1. SAFETY MANAGEMENT SYSTEMS RISK VERSUS SAFETY
Almaty, 5 to 9 September 2005

2. SUMMARY WHY THE SCIENCE OF SAFETY MANAGEMENT? TERMINOLOGY
COSTS (ACCIDENTS, INCIDENTS, SAFETY)
RISK CLASSIFICATION & ANALYSIS
RISK MANAGEMENT
QUESTIONS
Almaty, 5 – 9 September 2005

3. WHY USE THE SCIENCE OF SAFETY MANAGEMENT?
People often overreact to perceived risk:
Train crash in the UK – 5 die
Within one month, more death on car accidents then in trains for 30 years!
In risk management one must not transfer risk from one area to another!
Almaty, 5 – 9 September 2005

4. TERMINOLOGY HAZARD RISK MITIGATION RISK MANAGEMENT
Almaty, 5 – 9 September 2005

5. TERMINOLOGY - HAZARD
Hazard - a scenario which, if it occurs, can have negative consequences to personnel, material (or the environment)
Hazard - an event that has the potential to result in damage or injury.
Almaty, 5 – 9 September 2005

6. TERMINOLOGY - RISK
Risk: a hazard, chance of or of bad consequences, loss or injury, exposure to mischance …
(source: the Oxford dictionary)
Risk is two-dimensional:
Likelihood of an occurrence (probability)
Severity of consequences
“The degree of risk is based on the likelihood that damage or harm will result from the hazard and the severity of the consequences.”
RISK =
probability
consequences
Almaty, 5 – 9 September 2005

7. TERMINOLOGY - MITIGATION
Mitigation is the action taken to lessen the severity, violence or effect of a change.
Almaty, 5 – 9 September 2005

8. TERMINOLOGY – RISK MANAGEMENT
Risk management: the identification, analysis and elimination (and/or mitigation to an acceptable level) of those hazards, as well as the subsequent risks that threaten the viability of an organisation
Risk management serves to focus safety efforts on those hazards posing the greatest risks.
Almaty, 5 – 9 September 2005

9. (ALARP as low as reasonably practicable)
BALANCING RISK
Risks can be balanced using cost-benefit methodology
Risk
Unacceptable region
Risk cannot be justified except in extraordinary circumstances
risk “limit”
Tolerable only if risk reduction is impracticable or if its cost is grossly disproportionate to the improvement gained
Tolerable
region
(ALARP as low as reasonably practicable)
Acceptable
region
Tolerable if cost of risk reduction would exceed the improvement gained necessary to maintain assurance that risk remains at this level
While the elimination of accidents (and serious incidents) would be desirable, it must be recognized that such “perfect safety” is an unachievable goal; failures and errors can still occur, in spite of the best efforts to avoid them. No human activity or man-made system can be guaranteed to be absolutely safe, i.e. free from risk. Safety is a relative notion, whereby inherent risks are acceptable in a “safe” system. As long as everyone – from politicians to the travelling public – understands and accepts this, there is a coherent foundation for aviation safety.
ALARP – as low as reasonably practicable
risk “target”
Negligible Risk
Costs
Almaty, 5 – 9 September 2005

10. COST OF ACCIDENTS Industry and social costs
Direct costs (related to physical damage)
Indirect costs:
Loss of business;
Loss of use of equipment
Loss of staff productivity;
Investigation and clean-up;
Insurance deductibles;
Legal actions and damage claims;
Industry and social costs
Comments
Almaty, 5 – 9 September 2005

11. COST OF INCIDENTS Flight delays and cancellations;
Alternate passenger transportation, accommodation, complains;
Crew change and positioning;
Loss of revenue and reputation;
Aircraft recovery, repair etc. and
Incident investigation.
Comments
Almaty, 5 – 9 September 2005

12. COST OF ACCIDENT PREVENTION
Difficult to quantify;
SMS implementation cost-benefit analysis – complicated but should be done;
Requires senior management involvement.
If you think safety is expensive, try an accident!
Comments
Almaty, 5 – 9 September 2005

13. COST OF SAFETY Costs Total Costs Losses Risk Reduction Protection
Safety and profit are not mutually exclusive. Quality organisations realize that expenditures on the correction of unsafe conditions are an investment toward long-term profitability. Losses cost money. As money is spent on risk reduction measures, costly losses are reduced (see figure). However, by spending more and more money on risk reduction, the gains made through reduced losses may not be in proportion to the expenditure. Companies must balance the costs of losses and expenditures on risk reduction measures. In other words, some level of loss is acceptable from straight profit and loss point of view. However, few organisations can survive the economic consequences of a major accident. Hence, there is a strong economic case case for an effective safety management system. They may require energy and persistence, but not always a large budget.
Protection
Almaty, 5 – 9 September 2005

14. TERMINOLOGY – RISK MANAGEMENT
Risk management: the identification, analysis and elimination (and/or mitigation to an acceptable level) of those hazards, as well as the subsequent risks that threaten the viability of an organisation
REMINDER!
Risk management serves to focus safety efforts on those hazards posing the greatest risks.
Almaty, 5 – 9 September 2005

15. ORGANISATIONAL ACCIDENT STAGES
REMINDER!
Defences
Losses
DANGER
Hazards
Event
Causes
Latent
condition
pathway
Unsafe acts
Investigation
Stages in the development and investigation of an organisational accident
The rectangular block at the top represents the main elements of an event while the triangular shape below represents the system producing it. This has three levels: the person (unsafe acts), the workplace (error-provoking conditions) and the organisation. The red upward arrows indicate the direction of causality and the yellow downward arrow indicate the investigative steps
Local workplace factors
System
Organisational factors
Stages in the development and investigation of an organisational accident
Almaty, 5 – 9 September 2005

16. RISK MANAGEMENT PROCESS
Identify the hazards to equipment,
property, personnel or the organisation
HAZARD IDENTIFICATION
Evaluate the seriousness of the
consequences of the hazard occurring
RISK ASSESSMENT
Severity/Criticality
RISK ASSESSMENT
Probability of occurrence
What are the chances of it happening?
Is the consequent risk acceptable and
within the organisation’s safety
performance criteria?
RISK ASSESSMENT
Acceptability
YES
Accept the risk NO
Take action to reduce the
risk to acceptable level
RISK MITIGATION
Almaty, 5 – 9 September 2005

17. HAZARD IDENTIFICATION
Design factors;
Procedures and operating practices;
Communications;
Personnel factors;
Organisational factors;
Work environment factors;
Regulatory oversight factors;
Defences.
Almaty, 5 – 9 September 2005

18. FUNCTIONAL HAZARD ASSESSMENT
Functional Hazard Assessment (FHA):
determine how safe the system shall be!
Reminder! … a system consists of:
People (humans, liveware: L);
Equipment (hardware: H);
Procedures (software: S) and
Environment (E).
Almaty, 5 – 9 September 2005

19. THE FHA PROCESS
Almaty, 5 – 9 September 2005

20. RISK ASSESSMENT THREE CONSIDERATIONS INVOLVED:
Risk is the assessed potential for adverse consequences resulting from a hazard!
THREE CONSIDERATIONS INVOLVED:
Probability
Severity
Rate of exposure
Almaty, 5 – 9 September 2005

21. RISK CLASSIFICATIONS & ANALYSIS
The assessment of severity of the consequences always involves:
some degree of subjective judgment;
the use of structured grouped discussions:
guided by a standard risk classification scheme, and
using participants with extensive experience in their respective fields.
and …. should ensure that the outcome will be an informed judgment.
Almaty, 5 – 9 September 2005

22. STANDARD RISK CLASSIFICATION
Likelihood of event per operational hour per sector/unit
Severity Category
Qualitative
Quantitative
Cat 1
Cat 2
Cat 3
Cat 4
Frequent
Ps> 10-3
Low
Serious
Probable
10-3 > Ps > 10-4
Medium
High
Occasional
10-4 > Ps > 10-5
Remote
10-5 > Ps > 10-6
Improbable
10-6 > Ps > 10-7
Extremely improbable
Ps > 10-7
Almaty, 5 – 9 September 2005

23. There is no such thing as absolute safety!
RISK MITIGATION
There is no such thing as absolute safety!
Risk has to be managed to a level “as low as reasonably practicable” (ALARP)
Almaty, 5 – 9 September 2005

24. “AS LOW AS REASONABLY PRACTICABLE”
REMINDER!
Risk
Unacceptable region
Risk cannot be justified except in extraordinary circumstances
risk “limit”
Tolerable only if risk reduction is impracticable or if its cost is grossly disproportionate to the improvement gained
Tolerable
region
(ALARP as low as reasonably practicable)
Acceptable
region
Tolerable if cost of risk reduction would exceed the improvement gained necessary to maintain assurance that risk remains at this level
While the elimination of accidents (and serious incidents) would be desirable, it must be recognized that such “perfect safety” is an unachievable goal; failures and errors can still occur, in spite of the best efforts to avoid them. No human activity or man-made system can be guaranteed to be absolutely safe, i.e. free from risk. Safety is a relative notion, whereby inherent risks are acceptable in a “safe” system. As long as everyone – from politicians to the travelling public – understands and accepts this, there is a coherent foundation for aviation safety.
ALARP – as low as reasonably practicable
risk “target”
Negligible Risk
Costs
Almaty, 5 – 9 September 2005

25. RISK MITIGATION STRATEGIES
Exposure avoidance (if risk exceeds benefits);
Loss reduction (reduce frequency of unsafe events);
Segregation of exposure (separation or duplication):
Isolate the effects of the risk;
Build in redundancy.
Almaty, 5 – 9 September 2005

26. RISK MANAGEMENT – STATE LEVEL
Policy;
Regulatory change;
Priority Setting;
Operational Management;
Operational Inspections.
Almaty, 5 – 9 September 2005

27. RISK MANAGEMENT – BENEFITS
Avoiding costly mistakes;
Ensuring all aspects of the risk are identified;
Ensuring the legitimate interests of affected stakeholders are considered;
Providing decision-makers with solid defence;
Making decisions easier to explain;
Providing significant savings (time and money).
Almaty, 5 – 9 September 2005

28. ? QUESTIONS, COMMENTS Do you have any questions or comments?
Almaty, 5 – 9 September 2005

29. SAFETY MANAGEMENT SYSTEMS
Almaty, 5 to 9 September 2005
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