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jakeman.au

www.jakeman.com.au. Slip on wet surface. www.jakeman.com.au. www.jakeman.com.au. www.jakeman.com.au. www.jakeman.com.au. One page is enough!. www.jakeman.com.au. Risk Management Policy. Policy Philosophy Objectives Business Planning Application Performance Acceptance Criteria

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jakeman.au

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  1. www.jakeman.com.au

  2. Slip on wet surface www.jakeman.com.au

  3. www.jakeman.com.au

  4. www.jakeman.com.au

  5. www.jakeman.com.au

  6. One page is enough! www.jakeman.com.au

  7. Risk Management Policy • Policy • Philosophy • Objectives • Business Planning • Application • Performance • Acceptance Criteria • Documentation • Responsibilities www.jakeman.com.au

  8. www.jakeman.com.au

  9. Risk Bow-Tie The universal multi-tool www.jakeman.com.au

  10. RiskEvent Relationship Of Defined Terms CONSEQUENCE S O U R C E H A Z A R D T H R E A T S E F F E CT CONSEQUENCE BARRIERS ESCALATIONCONTROLS ESCALATION FACTORS ESCALATION FACTORS ESCALATIONCONTROLS THREAT BARRIERS LIKELIHOODMANAGEMENT CONSEQUENCEMANAGEMENT www.jakeman.com.au

  11. Event Bow Tie & Resilience CONSEQUENCE S O U R C E H A Z A R D E F F E C T T H R E A T S PLANNING PREPARATION RESPONSE RECOVERY www.jakeman.com.au

  12. Risk Bow-Tie PREVENTION EXPLOITATION Threat BENEFIT Threat EVENT BENEFIT Opportunity LOSS LOSS Opportunity RECOVERY OPTIMIZATION LIKELIHOOD MANAGEMENT CONSEQUENCE MANAGEMENT www.jakeman.com.au

  13. The Risk Bow-Tie PREVENTION Threats Benefits EXPLOITATION Rough roads Reduced mortality Electronic Stability Program (ESP) Automatic alarms to emergency services Anti lock brakes(ALB) Wet weather CAR SKIDSINTO TREE Economic stimulus New car sales Opportunities Market the benefits of ALB Losses Seatbelts Airbags New car sales Injury or death Modular design Legislate for ALB Repair costs Improved safety RECOVERY OPTIMIZATION LIKELIHOOD MANAGEMENT CONSEQUENCE MANAGEMENT www.jakeman.com.au

  14. RiskEvent CONSEQUENCE BARRIERS ESCALATIONCONTROLS ESCALATION FACTORS ESCALATION FACTORS ESCALATIONCONTROLS THREAT BARRIERS CONSEQUENCE S Resilience & Bow-Ties S O U R C E H A Z A R D THRE AT S E F F E CT S LIKELIHOODMANAGEMENT CONSEQUENCEMANAGEMENT Julian Talbot (ASIS 2009) www.jakeman.com.au

  15. Loss $ $ Loss $ ALARP ALARP $$$ Loss $ Assault $ Assault $$$ As Low As Reasonably Practicable Assault www.jakeman.com.au

  16. Eliminate Eliminate Substitute Isolate Engineer Administrative Controls Personal Protection ASSETS www.jakeman.com.au

  17. Eliminate ASSETS E Don’t explore for oil S Mauritania not Iraq I Staff in remote areas not city E Fence, gates, armoured veh. A Policies, Travel safety training P Bullet-proof vests www.jakeman.com.au

  18. www.jakeman.com.au

  19. As Low As Reasonably Practicable (ALARP) Magnitude of Risk Intolerable levels of riskAdverse risks are intolerable whatever the benefits and risk mitigation measures are essential at any cost if activity is to continue. Risk Increasing Intolerable Cost Increasing As Low as Reasonably PracticableA level of risk that is tolerable and cannot be reduced further without expenditure ofcosts disproportionate to the benefit gained or where the solution is impractical to implement ALARP Ideal levels of riskRisks are negligible, or so small that they can bemanaged by routine procedures and no additional risk treatment measures are needed. Tolerable www.jakeman.com.au

  20. ALARPAs Low As Reasonably Practicable “A level of risk that is tolerable and cannot be reduced further without the expenditure of costs that are disproportionate to the benefit gained or where the solution is impractical to implement” Level of Risk Risk Cost $, Resources, Effort ALARP Cost / Benefit www.jakeman.com.au

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  24. AHLARP Positive Risk AHLARP Resources Applied Consequence Negative Risk Likelihood RTP AHARP ALARP www.jakeman.com.au

  25. Cost/Benefit of Mitigation AHLARP: ‘As High/Low As Reasonably Practicable’. “The range between the RTP, ALARP and AHARP forms the boundary where the level of risk/resources/reward is optimal, and appropriate to the resources applied and to the accepted risk criteria.” Positive Risk AHLARP is based on the assumption that an initially small amount of resources, if applied well, will achieve significant immediate benefit, but that at some point, even an infinite amount of additional resources will provide minimal if any, additional benefit. Ie. The point of ‘diminishing returns’. Risk Tipping Point (RTP): is based on the concept that success for most initiatives is initially unlikely (though not impossible) but that the input of sufficient resources will reach a point where the balance between negative risks and positive risks, will tip in favour of positive outcomes AHLARP Resources Applied Consequence Negative Risk Likelihood RTP AHARP ALARP www.jakeman.com.au

  26. Positive v. Negative Outcomes • The “effect of uncertainty on objectives” is likely to produce more negative outcomes than positive if ‘resources’ are limited or the ‘quality’ of implementation is poor. Examples: • EVOLUTION: No conscious risk management – leads to more extinct species than successful • NATURAL DISASTERS: – Difficulty in predicting them and the vastness of required resources means that it is difficult if not impossible to harness energy/benefits of an earthquake Magnitude of Likelihood Negative (adverse) consequences Positive (beneficial) consequences www.jakeman.com.au

  27. Positive v. Negative Outcomes • The “effect of uncertainty on objectives” is likely to produce more negative outcomes than positive if ‘resources’ are limited or the ‘quality’ of implementation is poor. Examples: • EVOLUTION: No conscious risk management – leads to more extinct species than successful • NATURAL DISASTERS: – Difficulty in predicting them and the vastness of required resources means that it is difficult if not impossible to harness energy/benefits of an earthquake Magnitude of Likelihood Negative (adverse) consequences Positive (beneficial) consequences www.jakeman.com.au

  28. Positive v. Negative Outcomes • The “effect of uncertainty on objectives” is likely to produce more negative outcomes than positive if ‘resources’ are limited or the ‘quality’ of implementation is poor. Examples: • EVOLUTION: No conscious risk management – leads to more extinct species than successful • NATURAL DISASTERS: – Difficulty in predicting them and the vastness of required resources means that it is difficult if not impossible to harness energy/benefits of an earthquake Magnitude of Likelihood Negative (adverse) consequences Positive (beneficial) consequences www.jakeman.com.au

  29. Positive v. Negative Outcomes • Target area for the “effect of uncertainty on objectives” is: • BENEFITS: As High As Reasonably Practicable (AHARP) • LOSSES: As Low As Reasonably Practicable (ALARP) Magnitude of Likelihood Negative (adverse) consequences Positive (beneficial) consequences www.jakeman.com.au

  30. Risk Management • Target area for the “effect of uncertainty on objectives” is: • BENEFITS: As High As Reasonably Practicable (AHARP) • LOSSES: As Low As Reasonably Practicable (ALARP) Magnitude of Likelihood Negative (adverse) consequences Positive (beneficial) consequences www.jakeman.com.au

  31. Investment vs. Effectiveness of risk treatments Zone of prudent investments Perfect Security Totally Vulnerable Risk Management Investment 0% 5% 25% 50% 75% 95% Level of assurance and consistency www.jakeman.com.au

  32. Investment vs. Effectiveness of risk treatments Zone of prudent investments Perfect Security Totally Vulnerable Oil & Gas Facility 75% Prudent Zone Risk Management Investment Hotel / Restaurant 54% Manufacturer 34% Stationery Supplier 24% Bank 61% Medical Center 49% 0% 5% 25% 50% 75% 95% Risk Management Effectiveness www.jakeman.com.au

  33. Cost Effectiveness Discretionary Risk Management Investment Risk Management Effectiveness Best Practice AHLARP region Base (Prudent) Costs Compliance Costs Sunk Costs Decreasing Variability www.jakeman.com.au

  34. Risk Management Journey Risk Controllers Risk Enhancers Risk Transformers + Positive (Benefits) Target: AHARP AHLARP range Target: ALARP - Negative (Adverse) Compliance & Hazard Control Operational Performance Opportunity Realisation Earlier More Recent www.jakeman.com.au

  35. Risk Quality Resources Exposure www.jakeman.com.au

  36. Risk Equilibrium (Optimal Trade-Off) Resources 10 9 8 7 6 5 4 3 2 Negative (adverse) consequences Quality Risk Positive (beneficial) consequences Exposure www.jakeman.com.au

  37. Risk Equilibrium (Optimal Trade-Off) Quality Resources Magnitude of Risk Lower Risk Higher Risk Intolerable Resources and Quality in appropriate proportion to the Exposures for end result of risk ALARP ALARP Tolerable Exposure www.jakeman.com.au

  38. Few resources but high quality Resources 10 9 8 7 6 5 4 3 2 Lower Risk Higher Risk Quality Risk Exposure www.jakeman.com.au

  39. Significant Resources still equals High Risk if Exposures are High & SRM Quality is Poor Magnitude of Risk 10 9 8 7 6 5 4 3 2 Lower Risk Higher Risk Quality Resources Risk Exposure www.jakeman.com.au

  40. Risk is still High if Resources & Quality are Limited Magnitude of Risk 10 9 8 7 6 5 4 3 2 Lower Risk Higher Risk Quality Resources Risk Exposure www.jakeman.com.au

  41. Few Resources & Poor Quality still result in low Risk if Exposure is Low Magnitude of Risk 10 9 8 7 6 5 4 3 2 Lower Risk Higher Risk Quality Resources Risk In practice, risk this low is unlikely to occur as there are also limited opportunities here and this represents poor Return on Equity Exposure www.jakeman.com.au

  42. Example – Arson Attack Recover Respond Delay Detect Insurance, BCP, counselling, etc Fire suppression & emergency systems Internal barriers & access control Deter Intruder alarms & CCTV Fences, patrols, CCTV, etc Failed or Absent Barriers www.jakeman.com.au

  43. Organisational Influences Inadequate Oversight Pre-Conditions Inappropriate Behaviours Failed or Absent Barriers Example: Arson Attack(Offender enters unsecured rear door to light fire) Inadequate security training for managersand staff Inadequate management interventionregarding access control or rear door Lack of maintenance meantthat air-con failed during warm weather Rear door left ajarto allow airflow on a warm day www.jakeman.com.au

  44. Recover Respond Delay Detect Example – Workplace Assault Counselling, Rehabilitation Police, Security Internal doors and barriers Deter Door ajar alarms & CCTV Reception and Security Guards Failed or Absent Barriers www.jakeman.com.au

  45. Organisational Influences Inadequate Oversight Pre-Conditions Inappropriate Behaviours Failed or Absent Barriers HFACS Example Inadequate selection processesfor selection of senior manager Inadequate training in security procedures Cognitive task saturation- insufficient time to process information Allowed crew fromunidentified boat to dock & disembark www.jakeman.com.au

  46. Human Factors Julian Talbot (ASIS 2009) www.jakeman.com.au

  47. www.jakeman.com.au

  48. Regulation, Standards and Policy Training and Education Operations and Application Governance and Oversight Sustainability and Resilience Risk Management Framework ActivityAreas Practice Areas Strategic Knowledge Areas Risk Treatments ‘Quality Risk Resources Exposure Risk Management Application Integration Design Assurance Application • Operational Competency Areas Enablers www.jakeman.com.au

  49. PSPF SRM Framework www.jakeman.com.au

  50. www.jakeman.com.au

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