Risk Reduction | ALARP | As low as reasonable practicable

 ALARP PRINCIPLES | RISK REDUCTION MEASURES

RISK REDUCTION MEASURES | ALARP – AS LOW AS REASONABLY PRACTICABLE

ALARP Principle 

ALARP PRINCIPLES | RISK REDUCTION MEASURES

RISK REDUCTION MEASURES | ALARP – AS LOW AS REASONABLY PRACTICABLE

Once risk evaluation is complete, appropriate risk reduction measures shall be identified to reduce risks further to demonstrate ALARP- as low as reasonably practicable and to determine the residual risk. ALARP- as low as reasonably practicable demonstration should verify that appropriate credit is given to all existing engineering controls before recommending additional risk reduction measures.

Risk reduction measures include preventative or control measures likelihood reduction and mitigation or recovery measures consequence severity reduction. If the risk is low, no action may be required. Medium, High-Medium, and High risks require formulating a remedial action plan, which should include agreed actions, responsible person, and completion date.

ALARP PRINCIPLES

Application of the ALARP- as low as reasonably practicable principle involves specifying two sets of risk tolerance criteria. The first set of criteria, corresponding to the dividing line between the unacceptable and tolerable regions, usually called the maximum tolerable risk for personnel or maximum Design Accidental Load against each Fire, explosion, etc. for various receptors is a minimum requirement that must be met. The second set of criteria, corresponding to the dividing line between the tolerable and broadly acceptable regions, usually called the broadly acceptable risk, is a goal that may not be reached but towards which progress must be made until risk reduction measures involve grossly disproportionate resources. The residual risk, that is the risk remaining after controls have been implemented, should fall either in the broadly acceptable region or near the bottom of the tolerable region.

The key concept in using the ALARP- as low as a reasonably practicable principle is the trade-off between the benefits and costs of risk reduction measures. Eventually, a point of diminishing returns is reached wherein expenditure increases markedly as risk reduction diminishes rapidly. Cost-benefit analysis can be used with risk analysis and entails a comparison of the sacrifice costs and the risk reduction benefits achieved for a risk reduction measure.

Risk reduction measures include preventative or control measures likelihood reduction and mitigation or recovery measures consequence severity reduction. If the risk is low, no action may be required. Medium, High-Medium, and High risks require formulating a remedial action plan, which should include agreed actions, responsible person, and completion date.

Cost-Benefit Analysis helps in making judgments on whether risk reduction measures are reasonably practicable. In Cost-Benefit Analysis, usually, a measure is adopted only if the benefits outweigh the costs. However, in ALARP- as low as reasonably practicable determinations, a measure is adopted unless the sacrifice is grossly disproportionate to the risk. A Disproportion Factor is used so that a risk reduction measure would not be considered worth the risk reduction achieved if Costs/Benefits > Disproportion Factor. The greater the risk, the greater should be the Disproportion Factor to achieve a given benefit. The Cost-benefit analysis is useful to assist in deciding what risk reduction measures are warranted for the costs involved. The use of a disproportion factor in the analysis formalizes the concept of reasonably practicable and provides justification and transparency for decisions made.

 

 

THE COST-BENEFIT ANALYSIS

The Cost-Benefit Analysis (CBA) approach is an effective risk management tool as it aids consistency in decisions for health, safety, and environmental resource allocation. CBA aids the decision-making process by giving monetary values to the costs and benefits and enabling a comparison of like quantities. The analysis can help make an informed choice between risk reduction options and demonstrating ALARP- as low as reasonably practicable.

The Cost-Benefit Analysis approach requires monetary evaluation of risks or the monetary evaluation of the loss. Some typical examples are:

·         Loss of plant, assets e.g. rebuilds cost.

·         Loss of product and/or revenue.

·         Loss of sales or customers e.g. through loss of reputation.

·         Loss of life.

·         Loss of damage to a natural resource.

·         Cost of clean-up e.g. following accidental and chronic contamination.

·         Business interruptions.

 

IMPLIED COST TO AVERT FATALITY (ICAF)

QRA enables a better understanding of the relative risks associated with Risk Reduction options being considered. Where risk is measured in terms of potential loss of life, perhaps in combination with individual risk, then a measure of the relative safety of each option is derived. Each option will also have an economic value attached to it. When the safest option is much more expensive than the less safe option it is necessary to gauge the relative worth of each. While no amount of money can compensate for the loss of life it would be unrealistic to assume that an investment aimed at the potential reduction of loss of life must be made regardless of the size of that investment.

The evaluation of measures to avert loss of life requires ‘Valuation of life’ for which different figures have been used by various industries and countries.

WHERE:

C = Cost of implementing measure ($)

L = Estimated lifetime of plant (years)

∆PLL = Change in PLL following implementation of the measure (fatalities per year)

If the implied cost to avert fatality is below the order of US$ 10 million per fatality averted the measure is likely to be effective, certainly if IR levels are high.

If the implied cost to avert fatality is between US$ 10 million and 100 million per fatality averted the measure should be considered, taking into consideration the absolute risk level, the benefits achievable, whether there are other benefits, and the level of investments in the total project cost.

If the implied cost to avert fatality is above the order of US$ 100 million per fatality averted, the measure is normally ineffective.

MAXIMUM JUSTIFIABLE SPEND (MJS)

Maximum Justifiable Spend is a cost-benefit analysis method that is similar to the Implied Cost to Avert Fatality approach. Maximum justifiable spending addresses analyzing the cost of risk reduction measures versus benefits attained in reducing asset losses and production losses. Maximum justifiable spend is typically applied for the safety studies such as whereas implied cost to avert fatality is usually used in QRA.

Maximum justifiable spend should be used as a guide to evaluating the reasonable amount of money that could be justified Cost-Benefit Analysis for specific risk reduction measures for a given receptor. Spending justification should be based on the magnitude of the risk, priority in reducing the risk to a lower level, and demonstrating ALARP- as low as reasonably practicable.

·         Risk Reduction is a change in risk profile or event frequency or impairment frequency due to the implementation of the risk reduction measure.

·         Benefits Obtained are benefits concerning the reduction in risk to people, asset loss, and production loss.

·         The cost of failure is the direct and indirect financial loss.

DEMONSTRATING ALARP

ALARP- as low as reasonably practicable demonstration reflecting among other factors local conditions and circumstances, the balance of cost and benefits, and the current state of scientific and technical knowledge. To reduce risk to the lowest tolerable level practicable involves balancing reduction in risk to a level, objectively assessed, where the trouble, difficulty, and cost of further reduction measures becomes unreasonably disproportionate to the additional risk reduction obtained.

Demonstrating ALARP- as low as reasonably practicable requires consideration of all the hard and soft tissues related to a range of options.

It requires a judgmental decision at the right level in the organization with the full knowledge of all options, associated risks, and costs.

The ALARP demonstration shall include detailed technical rationale and supporting calculations that it was not reasonably practicable to do more than what had been done to reduce risks.

Care should be taken in transferring risk to other public as a risk reduction option e.g. exhaust, ventilation, flaring, stack emissions, etc. as the added risk to these receptors might offset the benefits the measure otherwise brings.

RISK REDUCTION/ ALARP WORKSHOP

Risk Reduction Measures are identified as part of various quantified risk assessment studies to reduce the risks to ALARP. A Risk Reduction Workshop shall be conducted to present the risk assessment study results and discuss the Risk Reduction Recommendations, attended by Subject Matter

Experts, mainly, Process Engineer, Piping,  Pipeline Engineer, Control & Instrumentation Engineer, Technical Safety, HSE Engineers, and Project Manager.

·         All major Hazard scenarios shall be discussed and options for potential risk reduction measures identified. This is usually done based on the identification of Major Risk Contributors.

·         Risk reduction results shall be presented to evaluate the effect of the potential risk reduction measures.

·         Cost-benefit analysis of potential risk reduction measures performed for potential risk reduction measures shall be presented; potential risk reduction measures that are rejected shall be recorded in the respective quantified risk assessment report with a justification for the rejection.

·         Applicable Safety studies shall then be updated to incorporate all agreed risk reduction measures.