Leadership Role in Risk Management

CII-ER Safety Symposium and Exposition 201411th -12th Sept 2014, ITC Sonar, Kolkata

Think about tomorrow, today!

Birendra Verma, Joint President & Group Head, Safety

A Basic System

+/-

Output ACTUAL performance

Input = TARGET performance

Input = A SYSTEM CHANGE BASED on +/-

Tolerance limitUpper control limit

Lower control limit

Tolerance limit

Target

Managing Deviations

How to avoid incidents ?

• Identify hazards

• Know risks – ( Probabilities * Consequences)

• Risks can and must be managed.

••• Losses can’t be impacted effectively without managing risks

List all the potential hazards

Process operations -

Employee health -

Employee safety -Employee safety -

Environment -

Reputation -

Security -

S

e

v

e

ri

t

y

ConsequencesIncreasing frequency of Occurrence (Probability)

A B C D E

People/ Values & Principles

Assets/ Economic Impact

Environment ReputationHas never

occurred in our Industry

Could / has occurred in our Industry and could reoccur

Could / has occurred in our Company and could reoccur

Could / has occurred

several times in one year in our Company and could reoccur

Could / has occurred

several times in one year in the same place and could reoccur

0 No impact No damage No effect No impact

1First aid case

<$25kSlight

damagePart of local population

Medical Local minor

Local

Risk Matrix

2Medical treatment case

$25k-100kLocal minor damage

Local population /

CEO

3

Lost time or mulitplemedical treatment cases

$100-500kLocal major damage

Local news / BOD / Offical Report

4Single fatality

$500-1 million

Major environmental damage

National news / Board of Directors /

Official Departments

5Multiple fatalities

>$1 millionMassive

environmental damage

International news /

Shareholder /MOL/MOE

F

How does matrix help ?

The risk can be easily assessed by selectinga category, e.g. People, and then selecting anitem from the risk matrix on the consequencescreen.

Manage for continual Manage for continual improvement

Demonstrate ALARP

Intolerable

H

A

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C

O

NS

E

Q

BARRIERS

Events and

Circumstances

Harm to people and

damage to assets

or environment

Risk Management Barriers ?

A

Z

A

R

D

Q

UE

N

CE

S

Undesirable event with

potential for harm or damage

Engineering activities

Operations activities

Maintenance activities

o Safe Technology –based on Process Hazard Analysis , Risk Mitigating Designo Verified and authorized at design level and installed as intended , verifiedo Doubled checked through Pre-startup Safety Review (PSSR)o Written Operational Manual with clear indication of process capability & limitationo Adequate Training, Job Cycle Check , Observation and Audit

o Facility capable to minimize consequences o System exists for energy isolation – LOTO, PTW, JSA, Supervision

o Use of correct PPEs as assessed in Risk Assessment

o Physical barriers , Access Controls o Learning – Correction and Prevention

H

A

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C

O

NS

E

Q

BARRIERS

Events and

Circumstances

Road

Failed Management Barriers ?

Harm to people and

damage to assets

or environment

A

Z

A

R

D

Q

UE

N

CE

S

Undesirable event with

potential for harm or damage

Engineering activities

Operations activities

Maintenance activities

Road TrafficAccident

• Well designed vehicle with ABS • Qualified, trained and experience driver• Well maintained, OEM certified, tyre conditions• Load as per capacity

• Driven within safe speed, Seat Belt, No intoxicated, • Safe Road• Precautions in line with Journey Risk Management • Fatigue Management – Rest / Sleep

• Designed in line with standards code

• All safety features

- Risk Assessment

- Job Safety Analysis

- Safe Work Procedure /

SOP / Method Statement

- Skilled / Training /

- Visible Felt Leadership

- Challenging Goal and Targets

- Clear Safety Policy and

Principles

- High Standard of Performance

- Supporting Safety

PROCESSTASKRoutine / Non-routine

BEHAVIOUR

Management Barriers ?

• All safety features including interlocks included

• Initial and cyclic Process Hazard Analysis (PHA) done and recommendations are taken care

• Maintenance-Preventive and Protective in place

- Skilled / Training /

Certification

- LOTOTO

- PTW

- Tool Box Talk

- Supervision

- Audit / Inspection

- Job Cycle Check

Organization

- Integrated Safety Organization

- Progressive Motivation

- 2 Way communications

- Safety Observation Visit –

Walkabout

- Continued Training / Skill

Development

- Contract Safety Management

- Transport Safety

How does Risk Assessment Helps ?

• To identify and quantify or rank risks

• To focus attention on the most important deficiencies

• To determine if systems, facilities or activities are • To determine if systems, facilities or activities are acceptable

• To “cover” the organization from liability

• To comply with legal requirements

• To include them in our safety objectives

To avoid corporate liability, there are three tests to pass:

• Corporate Negligence,

Risk Assessments:

To do them, or not?

• Corporate Complacency, and

• Corporate Inactivity

Corporate Negligence

Where no risk assessment was done, and

the risk therefore was not identified.

(i.e. We did not know that all

maintenance work is not done

in accordance with the

procedures!)

Corporate Complacency

Where the risk was identified and assessed

but then ignored.

(i.e. Its always been like that and never been a problem before).

Corporate Inactivity

Where the risk was identified and assessed

but inappropriate action was taken.

(i.e. We issued a memo).

1. Elimination

2. Reduce / Replace

3. Engineering – Sensors, LOTO

4. Administrative Control

Risk Management ?

4. Administrative Control

a. Procedures & Training

b. PTW / line break

c. Warning / Communications

d. Tool Box Talk

5. Personal Protective Equipment

Who is accountable ?

STEP 5

STEP 4 Analysis of

Organization

STEP 3 STEP

ANALYSIS

Management System Failure Model Resulting Incidences

Deficiencies related to Public Safety Framework

* Economy * Labour * Law and Regulation etc

Weakness & defects related to Top Mngt;

* Policy * Organization and Responsibility

* Influence on Attitude * Follow-up by Mngt

Weakness and defects with the mngt system

* Lack of or inadequate procedures

* Lack of implementation

* Insufficient training / education

* Insufficient Follow-up / JCC

STEP 2

STEP 1

Event Sequence

- Decisions

- Actions

- Omissions

Loss / Injuries on

- Personnel

- Properties / Assets

- Environment

* Insufficient Follow-up / JCC

Deviations & Failure influencing event sequences

* Procedure not followed

* Technical Failure

* Human Failure

Analysis of Causes Analysis of Consequences

Observe - Identify Risks

What are missing barriers ?

With this concept in background …..

assess whether you as part of management

Are you helping organization to manage

Risks in RED Zone ………………

Prepare Company Risk Profile Chart

Medium

High

IMPACT

50

MM. Management

25

[1]

LPG Leak

[2] Spill

[6]

Nationalization

[7]

[8]

Failure to

Secure

Insurance

[9]

BBPL Collapse

[11]

No MLA Financing

Residual Risks Assessment

Low Medium High

Low

Medium

LIKELIHOOD

IMPACT

UnacceptableNeeds ImprovementAccepted

0

50

25

[3]

Vehicles

[4] Transierra

Surcharge

[5]

Change in

Law

[7]

Gross Negligence

Firm Service

[10]

Loss of

Domestic Market

Surcharge

[12] Change in

Regulations.

[13] Force

Majeure

Firm Service

[14]

Adverse

Sirese Decision

[15] Facility

Blockades

[16]

Computers

Virus

[17]

Employee Scandal

e.g. Andina

Thank you

1. Responsible Stewardship

2. Stakeholder Engagement

3. Future-Proofing by Creating &

Sharing Value

Think about tomorrow, today!