Registration of Engineers (Victoria) & Why it's Important

The Engineers Registration Bill (Victoria) received Royal Assent on 3 November. This has always been a philosophically challenging matter for engineers. Many believe that it will stifle innovation in a shallow attempt to improve the status of engineers. Certainly, its implementation will be complex if the Queensland model is taken, as an example.

The primary reason for the registration of engineers is to protect the community and employers from unscrupulous and/or incompetent individuals claiming to be engineers.

The immediate purpose is to protect life, critical infrastructure and essential services.

Practically this comes down to ensuring that certain critical decisions must be transparently and diligently made by clearly identified responsible individuals, who recognise the possibility of their own negligence (you can’t always be right) with appropriate professional indemnity insurances, either by themselves or via their employers.

Such individuals include:

• Structural, civil and geotechnical engineers, for footings and structures including houses, high rise buildings, bridges, tunnels, dam design and operation, port and harbour design and the like;
• Mechanical engineers for high-rise lifts, cranes, boilers and pressure vessels, aircraft, road, rail and vehicle certification, high security bio-containment, defence munitions safety, pipelines etc;
• Fire Engineers for fire safe designs (hydraulic calculations, fire resistance, and the like);
• Chemical engineers, for process design particularly, to avoid major environmental contamination, toxic gas clouds, explosions and detonations;
• Electrical engineers, particularly for power station, substation and high voltage operations, and electrical safety generally;
• Mining engineers for underground, open cut and tailings dams’ safety and certification; and
• Aviation engineers for aircraft certification and naval architects for ship certification.

Historically, Engineers Australia has attempted to do this by ensuring, as far as possible, that such engineers have:

• Passed a recognised engineering course;
• Have relevant experience and continuing education; and
• Comply with The Code of Ethics which means at least ensuring that community safety is paramount, practicing within their area of competence, not accepting kick-backs (s/he who pays you is the client), being responsible for their own negligence (appropriate insurances) and giving credit where credit is due.

This 100-year-old view compares favourably with current financial governance being uncovered in the recent Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

Presently, these requirements only apply to the one third of engineers who choose to be members of Engineers Australia. But registration, supported by a Code of Conduct, should address this deficiency.

As for us at R2A, we are members of Engineers Australia and practice in accord with the Code of Ethics oulined above. But, we also believe practising to these standards is the right thing to do!

How did it get to this? Project risk versus company liability

Disclosure: Tim Procter worked in Arup’s Melbourne office from 2008 until 2016.Shortly after Christmas a number of media outlets reported that tier one engineering consulting firm Arup had settled a major court case related to traffic forecasting services they provided for planning Brisbane’s Airport Link tunnel tollway. The Airport Link consortium sued Arup in 2014, when traffic volumes seven months after opening were less than 30% of that predicted. Over $2.2b in damages were sought; the settlement is reportedly more than $100m. Numerous other traffic forecasters on major Australian toll road projects have also faced litigation over traffic volumes drastically lower than those predicted prior to road openings.Studies and reviews have proposed various reasons for the large gaps between these predicted and actual traffic volumes on these projects. Suggested factors have included optimism bias by traffic forecasters, pressure by construction consortia for their traffic consultants to present best case scenarios in the consortia’s bids, and perverse incentives for traffic forecasters to increase the likelihood of projects proceeding past the feasibility stage with the goal of further engagements on the project.Of course, some modelling assumptions considered sound might simply turn out to be wrong – however, Arup’s lead traffic forecaster agreeing with the plaintiff’s lead counsel that the Airport Link traffic model was “totally and utterly absurd”, and that “no reasonable traffic forecaster would ever prepare” such a model indicates that something more significant than incorrect assumptions were to blame.Regardless, the presence of any one of these reasons would betray a fundamental misunderstanding of context by traffic forecasters. This misunderstanding involves the difference between risk and criticality, and how these two concepts must be addressed in projects and business.In Australia risk is most often thought of as the simultaneous appreciation of likelihood and consequence for a particular potential event. In business contexts the ‘consequence’ of an event may be positive or negative; that is, a potential event may lead to better or worse outcomes for the venture (for example, a gain or loss on an investment).In project contexts these potential consequences are mostly negative, as the majority of the positive events associated with the project are assumed to occur. From a client’s point of view these are the deliverables (infrastructure, content, services etc.) For a consultant such as a traffic forecaster the key positive event assumed is their fee (although they may consider the potential to make a smaller profit than expected).Likelihoods are then attached to these potential consequences to give a consistent prioritisation framework for resource allocation, normally known as a risk matrix. However, this approach does contain a blind spot. High consequence events (e.g. client litigation for negligence) are by their nature rare. If they were common it is unlikely many consultants would be in business at all. In general, the higher the potential consequence, the lower the likelihood.This means that potentially catastrophic events may be pushed down the priority list, as their risk (i.e. likelihood and consequence) level is low. And, although it may be very unlikely, small projects undertaken by small teams in large consulting firms may have the potential to severely impact the entire company. Traffic forecasting for proposed toll roads appears to be a case in point. As a proportion of income for a multinational engineering firm it may be minor, but from a liability perspective it is demonstrably critical, regardless of likelihood.There are a range of options available to organisations that wish to address these critical issues. For instance, a board may decide that if they wish to tender for a project that could credibly result in litigation for more than the organisation could afford, the project will not proceed unless the potential losses are lowered. This may be achieved by, for example, forming a joint venture with another organisation to share the risk of the tender.Identifying these critical issues, of course, relies on pre-tender reviews. These reviews must not only be done in the context of the project, but of the organisation as a whole. From a project perspective, spending more on delivering the project than will be received in fees (i.e. making a loss) would be considered critical. For the Board of a large organisation, a small number of loss-making projects each year may be considered likely, and, to an extent, tolerable. But the Board would likely consider a project with a credible chance, no matter how unlikely, of forcing the company into administration as unacceptable.This highlights the different perspectives at the various levels of large organisations, and the importance of clear communication of each of their requirements and responsibilities. If these paradigms are not understood and considered for each project tender, more companies may find themselves in positions they did not expect.Also published on:https://sourceable.net/how-did-it-get-to-this-project-risk-vs-company-liability/

2017: The Year in Review

It’s hard to believe that 2017 is coming to a close and 2018 is almost here. As part of our end of year wrap up, here are some of the highlights that we would like to share with you.

In February R2A together with the Victorian Bar had the pleasure of presenting Cambridge Reader in Law and former British MP, Professor David Howarth for a special session, co-chaired by the Victorian Bar and Engineers Australia, exploring his latest book, Law as Engineering.

Professor Howarth’s essential point in his book is that these days most lawyers don’t litigate. Rather, they design social constructs such as contracts, companies, treaties and wills to facilitate their clients’ wishes. This is similar to how engineers design physical constructs to satisfy their clients’ desires.

David’s event sparked useful and interesting discussions between the engineering and legal professions.

Gaye's role on the Powerline Bushfire Safety Committee continued this year. Gaye’s role is to provide risk management and best practice advice.

We were privileged to work with many clients throughout the year. Here are a few of the interesting projects completed during the year.

INTERESTING PROJECTS

Bicycle Access Management Review. Earlier this year R2A assisted Queensland’s Department of Transport and Main Roads (TMR) with the development, testing and implementation of a risk assessment methodology for bicycle access management. Following a series of information-gathering tasks, R2A developed a proposed SFAIRP^[1] decision-making process for bicycle access management on state-controlled roads. TMR is currently preparing a supporting policy for state-wide implementation.

Asset Risk Management Framework Review. R2A completed a review to develop an asset safety risk management framework consistent with the requirements of the Work Health and Safety Act (WHS) 2012, the TasNetworks Risk Management Framework (2015) and the TasNetworks Asset Management Plan (2015) whilst simultaneously taking into account the requirements of Tasmania’s electricity safety regulator (the Department of Justice) and the national electricity economic regulator (the AER).

Gold Coast Desalination Plant Access Review. R2A undertook a commission to conduct a safety due diligence review of the Gold Coast Desalination Plant access arrangements to the high-pressure areas whilst the plant is producing water.

State Emergency Risk Assessment Review. This project was undertaken to confirm the appropriateness of the State’s priority emergency risks, the controls in place and their effectiveness as well as and if required revise the risk characterisation in line with the updated National Emergency Risk Assessment Guidelines (NERAG) 2014.

Rail Project Business Case Reviews. R2A completed a number of business case reviews were this year for PTV and Trasport for Victoria, including the Safer Country Crossings and DDA Access Improvements Programs.

Plant and Equipment Review. R2A were engaged by DEDJTR to review its plant and equipment safety management systems at 8 key Department research farms. This provided a basis for a larger Department program to enhance its safe and efficient management of physical assets.

Fire Loss Risk Methodology Review. The purpose of R2A’s review was to ‘test’ the proposed methodology and to provide advice as to its effectiveness or otherwise of demonstrating ‘as far as practicable’ in the management of bushfire risk, particularly with regard to the question of disproportionality.

The Grimes Review

On 19 January 2017, the Minister for Energy, Environment and Climate Change announced an independent review of Victoria’s Electricity Network Safety Framework, to be chaired by Dr Paul Grimes. On 5 May 2017, the Minister announced an expansion to the Review’s Terms of Reference to include Victoria’s gas network safety framework. R2A provided submissions for both gas and electrical safety, and met with Dr Grimes twice.

Pleasingly, from R2A’s perspective, the recommendation in the interim report stated that the decision-making criteria for safety should be consistent with that of the 2004 OHS act, that is, a precautionary approach that uses the SFAIRP principle rather than an ALARP principle using target levels of risk.

In coming to this view Dr Grimes comments favourably on the R2A understanding of issues involved.

The final report is expected to be released early next year.

CONFERENCES

Earlier this year Tim presented at the Fire Australia Conference in Sydney on The Legal Context to QRA. Whilst Gaye presented her paper on How safe is safe enough? Effective Safety Frameworks at EECon in Melbourne. Richard also presented to two groups of marine pilots on pilotage safety due diligence at SmartShip.

We have availability for similar opportunities next year. Drop us a line if you have an event coming up.

MEDIA

Richard and Tim continued to write for Sourceable this year:

• Engineering’s Golden Rule (March 2017)
• Design Safety Decisions Don’t Disappear (May 2017)
• Scientific Management and the AER (July 2017)
• Regulators Put Cost Before Safety (August 2017)
• Explaining Engineering Judgement (November 2017)

EDUCATION

From an education perspective, Richard delivered numerous public and in-house courses on Engineering Due Diligence as well as continuing to deliver the Swinburne post-graduate unit Introduction to Risk & Due Diligence with Gaye and Tim both presenting guest lectures.

The 2-day joint R2A/EEA engineering due diligence workshop was again successful this year and will continue in 2018. This workshop is aimed at aspiring directors and senior managers.

[1] “So far as is reasonably practicable”, as required by the 2011 Work Health and Safety Act.

Update on Victoria’s Energy Safety Framework Review

On 19 January 2017, the Minister for Energy, Environment and Climate Change announced an independent review of Victoria’s Electricity Network Safety Framework, to be chaired by Dr Paul Grimes. On 5 May 2017, the Minister announced an expansion to the Review's Terms of Reference to include Victoria’s gas network safety framework.The interim report was released in October and can be viewed at: https://engage.vic.gov.au/application/files/6915/0942/0613/Interim_Report_-_Review_of_Victorias_Electricity_and_Gas_Network_Safety_Framework.pdfR2A provided submissions for both gas and electrical safety which have previously been blogged at:

• Gas Supplementary Issues Paper - Review of Victoria's Electricity and Gas Network Safety Framework
• Review of Victoria's Electricity and Gas Network Safety Framework

From R2A’s reading of the interim report, the primary recommendation is that there should be a single piece of energy safety legislation that covers electricity, gas and pipelines, all to be administered by a single agency, Energy Safe Victoria.Pleasingly, from R2A’s perspective, the decision making criteria for safety should be consistent with that of the 2004 OHS act, that is, a precautionary approach that uses the SFAIRP principle rather than an ALARP principle using target levels of risk.In coming to this view Dr Grimes comments favourably on the R2A understanding of issues involved. He notes that R2A in its submission to the Review expressed a view that there needs to be clarity and consistency around the question of what constitutes “ reasonably practicable ” and, in addition, the language that is adopted to express the objective of the safety framework.

Nevertheless, the methodological distinction between the target risk and a precaution based approaches, and the other important practical implications identified by R2A, are highly relevant to the Review’s consideration and have helped inform its assessment of leading practice. (footnote on page 72)

Dr Grimes concludes that:

The Review is persuaded by the arguments that a pure target risk approach, while having some theoretical elegance, is less robust in practice than a precaution - based approach…(page 73) … the Review is proposing a draft recommendation that this definition be formally adopted for electricity and gas network safety.

The R2A Board considers the adoption of the precaution based approach to be an outstanding outcome and congratulates Dr Grimes on his acuity.The cutoff date for comment on the interim report of the Review of Victoria’s Electricity and Gas Network Safety Framework is the 27^th November.

Witness Box Whiteboards?

Engineers tend to think problems through as visual concepts, particularly as a concept sketch or design. This is reflected by a lawyer trained CEO of a water authority:

Now that you mention it, I have noticed that if I get between the whiteboard and my engineers they do tend to go mute.

That is, for an engineer a picture really is worth a 1,000 words. Well, at least a picture with some numbers on it.The courts, on the other hand, use words exclusively. It can be something of an art form to read a judgment to establish the key decision point. And when an engineer is in a witness box trying to explain to two barristers and a judge (who have not done a science based subject for many years) a complex technological matter, it is small wonder that uncertainty arises in the collective mind of the court.It would be most desirable to ensure the efficiency of the rule of law to include a whiteboard in the witness box when an engineer is on the stand.

Scientific Management and the AER

Scientific management appeared as a formalised concept in 1910. In its idealised form it involved observing workers performing tasks, identifying potential efficiencies that could be gained in time or effort, and implementing changes.This was followed, of course, by scientific management consultants invoicing businesses for these services.This approach (including the invoicing) seems to have been first implemented by Frederick Winslow Taylor, an industrial engineer from Philadelphia. It was named in 1910 and subsequently popularised by Louis Brandeis, a Boston lawyer later made an Associate Justice of the US Supreme Court, Frank Gilbreth, a building contractor and superintendent, and his wife Lillian, who had a background (and eventually a doctorate) in psychology.Taylor, Brandeis and the Gilbreths differed in their motivation and focus in this emerging field. Taylor had as his tool a stopwatch, focusing on potential time savings in tasks, often through greater exertion on behalf of manual labourers. The Gilbreths used a movie camera to study workers, classifying 17 ‘elementary’ units of movement they named ‘therbligs’ and identifying wasted time and motion.Brandeis, on the other hand, did not practice scientific management himself. In his work as a lawyer, he came across the concepts of scientific management. He used these to successfully argue (among other things) that the basis of freight prices set by rail carriers were arbitrary and excessive, and that scientific management could demonstrate great potential gains in efficiency, and hence that carriers ought not to raise their prices.Brandeis used consultants to identify these efficiencies through Taylor's and the Gilbreths' methods, with the aim of reducing the effort and complexity required for specific tasks. Through this, he came to believe that the ideas espoused by Taylor and the Gilbreths could be used to reduce costs, raise wages (especially for low-paid workers), and generally enhance workers’ standard of living.Brandeis attempted to bring this approach to labour disputes, campaigning to unions on the benefits of scientific management. Unions, however, were skeptical, seeing (not without justification) a slippery slope to the commodification of workers as indistinguishable parametric units, rather than individual human partners in enterprise.Regardless, the concept of scientific management spread quickly, resulting directly and indirectly in a wide range of today’s approaches to business and efficiency, including strategic management, large parts of MBA courses, human factors, and widespread organisational benchmarking.Benchmarking is used in a wide range of contexts, including quantity estimation, business planning and management, industry regulation, and many others. It provides insight into expectations of time and cost, and helps identify outliers that may warrant further attention.In view of the ‘natural’ monopoly nature of Australian electricity distribution networks, electricity network businesses are subject to economic regulation by the federal Australian Energy Regulator (AER) and safety regulation by state-based agencies, such as IPART in NSW, and Energy Safe Victoria (ESV). These regulators essentially attempt to balance the networks’ business interests against the interests of the community, both financial (such as reasonable electricity prices) and safety (such as the networks’ bushfire management actions).The AER promotes this community financial interest through its authority to (attempt to) replicate the commercially beneficial effects of a ‘market’. One mechanism used in this process is limiting the prices distribution networks can charge for electricity supply. Similar to Brandeis’ assessment of freight prices set by rail carriers, these limits are in partly based on the expected (benchmarked) cost of time, materials and labour for particular tasks.There is no doubt that as electricity networks have been privatised, the AER’s approach has resulted in the maintained affordability of electricity, an essential service, to the Australian community. However, the separation of the financial and safety regulatory functions has resulted in some unintended consequences.The AER’s determination of distribution networks electricity supply prices includes consideration of expected asset maintenance and replacement. This translates through the distribution networks' operations to their field work scheduling. Field workers are allocated a certain number of asset tasks to be completed in a certain time frame. However even with an allowance for some of the expected work, this drives the perceived responsibility of any shortfall of tasks or exceedance of timeframe to the field worker.The practical result is that electrical workers in the field are driven to act on a benchmarked price/time unit rate and to ignore incipient safety issues, especially to third parties the public) that should otherwise be reported and dealt with, in efficient economic terms, on the spot. In the hierarchy of day-to-day concerns, workers may become more focused on failing to complete each day’s scoped tasks than dealing with safety issues that arise. In terms of James Reason’s theory of risk culture, it encourages distribution networks in safety terms to move from generative to pathological. That is, workers are disincentivised from bringing safety problems to management’s attention.This is a spectre of the issue the unions raised to Brandeis when he assured them that scientific management would increase their members’ lots in life. Great benefit may be gained from the quantification and benchmarking of organisations. But this must be done in the context of the people carrying out the tasks. If it is not, workplace culture (safety and otherwise) is corroded, and workers’ perception being that management views them simply as numbers or automatons, rather than people, leads to a self-fulfilling prophecy.

This article first appeared on Sourceable.

Gas Supplementary Issues Paper - Review of Victoria's Electricity and Gas Network Safety Framework

Submissions for the Gas Supplementary Issues Paper on the review of Victoria’s electricity network safety framework closed on Friday 16 June. Along with the following organisations, R2A welcomed the opportunity to respond to the independent review.

• Australian Energy Market Operator
• Australian Energy Regulator
• Australian Gas Light Company
• Australian Gas Networks
• APA VTS
• Engineers Australia
• Jemena
• Multinet
• R2A

Our response focuses on the following particular aspects of the review:

• The objectives of the safety framework in Victoria and an assessment of its effectiveness in achieving safety outcomes.
• The extent to which the regulatory framework governing network safety ensures effective risk management by energy network businesses.

In particular the reliance on the traditional quantified risk assessment (QRA) and the ALARP (as low as reasonably practicable) approach using target risk criteria (tolerable or acceptable) by the gas and major hazard industries which has two primary difficulties:

• Arguable non-compliance with the provisions of the Gas Safety Act (1997) and OHS Act (2004), and,
• Disutility for land use (safety) planning that the QRA-ALARP-target-risk-criteria process facilitates.

Many of the points in R2A’s submission on the electricity networks also apply to the Victorian gas industry. Much of R2A’s submission on the electrical safety in Victoria is devoted to explaining why the legal presentation of SFAIRP (so far as is reasonably practicable) is not equivalent to ALARP (as low as reasonably practicable). This argument also applies to gas safety.Such an observation always generates commentary to the effect that major organisations like Standards Australia, NOPSEMA and the UK Health & Safety Executive (UK HSE) (a much-quoted source) say that it is.For example, WorkSafe Victoria’s information sheet[1] on land use planning near a major hazard facility states that operators of an MHF must reduce risk to the surrounding area so far as is reasonably practicable where it cannot be eliminated. However, it then goes on to say that WorkSafe believes it appropriate to present the extent of risk areas around a MHF as planning advisory areas:

1. Inner planning advisory area – the individual risk of fatality from potential foreseeable incidents is greater than or equal to 1 x 10^-7 per year (one chance in 10 million years).

These key points are expanded in the body of the submission together with a possible way forward. See the full response here.[1] https://www.worksafe.vic.gov.au/resources/land-use-planning-near-major-hazard-facility for current advice for Major Hazards land use planning from Worksafe Victoria (viewed 14 June 2017).

Engineering Coming Into Focus

Doctor Iain McGilchrist will soon be in Australia to present to the 2017 Annual Conferences of Judges of the Federal and Supreme Courts of Australia. Dr McGilchrist is a psychiatrist and a former reader in English at Oxford University. Dr McGilchrist’s most recent book, The Master and His Emissary, has been discussed in an illustrated TED talk and is also the subject of an upcoming documentary.

The Master and His Emissary explores the evolution, interactions, workings and meanings of the human brain’s left and right hemispheres. In particular, he investigates and expands on the different roles the left and right hemispheres play in our interaction with, perception of, and understanding of the world.

One of the many interesting concepts discussed is the notion of the ‘gestalt’ in cognition and understanding. Comprehending the gestalt may be thought of as the appreciation of something as more than the sum of its parts – for example, the “ah-ha!” moment when meaning emerges from the image above.

Once the Dalmatian is perceived it becomes obvious, even though it is not ‘built’ from the component black blotches of the image. Appreciation of the gestalt is something for which the right hemisphere has a much great facility than the left. It excels in understanding context and individuality.

The left hemisphere, in contrast, tends to work with logic and analysis, systems, models, representations, classing and sorting, and so on. It assembles component parts into a known whole, to move in a linear fashion from a starting point to a finishing point – whether or not this remains in the proper context.

Ultimately both of these approaches are needed for problem-solving. Unfortunately, in engineering, there is sometimes a tendency to treat analysis as the whole of the solution. This particularly presents problems when the analysis is seen as ‘true’ or ‘real’. Ultimately a model is literally a re-presentation of the world – a simplified system built in terms that (we believe) we understand. As the statistician George E. P. Box noted, “all models are wrong, but some are useful”.

However, it is very difficult, and sometimes impossible, to simultaneously appreciate a gestalt and its components. As soon as one focuses absolutely on one blotch in the picture above, the Dalmatian disappears.

R2A has found an effective approach to problem-solving is the following ‘V’ process. The example below is for a generic safety issue, but the approach may be adapted to any problem.

One key is the understanding that detailed analysis may or may not be needed. Each problem is individual and unique, and providing convincing solutions to different groups of stakeholders each facing the same problem will often require different levels of detail. Keeping this in mind during analysis, with an understanding of the high level problem context and solution goals, assists in delving only to the analytical depth necessary.

A second key is the recognition that this is not a linear process. It may take the form of an ascending spiral, continually reviewing and refining past ideas as it moves towards resolution. Or a solution may, as with the Dalmatian image above, simply emerge from the assembly of data, as a picture coming into focus.

Either way, retaining the context and individuality of each problem is paramount to developing good solutions – engineering’s ultimate aim.

Engineering’s Golden Rule

The Golden Rule, or the rule of reciprocity, states that one should treat others as one would wish to be treated. It is an astonishingly widespread maxim, appearing in some form in virtually every major religion and belief system.As a result, the Golden Rule permeates Australian society, in our courts and parliaments, and our laws and judgments. It is an integral and inalienable part of our social infrastructure.Cambridge professor David Howarth’s recent book, Law as Engineering: Thinking About What Lawyers Do, considers some of the implications of this. Howarth’s thesis is that most UK lawyers do not argue in court. Rather, on behalf of their clients, they design and implement, through contracts, laws, deeds, wills, treaties and so forth, small changes to the prevailing social infrastructure.Australian law practice seems to follow a similar pattern, and this is a good and useful thing; without these ongoing small changes to social infrastructure there would be large scale confusion, massive imposition on the court system, and general, often escalating, grumpiness.Engineering serves a similar function. Engineers, on behalf of their clients, design structures and systems that change the material infrastructure of society.This is also a good and useful thing. And, with the history of and potential for significant safety impacts resulting from these physical changes, engineers have over time developed formal design methods to ensure safe outcomes.These methods consider not only the design at hand, but also the wider physical context into which the design will fit. This includes multi-discipline design processes, integrating civil, electrical, mechanical, chemical (and so on) engineering. It also includes consideration of what already exists, and the interfaces that will arise. Road developments will consider their impact on the wider network, as well as nearby rail lines, bike paths, amenities, businesses, residences, utilities, the environment, and so on.Howarth’s book considers this approach to design in the framework of changing social infrastructure. He argues that lawyers, in changing the social infrastructure, ought to consider how these changes may interact with the wider social context to avoid unintended consequences. As an example, he examines the 2009 global financial crisis in which, he argues, many small changes to the social infrastructure resulted in catastrophic negative global impacts.Following formal design processes could have, if not prevented this situation occurring, perhaps at least provided some insight into the potential for its development. But the question arises: how should negative impacts on social infrastructure be identified? In contrast to engineering changes to material infrastructure, social infrastructure changes tend not to have immediate or obvious environmental or health and safety impacts.One option that presents itself is also apparent in good engineering design. Engineers follow the Golden Rule. It is completely embedded in engineering practice, and is supported and reinforced by legislation and judgements. Engineers design to avoid damaging people in a physical sense. Subsequent considerations include environmental harm, economic harm, and so on.A key aspect of this is consideration of who may be affected by infrastructure changes. Proximity is critical here, as well as any voluntary assumption of risk. That is, potential impacts should be considered for all those who may be negatively affected, and who have not elected to put themselves in that position. This is particularly important when others (such as an engineer’s or lawyer’s client) prosper because of such developments.A recent example involving material infrastructure is the Lacrosse tower fire in Melbourne. In this case, a cigarette on a balcony ignited the building’s cladding, with the fire spreading to cladding on 11 floors in a matter of minutes. The cladding was subsequently found to not meet relevant standards, and to be cheaper than compliant cladding.In this case, it appears a design decision was made to use the substandard cladding, presumably with the lower cost as a factor. Although it is certain that the resulting fire scenario was not anticipated as part of this decision, the question remains as to how the use of substandard materials was justified, given the increased safety risk to residents. One wonders if the developers would have made the same choice if they were building accommodation for themselves.In a social infrastructure context, an analogy may be that of sub-prime mortgages being packaged and securitized in the United States, allowing lenders to process home loans without concern for their likelihood of repayment. In this scenario, more consideration perhaps ought to have been given by the lawyers (and their clients) drafting these contracts as to, firstly, how they would interact with the wider context, and, secondly, whether the financial risks presented to the wider community as a result were appropriate. In many respects the potential profits are irrelevant, as they are not shared by those bearing the majority of the risk.The complexities here are manifest. Commercial confidentiality will certainly play a role. No single rule could serve to guide choices when changing social or material infrastructure, and unforeseen, unintended consequences will always arise. But, when considering the ramifications of a decision, a good start might be: how would I feel if this happened to me?

This article first appeared on Sourceable.

Are Australian Standards Becoming Irrelevant?

According to the Oxford English Dictionary, a standard is “an authoritative or recognised exemplar of correctness, perfection, or some definite degree of any quality.”

Of course, this is but one of several definitions, and there seems to be at least five types of ‘standards.’

1. Standards as measures: These are wholly scientific standards. They directly describe standardised measures such as those described in the Système International d'Unités, SI. That is, metre, kilogram, second, ampere, kelvin, mole and candela.
2. Specification standards: These describe the physical attributes necessary for harmonised results. For example, bullet and barrel specifications must align to enable a rifle to operate. These use the first meaning extensively and was historically the source of engineering standards organisations.
3. Standards as rules: These describe particular technical requirements to achieve standardised performance outcomes, like the Wiring Rules (AS 3000). This can include elements of the first two.
4. Design standards: These can be a combination of measures, specifications and rules. It makes them eminently arguable.

For example, Paul Wentworth a partner Minter Ellison in 2011 when discussing AS/NZS 7000 (Overhead Line Design) and the legal status of standards and relevance to professional liability noted that “Engineers should remember that in the eyes of the court, in the absence of any legislative or contractual requirement, an Australian Standard amounts only to an expert opinion about usual or recommended practice. Also, that in the performance of any design, reliance on an Australian Standard does not relieve an engineer from a duty to exercise his or her skill and expertise.”

And in an article in Engineers Australia Magazine of March 2009, Leigh Duthie a partner at Baker & McKenzie noted that “Engineers cannot avoid liability in negligence or for TPA (Trade Practices Act) contravention by simply relying on a current or published standard or code.”

5. Technique or method standards: For example, various risk management standards like COSO or AS 31000. These can have elements of the first four ‘standards’ but can also include an aspect requiring the realisation of a particular organisational or community expectation.

The primary difficulty with these standards is that their meaning is in the method. Results are only consequences. That is, the meaning of ‘standard’ ranges from wholly scientific definitions that have no moral attributes to opinions that are promoted to achieve political alignment.

Standards organisations don’t seem to recognise this range of meanings even though it is very important. A technique ‘standard’ is often promoted as having the same reliability as a ‘measure’ standard even though such ‘technique’ standards should really be regarded as opinion pieces.

Diagram that demonstrates that Australian Standards are falling down the hierarchy of significance

However, these difficulties are being recognised by many. For example, it seems that Australian governments have determined via their legislative processes (especially the model Work Health and Safety Acts, Rail Safety National Law and the like) that Australian Standards will no longer be called up in legislation. Apparently, parliamentary counsel has indicated that it is inappropriate to derogate the power of parliament to unelected standards committees.

The intention is no WHS Act, Regulation or Code of Practice will refer to them. And a Code of Practice under WHS legislation (once approved) has the force of law in many jurisdictions. Established rules standards, like AS 3000 (the Wiring Rules) are applied by making such codes a condition of registration to be an electrician rather than being called up by an electrical safety act or regulation.

Other advice is that for expert witness matters, an engineering guideline developed by a professional body like Engineers Australia, acting within its members’ areas of competence, will always have higher standing to an industry based Australian standard in Australian courts. This means that the rise of Bodies of Knowledge (BoKs) is also becoming more prevalent as a legally superior alternative to standards in practice matters.

There is also an argument that many standards organisations do not comply with professional organisations’ Codes of Ethics with regard to giving credit where credit is due. For example, Australian Standards do not acknowledge the (volunteer) individuals on the relevant committee in a standard, unlike for example, the National Fire Protection Association of the USA. And the floating of the commercial arm of Standards Australia in 2003 (SAI Global Limited) effectively commercialised the volunteer effort and intellectual property contributions of the many contributing Engineers Australia members at least, without recognition.

One of the results of all this is that Australian Standards are falling down the hierarchy of significance as shown in the diagram, being displaced by both Codes of Practice and Expert Guidelines. This is certainly making many of them less relevant.

If this becomes an enduring trend, then this has potentially serious implications for commercial organisations like SAI Global which depend on the continuing success of such standards documents.

This article first appeared on Sourceable.

Engineers Ethical Standing

A recent edition of the SFPE (Society of Fire protection Engineers of the USA) magazine had an interesting study on professional ethics.  Possibly the most arresting image is shown above on the public perception of honesty and ethics.The result is from a Gallup poll where respondents were asked to rate the honesty and ethics of the groups concerned with the table showing the % ranked ‘very high’ or ‘high’. Interestingly, nurses were clear winners with engineers ranked second at around 70%.  Lawyers were at about 20% with politicians close to 5%. The article notes that this has been a steady increase since 1976 when the combined percentage for engineers for ‘high’ and ‘very high’ was 48%.

When is a hazard not a hazard? Or, the issue of failed precautions

… their appearance and their work was as it were a wheel within a wheel. (Ezekiel 1:16)

“It’s turtles all the way down!” (Stephen Hawking, A Brief History of Time) 

R2A consults to a wide range of industries. We advise our clients on topics as diverse as safely emptying a 40-metre-tall sugar silo, procuring a fleet of new Melbourne trams, appropriate decision-making for road tunnel fire emergency response, and corporate governance for electricity industry regulators.

This wonderful diversity of projects lets us take good ideas from one sphere to another, helping our clients implement existing approaches in new contexts to solve known problems. It also shows us recurring problems in risk management approaches. One of the most common is identified hazards not really being hazards.

Formal risk management was introduced to Australia in the 1970s. A pattern then emerged in how organisations often appointed their risk managers. Rather than embarking on a specific ‘risk management’ career path, senior ‘chain-of-command’ managers initially took on risk management responsibilities for their role. As their interest or aptitude developed they increased their risk management portfolio, eventually stepping out of the chain and into the wide-ranging advisory ‘risk manager’ role.

These risk managers have a wide variety of backgrounds, allowing for incredible cross-pollination of their approaches, ideas and techniques as they move between organisations and industries. However, this also leads to an incredible mix of language around risk management concepts. One of the most persistent issues arising from this is the idea that a failed precaution constitutes a hazard.

This issue often appears in the form of concern about following Australian standards. In a design project, for instance, a risk assessment will often identify the risk of not following relevant design standards. But design standards are, without exception, developed to address risks, safety or otherwise. That is, they are a precaution. More precautions must then be added to address this new risk, but each of these introduces a risk if they fail and require still more precautions, and so on ad infinitum – wheels within wheels within wheels, turtles all the way down.

This confusion is promulgated by the Australian risk management standard AS31000 (and its predecessor AS4360), Section 5.5.2 of which notes that “a significant risk can be the failure or ineffectiveness of the risk treatment measures” (i.e. precautions).

Taken in context, this sentence aims to support AS31000’s entirely appropriate focus on monitoring precautions to ensure they remain effective after implementation. In practice however, it further entrenches the idea that failed precautions are, in and of themselves, risks.

R2A’s ‘Y’ model addresses the problems of this infinite regression by recognising that the monitoring processes which are used to maintain effective precautions form an organisation’s quality assurance/quality control (QA) system.

R2A’s ‘Y’ model

When viewed in this manner, risk management keeps its focus on key precautions for critical issues. The organisation’s QA system (which is generally already established) thus becomes a key element of diligent risk management, rather than a checkbox exercise. This also avoids the need to continuously add lines to a corporate risk register when dealing with a single risk.

We find that this approach not only simplifies the decision-making process as to what precautions are reasonable, it also ensures that risk decisions reported up to senior decision-makers and Boards are clear and concise.

Risk decisions being easier to make and more easily explicable indicates that they will be more easily defended if a risk manifests. We have found our clients to be unanimously in favour of this.

To find out more about R2A’s ‘Y’ model and our wider approach, have a look at the resources on our website, come to one of our EEA Engineering Due Diligence short courses, or purchase the R2A text.

(Photo credit)

2013 R2A Operations Due Diligence