This course is designed to provide participants with a detailed and up-to-date overview of safety and loss, major incidents have been occurring around the world for as long as hazardous materials have been processed. Loss prevention is not only concerned with incidents that cause injury to people. It covers all forms of loss, including damage to the environment and property and interruption to production caused by major failures of a plant, even when there is no injury to people or damage to the surroundings.
The escape of toxic methyl isocyanate vapour from the Union Carbide India Limited plant at Bhopal in India on December 1984 was the most serious chemical plant incident in history, causing thousands of deaths and many tens of thousands of severe injuries, many of them causing permanent incapacity. This and the explosion at the Phillips Petroleum polyethylene plant at Pasadena on 23 October 1989, which killed 23 people and injured hundreds more, alerted management and governments to the need for much more than traditional occupational safety and health programs to provide safety for those working in, or living around, process plants. However, this was not new knowledge. Major incidents have been occurring around the world for as long as hazardous materials have been processed.
Loss prevention is not only concerned with incidents that cause injury to people. It covers all forms of loss, including damage to the environment and property, and interruption to production caused by major failures of a plant, even when there is no injury to people or damage to the surroundings. Avoidance or minimization of the risks of all these types of incident is embraced by the field of process-plant risk and reliability management.
There are many reasons why organizations may be concerned with managing their risks. These range from avoidance of injury or the cost of replacing damaged equipment, to such matters as maintaining a good public image or avoiding legal claims or prosecution of senior managers for negligence.
Reliability
With ever-increasing competitive pressures worldwide, it is essential that plants operate with high reliability to maximize the return obtained for the capital investment.
When an operation provides a continuous service, such as piped supply of gas to a consumer, any interruption to supply can have severe effects, in proportion not only to the lost service but to the profitability of downstream industries, community amenities, safety, environmental performance, etc.
Risk
There is a widespread belief in the community that any major breakdown or accident in an industrial or service organization (e.g., transport, power, water) is the result of negligence by someone. The community is very sensitive to perceived “negligence” by management of large organizations. The professional institutions commonly require members to put community responsibilities first, above those of the organization or the individual. Litigation to recover damage is now normal.
There is a trend toward seeking to prosecute the person seen as most responsible. This may not be the person closest to the incident, but is increasingly someone higher in the organization with the perceived responsibility of ensuring that more junior employees are trained and supervised in such a way that breakdowns and accidents will not occur.
No longer can an individual be confident of being protected by his or her organization; an organization may undertake to pay any fine, but where criminal negligence is proved in court, an individual may face a term in jail.
The old legal principle of “no liability without fault” has long been replaced with “the injured party must be compensated by the person or organization most involved in the accident, whether a fault or not.”
However, there are approaches that can be taken to reduce to a very low level, the chance of being held liable. Similarly, there is also a growing awareness that to meet an organization’s commercial objectives satisfactorily, it is important to identify and to quantify as well as practicable the exposure to commercial risk. It can then be decided whether to accept the financial risk of accidents or incidents, or to transfer the risk by ensuring.
The approaches used to identify and assess risks of all kinds, and to reduce or transfer them, for the basis of risk management.
Handling the Situation
Unreliability can result in:
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Loss of profit for the organization operating the unreliable facility or operation;
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Loss of profit for organizations relying on supply of goods or services from the unreliable operation;
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Injury to people employed by the organization operating the unreliable facility or operation, or using the goods or services, or in the vicinity of the unreliable facility or operation or the goods or services provided by it.
In the increasingly litigious society of today, such unreliability can result in legal action, either to recover damages caused by the unreliability, or for criminal negligence which resulted in injury or environmental damage.
The best defence against a financial loss or a charge of negligence is to avoid mishaps, that is, to operate reliability.
When a mishap occurs, the best defence against a suggestion of negligence is t have taken all practicable care in the light of information available at the time.
Where there is the potential for a major mishap, it would be necessary to show that there had been proper attention to identifying the hazards, and that proper action had been taken to safeguard people, the environment, and property.
Management of the Hazards or the Potential for Mishap
The existence of hazards does not, in itself, necessitate action. A hazard is the potential to do harm. We are surrounded by hazards all our lives. Most of them we accept without concern.
The term “risk” implies probability, not certainty. Risk is defined by IChemE (1985) as “the likelihood of a specified period or in specified circumstances.”
If the probability of harm being done by hazard is low enough, then the risk is low, and no action is needed. If the damage is potentially very serious financially, and if the probability is sufficient, then it may be decided that it is appropriate to insure. In principle, the assessed risk assists in determining the reasonable level of premium.
Risk management is the name given to a systematic approach to identifying hazards, assessing the risks from each, and deciding what (if anything) needs to be done.
Why bother with risk management anyway?
There are many reasons why organizations may be concerned with managing their risks. These range from avoidance of injury or the cost of replacing damaged equipment, to such matters as maintaining a good public image or avoiding legal claims or prosecution of senior managers for negligence.
These reasons can all be classified as one of three main types:
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Legal
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Commercial
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Moral or ethical
The Legal Requirements
The legal reasons for risk management will depend on the particular legal framework and legislation in the particular community, but are commonly of two types: statutory obligations, and the “duty of care”. If the requirement of legislation is ignored (e.g. by not putting a guard on a machine), then prosecution is expected. On the other hand, the body of historical case law has established the principle that one must take care of others, even if there’s no specific legislation covering the particular matter. An employer who does not take due care of his or her employees is liable. A manager found guilty of negligence may be sent to jail.
Commercial Requirements
A mishap on a process plant may have a variety of commercial implications:
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Loss of profit from production lost due to plant downtime;
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The cost of damage to equipment, comprising replacement costs of spares, etc, labor;
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The costs resulting from injury or loss of life, including damages claims and the effect on insurance premiums;
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The cost of environmental damage, including cleanup costs and the cost of additional equipment and procedures for environmental protection;
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The costs of legal action, including damages awarded for injury, failure to honor supply contracts, damage to property, etc., legal fees, cost of the time of staff defending the cases, and the opportunity cost of staff not being able to progress toward corporate goals;
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The costs of damaged public image, including public opposition to future developments.
Moral or Ethical Requirements
The cost of accidents is broader than simply the financial costs of compensation, etc. There is the human dimension of life: the value to relatives and friends of a fit and healthy person that cannot be replaced by money. No senior manager wants to look back on his career to see a trail of human wreckage, or of destroyed environment. However, sometimes a problem arises in the middle levels of management where it is (usually erroneously) believed that senior management is really only interested in short-term profit.
In addition, most professional engineering institutions have codes of ethics requiring their members to place their responsibility for the welfare, health and safety of the wider community above sectional interests (such as those of their employer), private interests (such as their own), or the interests of other members. They may also specifically require members to take steps to inform themselves, clients, employers and the community of the social and environmental consequences of what they do.