gpic integrated risk management - the campbell institute

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FR-IMS-06 REV.0 13/07/2008

Gulf Petrochemical Industries Co.

INTEGRATED RISK MANAGEMENT

FR-IMS-06 REV.0 13/07/2008


Introduction Organizations of all types and sizes face a range of risks that may affect the achievement of their objectives. These objectives may relate to a range of the organization's activities, from strategic initiatives to its operations, processes and projects, and be reflected in terms of societal, environmental, safety and security outcomes, commercial, financial and economic measures, as well as social, cultural, political and reputation impacts. All activities of an organization involve risks that must be managed. The risk management process aids decision making by taking account of uncertainty and the possibility of future events or circumstances (intended or unintended) and their effects on agreed objectives. Risk management involves applying logical and systematic methods for: communicating and consulting throughout this process; establishing the organization’s context for identifying, analysing, evaluating, treating,

and monitoring risk associated with any activity, product, function or process; and reporting the results appropriately. It is intended that the generic risk management approach, described in this procedure, can be used within a wide variety of specific contexts such as project, defined function, asset, product or activity. Scope This procedure is applicable to the quality, environment, occupational health and safety management systems. Terms and definitions For the purpose of clarity and consistency, some commonly used terms are defined as follows: Aspect: Characteristic of an activity, product, location or service that has or can have an impact. Consequence: Outcome of an event. Event: Occurrence of a particular set of circumstances.

FR-IMS-06 REV.0 13/07/2008


Harm: Physical injury or damage to the health of people, property, or the environment; Hazard: Potential source of harm. An aspect of an activity, event, operation, location or service etc; Hazard identification: A process designed to find, list and characterize potential sources of harm; Impact: The effect on the company’s policy commitments and objectives, its interested parties, the company itself and / or on the environment; including employees, contractors, visitors and members of the surrounding community. Interested parties: Person or group concerned with or affected by the activities, products and / or services of the company; Legal Requirements: Local environmental and other laws, regulations, directives, ordinances, permits, licenses, or other governmental authorizations. Operations: Activities undertaken in all areas of the company; Probability: Likelihood of an occurrence of a hazardous event or exposure Residual risk: Risk remaining after risk treatment; Risk: Combination of the frequency (probability) of an aspect/hazard and its consequence (severity); Risk analysis: Systematic use of information to identify sources and to estimate the risk; Risk assessment: Overall process of risk analysis and risk evaluation; Risk control: Actions implementing risk management decisions;

FR-IMS-06 REV.0 13/07/2008


Risk evaluation: Process of comparing the estimated risk against given risk criteria to determine the significance of risk; Risk management: Coordinated activities to direct and control an organization with regard to risk; Risk treatment: Process of selection and implementation of measures to modify risk;

Source: Item or activity having a potential for a consequence; Principles for managing risk This risk management procedure is intended to add value to the company by contributing to the demonstrable achievement of objectives and improvement of, for example, efficiency in operations, environmental protection, human health and safety, product quality, legal and regulatory compliance. Within GPIC, risk management is an integral part of the company’s processes. To this end, risk management is part of the responsibilities of management; it is not a stand-alone activity but part of the main activities and processes of the company. The company’s risk management takes into consideration human factors such as the capabilities, perceptions and intentions of external and internal people who may facilitate or hinder the attainment of the company objectives. Procedure Roles and responsibility The responsibility for development of the risk management process is that of the Management Systems Superintendent (MSS) in consultation with senior management and with the ultimate authorization of the General Manager Manufacturing (GMM). Responsibility for the implementation of the elements of the process lies with the department managers and section heads in whose area of responsibility the risk is identified.

FR-IMS-06 REV.0 13/07/2008


Responsibility for communicating risk assessment findings, including identified hazards, aspects and management controls, is that of the various levels of supervision down the reporting line to the personnel actually undertaking the work / exposed to the hazards. Internal communication and reporting mechanisms All communication and reporting of the risk management process is carried out ‘on line’ through the Lotus Notes Integrated Management System (IMS) Database. Prior to implementation of any work plans, all personnel associated with such work must be made aware of the hazards involved and the risk reduction measures identified. The responsibility for communicating such information is that of the supervisor / senior member of the team undertaking the work activities. Prior to start of work, the supervisor / team leader must review the findings of the risk assessment with members of the work team and ensure, as far as practicable, that they understand the safe working requirements of the planned activities. During the course of the work, the supervisor / team leader must visit the work site at regular intervals (depending on the type of work, its duration and the risks involved) in order to reinforce the safety instructions.

FR-IMS-06 REV.0 13/07/2008


Risk management process Risk management is an iterative process as shown in the model below:

Risk identification

FR-IMS-01

Risk analysis

FR-IMS-02 & 03

Risk evaluation

FR-IMS-02

Risk treatment

FR-IMS-03, 04 &

05

Monitoring and

review

FR-IMS-06 REV.0 13/07/2008


Risk management is undertaken by a team comprising personnel who are familiar with the processes or circumstances under examination, along with personnel familiar with the risk assessment process. The team leader is the superintendent of the area in which the risk management is to be implemented. Each step of the process will be described in detail as follows: Risk identification: Risk identification seeks to identify the risks that are relevant to the objectives of GPIC. The aim of this step is to generate a comprehensive risk register based on those events and circumstances that might enhance, prevent, degrade or delay the achievement of the objectives identified for the company as a whole and in each specific area of operations. Identification includes risks whether or not they are under the control of the company. Risk identification is carried out by the area risk assessment team using two forms, FR-IMS-01, “Task Inventory” and FR-IMS-02, “Risk Assessment Record”. FR-IMS-01, “Task Inventory” For each area/section/department, an inventory of environmental and occupational health & safety risks is established and maintained by the responsible superintendent. FR-IMS-01 is used for this purpose. These risks are recorded in a uniquely numbered list which forms the directory of all risk assessments carried out. The unique risk assessment number consists of an area designation, followed by the task number, i.e. the first risk assessment requirement identified in the ammonia plant would be numbered: OPR/AMM/01, in the operations department this would be OPR/GEN/01 and a common task throughout the company would be GPIC/GEN/01. FR-IMS-02, “Risk Assessment Record” For each risk assessment required, form FR-IMS-02 is used to record all relevant information. The form contains the aspect / hazard / impact description, along with its unique identification number, previously allocated in the risk assessment inventory for each area. A flow diagram of the risk assessment process is shown at the end of this procedure. The requirements of each element of the process are as follows: Department / Area Name: Enter the department and area in which the risk assessment is required.

FR-IMS-06 REV.0 13/07/2008


Revision Number: The revision number should reflect the number of times the form contents have been revised. Note: this is not the revision number of the form. Date: Enter the date of last data entry into the form (revision date). Process / event / activity / location: State the process, event activity or location for which the risk assessment is required. Assessment No.: Unique number for the overall risk assessment: Area/serial No. (E.g. AMM/01). Applicable Legislation: Reference any legislation which is applicable to the aspects or impacts identified. (e.g. Law 3 of 2001 Environmental Standards – air and water). Description: Provide a short description of the process, event or activity under consideration. Inputs / Outputs / Activities: List the elements associated with the described process / event / activity or location. Aspects / Hazards: Identify and list the environmental aspects or occupational health and safety hazards associated with the materials, resources and activities under study, including emissions, waste generation, losses, effluents and potential for harm etc. For the production processes the use of process flow charts, environmental footprint and energy balance reports can be used as a basis for identification. Potential aspects are identified based on the following: 1. Relevant legal requirements and other requirements to which GPIC subscribed. 2. Community concerns. 3. Findings of the Hazop Studies.

FR-IMS-06 REV.0 13/07/2008


4. Accident investigation or statistical reports. 5. Corporate Inspections and Audits. 6. Others. Impacts: Identify and list all actual and potential environmental, occupational health and safety impacts associated with the identified aspects and hazards of the materials, resources and activities under study. Specific personnel at risk should also be listed. The actual/potential, adverse/beneficial impacts are identified based on professional judgments. The potential impacts can be any of the following: 1. Impaired air or water or land quality. 2. Improved air or water or land quality. 3. Increased Consumption of Natural Resources. 4. Conservation of Natural Resources. 5. Air, water or land pollutions / contamination. 6. Ground water contamination. 7. Waste Disposal. 8. Contamination of Waste Water. 9. Resource depletion. 10. Environment Liability. Risk Analysis: 1. Using the risk criteria table for ‘impact’, Table 1; determine the impact rating for each

aspect or hazard identified. Record this result in the impact rating column of FR-IMS-02. 2. Using the risk criteria table for ‘likelihood’, Table 2; determine the likelihood rating for

each aspect/hazard. Record this result in the likelihood rating column of FR-IMS-02. 3. Using the form FR-IMS-03, Risk management controls, identify the existing control

measures used to reduce or mitigate the identified risk. 4. Using the information recorded in FR-IMS-03 and the risk criteria table for ‘control’,

Table 3; determine the control rating, for each impact. Record this result in the control rating column of FR-IMS-02.

5. Using the risk criteria table for ‘residual risk’, Table 4; determine the residual risk rating

for each impact, based upon the impact, likelihood and control ratings already determined. Record this result in the risk rating column of FR-IMS-02.

FR-IMS-06 REV.0 13/07/2008


Risk Evaluation: Using the table for ‘Residual Risk Action’, Table 5, determine the requirement of any additional controls for each impact identified. Environmental Risks:

1. Residual risk levels of medium and below are not considered to be significant; however, the risk assessment for each level of risk must be reviewed for adequacy at the frequency indicated in the chart in Table no 5.

2. Residual risk levels above medium rating must be considered significant.

3. In the event an aspect of any activity, situation or event is covered by Bahrain Legislation, then such aspects must automatically be rated as significant. In such cases the letter (L) in parenthesis is also entered into the risk rating column, in addition to the identified risk rating.

Occupational Health And Safety Risks: Personnel must not be subject to residual risk levels above that of medium. Risk levels of high and very high must be treated as indicated in the table. Risk levels of low and very low indicate that existing control measures are adequate and no further action is required. A medium risk level indicates that the risk is tolerable; however, there may be additional control measures which could realistically be implemented which would reduce the level further. Risk Treatment: Risk Treatment For Occupational Health And Safety Risks : Where a high risk level has been identified then an action plan must be developed in order to reduce the level to a tolerable or acceptable level within a reasonable time frame. Where a very high risk level is identified then all work associated with the risk must cease. Refer to Table 5 for further details.

FR-IMS-06 REV.0 13/07/2008


Risk Treatment For Environmental Risks:

1. A register of all significant aspects must be developed by the relevant superintendent. FR-IMS-04 is used for this purpose.

2. All significant risks are subject to additional scrutiny. A form FR-IMS-05 must be developed for each significant risk identified.

When implementing risk reduction methods, the hierarchy of controls must be considered in the following order: i. Elimination

ii. Substitution

iii. Engineering controls iv. Signage / warnings / administrative controls v. Personal protection equipment and containment

Monitoring and Review All risks assessment and associated controls must be reviewed for adequacy as per the following criteria: 1) At least as frequently as indicated in the residual risk action table. 2) In case of an accident or near miss, or an unforeseen, unplanned or uncontrolled environmental event, then a review must take place within one week of the occurrence. 3) In the event of a change, modification or addition to plant or maintenance equipment.

FR-IMS-06 REV.0 13/07/2008


TABLE 1 RISK CRITERIA - IMPACT

RATING

DESCRIPTION

OHS ENVIRONMENT

MINOR 1 First aid injury (minor cuts, grazes, bruises

etc.).

Brief pollution with effective short term

remediation.

MODEST 2 Medical treatment injury with lost time

sustained (major injury, fracture etc.).

Transient harm to flora / fauna / soil / water

/ air.

SEVERE 3 Moderate irreversible disability or

occupational illness to one or more persons.

Significant harm to flora / fauna / soil /

water / air with medium term(<2 years)

recovery achievable.

MAJOR 4

Single fatality, permanent disability or

serious occupational illness (amputation, loss

of eye, cancer, lung disease, death etc.).

Significant harm to flora / fauna / soil /

water / air with long term(>2 years)

recovery achievable.

CATASTROPHIC 5 Multiple fatalities / significant irreversible

disabilities or occupational illness.

Long term effects to flora / fauna / soil /

water / air, or license revoked.

TABLE 2 RISK CRITERIA - LIKELIHOOD

RATING DESCRIPTION

ALMOST

IMPOSSIBLE 1

Highly unlikely to occur at any time in the foreseeable future. Theoretically possible but

not expected to occur.

RARE 2 Unlikely to occur at any time in the future.

POSSIBLE 3 Possible to occur at some time in the future. The event has been known to occur once in

the industry.

LIKELY 4 Highly likely to happen in the next three years. The event has been known to occur more

than once in the industry.

ALMOST CERTAIN 5 Certain to happen some time in the next 12 months. Event is imminent.

TABLE 3 MITIGATING CRITERIA – CONTROLS

RATING DESCRIPTION

EXCELLENT 1 Controls are totally effective and efficient, totally implemented, user friendly and

demonstrably ‘best practice’.

VERY GOOD 2 Controls are reasonable, well balanced and effective.

GOOD 3 Controls are reasonable and well balanced, improvements are possible.

MEDIUM 4 Controls are just starting.

POOR 5 There are few controls in place.

NO CONTROLS 6 There are no controls in place.

FR-IMS-06 REV.0 13/07/2008


LIK

EL

IHO

OD

RA

TIN

G

TABLE 4 RESIDUAL RISK CATEGORY

CONTROL

RATING

IMPACT RATING

CATASTR’ 5 MAJOR 4 SEVERE 3 MODEST 2 MINOR 1

AL

MO

ST

CE

RT

AIN

5

Excellent 1 H M M L L

Very good 2 H H M L L

Good 3 H H H M L

Medium 4 VH H H M M

Poor 5 VH VH H H M

No controls 6 VH VH H H H

LIK

EL

Y

4

Excellent 1 M M L L VL

Very good 2 H M L L L

Good 3 H H M L L

Medium 4 H H M M L

Poor 5 VH H H M M

No controls 6 VH H H M M

PO

SS

IBL

E

3

Excellent 1 M L L VL VL

Very good 2 M L L VL VL

Good 3 H M L L VL

Medium 4 H M M L L

Poor 5 H H M L L

No controls 6 H H M M L

RA

RE

2

Excellent 1 L L VL VL VL

Very good 2 L L VL VL VL

Good 3 M L L VL VL

Medium 4 M M L L VL

Poor 5 H M L L L

No controls 6 H M M L L

AL

MO

ST

IMP

OS

SIB

LE

1

Excellent 1 L VL VL VL VL

Very good 2 L L VL VL VL

Good 3 L L VL VL VL

Medium 4 M L L VL VL

Poor 5 M M L L VL

No controls 6 H M L L VL

FR-IMS-06 REV.0 13/07/2008

Gulf Petrochemical Industries Co. QUALITY MANAGEMENT SYSTEM

GENERAL MANAGEMENT STANDARD OPERATING PROCEDURE

GQS No.: SOP-IMS-00-06 Rev. No. : 2 Date : 28/07/2009 Page : 14 of 15

Title: INTEGRATED RISK MANAGEMENT Copy No.:

TABLE 5 RESIDUAL RISK

RATING

ACTION REQUIREMENTS

VERY HIGH

Risk requires attention.

Cease work until effective interim controls are agreed and implemented, and an action plan is in

place which will permanently reduce the risk to an acceptable level.

Continuous review required.

HIGH

Risk requires attention.

Draw up an action plan which will permanently reduce the risk to an acceptable level within a

time limit agreed by senior management.

Review annually.

MEDIUM

Risk is tolerable.

Implement cost effective and reasonable risk mitigation actions in order to reduce the risk to the

most reasonable level.

Review every three years.

LOW

Risk is acceptable.

Investigate engineering controls, training, supervision and procedures with a view to reducing

the risk level to an absolute minimum.

Review every four years

VERY LOW

Risk is acceptable.

No great effort required to reduce the risk further.

Review every five years.

FR-IMS-06 REV.0 13/07/2008

Gulf Petrochemical Industries Co. QUALITY MANAGEMENT SYSTEM

GENERAL MANAGEMENT STANDARD OPERATING PROCEDURE

GQS No.: SOP-IMS-00-06 Rev. No. : 2 Date : 28/07/2009 Page : 15 of 15

Title: INTEGRATED RISK MANAGEMENT Copy No.:

Risk Management Process Flowchart

RISK ASSESSMENT

REQUIRED

List elements of

task / activity etc

Identify aspects /

hazards for each

element

Identify impact of

the aspect /

hazard

Determine

residual risk

High risk or

above?

Prepare risk

reducing action

plan as per table 5

Update task

inventory

File risk

assessment

RISK ASSESSMENT

COMPLETE

YES

YES

NO

NOAssess potential

for harm

(impact rating)

Assess probability

of occurance

(likelihood)

Assess control

rating

Update significant

aspect register

Environmental

risk?

Significant

risk?

NO

YES

Complete

FR-IMS-05

gpic integrated risk management - the campbell institute

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