Safety in Design - A Due Diligence Perspective

Due diligence is a legal concept.  From the Concise Australian Legal Dictionary, due diligence is, a minimum standard of behaviour involving a system which provides against contravention of relevant regulatory provisions and adequate supervision ensuring that the system is properly carried out. The concept of due diligence has been captured in Corporations law, Environmental Law and now the model Work Health and Safety legislation.In an engineering and technological context due diligence is often construed to just mean compliance.  This is not the case.Due diligence is an aspect of moral philosophy, that is how the world ought to be and how humanity ought to behave to achieve it.  Often, this is along the lines that one should treat others as you would like to be treated by them.Due diligence for safety in design purposes uses the principles behind the judgments of the courts and applies them pre-event to ensure sound decision making. That is, reverse engineering of judicial decisions as shown above.How this manifests itself is that sometimes bad things happen and Courts and Royal Commissions question the design and design process with the advantage of hindsight to see what could have been in place, if it had been in place would have stopped the bad thing / accident from happening. Outcomes from such investigations are then fed back to see if the parties involved in the design were diligent.Safety due diligence is all about showing pre-event that the operation is safe. This means that when safety is being considered in the design process, all of the people that could be affected by the design need to be taken into account and the potential hazards to which they are exposed, over the entire lifecycle.From a safety due diligence aspect, all reasonable practicable precautions need to be in place applying the hierarchy of controls.

Risk vs Due Diligence: Why a Finnish community lobbied for a backyard reactor

I was recently part of a panel discussion on electrical energy security and the role of nuclear energy in Australia for the Electrical Energy Society of Australia.The panel consisted of five industry experts covering topics on energy security, nuclear energy, and risk and policy determination. A question and answer session followed the presentations.The opening address was by Senator Sean Edwards (Liberal Senator for South Australia) in light of the South Australian government’s decision on 8th February 2015, to establish a Royal Commission into the life cycle of nuclear fuel.My presentation titled 'Risk vs Due Diligence: Why a Finnish Community lobbied for a backyard reactor' was a personal insight into the way the Finns have established and embraced the nuclear industry over the last 40 years. It also explains why communities now put their hand up for new nuclear facilities.Finns do not discuss the level of risk of the nuclear facilities. They show it is safe by demonstrating that all reasonable practicable precautions are in place. Safety is not compromised for on-time and to budget delivery of new nuclear power facilities. For example, the Olkiluoto 3 nuclear power unit is 9 years behind schedule as a result of some safety concerns. There is a robust and stringent governance framework that does not allow short cuts to compromise safety.The presentations were filmed and can be viewed here.

What is Due Diligence Engineering (part 2)

A previous blog noted that due diligence engineering is the reverse engineering of the decisions of our courts.  The overall context to this observation is worth exploring.

The diagram below represents a view of the parliamentary structure that is the Commonwealth of Australia within a 19^th century philosophical framework.

Essentially the parliamentary process is a method of implementing moral philosophical thought via the medium of legislation and regulation.  Of course the difficulty is that predicting the way of the world and managing it in advance is stupendously difficult.  For example, simply trying to make the workplace ‘safe’ is a huge undertaking, when all the types of workplaces and environmental circumstances are taken into account. It’s simply not credible that the parliaments and regulators can predict the future so well that they ‘get it right’, all of the time.

This is where due diligence engineering comes in.  By watching the outcomes of the courts, both in their interpretation of legislation and regulation, and the common law assessment of ‘fairness’, engineers can align the observed laws of nature with the expressed laws of man.  This is especially important in an advanced industrial society where the outcomes of human technological activity can have such huge upsides and calamitous downsides.

This means that in the event that it all goes ‘pear shaped’ recriminations are minimised and the need for apology is eliminated.  (It is illogical to say sorry, when the best that should have been done, was done).

Client and Colleagues Event Details 2015

Gaye and I are pleased to host the next R2A client and colleague event on 10th February 2015. We will be launching our 10^th edition text at the event as well as outlining the outlook for 2015 in light of recent publications such as the safety case guidelines.The 10th edition will include a new chapter on Sustainability Due Diligence as well as an expanded section on Project Due Diligence and Safety Due Diligence.Event DetailsDate: 10^th of February 2015Time:  3pm-5pmRestaurant:The MillUpstairs 71 Hardware Lane Melbourne 3001 http://www.themillrestaurant.com.au/RSVP by 6^th February 2015Please join us to celebrate the new R2A text and welcome in the New Year. Look forward to seeing you there.

2014 The Year in Review

It’s hard to believe that 2014 is coming to a close and 2015 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.

The year started with drinks and canapes to launch the updated version of the 9^th edition of the R2A text, Risk & Reliability: Engineering Due Diligence.  The event was well attended by industry colleagues and provided an overview of the general state of affairs in industry.

Richard and I will host a similar event on 10^th February 2015 to launch the 10^th edition of the text. The 10^th edition will include a new chapter on Sustainability Due Diligence as well as expansion of our Project Due Diligence and Safety Due Diligence chapters.

We would love to see you there so pencil the date into your diaries.

Richard and I continued to work with the Risk Engineering Society to develop the third edition of the Safety Case Guideline in 2014 which was officially launched at the 2014 Engineers Australia Convention in Melbourne in November.  The guideline considers how a safety case argument can be used as a tool to positively demonstrate safety due diligence consistent with the requirements of the model WHS legislation.

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

Project Due Diligence Process, Port of Melbourne Corporation. A project due diligence process was developed for Gates 2 and 4 of all PoMC projects.  This was then applied to two projects which were written up as case studies.

Monash Medical Centre Power Supply Operations Due Diligence Review, Waterman AHW.  The process tested for the catastrophic, low likelihood events (outliers) before it optimised for operational availability.

Safety Due Diligence Review.  An assessment of the health and safety risks associated with the taxi and hire car industry in Victoria was completed.

High Energy Assets Due Diligence Review, Melbourne Water.  A safety due diligence review was completed on Melbourne Water’s high energy assets especially in relation to the high and low voltage upgrade options at Eastern Treatment Plant’s Influent Pumping Station (IPS).

Z class tram life extension review.  Public Transport Victoria and Yarra Trams.  A due diligence review was completed for the Z3 Class Tram fleets for a 15 year life extension period to ensure all credible critical issues had been identified and preliminary cost estimates developed.

Port Jackson and Port Botany Pilotage SMS Review.  Being on the bridge of a cruise ship on a fine day coming out of Sydney Harbour is a joy to envied.  The case study of this review has been included in the 10^th edition of the R2A text.

E class trams project due diligence review.  Public Transport Victoria. R2A continue to be the independent due diligence advisors for the procurement of the 50 new low floor trams for the Melbourne tram system.  A case study was developed for presentation at the Engineers Australia Mastering Complex Projects conference in Melbourne and is included in the 10^th edition of the R2A text.

CONFERENCES

Richard presented at a number of conferences and seminars in 2014 and has availability for similar opportunities in 2015. Drop Richard a line if you have an event coming up.

• Construction Risk Management Summit in Melbourne
• CORE 2014 in Adelaide
• Statewide Mutual Risk Management Conference in Sydney
• EA NSW Regional Convention in Wollongong
• Electrical Maintenance and Safety National Forum in Brisbane
• Society if Fire Protection Engineers Conference on the Gold Coast
• Mastering Complex Projects Conference in Melbourne

MEDIA

R2A were featured in a number of publications in 2014:

• Near Enough Not Safe Enough (Engineers Australia Magazine. Safety feature article. January 2014)
• Engineers Australia Safety Case Guidelines due to be released (Sourceable. January 2014.
• Operations Due Diligence (Australian Journal of Multi-Disciplinary Engineering Vol 11 No.1)
• Tough times ahead for the Construction Sector (Sourceable. April 2014)
• Rise of the Precautionary Approach (Engineers Australia Magazine. Executive Engineer feature. May 2014)

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.

The 2-day joint R2A/EEA engineering due diligence workshop was very successful and will continue in 2015. This workshop is aimed at aspiring directors and senior managers.

Project Due Diligence

Each year, the R2A Board reviews the R2A practice, what it is and how it achieves.  The Board notes that the directors always feel that what they and the practice do ‘makes a difference’, not just to our clients but to the overall way business is conducted in Australia.In doing so this year, the board has noticed some interesting correlations.  The greatest part of the R2A practice over the last 10 years has been in project due diligence.  Any project to which the R2A process has been applied has been a success.  They have come in on time and budget, and to specification.  These include the procurement of Class E trams and X’trapolis trains, Eastlink, Tugan Bypass, the Marina Coastal Expressway and many others.The directors believe that this is not necessarily only due to the power of the R2A project due diligence process. It is most likely to be due to the quality of our clients. Careful customers rarely make dumb mistakes.  Adding a third party like R2A to a project review is ensuing a further prudent precaution on top of what is an already robust process.But as a result of investigations into failed projects, and listening to discussions regarding the reasons for various project blowouts and failures at project management forums during the year, another, more alarming correlation is appearing. It seems that major projects that manage risks exclusively using the formal process described in ISO 31000, the Risk Management standard, are the ones most likely to fail.Whilst the R2A practice has always understood that the Risk Management Standard of itself is unable to positively demonstrate due diligence with regard to big, rare (low likelihood – high consequence) events, R2A did not believe that the standard of itself would be the mechanism of failure, but this now appears to be the emerging pattern.The R2A directors, Gaye Francis and Richard Robinson, are presenting on Project Due Diligence with a focus on the procurement and delivery of Class E Trams, at the Mastering Complex Projects stream at the Engineers Australia Convention in Melbourne on 26^th November 2014.  For further details see: http://www.convention2014.org.au/conferences-and-events/mcp-conference/day-2-program.

What is Engineering Due Diligence?

Richard was recently featured in an Engineering Online (EOL) video and answered 5 questions in two minutes on the topic of Engineering Due Diligence.

EOL is a new Online Learning Centre recently launched by Engineering Education Australia (EEA) to support the professional development of engineering related professionals across all disciplines. Registration is free for members of Engineers Australia.

Have you ever wondered ‘What is engineering due diligence’ and what is it that ‘R2A does’?

As due diligence engineers we often get asked what is engineering due diligence and what it is that we actually do at R2A. To be honest, this has been a really difficult question to answer.  Due diligence is a legal concept and often construed to only mean compliance in the engineering context which is not the case. Previously Richard has used throw away lines like ‘we align the laws of nature with the laws of man’  that is, ‘we make lawyers useful’. Although these are outcomes of what we do, they didn’t quite answer the question of ‘what engineering due diligence actually is’.

So, after much thought, here is our latest attempt of explaining what engineering due diligence is.

R2A explanation – What is engineering due diligence?

Engineering due diligence uses the principles behind the judgments of the courts and applies them pre-event to ensure sound organisational decision-making. The primary purpose of engineering due diligence is to facilitate safe and efficient operations. It also provides confidence to all relevant parties.  It perhaps represents a form of reverse engineering of ‘the decisions of the courts’.

In the event of an incident, the due diligence process should satisfy the courts.  As a legal concept and it represents an aspect of moral philosophy, that is, how the world ought to be and how humanity should behave.  This is along the lines that one should treat others as you would like to be treated by them (the reciprocity principle).

The role and responsibilities of an Expert Witness

Arising from a recent expert witness commission, the legal counsel directed R2A’s attention to Makita (Australia) Pty Ltd v Sprowles [2001} NSWCA 305 (14 September 2001), which provides an excellent review of the role and responsibility of an expert witness, at least in NSW.The case cites many authorities and outlines the various responsibilities of each. For example, (at 59) it indicates that for the professors report to be useful, it is necessary for it to comply with the prime duty of experts in giving opinion evidence, that is, to furnish the trier of fact with criteria enabling evaluation of the validity of the expert’s conclusions.This is alternatively stated in a number of different places and ways, for example (at 60); Courts cannot be expected to act upon opinions the basis of which is unexplained.  And again (at 69); Before a court can assess the value of an opinion it must know the facts upon which it is based. If the expert has been misinformed about the facts or has taken irrelevant facts into consideration or has omitted to consider the relevant ones, the opinion will be valueless.  In our judgement, counsel calling an expert should in examination in chief ask his witness to state the facts upon which his opinion is based.  It is wrong to leave the other side to elicit the facts by cross-examination.In keeping with what constitutes engineering due diligence in the article above, it remains a source of frustration to R2A that legal decisions are so opaque to non-lawyers that it requires legal counsel to direct R2A to the best decisions to provide insight in to the workings of our courts.  From R2A’s perspective, judgements should ideally be available in plain English on searchable databases so that the information is readily available to all. Apart from making the life of due diligence engineers easier, it would also enhance the value of the work of the courts to the society they serve.Case web reference:http://www.austlii.edu.au/au/cases/nsw/NSWCA/2001/305.htm

Operations Due Diligence

As risk and due diligence engineers, R2A has the opportunity to work on a diverse range of projects.  Interestingly we are currently undertaking two operations due diligence reviews for two very different applications.  The first is a review for the power supply at the Monash Medical Centre and the second is the supply of Class A recycled water from the Eastern Treatment Plant.

Both studies are utilising our Operations Due Diligence methodology.  This process tests for the catastrophic, low likelihood outliers before it optimises for operational availability. It does this by testing the system as a whole in relation to management concerns, applying a top-down systems analysis approach that focuses analysis effort where it is needed.  This approach means many lower-level sub-systems don’t need to be analysed in detail, as further analysis is not performed if information to answer the question is produced. It also aligns results with management’s concerns, often with far less effort and more clarity than a full bottom-up analysis.

Traditionally, risk analysis techniques are not normally considered as part of an availability analysis, which is usually focussed on system functional design and reliability and maintainability of system elements. From an organisational viewpoint, however, all causes of system failure are important, including further factors such as external effects (for example, materials supply interruptions, picketing, power failures, bushfires, floods, staff epidemic) and accidents (for example, building fires, materials handling, vehicle collisions, operator errors). These factors are external to the traditional scope of availability analyses but can have a disproportionate effect, as the damaged caused can be severe, leading to much longer downtimes than simple failures.

Operations Due Diligence includes these factors, assessing the criticality and risk of such threats from the start of the analysis and consists of four steps:

1. Context (or boundary) vulnerability assessment
2. Common mode (zonal) vulnerability assessment
3. Functional availability modelling
4. Options review, investment payback analysis and recommendations.

Further information on our Operations Due Diligence methodology can be found in our Operations Due Diligence whitepaper.

Demonstrating Societal Due Diligence Using the Precautionary Approach

Arising from correspondence and discussion regarding earthquakes in New Zealand and bushfires in Victoria, R2A has been considering the possible application of the precautionary approach from a government regulatory perspective. The Venn diagram below is one result.

This implies three primary control options: eliminate the threat, remove exposed persons, or reduce the vulnerability. All are viable options with different perspectives but typically fall into different ‘control’ domains. For example, the ‘exposed persons’ issue is usually a land use planning matter generally being the responsibility of local government. The issue of vulnerability is usually an engineering concern the responsibility for which mostly falls to owners of exposed facilities. The nature of the threat is more a scientific matter and typically the concern of research organisations.

This makes the grey intersection a complex disciplinary patch, with overlapping responsibilities for government agencies, research and engineering organisations and with all the confusions as to whether the ‘hazard’ is a personal problem and the responsibility of individual owners, or a societal problem to be addressed with community resources.

Perhaps the most useful observation from this model to date is that the elimination of persons from an exposed area, a quite natural government response, is only one of three possibilities. The model above suggests that the optimal societal course of action is likely to be a mixture of the three control domains.

Operations Due Diligence vs Operations Risk Management

The meaning of the word risk has changed substantially over the last 20 years or so which has caused confusion in the operations risk management space. It used to refer to potentially catastrophic events for which insurance was normally purchased, a meaning which is still used by Factory Mutual and Lloyds underwriters.

In more recent times it has become associated with the term management, which has morphed it from the consideration of potentially catastrophic events to a process, which determines the optimum risk (upside and downside) outcomes, epitomised by the concept of ‘risk appetite’.

The courts have never experienced this confusion. After all, they do not care how often something has gone well, they only examine the instances where it all went terribly wrong. And to deal with these, the courts use the legal concept of due diligence.

The risk management standard has probably been responsible for this confusion. This may not be a bad thing in itself, provided the new meaning of risk management is understood. From an engineering perspective it means that risk management has come to mean reliability management, (what is the most likely desirable outcome and what needs to be tweaked to ensure that this becomes the case) whilst the former, catastrophic meaning requires due diligence which is aimed at detecting the outlier events and their various, unlikely combinations.

For example, the extensive use of Monte Carlo simulations is another result of the new meaning. These are typically used to determine likely risk outcomes from independent probability event distributions. It will almost certainly reveal the most likely events to derail or enhance a business plan or project, but the simulations are unlikely to reveal the convergence of low probability, statistical outlier events, the combination of which creates perfect storms like the GFC (global financial crisis).

This may be why the various risk management societies have had difficulty in determining what their core business is in recent times. It also explains why it was so necessary for R2A to change its name (but not its business) from risk engineers to due diligence engineers. And why R2A’s operations due diligence model described in our white paper is so important. It tests for the catastrophic, low likelihood outliers (the old risk management) before it optimises for operational availability (the new risk management).

2013 The Year in Review

December again and 2013 is rapidly coming to an end. As part of our end of year wrap up, here are some of the highlights that we would like to share with you.

The year started with drinks and canapés to launch the 9th edition of the R2A text, Risk & Reliability: Engineering Due Diligence. The event was well attended by industry colleagues and provided an overview of the general state of affairs in industry.

Following on from this success, R2A will be hosting another event on Thursday, 6th February 2014 from 3pm to 5pm. Richard will launch the 2104 update of the R2A Text. R2A has concluded that the risk and liability world is changing so fast at the moment that, until further notice, the text will be updated annually at least.

Matters of interest include:

• The introduction of the Rail Safety National Law, which is complimentary but subordinate to the model WHS legislation.
• The expected approval in the new year of the Engineers Australia Safety Case Guideline (3 Edition). This specifically rejects the Risk Management Standard (AS 31000) hazard based approach as being able to positively demonstrate due diligence for high consequence – low frequency events. This has startling consequences.
• Why SFAIRP (so far as is reasonably practicable) can never legally equal ALARP (as low as reasonably practicable).
• The logical limitations of Monte Carlo simulation for demonstrating project due diligence

Richard will also outline the outlook for 2014. We expect a lively discussion so please pencil in the date and join us on the 6th February.

Richard and I continue to work with the Risk Engineering Society (he’s been made an Honorary Member) to develop the third edition of the Safety Case Guideline. Now at the penultimate draft stage, it is expected that these will be reviewed by legal counsel and approved by the National Committee in the next couple of months.

In October we welcomed Stacey Daniel to our team. I would like to thank her for her contributions over the last couple of months and look forward to continuing to work with her in 2014.

We were also privileged to work with many clients throughout the year. Here are a few of the interesting projects completed in 2013.

INTERESTING PROJECTS

Hazardous Trees Review, Department of Environment and Primary Industry – A precautionary gap analysis of the current controls in place for hazardous trees in relation to crews and vehicles, especially during fire fighting operations.

Safety Due Diligence Review, Rockhampton Girls Grammar School – A review consistent with the provisions of the Queensland Work Health and Safety Act (2011).

LNG ship arrival / departure review, Gladstone Port Corporation – A review to ensure all reasonable practicable precautions are in place for all credible, critical safety issues associated with the movement of LNG ships through the Port of Gladstone to Curtis Island.

E Class Tram Safety & Operations Review, Yarra Trams – A safety and operations review for the new E Class trams to form part of Yarra Trams’ submission to Transport Safety Victoria (TSV) for their Accrediation Variation Application (AVA) to type test the new tram on the network.

Port Jackson and Port Botany Pilotage SMS Review. Being on the bridge of a cruise ship on a fine day coming out of Sydney Harbour is a joy to envied.

CONFERENCES

Richard presented at the following conferences in 2013 and has availability for similar opportunities in 2014. Drop Richard a line if you have an event coming up. (richard.robinson@r2a.com.au)

• Asset Management in Melbourne
• Earthing, Lightning & Surge Protection in Brisbane
• Electrical Regulatory Compliance Forum
• Australian Marine Pilots Institute Spring Workshop

R2A’s paper on SFAIRP vs. ALARP has also been accepted for the 2014 CORE Conference.

MEDIA

Richard had two articles published in 2013:

• Implications of the WHS Act relating to protection and earthing (Australasian Power Technologies Publication)
• Legal implications for designers under the Engineers Australia Safety Case Guidelines (Industrial Electrix magazine)

MARKETING ACTIVITIES

Our marketing program continued in 2013 with the following highlights –

Project Insights White PaperSafety Due Diligence White PaperOperation Due Diligence White PaperThis blog!

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.

In partnership with Engineering Education Australia, we a piloted a 2-day How to Engineer Due Diligence Workshop in Melbourne. This workshop is aimed at aspiring directors and senior managers of essential service organisations. This partnership will continue in 2014. Workshop dates and locations are: Melbourne on 5th and 6th March 2014, Brisbane on the 20th and 21st May 2014, Perth on the 12th and 13th August 2014 and Sydney on 14th and 15th October 2014. Further details can be found at https://www.r2a.com.au/education/r2a-short-courses.html.

R2A Event 2014

Following on from the success of our client and colleagues function in 2013, we will be hosting another event on Thursday, 6th February 2014 from 3pm to 5pm.

Richard will launch the 2014 update of the R2A Text.  R2A has concluded that the risk and liability world is changing so fast at the moment that, until further notice, the text will be updated annually at least.

Matters of interest include:

• The introduction of the Rail Safety National Law which is complimentary but subordinate to the model WHS legislation.
• The expected approval in the new year of the Engineers Australia Safety Case Guideline (3 Edition). This specifically rejects the Risk Management Standard (AS 31000) as being able to positively demonstrate due diligence for high consequence – low frequency events.
• Why SFAIRP (so far as is reasonably practicable) can never equal ALARP (as low as reasonably practicable) legally.
• The logical limitations of Monte Carlo simulation for demonstrating project due diligence.

Richard will also outline the outlook for 2014.

We expect a lively discussion so please pencil in the date, RSVP and join us on the 6th February.

Managing Project Show Stoppers

Once or twice a year, R2A, as due diligence engineers, are called upon to investigate projects which have not gone well. Clients do not generally permit us to discuss such investigations, unless it’s a public inquiry of some sort, but there are common threads that emerge. For the most part R2A includes such learnings in our text, Risk and Reliability: Engineering Due Diligence.Whilst some issues are peculiar to an organisation, the most common difficulty across projects seems to rest around an exclusive reliance on the Risk Management Standard (ISO 31000) as the basis to manage risk. For high consequence, low likelihood events (the potential ‘project showstoppers’) the Standard fails the test. The reason is simple; it is risk based not criticality based.Risk based means the management of identified risks is by the simultaneous appreciation of likelihood and consequence. Criticality based means that the likelihood side of the risk equation is initially ignored if the event is credible and could prove fatal (completely stop the project). The diagram below describes the conundrum for senior decision makers responsible for multiple large projects, the failure of any of which might bring down those decision makers.The perspective of both the individual project managers and the senior decision makers are correct, but contradictory. An individual project manager can confidently state, using risk based approach, that yes, a critical possibility does exist but it is so rare that delaying the project on that account cannot be justified.  The project should proceed.The senior decision makers on the other hand see the critical risks from 100 project managers. Even though such risks are rarely manifested, the 100 credible show stoppers are all focussed on this single group. From this top-down perspective projects ought not to proceed until the show stoppers are eliminated.  The alternative is to proceed optimistically until one show stopper to one project eventually happens and the inquiry commences.R2A is focused on the prevention side which means that projects ought not to proceed until the show stoppers are dealt with. It’s the only place to be.

Origins of the Legal Concept of Due Diligence in the model WHS act

The case that launched the negligence tide is generally recognised as Donoghue vs Stevenson (1932). Essentially this tested the responsibility of a drink’s manufacturer for a stomach ache resulting from a late discovered decomposed snail in an opaque soft drink bottle, purchased by one of two friends to share.  Until that time, the liability for a bad product rested with the contractual arrangement between the seller and buyer, not a third party friend with whom the drink was shared and who subsequently fell ill.Interestingly, it was a split decision by the 5 judges in the UK House of Lords as to whether or not the case should proceed at all since the potential liability to the manufacturer lay outside the existing buyer-seller contract. The minority was concerned that a finding for the plaintiff would launch an uncontrolled avalanche of negligence claims in common law jurisdictions, a concern that has pretty much eventuated.The majority decision favoured to adopt the golden rule of most major philosophies and religions.  This is usually expressed in the Christian tradition, as: love your neighbour as yourself meaning do unto others as you would have done unto you.  That is, it was felt that the soft drink manufacturer owed a duty of care to any reasonably foreseeable consumer (or neighbour), not just the one who purchased the soft drink.In statutory terms due diligence has mostly been about compliance.  In common law terms due diligence (or care) has been a defence against negligence.  And whilst there has always been some legislation like the Victorian Wrongs Act 1958 which incorporated these negligence concepts, it has really been the model WHS act and the Rail Safety National law that have enshrined due diligence (as a defence against negligence) into statute law in Australia. It is interesting that it took 8 centuries for the golden rule to be incorporated into the common law (nominally institutionalised by King Henry II in the 13^th century), but it only took 8 decades to have it elevated into statute law in Australia.R2A has always been focussed on due diligence as a common law obligation.  Indeed we changed our name from risk to due diligence engineers before any inkling of the model WHS act and Rail Safety National law became apparent as we believed that it was always prudent (and morally sound) to satisfy both statutory compliance requirements and common law obligations.  The fact that these have now aligned has actually made life simpler in some ways.In legal terms (at least with regard to demonstrating due diligence under the provisions of the model WHS act), an arguable case on a common law basis (which is proved on the balance of probabilities) means the likelihood of being successfully prosecuted under a statutory law (which needs to be proved on a beyond reasonable doubt basis) is, well, virtually nil.  At least, this is the unanimous opinion of the many lawyers R2A has briefed over the years.So, if you are wondering if all reasonable practicable precautions are in place for all credible, critical, foreseeable issues and hazards for a project or operation especially in an essential services industry, need to satisfy directors, tax payers, shareholders, workers or regulators, then call R2A.  Engineering due diligence is what we do.

Implications for designers using EG(0), The Power System Earthing Guide

The change from hazard based risk assessment supported by the risk management standard to the precautionary due diligence approach now mandated by most Australian parliaments has significant implications for designers, especially in the use of standards that use target levels of risk and safety such as EG(0) Power System Earthing Guide and IEC 61508 the Functional Safety Assessment standard as a design tool.

In previous blogs we have explored the implications of the hazard based approach using target risk criteria for land use safety planning purposes for hazardous chemical facilities. This blog looks at the implications in relation to the application of EG(0), the Power System Earthing Guide¹. The guide appears to define risk limit targets consistent with the NSW Department of Planning guidelines as shown in the table and figure below.

EG-0 individual risk limits

EG-0 societal risk limits

• Intolerable Region—The risk profile must be reduced.
• ALARA Region—Reduce the risk profile whenever possible, and only accept the residual risk on the basis of a risk cost benefit analysis (RCBA) (see Appendix F). The use of the ALARA principle (or ALARP) is clearly intended to form a key part of the Due Diligence process embodied in this Guide. The ALARM principle that requires a designer and asset owner to reduce the risk profile whenever possible provides a consistent yet practical means for managing earthing system related risk.
• Low or tolerable Region—Risk generally acceptable, however, risk treatment may be applied if the cost is low and/or a normally expected practice.

Whilst the table has further caveats that consider some of the weaknesses of the hazard based approach to risk, the overall use of such target risk levels remains contrary to the SFAIRP approach of the model legislation.

Such an approach is especially problematic in states like Queensland that are modifying the provisions of the Electrical Safety Act to be entirely consistent with the provisions of the WHS act including penalties.

As a consequence, the attempt by Energy Networks Australia (ENA) to introduce target risk based processes to assess the safety of earthing systems via EG(0), is flawed. It means that organisations and their officers that use such target risk based processes as the primary tool for risk decision making would be subject to post event scrutiny under the new model WHS legislation. In the event of a fatality such officers would presumably be prosecuted for acting recklessly under the criminal provisions of the act. It may also leave the ENA and its officers open to prosecution for endorsing and promoting an arguably suspect process.

This blog is based on a paper presented at the Earthing, Lightning & Surge Protection Conference in July 2013 and subsequently the Electrical Regulatory Compliance Forum in September 2013. The full papers can be viewed at Conferences.

¹ Energy Networks Association Limited (2010). EG-0 Power System Earthing Guide. Part 1: Management Principles. Version 1 – May 2010. Canberra.

Due Diligence – Land Use Planning

Land Use Planning

Possibly the most unfortunate outcome of the use hazard based analysis using target risk criteria is in land use safety planning for hazardous chemical facilities.[1]

Firstly, if the criteria are not satisfied it tends to sterilise planning areas from development.  From an engineering perspective at least, this is just silly.  Any site has issues, including windstorm hazards, geotechnical and earthquake potentials, storm surge, flooding and inundation, lightning strike potentials etc.  For the design to be successful, all these must be addressed.  The fact that there is a chemical exposure is just another hazard to be managed. If in order to be safe, people wind up in an unaffordable, unattractive, air-conditioned bunker, then it may be that the project will not proceed. But this will be for commercial reasons, not safety ones.

Precautionary vs. target risk level approach to land use planning

Secondly, it ignores rare, catastrophic hazards.  For example, if a plot of the over-pressures at Buncefield (an unconfined vapour cloud that detonated in the UK in 2005) were to be mapped to any major hazard fuel farm in Australia, the area that can cause fatalities is huge. But although monstrous, this is historically a very rare event. If the event is discounted by the unlikelihood of its occurrence (at say 1 x 10^-9 pa) in accordance with the risk target approach (typically 1 x 10^-6 pa or 3 orders of magnitude larger) it is a much smaller area.  Under most current planning regimes, structures developed beyond such 10^-6 pa individual risk contours need only be building code compliant.  No building is permitted closer to the major hazard facility. The diagram above describes the concept.

Adopting the precautionary approach to land use planning in these circumstances means that, the closer to the hazard a structure is, the greater the precautions need to be. In principle, provided the level of protection is high enough, there are no limits to where a structure could be built in relation to the major hazard facility presented above.   For example, immediately adjacent to the explosion, the protection required may be a concrete bunker as death may result directly from the overpressure.  The direct overpressure danger may be reduced at some distance but a house with laminated windows may be required to prevent glass shards shrapnelling occupants. Beyond the credible worst-case contour no protection from this hazard is required.

The QRA (quantified risk assessment) calculation of the risk contour is beneficial only in terms of determining the level of protection that is required at a given location, enabling the common law test of the balance of the significance of the risk vs. the effort required to reduce it to be applied.  For example, between the 10^-6 pa risk contour and the credible worst case consequence contour the cost of the provision of sheet metal roofs and laminated glass windows rather than tiles and ordinary glass, especially for new structures is very, very small indeed.

If buildings are permitted between the designated 10^-6 pa individual risk contour and accelerative glass over-pressure limits without such precautions, and an (admittedly rare) explosion resulting in deaths or injuries occurs, then the responsible officers of PCBUs responsible for approving and building such structures (town planners, developers, architects, engineers, builders etc.) may be found negligent under common law and criminally reckless under the provisions of the new WHS legislation (knew or made or let it happen).

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[1] Robinson Richard M, Gaye E Francis, Peter Hurley et al (2013).  Risk and Reliability: Engineering Due Diligence (9^th Edition). R2A Pty Ltd. Page 169

R2A Safety Due Diligence Process

In reality, to be safe means to be free from harm.  In court, safe means that, despite something apparently unsafe having happened, due diligence has been demonstrated. In engineering terms this means that to be safe requires managing the law of nature in a way that is consistent with the laws of man and in that order.At R2A we have developed a set of routinely successful process to positively demonstrate safety due diligence consistent with the requirements of the model Work Health and Safety (WHS) legislation that has commenced in all Australian jurisdictions except, at the time of writing, Western Australia and Victoria.The R2A approach adopts a precautionary common law formulation for the demonstration of due diligence as a defence against negligence namely:

• A completeness argument as to why all credible critical safety issues to all affected parties have been identified
• A argument as to why all practicable precautions for each credible critical issue has been identified.
• An argument as to which practicable precautions are reasonable consistent with decisions of the High Court of Australia, and
• The establishment of a safety quality assurance regime to confirm that all reasonable practicable precautions are maintained on an ongoing basis

This approach does not mean that bad things cant happen. It means (assuming the activity is not prohibitively dangerous such that it should not occur at all) that all reasonable practicable precautions for all foreseeable, critical hazards to all affected parties are in place, based on the balance of the significance of the risk vs the effort required to reduce it. This also means that risks should be eliminated or minimized so far as reasonable practicable.Such a position, based around the test of reasonably practicability arguable at a common law balance (the 50:50 tipping point), should provide superior safety outcomes for all whilst offering the best protection against criminal charges for responsible officers under the provisions of the model WHS Act.Over the years, R2A has tested this Safety Case approach with various legal counsels when consulting for clients. We recommend that readers do so with their own legal counsel before adopting this approach.

ALF Literacy Camp – Ballarat

R2A Board Advisor, John Francis recently attended the Aboriginal Literacy and Heritage camp at Ballarat facilitated by the Aboriginal Literacy Foundation (ALF). R2A have a partnership with the ALF and here is John’s account of the dayOn Saturday 2nd March I attended the Aboriginal Literacy and Heritage camp.  Students are partnered with an adult for the morning session, which involves helping the students with their literacy skills.I was partnered with a young aboriginal girl approx. 8 years and in grade 2. We were given several tasks to complete and to read. She tackled these with enthusiasm, and at the end of the session was able to recognise words that had been difficult at the start.After lunch, the student’s do some craftwork and then an elder of a local tribe comes to talk to the students about their culture and traditions. This is followed by an activity like horse riding or roller skating etc.I felt chuffed with the amount of progress that had been achieved by the young girl in this brief session. I have undertaken to take part in the next camp in late April or early May to hopefully provide continuity in the partnership.