental quality Economic growth is essential to environmental quality

improvementimprovementCompare eastern and western EuropeCompare eastern and western Europe

Economic and environmental well-being are mutually reinforcingEconomic and environmental well-being are mutually reinforcing

– Others are philosophically opposed to costing the environmentOthers are philosophically opposed to costing the environment

One reason is the matter of ExternalitiesOne reason is the matter of Externalities– Expenses related to a product that are borne by someone other Expenses related to a product that are borne by someone other

than the individuals producing a product or using the resourcethan the individuals producing a product or using the resourceCommons such as air, water, landCommons such as air, water, land

– Pollution-control costs include pollution prevention as well as Pollution-control costs include pollution prevention as well as pollution costs that have associated feespollution costs that have associated fees

Not all do or reflect the marketNot all do or reflect the market

External Indirect Conventional

Risk Assessment Tutorial - National Library of Medicine Toxicology Tutor 1 - Basic Principleshttp://sis.nlm.nih.gov/toxtutor1/a61.htm

Costs considerations as part of risk management

Risk Management Risk Management Risk management may Risk management may involve:involve:– educational solutionseducational solutions– economic incentives, economic incentives,

disincentivesdisincentives– regulatory approachesregulatory approaches

Often involves comparingOften involves comparing– risk to another factor such risk to another factor such

as the costas the cost– or reducing the risk or or reducing the risk or

improving the benefit improving the benefit gained from the riskgained from the riskThe “best” course of action is not always the one that reduces

just riskrather, is the most economically feasible optionreducing the greatest amount of risk per dollar spent

$$ per year of life saved$$ per year of life saved

ProgramProgram CostCost UncertaintyUncertainty

Childhood measlesChildhood measles saves $saves $ lowlow

Lead PhaseoutLead Phaseout saves $saves $ lowlow

Underground safety rulesUnderground safety rules 52,23452,234 lowlow

Hemodialysis at dialysis ctr.Hemodialysis at dialysis ctr. 56,07656,076 lowlow

Coronary artery bypassCoronary artery bypass 67,57967,579 lowlow

Front-seat airbagsFront-seat airbags 108,593108,593 mediummedium

Dioxin effluent control - paperDioxin effluent control - paper 5,566,3865,566,386 highhigh

Control of routine PP radiationControl of routine PP radiation 164,875,379164,875,379 highhigh

Adapted from Moeller, 1997

Common Property Resource Common Property Resource ProblemsProblems

Common ownership (everyone owns) Common ownership (everyone owns) means essentially that no one ownsmeans essentially that no one owns

Common ownership makes it virtually Common ownership makes it virtually cost-free to use the resource as a cost-free to use the resource as a – Sink for pollution, orSink for pollution, or– Free resourceFree resource

Garret Hardin - Tragedy of the CommonsGarret Hardin - Tragedy of the Commons– livestock grazing on public lands, with no livestock grazing on public lands, with no

owner resource becomes depletedowner resource becomes depleted

Principles for Risk Principles for Risk ManagementManagement

Principles have been proposed to guide risk Principles have been proposed to guide risk management decision-makingmanagement decision-making

Hattis suggested that RMHattis suggested that RM– Should be aspirational, not prescriptive, requiring Should be aspirational, not prescriptive, requiring

flexibility and judgmentflexibility and judgment– Is a balancing process among competing Is a balancing process among competing

interests and concernsinterests and concerns– Decisions must balance competing priorities Decisions must balance competing priorities – May require that tradeoffs between conflicting May require that tradeoffs between conflicting

principles maybe necessaryprinciples maybe necessaryHattis, D. 1996. Drawing the line. Environment 38(6): 11-15, 35-39

Principles for Risk ManagementPrinciples for Risk Management

Do more good than harmDo more good than harm– The goal of risk management should be to prevent or The goal of risk management should be to prevent or

minimize risk, or to “do good” as much as possibleminimize risk, or to “do good” as much as possible– Zero risk is not achievable, so it is difficult to attempt Zero risk is not achievable, so it is difficult to attempt

to “to “Do no harmDo no harm” but it may be possible to not make ” but it may be possible to not make matters worsematters worse

Fair process of decision-makingFair process of decision-making– Risk management should be just, equitable, Risk management should be just, equitable,

impartial, unbiased, dispassionate, and objective as impartial, unbiased, dispassionate, and objective as much as possible given the circumstances of each much as possible given the circumstances of each situationsituation

Hattis, D. 1996. Drawing the line. Environment 38(6): 11-15, 35-39


Ensure an equitable distribution of risk Ensure an equitable distribution of risk – To ensure fair outcomes and equal treatment of To ensure fair outcomes and equal treatment of

affected parties through an equal distribution of affected parties through an equal distribution of benefits and burdensbenefits and burdens

– This should be based on an open process that This should be based on an open process that provides equal opportunities for affected partiesprovides equal opportunities for affected parties

– Watch for risk transference or transformationWatch for risk transference or transformation

Seek optimal use of limited resourcesSeek optimal use of limited resources– Optimal use of limited resources seeks to achieve Optimal use of limited resources seeks to achieve

the most real risk reduction for the resources the most real risk reduction for the resources spentspent



Promise what can and will be delivered Promise what can and will be delivered – Honest and candid public accounting of what is known Honest and candid public accounting of what is known

and not known about risk and what can be done about it.and not known about risk and what can be done about it.

Impose no more risk than what would be tolerated Impose no more risk than what would be tolerated yourselfyourself– The Golden Rule of risk management brings decision-The Golden Rule of risk management brings decision-

makers to understand the perspectives of those affectedmakers to understand the perspectives of those affected

Be cautious in the face of uncertainty Be cautious in the face of uncertainty – A cautious approach is warranted when faced with a risk A cautious approach is warranted when faced with a risk

of serious, irreversible damage, even if the evidence is of serious, irreversible damage, even if the evidence is uncertainuncertain



Foster informed risk decision-making for Foster informed risk decision-making for stakeholders stakeholders – This involves both providing the opportunity to This involves both providing the opportunity to

participate, and disclosure of the information participate, and disclosure of the information required for informed decisionsrequired for informed decisions

Recognize its flexible and evolutionary Recognize its flexible and evolutionary aspectsaspects– To be open to new knowledge and understandingTo be open to new knowledge and understanding

Evaluation start at the beginning and continue Evaluation start at the beginning and continue throughout the processthroughout the process


Developmentof regulatory

options

Agency decisionsand actions

Risk Assessment in the Risk Assessment in the Federal Government in 1983Federal Government in 1983

Laboratory and field

observations

Information on extrapolation

methods

Field measurements

HazardIdentification

Dose Response

Exposure Assessment

Risk Characterization

Evaluation of public health,

economic, social, political

consequences ofregulatory options

Research Risk Assessment Risk Management

(U.S. National Research Council 1983, from Hrudey, 1996)

New Framework for Risk New Framework for Risk ManagementManagement

(U.S. Presidential/Congressional (U.S. Presidential/Congressional Commission on Risk Assessment and Risk Commission on Risk Assessment and Risk

Management 1997)Management 1997)Problem/Context

Risks

Options

Decisions

Actions

Evaluation

EngageStakeholders

Australian Australian enHealth enHealth

Risk Risk AssessmeAssessment Model nt Model

(2000)(2000)Source: HrudeySource: Hrudey

Issue Identification

Risk Characterization

Risk Management

Exposure Assessment

Hazard Assessment

Hazard Identification

Dose-Response

Assessment

Engage the Stakeholders, Risk Communication and Community Consultation

Review and

reality check

Review and

reality check

Common Elements that form Common Elements that form a a

Comprehensive FrameworkComprehensive FrameworkProblem and Context Stage is key – the right problem, Problem and Context Stage is key – the right problem, time, placetime, placeStakeholder involvement throughoutStakeholder involvement throughout

Communication – often and openCommunication – often and open

Full Risk Characterization Assessment, Uncertainty, Full Risk Characterization Assessment, Uncertainty, AssumptionsAssumptions

Open Decision-makingOpen Decision-making

ImplementationImplementation

Iteration and EvaluationIteration and Evaluation

Informed Decision-MakingInformed Decision-Making

FlexibilityFlexibility

Caveats that apply to risk Caveats that apply to risk managementmanagement

Define risk upfrontDefine risk upfront– what is meant by riskwhat is meant by risk

Identify how risk will be usedIdentify how risk will be used– for example, priority-setting and mitigation rather for example, priority-setting and mitigation rather

than hazard, probability or consequence analysis than hazard, probability or consequence analysis alonealone

Risk is a policy constructRisk is a policy construct– cannot be the sole determinative decision-making cannot be the sole determinative decision-making

factorfactor

Be wary of risk management decisions that rely Be wary of risk management decisions that rely on bright line risk assessmentson bright line risk assessments

Caveat: Real and Perceived Caveat: Real and Perceived RisksRisks

The frequency and severity of sensational causes of The frequency and severity of sensational causes of death are often overestimated (airline disasters), while death are often overestimated (airline disasters), while familiar risks are underestimate (automobile accidents)familiar risks are underestimate (automobile accidents)Tendency for policy to call for elimination of all riskTendency for policy to call for elimination of all risk– Which is impossibleWhich is impossible

This leads to a policy making dilemmaThis leads to a policy making dilemma– Either fund the greatest real risk reduction projectsEither fund the greatest real risk reduction projects– Or, where the most people perceive the risk to be?Or, where the most people perceive the risk to be?

Deaths per million hours of exposureDeaths per million hours of exposure– Mountain ClimbingMountain Climbing 40,00040,000– Cigarette SmokingCigarette Smoking 3,000 3,000– Air TravelAir Travel 500 500– Living near nuclear power plant 0.5Living near nuclear power plant 0.5

Perspective and ScalePerspective and Scale

For risk assessment, what is BIG and what is For risk assessment, what is BIG and what is SMALL is relativeSMALL is relative– absolute numbers are of limited valueabsolute numbers are of limited value– yet we think and act according to arithmetic (linear) yet we think and act according to arithmetic (linear)

scales of numbersscales of numbers

Note:Note:– the absence of zero on the log scale is indicative the absence of zero on the log scale is indicative

about the meaning of zero in environmental health about the meaning of zero in environmental health and risk issuesand risk issues

– zero risk is unattainable, even “undefined”zero risk is unattainable, even “undefined”– we cannot equate safety with zero riskwe cannot equate safety with zero risk

The Challenge of Risk The Challenge of Risk ManagementManagement

Making decisions in the face of uncertaintyMaking decisions in the face of uncertainty– If there was no uncertainty and all evidence of If there was no uncertainty and all evidence of

impending danger was available and understood impending danger was available and understood then decision-making would be straightforward.then decision-making would be straightforward.

However this ideal does not exist in the real worldHowever this ideal does not exist in the real worldTwo types of failure can arise from such Two types of failure can arise from such uncertaintiesuncertainties– Type I failure is the decision to act as if danger Type I failure is the decision to act as if danger

was imminent when this assessment is NOT was imminent when this assessment is NOT correct – FALSE POSITIVEcorrect – FALSE POSITIVE

– Type II failure is the decision not to act when Type II failure is the decision not to act when danger IS TRULY imminent – FALSE NEGATIVEdanger IS TRULY imminent – FALSE NEGATIVE

Uncertainty failures in risk Uncertainty failures in risk managementmanagement

Since there is no fail safe decision, both types of failure Since there is no fail safe decision, both types of failure have consequences have consequences – However, statistical uncertainty analysis tells us that it is However, statistical uncertainty analysis tells us that it is

fundamentally impossible to simultaneously eliminate the fundamentally impossible to simultaneously eliminate the chances of a false negative without increasing the chances of a chances of a false negative without increasing the chances of a false positive and vice versa. false positive and vice versa.

Could the Precautionary Principle be the answer?Could the Precautionary Principle be the answer?– The Rio Declaration 1992 stated “In order to protect the The Rio Declaration 1992 stated “In order to protect the

environment, the precautionary approach shall be widely applied environment, the precautionary approach shall be widely applied by States according to their abilities. by States according to their abilities.

– Where there are threats of serious or irreversible damage, lack Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental postponing cost-effective measures to prevent environmental degradation”degradation”

http://www.sehn.org/pppractc.html

Some have argued that Some have argued that precautionary approaches precautionary approaches

should be usedshould be used

Precautionary principle as a Precautionary principle as a risk management answerrisk management answer

In consideration of the interrelationship of false In consideration of the interrelationship of false negatives and false positives, it appears the negatives and false positives, it appears the Precautionary Principle offers a false choice.Precautionary Principle offers a false choice.– Eliminate Eliminate false negative failuresfalse negative failures, then the rate of , then the rate of false false

positive failurespositive failures will increase. will increase.

Repeated Type I failures might lead consumers Repeated Type I failures might lead consumers to eventually disregard risk advisories when they to eventually disregard risk advisories when they are actually warranted, the “Cry Wolf” scenarioare actually warranted, the “Cry Wolf” scenario– Creating the opposite effectCreating the opposite effect

On the other hand, Type II failures might cause On the other hand, Type II failures might cause illness or death among consumersillness or death among consumers

Precautionary principle as a Precautionary principle as a risk management challangerisk management challangeThe challenge is to finding the balance The challenge is to finding the balance between avoiding Type II errors without between avoiding Type II errors without creating an unacceptable increase in creating an unacceptable increase in Type I errors Type I errors

While the optimum balance will not While the optimum balance will not always be clear risk management always be clear risk management decisions must be made with the decisions must be made with the flexibility to adjust as new information flexibility to adjust as new information becomes known.becomes known.

Typology of Risk TradeoffsTypology of Risk Tradeoffs

Compared to Compared to the Target Risk the Target Risk the the Countervailing Countervailing Risk Affects:Risk Affects:

Compared to the Target Risk, the Countervailing Compared to the Target Risk, the Countervailing Risk is:Risk is:

Same TypeSame Type Different TypeDifferent Type

Same Same PopulationPopulation

Risk OffsetRisk Offset Risk SubstitutionRisk Substitution

Different Different PopulationPopulation

Risk TransferRisk Transfer Risk Risk TransformationTransformation

Source: Graham & Weiner, 1995

Examples of Risk TradeoffsExamples of Risk TradeoffsDecision Decision ContextContext

Decision Decision makermaker

Target Target RiskRisk

Counter-Counter-vailing vailing RiskRisk

Risk Risk TradeoffTradeoff

Eating Eating FishFish

GovernmGovernmentent

ConsumeConsumersrs

Heart Heart DiseaseDisease

CancerCancer SubstitutiSubstitutionon

Chlorine Chlorine in Drink. in Drink. WaterWater


Environ’liEnviron’listssts

CancerCancer InfectionInfection SubstitutiSubstitutionon

RegisteriRegistering ng PesticidePesticidess


CancerCancer CancerCancer

Repro. Repro. EffectEffect

NutritionNutrition

OffsetOffset

SubstitutiSubstitution on TransferTransfer

TransforTransform.m.

RecyclinRecycling Leadg Lead


NumerouNumerouss

NumerouNumerouss

Transfer Transfer to to workersworkers

Adapted from Graham & Weiner, 1995

Risk vs. RiskRisk vs. Risk

Not all risks are equalNot all risks are equal– Factors such as severity, likelihood, magnitude, etc.Factors such as severity, likelihood, magnitude, etc.

Nor are choices risk freeNor are choices risk freeWe are confronted with such choicesWe are confronted with such choices– Pain vs. SurgeryPain vs. Surgery– Transportation by car or train or plane or shipTransportation by car or train or plane or ship

Risk management is therefore choosing among risks, important Risk management is therefore choosing among risks, important aspects risk – risk decisions include:aspects risk – risk decisions include:– Magnitude of the riskMagnitude of the risk– Population at riskPopulation at risk– CertaintyCertainty– Type of outcomeType of outcome– Distribution and TimingDistribution and Timing

Magnitude of the riskMagnitude of the riskTarget and countervailing risks often differ in Target and countervailing risks often differ in their magnitude of probabilitytheir magnitude of probabilityWhen similar outcomes are presented such When similar outcomes are presented such as cancer risk vs. cancer risk the relative as cancer risk vs. cancer risk the relative magnitude becomes importantmagnitude becomes important– 1 in 100 risk vs. 1 in 10,000 might lead to a 1 in 100 risk vs. 1 in 10,000 might lead to a

straightforward decisionstraightforward decision

When different outcomes are present such When different outcomes are present such as heart disease vs. cancer the relative as heart disease vs. cancer the relative magnitude is also importantmagnitude is also important– The risk of cancer from fish is much smaller than The risk of cancer from fish is much smaller than

heart disease from not eating fishheart disease from not eating fish

The importance of sizeThe importance of sizeIf the probability of an adverse outcome is held constant If the probability of an adverse outcome is held constant then relative size of an affected population becomes then relative size of an affected population becomes important important – Let’s say the the Let’s say the the incremental lifetime riskincremental lifetime risk of a of a

cancerous agent is 1 in 100,000cancerous agent is 1 in 100,000– Let’s also say the total exposed population is no more Let’s also say the total exposed population is no more

than 100 peoplethan 100 peopleThen the incremental lifetime population risk is Then the incremental lifetime population risk is about 0.001 (100 x 1/100,000) cases of cancer – about 0.001 (100 x 1/100,000) cases of cancer – very smallvery small

– However, if the However, if the same incremental cancer risksame incremental cancer risk is is applied to a population of 100,000,000applied to a population of 100,000,000

Then the incremental lifetime population risk is Then the incremental lifetime population risk is about 1000 (100,000,000 x 1/100,000) case of about 1000 (100,000,000 x 1/100,000) case of cancer – very largecancer – very large

Certainty of the riskCertainty of the risk

We have spoken at length about how We have spoken at length about how uncertainty is part of a risk estimate and the uncertainty is part of a risk estimate and the importance of characterizing itimportance of characterizing itOften however, uncertainty is difficult to quantifyOften however, uncertainty is difficult to quantifyIn any event, for risk vs. risk comparisons the In any event, for risk vs. risk comparisons the same “metric” should be used, for example:same “metric” should be used, for example:– If worst case estimates are used for one target risk If worst case estimates are used for one target risk

the same should be used for countervailingthe same should be used for countervailing– For distributions, the resulting shape of the For distributions, the resulting shape of the

distribution (for both) will reveal the nature of distribution (for both) will reveal the nature of uncertainty and variabilityuncertainty and variability

Distribution and TimingDistribution and TimingEven in the case when risk tradeoffs result in the same outcome and Even in the case when risk tradeoffs result in the same outcome and uncertainty of either is equivalent, who incurs the risk remains criticaluncertainty of either is equivalent, who incurs the risk remains critical

– Unequally distributed risks may be perceived as worse than equally Unequally distributed risks may be perceived as worse than equally distributeddistributed

Risks incurred by disadvantaged groups may be seen as less fair Risks incurred by disadvantaged groups may be seen as less fair because they may be poor, less powerful, lower social standingbecause they may be poor, less powerful, lower social standing

– In addition, ethical concerns will be raised by risk transfers and In addition, ethical concerns will be raised by risk transfers and transformations as a new population is put at risktransformations as a new population is put at risk

Politics may enter into this risk shift as we have seen in Politics may enter into this risk shift as we have seen in Transboundary pollution concernsTransboundary pollution concerns

Timing of when the risk outcome will be realized will affect choices and Timing of when the risk outcome will be realized will affect choices and perception of the riskperception of the risk

Type of outcomeType of outcomeThe nature of risk vs. risk is that often the risk outcomes differ, The nature of risk vs. risk is that often the risk outcomes differ, that is they are transformed.that is they are transformed.– Some people who quit smoking will gain weightSome people who quit smoking will gain weight– Some women who take estrogen therapy to reduce Some women who take estrogen therapy to reduce

osteoporosis increase the risk of cancerosteoporosis increase the risk of cancer– Reducing risk of terrorist attacks will reduce freedomReducing risk of terrorist attacks will reduce freedom

Comparing dissimilar risks is difficult, not only because Comparing dissimilar risks is difficult, not only because calculations differ,calculations differ,– More importantly views (subjective attitudes and More importantly views (subjective attitudes and

perceptions) about risks differperceptions) about risks differ

Perceptions may drive the management decisionPerceptions may drive the management decision

Some dimensions of risk and their Some dimensions of risk and their effect on perceptioneffect on perception

DimensionDimension Conditions – Higher RiskConditions – Higher Risk Conditions – Lower RiskConditions – Lower Risk

VoluntarismVoluntarism Involuntary Exposures – air Involuntary Exposures – air pollutionpollution

Risk taken by choice – skiing, Risk taken by choice – skiing, smokingsmoking

Attribution of blameAttribution of blame Risk caused by human failure Risk caused by human failure – explosion at industrial plant– explosion at industrial plant

Risk caused by nature – Risk caused by nature – lightning, alfatoxin in peanutslightning, alfatoxin in peanuts

FamiliarityFamiliarity Unfamiliar – ozone depletionUnfamiliar – ozone depletion Familiar – household Familiar – household accidentsaccidents

UnderstandingUnderstanding Lack of – nuclear power Lack of – nuclear power Understanding – falling on iceUnderstanding – falling on ice

Media AttentionMedia Attention News – airline crash, accidentNews – airline crash, accident Little attention – work injuriesLittle attention – work injuries

DreadDread Fear evoking – hazardous siteFear evoking – hazardous site Not feared – food poisoningNot feared – food poisoning

Catastrophic Catastrophic potentialpotential

Risks uncertain – nuclear Risks uncertain – nuclear powerpower

Well known – auto accidentWell known – auto accident

Personal controlPersonal control Little control – traveling as air Little control – traveling as air passengerpassenger

Some control – driving an Some control – driving an automobileautomobile

EquityEquity No benefit – living near wasteNo benefit – living near waste Equitable distribution - Equitable distribution - vaccinevaccine

Impact on ChildrenImpact on Children At risk – birth defectsAt risk – birth defects Only adult risk – occupational Only adult risk – occupational

Adapted from Yassi, et al, 2002 from Sandman 1986, Covello, 1989

Some dimensions of risk and Some dimensions of risk and their effect on perceptiontheir effect on perception

DimensionDimension Strategy to ManageStrategy to Manage

VoluntarismVoluntarism Make risk more voluntary by empowering community; Make risk more voluntary by empowering community; negotiate conditions of acceptabilitynegotiate conditions of acceptability

Attribution of blameAttribution of blame Don’t compare natural risks with anthropogenic risksDon’t compare natural risks with anthropogenic risks

FamiliarityFamiliarity Conduct open meetings and tours, keep talking about Conduct open meetings and tours, keep talking about the risks until they are better understoodthe risks until they are better understood

UnderstandingUnderstanding Educate, build trust in technical expertsEducate, build trust in technical experts

Media AttentionMedia Attention Recognize the media attention and address it openlyRecognize the media attention and address it openly

DreadDread Legitimize the dread and agree with the disgustLegitimize the dread and agree with the disgust

Catastrophic potentialCatastrophic potential Acknowledge range of risk to minimize the debateAcknowledge range of risk to minimize the debate

Personal controlPersonal control Empower community board, offer community auditsEmpower community board, offer community audits

EquityEquity Share the benefits in proportion to risks – ask Share the benefits in proportion to risks – ask communitycommunity

Impact on ChildrenImpact on Children Characterize risk in terms of the whole family or Characterize risk in terms of the whole family or communitycommunity

Adapted from Yassi, et al, 2002 from Sandman 1986, Covello, 1989

US NRC, 1989

Qualitative factors affecting risk perception and evaluation

Factor Conditions associated with increased public concern

Conditions associated with decreased public concern

______________________________________________________________________________________________________Catastrophic potential

Fatalities and injuries grouped in time and space

Fatalities and injuries scattered and random

Familiarity Unfamiliar FamiliarUnderstanding Mechanisms or process not understood Mechanisms or process understoodControllability (personal) Uncontrollable ControllableVoluntariness of exposure Involuntary VoluntaryEffects on children Children specifically at risk Children not specifically at riskEffects manifestation Delayed effects Immediate effectsEffects on future generations

Risk to future generations No risk to future generationsVictim identity Identifiable victims Statistical victimsDread Effects dreaded Effects not dreadedTrust in institutions Lack of trust in responsible institutions Trust in responsible institutionsMedia attention Much media attention Little media attentionAccident history Major and sometimes minor accidents No major or minor accidentsEquity

Inequitable distributions of risks and benefits

No major or minor accidentsBenefits Unclear benefits Clear benefitsReversibility Effects irreversible Effects reversibleOrigin Caused by human actions or failures Caused by acts of nature or God______________________________________________________________________________________________________

Summary of “Typical” Risk Summary of “Typical” Risk PerceptionsPerceptions

““Acceptable” if:Acceptable” if:

VoluntaryVoluntary

Proximate BenefitProximate Benefit

KnownKnown

WorkplaceWorkplace

NaturalNatural

SelfSelf

Organ DamageOrgan Damage

Distant (time, place)Distant (time, place)

““Unacceptable” if:Unacceptable” if:

InvoluntaryInvoluntary

No BenefitNo Benefit

UnknownUnknown

ResidentialResidential

AnthropogenicAnthropogenic

ChildrenChildren

CancerCancer

NearNear

Risk Assessment Tutorial - National Library of Medicine Toxicology Tutor 1 – Basic Principleshttp://sis.nlm.nih.gov/toxtutor1/a61.htm

Examples of how risk management has been applied

Urban air pollution:Urban air pollution:key environmental concernskey environmental concerns

Human health impactsHuman health impacts– Highest risk: lead, particulates Highest risk: lead, particulates – Other pollutants of concern: carbon monoxide, sulfur Other pollutants of concern: carbon monoxide, sulfur

dioxide, nitrogen oxides, ozone, toxic chemicalsdioxide, nitrogen oxides, ozone, toxic chemicals

Other environmental externalities Other environmental externalities – damage to natural and physical capital, amenity losses, damage to natural and physical capital, amenity losses,

noise, climate changenoise, climate change

~ 40,000 excess deaths/yr and $6 billion annually in the Newly ~ 40,000 excess deaths/yr and $6 billion annually in the Newly Independent States Independent States

Average 3 - 6 IQ points loss in children in some citiesAverage 3 - 6 IQ points loss in children in some cities

$1.1 -$4 billion annually in large cities of Asia$1.1 -$4 billion annually in large cities of Asia

Lovei, World Bank 1997

Sources of the environmental Sources of the environmental damage of air pollutiondamage of air pollution

Note: non-health impacts include visibility impacts, soiling and material damages

Local damageGlobal damagePower plants 30 284Large boilers 231 352Vehicles 979 101Small furnances 1026 132

Sector contribution to 'local' and 'global' damages: average for six cities

0

200

400

600

800

1000

1200

1400

Power plants Large boilers Vehicles Small furnances

Dam

age.

US

D m

illio

n

Globaldamage

Localdamage

Note: Average for 6 developing cities, Source: Lvovsky et al.

Increasing problem in Increasing problem in developing countriesdeveloping countries

Rapidly growing vehicle fleet with high Rapidly growing vehicle fleet with high pollutionpollution– inefficient and old vehicle fleetinefficient and old vehicle fleet– poor maintenance poor maintenance – lack of proper emission controllack of proper emission control– poor fuel qualitypoor fuel quality

Large roadside population exposedLarge roadside population exposed– street vendors, pedestriansstreet vendors, pedestrians

The leaded gasoline phase out caseThe leaded gasoline phase out caseLovei, World Bank 1997

Blood lead levels worldwideBlood lead levels worldwide(average of sampled populations, 1980s-1990s)(average of sampled populations, 1980s-1990s)

0

10

20

30

40

Mic

rogr

ams

per d

ecili

ter

U.S

.A

vera

ge

Ban

glor

e

Ban

gkok

Bud

apes

t

Cai

ro

Dam

ascu

s

Jaka

rta

Man

ila

Mex

ico

City


Lead in gasoline and human Lead in gasoline and human exposures: close linksexposures: close links

United States

0

20

40

60

80

100

120

19

75

19

78

19

81

19

84

19

87

19

90

Veh

icu

lar

Lea

d

Em

issi

on

s (1

,000

to

ns)

0

3

6

9

12

15

18

Blo

od

Lea

d L

evel

s (u

g/d

l)

Vehicular Lead Emissions Median Blood Lead Levels

Impact of phase out: No serious Impact of phase out: No serious technical constraints, U.S. advantagetechnical constraints, U.S. advantage

Vehicles can run on unleaded gasolineVehicles can run on unleaded gasoline– Catalytic converters are not needed Catalytic converters are not needed – Valve seat recession only affects few old carsValve seat recession only affects few old cars– Lubricating additives are available to protectLubricating additives are available to protect

Refineries can adjust to produce unleaded gasolineRefineries can adjust to produce unleaded gasolineBenefits – CostsBenefits – Costs– Clear advantageClear advantage

PolicyPolicy– Political willPolitical will– Make unleaded cheaperMake unleaded cheaper– Public informationPublic information 0

10000

20000

Mil

lio

n U

S$

Benefits Costs

Progress in the global Progress in the global phase-out of leadphase-out of lead

Total phase-out in Total phase-out in 25+ countries25+ countries

Decline in the amount Decline in the amount of lead in gasolineof lead in gasoline

Around 80% of Around 80% of gasoline is unleaded gasoline is unleaded world-wideworld-wide

Improvements in Improvements in ambient air quality ambient air quality and human healthand human health

Global Trend in Gasoline Production

Unleaded Gasoline

Unleaded Gasoline

Unleaded Gasoline

Unleaded Gasoline

Unleaded Gasoline

Unleaded Gasoline

Unleaded Gasoline

Unleaded Gasoline

Leaded Gasoline

0

200

400

600

800

1000

1990 1991 1992 1993 1994 1995 1996 1997M

illion

Met

ric T

ons

Leaded Gasoline Unleaded Gasoline


Rapid Phase-out in a Small Rapid Phase-out in a Small Country: El SalvadorCountry: El Salvador

Completed in 1 yearCompleted in 1 yearFast decline in airborne Fast decline in airborne lead (from 1.5 ug/mlead (from 1.5 ug/m3 3 to to 0)0)Enabling conditions:Enabling conditions:– Private ownership of Private ownership of

petroleum sectorpetroleum sector– Liberalized Liberalized

petroleum pricespetroleum prices– Significant importsSignificant imports

Cost: 1 U.S. cent/literCost: 1 U.S. cent/liter 0

20

40

60

80

100

Per

cent

1995 1996

Market Share of Unleaded Gasoline


From health concerns to total From health concerns to total phase-out in Thailandphase-out in Thailand

Risk assessment study: lead Risk assessment study: lead exposure is priority problem exposure is priority problem Political commitment Political commitment Price and market Price and market liberalizationliberalizationStrengthened environmental Strengthened environmental regulations, institutions regulations, institutions Differentiated taxationDifferentiated taxationClean fuels program and Clean fuels program and refinery adjustmentrefinery adjustmentIncreasing community Increasing community awarenessawareness

9.3

9.4

9.5

9.6

9.7

9.8

Pre

miu

mle

aded

Pre

miu

mun

lead

ed

Retail price of leaded and unleaded gasoline


FederalFacilitiesDocketListing

SiteDiscovery

RemovalAction

Required?

PreliminaryAssessment

SiteInspection

CleanupUnder

CERCLA?

PossibleAction

Under OtherAuthorities

HRSScore at or

Above28.50?

NPLListing

FederalFacilities

Agreement

RemovalAction Yes

Yes

Site AssessmentSite

Discovery

Remedial Action Risk Remedial Action Risk ManagementManagement

Adapted from Bell, 1997

No

No Yes

No

7373

Operationand

Maintenance

Recordof

Decision

RemedialDesign

RemedialAction

Remedial Design/Remedial ActionRemedial Investigation/Feasibility Study

RemedySelection

Scopingthe RI/FS

SiteCharacterization

Data Shared

Development &Screening of Alternatives

TreatabilityInvestigations

Detailed Analysisof Alternatives

ProposedPlan

DeletefromNPL

Five-YearReviews

Remedial Action ProcessRemedial Action Process


Purpose of RI/FS ProcessPurpose of RI/FS Process

Used to characterize extent, nature, risk, & cleanup alternatives of Used to characterize extent, nature, risk, & cleanup alternatives of hazardous substance releases hazardous substance releases – Leads to informed risk management (cleanup) decisionLeads to informed risk management (cleanup) decision

Scoping/Planning the RI/FSScoping/Planning the RI/FS– Review existing information Review existing information – Establish remedial objectives and determine remedial options Establish remedial objectives and determine remedial options – Assess need for treatability studiesAssess need for treatability studies

Bench or pilot scale to determine effectiveness of technologyBench or pilot scale to determine effectiveness of technology– Identify preliminary regulatory standardsIdentify preliminary regulatory standards


The RI/FS: Site The RI/FS: Site CharacterizationCharacterization

Site CharacterizationSite Characterization– Investigate physical characteristicsInvestigate physical characteristics– Define sources of contaminationDefine sources of contamination– Determine nature/extent of contaminationDetermine nature/extent of contamination– Analyze contaminant fate & transportAnalyze contaminant fate & transport– Using characterization data, conduct baseline risk Using characterization data, conduct baseline risk

assessmentassessment– Develop preliminary remedial goals (PRGs), based on Develop preliminary remedial goals (PRGs), based on

the risk assessment data and chemical-specific the risk assessment data and chemical-specific standardsstandards

– Develop documentation of chemical- and location-Develop documentation of chemical- and location-specific regulationsspecific regulations


Risk Assessment in Remedial Risk Assessment in Remedial InvestigationInvestigation

Risk Assessment plays a major role in RIRisk Assessment plays a major role in RI– Risks to human health and ecological resources are Risks to human health and ecological resources are

quantifiedquantified

Uddameri, 2001

The RI/FS: Development & The RI/FS: Development & Screening of AlternativesScreening of Alternatives

Develop remedial action objectives (RAOs) Develop remedial action objectives (RAOs) based on PRGs developed in the RIbased on PRGs developed in the RI

Identify potential treatment technologies, & Identify potential treatment technologies, & containment disposal requirements for untreated containment disposal requirements for untreated waste and residualswaste and residuals

Screen technologiesScreen technologies

Identify action-specific standardsIdentify action-specific standards

Assemble technologies into alternativesAssemble technologies into alternatives

Screen alternatives as necessaryScreen alternatives as necessary


The RI/FS: Detailed Analysis of The RI/FS: Detailed Analysis of AlternativesAlternatives

Analyze each alternative Analyze each alternative against nine evaluation against nine evaluation criteriacriteria

Compare alternatives Compare alternatives against each otheragainst each other

Using RI and treatability Using RI and treatability studies findings, determine studies findings, determine which alternatives provide which alternatives provide greatest benefits while greatest benefits while maximizing use of maximizing use of available resources, available resources, including fundingincluding funding

Threshold criteriaThreshold criteria– Overall protection of human Overall protection of human

health and the environmenthealth and the environment– Compliance with standardsCompliance with standards

Primary balancing criteriaPrimary balancing criteria– Long-term effectiveness and Long-term effectiveness and

permanencepermanence– Reduction of toxicity, Reduction of toxicity,

mobility, or volume of waste mobility, or volume of waste through treatmentthrough treatment

– Short-term effectivenessShort-term effectiveness– ImplementabilityImplementability– CostCost

Modifying criteriaModifying criteria– State acceptanceState acceptance– Community acceptanceCommunity acceptance


Risk Assessment in the FSRisk Assessment in the FSRisk Assessment in Feasibility StudyRisk Assessment in Feasibility Study– Screening of alternativesScreening of alternatives– Record of decisions is driven by risk assessmentRecord of decisions is driven by risk assessment– Remedial action – protect workers health Remedial action – protect workers health

Uddameri, 2001

8080

Selects preferred alternative & solicits public involvement & Selects preferred alternative & solicits public involvement & acceptance, is based on FS findingsacceptance, is based on FS findings

– Nature/extent of contaminationNature/extent of contamination– Alternatives evaluatedAlternatives evaluated– Preferred approachPreferred approach

ROD selects remedy and sets bounds for RD and RAROD selects remedy and sets bounds for RD and RA– Remedial action must start within 15 months of signed RODRemedial action must start within 15 months of signed ROD

Types of RODs Types of RODs – No ActionNo Action– Interim ActionInterim Action– Contingent ActionContingent Action– Final ActionFinal Action

Proposed Plan and Record of Proposed Plan and Record of DecisionDecision


Basic Elements of the RODBasic Elements of the ROD

DeclarationDeclaration– Formal statement signed by EPA that Formal statement signed by EPA that

identifies selected remedyidentifies selected remedy– Includes a Includes a Statutory DeterminationsStatutory Determinations section section

stating that the selected remedy complies with stating that the selected remedy complies with ARARs or states that a waiver is justified and ARARs or states that a waiver is justified and is cost-effectiveis cost-effective

Decision SummaryDecision Summary

Responsiveness SummaryResponsiveness Summary


8282

ROD Decision SummaryROD Decision Summary– Presents overview of site problems, remedial Presents overview of site problems, remedial

alternatives, and analysis of alternativesalternatives, and analysis of alternatives– Explains rationale for remedy selectionExplains rationale for remedy selection– Statutory Determinations section explains how Statutory Determinations section explains how

selected remedy satisfies statutory requirementsselected remedy satisfies statutory requirements

ROD Responsiveness SummaryROD Responsiveness Summary– Provides decision-makers with information Provides decision-makers with information

about community preferencesabout community preferences– Demonstrates to public how their comments Demonstrates to public how their comments

were taken into accountwere taken into account

ROD Decision & ROD Decision & Responsiveness SummaryResponsiveness Summary


8383

Purpose - develop remedial design/remedial Purpose - develop remedial design/remedial action (RD/RA) Work Plan and implement action (RD/RA) Work Plan and implement remedial actionremedial actionDesign/action Design/action mustmust criteria criteria listed in signed ROD listed in signed RODVerify protectiveness of remedy if significant new Verify protectiveness of remedy if significant new ARARs are promulgated or identifiedARARs are promulgated or identifiedReview ARARs if remedial action is significantly Review ARARs if remedial action is significantly different from RODdifferent from RODAny changes to preferred alternative after the Any changes to preferred alternative after the ROD has been signed must be specifically ROD has been signed must be specifically documented & approved by all stakeholdersdocumented & approved by all stakeholders

Remedial Design and Remedial Design and ConstructionConstruction


Risk Based Corrective Action Risk Based Corrective Action (RBCA)(RBCA)

ASTM has developed a “risk” based approach ASTM has developed a “risk” based approach for closure assessment of waste sitesfor closure assessment of waste sites– Many states have adopted this approach as a Many states have adopted this approach as a

screening technique for sites such as underground screening technique for sites such as underground storage tanksstorage tanks

– Private parties often use RBCA for due diligencePrivate parties often use RBCA for due diligence

Tiered approachTiered approach– 1 – risk based screen levels (tables)1 – risk based screen levels (tables)– 2 – baseline risks and/or site-specific target levels 2 – baseline risks and/or site-specific target levels

for on-site and off-site receptors using site-specific for on-site and off-site receptors using site-specific soil, groundwater, and air parameterssoil, groundwater, and air parameters

Use of Risk Management in the Use of Risk Management in the MilitaryMilitary

The use of risk The use of risk assessment methods assessment methods in the military varies in the military varies – Quantitative Health Quantitative Health

Risk Assessment Risk Assessment follows generally follows generally accepted principlesaccepted principles

– Qualitative methods Qualitative methods are also used for are also used for decision-makingdecision-making

Step 1Step 1– IDENTIFY HAZARDS DURING MISSION ANALYSISIDENTIFY HAZARDS DURING MISSION ANALYSIS

CONDITIONS THAT HAVE THE POTENTIAL OF CONDITIONS THAT HAVE THE POTENTIAL OF POLLUTING THE AIR, SOIL, WATER, OR DEGRADE POLLUTING THE AIR, SOIL, WATER, OR DEGRADE NATURAL CULTURAL RESOURCESNATURAL CULTURAL RESOURCES

Step 2Step 2– ASSESS THE PROBABILITY OF ENVIRONMENTAL DAMAGE ASSESS THE PROBABILITY OF ENVIRONMENTAL DAMAGE

AND VIOLATIONSAND VIOLATIONSENVIRONMENTAL RISK ASSESSMENT MATRICES ENVIRONMENTAL RISK ASSESSMENT MATRICES

Step 3Step 3– MAKE DECISIONS AND DEVELOP MEASURES TO REDUCE MAKE DECISIONS AND DEVELOP MEASURES TO REDUCE

HIGH RISKSHIGH RISKS

Six Steps of Risk Management Six Steps of Risk Management in Militaryin Military

http://155.217.58.58/cgi-bin/atdl.dll/gta/5-8-2/050802_top.htm

Step 4Step 4– BRIEF THE CHAIN OF COMMAND AND APPROPRIATE BRIEF THE CHAIN OF COMMAND AND APPROPRIATE

DECISION MAKERSDECISION MAKERSPROPOSED PLANS AND RESIDUAL RISKSPROPOSED PLANS AND RESIDUAL RISKS

Step 5Step 5– IMPLEMENT ENVIRONMENTAL MEASURESIMPLEMENT ENVIRONMENTAL MEASURES

INTEGRATE THEM INTO PLANS, ORDERS, SOPs, INTEGRATE THEM INTO PLANS, ORDERS, SOPs, TRAINING PERFORMANCE STANDARDS, AND TRAINING PERFORMANCE STANDARDS, AND REHEARSALSREHEARSALS

Step 6Step 6– SUPERVISE AND ENFORCE ENVIRONMENTAL STANDARDSSUPERVISE AND ENFORCE ENVIRONMENTAL STANDARDS

TRAIN TO THESE STANDARDSTRAIN TO THESE STANDARDS

Six Steps of Risk Management Six Steps of Risk Management in Militaryin Military


Air PollutionAir Pollution

Archaeological & Historical SitesArchaeological & Historical Sites

Hazardous Material & Hazardous WasteHazardous Material & Hazardous Waste

Noise PollutionNoise Pollution

Threatened & Endangered SpeciesThreatened & Endangered Species

Water PollutionWater Pollution

Wetland ProtectionWetland Protection

Risk Impact Values are used in matrices (scale of 0 to 5)Risk Impact Values are used in matrices (scale of 0 to 5)– 5 = greatest risk5 = greatest risk– An estimate of operating conditionsAn estimate of operating conditions– They indicate a severity of environmental degradationThey indicate a severity of environmental degradation

7 Areas of Environmental 7 Areas of Environmental ConcernConcern


ENVIRONMENTAL AREA: Air Pollution

TOTAL RATING:

UNIT OPERATIONS RISK-IMPACT VALUE

5 4 3 2 1 0Movement of heavy vehicles and systems

Movement of personnel and light vehicles/ systems

Assembly Area activities

Field maintenance of equipment

Garrison maintenance of equipment

5 4 3 2 1 0

5 4 3 2 1 0

5 4 3 2 1 0

5 4 3 2 1 0


Air Pollution

Archaeological and Historical Sites

Hazardous Material and Hazardous Waste

Noise Pollution

Threatened and Endangered Species

Water Pollution

Wetland Protection

Low

0-58

Med.

59-117

High

118-149

Ex High

150-175Risk Value Totals

Training Event: _________

Garrison Maintenance of Equipment

Field Maintenance of Equipment

Risk Rating

Assembly Area Activities

Movement of Personnel and Light Vehicles/Systems

Movement of Heavy Vehicles/Systems

Air Pollution Contributing Air Pollution Contributing FactorsFactors

Value = 0 NO RISK/NOT APPLICABLEValue = 0 NO RISK/NOT APPLICABLE

Value = 1Value = 1– OPERATING AREAS ARE NOT SUSCEPTIBLE TO RANGE FIRES.OPERATING AREAS ARE NOT SUSCEPTIBLE TO RANGE FIRES.– FIRES ARE LIMITED, CONTROLLED, AND ALLOWED ONLY IN FIRES ARE LIMITED, CONTROLLED, AND ALLOWED ONLY IN

AUTHORIZED AREAS (powder burn areas and incinerators).AUTHORIZED AREAS (powder burn areas and incinerators).– USE OF AND TRAINING WITH RIOT CONTROL CHEMICAL USE OF AND TRAINING WITH RIOT CONTROL CHEMICAL

AGENT (CS) AND SMOKE ARE STRICTLY CONTROLLED.AGENT (CS) AND SMOKE ARE STRICTLY CONTROLLED.– VEHICLES AND EQUIPMENT ARE WELL MAINTAINED AND IN VEHICLES AND EQUIPMENT ARE WELL MAINTAINED AND IN

GOOD OPERATING ORDER.GOOD OPERATING ORDER.– SOLDIERS ARE ENVIRONMENTALLY CONSCIOUS.SOLDIERS ARE ENVIRONMENTALLY CONSCIOUS.– SOLDIERS ARE THOROUGHLY FAMILIAR WITH RANGE FIRE SOLDIERS ARE THOROUGHLY FAMILIAR WITH RANGE FIRE

RESTRICTIONS.RESTRICTIONS.– COMMAND AND CONTROL OR SUPERVISION IS EXCELLENTCOMMAND AND CONTROL OR SUPERVISION IS EXCELLENT



Value = 2Value = 2– OPERATING AREA IS SAFE FROM RANGE FIRES.OPERATING AREA IS SAFE FROM RANGE FIRES.

– STANDBY FIRE FIGHTING EQUIPMENT IS AVAILABLE.STANDBY FIRE FIGHTING EQUIPMENT IS AVAILABLE.

– SOLDIERS ARE ENVIRONMENTALLY CONSCIOUS.SOLDIERS ARE ENVIRONMENTALLY CONSCIOUS.

– SOLDIERS ARE BRIEFED ON THE HAZARDS OF RANGE FIRES AND SOLDIERS ARE BRIEFED ON THE HAZARDS OF RANGE FIRES AND RANGE FIRE RESTRICTIONS.RANGE FIRE RESTRICTIONS.

– COMMAND AND CONTROL OR SUPERVISION IS GOOD.COMMAND AND CONTROL OR SUPERVISION IS GOOD.

Value = 3Value = 3– WEATHER IS FAVORABLE FOR TRAINING; WINDS AND RANGE WEATHER IS FAVORABLE FOR TRAINING; WINDS AND RANGE

CONDITIONS ARE WITHIN SAFE OPERATING LIMITS.CONDITIONS ARE WITHIN SAFE OPERATING LIMITS.

– OPERATING AREA IS SAFE FROM RANGE FIRES.OPERATING AREA IS SAFE FROM RANGE FIRES.

– SOLDIERS ARE BRIEFED ON THE HAZARDS OF RANGE FIRES AND SOLDIERS ARE BRIEFED ON THE HAZARDS OF RANGE FIRES AND RANGE RESTRICTIONS.RANGE RESTRICTIONS.

– COMMAND AND CONTROL OR SUPERVISION IS ADEQUATE.COMMAND AND CONTROL OR SUPERVISION IS ADEQUATE.



Value = 4Value = 4– CURRENT OR FORECASTED WEATHER CONDITIONS COULD CONTRIBUTE CURRENT OR FORECASTED WEATHER CONDITIONS COULD CONTRIBUTE

TO RANGE FIRES.TO RANGE FIRES.– OPERATING AREA IS SUSCEPTIBLE TO RANGE FIRES.OPERATING AREA IS SUSCEPTIBLE TO RANGE FIRES.– SOME HIGH-TEMPO OPERATIONS ARE PLANNED (up to 36 hours).SOME HIGH-TEMPO OPERATIONS ARE PLANNED (up to 36 hours).– SOLDIERS ARE NOT ENVIRONMENTALLY CONSCIOUS.SOLDIERS ARE NOT ENVIRONMENTALLY CONSCIOUS.– COMMAND AND CONTROL OR SUPERVISION IS MARGINAL.COMMAND AND CONTROL OR SUPERVISION IS MARGINAL.– SOME USE OF EXPLOSIVES IS PLANNED. SOME USE OF EXPLOSIVES IS PLANNED.

Value = 5Value = 5– CURRENT OR FORECASTED WEATHER CONDITIONS (dry and windy) WILL CURRENT OR FORECASTED WEATHER CONDITIONS (dry and windy) WILL

CONTRIBUTE TO RANGE FIRES.CONTRIBUTE TO RANGE FIRES.– OPERATING AREA IS SUSCEPTIBLE TO RANGE FIRES.OPERATING AREA IS SUSCEPTIBLE TO RANGE FIRES.– VEHICLES AND EQUIPMENT ARE NOT RELIABLE OR WELL MAINTAINED.VEHICLES AND EQUIPMENT ARE NOT RELIABLE OR WELL MAINTAINED.– SOLDIERS ARE NOT PROFICIENT/EXPERIENCED.SOLDIERS ARE NOT PROFICIENT/EXPERIENCED.– COMMAND AND CONTROL OR SUPERVISION IS MARGINAL.COMMAND AND CONTROL OR SUPERVISION IS MARGINAL.– SUSTAINED HIGH-TEMPO OPERATIONS ARE PLANNED (36 hours plus).SUSTAINED HIGH-TEMPO OPERATIONS ARE PLANNED (36 hours plus).– EXTENSIVE USE OF EXPLOSIVES IS PLANNED.EXTENSIVE USE OF EXPLOSIVES IS PLANNED.


Delegating decision rolesDelegating decision roles

Environmental Risk Decision-maker Environmental Risk Decision-maker matrixmatrix

CategoryCategory Risk ValueRisk Value Decision-Decision-makermaker

LowLow 0 – 580 – 58 Squad / Squad / PlatoonPlatoon

MediumMedium 59 – 11759 – 117 Company / Company / BattalionBattalion

HighHigh 118 – 149118 – 149 Installation / Installation / DivisionDivision

Extremely Extremely HighHigh

150 – 175150 – 175 Major Army Major Army CommandCommand


US DOT Risk Management US DOT Risk Management ApproachApproach

InformationInformation– Labels for ContainersLabels for Containers– Placards for VehiclesPlacards for Vehicles– Shipping papers for Shipping papers for

each shipmenteach shipment

Standards for Standards for Shipping ContainersShipping Containers

InspectionsInspections

Penalties for non-Penalties for non-compliance compliance

US DOT Risk Management US DOT Risk Management ApproachApproach

CCll

TypeType .1.1 .2.2 .3.3 SymbolsSymbols

11 ExplosivesExplosives

22 GasesGases FlammaFlammableble

Non FlammableNon Flammable Poison Poison

33 Fl. LiquidsFl. Liquids

44 Fl. SolidsFl. Solids Flam Flam SolidSolid

Spont. Spont. CombustibleCombustible

Danger Danger wetwet

55 OxidizersOxidizers OxidizerOxidizerss

Organic Organic PeroxidePeroxide

66 PoisonsPoisons PoisonsPoisons Keep away from Keep away from foodfood

InfectiouInfectiouss

77 RadioactivRadioactivee

88 CorrosivesCorrosives

99 MiscellaneMiscellaneousous

NFPA Risk InformationNFPA Risk Information

National Fire Protection National Fire Protection Association labeling systemAssociation labeling system

Containers, storage roomsContainers, storage rooms

For emergency respondersFor emergency responders

Local (permits) & insurance Local (permits) & insurance (premiums) enforcement(premiums) enforcement

http://www.parish-supply.com/software/safe_labels/safe_labels.htmhttp://www.hclco.com/software/trainbook/nfpaimage/vc-49vh.jpg

General Rating Summary

Health (Blue)4) Danger - May be fatal on short exposure. Specialized protective equipment required3) Warning - Corrosive or toxic. Avoid skin contact or inhalation2) Warning - May be harmful if inhaled or absorbed1) Caution - May be irritating0) No unusual hazard

Flammability (Red)4) Danger - Flammable gas or extremely flammable liquid3) Warning - Flammable liquid flash point below 100° F2) Caution - Combustible liquid flash point of 100° to 200° F1) Combustible if heated0) Not combustible

Reactivity (Yellow)4) Danger - Explosive material at room temperature3) Danger - May be explosive if shocked, heated under confinement or mixed with water2) Warning - Unstable or may react violently if mixed with water1) Caution - May react if heated or mixed with water but not violently0) Stable - Not reactive when mixed with water

Special Notice Key (White)W - Water ReactiveOX - Oxidizing Agent

Management Systems

Plan

Do

Check

Act

Environmental Management Environmental Management SystemSystem

4.2 Environmental

policy

4.3 Planning

4.4 Implementation and operation

4.6 Management

review

4.5Checking and

corrective action


4.2 Environmental

policy

4.3 Planning

4.4 Implementation and

operation

4.6 Management

review

4.5Checking and corrective

action

Appropriate to ...

Commit to continual improvement and P2

Commitment to compliance

Framework for setting and reviewing environmental objectives and targets

Documented, implemented and maintained and communicated to employees

Available to the public


4.2 Environmental

policy

4.3 Planning


operation

4.6 Management

review


action

Environmental aspects

Legal and Other requirements

Objectives and targets

Environmental management program(s)


4.2 Environmental

policy

4.3Planning

4.4 Implementation and operation

4.6 Management

review


action

Structure and responsibility

Training, awareness and competence

Communications

Environmental management system documentation

Document control

Operational control

Emergency preparedness and response


4.2 Environmental

policy

4.3Planning


operation

4.6 Management

review

4.5Checking and

corrective action

Monitoring and measurement

Nonconformance and corrective and preventive action

Records

Environmental management system audit


4.2 Environmental

policy

4.3Planning


operation

4.6 Management

review


action

Review the environmental management system

Necessary information is collected

Review shall be documented

The Road MapThe Road Map

Activities, Products, Services

Environmental Aspects of ...

Identify Impacts of

Aspects

Evaluate Impacts to Determine Significance

Identify Significant

Aspects

Objectives & Targets

Environmental Management

Program

Track Performance

ISO 9000 Series & ISO 14001ISO 9000 Series & ISO 14001

Similarities in Structure Differences Similarities in Structure Differences in Scopein Scope

Potential Integration opportunity

SimilaritiesSimilaritiesBoth have specifications Both have specifications

and guidelines and guidelines Management Management CommitmentCommitmentPolicies and objectivesPolicies and objectivesWell defined assignment Well defined assignment of responsibilitiesof responsibilitiesEmployee TrainingEmployee TrainingContinual ImprovementContinual ImprovementMonitoringMonitoring

Documentation and Documentation and controlcontrolOperational ControlOperational ControlCorrective ActionCorrective ActionMeasuresMeasuresManagement Management ReviewsReviewsAuditsAudits

ISO 9001 ISO 14001ISO 9001 ISO 14001

Quality SystemsQuality Systems

Quality PolicyQuality Policy

Included in Legal Included in Legal Requirements and Requirements and Quality PolicyQuality Policy

General RequirementsGeneral Requirements

Environmental PolicyEnvironmental Policy

Environmental Environmental AspectsAspects

Legal & Other Legal & Other RequirementsRequirements

Objectives & TargetsObjectives & Targets

Environmental Environmental Management ProgramManagement Program

ISO 9001 ISO 14001ISO 9001 ISO 14001

OrganizationOrganization

TrainingTraining

GeneralGeneral

Document & Data Document & Data ControlControl

Structure & ResponsibilityStructure & Responsibility

Training, Awareness …Training, Awareness …

CommunicationCommunication

Environmental Environmental DocumentationDocumentation

Document ControlDocument Control

ISO 9001 ISO 9001 ISO 14001 ISO 14001

Quality system Quality system proceduresprocedures

Contract reviewContract review

Design controlDesign control

PurchasingPurchasing

Control customer-Control customer-supplied productsupplied product

Process controlProcess control

Handling, storage, …Handling, storage, …

ServicingServicing

Operation controlOperation control

Emergency preparednessEmergency preparedness

ISO 9001 ISO 14001ISO 9001 ISO 14001

Inspection & testingInspection & testingControl of inspection, …Control of inspection, …

Control of non-conforming Control of non-conforming productproductCorrective & preventive Corrective & preventive actionactionControl of quality recordsControl of quality recordsInternal quality auditsInternal quality audits

Management ReviewManagement Review

Monitoring & measurementMonitoring & measurement

Non-conformance & Non-conformance & corrective & preventive actioncorrective & preventive action

RecordsRecords

Environmental management Environmental management system auditsystem audit

Management ReviewManagement Review

Implementation Occurs in Implementation Occurs in StagesStages

Eff

ecti

ve-

ness

Imp

lem

en

ta-

tio

nIn

ten

t

Early Developing Mature

Stage of Management System Development

Dev

elo

pm

enta

l F

ocu

s

• All Elements Implemented• Refining Effectiveness

• All Elements Developed• Working to Fully Implement All Elements• Some Refining Effectiveness

• Elements Under Development• Some Fully Implemented

HSE (risk) Audit ProcessHSE (risk) Audit Process

ObjectivesObjectives

Functional AreasFunctional Areas

FrequencyFrequency

Typical Site Events, Audit Week Typical Site Events, Audit Week SequenceSequence

Report, Distribution, Follow-upReport, Distribution, Follow-up

Facility Classification MethodologyFacility Classification Methodology

HSE Audit ProcessHSE Audit ProcessCombined HSE Audit to verify compliance with:Combined HSE Audit to verify compliance with:

• Federal/State/Local rulesFederal/State/Local rules

• Company policiesCompany policies

Primary Customer flow: Leadership to EnterprisePrimary Customer flow: Leadership to Enterprise

• Leadership authorizes auditsLeadership authorizes audits

• Enterprise implements findingsEnterprise implements findings

Leadership establishes PolicyLeadership establishes Policy

– Corporate HS&EA Process OwnerCorporate HS&EA Process Owner

Risk Based FrequencyRisk Based Frequency

Rating -- Focus on improvement Rating -- Focus on improvement

A Compliance OverviewA Compliance Overview

– NOT an In-depth review of each functionNOT an In-depth review of each function

HSE Audit Process - Functional HSE Audit Process - Functional AreasAreas

Air QualityAir Quality

Waste WaterWaste Water

Hazardous WasteHazardous Waste

Solid WasteSolid Waste

Clean Air Act Title VClean Air Act Title V

Drinking WaterDrinking Water

Underground TanksUnderground Tanks

Oil & PetroleumOil & Petroleum

Emission InventoriesEmission Inventories

Special PollutantsSpecial Pollutants

Emergency PreparednessEmergency Preparedness

General Safety & HealthGeneral Safety & Health

Process SafetyProcess Safety

RecordkeepingRecordkeeping

Chemical ExposuresChemical Exposures

Hazard CommunicationHazard Communication

Personal Protective Equip.Personal Protective Equip.

Confined SpaceConfined Space

Lockout & TagoutLockout & Tagout

HAZWOPERHAZWOPER

Welding & CuttingWelding & Cutting

Fire ProtectionFire Protection

HSE Audit Process - FrequencyHSE Audit Process - Frequency

Use of “Risk” Based Approach for Use of “Risk” Based Approach for FrequencyFrequency• Semi-quantitative method coveringSemi-quantitative method covering

Compliance History, Internal Program, Potential Compliance History, Internal Program, Potential Risk, Performance, Regulatory EnvironmentRisk, Performance, Regulatory Environment

Use of Previous Audits as Initial Base Use of Previous Audits as Initial Base PeriodPeriod

5 Year Plan with a Frequency of 2 to 4 5 Year Plan with a Frequency of 2 to 4 yearsyears

HSE Audit Process - Site HSE Audit Process - Site EventsEvents

1st Day 2nd to 4th Day Last Day

Travel DocumentationReview

Verification,Feedback

Opening Meeting& Objectives

Field Verification Reconciliation

Initial Tour Field Verification Close-out &Final Findings

DocumentationReview

Feedback Begin DraftPreparation

Pre-audit preparation: questionnaire, documentation, etc.

HSE Audit Process - Facility HSE Audit Process - Facility ClassificationClassification

Functional Areas are checkedFunctional Areas are checked

• Each finding is assigned severityEach finding is assigned severity

Major, Moderate, MinorMajor, Moderate, Minor

• Overall Functional Area assigned severityOverall Functional Area assigned severity

• Overall Functional Area degree of complianceOverall Functional Area degree of complianceFunctional Area is Classified by using severity and complianceFunctional Area is Classified by using severity and compliance

• e.g., If a functional area is judged to be Major for severity e.g., If a functional area is judged to be Major for severity or if it is judged to have minimal compliance, then it will or if it is judged to have minimal compliance, then it will be assigned “Requires Significant Improvement”be assigned “Requires Significant Improvement”

• Major Items to be elevated to Leadership TeamMajor Items to be elevated to Leadership Team

Severity Classifications - Severity Classifications - FindingsFindings

MajorMajor• Potential for catastrophic or severe HSE impactPotential for catastrophic or severe HSE impact

• Requiring top-level management interventionRequiring top-level management intervention

ModerateModerate• Serious adverse HSE impactSerious adverse HSE impact

• Company reputation would be adversely impactedCompany reputation would be adversely impacted

• Likely to result in enforcement action or penaltyLikely to result in enforcement action or penalty

• Represents absence of a key required programRepresents absence of a key required program

MinorMinor• No potential for environmental damage or employee injuryNo potential for environmental damage or employee injury

• Programs or minor gaps in need of fine tuning Programs or minor gaps in need of fine tuning

HSE Audit Compliance GridHSE Audit Compliance Grid

MajorMajor Requires Significant ImprovementRequires Significant Improvement Meets Meets RequireRequirementsments

ModerateModerate Requires Significant Requires Significant ImprovementImprovement

Generally Meets Generally Meets RequirementsRequirements

MinorMinor Requires Requires SignificaSignificant nt Improve-Improve-mentment

Requires Requires Improve-Improve-mentment

Generally Generally Meets Meets Require-Require-mentsments

SubstantialSubstantially Meets ly Meets Require-Require-mentsments

MinimalMinimal LimitedLimited GeneralGeneral SubstantialSubstantial FullFull

Level of Compliance

Se

veri

ty

HSE Audit Process - 5 Possible HSE Audit Process - 5 Possible Facility ClassificationsFacility Classifications

Meets Requirements (MR)Meets Requirements (MR)

• At least 75% of Functional Areas = MR or betterAt least 75% of Functional Areas = MR or better

• No Functional Areas below SMRNo Functional Areas below SMRSubstantially Meets Requirements (SMR)Substantially Meets Requirements (SMR)

• At least 75% of Functional Areas = SMR or betterAt least 75% of Functional Areas = SMR or better

• No Functional Areas below GMRNo Functional Areas below GMRGeneral Meets Requirements (GMR)General Meets Requirements (GMR)

• At least 75% of Functional Areas = GMR or betterAt least 75% of Functional Areas = GMR or betterRequires Improvement (RI)Requires Improvement (RI)

• More than 25% of Functional Areas = RIMore than 25% of Functional Areas = RIRequires Significant Improvement (RSI)Requires Significant Improvement (RSI)

• More than 25% of Functional Areas = RSIMore than 25% of Functional Areas = RSI

Facility Classification GridFacility Classification Grid

MR*MR* SMR*SMR* GR*GR* RI*RI* RSIRSI

MRMR >> 75% 75% >> 75% 75% >> 75% 75% > 50%> 50% < 75%< 75%

SMRSMR < 25%< 25%

GRGR

00

< 25%< 25%

RIRI

00

< 25%< 25% > 25%> 25%

RSIRSI << 25% 25% >> 25% 25%

Facility Classification

Fu

nct

ion

al C

lass

ific

atio

n

* Provided no other relevant information suggests a lower classification

Management Systems Development

Co

mp

lian

ce S

tatu

sCompliance & Management Systems

(adding context)

Good Performance But Not Sustainable

Ineffective Systems

Sustainable Zone

Weak Systems & Poor Performance

High

Low

Early Mature

Qualitative Risk Management Qualitative Risk Management Systems – Severity basedSystems – Severity based

Challenge to find a method that would Challenge to find a method that would account for differing hazard data typesaccount for differing hazard data types– Degree of Hazard such as ToxicityDegree of Hazard such as Toxicity– Quantity at riskQuantity at risk

and intangible aspectsand intangible aspects– Impact of regulationImpact of regulation– Sensitivity of the environmentSensitivity of the environment– Degree of controlDegree of control

To help set priorities for capital spendingTo help set priorities for capital spending

Qualitative Risk Management Qualitative Risk Management Systems – Severity basedSystems – Severity based

RiskManRiskMan

Use of expert (internal to the organization) panelUse of expert (internal to the organization) panel– assess risk related qualitative componentsassess risk related qualitative components– given quantitative valuesgiven quantitative values– through a consensus approachthrough a consensus approach

Values are scored and plottedValues are scored and plotted

The values that are plotted in three rangesThe values that are plotted in three ranges– AcceptableAcceptable– Needs ImprovementNeeds Improvement– UndesirableUndesirable

Values in each range should agree with funding priorities Values in each range should agree with funding priorities budgeted for the next fiscal yearbudgeted for the next fiscal year

Qualitative severity to identify risk Qualitative severity to identify risk management opportunitiesmanagement opportunities

Challenge was to identify an environmental measure Challenge was to identify an environmental measure that could be used across many different types of that could be used across many different types of industrial operations and sectors industrial operations and sectors – Unit processes & operationsUnit processes & operations– Pharmaceuticals, agrochemicals, fine organics, Pharmaceuticals, agrochemicals, fine organics,

and commodity chemicalsand commodity chemicals

to capture “emergency” events andto capture “emergency” events and– Allow managers to distinguish the serious from Allow managers to distinguish the serious from

incidentalincidental– Allow executives to compare facility behaviorAllow executives to compare facility behavior

Social Risk Management Framework:Social Risk Management Framework:Basic thrusts: Basic thrusts:

The poor are typically most exposed to diverse risksThe poor are typically most exposed to diverse risks– traditional and moderntraditional and modern

The poor least equipped to deal with these risksThe poor least equipped to deal with these risks– The poor are most vulnerable The poor are most vulnerable – High vulnerability makes them risk averse and thus unable or High vulnerability makes them risk averse and thus unable or

unwilling to engage in higher risk/high return activitiesunwilling to engage in higher risk/high return activitiesSRM seeks to account for multiple sources of risk and their SRM seeks to account for multiple sources of risk and their characteristics to address vulnerability characteristics to address vulnerability – Operates with multiple strategies (prevention, mitigation, coping) Operates with multiple strategies (prevention, mitigation, coping)

and arrangements (informal, market-based, public) to deal with and arrangements (informal, market-based, public) to deal with riskrisk

– Attempts to match the multiple suppliers of risk management Attempts to match the multiple suppliers of risk management instruments (such as households, communities, NGOs, and instruments (such as households, communities, NGOs, and governments) with key demand groups (formal, informal-urban governments) with key demand groups (formal, informal-urban and informal-rural workers)and informal-rural workers)

Adapted from Holzmann, 1998

Sources and Forms of Social RiskSources and Forms of Social Risk

MicroMicro MesoMeso MacroMacro(idiosyncratic)(idiosyncratic) (co-variant)(co-variant)

NaturalNatural RainfallRainfall EarthquakeEarthquakeLandslideLandslide FloodsFloodsVolcanic eruptionVolcanic eruption DroughtDrought

Strong windsStrong windsHealthHealth IllnessIllness EpidemicEpidemic

InjuryInjuryDisabilityDisability

Life-cycleLife-cycle BirthBirthOld-ageOld-ageDeathDeath

SocialSocial CrimeCrime TerrorismTerrorism Civil strifeCivil strifeDomestic violenceDomestic violence GangsGangs WarWar

EconomicEconomic UnemploymentUnemployment Resettlement Resettlement Output collapseOutput collapseHarvest failure Harvest failure FinancialFinancialBusiness failureBusiness failure or currency crisisor currency crisis

Technology Technology PoliticalPolitical Ethnic discriminationEthnic discrimination RiotsRiots Default on social prog.Default on social prog.EnvironmentalEnvironmental PollutionPollution

DeforestationDeforestationNuclear disasterNuclear disaster


Risk Management StrategiesRisk Management Strategies

Prevention Strategies - to reduce the Prevention Strategies - to reduce the probability of down-side riskprobability of down-side risk

Mitigation Strategies - to decrease the Mitigation Strategies - to decrease the impact of a future down-side riskimpact of a future down-side risk– Portfolio diversificationPortfolio diversification

– InsuranceInsurance

– Hedging/Risk exchangeHedging/Risk exchange

Coping Strategies - to relieve the impact Coping Strategies - to relieve the impact once the risk (the event) has occurredonce the risk (the event) has occurred


Risk Management ArrangementsRisk Management Arrangements

Informal arrangements, e.g.Informal arrangements, e.g.– marriage, real assets, mutual community supportmarriage, real assets, mutual community support

Market-based arrangements, e.g.Market-based arrangements, e.g.– cash, bank deposits, bonds and shares, cash, bank deposits, bonds and shares,

insurance contractsinsurance contracts

Publicly provided or mandated arrangementsPublicly provided or mandated arrangements– social insurance, transfers in cash and kind, social insurance, transfers in cash and kind,

subsidies and public workssubsidies and public works


Arrangements/ Strategies

Informal/personal Formal/ financial market-based

Formal/publicly-mandated/provided

Risk reduction Less risky production Migration

Labor standards VET Labor market policies Disability policies

Risk mitigation

Portfolio Multiple jobs Investment in human, physical and real assets

Investment in multiple financial assets

Multi-pillar pension systems Social Funds

Insurance Marriage/family Community arrangements Share tenancy Tied labor

Old-age annuities Disability/Accident

Mandated/provided for unemployment, old-age, disability, survivorship, sickness, etc.

Hedging Extended family Some labor contracts

Risk coping Selling of physical and real assets Borrowing from neighbors Intra-community transfers/charity Sending children to work

Selling of financial assets Borrowing from banks

Transfers/Social assistance Subsidies Public works

Matrix of Social Risk Management (examples)


Framework for studying vulnerable populations

Communityresources

PeopleTies betweenpeopleNeighborhoods

Source: Aday (1994)

Community

Individual

VulnerablePopulations

At-risk

Communityhealth Needs

PhysicalPsychologicalSocial

Statistical(aggregate)

lives

Common GoodReciprocityInterdependence

IndividualResources

Social statusSocial capitalhuman capital

VulnerableIndividuals

Susceptible to:harm or neglect

IndividualHealth Needs

PhysicalPsychologicalSocial

Individual(identifiable)

lives

Individual RightsAutonomyIndependence

Community andIndividual Well-

Being

Resourceavailability

(+)

Relativerisk(+)

Healthstatus

(+)

(+)

(-)

(-)(+)

Social and Community-oriented Medical care and Level Ethical normsPerspective economic policy health policy public health policy of analysis and values

Policy

Note: (+) indicates direct relationship (likelihood of outcome increases as predictor increases; (-) indicates inverserelationship (likelihood of outcome decreases as predictor increases)

Documents

RISK MANAGEMENT