School of Engineering and Electronics

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School of Engineering and Electronics Bovis
Lend Lease

• Risk Management in Construction Engineering

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Introduction

• We have looked HS legislation
• It must be remembered that legislation alone will
  not protect it is merely the rules
• We have considered the behavioural and cultural
  aspects of HS Management
• We have looked at practical aspects of health
  safety on construction sites
• We have considered specific areas where hazards
  occur
• We have also considered the identification of
  hazards
• Today we will consider
• how HS management is implemented at a site level
• the wider concept of engineering risk management

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Health Safety Hierarchy
General site safety management
Fundamental topic covered in greater depth
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Health Safety Legislation

• As covered first lecture
• For example
• The Health Safety at Work etc Act 1974
• The Management of Health and Safety at Work
  Regulations 1999
• The Provision and Use of Work Equipment
  Regulations 1998
• The Manual Handling Operations Regulations 1992
• The Construction (Head Protection) Regulations
  1989
• Personal Protective Equipment at Work Regulations
  1992
• Control of Substances Hazardous to Health
  Regulations 2002
• Construction (Design and Management) Regulations
  1994
• The Construction (Health, Safety and Welfare)
  Regulations 1996

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Health Safety File

• To recap
• contains all HS information about the project
  for those that follow (i.e. clients users)
• should contain information about the design
  construction of every structure element of the
  project
• responsibility lies with the CDM Co-ordinator who
  must
• keep it up to date
• deliver to client at end of project

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The Method Statement

• A Method Statement defines the scope of the work
  to be performed in producing a significant
  section or phase of the project
• It is also produced as part of the Project
  Quality Plan
• It is a statement about the desired level of
  quality
• As a definition of the work involved it allows
  assessments of the risks involved to be made
• Once prepared it should be passed to every person
  involved in that part of the project whatever
  capacity they may have

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Method Statements areas covered

• A method statement is a large document and
  therefore cannot be prepared for all activities
• Work activities are therefore split into areas
  usually geographic but also process areas
• The project manager is responsible for
  determining what method statements are required
  he must find the right balance
• too broad a scope and detail will be lost
• too narrow and the volume of paperwork will
  dominate

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Method Statements examples

• On a road project we may have the following
  method statements
• One for each major structure (e.g. bridges)
• One for a group of minor structures (e.g.
  culverts)
• Earthworks
• Fencing
• Site clearance
• Drainage
• Road surfacing
• Traffic management
• Safety fencing
• Any other specialist subcontractor operations

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Preparation of a method statement

• The project manager will decide which person in
  the team will prepare which method statements
• This person is usually the senior engineer for
  that area of work
• or the subcontractor
• Safety is just one (though major) part of a
  method statement
• All method statements should be set out on
  similar lines in order that the information
  contained can be easily identified

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Content of a method statement

• The operations concerned
• A risk assessment of the operations
• A listing of key drawings
• The direction and sequence of work
• The types of resources to be used
• A basic layout or sketch
• Delegated responsibility for the work
• Any other specific aspects of the work

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Operation Plans

• The next level in the HS hierarchy
• It is prepared for each discrete activity of work
• There may be a number of operation plans for an
  area of work already covered by a method
  statement
• The operation plan is usually drawn up by the
  site engineer looking after the work
• A pro-form is usually used

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Operation Plans pro-forma
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Risk Assessments

• Risk is a large part of any project
• financial, technical safety risk
• It is just one stage in the overall risk
  management strategy prepared for every project
• We shall look at the subject in greater depth in
  a moment
• Each method statement will have detailed risk
  assessments

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Risk assessment only useful if the info in it is
well considered...
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Risk Management

• Risks are ever present
• The management of risk is an area of significant
  expansion over the last decade.
• Within the construction and process industries
  the consequences of an accident can be
  significant (e.g.Piper Alpha)
• Detailed management of risks are routinely
  carried out, conducted at all stages of a project
  life cycle
• This lecture will
• Define risk concepts
• Introduce the Risk Management Procedure
• Piper Alpha Case Study

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Foolish Risks
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Poor Planning...
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Engineering Small Risks
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Large Risks - Piper Alpha (before)
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Piper Alpha - After
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Large Consequences Hatfield Ladbroke Grove
Rail Crash
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Definitions

• Harm
• Physical injury or damage to health, property or
  the environment
• BS8444 Part 3 1996
• In all aspects of project management, we want to
  minimise, if not eliminate any kind of harm
• Harm may be, for example
• Employee accidents or death
• Financial collapse
• Environmental accident

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Definitions cont.

• Hazard
• A source of potential harm or a situation with
  potential for harm in terms of human injury,
  damage to property, damage to the environment, or
  combination thereof
• In project management terms, we need to control
  financial hazards as well as physical ones
• Examples may be
• Falls from heights
• Collapse of excavations
• Dropped objects
• Poor environmental management
• Abnormal inflation
• Abnormal weather conditions

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Definitions cont.

• Risk
• The combination of the probability of an
  abnormal event or failure and the consequence(s)
  of that event or failure to a systems operators,
  users or its environment
• Risk involves two aspects
• Probability of a hazard taking place, and
• The severity of the harm that occurs
• Low probability, high severity high risk
• High probability, low severity intermediate
  risk
• Low probability, low severity low risk

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Definitions cont.

• Risk Management
• The systematic application of management
  policies, procedures and practises to the tasks
  of identifying, analysing, evaluating, responding
  and monitoring risk
• Five stages

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Risk Identification

• The stage where all potential hazards in a
  project are identified
• Three main methods of identification
• Individual Consultation
• interviews with project personnel
• lengthy time consuming
• Group discussions
• formal brainstorming
• requires motivation teamwork
• HAZOP
• HAZard and OPerability studies
• Formal questioning of processes, e.g design

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Risk Estimation

• Potential hazards have been identified
• Now need to assess
• Probability of occurrence
• Severity if occurs
• Can be done in two main ways
• Qualitatively
• in a linguistic manner
• usually done first high probability/severity
  cases then may be examined
• Quantitatively
• in a numerical manner

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Risk Estimation cont

• Qualitative Techniques
• Fuzzy set analysis
• expresses the likelihood and consequences of a
  risk in readily understood language terms.
• Interviewing and Brainstorming
• is an extension of two of the techniques employed
  in the identification stage.
• Personal and Corporate Experience
• if it exists should be exploited.
• Engineering Judgment

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Risk Estimation cont

• Quantitative Techniques
• Expected Monetary Value (EMV)
• i.e. putting a financial value to the expected
  result of a risk.
• Expected Net Present Value (ENPV)
• is an extension of EMV by calculating the net
  present value of a probability state.
• Decision Analysis
• looks at possible outcomes and determining
  optimal choices

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Risk Estimation cont

• Quantitative Techniques cont
• Sensitivity Analysis
• tests how sensitive an event outcome is to slight
  changes on the input variables.
• Delphi peer groups
• attempts to put quantitative values to results
  obtained in a manner similar to discussion groups
  and brainstorming.
• Simulation
• creates a probable life history of an event and
  thus allows its outcome to be predicted.

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Risk Evaluation

• 3rd part of Risk Assessment
• Need to combine the severity and probability of
  the identified hazards
• Can be done using a risk matrix

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Practical Risk Assessment Procedure

• Identify the principal hazards that will be
  present in the operation.
• Assign a number 1 to 5 for both Consequences of
  Hazard and Probability of Occurrence.
• The Risk (i.e. the product of Consequence x
  Probability), indicates the level of action.
• Identify persons affected by the risk
• Respond to the risk
• Monitor and update as necessary.

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Risk Response

• If risks are identified as being intolerable how
  can these be dealt with?
• There are four main methods of responding to such
  risks
• Risk Avoidance
• Risk Transfer
• Risk Retention
• Risk Reduction

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Risk Response

• Risk Avoidance
• Managing or developing a situation in which the
  identified risks do not occur, e.g
• not proceeding with the project
• tendering at a very high bid
• placing conditions on a bid
• changing design

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Risk Response cont

• Risk Transfer
• Via Subcontractors
• a third party undertakes the high risk portion of
  the work and the responsibility that goes with it
• Via Insurance
• A pre-determined insurance premium is often
  better than unexpected costs due to risk
• may be done using a captive insurance company
• involves excesses
• some risks may result in premiums higher than the
  probable financial loss

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Risk Response cont

• Risk Retention
• Some risks may be better managed internally
• High frequency/low severity or very low
  frequency/high severity risks may be best
  retained
• Risk Reduction
• The most usual way in which to manage common
  risks is to reduce either the severity, the
  chance of occurrence or both. E.g
• early warning systems
• improved maintenance
• better housekeeping

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Risk Response cont

• The choice of method used to respond to risk will
  largely depend on company policy
• Using the risk matrix model, a typical company
  scenario may be

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Risk Monitoring

• The final stage of risk management
• Risk situation will continue to change throughout
  the life of the project
• New hazards will become present
• Existing hazards will stop or change
• The management must be continually monitored,
  reviewed and improved
• Existing risks may be managed differently
• therefore
• Risk monitoring completes cycle back to risk
  identification