Risk Management PDF

# Domain III: Risk Management ## 3.1 Managing Risks There are four steps involved in risk management: 1. **Hazard Identification** The first step in the process of risk management is hazard identification. This is probably the most important step in this process. If certain hazards are not...

# Domain III: Risk Management ## 3.1 Managing Risks There are four steps involved in risk management: 1. **Hazard Identification** The first step in the process of risk management is hazard identification. This is probably the most important step in this process. If certain hazards are not identified, their risk cannot be assessed and properly managed. Hazards in the workplace fall into broad categories, from exposure to hazardous chemicals, injurious physical agents, noise and vibration, heat stress, etc. However, in the process of risk management, every effort must be made to identify all hazards and potential hazards. Working closely with workers and looking at every task at the workplace will assist in finding potential hazards. Manufacturers and suppliers can provide information about hazards and safety precautions for specific substances (safety data sheets), plant or processes instruction manuals. 2. **Risk Assessment** The risk assessment process will yield more comprehensive and better results when reliable statistical and probability data are available. In the absence of such data, the results are a strong function of the engineering judgement of the assessors. The important issue is that both the severity and probability of the accident must be taken into account. Although the acceptability of risk is a management decision, one can divide the area in a risk matrix (plot of probability vs severity) into unacceptable, marginally acceptable, and acceptable regions. 3. **Risk Control** Risk can be controlled or minimized by implementing engineering and/or administrative controls. For example, placing a shield between a worker and an ionizing radiation source is an example of engineering control. Rotation of workers in high noise area to reduce exposure is an example of administrative control. For hazards that cannot be controlled by engineering or administrative techniques, proper Personal Protective Equipment must be provided. 4. **Review Control Measures** Once a hazard is identified and its risks have been assessed, control measures are put in place to either eliminate or minimize the risk. However, risk controls must be reviewed on a regular basis to ensure that they are still capable of controlling the risk. Many times, changes in the workplace may affect risk control measures. ### Who should be covered? The process of risk management must also address the safety and health of not only the workers but all others such as contractors, visitors, etc. who might be affected by the presence of hazards in the workplace. ### Keeping records: It is good practice to document and keep records of the risk assessment process. This can help with compliance activities as well as future risk assessments. ## 3.2 Example Questions 1. In the process of risk assessment, risk can be classified into two general categories; societal risk and individual risk. Which of the following statements is the best description of a societal risk? * The risk associated with a large group of individuals * Number of incidences or consequences that can occur per year * The risk of release of a hazardous chemical into the community * All the risks that a given society is exposed to 2. Which of the following statements best describes the concept of individual risk? * The risk associated with workplace hazards to an individual * Number of undesirable incidences or consequences that can occur to an individual in any given day * Probability of a single consequence occurring to an individual in a given year * The risk an individual assumes in a given day 3. Risk analysis in occupational and environmental safety: * Is a qualitative method only * Is a quantitative method only * Can be qualitative or quantitative * Must provide solutions to eliminate risks 4. In regard to the process of risk assessment, which of the following statements is the most correct? * Risk must first be managed and then assessed. * Risk can only be assessed after hazard identification. * Risk must be assessed before hazard identification. * Only (a) and (b) above. 5. MORT is used extensively in Total Quality Management (TQM). MORT is an acronym for: * Management Oversight Risk Tree * Minimum Operational Readiness Test * Management Objectives and Reorganization Technique * Management Organization and Restructure Technique 6. The Management Oversight Risk Tree (MORT): * Starts with an undesirable event and traces that event to all its possible causes * Is a diagram which primarily focuses on risk analysis and management failures to adequately respond to risks * Is similar to fault tree analysis * Only (a) and (c) above 7. Unit Risk Exposure is calculated by: * Dividing total lost dollars by the total number of units lost. * Calculating the reliability of each component of a system and using the appropriate relationship for series or parallel system reliability. * Dividing the total risk exposure by the total number of units. * Calculating the reliability of each component within a system and adding the results for all components. 8. Risk identification must be conducted before: * Risk management * Risk analysis * System safety application * All of the above 9. Proper risk assessment is one of the key steps in the process of hazardous waste management. Which of the following would you use as the first step in the process of risk assessment for a hazardous waste site? * Site assessment * Contact OSHA * Contact the LEPC and SERC * Contact the U.S. Coast Guard 10. In the process of risk assessment, both the probability and severity of an incident must be taken into account. From the following table, which case poses the highest risk? | Case | Probability | Severity | |---|---|---| | 1 | 0.000005 | 2 | | 2 | 0.000003 | 5 | | 3 | 0.000001 | 6 | | 4 | 0.000001 | 4 | * Case 1 * Case 2 * Case 3 * Case 4 11. Which of the following statements is true in regards to cost-benefit analysis? * Cost-benefit analysis calculates the benefits and costs of competing alternatives. * The analysis can be performed by calculating the cost-to-benefit ratio. * The analysis can be performed by calculating the benefit-to-cost ratio. * All of the above. 12. Hazard and Operability (HAZOP) studies are conducted to identify the deviations of process parameters from their design intent. A team conducts a HAZOP study. Which of the following IS NOT true in regards to HAZOP team leaders or their functions? * The HAZOP team leader must be completely familiar with the process and its safety features. * The HAZOP team leader must be able to assist in brainstorming the process. * The HAZOP team leader must be able to document the findings of each brainstorming session. * The HAZOP team leader must be able to prepare a sound HAZOP report. 13. Which of the following is considered to be an environmental risk assessment technique? * Probability analysis * Systems analysis * Cost-benefit analysis * All of the above. 14. The risk assessment process must be conducted in the following order: * Hazard accounting, hazard identification or risk evaluation, risk characterization * Hazard identification, risk evaluation, risk characterization, hazard accounting * Hazard identification, hazard accounting, risk characterization, risk evaluation * Hazard identification, hazard accounting, risk evaluation, risk characterization 15. Residual risk is defined as equal to inherent risk less the effect of controls. Which of the following is NOT one of the three types of controls that are commonly used to reduce inherent risk? * Preventive * Probabilistic * Detective * Remedial 16. Which of the following statements is not true in regard to a management oversight risk tree (MORT)? * It can be used to predict the adequacy of control elements already in place to prevent accidents. * MORT uses similar symbols and logic to those used in fault tree analysis. * MORT does not look at what happened during an accident, but traces causal factors back to management systems to identify why events happened. * It is very effective in identifying the underlying management root causes of hazards. 17. Pure risk is defined as risk that can only produce negative outcomes. Speculative risk is defined as risk that can produce both positive and negative outcomes. Which of the following is not an example of pure risk? * Fire * Unrecoverable disability * Gambling * Accident 18. You are a CSP in charge of safety for a petrochemical plant. A reactor explodes and 4 workers are killed and 3 are severely injured. The local newspapers and TV personnel pour into the plant and want information from you. Which of the following courses of actions would be most appropriate for you to take? * Try to downplay the accident. * Try to tell them everything that you know. * Stay in the background and provide information to management. * Try to blame the accident on unavoidable causes. 19. As a safety and health professional in a midsize company, you have established a safety and health program. One of the employees in the production department has consistently been ignoring safety rules and policies. You have discussed the matter with his supervisor without getting any results. You should: * Contact the company vice president * Contact the personnel department * Contact OSHA * Contact the employee’s labor union 20. All of the following must be considered in developing a safety and health program for an organization EXCEPT: * Emotional aspects * Individual differences * Motivational issues * Availability of personal protective equipment 21. Formal hazard analysis techniques can be divided into two general categories. Which of the following is the correct description of these two categories? * HAZOP and Fault Tree * FMEA and Event Tree * FMEA and OHA * Inductive and deductive 22. According to Berlo, the communication process is made up of seven steps. Which of the following is NOT one of the seven communication steps suggested by Berlo? * Encoding * The channel * Interpretation * Decoding 23. Which of the following is NOT considered to be a valid approach in safety programs that primarily focus on behavior modification? * Eliminate unwanted behavior. * Provide training to eliminate or reduce the number of unsafe conditions. * Educate employees on desired responses. * Provide reward and/or praise for working safely. 24. All of the following are examples of situations that knowledge of the risks involved may not lead to safe behaviors EXCEPT: * Smoking * Handling toxic chemicals * Eating high-cholesterol, high fat foods * Not wearing seat belts 25. All of the following are steps involved in conducting Job Hazard Analysis EXCEPT: * Determine the steps involved in each job * Identify hazards related to each task * Quantify the results using minimum cut sets * Determine how hazards can be mitigated 26. Which of the following statements is true in regard to Root Cause Analysis? * It combines the forward thinking pattern of PHA with the backward thinking pattern of FTA to predict the failure of safety functions that could lead to an undesirable event. * It is the process by which the cause and effect relationship of an event, usually with undesirable consequences, are analyzed. * It is a process by which the members of a team engage in brainstorming sessions to find out the deviation of process parameters from their design intent. * It is best suited for predicting human errors by breaking a job into several steps and analyzing each step separately. 27. Which of the following IS NOT considered an essential step in the process of risk management? * Communication with supervisors * Development of risk scenarios * Means of control * Implementation of best control method 28. In the process of risk assessment, both the probability and severity of risk must be addressed. This can be done either graphically, with one axis showing the probability and the other axis showing the severity, or in the form of a table. This representation of risk data is called: * Risk chart * Risk matrix * Risk table * Risk domain 29. Which of the following techniques is most helpful to top management in placing priorities on corrective actions to eliminate or reduce risks? * Fault tree analysis * Risk analysis * Failure analysis * Cost/benefit analysis 30. All of the following are steps which must be undertaken in a risk assessment process EXCEPT: * Hazard identification * Decide on who and what may be harmed and how * Evaluate the risks and decide on control measures * The person in charge of the risk assessment process must attend risk assessment training 31. In proper risk assessment, a cost-benefit analysis must be performed. Both tangible and intangible costs must be considered. All of the following are examples of tangible costs associated with a project EXCEPT: * Shipping * Energy costs * Real Estate * Price of goods or equipment 32. A measure of the combined probability and severity of potential harm to one or more resources as a consequence of exposure to one or more hazards is the correct definition of: * Risk * Risk assessment * Risk control * Risk management 33. The process of determining the degree of threat that is posed by one or more hazards is called: * Risk control * Risk management * Risk assessment * Risk acceptance 34. The process of minimizing or eliminating accidental losses by anticipating and preventing the occurrence of unplanned events is called? * Risk assessment * Risk management * Risk acceptance * Risk control 35. The professional assessment of all loss potentials in an organization’s structure and operations leading to the establishment and administration of a comprehensive loss control program is called: * Risk control * Risk assessment * Risk management * Risk acceptance 36. “Risk homeostasis" is a theory that: * A person may operate at a given risk level regardless of the safeguards provided * Deals with non-industrial risks such as smoking * Deals with risk of hazards encountered off the job such as climbing a ladder at home * All of the above 37. Fault Tree Analysis (FTA) is: * Bottom up system safety technique * Top down system safety technique * Used to determine the deviation in process parameters from their design intent * A qualitative system safety technique that identifies the consequences of success or failure of safety functions in a system. 38. Which of the following BEST describes the concept of safety and health “benchmarking”? * Benchmarking cannot be applied to ALL aspects of a safety and health program. * Benchmarking does not necessarily require management commitment but it does require employee involvement. * Any information that is exchanged does not have to be comparable with partner’s information. * Safety and health benchmarking compares an organization’s safety and health performance with similar organizations. 39. In performing a Job Safety Analysis (JSA), several factors affect prioritizing different jobs for analysis. All of the following are factors which affect the prioritization of jobs for analysis EXCEPT: * Incident frequency * Incident severity * New jobs * Complexity of an operation 40. All the following statements are correct about Job Safety Analysis (JSA) EXCEPT: * JSA breakdowns a job into several steps. * JSA identifies the hazards associated with each step. * JSA can be used to educate employees on safe practices. * JSA can quantify the accident probabilities. 41. In conducting a Job Safety Analysis, the priority should go to which of the following jobs? * Jobs with the highest injury or illness rates. * Jobs with the potential to cause severe or disabling injuries or illnesses. * Jobs in which one simple human error could lead to a severe accident or injury. * All the above. 42. Which of the following best describes the “Casual Analysis?” * To find the root cause of a problem instead of finding the symptoms. * Helps to uncover the facts that lead to a certain situation. * Cause refers to a reason. * All the above. ## 3.3 Example Answers 1. Select (b) Societal risk is defined as the number of undesirable incidences or consequences that can occur per year. 2. Select (c) The correct definition of individual risk is stated in (c). 3. Select (c) Risk analysis can be conducted on either a qualitative or quantitative basis. Both probability and severity of undesirable events must be taken into account and every effort should be made to either eliminate the risk or reduce its value to acceptable levels. 4. Select (b) Risk assessment is conducted after hazard evaluation. The next step is to determine the probability and severity of the events which create the risk. 5. Select (a) MORT which has William G. Johnson as its principle author is an acronym for Management Oversight Risk Tree.. 6. Select (d) MORT, which is a technique similar to Fault Tree Analysis, starts with an unwanted event and traces that event to all its possible causes. MORT charts, which are similar to fault trees, are primarily used for accident investigation. MORT can also be used for inspection, audit, and appraisal purposes. 7. Select (c) Calculation of unit risk exposure is done as described in (c). For example, if in 10,000 units, the risk exposure is 100, then the unit risk exposure is 100+ 10,000. 8. Select (d) In the process of risk management, the first step is identification of situation that create risk. The objectives of risk identification are to identify and categorize risks that could affect the project and document these risks. The outcome of risk identification is a list of risks. What is done with the list of risks depends on the nature of the risks and the project. On noncomplex, low-cost projects with little uncertainty (few risks), the risks may be kept simply as a list of red flag items. The items can then be assigned to individual team members to watch throughout the project development process and used for risk allocation purposes On complex, high-cost projects that are by nature uncertain, the risks can feed the rigorous process of assessment, analysis, mitigation and planning, allocation, and monitoring. 9. Select (a) Proper site assessment provides information on the risks posed by a hazardous waste site. The major objective of site assessment is to identify all conditions or suspected conditions that might be immediately dangerous to life or health. A secondary site assessment is conducted to identify these hazardous conditions and recommend appropriate protective measures. Examples of such hazards include, but are not limited to, entry into confined spaces, potentially explosive or flammable situations, visible vapor clouds, or areas where a biological indicator, such as dead animals or vegetation, is located. 10. Select (b) One way to define risk is to multiply probability and severity. In this case: | Case | Risk | |---|---| | 1 | 0.000010 | | 2 | 0.000015 | | 3 | 0.000006 | | 4 | 0.000004 | 11. Select (d) All statements are true in regards to cost-benefit analysis. Cost-benefit analysis considers the equivalent dollar value of costs to benefits among competing projects. If the costs exceed the benefits the project is not considered worthwhile to pursue. Many components of costs and benefits lend themselves to simple analysis. However, there are other components for which intuition fails to offer an accurate method of measurement. 12. Select (a) Although a HAZOP team leader must in general be familiar with the process, complete familiarity with the process is not a requirement. One of the responsibilities of the team leader is to form a multidisciplinary team that is completely familiar with the process and its safety features. 13. Select (d) All are techniques used in environmental risk assessment. 14. Select (c) Statement (c) describes the correct order for environmental risk assessment. 15. Select (b) Preventive controls focus on reducing the probability of risk occurring. Detective controls attempt to identify the occurrence of risk. If detective controls are applied before the occurrence of risk, they reduce the likelihood of occurrence. If they are applied after the occurrence of risk, they reduce the consequences of the risk. Remedial controls attempt to reduce the consequences of a risk that has occurred. 16. Select (c) MORT has the capability to analyze what happened during an accident. It is a comprehensive, analytical, and disciplined method for determining the causes and contributing factors of an incident. 17. Select (c) Gambling can offer winnings as well as losses. 18. Select (c) In situations like this, the safety professional should stay in the background and provide adequate information to management (unless specifically directed by management to get directly involved). 19. Select (b) The best course of action is to inform the personnel department. 20. Select (d) PPE is not a consideration in developing a safety and health program. It is a consideration after the program has been developed. 21. Select (d) Formal hazard analysis techniques are often divided into two general categories, inductive and deductive. In inductive hazard analysis (bottom up), future behavior is based on experience which is hypothetical, and the conclusion is generally more than just the sum of observations. In deductive hazard analysis (top down), future behavior is concluded from a number of premises which may be true or false. 22. Select (c) According to Berlo, the communication process is made up of seven steps; the communication source, encoding, the message, the channel, decoding, the receiver and feedback. 23. Select (b) Training on eliminating unsafe conditions is not considered to be a behavioral modification approach to enhance safety programs. 24. Select (b) Knowledge of the risks involved in handling toxic chemicals usually leads to safe behaviors. 25. Select (c) Minimum cut sets are used in Fault Tree Analysis. A minimal cut set is the smallest combination of component failures which, if they all occur, will cause the top event to occur. By definition, a minimal cut set is thus a combination (intersection) of primary events sufficient for the top event. The combination is a “smallest” combination, in that all the failures are needed for the top event to occur. If one of the failures in the cut set does not occur, then the top event will not occur (by this combination). Any fault tree will consist of a finite number of minimal cut sets that are unique for that top event. The one-component minimal cut sets, if there are any, represent those single failures that will cause the top event to occur. The two-component minimal cut sets represent the double failures that together will cause the top event to occur. 26. Select (b) Root Cause Analysis (RCA) is the process by which the cause and effect relationship of an event, usually with undesirable consequences, are analyzed. The goal of conducting an RCA is to find a solution that ensures that the undesirable event does not happen. RCA uses a specific set of steps to find the main cause of a problem. This gives the analyst an opportunity to determine a) what happened, b) why it happened, and c) what to do in order to prevent its recurrence. In RCA, the causes of a problem can be physical (for example, a control valve failed to open), human error (the technician failed to perform a scheduled maintenance on the control valve), and/or organizational causes (for example, no one was assigned to do maintenance and everyone thought someone else was assigned to do it). 27. Select (a) The fourth step in the process of risk management is management and control of the risk and feedback on the effectiveness of the process. 28. Select (b) The representation of risk data in graphical or tabular form is called a risk matrix. For example, the following graph illustrates a typical risk matrix. 29. Select (d) The benefit obtained from risk reduction must be justified through benefits to the organization. 30. Select (d) The other steps involved in the risk assessment process are to record the findings and implement them, then review the assessment and update if necessary. 31. Select (b) Energy costs are considered an intangible cost for a project. Tangible costs typically include things a business can buy directly for specific costs, such as labor, materials and space. 32. Select (a) Risk is the defined as the simple product of probability and severity. In order to reduce risk, the probability or severity or both must be reduced. For example, consider an exothermic (heat generating) reaction in a chemical reactor where the heat of reaction is removed by pumping a coolant through the jacket around the reactor. If the coolant pump fails, heat will accumulate in the reactor leading to a runaway reaction and explosion. Installation of a spare pump would reduce the probability of losing coolant flow to the reactor because two pumps must fail at the same time. 33. Select (c) Risk may be assessed either subjectively (non-quantitatively) or numerically (quantitatively). 34. Select (d) Risk control incorporates a wide range of elements including worker safety. Once the hazards are identified and the risk assessed, risk should be managed and controlled. Engineering and administrative measures are used to control risk. For example, use of enclosures to protect workers is an example of engineering control and measures such as job rotation is an example of administrative control. 35. Select (c) Risk management’s goal is to eliminate or to reduce losses to an acceptable minimum at the lowest possible cost. 36. Select (a) For example, a worker who feels he/she is protected by a back-belt may attempt to lift even more with the belt than he/she would without it. 37. Select (a) Fault tree starts with an undesired event and traces backward to all possible causes. Failure mode effect analysis (FMEA) is also a bottom up system safety technique. Event Tree Analysis (ETA) is a system safety technique that determines the consequences of success or failure of safety functions in a system. 38. Select (d) Benchmarking requires both management commitment and employee involvement. Information that is exchanged must be comparable to the other organization’s information and arrangements for confidentiality issues must be made. 39. Select (d) Complexity of an operation is not considered to be a factor in prioritizing a job for Job Safety Analysis. 40. Select (d) JSA breaks down a job into many steps and identifies the hazards associated with each step and their means of control. This technique can be used to educate employees on safe work practices.It must be pointed out that the priority for JSA should be assigned to those jobs that have a relatively high probability of leading to an accident which has severe consequences. 41. Select (d) A job hazard analysis can be conducted on many jobs in the workplace. Priority should go to the following types of jobs: * Jobs with the highest injury or illness rates. * Jobs with the potential to cause severe or disabling injuries or illnesses, even if there is no history of previous accidents. * Jobs in which one simple human error could lead to a severe accident or injury. * Jobs that are new to the facility operation or have undergone changes in processes and procedures. * Jobs complex enough to require written instructions. 42. Select (d) Cause refers to a reason. The purpose of casual analysis is trying to find the root cause of a problem instead of finding the symptoms. This technique helps to uncover the facts that lead to a certain situation.