RISK MANAGEMENT - Engineers Canada

1 RISK MANAGEMENT AN AREA OF KNOWLEDGE FOR ALL Engineers A Discussion Paper By: Paul R. Amyotte, & Douglas J. McCutcheon, 1 Chemical Engineering Program Department of Process Engineering & Applied Science Dalhousie University Halifax, Nova Scotia, Canada B3J 2X4 2 Industrial Safety & Loss MANAGEMENT Program Faculty of Engineering University of Alberta Edmonton, Alberta, Canada T6G 2G6 Prepared For: The Research Committee of the Canadian Council of Professional Engineers October 2006 SUMMARY The purpose of this paper is to seed the discussion by the Research Committee of the Canadian Council of Professional Engineers (CCPE) on the topic of risk MANAGEMENT .

2 The paper is in part a research paper and in its entirety a position paper. As can be inferred from the title, the authors hold the firm opinion that risk MANAGEMENT is an area of knowledge with which all Engineers should have familiarity and a level of competence according to their scope of practice. The paper first makes the distinction between hazard and risk. The two terms are often used interchangeably when in fact they are quite different. A hazard is a chemical or physical condition that has the potential to cause harm or damage to people, environment, assets or production. Risk, on the other hand, is the possibility or chance of harm arising from a hazard; risk is a function of probability and severity of consequences.

3 A description of the process of risk MANAGEMENT is then given. A generic framework for risk MANAGEMENT is presented to illustrate the essential activities of hazard identification and the analysis, assessment and MANAGEMENT of risks . Key activities in this framework are the decisions that must be made on risk acceptability whether to continue with an activity and monitor the risk, to implement risk reduction measures and then conduct a re-assessment, or to discontinue the activity because the risk is unacceptable and cannot be cost-effectively reduced. The first of two main questions the paper seeks to answer is then analyzed: Why risk MANAGEMENT for Engineers ? The argument in support of risk MANAGEMENT knowledge being important for Engineers is advanced on three fronts: moral/ethical, legal, and financial.

4 A brief review is then given of educational needs on risk MANAGEMENT in Canadian engineering schools, and the activities of some CCPE Constituent Members and selected Canadian engineering technical societies (discipline-specific) with respect to risk MANAGEMENT activities and services. A second question is then addressed: Why risk MANAGEMENT for all Engineers ? The basic intent in this section is to counter the argument that risk MANAGEMENT is only important for those Engineers working in high-risk industries or for those Engineers dealing with dangerous materials. The modern engineering team is examined from the perspective of its multi-disciplinary nature which necessitates particular attention to risk communication.

5 Several international initiatives in risk MANAGEMENT education and practice development are described to demonstrate that other countries do not make a distinction between artificial groupings of Engineers who may or may not require risk MANAGEMENT knowledge. To further illustrate this point, several case studies of differing origin are briefly reviewed. The Westray coal mine explosion that occurred in May 1992 in Nova Scotia is presented as a case study to show that this disaster holds important lessons for all Engineers , not just those engaged in coal mining. The final section gives several recommendations in the form of suggestions to advance the state of risk MANAGEMENT education, training and practice by Engineers in Canada .

6 These recommendations are presented for consideration by the Canadian Engineering Accreditation Board, Canadian Engineering Qualifications Board, CCPE, CCPE Constituent Members, National Council of Deans of Engineering and Applied Science, Canadian engineering technical societies, and the CCPE Research Committee. 2 TABLE OF CONTENTS Page SUMMARY 2 TABLE OF CONTENTS 3 INTRODUCTION 4 HAZARD AND RISK 4 THE RISK MANAGEMENT POCESS 6 WHY RISK MANAGEMENT FOR Engineers ?

7 10 Moral/Ethical Issues 10 Legal Requirements 12 Financial Motivation 13 Educational Needs 14 CCPE Constituent Member Activities 18 Technical Society Initiatives 19 WHY RISK MANAGEMENT FOR ALL Engineers ?

8 20 The Engineering Team 21 Case Studies 25 Westray 26 RECOMMENDATIONS FOR THE ENGINEERING 31 PROFESSION IN Canada CONCLUDING REMARKS 32 REFERENCES 32 3 INTRODUCTION This paper has been written to facilitate discussion by the Research Committee of CCPE on the topic of risk MANAGEMENT . The argument presented herein is that risk MANAGEMENT is an area of knowledge with which all Engineers should be familiar.

9 The degree of familiarity, or depth of knowledge, will depend on the specific engineering discipline and the nature of the field of practice. Nevertheless, it is the authors view that awareness of the risk MANAGEMENT process, and some degree of competence in its application, are essential for all Engineers . The assessment and MANAGEMENT of risk are integral components of the daily activities of human beings. From choosing a mode of transportation to deciding on what to eat for lunch, potential concerns are identified, the consequences considered, and the probability of a mishap debated. A decision is then made on the best course of action and steps are taken to prevent an undesirable outcome while attempting to ensure a pleasant trip or an enjoyable meal.

10 All of this may occur in the blink of an eye, or may be the subject of a more deliberate exercise in risk MANAGEMENT . Engineering work also requires the assessment and MANAGEMENT of risk. Hazards need to be identified and consequences and probabilities analyzed. MANAGEMENT decisions must be made as to whether the risk is acceptable in which case the activity would continue with appropriate risk reduction and monitoring measures or whether the risk is unacceptable and the activity must not be undertaken. Simply put, the practice of engineering carries with it an inherent level of risk that Engineers must seek to understand and manage. The remainder of this paper attempts to explain the reasons for the authors opinion that risk MANAGEMENT is an area of knowledge with which all Engineers should be familiar.