Hazard & Risk versus Threat & Vulnerability - Top down, Bottom up
Risk! Engineers Talk Governance
Season 8, Episode 6
In this episode of Risk! Engineers Talk Governance, due diligence engineers Richard Robinson and Gaye Francis discuss Hazard and Risk versus Threat and Vulnerability – Top Down, Bottom Up.
The podcast discussion includes:
How bottom-up techniques are creeping back into risk assessments, even though WHS legislation focuses on criticality and asks what is reasonable in the circumstances,
How prosecutions are shaping what "critical" means in practice,
Why cutting minor-incident rates doesn't remove fatality risk, and
Why the two methodologies each have a place if used at the right time.
If you'd like us to cover a specific topic or have any feedback we'd love to hear from you.
Timestamps
00:34 – Why revisit hazard and risk versus threat and vulnerability: a drift back to bottom-up techniques despite the WHS focus on criticality
01:13 – Prosecution patterns in Australia: SFAIRP is hard to prosecute, smaller organisations and repeat or multiple-fatality events get targeted
03:26 – WHS Codes of Practice are written around single-fatality hazards such as working at heights, and the language confusion that follows
04:03 – Bird and Heinrich's triangle, and the elimination of fatalities task force in underground mining
06:29 – WHS asks what controls are practicable and reasonable, not whether the risk is bad enough to act
07:18 – Hazard and risk as middle-management, bottom-up measures versus threat and vulnerability as national-interest, top-down thinking (the desalination plant and defence examples)
08:30 – Criticality in two bands: single or multiple fatalities versus rare mass-casualty events
09:16 – How major events change policy, and the New Zealand experience including the Port of Auckland prosecution
10:27 – Differing state approaches and the pending Safe Work Australia review
10:49 – Wrap-up: both methodologies have insight, so use each in the right place at the right time
Episode transcript
Megan (Producer) (00:00):
Welcome to Risk! Engineers Talk Governance. In this episode, due diligence engineers Richard Robinson and Gaye Francis discuss: Hazard and Risk versus Threat and Vulnerability - Top down, Bottom up.
(00:15):
We hope you enjoy the discussion. If you do, please support our work by giving us a rating and subscribing on your favourite podcast platform. And if you'd like more information on R2A, our newsletter and resources, or have any feedback or topic ideas, head to the website, www.r2a.com.au.
Gaye Francis (00:34):
Hi, Richard. Welcome to a podcast session.
Richard Robinson (00:37):
Hello Gaye.
Gaye Francis (00:38):
Today we're going to talk about, and we've talked about this probably an episode each of the seasons that we've done, but hazard and risk versus threat and vulnerability - top down versus bottom up. And the reason we're revisiting it is because we're sort of seeing that change again into more bottom up type techniques being used when they're looking at risk assessments. And even though the WHS legislation concentrates on criticality, which we've talked about in this podcast season as well, there's still that mismatch happening.
Richard Robinson (01:13):
Yeah. And there's a number of reasons for that. I think partly to do, remember we talked about the West Australian regulator who told us that one of the reasons why WA had taken so long to implement their Act was because they found prosecuting for SFAIRP to be difficult. And we've noticed that the prosecution for SFAIRP in Australia tends to be for smaller organisations and things like that, not for the big ones - the corporate veil still keeps working. But we have also noticed that the prosecutions seem to be, because there's two parts to this. I mean, first of all, what the legislation actually says, and then there's a propensity of whoever's going to prosecute to prosecute you. I mean, I believe you can still be prosecuted for being drunk in charge of a horse, but it doesn't happen very often, so nobody worries about it.
(01:55):
Now, what we've seen to be noticing is that the prosecutions are either to smaller organisations for a single fatality, or if it's a multiple fatality, then a larger organisation might be prosecuted. I mean, that's what happened with the volcano blowing up (in NZ).
Gaye Francis (02:11):
And we've seen a couple of cases of those in New Zealand, but I don't recall any in Australia being particularly done here.
Richard Robinson (02:17):
And the other one is where the same fatality incident has occurred sequentially -
Gaye Francis (02:24):
For the same organisation.
Richard Robinson (02:25):
For the same organization. So I mean, for example, the whole reason why the multiple fatalities, the raft flipped and the four young people got killed at Dreamworld, well, that's the multiple fatality situation. Now, what that effectively means, I think, is that from the point of view of Australian prosecutors at any rate, criticality is being defined as that multiple fatalities or a sequence. It's not just a single fatality unless you're a smaller organisation.
Gaye Francis (02:54):
Yes, it's a number of single fatalities within...
Richard Robinson (02:58):
Obviously, the Powerline Bushfire Safety Task Force, which we were on, there was 173 people got killed in the Victorian fires and South Australian fires. And that obviously created a great political outcry quite sensibly. And so fatality instance still seem to have that overflow, but what actually criticality means is becoming harder and harder to define from the point of view of probable prosecution.
Gaye Francis (03:26):
And I think you're right. And the WHS legislation is focusing on that single fatality type when they're doing up their Codes of Practice, they're typically for working at heights...
Richard Robinson (03:41):
Falling off a roof...
Gaye Francis (03:43):
Things like that. So things that are typically single fatalities at a time. So there's this, again, language thing, and we've addressed language in a number of our podcasts previously, but that confusion with language again and what terminology that's being used is creating a whole lot of confusion again.
Richard Robinson (04:03):
Yeah. Now the other reason why this sort of popped up, because we were talking about this in a threat and vulnerability, bottom up, top down. And this is an argument, far as I know, we used a very long time ago, Bird & Heinrich's triangle. Now Bird & Heinrich's triangle, basically, if you think of a triangle like that, what it's basically saying is a tenfold increase in consequences accompanied by a tenfold decrease in likelihood. Now, that's the same thing as the hyperbola, and I've talked mathematically how complicated trying to work out there under hyperbola is.
(04:33):
But one of the things which we didn't talk about then was, you see, and this partly arose because of the elimination of fatalities task force program when I was a member for the state mining engineer, WA, and they were investigating underground fatalities in WMC mines. And that is also the classic case where there's a series of fatalities. Remember they were killing one in a thousand employees per year in an underground mining explosion or event.
Gaye Francis (04:57):
That was before the WHS legislation came in.
Richard Robinson (05:02):
But that's where the political energy came in. Now, one of the strange things about the... I mean, it was a very popular philosophy there for a while. If you think of the triangle like that, the theory became that if you could decrease the... If that was a correct characterisation of how risk worked, then if you could cut your loss time frequency injury rate in half, then you'd shave half of the triangle, right? So where previously you would've had a hundred minor instance, 10 serious ones and one fatality. If you managed to chop that triangle in half, there would now be...
Gaye Francis (05:32):
One every two years or whatever it was.
Richard Robinson (05:34):
Well, you cut down the likelihood of this. If you can cut the likelihood of any small event down enough, then you prevent the big ones as well. And from my point of view, I think that the elimination of fatality task force, what it actually proved to me, that wasn't what actually happens. If you go for the lost time frequency injury rate, what you actually do is chop the sides of the triangle off and leave the pointy sharp bit where people are getting killed in place. And that's certainly what, at the time, the state mine engineer and WMC were focused on with their elimination fatality task force because they basically said: Well, okay, what kills people in underground mines and obviously is working under unsafe ground. You make the mine safe by putting rock bolts and shotcretes in to make sure the roof doesn't fall in on you, but we are actually mining, that's a problem. And so what they were basically doing is buying machines that you could work from safe ground into the unsafe ground. So if there was a collapse, it couldn't get you.
Gaye Francis (06:28):
You went there.
Richard Robinson (06:29):
Basically.
Gaye Francis (06:29):
And that's how technology's evolved over the years, isn't it? But it still is asking the question. I think that's where we've come to even where we are now is they're still asking the question: Is this bad enough that we need to do something about it? Rather than (what) the WHS legislation is saying: What are all the controls that you could put in place that are practical and which of those are reasonable in the circumstances? So you have to justify why you are not going to do things. But we've gone back to this bottom-up approach to say hazard and risk and the likelihood is discounting these critical events.
Richard Robinson (07:05):
That's right. Because if you've cut your likelihood down, you're good even though the fatality ones just stay put.
Gaye Francis (07:10):
And it doesn't change.
Richard Robinson (07:11):
It doesn't change.
Gaye Francis (07:12):
So we're still not looking from our perspective on what else could be done.
Richard Robinson (07:18):
And that's where this sort of language bit comes back again, because hazard and risk from our point of view is bottom up and focus of middle management for the things that happen a lot and therefore motivate middle management greatly because they can measure it and test it. Whereas threat and vulnerability, as I pointed out, ASIO basically do threat assessments. They don't do hazard assessments when you talk about the national interest, because from the point of view of the national interest, an individual fatality doesn't really make a difference. Whereas from the point of view of the national interest, World War III is absolutely critical.
(07:50):
And that example I used to give of the desalination plant in Victoria, why do we have one? We haven't taken any water from it and it's costing us $1.8 million a day and it's about $18 billion over the 25 year of the ownership of the thing. The answer was, well, we'd had 10 years drought and the cabinet of the day said: Well, if we have another 10 years drought we'd actually run out of water. And the answer to that was: We don't like that and we've got the resources to fix it. And that's the same thing with having a department of defense. If you don't ever fight a war, it's a complete waste of money, but when you need it, it's absolutely critical.
Gaye Francis (08:30):
I also think that what we've talked about in the office here is there's now criticality being separated into two bands in a way. There's those single fatalities and an event that can cause multiple fatalities like Dreamworld that we are talking about, that two, three, four. And then there's mass casualty events like we've seen in the natural events like flooding, train collision accidents, bushfires. So there is another level above that, but I think all of the...
Richard Robinson (09:01):
But that's very rare.
Gaye Francis (09:02):
Correct. Very rare. And there's only a small number of organisations that really have to concentrate on those sort of ones. And they're probably more... They're going to be looked at probably from a governance viewpoint.
Richard Robinson (09:16):
Well, it's one of the reasons I understand, just explained by railways people, the reason why New South Wales was always so keen on level crossings is because they'd had, I think it was in the 40s, a train ran into a bus load of school kids and the world changed.
Gaye Francis (09:31):
Yeah. So it was just something that they weren't going to ever have happen again.
Richard Robinson (09:35):
Well, they also are lumpier than Victoria, so it's easy to do.
Gaye Francis (09:38):
True, true. So I think there's this difficulty in language again, but the Work Health and Safety Codes of Practice and the Standards that New Zealand are introducing, they're sort of aimed at those single fatality band, isn't it?
Richard Robinson (09:56):
Well, it is interesting because they talked about simplifying the legislation in New Zealand for smaller organisations and they define more or less what criticality was, which means kill or maim for an individual organisation, for a smaller organisation. But then again, they went and successfully prosecuted the CEO of the Port of Auckland. But that was for the series of events, not just one.
Gaye Francis (10:16):
Correct. And I guess Australia's got a little bit more complexity in there in that we have different states and states are prosecuting in different ways as well.
Richard Robinson (10:27):
Yeah. And we haven't seen the final outcome of the health and safety review.
Gaye Francis (10:33):
No. So Safe Work Australia are doing a review and that was a report to go to the ministers in August and whatever feedback comes from that. We'll certainly update a podcast or do a podcast on that when we hear anything.
Richard Robinson (10:48):
Yep.
Gaye Francis (10:49):
All right. So I think just finishing off, hazard and risk versus threat and vulnerability, there is still a difference and both methodologies are being used out there.
Richard Robinson (11:01):
And both methodologies have insight, but you've got to make sure you use it the right place at the right time.
Gaye Francis (11:06):
Yeah. So just understand that, but also remember that the WHS legislation is really looking at here are good ideas, what is reasonable in the circumstances rather than the level of risk.
(11:19):
So thanks for joining us today, Richard, and we will see you next time.
Richard Robinson (11:23):
Thanks, Gaye.