Engineering for Communities & Season 5 Wrap

Risk! Engineers Talk Governance
Season 5, Episode 10

In this final episode of Season 5, Richard Robinson and Gaye Francis conclude their theme of difficult conversations engineers need to have as well as discuss Engineering for Communities. 

They explore how engineering should focus on improving rather than maintaining the status quo, and the concerning trend of engineers being sidelined in critical decision-making processes.

The discussion includes:

• How councils and planning decisions have become "de-engineered"

• The importance of due diligence beyond just health and safety - extending to environmental protection and project management

• Why engineers seem to have "vacated the field" in many areas, leaving non-technical decision-makers to handle complex problems

• The need for validation, verification, and challenging assumptions rather than blindly applying Standards

• How proper due diligence can demonstrate governance and protect communities, workers, and the environment

• Due diligence is an ongoing process requiring continuous thinking and adaptation as technology and circumstances change. 

The also discuss their confusion how anyone could they're a designers and not demonstrate due diligence irrespective of what the WHS/OHS legislation says and that they’re setting themselves up for a fall.

Access the episode’s full transcript below.

Episode transcript

Megan (Producer) (00:00):

Welcome to Risk! Engineers Talk Governance. In this final episode of Season 5, due diligence engineers, Richard Robinson and Gaye Francis wrap up the theme of difficult conversations engineers need to have, as well as discuss engineering for communities.

(00:19):

We hope you enjoy the chat. If you do, please give us a rating and subscribe on your favourite podcast platform.

(00:26):

If you'd like to keep in touch with R2A's work and events, please head to the website www.r2a.com.au and sign up to our quarterly newsletter.

(00:37):

Thanks for all the wonderful support and feedback this season and look out for Season 6, as well as an in-person event.

Gaye Francis (00:46):

Hi Richard. Welcome to our final podcast session for Season 5, the wrap up.

Richard Robinson (00:52):

Season 5!

Gaye Francis (00:53):

Season 5.

Richard Robinson (00:54):

It's hard to believe Gaye.

Gaye Francis (00:54):

It is. It is, but it's very exciting. It's been quite an interesting season this season because we themed it difficult discussions that engineers need to have, and we've covered risk management and negligence, our new booklet. The difficult conversations that engineers need to have. Catastrophic project blowouts, which is also one of our booklets, but also we've seen that in government projects in particular and how big projects are not meeting the requirements on time, on budget and specification. Insurance criteria. One that got a lot of feedback was standards are not the solution, so that was an interesting podcast. Target levels of risk and safety always gets the the thought leadership conversations happening. Relevant, reasoned and concise, especially around expert witness type cases. How things are done in silos. And then due diligence revisited.

(01:53):

So today we thought we'd try and bring all of those topics together in a bit of a mismatch, but bring them all together and talk about in the context of engineering for communities and the philosophy of engineering is about change and not maintaining the status quo. So that comes down to one of...

Richard Robinson (02:11):

Meaning things improve.

Gaye Francis (02:13):

And meaning things improve, correct!

Richard Robinson (02:14):

And don't decline. <laughs>

Gaye Francis (02:18):

And that it requires engineers and the people in those sort of positions to think about things and not just apply standards like we've talked about previously, to get that improvement in our communities.

Richard Robinson (02:33):

Yes. Well, you're actually addressing a somewhat larger subject when you talk about engineering for communities, and what I think you're saying is that in practice in community, a lot of the core decisions that have been going on around the place have de-engineered. One of our frustrations and that's what the previous podcast (S5E9) was about, that due diligence is not just about health and safety.

Gaye Francis (02:52):

Correct.

Richard Robinson (02:53):

It's about protecting the environment. It's about not having projects blow out when you're trying to get something done. And it is also about making sure that existing plants and processes do the best they can with what you've got. Because sometimes you simply aren't going to be able to replace all these things in a hurry. So ageing, thermal power stations, yeah, we'd like to keep them going until we're sorted out whatever else we're going to do. Australia's getting, well, I think we're getting better at it... we are making it happen because we have to.

Gaye Francis (03:22):

And due diligence is one of the processes that you use to demonstrate that that's being done

Richard Robinson (03:28):

Correct. Now, from the point of view of engineering and societies, I mean one of our frustrations we've noticed, for example, in planning decisions with councils - councils are basically de engineered. I mean, they've got all these planners making decisions about, and they like target levels of risk and safety because it means you can make a quick decision when they having to think things through. Although as we have demonstrated we have a current case, even actually demonstrating what the level of risk is, is somewhat messy, let's put it that way.

Gaye Francis (03:57):

Difficult thing to justify.

Richard Robinson (04:00):

And uncertain. And then when you try to work out the quantum of human effort, that should be put into a place to deal with something that's messy. That's a little bit scrappy too. So when you're trying to put the two things together, that's why it's hard and people have to think about these things. Now if you don't have the engineers around, and certainly in planning decisions, engineers seem to have basically left the fields as far as I can tell. Same things happened with building surveying. The engineers for the most part, apart from doing particular studies on bush fires or soil conditions or whatever the aspect is...

Gaye Francis (04:34):

They're a single input into the process.

Richard Robinson (04:36):

A series of single inputs the way it's going. But the collective overview of what's important to the thing seems to have gone missing and how many projects do we keep seeing blowing out? It's a little bit frustrating to us to be invited to a large project late in the day and then trying to as politely as we can point out that, yeah, it would've been better if you thought about this upfront.

Gaye Francis (04:58):

Yeah. Because what you can put in place, the controls that you can put in place and precautions you can put in place when a project is well on its way after practical completion, even some might say, is very, very limited compared to what could have been done in a safety and design process.

Richard Robinson (05:15):

And you would recall we have some Cabinet in confidence projects that we facilitated their demise and we're not allowed to talk about in case the tenderers find out.

Gaye Francis (05:24):

Correct.

Richard Robinson (05:24):

And sue the government.

Gaye Francis (05:26):

But that would have been a lot less hurt than if it had a gone ahead.

Richard Robinson (05:29):

Much less hurt, but let's not go into that. So the whole thing to us has become rather odd and we don't quite understand why the engineers have, in a sense vacated the field. And more to the point, the senior decision makers haven't grasped that in an advanced technological society, pushing the engineers away is going to cause excessive pain for the senior decision makers.

Gaye Francis (05:57):

And make those decisions harder and making informed decisions even harder.

Richard Robinson (06:03):

I'm not sure. I don't quite understand how they've done it? It's not as though, I mean we've talked about this before, but in Australia, as long as the sun's shining, I mean all the places on the planet where there's a lot of sun. I mean, you have your Finnish friends.

Gaye Francis (06:18):

I do.

Richard Robinson (06:18):

And they like nuclear reactors because in winter it's very cold and very dark.

Gaye Francis (06:24):

Not much sunshine.

Richard Robinson (06:24):

Not much sunshine. Whereas we have lots of it, and it's now cheaper to build solar power stations cheaper, faster, and quicker than nuclear plants. How long did it take the Finns to get the next Olkiluoto station going?

Gaye Francis (06:38):

I think the last one took up to 15 years because they weren't going to switch it on until they were completely confident that it was "safe".

Richard Robinson (06:47):

Which we in our society tend to say, oh, we better turn it on because we've got an election coming up or something like that.

Gaye Francis (06:54):

That's a bit cynical, Richard. But yes.

Richard Robinson (06:57):

Not after our experiences on the Geelong Freeway, but perhaps we shouldn't go there either. <laughs>

Gaye Francis (07:04):

So I think as was saying, due diligence is one of those processes that we've always said is used to demonstrate and as a defense against negligence, but it can be applied across the field, not just in health and safety. It can be applied in environment and projects and SIL reviews (safety integrity level) reviews and a whole lot of things. But one of the other important things I think that goes with the due diligence aspect is that validation and verification, and it's the ability to test and challenge and question, which is not necessarily being done. And that comes down to that questioning of things and thinking things through, but also not just applying the Standard as a minimum requirement and not thinking of the context in which the particular problem that needs to be solved in.

Richard Robinson (07:52):

Correct. And not avoiding a problem if you can in the first instance. I mean, we are continually astonished that people coming up with ideas and the solution of not doing it that way at all and doing it a better way for some reason just doesn't seem to be considered. We don't get that.

Gaye Francis (08:12):

And I think we've used this in our course many, many times just because everybody else is doing it that way, is not a defense against negligence.

Richard Robinson (08:18):

Correct. And the lawyers have been crystal clear about that forever.

Gaye Francis (08:21):

Yeah. Yeah. So think these things through what has always been done isn't necessarily the way to go about it. You've got to be diligent. And we are just talking and people are absolutely correct that there's no requirements in legislation and in the WHS Act, that is a requirement for engineers to be diligent or demonstrate due diligence. But as an engineer and a business owner, I'd like my engineers to be diligent.

Richard Robinson (08:57):

Certainly.

Gaye Francis (08:57):

And to be able to think these things through from scratch and understand the context in which they're applying it.

Richard Robinson (09:08):

A designer who doesn't demonstrate due diligence is just kidding themselves. I don't understand how somebody could even possibly say they're designers and they don't have to demonstrate due diligence irrespective what the legislation says. You would just be setting yourself up for a fall every time.

Gaye Francis (09:24):

So I think engineers are important people in our society and we're required to have good communities.

Richard Robinson (09:30):

Actually, their importance is actually demonstrated because whenever there's a court case, it's always the engineers.

Gaye Francis (09:35):

That come up and solve it or present the evidence.

Richard Robinson (09:38):

Yeah, it's not the town planner, it's the engineers. It's not the building surveyor, it's the engineers. Whenever there's a hard problem, it's the engineers that appear. And I don't quite understand why if you just look at the court process, if that's what happens, why do all these other parties who can't be a part of the solution per se, why are they making the decisions? That's the bit I don't get.

Gaye Francis (10:05):

I think it's also interesting, and another observation that we've probably had is that many of the health and safety people and advisors in organisations don't have that technical expertise.

Richard Robinson (10:16):

So they couldn't tell you how to avoid it in the first place, not the design party.

Gaye Francis (10:20):

So many of the solutions that are put forward by these people and these parties are often in the admin, the procedural sort of areas. So you've down the hierarchy of control before you even start.

Richard Robinson (10:32):

And do they attempt in the first instance, which is what they ought to be doing, to consult with those people who could perhaps eliminate the problem? I don't think they do. I think they just put forward the suggestion and more importantly, actually impose a rule on people without actually testing what the larger solutions ought to be.

Gaye Francis (10:51):

So I think there's two things that we've sort of seen, and much of the work that we do could probably be put into two categories. It's those people that want to improve safety in the organisation by demonstrating due diligence.

Richard Robinson (11:04):

Or project management

Gaye Francis (11:05):

Or project management

Richard Robinson (11:06):

Or environmental management.

Gaye Francis (11:07):

Yes, thank you. And then by doing that process, the due diligence process, you're also demonstrating a governance process that you've been through a governance process and it's sort of hand on heart stuff again, isn't it? We've done everything reasonably we can to protect our community, our workers, the people who our work exposes, what else can we do? Or we've got all reasonable practical controls in place to manage this big project or this environmental issue, whatever it is.

Richard Robinson (11:43):

And that's what that CFA chief said. Remember he said, I've been a volunteer chief for 10 years and I know that I'm going to lose somebody if I keep doing this job.

Gaye Francis (11:50):

In a bushfire.

Richard Robinson (11:51):

In a bushfire, but what I need to be able to do is put my hand on my heart and say, it wouldn't have mattered if it was my son or daughter fighting the fire. The same thing would've happened and we'd done everything reasonably practicable, but we could in the circumstances, and this is Australia and we burn.

Gaye Francis (12:06):

Yeah. And so I think due diligence is one of those processes that can do that. It is a process that requires people to think things through.

Richard Robinson (12:16):

Correct.

Gaye Francis (12:17):

Look at the context in which your situation is and look at all the controls, not just do the status quo, maintain the status quo. Technology's changing all the time. The controls are changing all the time, and what's reasonable in the circumstances can change year to year. And so it's not something that's done once put on the shelf and forgotten about. It's something that has to be thought about continuously.

(12:44):

So I think that's sort of a wrap to Season 5. We hope you've found it interesting and the difficult discussions that engineers need to have.

(12:58):

Richard and I are still looking at doing an in-person event in mid-late 2025, and especially around this sort of difficult discussions that engineers need to have because the interesting part is the different opinions of people and how it works within organisations. So we're looking at setting up a due diligence seminar, as I said, in mid 2025. And if you are interested, sign up to our newsletter to keep informed on how that's coming along and further details as they're released.

(13:30):

So thank you again for joining me on for Season 5, Richard. And we will be back for Season 6 later in the year. Thank you.

Richard Robinson (13:40):

Thank you.

Engineering Due Diligence: The confusion between Risk, Assurance & Diligence

Risk! Engineers Talk Governance
Season 5, Episode 9

In this episode, Richard Robinson and Gaye Francis revisit the fundamentals of engineering due diligence in response to listener feedback about the confusion between risk, assurance and diligence.

The discussion covers how R2A became specialised in due diligence engineering through their expert witness work, where they learned that due diligence serves as a defense against negligence with two key components: having reasonable control in place and taking all reasonable steps to protect against foreseeable harm.

Richard explains their decision to move away from quantified risk assessments using target risk levels, as this cannot adequately demonstrate due diligence. Instead, R2A advocates for a top-down approach that identifies critical issues, evaluates available controls, and determines what's reasonable in the circumstances.

They clarify that while due diligence obligations are explicitly stated for corporate officers in workplace safety legislation, all professional engineers have an implied duty to demonstrate due diligence as part of their professional responsibilities, and emphasise that simply following regulator approval doesn't guarantee protection from negligence claims. Engineers must take a holistic approach rather than relying solely on Standards or regulatory compliance.

The books they mention are:

• For Directors: Criminal Manslaughter, How Not To Do It

• For Engineers: Risk Management & Negligence; Due diligence Essentials for Engineers

 Access the episode’s full transcript below.

Episode transcript

Megan (Producer) (00:00):

Welcome to Risk! Engineers Talk Governance. In this episode, due diligence engineers Richard Robinson and Gaye Francis revisit the topic of due diligence. And this is thanks to an email from Chris who wrote that they've been listening to the podcast to better understand risk due diligence, Rail Safety National Law, and duties of engineers, and that it's hard to rationalise the relationship and hierarchy of Rail Safety National Law versus (e.g.) Victoria's OHS Act, what is and isn't required to be diligent, and the relationship of risk assurance and diligence.

(00:40):

We hope you enjoy their chat. If you do, please give us a rating and subscribe on your favorite podcast platform. And if you'd like more information on R2A's work or have any feedback or topic ideas, do what Chris did and head to www.r2a.com.au.

Gaye Francis (00:58):

Hi Richard, welcome to a podcast session.

Richard Robinson (01:01):

Good to be here again, Gaye.

Gaye Francis (01:04):

Today we're going to revisit due diligence and part of it's based that we've recently had an enquiry about an observation that there's some confusion and differing views out and about around the risk space, around risk and assurance and diligence and what it actually means. And I thought what we'd do today, we've covered due diligence on a number of our podcasts, but if we go back today and have a look how we actually started in the engineering due diligence space and why we did it and how we apply due diligence in the engineering work that we do, that might be a useful conversation. So I'll get you to give an intro into how we became due diligence engineers.

Richard Robinson (01:50):

I can do that. I must firstly observe. It was surprised to me to see that you'd never actually listened to one of our podcasts. I recommend you do that. Gaye.

Gaye Francis (01:58):

Oh, well, we're only in Season 5 Richard. I'll get around to it.

Richard Robinson (02:01):

Excellent. Now, anyway, the reason why we became due diligence engineers, and as far as I know you were around during the entire process, was that we were doing this as response to expert witness matters before the courts. Now we're engineers, not lawyers. So what happened was that every time you do an expert witness case, the lawyers tell you to read various things, and they directed our attention to various relevant cases, particularly Wyong Shire Council vs Shirt, where Chief Justice Harry Gibbs talking about the balance of the significance of the risk versus the effort required to reduce it. But what became patently clear to us about all of this was that due diligence has always been a defense against negligence. And there were two parts against the defense against negligence. The first part was the no power defense, that you could only be responsible for matters over which you had control. And the second part was that in the circumstances as a reasonable human being, you would do all reasonable things to protect against foreseeable bad things that might happen to other people around you or the people, your clients and so forth. And so due diligence was articulated quite clearly to us as a defense against negligence.

(03:08):

Now, the world moved on, and in 2004, Maxwell QC reviewed the OHS Act in Victoria, and he put in place that you had to eliminate hazards so far as reasonably practical and if you couldn't eliminate, you had to reduce them so far as reasonably practicable. But the Victorian Act doesn't talk about due diligence anywhere. But nevertheless, we were cognisant of what the Act was talking about. And we were doing at the time, quantified risk assessments where you target levels of risk and safety around major hazard facilities. And I've got to say it's a prosperous area of activity to be in.

Gaye Francis (03:41):

It is.

Richard Robinson (03:42):

But when you looked at that and you looked at what due diligence as a defense against negligence was which engineers had to apply. I mean, you have to pay PI insurance if you're an engineer, and that's mandated under Registration of Engineers, under the Code of Ethics of Engineers Australia, if you don't happen to be a Registered Engineer, you have to do these things. And we basically had to say to the major hazard's regulator of Victoria and all other jurisdictions, and this includes quantified risk assessment in railways, which we had to walk away from, quantified risk assessment in the aviation sector, which we had to walk away from, we said, you cannot demonstrate due diligence by using target levels of risk and safety because there's two parts to it. Apart from the difficulty of actually knowing what the number is for high consequence, low likely things, which is a rabbit hole, which I'm about to test in a court case in the very near future in Brisbane. The other one is, the other side of the equation is what's reasonable in the human effort. Because designating human effort, you can't quantify that unless you're just going to put dollars to it or something and that doesn't work when you talk about life safety.

(04:46):

So we have to say to the major hazards regulator of Victoria and all the other places, we're not going to do it anymore. And why aren't we going to do it anymore? Because we've given up on using target levels of risk, and what your duty is as an engineer and your common law duty is to demonstrate due diligence.

Gaye Francis (05:04):

To show that all reasonable, practicable precautions are in place.

Richard Robinson (05:08):

Now at this point, you could have knocked us over with a feather when Julia Gillard turned up and then started promoting the WHS legislation, taking the SFAIRP approach from Victoria, because remember, she was Victorian, well at least for the purposes of, she went back to South Australia, but for the purpose of this, she was a Victorian. And then she became Workplace Relations Minister, the Chair as Deputy Prime Minister and so forth. And she obviously put her heart and soul in, and she basically tucked due diligence into the WHS legislation, but quite correctly as some people say, and as far as I know, we've always been quite crystal clear on this, that due diligence obligation in a statutory sense applied to the officers of the corporation, the business, the PCPU has to demonstrate that that all reasonable controls are in place. Anybody who works there, you've got to demonstrate all controls are in place.

Gaye Francis (05:58):

Reasonable care

Richard Robinson (05:59):

But the due diligence obligation, and remember due diligence only includes, it doesn't mean the six items in the WHS Act. And I spent a lot of time with Barry Sheriff giving presentations on behalf of Engineers Australia all over Australia, talking about all this because he would talk about what's required. Then I'd say, well, here's what you have to do to demonstrate due diligence with regards to how an organisation would show that all reasonable practicable controls are in place. Now, at this point, seemed being pretty clear to me, the due diligence provisions of the WHS legislation, the onus on directors came from the common law due diligence as a defense against negligence. And I haven't had any lawyer ever disagree with that understanding. That it came from the common law and due diligence as defense against negligence in the common law. Now, that means from a practical viewpoint, all engineers anyway have to demonstrate due diligence...

Gaye Francis (06:52):

Even though it's not explicitly said in the legislation.

Richard Robinson (06:56):

Yeah, because you've got to demonstrate it anyway.

Gaye Francis (06:59):

As a professional engineer.

Richard Robinson (07:00):

As a professional engineer, if that's what you hold yourself out to be. And then as the Chief of the Navy goes to some trouble to say in his documentation, anybody who works in that organisation had better help the officers demonstrate the officer's due diligence. And how do you do that? You demonstrate that all reasonable practicable controls are in place. To say that the engineers don't have that duty, I just find bizarre.

Gaye Francis (07:26):

Yeah, it's sort of inferred in a way, isn't it? And that's how you go about your business as an engineer. How do we show that we're not being negligent or we use due diligence as the demonstration and the process to do that?

Richard Robinson (07:38):

Don't use risk assessments except as the second part. You work out what the core issues are. Because remember, we always came top down. And that's the other thing that R2A always does. We always say, you must come top down working on what the credible critical issues are, and then you work out what the options are. And then you're saying, in the circumstances, the balance, what's reasonable? Because that's the only way you can practically do it.

Gaye Francis (08:01):

Yeah. So we want to do that completeness check like we talked about, what all the controls are that can be put in place and what is reasonable in the circumstances.

Richard Robinson (08:09):

And if you want to be a worthwhile engineer and value to the organisation, particularly if you're a young engineer, starting your career, and this is something we say all the time when we're training young engineers. If you can show that whatever decision you are making has been diligent in a way that will satisfy your managing director and your board, you are worth your weight in gold. And if you are unable to do that, then you are not going to be a very successful engineer, not in this day and age.

Gaye Francis (08:39):

And helps inform decisions to be made.

Richard Robinson (08:41):

Correct.

Gaye Francis (08:42):

So by doing it throughout the organisation and people are right, they come and ask, and there's questions that some of the legislation or some of the regulations and hierarchy control, for example, there's some mismatch between...

Richard Robinson (08:57):

The regulators are muddled.

Gaye Francis (08:58):

And there is some confusion out there and what the requirements are. But as we said, we've always used due diligence as a defense against negligence and the hierarchy controls as the court sees it. So those three: elimination, prevention and mitigation.

Richard Robinson (09:14):

But it actually goes on. Remember some people, and I've seen this written a number of places. Well, if the regulator says It's okay, we're good. No! If it goes badly wrong and the public prosecutor wants to have a go at you, the fact almost all regulators and all that I've ever read, as long as they're acting in good faith, they can't be prosecuted for negligence. But the company can still go down.

Gaye Francis (09:39):

Even though they've followed the rules of the regulator.

Richard Robinson (09:41):

Even though they follow what the regulator said. Unless your legislation for your regulator specifically says that acceptance by the regulator has satisfied all your obligations, and most regulators try to avoid that!

Gaye Francis (09:56):

I was going to say they're more clever than that to say that in full on statement like that.

Richard Robinson (10:01):

Well, that's not quite right because the Victorian major hazards regulator, they have to accept it. But that's not what all jurisdictions say in all the regulatory regimes. You want to be very cautious and have a think about exactly what it is your regulator can and cannot accept.

Gaye Francis (10:19):

Comes back down to that question that we've talked about on a number of occasions and the topic we've talked about on a number of occasions, that you have to think these things through for the circumstances that you find yourself in and the organisation, in the whole of context that you're in. It's not just all of the silos, that you've got to put all of that together and have a holistic approach on this.

Richard Robinson (10:40):

And relying on a Standard as your core defense, you've got to think it through and then you test against the standard to make sure you haven't overlooked anything.

Gaye Francis (10:49):

True. True. Which we covered in our podcast very, very recently.

Richard Robinson (10:54):

Indeed.

Gaye Francis (10:55):

So what we want to talk about today was that there is some confusion out there. There's differing views.

Richard Robinson (11:03):

I suppose it's actually relevant from our point of view, our book "Criminal Manslaughter, How Not To Do It", that's aimed at directors.

Gaye Francis (11:09):

Correct.

Richard Robinson (11:10):

And our latest publication, which was...

Gaye Francis (11:13):

"Risk Management and Negligence, A Guide for Engineers"

Richard Robinson (11:18):

Due Diligence Essentials for Engineers. Because one of the points we make in here, I think it's Section 22, basically points out that designers have a particular duty...

Gaye Francis (11:27):

Under the WHS legislation.

Richard Robinson (11:28):

Correct. And that duty is to eliminate hazards so far as reasonably practicable. And how do you go about demonstrating so far as reasonably practicable that you've achieved those design obligations? Anybody who says you don't have to do due diligence to achieve that, I think is courageous.

Gaye Francis (11:47):

Well, maybe on that note, we would just say, think about what you need to do. And as I said, we've always used due diligence as a defense against negligence in the work that we do. And we would recommend...

Richard Robinson (12:03):

Continuing that way, do not change it. <laughs>

Gaye Francis (12:07):

Thanks for joining us today, Richard, and we will see you next time. Thanks everyone.

Richard Robinson (12:10):

Thanks Gaye.

How organisational silos impact due diligence across safety, projects & compliance

Risk! Engineers Talk Governance
Season 5, Episode 8

In this episode, Richard Robinson and Gaye Francis tackle the growing problem of organisational silos and their impact on due diligence and explore how siloed thinking undermines efforts across various domains—from safety, projects and regulatory compliance.

Drawing from decades of industry experience, Richard traces the evolution of risk engineering. They then discuss the need for integrating expertise across the entire organisation to achieve genuinely diligent solutions that satisfy all stakeholders.

Through real-world examples including waterfront safety designs in New Zealand and the Space Shuttle Challenger disaster, they demonstrate how breaking down silos leads to better outcomes. 

They also emphasise that while the R2A due diligence process isn't "rocket science," it requires structured thinking and inclusive facilitation to bring disparate perspectives together.

This episode refers to their previous discussion about being "relevant, reasoned and concise" (S5 Ep7), offering practical insights on how organisations can overcome the silo mentality to demonstrate due diligence across all operations.

Access the episode’s full transcript below.

Episode transcript

Megan (Producer) (00:00):

Welcome to Risk! Engineers Talk Governance. In this episode, due diligence engineers Richard Robinson and Gaye Francis discuss silos, the due diligence difficulties and how they deal with siloed competing interests.

(00:17):

We hope you enjoy the chat. If you do, please give us a rating and subscribe on your favourite podcast platform. If you'd like more information on R2A's work or have any feedback or topic ideas, please head to the website www.r2a.com.au.

Gaye Francis (00:35):

Hi Richard.

Richard Robinson (00:37):

Hello Gaye. Back again.

Gaye Francis (00:38):

We are back again. Today we're going to talk about silos and the difficulty that we've seen with silos over the last little while.

Richard Robinson (00:49):

And how we deal with silos.

Gaye Francis (00:50):

And how we deal with silos. I think they've been separating out more recently into different categories, and I guess that it's very difficult to come to a due diligence solution or answer when everybody's doing things in silos.

Richard Robinson (01:09):

I think that's correct, and I think that's one of the reasons why on our last podcast (S5 Ep7) we were talking about that we need to be relevant, reasoned and concise. But when you're split into silos, everybody tries to make a justifed course of action from their own silo, you suddenly have all these competing interests and whatever you get when you consolidate it is usually a mess and rather scrappy.

Gaye Francis (01:31):

And I guess we can just say that we've seen this in a whole lot of applications. It's not just in safety, it's in projects, it's in SIL ratings, it's in a whole lot of things.

Richard Robinson (01:40):

Well, again it flows on from some of the other discussions we've had about the way in which the history of these things actually was created. I mean, now I'm actually going past and talking about how long I've been in this business, but the Risk Engineering Society of Engineers Australia originally started as the loss control section of the management branch of the Victorian division of Engineers Australia by a whole bunch of ex Factory Mutual engineers, of which I was one of them. Factory Mutual's based in Melbourne, that's why there was a collection of them in this location. Right.

(02:10):

Actually, it was actually rather close actually, the vote, because I do remember the vote as to whether or not it should be part of Engineers Australia because there's actually an argument to say that it shouldn't be. And as I said, it started as the loss control section, which in a sense was perhaps more allied to the insurance industry than to engineers per se. But then one of my former business partners, Derek Viner, dreamed up the idea of calling the risk engineers following on from Factory Mutual HPR, highly protected risk engineering, as a concept. And that was something that just flashed around the planet in a most extraordinary speed. Everybody became risk engineers all over the planet. It was something that I was completely astonished about. But anyway, that's what sort of happened.

(02:51):

But anyway, time went on and then rather than risk being a generic thing, which is what we were trying to do and from a Common Law viewpoint and from the point of view of what we then just thought was where the WHS legislation was going; this overarching thing dealing with the subject of risk. You might recall, we tried to convince the Risk Engineering Society to change its name to the Due Diligence Society, which hasn't been a success.

Gaye Francis (03:15):

No, we were unsuccessful in that attempt.

Richard Robinson (03:19):

But then the Fire Engineering Society of Engineers Australia appeared and it sort of hired off that part of what we had considered to be an integrated aspect of risk to somewhere else. It certainly confused perhaps some Factory Mutual type HPR engineers because fires and explosions is what Factory Mutual was focused on. I mean, the whole point of BLEVE is Boiling Liquid Expanding Vaporcloud Explosions, that was the term dreamed up by Factory Mutual researchers in the 1950s & 1960s I recall, because that's what I got fed in the 1970s, the late seventies. So yes, I have been around for a long time.

(03:53):

What got us completely stumped and this subdivision into silos of activity that's been preceding at pace because just think of Registration of Engineers and the fire engineers that are in their own little group. And yet as we've sort of been explaining, if you just look at that in isolation, you get completely confused. And Frank Stocks, our New Zealand associate, he's just been doing expert witness matter for some fellow who went over the edge at one of the harbors and drowned. And he'd been giving advice to various councils on this sort of thing. He's an architect actually, but he has a PhD in accepted crime prevention through environmental design. And his point has been, and that's where he's just been given this expert witness stuff and the coroner New Zealand and the provisions of the WSHA in their case apply, that to do and just make a decision on a silo, it doesn't make sense. You've got to have all the parties there.

(04:44):

For example, one of the things that Kiwis (NZ) really do like is their waterfronts and it's part of their social environment, and they don't want to have great fences areas stopping people falling over the edge. And yet obviously there's a danger there, particularly with kids. And Frank was sort of saying, well, what you've got to do is get all the relevant experts together, the people who want to make sure the access is maintained to the waterfront and so forth. So, where there's a bar, you can have a glass wall there with a glass top on it, proper plain glass, so it's not going to shatter and so people can have a drink and look at the water and admire things, and in another place you might do other treatments. And yes, the risk levels might change in one way, but what you need is an integrated solution that satisfies all the competing interests in a way that demonstrates due diligence and you won't be getting a constant level of risk all over the place because that's just not the nature of the thing. But you will have demonstrated due diligence all over the place, which is what the purpose is.

Gaye Francis (05:35):

But you won't get that solution if you keep thinking about it in silos.

Richard Robinson (05:39):

No. And using target levels of risk and safety, for example, you will be completely confused.

Gaye Francis (05:44):

So the key is to get the due diligence argument, you really need to bring those silos together. And we've seen it a lot in projects as well. Often somebody's got an idea and management do it, but they haven't talked to necessarily the operations or the maintenance staff of how it's going to be done. And so things are promised and done in isolation without considering all of the key parties and then trying to bring it back together is quite difficult.

Richard Robinson (06:12):

Well, and that's actually what we wind up doing. If you sort say what's a due engineer do? Well, in a way, you're making sure that the silos get back together again. So the decision that's made and the way it's presented is diligent for the whole organisation and all the players, including anybody who's actually exposed to the risk itself. I mean, one of the reasons why we're not RPEQ or RPV, the registrant being a registered engineer in Queensland or Victoria, is because what we do does not require it. We've talked about this a number of cases like RPEQ. And it's like the example we gave of the one our previous recently was about the fire engineers and things like that. We're setting up the argument of the WHS legislation as to why something needs to be done. And then that design is implemented and signed off by the relevant design engineer.

Gaye Francis (07:00):

With the support of all of the key stakeholders and all of the different silos.

Richard Robinson (07:04):

Which means the fire engineers are grateful for the answer, but there's no point in us being registered because what are we, there's no such registration for due diligence engineers.

Gaye Francis (07:14):

No, no. Well, we always said that a large part of our job is that facilitation process and communication process and bringing due process to things so that those arguments can be had in a constructive manner.

Richard Robinson (07:30):

And the way we do it, I mean, I guess it sort of puzzles me. It's not as though we do anything, which is astounding in the sense of the process. You go and talk to all the other parties, pick the core ideas, put it together in sort of some simplified form, and then run a workshop and test it with everybody. This is not rocket science.

Gaye Francis (07:49):

It's not rocket science, but you have to have a considered way of thinking about things and a structured process to go through.

Richard Robinson (07:57):

I tell a lie there. actually. The reason why one of the space shuttle blew up was because the O-rings got wrong. And if they'd actually done what we'd said... The problem was they had two O-rings, but they'd never launched when it was cold, and they didn't really know how the O-rings would perform. And the only reason why they had to have the O-rings is because they had to spread the manufacturing out across America, and if they'd manufactured it close to where the rockets were, they would've manufactured a single integrated without the need to join the bits together and have the O-rings. So not only did they fail to eliminate the hazard, they also then said, we've never had an O-ring fail. We've got two, so we've got backup. But the engineers were saying, you've never launched when it was this cold (and) we don't know what the performance of the O-rings will be in that condition. So yes, due diligence would've addressed it, and to very great extent the Americans set themselves up for the fall by the silos that they'd been creating.

Gaye Francis (08:53):

I also think you just set up potentially another podcast about quality assurance and the ability to test challenge and question.

Richard Robinson (09:02):

Yeah, probably.

Gaye Francis (09:05):

Just going back to that silo thing, we have seen a lot of organisations break out into silos and try and solve the issue of concern within those silos.

Richard Robinson (09:17):

But the reason why it drives this crackers, it's a bit like the safety function, break it out and putting a safety specialist over there and not recognise that risk management's a line management function, it just sets you up for a fall.

Gaye Francis (09:27):

Yeah, well, it should almost be all business as usual stuff, isn't it integrated into the whole of business. But what we say is that the due diligence process and demonstrating SFAIRP does get you over that silo and people having their own views on things in their own silos - it (all) has to be integrated.

Richard Robinson (09:47):

Yep.

Gaye Francis (09:49):

So we hope you found that interesting. Thank you for joining us today, Richard, and we will see you next time.

Richard Robinson (09:54):

Thanks, Gaye.

Being Relevant, Reasoned & Concise for your Due Diligence Argument

Risk! Engineers Talk Governance
Season 5, Episode 7

In this episode, Richard Robinson and Gaye Francis discuss why effective due diligence arguments need to be relevant, reasoned, and concise. 

They share their frustrations with overly complex safety documentation that fails to deliver clear, defensible arguments, and explain why safety cases should be brief yet comprehensive enough to stand up to legal scrutiny. 

Drawing from their extensive experience as expert witnesses and consultants, they offer practical advice on creating effective safety documentation that not only satisfies the courts and makes sense to lawyers and Boards, but actually improves safety outcomes at optimal cost.

The episode starts with them explaining (following a question from their producer) how safety approaches shifted from target-based risk assessments to the SFAIRP (So Far As Is Reasonably Practicable) principles with the OHS Act in Victoria, and why it was necessary.

Access the episode’s full transcript below.

Episode transcript

Megan (Producer) (00:00):

Welcome to Risk! Engineers Talk Governance. In this episode, due diligence engineers Richard Robinson and Gaye Francis discuss why your due diligence argument needs to be relevant, reasoned and concise.

(00:16):

We hope you enjoy the chat. If you do, please give us a rating and subscribe on your favourite podcast platform. And if you'd like more information on R2A's work or have any feedback or topic ideas, please head to the website www.r2a.com.au.

Gaye Francis (00:35):

Hi Richard, welcome to another podcast session.

Richard Robinson (00:37):

Hi Gaye.

Gaye Francis (00:39):

We were just talking around topics of what we're going to talk about for this particular podcast and how we come up with the topics that we're going to do. And we're talking to our producer Megan, and she actually asked us, well what was there before the WHS legislation and the OHS legislation before SFAIRP came in. And we were having a conversation that R2A has always based their business on the SFAIRP principles in line with the Common Law. But before the SFAIRP provisions came in with the WHS legislation, there was a requirement to do risk assessment.

Richard Robinson (01:15):

Yeah, that's right. Using target levels of risk and safety. That's actually the way the legislation of most jurisdictions actually called it up. And that's why it got confusing because Victoria went SFAIRP in 2004. And you might recall we used to quantify risk assessment in a major hazard facilities and whilst the legislation basically required it to be done, that wasn't a problem.

Gaye Francis (01:34):

No, you had to do it.

Richard Robinson (01:35):

You had to do it if you wanted license to trade. But then the common law actually demanded that you use the SFAIRP approach. And there was the elevation of SFAIRP from the common law into statute law that made the change. And you'll recall one of the reasons why we became due diligence engineers quite specifically was because we sort of had to say to the major hazard regulator in Victoria, the WHS or the OHS Act in Victoria has commenced, we cannot keep doing target levels of risk and safety. We actually cannot do it. It's why we changed our name to due diligence engineers because that was the only choice you had. And what was interesting about that was remember the Victorian legislation of itself does not call up due diligence. It just demands that all reasonable practical controls are in place.

Gaye Francis (02:18):

So the two principles have been existing in or coexisting in society. Sometimes you need to do something, the target level of risk approach to get your license to trade, but it's never met your common law requirement duties.

Richard Robinson (02:32):

Correct

Gaye Francis (02:34):

And so now by changing to the WHS legislation that has changed that principle. And I think one of the key ones was in Victoria, why it did go to the SFAIRP approach was people were saying, well, we've done a risk assessment and it says that the risk is low so we don't have to put those controls in place.

Richard Robinson (02:51):

Correct.

Gaye Francis (02:52):

And something awful would happen. And the first question was asked was, well, why wasn't that control in place, which is just recommended good practise. And the comments that were coming back was, oh, we did a risk assessment and it was low so we didn't do anything.

Richard Robinson (03:05):

Well, that's quite literally. I mean in a practice, this came from machine guard because somebody's lost their arm on a press and the workplace inspector turned up and took one look at the press and said this is X, Y, Z press and recognise good practice would have this form of machine guarding (so) why isn't it there? And the answer came back, under the legislation we're required to do a risk assessment. We did the risk assessment, the risk was so low we didn't need to put the guard on it. Now the way that often happened was rather simple fact that they didn't use the machine very often, so the exposure was low, but if somebody was actually using, and if they got it wrong, they just lost their arm.

Gaye Francis (03:39):

And I think that's why we favoured the due diligence approach very, very early on because the questions that we were being asked about were high consequence, low likelihood events.

Richard Robinson (03:50):

After the event. And that's what the coroner and the regulators kept asking Why wasn't recognised good practice on this press? Why wasn't it done this way? And the answer was, well, risk assessments don't work.

Gaye Francis (04:04):

So that's sort of a bit of an introduction of why it's changed.

(04:07):

But the topic of this podcast, we want to call it Relevant, Reasoned and Concise. It comes from two aspects. It comes from an expert witness aspect, which Richard's going to talk about in a minute. But it also comes from we are seeing so much work being done around the hazard and risk space to develop a safety case or an argument for a project as to why they think everything's in place and the sheer volume of work that is being done, it doesn't appear productive and it still doesn't give them a reasoned, concise or defensible case a lot of the time.

Richard Robinson (04:48):

Correct. And that's what you need. That's what I don't get. See, there seems to be some belief somehow I've never understood this, that the courts and the parliament legislation stands aside from what engineers do. And I'm sorry guys, that's just not the way it is. You must do everything within the context of the courts, the parliaments and the legislation because that's what our system is. If you don't do it that way, you're just aggregating the entire point of an open free democratic society. And I don't think engineers believe it. I think they're all in favour of it, but they just don't seem to think about it very often.

Gaye Francis (05:22):

So the value that people are getting out of doing all of this work, it just doesn't appear to be there for the amount of work that's being done as well as the cost associated with developing something. It's stupendous.

Richard Robinson (05:36):

It's utterly stupendous and we just watch people spinning the wheels for no useful outcome. It just drives us completely crackers. And you sort of recall, we're doing some work for government now fairly urgently where perhaps we won't talk about what that is, but what seems to be a surprise to the people we work with, the speed with which we come to the heart of the matter and provide recommendations to fix it seems to take people aback.

Gaye Francis (06:02):

Yes. It's been commented on.

Richard Robinson (06:05):

By different parties.

Gaye Francis (06:07):

Correct.

Richard Robinson (06:08):

It's been rather odd.

Gaye Francis (06:10):

But by doing the due diligence approach, you're really putting a line in the sand and you're saying, okay, these are the issues that we have to deal with, safety issues that we have to deal with. These are our options, control options and precautions that are on the table. What are reasonable in the circumstances? It doesn't get much harder than that.

Richard Robinson (06:28):

Well, I think this is where it flows onto the expert witness stuff. You see, it's always been crystal clear to me. And when you're doing an expert witness case, the lawyers tend to brief you and say, read this case, this might be relevant. Read this case. It might be relevant. And one of the lines they always give you is what does an expert witness need to do to get it right. Okay. And there's been a number of judgements by different cases, McKeeter versus Sproule is one that we often use. And there's a more recent one which I've just been made aware of, which Judge Kifford in Gold Coast Council versus motorsport facility, I think it was. In that last one, there were a couple of engineers who were experts and the judge was sort of saying, I have no doubt you guys are qualified and know what you're talking about, but you didn't give me an argument I could work with. And this is part of the point about all this sort of stuff. Any argument that you put forward has to be relevant, reasoned, and concise. I think the proper term for that is cogent for those who care about the language.

(07:34):

And if it's not reasoned, clean and precise and it's muddy and scruffy and the court is spending extra time trying to understand what's being said, you're not helping the court, you're not helping your client, you're not helping anybody. And the idea that being muddy in court is going to be a successful approach to getting a useful outcome for either your client or the court or society generally. It just doesn't make any sense at all. And the whole point of a safety case is it needs to be relevant, reasoned and concise.

Gaye Francis (08:06):

And presented in a transparent (way).

Richard Robinson (08:08):

And one of the reasons we always say, if you're putting a safety case together, it's not a bad idea to have a lawyer review it because if it doesn't make sense to the lawyer, it's probably not going to make sense to the courts and probably not much sense to your board either for that matter. And guess what your board would like? A safety case that would survive post-event legal scrutiny. If nothing else, to prevent liability to said board members. And we simply don't get why the engineers aren't willing to actually consider what the lawyers require as a necessary argument. It's something we just sort of, it's...

Gaye Francis (08:40):

A little bit frustrating.

Richard Robinson (08:42):

Well, they just use a standard and say, it complies with the standard, we're good. And you're going.... No.

Gaye Francis (08:46):

And I think coming back to that, if you have that at the heart of the matter that your documents that you have to produce have to be relevant, reasoned and concise, you come up with a pretty pifthy document. It's not a big document in the end.

Richard Robinson (09:04):

Ten pages is a long report for us.

Gaye Francis (09:06):

It is a long report. <laughs> But the content is very good though, Richard.

Richard Robinson (09:12):

Concise, even.

Gaye Francis (09:13):

And I think that's the difference, isn't it? I've been reviewing some safety cases for a number of organisations and you get hundreds of pages and you had to refer to different documents within this, and I got lost really, really quickly.

Richard Robinson (09:31):

And you know the business! Can you imagine if you give it, this is all technical stuff and you can imagine going to court and trying to get the barristers and the lawyers up to speed on all this technical, I mean the laws of nature. I said just talking what's a kilogram? What's a mole? The court doesn't know what you're talking about. Then you start talking about KPA and they're sort of what does that mean?

Gaye Francis (09:58):

So for us, a really good safety case is in the tens of pages compared to it's nowhere near a hundred pages. So I think that's probably our biggest tip at the moment. Make sure all the safety stuff that you're doing is relevant, reasoned and concise. And if you can do that, you'll cut through a lot of the wheel spinning that seems to be happening.

Richard Robinson (10:22):

And your senior decision makers can sign off it, your lawyer will understand, and if it's necessary, and we hope it never is, but the courts will get it too.

Gaye Francis (10:31):

But I also think more importantly, and the reason for doing all of this stuff is you can make your place safer. You can address all of the safety concerns that are in there. And if you've got a quality assurance system on top of that safety case to say how you're going to make sure that those controls remain robust, then you do get a jump in safety improvement.

Richard Robinson (10:53):

Correct. And you will do it in an innovative way that's cost effective and all this sort of upside, downside risk stuff they talk about, you'll effectively be doing that because you'll be doing it at best cost.

Gaye Francis (11:04):

Yes. So it's the optimum, isn't it? So we hope you found that one interesting today. That's one of our difficulties that we have in sometimes reviewing some of our work.

Richard Robinson (11:16):

Yes, that may be true, but it's also true that the people who are coming to us now, like regulators and well all sorts of regulators saying, yes, we agree, we're really trying to get the engineers up to speed and they seem to be resisting us in some places.

Gaye Francis (11:30):

Correct. So thank you for joining me today, Richard, and we'll see you next time.

Richard Robinson (11:35):

Thanks, Gaye.

Target Levels of Risk & Safety: SFAIRP vs ALARP Revisited

Risk! Engineers Talk Governance
Season 5, Episode 6

In this episode, Richard Robinson and Gaye Francis revisit the distinction between SFAIRP (So Far As Is Reasonably Practicable) and Target Levels of Risk and Safety.  

They explain how target levels of risk continue to be problematic in engineering despite being legally unsupportable under WHS/OHS legislation and share examples of regulators and engineers still using outdated approaches and discuss why this confusion persists, pointing to issues with Standards and educational institutions that continue teaching these methods.

They clarify that SFAIRP asks "Are all reasonable practical precautions in place?" while target based approaches rely solely on calculated risk levels. Through real-world examples including expert witness cases and engineering consultations, they demonstrate how the SFAIRP approach leads to better safety outcomes and alignment between stakeholders and warn engineers and organisations still using target levels of risk for safety issues. 

This conversation follows their original discussion in Season 1 Episode 1: SFAIRP vs ALARP.

While the table they refer to is available in their Criminal Manslaughter – How Not To Do It booklet.

Richard and Gaye also run public and in-house workshops on the topic.

Access the episode’s full transcript below.

Episode transcript

Megan (Producer) (00:00):

Welcome to Risk! Engineers Talk Governance. In this episode, due diligence engineers Richard Robinson and Gaye Francis revisit the topic of target levels of risk and safety.

(00:13):

We hope you enjoy the chat. If you do, please give us a rating and subscribe on your favourite podcast platform. If you'd like more information on R2A's work or have any feedback or topic ideas, please head to the website www.r2a.com.au.

Gaye Francis (00:33):

Hi Richard, welcome to our podcast session today.

Richard Robinson (00:37):

Good day Gaye. I'm glad I'm over. I can tell you that

Gaye Francis (00:39):

I'm glad you're over Covid. You're thinking a bit better now. So that's always a good thing.

(00:44):

Today we're actually going to revisit one of our topics that we've talked about in the first season (Season 1 Ep 1) I think it was, and it was around SFAIRP and ALARP. So this one's titled Target Levels of Risk Revisited. And I guess the reason for revisiting it, it's that it's had over 200 listens on the podcast for the previous one, but we are finding more and more that target levels of risk and safety are still causing problems and still being called up and still being used and even more so I think now than they have in the last five years.

Richard Robinson (01:23):

But the consequences of this is that all these other parties are turning up to talk to us, to actually ask us to do more to overcome it. And by that I mean for example, we just had a regulator from New South Wales where a lot of the stuff seems to be based sort of wanting us to actually come and give a paper or presentation to their regulator, their conference, about why you ought not to be using the hazard and risk-based approach within SIL allocation processes, which is something we've talked about at a great length. And then we had also another visitor from another state regulator and they want us to act as the peer reviewer for the registration of fire engineers. And in particular they want us to make sure that everybody understands as a fire engineer that it's all being driven by the provisions of the WHS/OHS legislation, which a law fire engineers still don't seem to grasp and still want to keep using target levels of risk and safety. And then more than that, we then had an engineer from Western Australia pop up and I'm really literally talking about the last three weeks I suppose.

Gaye Francis (02:24):

Correct.

Richard Robinson (02:26):

Basicly explaining how EG-0 which uses target levels of risk and safety, it's completely unsupportable and which, so far as his concern had been overturned in the state in which he lives, has suddenly made a reappearance. And we're sort of saying this is peculiar because the serious players saying don't do it. And yet for reasons that we don't understand, it keeps coming back.

Gaye Francis (02:49):

I think it goes down to, and another topic that we'll probably talk about in this season, is that silo work and people doing things in silos and not understanding the overall context and the high level context as you said, that the WHS and OHS legislation really runs anything to do with safety.

Richard Robinson (03:08):

Correct. And it drives it. I mean we don't get it because I mean we live in a democratic society run with the rule of law and our parliaments actually do decide, and there was this contest of ideas, and they did adopt the WHS legislation with criminal manslaughter provision I might point out, as well as the peculiar duties on designers and the Section 22. And it basically hammers it forever. We just don't simply understand why engineers in particular don't seem to grasp this point.

Gaye Francis (03:37):

It's probably worth just giving a brief overview of what we mean by SFAIRP and target levels of risk and safety and the difference between the two.

Richard Robinson (03:46):

Well, we've been observing that ALARP is mutating into SFAIRP that the bit that's not mutating properly is the target levels of risk and safety. And this notion that risk assessments of themselves will provide you with an answer and describe why you don't have to do any more and that's just patently incorrect.

Gaye Francis (04:03):

So for us, the basis or the difference between the two are the SFAIRP principle says: Are all reasonable practical precautions in place? And the target level of risk and safety says that a calculation has been done based on consequence and likelihood and then that's as low as it can be. So that's sort of the two ideas that we think that there is a difference. And as you said, the principles around ALARP have been mutating into different things and they're sort of now asking the question, well even if the risk target is this much, can we do anything more?

Richard Robinson (04:43):

Yes.

Gaye Francis (04:47):

But really we're talking about SFAIRP and target levels of risk and safety.

Richard Robinson (04:52):

And I think we've basically decided we're going to stop talking about ALARP per se and just don't keep talking about target is risk and safety, because that's the path that fails. And that's the path that the risk management standard keeps encouraging. And I guess that's why we think people keep adopting it. I actually think an awful lot of this has got to do with Standards Australia, which we've already sort of talked about, and the fact that for reasons that we don't understand, Standards Australia haven't been picking up their game. It's got a lot to do with the fact, and again, one of these engineers asked about EG-0 that's endorsed by ENA, the Energy Networks Australia organisation, no liability seems to be being assigned back to the authority that's endorsing these things.

Gaye Francis (05:33):

Okay.

Richard Robinson (05:34):

Now I dunno legally whether that's actually the case because it was the question I was being asked and I'm not law enough to answer that one. But it does seem to me that if the reason why that people are still using target levels of risk and safety is because either Standards Australia either inadvertently or deliberately let it happen or in the case of Energy Networks Australia, they deliberately let EG-0 continue in the way that it's been going. We simply don't get it. I mean I can distinctly remember this is sort of one of these weird things that I was giving briefing to one of the boards, I better not say which one, but one of the distribution boards about the limitation of target levels of risk and safety and why he couldn't use EG-0, and when I stepped out the back, the fellow who drafted EG-0 was actually running a course on the subject. What I was doing was briefing the board with the support of the legal counsel for that organisation and yet the engineers were being taught at the back to go and use target levels of risk and safety at the same time. Now you sort of look at that and say, how is that possible?

Gaye Francis (06:32):

And you wonder why engineers are confused.

Richard Robinson (06:34):

Correct. Because they're being taught it.

Gaye Francis (06:36):

Yep.

Richard Robinson (06:37):

I remember I told you I was one of the defense engineers, I was busily explaining the difference between the two, and this bright young female engineer was looking at me said: I only finished university last year and they were teaching the risk management standard and target levels of risk and safety. I sort of went, yeah, it's a bit hard when the whole system or part of the system continues to teach it like it's a science when it simply doesn't pass the test.

Gaye Francis (07:01):

I think when the WHS legislation came in, we were in a conference or in a meeting and regulators give advice and so unless it's called up by legislation they can't be held accountable. Was that the way it was with standards as well? Because you said because the liability is not going back to the people that are putting out the standards, I guess their guidances, aren't they? And then you've got to really sit back and have a look at it and see whether it's relevant and applicable to what you're doing.

Richard Robinson (07:33):

But that was part of the point about the... Remember that quote from that lawyer from Minter Ellison about regarding AS 7000 and he's pointing out, now unless the standard's called up by statute of regulation, which they're pretty much not anymore, it only amounts to expert advice, but an engineer still has to exercise his or her skill and expertise irrespective of what the standard says. And what that was all about. I mean, I sort of explained this before with standards have two purposes: Preventing fools from their follie and rogues from their roguery because what you're supposed to do is figure out how it ought to be and then you go, and that's a design issue that's got nothing to do with target levels of risk and safety. You're saying right in the circumstance for this particular problem, what's the best solution?

(08:16):

You might recall again for the electrical company I was talking about, we were doing that review on the sub-station, which was next to the train lines and we were trying to figure out, because when you get earth return current, you've got obviously rail tracks going next to it you've got the ability to transfer high voltages and currents over a long distance when you've got steel rail tracks nearby is actually quite relatively easy even though it's an unlikely thing. And in the end, after we went through the process and this was following the provisions of the WHS Act, well in that case, the same SFAIRP principle as it was contained in their revised Electrical Safety Act, they basically sold the site and moved far enough away that the earth return currents couldn't affect, or the railways couldn't be part...

Gaye Francis (08:56):

So they couldn't put enough controls in place or precautions in place to allow it or determine it to be SFAIRP.

Richard Robinson (09:03):

Well you had to eliminate if you could. And the short answer was we could sell the site and buy the another one down the road and it was the cheapest way to fix it.

Gaye Francis (09:09):

So that comes back to my line, doesn't it? The difference between the two is target levels of risk and safety asks: Is this bad enough that we need to do something about it? Whereas SFAIRP is saying, here's a good idea, why wouldn't we do it?

Richard Robinson (09:21):

Correct. And the target of risk and safety is basically pathological in James Reason's terms, "here's a good idea", that is the objective of the legislation. The highest level of control as is reasonably practicable.

Gaye Francis (09:35):

And I think though, the key reason we keep pushing the SFAIRP principles is that we do give expert witnesses. Richard's doing an expert witness case at the moment and the opponent's argument is around target levels of risk and safety that it's really so low that we don't have to worry about it and where there's good ideas that can be put in place and so the court is going to test it.

Richard Robinson (10:04):

Well, it's going to be absolutely fascinating because one of the other things. You know we've got that little table (Criminal Manslaughter Booklet p24) and we when we run the course, we sort (show) the advantages and disadvantages between the two approaches and the solution-based approach, which is looking at here's a good idea, everybody comes together to look for it. Whereas when you do the hazard and the risk stuff, it devolves into detail. Everybody gets lost. And I can tell you the lawyers and the barristers are very lost in a whole lot of technical. Part of the problem is when you're going from what's the molecular weight of something and most times that's expressed in grams per mole, but a lot of people want to express it in kilograms per kilo mole. Well at this point, I'm not sure the court's basically with us in the discussion!

Gaye Francis (10:51):

And the numbers have been changing as well depending on what the circumstances that you're going to base your calculation on. So for us, we've always said that the WHS legislation/OHS legislation requires SFAIRP. ALARP as a term is still being used, but it has mutated into something that it wasn't. But R2A are really against and you can't use target levels of risk and safety to deal with safety issues.

Richard Robinson (11:22):

Correct. And I suppose just sort of a final point, I mean you may recall last year we did that review in that tall building and we had two sets of lawyers, one for the underwriter, one for the body corporate, and there were two sets of fire engineers and a lot of damage that occurred and what the underwriter's willing to pay for and what the body corporate thought should be the case, they were heading towards a court case.

(11:49):

And the last chance I think was when they got the couple of due diligence engineers and we ran a workshop and we explained the provisions of the WHS legislation and the lawyers looked at each other and said, yes, that's right. And then the fire engineers whom they've advised us afterwards, were getting ready to walk because they weren't going to sign off on the solutions that were being suggested, I think by the other party there were two sets. Once the WHS legislature was evoked, everybody aligned and the fire engineers said, thank goodness for that, we can sign off on the solution that's resulting.

Gaye Francis (12:25):

It was working towards a solution that everybody agreed to, wasn't it?

Richard Robinson (12:29):

And that's just hammering the point. There's no such thing legally, so far as we know as a risk assessment, it's a risk design assessment and that's where people seem to get it wrong. And I do not understand why that part, you would've thought the engineers would've thought design. That's us.

Gaye Francis (12:45):

It's a lot easier to do as well.

Richard Robinson (12:48):

The other options are just appalling. And I've just watched as this case, it was meant to be finished a few weeks ago and it got deferred. So more risk assessment work could be done. And I don't think it's going to help the court at all, but I'll find out soon.

Gaye Francis (13:02):

You will find out in a week's time.

(13:05):

So we just wanted to revisit that subject today, target levels of risk and safety and the SFAIRP principle, try and explain the difference between the two, and hopefully just give you a bit of a heads up that if some of your standards are still using target levels of risk and safety, be really careful, especially around safety issues.

(13:24):

So thanks for joining us today, Richard, and we'll see you next time.

Richard Robinson (13:28):

Indeed.

Why Standards are not the Solution

Risk! Engineers Talk Governance Podcast
Season 5, Episode 5

In this episode, Richard Robinson and Gaye Francis discuss why Standards are not diligent solutions for your governance obligations.  

They explore why following Standards can be problematic, outlining key issues: 

1. Using Standards out of context;

2. There’s no explanation for rationales;

3. They don’t cover all things; and

4. They are often lagging indicators.

They share a number of examples within SIL, AS1940 and AS61508 that demonstrate the issues if you do blindly follow the Standard. 

The episode concludes with their answer to an often asked question: If you don't design to Standards, how do Engineers design? 

The text they mention is Engineering Due Diligence (Concepts, Applications, Tools & Techniques) that can be purchased online.

Access the episode’s full transcript below.

Episode transcript

Megan (Producer) (00:01):

Welcome to Risk! Engineers Talk Governance. In this episode, due diligence engineers Richard Robinson and Gaye Francis discuss that Standards are not the solution.

(00:13):

We hope you enjoy their chat. If you do, please give us a rating and subscribe on your favourite podcast platform. If you'd like more information on R2A's work or have any feedback or topic ideas, please head to the website www.r2a.com.au.

(00:32):

And we do apologise for any background noise. We've done our best to remove it in the editing process. Thank you.

Gaye Francis (00:41):

Hi Richard. Welcome to another podcast session.

Richard Robinson (00:44):

Hello Gaye. It's good to be here.

Gaye Francis (00:46):

Just before we start, we've just noticed a bit of construction noise outside, so we apologise for that if it comes through in the background. We just had an observation last week that there was some noise coming through some of our podcasts. We are in an office space that's shared and sometimes we get some background noise from the corridor and outside. So apologies in advance for this particular session.

Richard Robinson (01:11):

For those of you who care about these things, we actually do try to minimise this because we're using a Rode podcaster too. And these are PodMics which are dynamic mics, which are obviously close field proximity devices to deliberately use to avoid background noise. But nevertheless, if there's enough noise out there, it will come through.

Gaye Francis (01:28):

So that was just a little bit of introduction, but today's session we're going to talk about Standards are not the solution. Now, we've talked about this probably a number of times in different podcasts throughout our seasons in different ways, but we're trying to bring some of this together because we're still finding that it's a big problem in industry. And some of the issues that we're asked to solve is because people rely purely on Standards.

Richard Robinson (01:55):

And we don't get it because I mean there's two fundamental problems here, well maybe three depending on how you look at it. But the first one is that people use Standards out of context, and that one I think is the one that mystifies us the most. And we'll give some examples of that. But I might just articulate those three. The first one's out of context. The second one is the Standard doesn't explain why that decision was made in the Standard. I mean, I keep coming across Standards to say the separation distance should be this. Well, was that based on tests or some conceptual design?

Gaye Francis (02:28):

Or a random number?

Richard Robinson (02:30):

Or random number? I mean, one of the ones I think I might've told you, I was coming back from a fire conference with Ted Ramsey from CSIRO, I forget why, but we're in the car together driving back and we were talking about standards and standard tests and things like that. And he was explaining this as one of the more delightful ones where the Americans devised this test for smoke development and basically they had this little chimney stack, which if you happen to measure with various Heinz cans on top of each other and you've got a small sample that you put on the bottom of this chimney stack, and then you put a sort of defined heat source underneath it, and you saw where this created certain amount of smoke coming out of the stack. She said there was one particular substance that burst in such violent flame that it belched out the front and didn't go out the stack at all. So we got a zero smoke rating even though it was clearly highly combustible, which is just absurd!

Gaye Francis (03:16):

It exploded, but no smoke! It's all right. It was just was an explosion, no smoke.

Richard Robinson (03:21):

Just another point. I've had my first experience with Covid in the last couple of weeks, so I've got a cup of hot water here, and if I suddenly start coughing or being a bit croaky, that's the reason why.

(03:33):

Yeah, so, I had three reasons and I forgotten what the third one is! <laughing> Oh, I know what it was. It was the fact that Standards don't cover all things anyway because we've had this experience a number of times. But going back to the first one.

Gaye Francis (03:48):

I'm going to add one more in there. I also think that they're lag indicators and there often five to 10 years behind what industry is actually doing, potentially.

Richard Robinson (03:59):

Well, it's like AS1940, they'd only updated it in 2017 based on Bunsfield. It took them, I don't know, 10 years. I think Bunsfield was 2005. And in 2017 is a fair amount of time to actually get your act together!

Gaye Francis (04:13):

And you would be hoping that some of the lessons learned from Bunsfield and the controls that you could put in place to prevent a Bunsfield would've been happening within that time before the Standard was updated.

Richard Robinson (04:23):

Yes. Well, there's the other point though. AS1940 is the standard, I used to spend an awful lot of time with working on. We used to use finite element models to try and work out the fire exposure and work out how much cooling or what had to be sprayed on tanks and tank farms and things like that. But one of the other options that the Standard suggests if you want to protect something is just put it behind in a chamber, sort of reinforced concrete walls so that any exposure fire would be prevented from exit causing troubles. But I've got to say the whole point of AS1940 as far as I've ever been able to tell is that it was located in an industrial area in tank farms so that if one of these things did happen, it was well away from any residences. To go and apply AS1940 adjacent to residential areas is not something that, as far as I know, AS1940 ever contemplated, but it doesn't say that anywhere. I guess that's one of the frustrations we have with standards. The context of the standard isn't actually properly articulated. And if you dunno the context, you dunno whether the Standard's relevant or not.

Gaye Francis (05:24):

And which they apply, isn't it? The situations in which they apply. Just makes it impossible. And I think the engineering environment that we are living in at the moment, those situations are changing.

Richard Robinson (05:40):

So fast!

Gaye Francis (05:41):

There's not a single environment that you apply all of these standards. There's all these nuances between the engineering solutions and the engineering challenges that we're seeing. And that environment and context seems to be changing.

Richard Robinson (05:55):

Well, one of the ones we were talking about, for various reasons we've got sort of sucked into high pressure gas mains. And one of the reasons why this topic has come back to the fore is because people keep building high-rise apartments next to roads that have high pressure gas mains in them. And obviously you can have a fireball. It's rare because somebody most likely a guy with a backhoe digger has to dig a hole and then punch into the high pressure pipe. Now it comes at supersonic speed, so it'll shriek. It's almost certainly going to find an emission source, so it's going to be really probably quite sad for the backhoe driver who digs the hole. But it also means you've going to go a very high, it's possible, it's not ever going to be likely because these things are well controlled and so forth.

Gaye Francis (06:37):

Credible, we use the word credible. It's credible that this could happen.

Richard Robinson (06:40):

Correct. And it does happen. I mean they did it in Sydney City a while back. They punched a hole. And you might recall we had a problem with when they were building the casino here, they managed to punch the offtake from the Sydney, at least the Dandenong to Melbourne high pressure gas main, which created some excitement. But one of the things, there's no Standard to it. It's the question is, well, when you're designing a residential building and you realise there can be a fireball out the front, what do you design the balcony and the windows to be? Because clearly if it's all glass and you happen to be on the balcony when this thing happens because you're curious about who's digging a hole in the road or something you are going to be in serious trouble. The heat is so great, so fast that it can kill you. I don't know if you remember those studies you did in on behalf of the, what was the Office of Gas Safety in Collins Street a long time ago ago where we used finite element models and working out the fatality rate for an ordinary commercial load building with glass windows.

(07:42):

Anyway, so one of the things we said was, well, you obviously don't want a combustible balcony, you don't want a transparent balcony. You've got to have a balcony that would actually act as a shadow so that if a firewall errupts, you can just drop to the ground, which is your natural tendency and have some shielding. And moreover, you don't want a fully glass window facing out there. You want to have a certain percentage that's blank wall so that you can crawl to the side and get to a safe location. And we have no knowledge and we've never seen any Standard which tells us what that ought to be. And our design solution was let's go with 50% glass and 50% non-combustible construction.

Gaye Francis (08:19):

So basically it gave somebody a chance in the rare event that there was this fire ball.

Richard Robinson (08:26):

But that leads on to the third point, which drives me crackers. We said that we don't know what the ratio should be. It's just an inspired guess on our part. So anybody can have an argument about that if they so wish. But when you look at a lot of these Standards, they don't tell you where these design criteria come from. They don't tell you why the separation distance should be 15 meters between tanks. Why is that? I've never seen it described anywhere. It's one of my frustrations with the SIL Standard in particular. Safety Integrity Levels. They have these numbers going from minus one, minus two, minus three, minus four for low demand and then it goes to minus five, minus six, minus seven, minus eight for high demand or continuous control. Where did these numbers come from? Is there a scientific breakpoint as to why this should be the case? And so far as I know, and we've been to lots of SIL conferences and talk about these things, no there's not. Some expert group just decided let's go with order of magnitude changes here.

Gaye Francis (09:20):

They all also seem to have been in place for a very long period of time. So you wonder what the context was going back to that first point in which they were thought up in the first place and have circumstances changed enough that they're still relevant at all?

Richard Robinson (09:34):

Well, remember we had that really peculiar thing we were doing with the transmission lines of Tasmania. We were trying to work out how transmission line heights were determined. Apparently it was all decided in New South Wales. And when we asked New South Wales to sort of explain themselves, well nobody could and we couldn't work out whether that's because they didn't know or because those who decided weren't with us anymore, which I suspect is probably the latter. But we don't know. And in the end, the only way we could work it out so far as we can tell it all comes back to Roman Horseman because every time we actually went and had a look at the design criteria, bridge heights so far as we can tell, have always been established by people gathering along on a horse and not bashing their head as they go under the bridge. And Roman Horsemen worked that stuff out a long time ago. And so that's just an historical height that was sitting there. And so if you look at a conductor that's going over a roadway and then you add the flashover distance that you'd get if a high voltage lightning strike hits it, which is 500 kilovolts and you add that flashover distance to that bridge height, you actually get the height that's in the Standard! <laughter> Now, whether that's the case, we don't know, and if anybody cares to look it up, you'll find it all described in our (Engineering Due Diligence) text, one of those more interesting things that popped up. But if you ask an electrical engineer about or transmission engineer, why are conductors at this height? The answer seems to be, well we''ve always done it that way.

Gaye Francis (10:58):

And the Standard says so.

Richard Robinson (10:59):

<laughs> Now obviously, I mean AS61508 makes the remark that if you've been doing it for long enough and it seems to work, that's actually a reason to keep a Standard. But it's worthwhile explaining and I think all standards should do it. Why they believe whatever it is they think is necessary and a good thing why it should be that way. I get very annoyed with fire standards and separation added between buildings and things like that because you sort of see it as one meter or three metres or five metres. Is that because somebody has thought it's a nice round number, it used to be three feet, so when you updated it, why wouldn't you make it a metre?

(11:39):

But is that a design reason? Does that explain what the load is? I mean, I think I've sort of explained to you that if you're building a firewall in Australia, they tend to just accept a four hour standard firewall, which is designed to resist a four hour standard fire. Now there is no such thing as a four hour standard fire! And if for example, you have a roll paper on end, you can't put it out, you have to assume burnout, which means the firewall has to be a massive independent, freestanding structure.

Gaye Francis (12:10):

It's going to burn for more than four hours.

Richard Robinson (12:12):

It's going to burn for more than four hours. So this idea that you have Standards that make sense and people haven't been testing the standards, and it's one of the frustrations we have because Engineers Australia keeps encouraging engineers to put their intellectual property into Standards. And I think I've talked about this one before, but none of the American Engineering Societies are dumb enough to do this. If you create the Society of Fire Protection Engineers handbook, it's your intellectual property and you sell it and you hang onto it, and they do give reasons for it. Remember we did that a long time ago we did that US fires that it's when you really found out you were allergic to chemicals, as a Chemical Engineer.

Gaye Francis (12:48):

I do.

Richard Robinson (12:50):

And we were lucky because one of our then young engineers about as young as you at the time was reading the Society of Fire Protection Handbook and realized that if you have electrostatic sparking in a high HDPE, high oxygen container, you can get ignition. The thing itself was meant to be always wet. It's one of the reasons why the HAZOP didn't work because they were actually commissioning it and it never occurred to 'em that it wouldn't be wet. So they never considered that configuration and HAZOPs have these weaknesses that we could go into, but that's actually one of the problems that we've had. Now it's just one of those extraordinary things. We were very lucky that we had a very bright engineer who was reading this book and why she was doing that, I still don't understand.

Gaye Francis (13:35):

Well, I guess the question people ask us, Richard, if you don't design to Standards, how do you design? If standards aren't the solution, which the engineering profession seem to be promoting, that that is the solution. Well, what do we do?

Richard Robinson (13:50):

You've got to figure it out from first principles. You look at the design options, you work out which design option's, right? Then you get the Standard out and check it to make sure you haven't done something daft.

Gaye Francis (13:59):

So it is, it's setting up what the context is. Where is this thing going to be designed? Where is it going to operate? What are the conditions?

Richard Robinson (14:07):

It requires you to think and thinking is hard.

Gaye Francis (14:10):

It is hard. It is hard.

Richard Robinson (14:12):

It is really hard. I don't know why people don't understand that thinking is hard. That's why you get the kudos for having theoretically gone to university. And if you have been thinking hard for eight or 12 hours, you are exhausted. At least that's been my experience.

Gaye Francis (14:29):

<laughs> That's another subject. So what we would say is have a look at your context, have a look at your problem that you're trying to solve, but also the environment in which it's going to live, the people it's exposing, because some of those vulnerabilities need to be thought about harder and there may be different solutions for those particular things.

Richard Robinson (14:51):

Yes. Well obviously we have some more experiences more recently with network design solutions and things like that. And it's particularly frustrating when you realise that the people who are responsible for this have not been thinking through what the further possible options are and not made it transparent, at any rate.

Gaye Francis (15:07):

I also think that Standards are lagging indicators. They're not always up with, they may be what represents current good practice, but that might be 5, 10, 15 years old.

Richard Robinson (15:19):

Well that's like AS1940 and Bunsfield. Bunsfield, I think it was 2005 and the Standard wasn't updated 2017 and the introduction says this is why we did it. To take into account Bunsfield. That's a long time.

Gaye Francis (15:31):

That's a long time. So you ought to remember that Standards are lagging indicators. It's the absolute minimum that you start with, but we would say that you actually go back and check against it rather than starting with the Standard and designing from there.

Richard Robinson (15:44):

Correct. And I think I'm going to be explaining this in the court in the very near future and we'll see how that goes.

Gaye Francis (15:51):

Which I'm sure will be the discussion of another podcast in coming weeks.

Richard Robinson (15:55):

Indeed.

Gaye Francis (15:56):

So thank you for joining us today. We hope you found it interesting. As you can see, it is one of our frustrations and I think a frustration around the engineering profession as well as a whole. So thanks for joining us and we hope to see you next time.

Richard Robinson (16:11):

Thanks Gaye.

Insurance Criteria: Its history, relevance, and the Highly Protected Risk (HPR) engineering process

Risk! Engineers Talk Governance
Season 5, Episode 4

In this episode, Richard Robinson and Gaye Francis discuss Insurance Criteria and its history and modern relevance, particularly focusing on the Highly Protected Risk (HPR) engineering process.

Richard shares his experience training with Factory Mutual in the US and explains how the HPR approach originated in the 1840s with Zacharia Allen, a cotton mill owner who re-engineered his facility to minimise fire risks. When his insurance company refused to offer discounts for these improvements, Allen created a mutual pool with other safety-conscious factory owners, establishing an engineering-based approach to insurance rather than a purely financial one.

The conversation explores key concepts like Normal Loss Expectancy versus Maximum Foreseeable Loss, highlights common design flaws in Australian Standards, and emphasises that engineers must think beyond merely following standards to truly understand what they're trying to protect. The episode concludes with takeaways about designing for specific needs rather than blindly applying Standards.

This conversation follows the R2A text Engineering Due Diligence (Concepts, Applications, Tools & Techniques) that can be purchased online.

Access the episode’s full transcript below.

Episode transcript

Megan (Producer) (00:00):

Welcome to Risk! Engineers Talk Governance. In this episode, due diligence engineers Richard Robinson and Gaye Francis discuss Insurance Criteria: its history, relevance today, and the highly protected risk process.

(00:18):

We hope you enjoy their chat. If you do, please give us a rating and subscribe on your favourite podcast platform. If you'd like more information on R2A's work or have any feedback or topic ideas, please head to the website www.r2a.com.au.

Gaye Francis (00:36):

Hi Richard, welcome to a podcast session.

Richard Robinson (00:38):

Hello Gaye. It's good to be back again.

Gaye Francis (00:40):

Back again. That's right. Today we're going to talk about one of the chapters in our larger book (text), the Engineering Due Diligence book, and we're going to talk about Chapter 5, Criteria and in particular 5.5, which is the Insurance Criteria and the history of it, which you're going to talk about in a moment, but also how it's relevant today. And we are particularly going to talk about the Highly Protected Risk engineering (HPR) process that's there. So over to you Richard. Give us a blast on the history.

Richard Robinson (01:14):

Right, Gaye, I wasn't too sure about that! Basically I'm just going to give a brief shot on what this HPR business is because I once upon a time trained with Factory Mutual a very long time ago in the US and actually I found it a bit more interesting than I was possibly anticipating because at that stage and being a fire engineer or anything like that was new and novel and nobody had a clue what it was. But from my point of view, basically derived from the Factory Mutual highly protected risk engineering approach. Now, the best way to actually explain it is just to explain how they started because once you understand the history of them, you get the drift. They are actually quite different to Lloyd's London, which took the wholly financial view of risk. Whereas Factory Mutual took the engineering view of risk and it basically started like this:

(01:57):

In the 1840s there was a bloke called Zacharia Allen and he owned a cotton mill. And yes, you can smile at me Gaye and that's nice. Anyway, when you rip the cotton seeds out of the cotton balls, you get a lot of friction, the highly combustible medium. So these things used to burst into flame. And the cotton gins are wooden, the factories are wooden, so what tended to happen was cotton mills burnt down a lot. And this fellow called Zacharia Allen didn't like this. So what he decided to do was to build a better cotton mill. And the way he did that is that he fire isolated the cotton gins from the rest of the structure. He actually gave his people equipment with which to put out fires and taught 'em how to do it, like a fire hose. And with massive wooden construction, you don't actually get a fire that burns the place to the ground. If you put the fire out, you just get a slightly charred timber and it works fine.

(02:46):

Having done all that, he then fronted up to his underwriter and said, look what a good thing I've done, give me a discount. And the underwriter said, buzz off the good pay for the bad, which is probably something you've heard in fairly recent times around the place. And so he said, if that's the way you feel about it, what I'm going to do is find other cotton mill owners or industrial owners who've re-engineered their facility to minimise losses and then we're going to pay what we're paying you, our existing underwriter into a mutual pool. And at the end of the insurance period, three, five years or whatever it is, we'll pay back to ourselves in profits what we didn't pay out on losses.

(03:23):

Now, as a concept, this is pretty simple, but it means you've got an engineered view of insurance, not a financial view of insurance. If you were The Lloyd's of London and which I have to say most of the Western world continues to sort of flow through a wholly financial view of insurance. It's just a matter of working out the odds. You can assure a burning building if you want to, as long as you've got the odds right. Whereas with Factory Mutual, they said: No, if you haven't engineered it properly in the first place, we won't insure you.

Gaye Francis (03:52):

They're very, very early days of safety in design.

Richard Robinson (03:54):

In effect. And that's the point. The Factory Mutual approach, it was always about control. It was never about levels of risk per se. That doesn't mean to say they didn't have reinsurance and all the other things that they do. Now, the other way they worked this out was because they still have an insurance view on life is that they then emphasised this business, the difference between, well, the way they defined it was normal loss expectancy, which is what the worst case loss should be if everything worked the way it's supposed to. In this day and age, that chiefly means automatic sprinkler protection. And then they defined the worst case, which is the maximum foreseeable loss, which was typically determined by blank firewalls or separation. And that would be the worst loss that could occur on site. So if you're a Factory Mutual engineer going to a site, you had to work out both these two things and obviously look at firewalls was the thing that could usually cause you the greatest grief.

(04:49):

Now in Australia, this is causing an awful lot of problems because we don't quite understand this. And from a financial law design viewpoint, it's pretty straightforward. I mean, if you've got a building that's worth a hundred dollars and it burns down once a year, well your annual loss expectancy is a hundred dollars per year. If you build a duplicate facility a hundred meters away and it can burn down without touching the other one, well that's $100 burning down once a year and that's $100 burning down once a year. That's $200 loss expectancy. But if you put the two buildings beside each other and don't have 'em separated, each one will take the other one down. When it burns down, you'll lose the lot twice a year, which means your lost expectancy is doubled.

Gaye Francis (05:30):

$400 potentially.

Richard Robinson (05:32):

And you can see why underwriters and people like that really want to work out what the maximum credible foreseeable loss is because that's what they really need to buy insurance and reinsure for. Now, as a design concept, this is pretty straightforward, but the trick is, and if you want to build the two facilities adjacent to each other, which from a cost point of view and land acquisition, all the rest of it becomes essential. You then have to put a firewall between them such that that firewall has the same effect as a hundred meter separation. And this depends what you're trying to protect. And Australian Standards and building codes don't really think this through very well for several reasons. First of all, they don't think about the load so much. They sort of go for a standard four hour firewall to something like that. Now standard four hour firewalls designed for a standard fire, whatever the hell that is, and there's a standard fire curve with a certain shape that you're meant to apply to a wall to see how it retains itself.

(06:24):

Not so relevant anymore because we don't do it much and we don't do much print anymore, but roll paper on end and when they print big rolls of paper or make rolls of paper, they just stack it up on top of each other on end. If one of those goes off, you can't put enough water on it to put it out. You cannot do it with sprinkler protection. You cannot do with fire hoses. You have to wait until it burns out. But that means your firewall has to be a 48 hour firewall, which you can design and build...

Gaye Francis (06:51):

But it's going to look very different to a four hour firewall.

Richard Robinson (06:54):

The other thing where Australians get it wrong because they tend to say that you can have a tired four hour firewall, which means you can have steel structures connected and a brick wall between it. Now this doesn't work too well. You've got to decide it so that when the site's burning down as the steel collapses, it turns into ropes and so it creates great tension. So you've got to design each side of the building to be able to resist that collapse forces on the building as it collapses, which is not an easy thing to do because you've got a dynamic fire on different loads and things like that. And the other thing which we get wrong is that way we design our automated sprinkler systems, we run the six and eight inch water pipes through the top of the wall. Now I can tell you the one piece of steel that's going to have its full strength is the one that's got cold flowing water running through it. That's one of the reasons why steel sprinkler pipe works well for sprinkler protection because once the sprinklers activated, that steel stays really cool and it retains its full strength. That means when your roof on one side collapses, it just brings the sprinkler pumping down and that rips the wall down. And the best part is that then takes out your sprinkler system on the other side of the wall.

Gaye Francis (07:59):

So you're saying all your controls go, your firewall, your sprinklers and everything.

Richard Robinson (08:03):

Correct. They sometimes wonder why Factory Mutual gives their insurance, reinsurance losses are pounding and the reason is because Australian Standards got it wrong and they didn't think it through. And then people keep designing to standards without actually thinking through functionally what it is that that firewall is trying to do. And it's meant to withstand burnout of whatever's on the other side of it. So if it's pig iron underwater, which is a Factory Mutual line, you still have automatic sprinkler protection with Factory Mutual even if you've got pig iron underwater, you still have automatic sprinkler protection provided, but that means the firewall possibly doesn't need to be as robust as some other occupancies that you might conceive.

Gaye Francis (08:46):

So it goes back to understanding what the issue of concern is.

Richard Robinson (08:50):

Correct. Now what's really strange about this is, I mean, Factory Mutual in Australia is based out of Melbourne, and that's the reason why the Risk Engineering Society, it started as a loss control section of the management branch of the Victoria Division of Engineers Australia. And it very nearly didn't join Engineers Australia. It was a very close vote. But that's the reason why it started in Victoria. What was interesting, one of my then business partners, Derek Viner coined the term risk engineering because he took it off the Factory Mutual kind of approach to highly protected risk engineering, and that idea just flashed around the planet in a way that the rest of us were slightly astonished, which was quite impressive.

(09:31):

But the other point I wanted to really make, which I think is sort of interesting from my point of view because I hadn't thought of it like this. One of the Factory Mutual's arguments in life is that you can't take somebody who's learned about Standards and then reteach them to become a Highly Protected Risk Engineer because they've acquired the bad habits. This is very much like the Catholic church. You've got to get 'em early, train 'em young, and then you'll keep them for life. Well, apparently you've got to take young graduate engineers, teach 'em the Factory Mutual approach and they'll keep it going for life. Which I suppose is my condition.

Gaye Francis (10:04):

That's probably right. And then I've been trained by you.

Richard Robinson (10:09):

That's one of the things because I had this fascinating conversation. Again, the Americans are very egalitarian, all this sort of stuff. You're at the research center in Norwood, Massachusetts, and they're running the courses. You get dragged there I think three times in the year that you're in America and you get trained there. And I was having lunch with one of the, just sitting there and one of the senior guys, I mean one of the very senior guys, one of the Vice Presidents of Factory Mutual turned up, and sat next to me and said: Who are you and why are you here? And I said, I'm an Australian having a good time. Thank you for asking. Because Australians, I was trying to explain to these Americans that we got a holiday for a horse race in Melbourne, they would not believe me. They actually would not believe me.

(10:54):

Anyway, I was talking to this fellow here and I said, look, all the stuff that you guys are teaching is great and it's really good stuff, but I said, you import people from all over the planet here. I mean, I was sharing flat with the span and then a Frenchman and the retention rate of we young engineers isn't high. This is a huge investment you people are putting into characters like us. And he said, yeah, that's right. That's what he said. And I said, why do you do it? He said, because you leave us and do good works and other places and Factory Mutual prospers.

Gaye Francis (11:29):

Right.

Richard Robinson (11:29):

I always thought, wow, the Americans always mystify me because they're so good in some places and other places, it just doesn't quite make sense. I told her that cartoon, they used to gave me the flip over the desk calendar and the generous sort of some Christian religious homily, and then you get to tax time and it says, next they're getting shot and missed, nothing's quite as satisfying as an income tax return. I thought only in America.

Gaye Francis (12:00):

I don't want to compare those two.

Richard Robinson (12:02):

I don't have a basis for comparison either. I do agree that tax returns are satisfying. But the point that what I was trying to say was that Factory Mutual was control focused and that's how they started and that's what they were trying to do, and they weren't relying on just the financial numbers, which the Lloyd's approach actually did.

Gaye Francis (12:21):

I think that's one of the key takeaways from this, but also that you can't just design to Standards.

Richard Robinson (12:29):

Correct.

Gaye Francis (12:30):

You actually have to...

Richard Robinson (12:31):

To think through what it is you're trying to achieve. And if you fail to do that nonsense arises and how much nonsense have we seen from Australians designing to Standards in recent times.

Gaye Francis (12:40):

And the Standards often don't apply or can't be applied to the actual situation that they find themselves?

Richard Robinson (12:50):

Well, just to, again, I don't want to bore people with Fire Standards and things like that, but in the US the Factory Mutual Sprinkler Standard is NFPA 13, which is the National Fire Code Sprinkler standard because it's an engineered standard. If they have a problem, something burnt down somewhere, they rack that material up, put it in their research lab and find out what sprinkler density actually is required. AS 2118, which is the Australian Sprinkler Standard, it might've changed a bit, but it started off from the Fire Officers Committee of the UK, i.e. the insurance committee, and it was a retrospective standard in the sense that if underwriters had a bad experience, they then increased the design density of the sprinklers.

Gaye Francis (13:30):

But it wasn't tested.

Richard Robinson (13:31):

It wasn't an Engineered Standard. It's just something that followed through. And that flows through to the way in which we design things. Remember how I said the firewalls and the sprinkler pipe takes it down? Well, again, it's got to do with scale, and the reason for this America just industrialised it. If Australia compared to America there for a while, we just are less than one state. We're little, right? We might be the 10th largest economy on the planet, but San Francisco and California, I think is the second largest economy out right now, isn't it?

Gaye Francis (14:06):

Not sure.

Richard Robinson (14:06):

Anyway, the point I make is that what they do is they put the water pipes around the outside of the plant so that even if the walls collapse, you can't lose your fire protection water. And it's just a different design process. But that depends on the size of your factory. If you're only building a small one, I'd stick to a Australian Standards. If I'm building a big one, I'd definitely go with North American Standards.

Gaye Francis (14:27):

Yeah, I think Standards might be a whole other podcast and the discussion that engineers have to have around Standards.

Richard Robinson (14:34):

Well, the funniest one though, and again, I was working at Factory Mutual at the time. I had a problem with the Fire Main, this was in Melbourne. They had a problem with the Fire Main and they were digging holes to try and find it and couldn't find it, and people were getting cranky and what's going on here. What had happened was the plant had been designed in Canada and had been installed in Melbourne. The pipe had been installed to be below the permafrost level. That's why it was so far underground.

Gaye Francis (15:05):

<laughs> Which it didn't need to be the case in Melbourne.

Richard Robinson (15:07):

It would've been lot simpler if it'd been a little bit closer to the surface.

Gaye Francis (15:10):

It does get cold, but not quite permafrost cold.

(15:14):

So a couple of takeaways. Look at what you're designing for. Have that understanding of maybe what's happened in the past doesn't necessarily represent what happens in the future. And be careful of Standards. But I think we might cover Standards in another podcast Richard.

Richard Robinson (15:32):

I'm sure that's going to be the case.

Gaye Francis (15:35):

<laughs> Well, thank you for joining us today and thanks for listening everyone. Bye.

Richard Robinson (15:39):

Bye.

How to Prevent Catastrophic Project Blowouts: Project Due Diligence

Risk! Engineers Talk Governance
Season 5, Episode 3

In this episode, Richard Robinson and Gaye Francis discuss How to Prevent Catastrophic Project Blowouts and R2A’s project governance and due diligence approach.

They discuss the three key considerations when undertaking project due diligence and preventing project blowouts as:

1. Ensure your scope is right, have identified your critical success outcomes are and all key stakeholders understand what the prize is and agree.

2. Undertake a completeness check of threats. Project due diligence is not a risk assessment, it’s about controls, and putting in controls to protect against threats. 

3. Review the project on a regular basis and at key milestones. If there are any scope changes being proposed, you need to question what it will actually do to your project and where it’s at now. Redefine the project scope, as appropriate, but ensure changes are communicated transparently and clearly.

This discussion follows R2A’s booklet: How To Prevent Catastrophic Project Blowouts (A Practical Guide for Directors).

Access the episode’s full transcript below.

Episode transcript

Megan (Producer) (00:00):

Welcome to Risk! Engineers Talk Governance. In this episode, due diligence engineers Richard Robinson and Gaye Francis discuss: How to prevent catastrophic project blowouts.

(00:14):

We hope you enjoy their chat. If you do, please give us a rating and subscribe on your favourite podcast platform. If you'd like more information on R@A's work or have any feedback or topic ideas, please head to the website www.r2a.com au.

Gaye Francis (00:32):

Hello Richard, welcome to another podcast session.

Richard Robinson (00:35):

Good morning Gaye. Interesting trip in today!

Gaye Francis (00:37):

It 's been a difficult start to the morning, but we are here now and ready to do a podcast. So today we're going to talk about preventing catastrophic project blowouts and it's a bit timely in that we've just updated our little booklet for 2025 and that's now available.

Richard Robinson (00:57):

And you might notice one of my favourite chapters is in it.

Gaye Francis (00:59):

What's your favourite chapter?

Richard Robinson (01:01):

Eeke, Irk and Oops!

Gaye Francis (01:03):

You can tell Richard went about naming some of these chapters, can't you?

Richard Robinson (01:07):

Yes. But see, I explained this to you a long time ago and one of the first things that happened when you arrived at R2A if I recall correctly, and you said there's a fourth term. I was explaining how these are three critical terms in risk. And you said the fourth term is Grrrr. And I said, what does that mean? You said, it arises when you're a younger female working with an older male.

Gaye Francis (01:30):

It probably still exists today even though we've aged a little bit. So we've gone out off on a tangent already in the first two minutes of the podcast, but that's alright. So for ending catastrophic project blowouts, and it was also timely in that there was a recent article in Create at the end of February and it was called...

Richard Robinson (01:49):

Create Magazine from Engineers Australia.

Gaye Francis (01:51):

Correct. Big budget blowouts costing billions each year. And it was basically an interview and a chat with the national chair of the CROSS Engineering Society and it sort of covered projects like Inland Rail, Snowy Hydro, the Northeast Link, Paradise Dam, Project Energy Connect, and then the Northeast Link. And I think one of the interesting things that it said was they're typically not technical issues that slow a project down or stop a project down. And when they were talking about budget blowouts, they were talking in terms of cost, time and also scope, which was an interesting one. But they were saying that the engineers aren't so good at communicating such things as the environmentals approvals and legislation and land acquisition issues and they're typically the issues that can blow projects out.

(02:48):

So it was really interesting. I think one of the interesting things that he said was typically projects don't go wrong, they start wrong. And I think some of our stuff that we would observe in the project due diligence stuff that we do, and I think the governance process and the due diligence process at R2A applies to projects probably extends that cost engineering idea further because he's sort of talking about typically the most likely type of blowouts and things that can go wrong in projects and starting with other projects. But we're saying what are those catastrophic issues regardless of how likely they are, that can stop a project.

Richard Robinson (03:32):

And the key thing was to make sure you understand what it is you're actually doing. I mean one of the points we make is that our approach to all this is a very military intelligence approach because we learned, I got this with Bob Browning all those years ago and he got it off MI6, I think it was when he was on exchange to the UK. But the point was you need to clearly understand what is you're trying to achieve as setting out to achieve. And if you don't get that right, it will come unstuck. And I say it's the military intelligence technique because one of the things that you try to do if you're about to go on a military mission on which your life depends and if you get it wrong, things are going to go badly. You need to really spell out what success looks like and how you're going to get there. And then you make sure that anything that threatens those outcomes are dealt with them, we call them vulnerabilities, but that means we're looking at control. And one of the more interesting articles that popped up, I dunno quite why I came across it, but I was doing a search for some work we were doing. Oh it was we were doing course last week wasn't it?

Gaye Francis (04:25):

Last week for defense?

Richard Robinson (04:26):

For defense. And I came across an article by, it was an RMIT researcher and aI New Zealand army personnel person. And they were reviewing 10 years of the implication of WHS legislation on defense in Australia. And they said, this is sort of the first study this has been done. It's been around now for about 10 years from defense's viewpoint because it commenced in 2012. And they were asking the question, well what's the impact? And the last sentence, literally the last sentence in the whole article just says that the WHS legislation, the difference it's made, it's not about the level of risk, it's all about the level of control. And that's the final conclusion.

(05:08):

And that's our point because our frustration with all this stuff is particularly to do with the Rsk Management Standard. And I suppose I could mention a current court case I've got, but people still doing risk assessments, working out target levels of risk and safety when the legislation, it's just flowing from that very human thing. It's not the level of risk that counts. It's always been the level of control. And that's the same thing, whether it's projects or safety.

Gaye Francis (05:31):

And I think that's the difficult conversation that people have to have. Isn't it often the project comes unstuck because the aim or the objectives of the project aren't articulated that all the stakeholders agree that that's what they're working towards.

Richard Robinson (05:47):

Correct. I mean we make the remark about we watch defense in some of their gate procurement processes. If you don't keep an eye on what the overall outcome is, I mean they go through this gate and there's a two year team that's got to get through the next gate. Well for them that's their critical success outcomes. But if that team there isn't looking to what the final outcome is supposed to be, then they set all the other teams in the following gates up for the fall.

Gaye Francis (06:12):

So I think the idea of scope creep is a little bit of a funny one, because you've actually got to go back and say, alright, if we change that in our project, how does that affect our critical success outcomes? And it's not just time and budget, it's actually is it actually delivering what we want it to deliver? And do all the stakeholders agree to that?

Richard Robinson (06:33):

Yes. And one of the problems you've got is times change and if it's a long project, people's perceptions change and what's important, what it was trying to achieve can change too. I mean one of the funny things last week we got asked about Agile and I had a quick look at that. I mean I've come across it before, but all the different techniques that pop like PRINCE2 and all the other ones that different people say, this is the way to do it, if you don't do it this way, it's a failure. Whereas I think we would say it is better off to think through what you're trying to achieve rather than just rely on a (one technique).

Gaye Francis (07:02):

Previous experience on other projects, I think would be our suggestion to think it through. And then, I mean, don't lose all the lessons learned and everything, but don't use it as the basis for going forward. Use it as insight to reflect on the project that you are doing.

Richard Robinson (07:17):

But you've got to make sure you understand what it's you're trying to achieve. And if you don't, it will come and haunt you.

Gaye Francis (07:23):

We've actually walked away from projects because they couldn't articulate what they were trying to achieve.

Richard Robinson (07:27):

Well, you might remember that large desal project in Victoria and the project manager wanted to do it our way and because they wouldn't do it our way he walked.

Gaye Francis (07:35):

I think one of the other difficult things that there's a lot of pressure on projects at the moment and they're saying that there's big project blowouts and things like that, but many of these projects were scoped and started and estimated before Covid-19 and during Covid. And I think times have really changed. There's a big difference in the costs associated with projects in today's dollars compared to what they were five years ago.

Richard Robinson (08:02):

Yeah, it's been 10% per year roughly from what I can see. You watch the CPI figures and things like that and what's happening in procurement and so forth. Although I was listening to somebody saying, and one of the problems is just not having the people to do things at the moment, getting anybody even give you a quote or a tender is getting problematic, but somebody did say that that's all starting to slow down a bit and there might be more bodies available to do things in the future.

Gaye Francis (08:26):

So maybe there'll be an improvement in some of those?

Richard Robinson (08:31):

Maybe. I don't know. The world is a very strange place at the moment. If anybody's watching politics.

Gaye Francis (08:38):

It's also for us, we often see that look typically projects do some sort of risk management or due diligence with their projects, what we...

Richard Robinson (08:47):

They always do. Whether it's successful or not, that's the next question.

Gaye Francis (08:50):

Yep. I think the other thing is that we often see missing is there's gaps in it. There's not a completeness check of ideas. And a lot of the work that we do, I think that's one of our key criticisms of the risk processes or due diligence work that people undertake or organisations and projects undertake is you don't have that sense of completeness. It's sort of a brain dump of issues in no particular order. And I would agree with the Chair of the CROSS Engineering Society in that I think typically it's not technical issues.

Richard Robinson (09:26):

For a known technical issue, they seldom failed. It's the unknown one or unspecified one that nobody quite understood was there or chose not to understand.

Gaye Francis (09:36):

And so there's some planning associated with that. But if you go through a project due diligence viewpoint and you list the threats by project life cycles starting at the very, very top where you've got procurement and planning and approvals processes. One of the things that the inland rail was getting a bit of a bad rap about was basically it's a rail project, but it's going through three different jurisdictions, which means that there's three different approval processes and they didn't allow sufficient time. And I don't know whether they were actually one approval before you could get the next approval or whether you could go and get 'em concurrently.

Richard Robinson (10:19):

You might remember the Tugan bypass Queensland said New South Wales goes under a federal airport. And we had 40 people in the room, remember, because it was all becoming a bit unstuck. But it did come down to who has the biggest, well, I'm not quite sure, but it seemed to me that the Queensland's were paying for it, but New South Wales had the greatest impact, which seemed a bit unfair to me.

Gaye Francis (10:40):

I think that was because from emergency services viewpoint, they were the one that would respond to any incident under the tunnel. So that's that discussion around which we've had many times around stakeholders, key stakeholders and interested parties who actually live and dies by the (decisions). So by going through all of this stuff, it's not just the technical issues. If your project's only considering the technical issues, you will come unstuck.

Richard Robinson (11:04):

And people are still trying to apply the Risk Management Standard. Just again, because I'm in this Expert Witness thing, you're talking about unlikely things and one of the thing is experts are not omniscient. They can't be. So they can't say when you're talking about rare, big, bad things, they of themselves can't say what all those things are and how they might manifest. But you can go about it another way. But if you try to risk assess it and you're trying to say, I've identified them all, it is all about the control. It's not about the risk assessment. That doesn't help at that point because you cumulatively, you can't work out from a calculation viewpoint what that might be.

Gaye Francis (11:45):

So the three key things that we would say for project due diligence and preventing catastrophic project blowout is make sure you've got your scope right and you've identified what your critical success outcomes are.

Richard Robinson (11:55):

And you've communicated to everybody. So everybody understands what the prize is.

Gaye Francis (11:58):

And everyone agrees! That's always a bonus. I think you happen to have a completeness check of threats because you can typically manage... You can't manage the surprises. Projects can typically manage things that can go wrong. And then, as you said, it's a controls review to say, well, these are the controls you can put in place to protect against these sort of threats.

Richard Robinson (12:24):

And things that pop up if you've got the control there can be dealt with. But when there's no control, it's just a surprise.

Gaye Francis (12:32):

And I guess that takes us down to our last point. It's not do you due diligence review or your risk assessment and then pop it on the shelf for the entire remainder of the project. You've actually got to review these things on regular basis and the key times to do that are project milestones or if there's one of those scope changes being proposed, you really got to pull that out and say, well, what does that scope changer actually do to our project and where we are. Now, you can redefine it, that's fine, but you have to take everybody on the journey and it has to be transparent and clear.

Richard Robinson (13:06):

And that's what I understood the Agile process was trying to do.

Gaye Francis (13:09):

A change management process? Ok. So again, we're not saying that any of these things are wrong or anything like that.

Richard Robinson (13:18):

Hey, hang on a minute, we've in crucifying, the risk management standard. And I will point out that...

Gaye Francis (13:22):

In isolation.

Richard Robinson (13:23):

But I will point out that article I read, it was commenting that the Engineer's Australia Safety Guideline actually said the Risk Management Standard was an error and that the defense had been agreeing with that.

Gaye Francis (13:34):

For safety terms.

Richard Robinson (13:35):

For safety terms, correct.

Gaye Francis (13:37):

Correct. So understand what your different processes and tools do and then yeah, use 'em as guidance rather than the answer, I would say.

Richard Robinson (13:48):

Yep.

Gaye Francis (13:48):

Thank you for joining us today and we hope that our chat has prevented a catastrophic project blowout for your particular project. Thanks, Richard.

Richard Robinson (14:00):

Thanks Gaye. Always interesting.

Gaye Francis (14:01):

Bye.

Difficult Conversations Engineers need to have about Risk

Risk! Engineers Talk Governance
Season 5, Episode 2

In this episode, Richard Robinson and Gaye Francis this season’s theme of "Difficult Conversations Engineers Need to Have About Risk". 

Key discussion points include:

• Risk is multidimensional. 

• Risk covers a big domain that has lead to confusion.

• There are three different types of risk, but R2A’s focus is typically on safety risk and project risk – downside risk.

• Commercial industry like to focus on upside, downside risk (risk and reward, risk appetite and innovation), but Engineers should focus on downside risk.

• Innovation and Risk Management is good but not at the expense of zero harm and the WHS/OHS legislation.

• Often innovation is the solution to the problem but cannot compromise safety.

• Innovation cannot be encouraged as the focus of Risk Management.

• Safety risk shouldn’t been seen as an obstruction; safety is non-negotiable.

• Don't just choose one technique because if you do, and particularly if you ignore the WHS legislation requirements, you're going to set yourself up for a pretty serious fall. 

Access the episode’s full transcript below.

Episode transcript

Megan (Producer) (00:00):

Welcome to Risk! Engineers Talk Governance. In this episode, due diligence engineers Richard Robinson and Gaye Francis discuss the theme of this season: Difficult Conversations Engineers Need to Have About Risk.

(00:18):

We hope you enjoy the chat. If you do, please give us a rating and subscribe on your favourite podcast platform. If you'd like more information on R2A's work or have any feedback or topic ideas, please head to our website www.r2a.com.au.

Gaye Francis (00:38):

Hi Richard.

Richard Robinson (00:39):

Hi Gaye.

Gaye Francis (00:40):

Welcome to another podcast session.

Richard Robinson (00:42):

It's good to be here.

Gaye Francis (00:43):

Excellent, excellent. We're going to touch on the theme of this series, which is the difficult discussions that engineers need to have concerning the issue of risk, or the subject of risk. And we have covered this sort of stuff in some of our earlier podcasts, but I think it's worth going back to that risk is multidimensional.

Richard Robinson (01:04):

That's right. There's no one way to cut to the risk, whatever it is. It's a multidimensional thing. And depending on which technique or idea you use, you'll get different insight. And one of the problems with the word risk, we just cover such a big domain, now everyone's confused. Which leads on to your little frustration just recently with a journo.

Gaye Francis (01:21):

It does. So R2a was asked to provide some input into an article on risk management for Create (Engineers Australia magazine). And so we gave them the stuff that we usually do and sort of pointed out that there were three different types of risk, but our focus is typically on safety risk and project risk.

Richard Robinson (01:41):

And that's just actually downside risk. Which is there's no prospect of gain as opposed to what commercial people like to do, which is the upside, downside risk. Risk and reward is usually the way that's formulated. And which gives rise to the risk appetite statements, which we've mentioned earlier.

Gaye Francis (01:57):

And after that, and the article was drafted, it came back from the editorial that they wanted to be more of a focus on getting past risk adverse responses to enable innovative change. And I found this really interesting and a little bit disappointing, I guess, from an engineering viewpoint because that's typically not what engineers do in their day-to-day business. For me, that's more about an entrepreneurialship -- looking at what ideas you can do and innovation and overcoming some of the risk issues. So risk in that sense is a by-product.

Richard Robinson (02:33):

Yeah, that's right. So the risk reward profile. I mean, we're just talking about it just before the session to try to explain what we're talking about here, but it's a bit like, well, the example I gave, if you're building a bridge, you don't put the site officers under the bridge despite the belief of the engineers the bridge will not fall down during construction, which is what happened in Westgate and crushed the people in the huts below. And also the engineers were on the bridge that went down with it. They didn't believe it was going to fall, and all the calculations and all the evidence you would've asked them said, no, the bridge is going to stay up. But you just avoid avoidable risk if you can. Versus the situation with cars, driving cars around. Everybody knows that driving cars, relatively speaking, is quite a dangerous thing to do, but the benefits we get from driving cars is so great that we all decide that we're going to keep doing it.

Gaye Francis (03:18):

Hopefully by abiding all the rules.

Richard Robinson (03:21):

Well, yes. And as new innovations come in, for example, self-drive cars, I mean, the whole thing was if you drink and drive, you're a bloody idiot. Well, once the car will take you home... you don't worry about it. It's not a problem!

(03:31):

So innovation is good. So it depends what you're trying to achieve. So we're not against the innovation and risk management, but part of our problem is we keep coming across people who keep talking about risk solely as this upside risk and reward thing without realising the zero harm, which is basically what most engineers do most of the time, I have to say, it's got to be safe. And safe doesn't mean free from all risks. Safe means that the balance, the value you get from it, outweighs the disbenefits.

Gaye Francis (04:01):

That's correct. And I think by encouraging that risk appetite model and being risk adverse, or not getting responses back that are not risk adverse, it's sort of missing that aspect. And it was sort of evident when we did the course for Engineers Australia chartered assessors and their view on things was only between 1% and 3% of engineers interviewed as part of chartered status and risk is a component of that, understood that the WHS or Work Health and Safety legislation was actually relevant to their job.

Richard Robinson (04:45):

Because as we were just sort of commenting, I mean people keep talking about risk assessments. What the legislation demands is risk design assessments and that you've been diligent in the design options. It doesn't mean free from all risk. It just means in the circumstances you've demonstrated diligently that every reasonable practical control is in place.

Gaye Francis (05:03):

So I think the innovation comes in, first of all, you've got to understand what your problem is, and often the innovation is in the solution to that problem.

Richard Robinson (05:11):

Correct.

Gaye Francis (05:12):

And so there's this balance then to work it up about, well, what are the benefits that you get? But you can't do it if safety is compromised.

Richard Robinson (05:23):

Correct.

Gaye Francis (05:23):

If it's prohibitively dangerous, that solution or innovation cannot be implemented.

Richard Robinson (05:28):

That's correct. Until you figure out away around that prohibitively dangerous aspect, which may well require innovation in itself. I mean it's like necessity is the heart of innovation and things like that. I mean, it's a bit like watching the Ukrainians fighting a war. They have been innovated because they had no choice. And if you talk about risk assessments and things like that, innovation, overcoming the problems, well, they've got a lot of problems and then...

Gaye Francis (05:53):

They're trying to work out which are the best options to go for.

Richard Robinson (05:55):

And they're working on the same option with regard to the US politics at the moment, which has got enormously complicated.

Gaye Francis (06:00):

Just bringing it back to an engineering example. And you've seen innovation over time. You think about 30 years ago, 50 years ago, in underground mining, somebody had to go out underground, let off the charge when they were pretty close.

Richard Robinson (06:17):

They'd drill holes, charge the holes, fire the holes, muck it out and do it all again. The Air League miner. Never saw a plump air league miner in my life.

Gaye Francis (06:25):

And then technology progressed that the charges could be filled and everything and then let off above the site. And now it's all done remotely, is my understanding. At an operation center remote from the mine location. That's technology that's overcome some of these safety issues.

Richard Robinson (06:48):

It's like the personal pilotage unit for marine pilots, which trains could consider. It's like the low voltage power ethernet and LED lightings and roof spaces, which we've talked about. These are all innovations which will save lives. They're good ways to do things and, I imagine, are faster, cheaper, and more economic too.

Gaye Francis (07:10):

So it's not that R2A and Richard and I are saying don't do some of this innovation stuff, but you can't encourage this as the only way to do risk management.

Richard Robinson (07:22):

Correct.

Gaye Francis (07:23):

I think some of the discussions that Engineers Australia, and even in the title of their conference for 2025: Turning Risk into Opportunities. Now, you can't turn all risk into opportunities if you understand all the different risk types.

Richard Robinson (07:40):

But that doesn't mean to say when you look at it, you won't consider all the options and test, which in the circumstances makes the most sense. And I think that's where we get a bit frustrated, is that by making an all opportunity and in effect saying that anybody sort of into safety risk is just an obstruction that doesn't make sense. It just doesn't make sense. You have to consider all those aspects.

Gaye Francis (08:01):

It's a non-negotiable, safety. And we see it being pushed down, pushed down, pushed down. And sometimes some of the solutions that are put in place are to the detriment, safety detriment, of other people.

Richard Robinson (08:15):

Correct. And well, that's the court case I'm actually involved at the moment, which we perhaps won't talk too much about, but the question of the neighbourly exposure to the hazards, it's good for the business, but not necessarily good for everybody else.

Gaye Francis (08:29):

So when you're considering safety, not only do you have to consider your own workers, but you have to consider the other people that are affected by it. And I think that's where Richard and I come from the majority of the time.

Richard Robinson (08:44):

Yep. Well, we could go back and redescribe this again, I guess, but I think the key point is it's this multidimensional thing. Don't just choose one technique because if you do, and particularly ignore the WHS legislation requirements, you're going to set yourself up for a pretty serious fall.

Gaye Francis (09:00):

Or other people up for a fall as well. So yeah, don't not consider the innovation and the benefits of risk and opportunity, but forefront should be safety and the consideration of that.

(09:17):

So thanks for joining us today, short and sweet today, but thank you. And I feel better now. Thanks, Richard.

Richard Robinson (09:23):

A pleasure Gaye.

Risk Management & Negligence - Due Diligence Essentials for Engineers

Risk! engineers Talk Governance
Season 5, Episode 1

In this first episode of Season 5, Richard Robinson and Gaye Francis provide an overview of their new booklet Risk Management and Negligence - Due Diligence Essentials for Engineers. 

They discuss the importance of engineers to understand their responsibilities around risk management and due diligence, and the need to communicate this effectively to senior decision-makers. 

The booklet covers:

• You can’t always be right but you can be diligent

• What it means to be an engineer today

• The risk management swamp

• Methods to drain the swamp

• Due diligence domains

They also discuss this season’s theme of difficult conversations engineers need to have and their plans for an in-person event to further discuss this topic.

You can purchase this and all other books from our online store.

Access the episode’s full transcript below.

Episode transcript

Megan (Producer) (00:01):

Welcome to Risk! Engineers Talk Governance. In this first episode of Season 5, due diligence engineers, Richard Robinson and Gaye Francis provide an overview of their new booklet, "Risk Management and Negligence - Due Diligence Essentials For Engineers".

(00:20):

This and all books they mentioned are available on the R2A website via their online store (www.r2a.com.au/store). The direct link is in the podcast description.

(00:30):

If you'd like more information on R2A's work or have any feedback or topic ideas, please head to the website www.r2a.com.au.

Gaye Francis (00:42):

Hi Richard, welcome to a new season of R2A podcasts.

Richard Robinson (00:47):

Yes, and considering how many people and how fast they respond to our podcasts, welcome again, Gaye.

Gaye Francis (00:52):

Season five. (This season) we're going to do a little bit differently, aren't we? We're going to talk about, or hopefully talk about some things that some of the difficult discussions around risk and due diligence. Discussions that we think people need to have but aren't necessarily happening. But in this first session today, we're just going to talk about... We've had a very busy January and we have updated all of our textbooks and our booklets and also written a new booklet, which is very, very exciting. And this one in particular is aimed at engineers.

Richard Robinson (01:26):

That's correct. And what we thought we might do is just take you through the generic contents of it, just so you understand the points we're trying to make. And then touch on a couple of the things whilst we do it, because to sum up all this, we kind of get the feeling there's become a disconnect between engineers who seem to be increasingly working in silos and the senior decision makers, the directors, and the responsibilities that they have. And we are sort of doing some other work for other regulators and things like that. And that's become particularly apparent and some of the things that we were doing.

Gaye Francis (01:55):

I think it's also shown that we thought that everybody was on track and not on the same wavelength and the same page with these things, but there seems to be a step back or gone backwards a little bit in some of the management of safety and how it's communicated throughout organisations.

Richard Robinson (02:15):

Well, that's right. I mean, part of that was sort of because we were giving a course to Engineers Australia internally on engineers becoming chartered members.

Gaye Francis (02:24):

For the assessors.

Richard Robinson (02:25):

For the assessors. And one of the things that they expressed surprise about was how few engineers actually were aware of significance of the WHS legislation and why it was so important that engineers get it right. And from the point of view of their organisation why it was essential that everybody understood. I mean, we find it strange because due diligence for directors being able to pay your bills when they fall due is absolutely everything all directors focus on when you have to sign your ASIC reports every year to say that that's the case. And so all directors are particularly focused on it. And that same responsibility now applies to directors with regards to health and safety, which we think is entirely irrational.

Gaye Francis (03:03):

And so you would've expected that message to be propagated down.

Richard Robinson (03:06):

Through organisation, but that's not what seems to be happening.

Gaye Francis (03:09):

Correct.

Richard Robinson (03:10):

And we find that very confusing and that's one of the reasons why we felt this new book that was so important.

Gaye Francis (03:14):

I also think that there's a lot of emphasis put on a lot of organisations. We've talked about this in our other podcast as well as they have a health and safety department or our OHS department, and really they're only internal advisors. They are not responsible. As we said many, many times, safety is the responsibility of line management.

Richard Robinson (03:33):

And risk management is a line management function. And that has always been the case. That has never not been the case. I think that's something that's always mystified me as everyone keeps passing it out to somebody else

Gaye Francis (03:43):

And saying, by having this dedicated department to that, they're going to manage all of it. Now really all that they're doing is facilitating some of the processes that happen when some of those due diligence processes.

Richard Robinson (03:55):

And the line manager still has to make the decision or the directors depending on what the substance of the decision is.

Gaye Francis (04:00):

Correct, correct.

(04:01):

We thought we'd go through the contents (of the new booklet) anyway.

Richard Robinson (04:04):

Well, are you able to summarise the names of all these books now? Because I've forgotten? Well, not forgotten, but it'll come back to me when you've described it to me.

Gaye Francis (04:13):

I love being Richard's corporate memory sometimes. But anyway, the test! No change to the name of our big R2A text, which is based on everything. So it's "Engineering Due Diligence Concepts - Application, Tools and Techniques". Our Criminal Manslaughter one has remained unchanged, "Criminal Manslaughter - How Not To Do It (A practical guide for directors)". We did change the Project Governance booklet to "How to Prevent Catastrophic Showstoppers for Projects". And that was really about changing the language a little bit to say it's really those black swan events that we're trying to do those high consequence, low likelihood ones.

Richard Robinson (04:57):

And that's aimed at directors too.

Gaye Francis (04:58):

That's correct. That's aimed at directors. And then our last one...

Richard Robinson (05:03):

Which we spoke about last year (Season 4, Episode 5).

Gaye Francis (05:05):

We did, but it's had a little bit of a tweak and a name change. It's called "Risk Management and Negligence - Due Diligence Essentials for Engineers".

Richard Robinson (05:14):

That's correct. And to just give you the flavour of the contents, because this is part of this frustration we've got that engineers are being pushed into silos and they're not consciously thinking about what they need to do to provide information to the senior decision makers so they can satisfy the senior decision makers, the director's due diligence obligations for health safety and so forth. And we just found this particularly frustrating.

(05:37):

We don't understand why that's happened because we thought one of the consequences WHS legislation generally was that technical directors would appear. And I certainly remember that's a while ago. Now I can remember my youth, the heads of two of the Australian banks were both engineers. The fact that engineers have just been pushed out of all these senior decision making positions and it's all sort of gone to accountants and lawyers still, we simply don't get it when you live in advanced technological society when horrible things can happen.

(06:04):

Anyway, this (book's) now focused at engineers and in a sense, it's trying to get the engineers out of the silo, I suppose, and make sure they're thinking about how their information should be presented to the senior decision makers in a competent way. So Chapter 1 is...

Gaye Francis (06:18):

Be diligent. You can't always be right.

Richard Robinson (06:21):

And that's the point. I think a lot of engineers, I mean we had to do a lot of this expert witness stuff. When something bad happens, the engineers say, oh, it's all my fault. I should have got it right. And we said, no, no, no, no, no, no, no. What you needed to have done was demonstrated diligence. You cannot always be right. That's not possible. You have to be responsible for your own negligence. That's why you buy insurance. And if you're an employed engineer, why your employer buys insurance so that any harm that does happen, you could do the best you can to rectify it, but you can't always be right. You go through a process that demonstrates diligence for the matter that you're dealing with and the organisation has to sign off at it. That's just the way it works. You can't always be right.

Gaye Francis (07:00):

And I think that was one of the things, key takeaways I recently gave presentation mid last year, and one of the directors came up to me and she said, the thing I got out of your presentation was about process. Good governance and process.

Richard Robinson (07:13):

Correct.

Gaye Francis (07:14):

And if you do that, then you will be diligent.

Richard Robinson (07:18):

The core of that chapter is all about design. Get it right. Don't try to fix it afterwards. It's just wasting time, energy, and effort. You really are.

Gaye Francis (07:27):

I think the other key thing out of that is criticality not risk. It's about the critical things. Those high consequence, low likelihood things, which we've talked about in many, many, many of our sessions.

(07:39):

Chapter 2 or second section is: Being an engineer and what does that actually mean these days? There's a whole lot of constraints around you and know what you're good at, but also the environment and the context in which you work will have all of these constraints around you.

Richard Robinson (07:57):

But it's got a lot to do with engineering education again, because engineering education has always been focused on science and applied science. And so you were taught to be competent in how to solve and the gas equation or whatever it is, the issues that you're concerned about and how to design structure and so forth. But they never told you much about the context in which you found yourself. And I have always assumed that one of the purposes once upon a time was it was Corporate Membership. Now it's Chartered Engineer Status. But the reason for imposing that was that merely passing an engineering course and being competent in the science and knowing how to pass the exam didn't actually mean you were competent to design anything. And nor to put it in the context of what would happen if it went wrong and why you have to get it right.

(08:40):

And that's the due diligence part and the legal context part, all that sort of stuff. And most engineers, they learn about that. Well, probably the first two or three years if they've been chucked in the deep end and then they start going, I need to know a bit more about this and what do I have to do to get there? And that's the sort of stuff that we always thought Engineers Australia was going to focus on. But judging from the remarks of the Chartered Assessors, it perhaps hasn't been successful as it ought to have been.

Gaye Francis (09:09):

I think I've shared this story in another podcast, but as a young engineer many, many years ago, one of the things that Richard taught me first was it doesn't matter how technically brilliant or correct you are in your solution, if you don't get your politics right, you'll never get it over the line. And that's that communication aspect and understanding the solution that you're putting forward and the context in which you make that.

Richard Robinson (09:33):

Well, it actually goes a bit further than that because if you do want to prosper and you're in a large technological organisation and you've put forward a technical solution which doesn't satisfy your WHS legislation, you'll come a cropper for the first place. But conversely, if you get it right and you positively demonstrate due diligence in a way that the senior decision makers can rapidly sign off on, you are worth your weight in gold. You solve so much time and organisational frustration, you just simplify things instantly.

Gaye Francis (09:59):

And it results in action being undertaken.

Richard Robinson (10:01):

Correct. And being an engineer if you do this work and nothing happens... I mean the satisfying jobs for us, the ones where we know the result is that people went off and did things.

Gaye Francis (10:12):

Oh, and it made a difference. And you could see that it made a difference in the organisation.

Richard Robinson (10:16):

If it's just a matter of spinning the wheels. We don't want to work for those people again, do we?

Gaye Francis (10:20):

No. And we typically don't.

Richard Robinson (10:22):

We typically don't.

Gaye Francis (10:23):

So Chapter 3: The risk management swamp. You can see that Richard's had a little way with his words here!

Richard Robinson (10:32):

Well, this is the frustration engineers are having from their point of view. I mean, that's Sydney Decker, the psychologist from Queensland Uni, airline pilot turned psychologist. Now here's the line about there are so many safety rules out there that nobody really knows what they are, least of the people doing the job, which is blatantly absurd. So you've actually got to do things in a way which make common sense, that you're going to need to have a philosophy and an understanding and a reason behind it. And let's just try to remember the rules. It's not possible. Know all the rules. Now, it actually isn't possible. You have to understand the principles so that when you go and test for the rules, you realise: Ah, we got it right the first time.

Gaye Francis (11:05):

So that chapter goes through some of the difficulties I guess engineers have with the risk management domain and some of the theories and some of the ideas in that area.

Richard Robinson (11:18):

Particularly the tolerable acceptable risk argument, which has still become very popular with engineers and you can't do it anymore.

Gaye Francis (11:24):

I actually think that it's risen again. It sort of went quiet for a while and I think it's back with a vengeance. But anyway...That might be a whole other podcast.

Richard Robinson (11:34):

We could say too much there without too much trouble.

Gaye Francis (11:36):

And then Chapter 4 has to be: Methods to drain the swamp. So this one just goes through a whole lot of different methods to be able to do that. And I think we always say in our courses, in our books, in our consulting gigs, it's not one size fits all. There's a whole lot of different ways that you can go about doing this, and you've got to pick the one that is right.

Richard Robinson (11:57):

That solves that problem.

Gaye Francis (11:58):

Correct. Due diligence by design. How do you actually go about it?

Richard Robinson (12:04):

Well, that's the point. I mean, in the earlier chapter, being an engineer, we sort of make the point about the alliance of lawyers and engineers, and we've spoken about this number of times, David Howarth, the professor of Law of Public Policy, saying how the lawyers are actually copying the engineers. Because basically what happens with engineers, there is a problem or somebody wants to do something, what are the options and in the circumstances, which is the right option and why is it the right option? That's called doing due diligence. It doesn't matter if it's a commercial decision or it's a design decision, you go through the same process or it's a legal problem. And we don't understand quite why that's somehow gone missing again. Design by standards is usually indefensible because there's something that always goes beyond the standard.

Gaye Francis (12:49):

And I think a lot of organisations, this is the Standard, you design to that. But yeah, it's not getting the answers...

Richard Robinson (12:56):

Doesn't normally demonstrate due diligence.

Gaye Francis (12:58):

Correct. And then our last chapter in the book is: Due diligence domain. So it sort of goes through some safety, project, enterprise, environmental, and that sort of thing. So it's really the application of the due diligence process to a whole lot of different domains and the way that we've seen it work within industry.

(13:19):

So we're looking forward to this season of podcasts and having some of those difficult discussions. We'd really love to hear from you if you've got any big, big picture questions that you'd answered or Richard and I to have a chat about.

Richard Robinson (13:32):

The other thing that we're just a talking about was the idea that we might want to have some kind of, I dunno, it's not a conference? What actually is it?

Gaye Francis (13:40):

Yeah, let's call it a conference or a gathering for now.

Richard Robinson (13:43):

A gathering, yes. That's a term my son uses and I'm never quite sure what it means. But basically we think that the system and the engineers are missing the point to some extent, and we want to concentrate. And that's what you want the season to be about, those points that have been missed. So some of those points might be sore points in some places because we're basically criticising Standards Australia and the fact that Engineers Australia keeps encouraging all their engineers to give all this IP to standards. None of the American societies do that. If you're the Society of Fire Engineers in the USA, which I'm a member, you hang on to your IP. You sell your handbook, you do not give it to a third party free, and you do not volunteer your members' time.

Gaye Francis (14:26):

Yeah.

Richard Robinson (14:27):

Association of Mechanical Engineers don't do it. Civil Engineers. They just don't do it.

Gaye Francis (14:32):

I think there's the discussion about ALARP and SFAIRP, target levels of risk of safety, and the changed meaning of things that it seems to be happening in industry, but the methodology that it's used to show those particular concepts has not changed. So we want to have some of those discussions this year and we are thinking that maybe it's a bit more than a roundtable. It'll be sort of a conference or a one day seminar session and have some invited guests and speakers to that and see whether there's any interest.

(15:09):

So thank you for joining us today for our...

Richard Robinson (15:15):

I hope you enjoyed it too. Yes.

Gaye Francis (15:16):

I hope you enjoyed it too. For our first podcast for Season 5, and we hope you join us next time. Thanks, Richard.

Richard Robinson (15:23):

Thanks Gaye.