Transcript Video 5: An introduction to work health & safety management (Chapter 11)

What is risk management? Initially, risk management might sound simple:

• You identify some risk
• You work out how big the risk is
• And then you try to prioritise different risks and find ways to control them so that incidents and their consequences don’t eventuate.

This is the basis of risk management but there are many more complexities that need to be understood. For example, there are different ways to apply risk management. So, achieving a deep understanding of risk management to apply it in practice is more difficult than it first looks.

Consider, what I think is risky you might think is OK?

Or what I think is a tolerable risk you might think is completely unacceptable

Also – should risk management be confined to circumstances when the risk might lead to hurting people or should you consider all of the possible consequences of an incident?

Does risk always have a bad, or negative, outcome?  There is risk in buying shares in the stock market but you don’t buy shares thinking you are going to lose your money – you want to make money and have a positive outcome.  If risk outcomes were always negative there would be no investment! Sometimes ‘taking a risk’ can then be a good thing so all this needs to be considered within the broader context of risk management.

What impacts our perceptions of risk can depend on our experience, education, whether the risk is voluntary or imposed on us, that is, whether we feel that we are in control and what benefit we think we will get from taking the risk.

Risk is a part of everything that we do from getting up in the morning

We are all making risk-based decisions, all the time. Using instinctual risk management in our daily lives is what we do to make sure we stay safe.

So why study risk management?

What I might think of as severe or catastrophic consequence you might think of as only a minor or moderate consequence. Because my perceptions of risk are different to yours, my tolerability or acceptability of risk may be different to yours and my experiences are different to yours – we need to have a way that we can communicate about risk in a way that takes away all of the emotion and gives us a common language.

Also if we can learn some simple tools then we can make sure that when we “do” risk management we are much more likely to identify all of the risks. Then we can have a better understanding of the causes, consequences and likelihoods to then develop controls that will be effective in managing those risks to get good outcomes we are after.

More advanced risk management also helps you to know what to do when you have a long list of risks and controls – it will guide you on what to do next.

So let’s start with establishing a common language?

The terms hazard and risk are often used interchangeably in the English and other languages. This is because our understanding risk varies depending on our culture and context.  Even some WHS professionals use the words interchangeably but they are different.

In a WHS context a Hazard is a situation or thing that has the potential to harm a person.  Hazards in a workplace can include: noisy machinery, a moving forklift, chemicals, electricity, working at heights, a repetitious job, bullying and violence.

The International Standard for Risk management principles and guidelines, ISO 31000, replaced the term “hazard” with “risk source”. This then means that risk sources maybe considered to be elements acting either alone or in combination with an intrinsic power to generate a risk.

Risk may then defined any effect of uncertainty on objectives.

What is uncertainty? It can be the likelihood, frequency or probability of something occurring.

Risk = consequences X frequency

Risk = dying in a road incident X number/year

Thinking about it another way…

A good way to remember this is to think of a shark – A shark maybe a source of harm but does it pose a risk?

Given our new understanding of the word risk – for a shark to pose a risk, the shark has to pose a risk to something – it has to have an effect over something

For example, if you put a swimmer near a shark – the shark now poses a risk to the swimmer.  But how much risk does it pose?

To understand the level, scale or size of risk that the shark poses to the swimmer there are many factors to consider:

• How far away is the person from the shark? Are they isolated by distance or some other barrier such as a shark proof fence?
• What type of shark is it and how big is it? (baby or a fully grown white pointer)
• How fast can the person swim? Can they get away from the shark once they know it is there?
• What PPE is the person wearing? This could be a mesh suit to resist any bite?
• What engineering controls are in place? Is the person in a shark proof cage, are there other deterrents such as acoustic measures?

By thinking about the person, the shark and the situation – you are starting to do risk management.

So if risk is the effect of uncertainty on objectives, in this case, the risk could be defined as chance of getting bitten by a shark while swimming in waters where sharks have been sighted.  All of the other considerations are controls that impact on the level or size of the risk.  Risk management is simple a way to explain all of this complexity.

The actual risk for any person facing a shark is therefore dependent on many factors – so now you can see why risk and its management is such a complex topic!

Risk Prioritisation

Now that you know the basics of risk management but how can we use it because we can’t fix everything at once!

By understanding levels of risk we can prioritise different scenarios to see where we are best off spending our money.  A common way to do this is to rate the level of consequence (impact) and likelihood (how often you get the impact) and prioritise the risks based on a score.

Risk tables can be used for WHS but area also a useful tool to examine Environmental, Financial, Legal, Cultural, reputation and other types of business risk.

The common idea is that they provide a way of saying which risks are really important ( big risks) and which ones are less of a concern ( little ones) and they often have rules on what to do if you have different sized risks.

Having a list or a chart so that people understand what is important to be focussed on is an important tool for businesses as it doesn’t matter how good you are you can’t do everything at one.

Why is risk management important?

By understanding and applying risk management you can identify problems, determine how to control them and make assessments as to whether the risk is acceptable.  In a WHS context you can make things safer for people by understanding what can go wrong and how to prevent it.

It also provides you a common language by which to compare different risks and prioritise them so that you can spend (or use) limited resources  including people, time and dollars wisely to most benefit the largest number of people or, put simply, to keep the greatest number of people safe within budget constraints.