Risk Reduction and ALARP

Lesson 2
Basic Risk Management Introduction

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A very brief refresher on the basic themes of risk management to show where the concept of
ALARP fits in.
Activity 1

Activity 1

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Firstly, let’s get some idea of what you currently believe, so that at the end of this course you
can come back and see whether it has changed your opinions.
Please refer to Activity 1 in your Activity Book.
Risk management process

Risk assessment should be an

input into a decision making
process, NOT a justification for a
decision already made

Ref. A structured approach to Enterprise Risk Management (ERM) and

the requirements of ISO 31000, AIRMIC, Alarm, IRM, 2010

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Although this figure is from a ‘business’ risk management standard, it illustrates neatly the key
steps applicable to any risk management process and the same approach is embodied in
many other standards from other sectors and countries.
In this course we are examining the “risk treatment” activity above – what, how many, and
what type of risk reduction measures are necessary. How can we justify that the end product
has controlled risks to a sufficient level? In the lifecycle of assets or systems this risk
management process may be gone through a number of times as further monitoring and
reviews are undertaken. Examples of this may be at points in design/construction, after a set
time, in the event of an incident, with a change in legislation, etc.
The basic idea that should be retained though, is that at some point we have to be in a
position where we can say “enough is enough; we are managing our risks to the best of our
ability to an acceptable level”. The questions that then arise are:
• What is acceptable?
• When is enough, enough?
• How do we decide?
Risk reduction and ALARP

Risk Reduction and

ALARP are integral parts
of any risk evaluation

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This is a similar process flow to the previous slide but is dealing with it in a more detailed
fashion. After defining the scope (i.e. ‘context’), what are the hazards (HAZID), and what are
their frequency and consequences (risk assessment)? Once we know what we have in terms
of hazards and their associated risks, the question has to be, how are we controlling them and
is this good enough?
Can we live with this level of risk (e.g. by comparing against some form of qualitative or
quantitative criteria) and is this the best we can practicably do? As a general principle it
should never be enough just to say that a risk is tolerable. Any risk assessment should be
regarded as an opportunity to improve, and whether you can identify any possible
improvements (risk reduction measures) to evaluate them for implementation.
Note that there is a distinct difference between:
• “The best that we can do”, which is managing risks to As Low As Possible
and
• “The best that we can practicably do”, which is managing risks to “As Low As Reasonably
Practicable”
Any risk assessment which just evaluates a risk, without looking to see if we could improve, is
missing an opportunity.
Risk management

Are people, environment, assets or reputation exposed to

potential harm?
Identify What could go wrong?

What are the causes and consequences?

How likely is it?
Assess How bad will it be?
What is the risk and is it tolerable? ✓ Is this tolerable?
Can the causes be eliminated? ? Can we do anything
Is there a better way? more?
Control How can it be prevented?
How effective are the controls?

Can the potential consequences be limited?

Recover What recovery measures are needed?
Are recovery capabilities suitable and sufficient?

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This is pretty much risk management reduced to its most basic level:
• What do we have that is going to hurt us?
• How bad is it going to be?
• How do we stop it from happening?
• How do we pick up the pieces?
And at the end of this, we then have to ask ourselves a couple of fundamental questions:
• Can we live with this?
• Could we do it any better?
This basic risk management approach applies whether we are dealing with health and safety,
environment, reputation, profit or schedule risks or any other form of risk that could harm
something we care about.
This module is concerned with the last two questions.
ALARP basic principle

▪ Whilst the reduction of risk may always be desirable, the achievement of the reduction may be
unwarranted
▪ ALARP may be summarised as:
A measure to reduce risk must be undertaken unless it can be demonstrated (by the duty holder) that the
sacrifice involved in implementing the preventative measure(s) is grossly disproportionate to that risk .

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It doesn’t take much thought to realise that whilst risks could be eliminated completely from
hazardous activities, this would prove extremely expensive, time consuming and impractical.
So how much risk reduction is enough? Enough to reduce risks to ALARP.....“ALARP” widely
used as shorthand for “reducing risk to as low as is reasonably practicable”.
ALARP (actually SFAIRP, see below) is a UK safety legislation concept. It is now used in
many worldwide safety legislative systems and is virtually universal in corporate safety
management systems in high hazard industries.
[You may also come across the term SFAIRP (“so far as is reasonably practicable”). SFAIRP
is a term often used in the UK Health and Safety at Work etc Act and in UK Regulations.
ALARP is the term used by risk specialists. The two terms are effectively interchangeable
and ALARP is most often used.]
The term ‘duty holder’ may have a wide range of definitions as it is used in many pieces of
legislation, but in essence, it means the body or person who owns or controls the risk. For a
refinery, it would be the company that operates the facility; for a car repair workshop it is the
workshop owner or manager; for a self-employed van driver, it would be the van driver as they
own the van, therefore they are the ‘duty holder’ for the risk posed by the van.
Balancing cost and risk reduction

Risk
Reduction
Risk Implement
Reduction
Risk
Reduction

ALARP level

Risk
Reduction
No need to Cost grossly
implement disproportionate

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In deciding whether our risks are ALARP, what we are trying to achieve is a balancing
act between the potential level of risk reduction (‘benefit’) from adding further risk
control measures, against the effort (‘sacrifice’) that would be incurred from putting
the measures in place. As such, a seesaw is a useful metaphor for this balancing act,
weighing benefits on one side against the sacrifices on the other as we make our
decisions. To put it a another (very simplistic) way, for each potential risk reduction
measure, how much bang (benefit) do I get for my buck (sacrifice)?
We use cost here to indicate it as a balancing factor to risk reduction. Whilst this is
often the case, it is important to point out that it is not just cost that should be weighed
against risk reduction. Factors such as adverse environmental impact of a risk
reduction measure (RRM), schedule delays, practical difficulties, etc can also be
considered. The term ‘sacrifice’ is the more correct term, although ‘cost’ is often used
as a shorthand; sacrifice should be considered in terms of “money, time or trouble”
required to implement and maintain the measures.
ALARP is not purely about cost versus risk reduction; a balanced ALARP case should
be looking at relevant good practice elsewhere, principles and standards, ethics,
sustainability of the approach, all of which could counterbalance cost.
It is also important to point out that ALARP is often achieved using good best practice
to recognised codes and standards. Cost vs. risk benefit assessment is not used to
argue for a reduction in these basic levels of safety (sometimes referred to as reverse
ALARP). And you can’t use ALARP to justify not meeting risk standards. ALARP
looks beyond the standards and asks how much further can you and should you go,
or whether you can use alternatives.
You will note from the previous slide (and this one) that the term ‘gross disproportion’
is used, we’re not trying to achieve parity between sacrifice and benefit; the ALARP
principle deliberately errs on the side of health and safety, effectively weighting the
‘benefit’ more than the ‘sacrifice’.
Two questions to keep in mind:
• What more could I do (to reduce risks)?
• Why have I not done it?
Activity 2

Activity 2

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Refer to Activity 2 in the Activity Book