Risk-Based Approach to Regulation Red Tape to Smart Tape Innovative Regulation for the 21st Century September 27,

1. Risk-Based Approach to Regulation�Red Tape� to �Smart Tape�Innovative Regulation for the 21st CenturySeptember 27, 2002

2. 2 Technical Standards & Safety Authority (TSSA) A private corporation with a focus on public safety. Governed by a 17 member Board of Directors (reflecting industry, consumer, public and government). One of the few independent corporations in North America with delegated responsibility for administering and enforcing public safety legislation. More than 230 full-time employees Delegated authority in Ontario from the Ministry of Consumer & Business Services (MCBS) Business experience for private-sector clients in several countries

3. 3 TSSA�s Mission & Vision Our Mission is to make people�s lives better by enhancing public safety Our Vision is to become an internationally recognized leader in the design and delivery of public safety services

4. 4  TSSA�s Ontario Mandate In 1997, TSSA was made the sole authority in Ontario for administration and enforcement of seven public safety Acts: Amusement Devices Act Boilers & Pressure Vessels Act Elevating Devices Act Energy Act Gasoline Handling Act Operating Engineers Act Upholstered & Stuffed Articles Act

5. 5 Risk Based Approach- An Overview The Risk Management Process Identify & Assess Risk Control Risk Finance the residual Risk Monitor/Modify/Continuous Improvement

6. 6 Risk Based Approach The Risk Management Process at TSSA Through core services (Engineering, Inspection and Investigation) TSSA identifies Public Safety Risk. Utilizing information collected from these activities through our �POSSE� IT system, safety hazards are analyzed. TSSA designs and implements effective solutions to address the identified safety hazards. Information on safety hazards and the results of our risk control/mitigation activities are used to effect continuous improvement of our activities

8. Addressing Safety Hazards

9. 9 Risk ControlAddressing Safety Hazards Human error continues to be a major causal factor in the incidents reported to TSSA Improper maintenance and use of equipment accounted for the majority of serious injuries/deaths These trends identify the need to focus on Operator/Contractor Training & Certification as well as Public Education

10. 10 An example: Elevating Devices Inspection Scheduling Under the Elevating Devices Regulation of the Technical Standards and Safety Act, TSSA regulates the safety of: 44,000 elevators, escalators, construction hoists, ski lifts and other passenger ropeways Risk Based Resource Allocation at TSSA

11. 11 Historically: Insufficient numbers of inspectors to address volume Large backlog of inspected sites Uncertainty about how to prioritize backlog Challenge: Manage inspection workload without compromising public safety Solution: Risk-based resource allocation, i.e. inspection scheduling program Risk Based Resource Allocation at TSSA

12. 12 Example:Risk Based Inspection SchedulingElevating Devices Program based on: Collection, in a database, of information on each device gathered through Inspections Engineering design reviews Incident investigations Identification of risk factors � key information in database which is predictive of safety deficiencies Development of a scheduling formula in which a given device�s frequency of inspection is lengthened or shortened using the risk factors

13. 13 RISK FACTORS: TSSA analysis indicated 5 appropriate risk factors: Severity of non-compliance directives (inspector issued during inspections over last 3 years) Contractor performance Age of device Building occupancy type # of floors serviced

14. 14 HOW IT WORKS: Base inspection frequency of once every two years the period it would take us to visit every elevator once using current staffing A system of debits and credits (time oriented) is applied to each device based on 5 Risk Factors Inspection frequency is modified as a result of risk factors maximum: �better� devices inspected every 3 years minimum: �riskier� devices inspected every 6 months For any given device, inspection frequency adjusted over time as risk factors change Risk Based Inspection SchedulingElevating Devices

15. 15 BENEFITS: Workload Management Limited inspection resources are not being wasted checking devices with established histories of good safety compliance. Creates a more sophisticated tool to guide inspectors in determining where and when to inspect. Public Safety High risk devices & clients receiving more attention Client understanding of risk factors affecting safety Incentives for clients to comply with the Elevating Devices Regulation through fewer inspections and thus reduced fees Risk Based Inspection SchedulingElevating Devices

16. 16 SUMMARY TSSA�s Risk Based Approach allow us to: Collect and analyze information on our activities Identify & analyze safety hazards Measure & demonstrate our effectiveness (Scorecard) Continuous Improvement Improve our operational efficiency and effectiveness Improve our allocation of resources (i.e. inspection scheduling) Implement effective safety programs including, but not limited to, Regulation

17. 17 For more information,please visit our website:www.tssa.org