1. Anuj Sahai Lloyd’s Register Asia, Singapore
Risk Assessment in Shipping Companies Intertanko Vetting Seminar Singapore 29th November 2005
Welcome – Pleasure to be here
Introduction –
Me, Seagoing / Superintendent / Insurance and now with LR
Recent background LR Singapore
Live Close
Risk Management in Shipping Companies
Wish to talk/discuss about the Industry’s performance in this area as a whole thus not only the progressive Companies
20 minutes or so “setting scene” so to speak and then some discussion on if you agree with my comments!
Anuj Sahai
Lloyd’s Register Asia, Singapore

2. Risk Assessment Do the shipping companies do it well?
Risk Management Are shipboard risks well managed?

3. Source: Fearnleys, ITOPF
Leading indicators
Let us have a look at the oil movement trade, almost twice to what it was 20 years ago and the large spills – they are down to third.
Source: Fearnleys, ITOPF

4. Leading indicators 99.99999% of oil is safely delivered.
In the last few years, tremendous amount of resources in getting ‘operational risk’ management off the ground.
Because of tremendous amount of work done and the intellectual capital that already resides in the industry, Risk management, although topic, is no longer a buzz word. All, especially the tanker operators ashore are well familiar with the methodology and have made concerted efforts to get it off the ground. Just have a look at the number of seminars, training initiatives by class and other bodies and you will know what I am talking about.
% of oil is safely delivered.
Source: Intertanko

5. Source: LMIS, Informa, press, INTERTANKO
Leading indicators
In the last few years, tremendous amount of resources in getting ‘operational risk’ management off the ground.
Because of tremendous amount of work done and the intellectual capital that already resides in the industry, Risk management, although topic, is no longer a buzz word. All, especially the tanker operators ashore are well familiar with the methodology and have made concerted efforts to get it off the ground. Just have a look at the number of seminars, training initiatives by class and other bodies and you will know what I am talking about.
Source: LMIS, Informa, press, INTERTANKO

6. Perception The risks are well managed.
Further improvements - only incremental.
Risk Assessments – why?

7. Risk Assessment requirements
Deficiencies
Critical systems and equipment
Health risk assessments
Management of Change
Near misses
Industry would rather learn from the mistakes and accidents that have already happened then the ones that are waiting to happen or may happen in future.
Great fire-fighters, maybe not so good at looking ahead long term.

8. Reality IMO / Flag regulated Reactive not proactive
Why fix it, if it ain’t broken?
Compliance driven
Industry would rather learn from the mistakes and accidents that have already happened then the ones that are waiting to happen or may happen in future.
Great fire-fighters, maybe not so good at looking ahead long term.

9. Risk Assessments Let someone else do it! Still thinking about it!
Shipping companies don’t see any tangible benefits of risk assessments!
Often Risk Assessment in a Company is done due to problems found – Thus re-active – Risk Assessment is supposed to find out where a Company MAY HAVE problems so that they can be solved beforehand.
There is a link obviously between investigating incidents and risk assessment but it should be for lessons learnt not the only time to do the assessments
Many Companies do good Risk Assessments of Specific Shipboard Operations quite well. It’s the linking of everything together that is the area that is lacking
Let someone else do it!

10. Why Risk Assessments? ISM Code – Implicit OCIMF – TMSA
Manage shipboard risks better
Continuous Improvements
What is suggested, probably some Companies doing it but in general from the evidence seen at DOC audits its not done Industry wide

11. Suggested Approach
Red – Look at the whole Company occasionally (yearly?) A high level view of what is important and what could affect the Company’s existence. Brain-storming session of top management?
The review may include all of the areas that may an impact on the Company, interest rates, freight rates, trade, crew availability, impact of the changes made to company procedures, past and future software upgrade, future legislation and environmental issues, customer needs – need to have the answers that customer has not asked… not yet anyway.
Also take a moment and revisit past incidents, analyze trends and review of controls have been adequate to mitigate risks and hazards.
Shipboard level – The people at the sharp end are the ones to identify operational hazards. There is no replacement for good awareness levels and accountability to the seafarers who carry out the job.

12. Are your assessments being effective?
Business or safety performance improvements?
Can the benefits be measured?
How do you know, if you are carrying out these assessments, if its actually working?
Often no direct savings or benefits seen
How do you justify the cost of carrying out the Risk Assessments?

13. Link Risk Assessment to Performance (KPI’s)
LTIF
LTA’s
Non-budgeted repair costs
PSC results
Insurance claims
To crews! Retention Satisfaction
Accidents – Procedures, Competence, Training, Awareness
Off-hire – Reliability, New Buildings? – same equipment? Maintenance, Crew Competence, Charterers?, Right ship
Maintenance Costs – Linked to above, Inspection Routines
PSC – If results bad why, is this the ship you want? Inspection Routines
Finance
Insurance Claims
Crew

14. Business Management and Risk Management
Shipboard Risk management is about minimizing the chance of failure – pure risk
Effective risk management requires structured risk assessment as an input
Successful business manage their risks.
However, effective risk management does’t just happen; something has to feed it.
If the risks are not identified and assessed, how can they be managed?

15. Hazards Identified using Different Approaches
Actual Total Hazards ID from Prescriptive
ID from Structured Risk ID from Unstructured Risk
100 %

16. A Culture within a Culture
Safety Management
Culture
Risk Based
Culture

17. Summarize Further Training / refresher training Continuous Improvement
Commitment
Competitive Advantage

18. Building better business
Working together to improve business performance