RISK MANAGEMENT Project Update – June 2016 Peter Cooke Agknowledge ®

WHAT IS RISK MANAGEMENT? Risk is: The effect of uncertainty on the ability of an organisation to meet its objectives. Risk management is: The range of activities that an organisation intentionally undertakes to understand and reduce these effects. Effective risk management is: Executing these activities efficiently and in a way that actually and demonstrably improves the ability of the organisation to meet its objectives in a repeatable fashion. Agknowledge ®

TERMS OF REFERENCE – RISK MANAGEMENT SPECTRUM Agknowledge ® Risk strategy and appetite Risk governance Risk assessment and measurement Risk management and monitoring Risk reporting and insights Data and technology Risk culture MSC Re- certification review WRL Industry Risk Management

AN OVERVIEW: PROCESS Agknowledge ®

WRLC STRATEGIC VIEW Our Vision The Western Rock Lobster industry will be a confident, viable and well respected industry. Co-management of our industry Secure rights of access to resources Stewardship that results in stock abundance Producing a premium product for world markets Profitability for operators Secure returns for investors High public acceptance Working towards opportunity and security for the next generation of the industry. Our strategic imperative is to maintain unity in the industry, during a period of significant change. Our Goals Goal 1. To increase industry confidence in the role and achievements of the Council. Goal 2. To grow the value of the industry by 2 – 4% per annum. Goal 3. To develop sources of independent funding within three years. Agknowledge ®

WRL INDUSTRY VALUE CHAIN Agknowledge ® Sustainability & Resource Access Industry Management WRL Fishery & Harvest Processing & Distribution Markets & Consumers

VALUE CHAIN AND RISKS Agknowledge ®

RISK REVIEW MATRIX INTERVIEWS Agknowledge ® In thinking about the WRL Industry as a whole: What do you believe is the single biggest risk facing the rock lobster industry today? What do you think is the potential cause of this risk? What is the potential consequence of the risk? How can the industry move to overcome or better manage that potential risk? For each of the identified potential risks, can you please provide a score for both the risk likelihood and risk consequence Risk LikelihoodRareUnlikelyModerateLikelyAlmost certain Risk ConsequenceLowMinorModerateHighExtreme Score12345

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RISK CRITERIA TABLE RISK LEVEL CRITERIA FOR MANAGEMENT OF RISK RESPONSIBILITY RISK OWNERSHIP REVIEW PERIOD 1 - 3LowLowWatching brief12 months 4 – 7MinorStrategic investment12 months 8 - 9Moderate Acceptable with adequate controls 6-12 months High Only acceptable with adequate controls 3-6 months 16 +Extreme Only manageable with considered controls Board Oversight 3-6 months Agknowledge ®

KEY RECOMMENDATIONS FROM MSC BENEFIT ANALYSIS 1. WRLC invests in MSC re-certification for Maintain representation at the MSC Stakeholder Council, and the Association of Sustainable Fisheries. 3. Negotiate a joint marketing and communications strategy with MSC. 4. Make members aware of the potential discount on lending margins. 5. Optimise the R&D investment in the industry. 6. Foster a discussion on animal welfare. 7. Work collaboratively to optimise a long term market in China. 8. Develop a premium ‘Australian Lobster’ brand. 9. Develop a Western Rock Lobster Festival with affordable product across WA to create awareness and domestic support. 10. WRLC to look at alternate industry funding by creating a short term collection from harvesters, to create an industry future fund.

Agknowledge ® KEY SUGGESTIONS FROM INDUSTRY INTERVIEWS Diversify markets for western rock lobster. Service the local market. Investigate an increase in quota. Engage with NGO’s. Address the risks with exporting a live product. Promote best handling practices of the WRL. Update the structure of the WRLC. Promote and raise awareness of OH&S. Demonstrate industry’s social licence to operate. Promote the WRL industry and raise awareness. Re-address the quota management system. Establish a pot register around transfers. Secure property rights for fishermen. Engage the processing sector. Establish policy on foreign investment. Consult other sectors of Australian rock lobster industry. Promote MSC certification.

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RISK MANAGEMENT STRATEGY – Draft 1. Work in collaboration with industry to understand and investigate all market opportunities to mitigate the risk of reliance on a single market. 2. Invest, manage and cultivate a strong social licence to operate the industry. 3. Invest in a total industry responsibility to actively manage the chain of custody. 4. Develop a high standard of occupational health and safety in the industry. 5. Industry to actively manage the TACC. 6. Collaborate and invest in targeted research for future security and productivity. 7. Develop the WRLC as a key policy and governing body for the industry.

Discussion