HSEC Risk Management

Specifically, for HSEC risk issues (sources/events) the ALARP criterion (Refer HSEC Toolkit T07:
Risk Criteria / ALARP Principle) should be used. That criterion, as represented in Figure 4 below,
is more onerous than simple cost-benefit, in that the concept of “gross disproportionation” is
applied following the dictum of Lord Asquith in 1949:
“Reasonably practicable” is a narrower term than “physically possible” and it seems to me to
imply that a computation must be made by the owner, in which the quantum of risk is placed
on one scale and the sacrifice involved in the measures necessary for averting the risk
(whether in money, time or trouble) is placed in the other; and that if it be shown that there is
a gross disproportion between them - the risk being insignificant in relation to the sacrifice -
the defendants discharge the onus on them.

The risk evaluation shall also establish the overall risk associated with multiple risk issues. For
instance, minor issues associated with a particular task or project, whilst not significant in
themselves on a stand-alone basis, may combine and result in an overall cumulative higher risk.

RISK RATING

A level of risk that is so high as to require significant and urgent actions to reduce its
magnitude. If these risk levels can not be reduced to ALARP or tolerable level,
the project objectives and operating philosophy must be fundamentally
Greater than 300 reviewed by the management. INTOLERABLE

Efforts must be made to reduce risk further, and as far as

11 - 300 can be achieved without the expenditure of a cost that is ALARP
grossly disproportionate to benefit gained.*

A level of risk that is so low as to not

10 or below TOLERABLE
require actions to reduce its
magnitude further, but which will
be monitored and managed
by the site using its
management
system.

All actions should be developed in accordance with the Hierarchy of Controls (see Figure 5).
* The benefit gained may include improvement in HSEC performance or the Company’s reputation.

Figure 4: The ALARP Triangle and Risk Management Concept

Marked in Figure 4 are suggested risk ratings that can be used as criteria with semi-quantitative
risk analysis.

Once the risk has been assessed against the defined tolerability criteria, a decision can then be
made to either:
x tolerate the risk if it is ALARP; or
x consider control options if the risk does not fall within the tolerable range.

Note that if a risk is ‘tolerable’, it requires ongoing management and monitoring, and management
procedures need to be developed to ensure that it remains in this risk category.

There will be circumstances where some risk issues cannot be reduced to an ALARP level in the
short term. The tolerability of these circumstances and the appropriate interim controls need to be
assessed on a case-by-case basis. Such risks may require temporary or longer-term modifications
or shutdown, but cannot be accepted as tolerable in the long term and require formal management
approval for their short-term toleration. The table given above under Priority Guide indicates the
level of management that is required to provide the authority for the continued toleration of residual
risks.

HSEC Guideline No G19 CONTROLLED DOCUMENT Revision No 2.1

Printed copies of this document are not controlled.
14 February 2005 To verify this copy is current, check on the intranet at http://hsec.bhpbilliton.net Page 14 of 22