R2A Blog

November 28, 2012
Due Diligence vs Risk Management

We desire that our world be prosperous and safe. And it seems that due diligence has become essential to these outcomes. Due diligence (or care) is a legal concept, derived from the societal need to ensure fairness in dealings between human beings. It has been variously defined, for example:

The diligence reasonably expected from, and ordinarily exercised by, a person who seeks to satisfy a legal requirement or obligation1 and,

A minimum standard of behaviour which provides against contravention of relevant regulatory provisions and adequate supervision ensuring that the system is properly carried out.2

Such legal obligations can be created by statute law, for example the Model Work Health and Safety Act (2011)3 or from the common law as a defence against negligence4.

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November 28, 2012
Project Due Diligence vs Project Management

Risk management is often a key element asked for in large infrastructure development project. Organisations want a robust and transparent system that can be utilised during current and future development phases of a project to inform decision-making and guide levels of investment in various project investigations.

In setting up a risk management framework for a project it is essential that it take account of all risks to Project including technical, environmental, economic, stakeholder, political delivery and on-going operational considerations.  This must be done in the context of the current operations.

The risk management framework and system must be set up so that the Organisation has confidence in the process and results, ownership of the outcomes and can maintain and utilise the system going forward.  It must be set up to ensure that the project is right the first time.

To ensure the Project is successful in terms of both delivery and ultimate project performance, R2A have developed a project due diligence methodology.

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November 19, 2012
Edith Cowan

Edith Cowan R2A were commissioned by Edith Cowan University 2012 to write a unit in the Masters of Occupation Health & Safety. The unit is known as Systems Safety and is available as a off and on campus modes. The R2A updated text is the significant resource for the unit and is referenced extensively in […]

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November 19, 2012
R2A Short Courses

R2A EEA Workshop   Engineering Due Diligence Workshop R2A is partnering with Engineering Education Australia (EEA) to deliver a two day Engineering Due Diligence workshop.  This workshop is based on the very successful Risk and Liability Management course presented by Richard Robinson over the last 10 years or so. Workshop Aim Provide decision-makers with tools […]

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October 25, 2012
Due Diligence and ALARP - Are They the Same?

With the paradigm shift occurring to precautionary risk assessment from hazard-based risk assessment, R2A have heard a number of discussions suggesting that if an organisation demonstrates ALARP (as low as reasonably practicable) then can also demonstrate due diligence.

R2A’s opinion is that this may not necessarily be the case. The concept of ALARP is in fact hazard focused, comparing risk (likelihood and consequence) to acceptable or tolerable target levels of risk and safety.  The use of such quantified risk assessment processes to satisfy target (tolerable or acceptable) risk criteria has never been able to satisfy post event common law scrutiny in Australia, which requires a demonstration of due diligence. 

However, many industries that use the ALARP principle currently appear to be redefining its meaning by adding a number of caveats in what appears to be an attempt to close the due diligence loop and satisfy the courts after an event.  The shift from hazard based risk assessment to due diligence is shown in the diagram below.

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October 25, 2012
Expert Witness

At R2A, we are called upon from time to time to give expert witness statements.  Recently, Richard was an expert witness for the Harbour Master at Marlborough District Council (New Zealand). Richard was asked to provide evidence to the Board of Enquiry appointed under the Resource Management Act 1991 to consider The New Zealand King […]

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October 24, 2012
Western Outer Ring Main Project

R2A completed a review of the security of supply of the Victorian Transmission System (VTS) in early 2012 and the report has recently been made public.

R2A were commissioned by the APA Group to complete a review of the security of supply of the Victorian Transmission System (VTS) with particular regard to the economic benefits to existing and long-term customers of the proposed Western Outer Ring Main (WORM) Project in Victoria for submission to the Australian Energy Regulator (AER), the national energy market regulator. 

The report concludes that in the event of a supply failure as occurred at Longford in 1998, the WORM Project would:

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October 22, 2012
New EEA course in 2013

R2A is pleased to announce that in 2013, R2A will be partnering with Engineering Education Australia to deliver a new course titled ‘Defensible Risk Management Techniques’.

The one day course will cover practical techniques for conducting risk assessments in a due diligence context and is ideal for engineers with up to five years post – graduate work experience.  I will be delivering the program.

The objectives are –

  • Develop an understanding of fundamental risk and due diligence concepts
  • Appreciate the safety, economic and legal drivers of risk management requirements
  • Generate safety case arguments to positively demonstrate due diligence and thereby limit legal liability
  • Apply top down risk management techniques to organisational and project risk issues
  • Understand the strengths and limitations of bottom up techniques such as Failure Mode Effect Analysis (FMEA) and Hazard Operability Studies (HazOps)
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October 3, 2012
Diversity Means Business

The Women in Engineering National Committee (WIE NC), working with large engineering employers, have developed a solutions based approach focusing on delivering better business outcomes to enable industry to evolve and successfully compete in a changing environment.

Many of our members work in organisations that have had singular success in recruiting, retaining and celebrating female engineers in their workforce.

As a response to numerous approaches from industry to provide advice and guidance on how to set up a successful in-house professional women’s program, the WIE NC undertook a project to develop an industry blueprint of successful in-house professional women’s programs.

A paper was developed following a round table discussion with industry partners, that have programs that successfully encourage gender diversity in an organisation through initiatives that attract, retain and celebrate women in the engineering profession.

 

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September 12, 2012
Does ALARP = Due Diligence?

Does ALARP = Due Diligence?

Does ALARP equal due diligence? Well yes, if ALARP (as low as reasonably practicable) is redefined, as appears to be presently occurring.

Once upon a time ALARP meant achieving an acceptable or tolerable level of risk (consequence and likelihood). It was classically articulated by the UK HSE (Health and Safety Executive) in 1988 in the document The Tolerability of Risk from Nuclear Power Stations. The HSE suggested the limit of tolerable risk to a worker is 10-3 per year; the limit of tolerable risk to a member of the public is taken as 10-4 per year. The risk to a member of the public that might be regarded as acceptable, as opposed to tolerable, is then taken as 10-6 per year.  Such a concept was then taken up extensively in Australia, for example the NSW land use planning guidelines (2008).

However to satisfy the courts after the event, various caveats have been added to this approach. For example, from the NSW guidelines, … irrespective of numerical risk criteria, the broad aim should be to 'avoid avoidable risk.'  Another common caveat is to say that, irrespective of the level of risk, the value of further precautions should always be considered.

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