Risk Management an Element of Loss Control A Review of Risk Management Fundamentals Contributed by: Ben Sheppard, CMSP BWS&A – Building Stones, Inc. P.O. Box 90 Cataldo, ID 83810 Phone: 208-682-4774 www.bwsassociates.com A.4

The Fundamentals of Risk Management Recognize that loss potential exists Identify all loss potentials Eliminate or control all potentials to an acceptable level

Assessment and Management of Hazards Hazard Identification Risk Assessment Risk Control Measurement and Record Keeping

Hazard Identification – consists of identifying any condition that has potential to cause a loss to persons, property, production or planet.

Risk Assessment – consists of determining what the actual loss potential may be.

Risk Control – consists of eliminating and/or reducing the risk to an acceptable level

Measurement and Record Keeping – consists of measuring the control and documenting the results.

Hazard/Nonconformance Inspections Record each nonconformance/substandard act and/or practice Categorize each nonconformance * Establish a numerical system for prioritizing each nonconformance

Developing Categories for Establishing Priorities Establish a system of classification that will set a priority for fixing or correcting each nonconformance found during an inspection. * I.E., class 1-2-3-4-etc. or class A-B-C-D-etc. Give each item on the nonconformance list a number or letter that sets a firm action priority.

Priority Actions - Examples Class 1 or A = Emergency – Correct Immediately Class 2 or B = Urgent – Correct within 24 hours Class 3 or C = Correct within one week Class 4 or D = Correct within one Month Etc.

Priority Actions Priorities are based on event consequences and/or probability of occurrence Or another way of saying the same thing Frequency of exposure and severity potential

Priority Actions – Hazard Classifications Class “A” Hazard A condition or practice likely to cause permanent disability, loss of life or body part, and/or extensive loss of structure equipment or material. Example 1 - a large slab of loose hanging wall at a haulage cross cut. Example 2 - unmarked and unplugged misfire in a face being drilled.

Priority Actions – Hazard Classifications Class “B” Hazard A condition or practice likely to cause serious injury of illness (resulting in temporary disability) or property damage that is disruptive, but less severe than Class “A.” Example 1 - Loading operations in a blasted end commencing before watering down. Example 2 - Missing step in the middle of a stepladder.

Priority Actions – Hazard Classifications Class “C” Hazard A condition or practice likely to cause minor (non-disabling) injury or illness or non-disruptive property damage. Example 1 - Worker handling timber without using gloves. Example 2 - Slippery footwall in travel way.

6 Key Subjects for Risk Decisions CLASSIFICATION OF EXPOSURE PROBABILITY OF OCCURRENCE COST OF CONTROL DEGREE OF CONTROL ALTERNATIVES JUSTIFICATION

6 Key Questions of Risk Decisions 1. CLASSIFICATION OF EXPOSURE What is the potential severity of loss if an incident occurs? A - Major B - Serious C - Minor

6 Key Questions of Risk Decisions 2. PROBABILITY OF OCCURRENCE What is the probability that a loss will occur from this exposure of hazard? A - High B - Moderate C - Low

6 Key Questions of Risk Decisions 3. COST OF CONTROL What is the cost of the recommended control? A - High (establish meaningful cost ranges for your own organization) B - Medium C - Low

6 Key Questions of Risk Decisions 4. DEGREE OF CONTROL What degree of control will be achieved by this expenditure? A - Substantial or Complete (67 - 100%) B - Moderate (34 - 66%) C - Low (1 - 33%)

6 Key Questions of Risk Decisions 5. ALTERNATIVES What are the alternative controls? 6. JUSTIFICATION Why is this one suggested?

Identifying Hazards Hazard identification is the most important and critical component of risk assessment. And Hazard analysis is the most important safety process. If these fail – all other processes will most likely be defective.

Identifying Hazards ASK THE QUESTION(S) HOW COULD PERSONS BE INJURED? HOW COULD PROPERTY BE DAMAGED? HOW COULD PRODUCTION BE DELAYED? HOW COULD THE ENVIRONMENT BE HARMED?

A few examples of methods used to identify hazards Identifying Hazards A few examples of methods used to identify hazards Common sense & experience Potential contacts with energy and/or substance Standard reviews Utilize the manufactures recommendations Utilize the operator or process user Utilize similar processes Utilize checklists Analyze incident reports Analyze industry historical information Etc.

Reduce or Eliminate Risk Beginning with the Most Effective Control Measures and Ranking to the Least Effective Control Eliminate or control hazards and risks through System design and redesign. Reduce risk by utilizing materials and methods that reduce the hazard and risk. Utilize barriers (I.e., guards, fences, that prevent contact) Utilize warning systems (I.e., alarms, lights and etc.) Utilize administrative controls (I.e., training, exposure frequency, etc.) Utilize Personal Protective Equipment (PPE)

Risk Assessment Updating Risk assessments should be updated when: A design is changed The process is changed in any way Controls are changed or modified Contiguous processes with potential to affect are modified

Review Questions (Answers on the next slide) In order to eliminate or reduce risk, the use of PPE should be the ______ choice utilized: First Last What is the first step in the assessment and management of risk?. Hazard identification Risk assessment Risk control Cost analysis Which of the following should not be a factor in risk management decisions? Severity Probability Cost of control Degree of control Legal cost of no action

Answers to the Review Questions In order to eliminate or reduce risk, the use of PPE should be the ______ choice utilized: b. Last What is the first step in the assessment and management of risk?. Hazard identification Which of the following should not be a factor in risk management decisions? e. Legal cost of no action

Answers to the Review Questions A Hearing Conservation Program includes all of the following, except: b. Predictive Equipment Maintenance ___ dBA, called the Action Level, are required to be enrolled in a Hearing Conservation Program. a. 85 A Standard Threshold Shift (STS) is a decrease in a miner’s hearing by an average of ___ dB compared to his baseline audiogram. b. 10