GEMI%20Survey%20EHS%20Risk%20Management - PowerPoint PPT Presentation

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GEMI%20Survey%20EHS%20Risk%20Management

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Title: GEMI%20Survey%20EHS%20Risk%20Management


1
GEMI SurveyEHS Risk Management
  • October 2001

Carl Wirdak Occidental Petroleum Corporation
2
Outline
  • Survey Recap
  • Risk policy and program features
  • Risk assessment process
  • what is covered
  • how is risk assessed
  • Information and communication
  • Risk management process responsibilities
  • Risk management outcomes

3
Survey Overview
  • Survey covers the management of environment,
    health or safety (EHS) related risk as it applies
    to a companys business activities (i.e.,
    manufacturing, transportation/distribution,
    product formulation and use, etc.).
  • Survey response rate 69
  • 27 companies responded to the survey
  • Not all companies completed all questions
  • Broad industry coverage
  • Chemicals, semiconductor, oil/gas, consumer
    products, pharmaceuticals, food/beverage, forest
    products, energy, transportation, etc.

4
Risk Policy
  • gt95 of respondents have an internal policy or
    guidance document that directs efforts to
    identify / manage EHS risks
  • Most risk management programs are formal
  • Acceptable risks are established on a
    case-by-case basis, rather than by setting
    bright-line or unequivocal limits

5
Risk Policy
Majority require that all risks be identified and
managed
6
Risk Assessment - Scope
  • All respondents do EHS compliance audits
  • 80 of respondents covered by a legally mandated
    risk management requirement (OSHA PSM / EPA RMP)
  • 88 of respondents conduct EHS risk assessments
    and all of these address risk issues that go
    beyond regulatory compliance

7
Risk Assessment - Focus
Physical risks appear to be the primary focus
8
Risk Assessment - Process
  • 67 have written procedure that provides a method
    for categorizing EHS risks
  • 50 say the methodology for categorizing PSM /
    RMP related risks is different than for all other
    types of risk
  • 43 force rank different types of EHS risks on a
    common scale

9
Risk Assessment - Process
10
Information / Communication
  • 84 of respondents address inherent EHS risks of
    operations
  • 92 report on risks that go beyond those areas
    covered by PSM / RMP
  • Nature of risk discussion
  • 83 include mitigation opportunities
  • 59 document risks left unmitigated

11
Information / Communication
  • Facility, Corp EHS and Legal know the risks
  • Risk information communicated to Division/BU
    management
  • Corporate management does not receive risk
    information

12
Information / Communication
  • Legal Department involvement
  • 80 of companies have legal input
  • Risk assessment team member or report reviewer
    (sometimes directs the team)
  • Twice as likely (40) to have outside counsel
    involved in risk assessments versus EHS audits
  • Apply audit privilege

13
Responsibilities
  • Identification and management of EHS risks rests
    with line management and facility, division, or
    corporate EHS staff

14
Responsibilities
  • EHS and (to a lesser degree) other facility staff
    are primarily responsible for conducting and
    validating the risk analysis
  • Where corporate EHS is not involved in risk
    analysis, more than 25 of respondents do not
    validate the output

15
Headcount
16
Outcomes
  • 80 of companies require identification and
    prioritization of risks
  • Only 45 require elimination of risk
  • Line management is responsible for choosing
    accepting risks
  • Popular 3rd party insurance
  • Operational
  • Business Interruption
  • E, S, H

17
Outcomes
  • Benefits of EHS risk management
  • Lower risks
  • Reduced potential liabilities
  • Improved EHS performance
  • Enhanced EHS legal compliance
  • Lower EHS costs and lower insurance costs
  • Enhanced management awareness
  • Safer products
  • Smoother ISO 14000 registration
  • Satisfy stakeholder expectations
  • Created new customer service opportunities

18
Outcomes
  • Emerging areas of risk management
  • Sustainability
  • Social Responsibility
  • Company and brand reputation
  • Community relations
  • Persistent chemicals
  • Biosafety
  • New issue management

19
Questions / Comments
  • We assess existing risks to find ways to avoid
    conditions and designs that create significant
    future risk.
  • We use our life cycle management process, EHS
    management system plus RMP/PSM and EHS audits to
    control risk.
  • Has any company outsourced the risk analysis
    function?
  • Are companies considering a transparent, full
    disclosure policy or participation (by NGOs,
    etc.) on company risk assessments?
  • How well do companies utilize their risk
    evaluations related to intangible assets for
    financial analysts?
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