Qualitative Risk Assessment (QlRA)

1.0 Introduction to qualitative risk management

The objective of Risk Management is minimizing the probability and severity of adverse events of an enterprise.

Risk : The measure of the probability of an adverse event.
Hazard:The inherent attribute or feature that has the potential to cause an adverse event.

The purpose of a Qualitative Risk Assessment (QlRA) is to identify potential hazards and adverse events that may cause injuries to personnel, environmental damage and, loss of capital or production. It does not attempt to assign hard financial values or assets, expected losses, loss of control etc. Instead only relative values are being calculated which may include indicative cost and loss values. It is highly recommended to identify potential enterprise, operational and financial risks, prior to starting an enterprise.

Risk mitigation should be part of an Enterprise Execution Plan. Risk Management topics should address issues such as enterprise risk, management under estimation, loss of capital, equipment theft, earthquake, construction safety, political risks, privacy, workplace violence, strikes, liability claims, etc.

For assessing potential hazards that may occur during operation as result of a design weakness or inadequacy pertaining to system operating safety, a HAZOP (Hazard Operability) review/study can be conducted. A excerpt of a HAZOP review/study is described separately in the HAZOP section.

The methodology followed by Bornemann Consultancy is a workshop style with interactive communication. It focuses on identifying, evaluating and responding to risks in a consistent and systematic manner so that risks can be identified and dealt with in a controlled mode of action. It can be applied in its entirety to a whole enterprise as well as to specific parts, sections or stages of an enterprise.

Issues that are to be addressed during the course of the work shop are:

● Assessing and recognizing potential risks that may be hazardous to human health or the environment; or have an adverse effect on production or capital.

● What are the consequential effects and impacts associated with these potential risks?

● How to establish a risk and liability profile.

● How can risks or adverse events be avoided.

● What options can be made available for preventing, or in case of an occurrence, mitigating a potential adverse event.

2.0 Risk assessement review process

For initiating a QlRA, the overall objectives and execution scenarios must be established. For dealing with potential risks; i.e., potential adverse events, a Risk Management Plan (RMP) is to be prepared.The sequence of activities addressing particulars, pertinent to establishing a RMP, are addressed in 7 sequential actions as shown below in the Risk Assessment Process Diagram.

2.1 Action 1
Establish particular characteristics of the enterprise or actions (e.g. is it a continuous or occasional exposure; occasional exposures are often insufficiently considered in the risk assessment). Define objectives of the enterprise or action.

2.2 Action 2
What is the acceptable risk level i.e. ALARP (As Low as Reasonably Practical). The ALARP level may be adjusted during the course of the review as more information and data become available.

2.3 Action 3
Identification of risks relevant to the enterprise or action. Guidewords under item # 4 can be used for identification.

2.4 Action 4
Evaluation of the production process and the assessment of conditions that may initiate an adverse event and the potential risks that may cause a hazardous situation.

2.5 Actions 5 and 6
Once risks and associated hazards have been identified, corrective actions for prevention and mitigation can be established and defined in a Risk Response Plan. The Risk Response Plan will address how events and risks can be monitored and controlled for instituting early warning systems.

2.6 Action 7
Close out. This action includes preparation of a close out report summarizing the agreed actions and final criteria for a Risk Management Plan (RMP).

3.0 Concerns and considerations

3.1 Input:

● The stakeholders concerns.
● Setting-up of the Risk Management Process.

3.2 Output:

Development of an effective Risk Management Plan (RMP) and implementation of Risk Mitigation Guidelines

3.3 The Risk Management Plan shall address at least the following items:

● Risk Identification.
● Early Warning Systems.
● Risk Response Planning and Mitigation.
● Risk Monitoring and Control.

Potential risk can be reduced by:

● Changing the contractual conditions, if possible.
● Revising the execution scenario and incorporating an avoidance scenario.
● Contingency planning (financial).
● Assessing legal liability impact as a result of local legislation and regulations.
● Purchasing professional and personnel liability insurance.

4.0 Guidewords

Guidewords can be used for facilitating the review and evaluation of perceived potential risks.
As an example, listed below are guidewords for assessing hazards or potential causes for adverse events during the sequential stages of the assessment process

4.1 Process issues

● Material data; e.g., volatility, combustibility, and toxicity.
● Nature of the material, e.g. liquid, gas, solid.
● Storage method and quantity the material being handled; e.g., vessel, drums, containers, bags, and open air.
● Spacing between facilities, access and escape routes.
● Potential leakages.
● Critical material/air concentration for ignition.
● Critical material/air concentration for toxicity.
● Potential ignition sources.
● Potential causes for critical high concentration.
● Potential human errors or misjudgments by operation/maintenance personnel during progress of work.
● Potential equipment failure.
● Any non compliance with local regulations codes and standards.
● The environmental impact caused by and in case of an adverse event.
● Any adverse effect on operation/production.
● Potential injuries to maintenance personnel.
● Damage to, or affects on the health of the local community.

4.2 Financial and liablility issues

● Accurracy of the estimate.
● Available work capitial.
● Payment conditions.
● Liquidated damage and peformence bonds.
● Banking facilities.
● Contingencies for covering (unforeseen) contractual obligations.
● Financial Impact on capital due to equipment damage and loss of production.
● Liability claims due to environmental damage and impact.
● Liability claims due to health damage and accidents.

5.0 Reference documents

Hazard and operability studies CEI/IEC 61882
European commission: Chemical Accidents (Seveso I,II & III) – International co-operation.