5

RISK ASSESSMENT
PROCEDURES AND TOOLS

5.3.2 RISK ANALYSIS PROCESS

TO START WITH!
Likelihood Table
TO START
Likelihood is the chance of something happening and is determined by
the probability of occurrence or potential frequency. WITH !
01 Ask yourself how likely is the
Score Likelihood Probability of Occurrence Frequency risk to occur?
• Ask yourself how likely is the
risk to occur?
5 Almost Certain >90% Expected to happen At least monthly
4 Likely >60% to 90% Can happen frequently Bi-monthly
• How
How Frequently
frequently hashas this
this
3 Possible >30% to 60% Chances to happen is relatively Occurs every 1 to 2 02 occurred
occurred previously
previously in
in ourour
high years service
service?
2 Unlikely > 5% to 30% Could happen, however very rare Occurs every 2 to 5 • Then, assign a score of 1 to 5
year
1 Rare < 5% The probability to happen is Occurs every 5 using likelihood table.
extremely small years or more 03 Then, using the Likelihood Table ,
assign a score of 1 to 5.
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RISK ASSESSMENT
PROCEDURES AND TOOLS

5.3.2 RISK ANALYSIS PROCESS

Severity Table Severity Table

(Quality, Products/Services) (Environment, Health and Safety)
Score Impact Description Indication Score Impact Description Indication
5 Catastrophic Severe operations, delivery , Loss of customer, massive loss, legal 5 Fatal Fatality Fatal wound, amputation, intoxication,
service disturbance, suffering , problems etc.
discomfort 4 Serious Lost time incident Lost time incident, laceration, burn,
4 Serious Serious operations, delivery , Reduction in business activity or revenue chronic disease, etc.
service disturbance, suffering , 3 Medium Light injury/ case Light wound, dizziness, anemia,
discomfort cephalagia, etc.
2 Slight Health disturbance, suffering , Small cut, discomfort, sensation and
3 Medium Medium operations, delivery , Delay in business activity or revenue
discomfort worthlessness, etc.
service disturbance, suffering ,
1 Negligible No damage Very minor wound , injury or discomfort
discomfort
2 Slight Slight operations, delivery , Operational delay, increase in cost,
service disturbance, suffering , complaints
discomfort
1 Negligible No damage Very minor discomfort or product and
services impact
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RISK ASSESSMENT
PROCEDURES AND TOOLS

5.3.3 RISK EVALUATIONPROCESS

Risk Criteria
The purpose of risk evaluation is to make decisions based on the residual risk rating to
determine whether the risk requires further management action.

 High risks are scored between 15 and 25 and colored Red.

 Medium risks are scored between 6 and 12 and colored Amber.
 Low risks are scored between 1 and 5 and colored Green.

5 5
5 10 15 20 25 Low Medium High High High
Almost Certain Almost Certain
4 4
4 8 12 16 20 Low Medium Medium High High
Likely Likely
LIKELIHOOD

LIKELIHOOD
3 3
3 6 9 12 15 Low Medium Medium Medium High
Possible Possible
2 2
2 4 6 8 10 Low Low Medium Medium Medium
Unlikely Unlikely
1 1
1 2 3 4 5 Low Low Low Low Low
Rare Rare
1 2 3 4 5 1 2 3 4 5
Negligible Minor Moderate Major Extreme Negligible Minor Moderate Major Extreme
IMPACT IMPACT
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RISK ASSESSMENT
PROCEDURES AND TOOLS

5.3.3 RISK EVALUATIONPROCESS

Risk Evaluation
Risk Criteria Risk Classification Action
Rating
Such decision-making should not be guided solely by the There it is not possible to terminate or
rating of the risk but rather the rating of a risk should inform transfer the risk, a treatment plan should
be developed and the actions required
decision-making High Not acceptable assigned to action owners and their
completion should be monitored by the
relevant Management Team.
5
Low Medium High High High Such risks require consideration by the
Almost Certain
4 Management Team. It may be that a
Low Medium Medium High High decision is to take risk treatment options
Likely
[Reduce, Avoid or Transfer] or to accept
3 Medium Undesirable the risk but keep it under review [monitor]
LIKELIHOOD

Low Medium Medium Medium High

Possible with an option to open it for further
2 management in the future.
Low Low Medium Medium Medium
Unlikely
1 Such risks require no further action or can
Low Low Low Low Low
Rare be managed by an appropriate person or
1 2 3 4 5 department. Quarterly monitoring, review,
Negligible Minor Moderate Major Extreme Low Acceptable and/or testing of controls will be in place
to ensure that controls remain effective to
IMPACT manage the risk.