Understanding the Risk Equation: RISK = HAZARD x EXPOSURE

Date: 28 Mar 2011

The term risk is used a lot in today’s business environment. Risk is simply the chance of loss. As there are many different facets of business where loss may occur, there are many different types of risk: legal, reputational, operational, political and regulatory to name a few. Each type of risk may be calculated differently, but no matter how risk is determined, in the business world it can always translated into a dollar amount. This, of course, also includes safety risk.

In the occupational, health & safety world, the term risk is often confused with the term hazard. These are two very different yet closely related things. A hazard is a condition with the potential for loss. But a hazard requires exposure, or some sort of action to become a risk. A grizzly bear is a hazard, no argument. However, chance of loss (injury or death in this case) to a grizzly bear only occurs if there is exposure to the grizzly bear, or potential exposure to the grizzly bear. Otherwise, the grizzly bear is simply a hazard with no associated risk.

Safety risk is a straightforward equation:
RISK = HAZARD x EXPOSURE.

What are the hazards and what is the exposure? To quantify and prioritize safety risk in the workplace, safety professionals calculate severity and probability of potential loss. This is where the term worse case scenario comes from.
Before safety professionals can reduce or mitigate risk, they first need to identify and understand the elements of the equation. The “risk assessment” process first identifies all potential hazards as well as the exposure to those hazards. Then, using a matrix of severity and probability, risk can be quantified and prioritized. Only once this process is complete, they can look at how to reduce or mitigate risk by eliminating or decreasing the elements of the equation.

Risk assessments are not just for identifying and mitigating risk in new activities or projects. They are also regularly conducted to assess the effectiveness of current control measures within existing operations and work processes. Regular risk assessments can also identify shifts in hazards and exposures when operations, work processes or project scopes change. It also provides safety professionals with valuable information for continuous improvement in overall risk mitigation strategies.

There are 5 basic strategies to reduce the elements of the equation and mitigate the resulting risk. The first three, Elimination, Substitution and Engineering Controls, primarily address the hazard element of the equation. The last two, Administrative Controls and Personal Protective Equipment (PPE), primarily address the exposure element of the equation.

In today’s work environments safety risk can be considerable and complex. Thus, overall risk mitigation can use strategies in isolation or layered with one another. In terms of effectiveness, safety professionals approach risk mitigation in the following order:

Elimination or Avoidance:

Can the hazard simply be eliminated altogether? The best way to mitigate the exposure to any hazard is to completely remove it or totally avoid it. If this is accomplished, exposure to the hazard is zero, eliminating that element of the equation and resulting in a risk of zero.

Substitution:

Can the hazard be replaced with something non-hazardous or less hazardous? This is a very straightforward risk mitigation strategy and is most effective in the planning stages of a job or project. For example, could a noisy machine be replaced with a quiet machine? Is there an option to use less hazardous chemicals to do the same job?

Engineering Controls:

If elimination or substitution of hazards is not possible, the next step is to introduce engineering controls to remove hazards or place barriers between the worker and the hazards. For example, a bicycle has a moving chain & gears. The hazard is our pant-leg getting caught in these moving parts resulting in injury. This hazard is greatly reduced by installing a barrier; in this case a chain guard. Almost any type of fixed guard or shield protecting us from moving parts, heat sources or noise is an engineering control. Generally, anything that is automated is considered an engineering control, as fewer workers are potentially exposed to hazards. Engineering controls are very effective because they address hazards at the source. They are also relatively inexpensive in the design phase of a job or project, but can be much more expensive when implementing within existing operations or work processes.

Administrative Controls:

If a hazard cannot be eliminated, substituted or engineered out, there are administrative controls. Administrative controls are changes in work procedures such as written safety policies, rules, supervision, schedules and training. The objective of administrative controls is to reduce the duration, frequency and severity of exposure to hazards. These controls are inexpensive and relatively easy to implement in the short-term. In the long-term for a business, administrative controls can become resource intense and expensive. Administrative controls however rely heavily on human behaviour, which sometimes can be unpredictable. For example, workers are given time off to recover, rest and sleep between shifts. However, the employer has no control over exactly what the worker does between shifts. If the worker elects not to rest or sleep, or consume too much alcohol between shifts, the administrative control (scheduling) becomes less effective.

Personal Protective Equipment (PPE):

When exposure to hazards cannot be eliminated, substituted or engineered out, and administrative controls cannot provide sufficient additional protection, a supplementary control is the use of PPE. PPE is the least effective control because it places only a barrier between the worker and the hazard. The hazard still exists; so if the right PPE is not worn properly or when it is needed, or the PPE fails (for example, glove leaks), the worker is not protected. Examples of PPE include gloves, safety glasses, hardhats, steel-toed boots and coveralls. It is the last line of defence.

There is another element that can dramatically impact the risk equation: culture. Companies that have deeply-engrained cultures, where management are truly committed to their people as well as quality, health, safety & environment, can dramatically impact their risk position. This commitment by management must be genuine to be effective. Companies that achieve this type of culture have employees at all levels of the organisation that believe and commit to the company and safety. As a result, risk mitigation strategies such as administrative controls become that much more effective as the employees ensure implementation and adherence.

Attaining such culture is very difficult and the exception to the norm. It requires committed management and leadership by example at all levels of the organisation. Interestingly, the few companies that do reach this level of culture tend to have less safety professionals within the organisation. This is because employees at every level of the organisation take on safety as integral to his or her job and not just as an additional component of their job.

Driving:

The number one identified risk in the oil & gas sector world-wide is driving. Even with all of the worse case scenarios possible in the industry, once a risk matrix of severity and probability is applied, driving remains the riskiest activity. A major contributing factor of motor vehicle incidents is operator fatigue or drowsiness.

Until now it has been very difficult to pinpoint the exact percentage of motor vehicle incidents caused by operator fatigue or drowsiness. This is because there has never been an objective measurement indicating how alert an operator was at the time of the incident. Unlike drugs or alcohol, which can be objectively measured post-incident, an operator who was drowsy or even asleep can show little or no signs of fatigue or drowsiness post-incident. There simply has not been a “thermometer” that can measure and record how alert an operator is.

There are many indirect indicators that point to operator fatigue or drowsiness as a contributing factor to an incident. These indicators have given safety professionals a better understanding of how severe operator fatigue or drowsiness is when driving. In essence, safety professionals know that operator fatigue or drowsiness is a significant problem, they just have not been able to quantify the problem.

Canadian 2009 statistics show that over 30% of all motor vehicle incidents on public roads may have been operator fatigue or drowsiness as a contributing factor. The percentage is higher for commercial motor vehicle incidents. However, the true percentages are most likely even higher. Investigators are unable to definitively measure and thus determine if an operator was drowsy or sleeping post-incident. In addition, operators in post-incident interviews tend not to disclose their state of fatigue or drowsiness for fear of further repercussions.

Another consideration is the nature of heavy industry off public roads. With the greater demand placed on company performance and thus operator efficiency, the risk of operator fatigue or drowsiness is most likely even higher than public road statistics. As an example, a prominent global mining company’s internal statistics puts operator fatigue or drowsiness as a direct factor in heavy-haul mine truck incidents at about 60%.

OPTALERT & The Risk Equation.

OPTALERT’s technology presents safety professionals with a totally new alternative to reducing the risk equation. Due to the nature of operator fatigue or drowsiness, it is a hazard that can be eliminated or substituted in today’s demanding workplace. Furthermore, operators in driving positions or conducting vigilant tasks are not soon to be engineered out by automation. Thus, the element of the equation to reduce operator fatigue or drowsiness is exposure. Mitigating exposure is exactly the element of the equation that OPTALERT’s technology presents to safety professionals.

The true innovation of OPTALERT is the development of an objective measurement scale that indicates an individual’s alertness. More importantly, the scale is directly correlated to a risk profile similar to a risk profile correlated with blood alcohol levels. They are not the same correlation, but both are objective and quantitative. The scale, JDS (Johns’ Drowsiness Scale), presents safety professionals with quantitative data that can mitigate risk on three levels. The first two dramatically reduce the exposure element of the risk equation.

The ability to provide operators with a visual, continuous and objective JDS score directly impacts their behaviour. This provides frontline risk mitigation to the exposure of operator fatigue or drowsiness. As an operator sees all other continuous measurements in a vehicle, such as speed, pressure and temperature, they adjust their actions to ensure that those metrics remain within acceptable levels. By presenting an operator with their JDS score continuously, the operator can adjust their behaviour to ensure their alertness level remains within acceptable risk levels while operating. This ability has never existed before.

The next level of mitigating exposure to operator fatigue or drowsiness is the ability to real-time JDS data and corresponding risk levels to control rooms or equivalents. By presenting real-time risk profiles of individual operators as well as entire fleets, supervisors can take suitable administrative measures when risk levels move towards or enter unacceptable levels. This once again reduces the exposure of operator fatigue or drowsiness within the risk equation.

All of this objective and quantitative data for alertness levels also presents safety professionals with the ability to further analyse their operations and work processes. Just as the continuous real-time data will reduce exposure to operator fatigue or drowsiness on the frontlines, thorough monitoring of data will enable better design of fatigue management strategies, as well as better continuous improvement of existing operations and work processes.

The equation for safety risk does not change with the introduction of OPTALERT. However, the ability for safety professionals to reduce the exposure element of the safety risk equation has dramatically changed forever. Operator fatigue and/or drowsiness risk mitigation will never be the same.

Rich Robillard is the President of Canadian based Integrated Risk Management Inc and has been a safety professional for over 12 years in the energy industry. Integrated Risk Management specialises on worker “fitness for duty”, assessing and mitigating the safety hazards and business risks associated to drugs, alcohol & fatigue in the workplace.

OPTALERT is making strong inroads into the Canadian market, with national distribution partner, Integrated Risk Management reporting an enthusiastic response to the opportunities presented by the technology.

The company’s President, Rich Robillard says the response to the new technology has been overwhelmingly positive, with an enormous interest in the opportunity presented by OPTALERT for risk management.

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