Design Analysis not Risk Analysis

Risk! Engineers Talk Governance Podcast
Season 3, Episode 1

In this episode, Richard and Gaye discuss the topic of design analysis versus risk analysis. They explore the difference between ALARP (as low as reasonably practicable) and SFAIRP (so far as reasonably practicable) and how the interpretation of these concepts has caused confusion and problems in various industries. 

They also discuss the importance of safety in design and the need for a retrospective design review to ensure that all reasonable practical precautions are in place. The conversation also touches on the role of AI in consequence modelling and design review, as well as the need for quality assurance and independent checks in governance processes. 

The episode concludes with a reminder that there is no one-size-fits-all approach to risk analysis and that different tools and techniques can provide different insights into due diligence issues.

You can read the episode’s full transcript below.

Episode transcript

Megan (Producer) (00:00):

Welcome to season three of Risk! Engineers Talk Governance. In this episode, due diligence engineers Richard Robinson and Gaye Francis discuss the topic of design analysis rather than risk analysis. We hope you enjoy the episode. If you do, please give us a rating. Also, don't forget to subscribe on your favourite podcast platform.

Gaye Francis (00:27):

Welcome Richard, we're back for Season 3 of our podcast.

Richard Robinson (00:31):

Yes, and as we were just talking, Gaye had an excellent holiday in Finland with the family.

Gaye Francis (00:35):

I did! Had to do due diligence a couple of times with managing kids, but we made it safely and had a good time.

Richard Robinson (00:44):

And since then, you're able to go on more business trips because the kids are so well accepting of your traveling needs.

Gaye Francis (00:50):

My traveling needs. That's correct. Just a little aside there!

(00:55):

Welcome back, as we said, to Season 3. Today we're going to talk about design analysis rather than risk analysis, and the need to demonstrate SFAIRP (so far as reasonably practicable) is really a design exercise.

Richard Robinson (01:12):

Yeah. In part this arose because there's been some interesting discussion if there's really a difference between ALARP and SFAIRP. And I suppose we were sort of completely mystified by the whole discussion because, from our viewpoint, ALARP should never have existed. And the way it got interpreted has caused an awful lot of grief in an awful lot of places for an awful lot of people.

(01:29):

But when we were just fiddling around with it, I think it partly irritated me because I've sort of said a lot of things in different ways and I've understood what the different points were. For example, consequence modeling, that's things that go 'pop' and 'bang' and overpressures and things like that, is a very scientific area of activity. And consequence modeling to me was always fully scientific. What always was clear to me is that risk analysis per se, which is a simultaneous appreciation of likeliness consequence was always a very muddly subject and everybody always got confused.

(01:58):

Now, I just did sort of an exercise out of a curiosity because all this ALARP (vs) SFAIRP business reappeared, I sort of actually went and looked back at Sir Frank Layfield's review of the Sizewell B power station, which is where he had a problem because whether or not they were going to approve the new nuclear power station, which was a fairly complicated idea in the UK, and he had a lot of engineers advising him and he was a lawyer. And one of the things that sort of became clear is that when you look at nuclear radiation levels, you had to decide what was harmful or not harmful and what was reasonable. And so the recommendation that came out of his thing is that somebody should do a review of this. Now that sort of ultimately sort of floated over to the then what was the new UK Health and Safety Executive, and when you look at the people who put the tolerability risk of nuclear power stations together, they were mostly scientists talking about radiation and they were the people who dreamed up this whole ALARP business.

Gaye Francis (02:52):

So they were actually looking at the level of radiation that could be acceptable, in quotation commas, "to humans".

Richard Robinson (02:59):

But what was interesting about that, that so-called dagger diagram never had any numbers in that document, but what they did do was put in the appendice what acceptable or tolerable levels of risk in different industries otherwise were: Car industries about 10 to minus four per annum for a single fatality; and lightning strikes and so forth was about 1 x 10 to minus six or 10 to seven. Now, they didn't necessarily recommend putting those numbers onto their dagger diagram, but that's what everybody in the petrochemical business, in particular, and the land use planning guys in major hazard facilities did for the next 20 years.

Gaye Francis (03:35):

They equated the two (ALARP & SFAIRP).

Richard Robinson (03:36):

They equated the two. And then I realised well the engineers doing Sizewell B and giving advice to lawyers were very careful. And even the scientists when they were putting in the risk level, left it all in the appendix. It was other people that stuck the two together. And that's in fact where the difficulty arose. Now that sort of caused me a reflection in which irritated me because I've thought about this for a long time and trying to put models together and so forth. I mean, one of the things we had realised for example, was that because we had David Howarth the professor of law and public policy out we sponsored into Melbourne in 2017, and the reason why we were interested in him because he had that book "Law as Engineering". And what he was pointing out is that the lawyers, particularly international UK and US lawyers, were consciously studying the design activities of engineers on the basis that the lawyers do the same as engineers. If somebody client turns up says, I got a problem or I want to do something, then in the circumstances what are the options and which is the best for the client? Now that's a design exercise. And I suddenly realised safety in design, well, that's a design exercise. That's the point. Consequence modeling is scientific, which drives the criticality analysis decision. And what the courts actually do post-event, it's not the level of risk that counts, it's a retrospective design review.

Gaye Francis (04:55):

To make sure that all reasonable practicable precautions were in place.

Richard Robinson (04:58):

Now if you look at it like that, you do consequences now just to work out what the critical things are, that is very scientific. And then you do safety and design to manage that consequence. And then if it all goes wrong post-event, you do a retrospective design review, which is what the lawyers are deliberately studying the engineers for. That's what David Howarth's point was. Now that has a couple of interesting little flow-ons because the consequence analysis, which I've always understood was scientific. You've listened to me ramble on about that for 10 years!

Gaye Francis (05:32):

A few more probably!

Richard Robinson (05:34):

Because basically we decided to stay away from major hazards because they were doing risk analysis, not consequence analysis, in the first instance, and therefore weren't demonstrating all reasonable practicable precautions were in place.

Gaye Francis (05:43):

I think just before you go on there, it's just important to know, that we've covered this in another podcast, that major hazards have gone to consequence modeling and consequence analysis primarily now.

Richard Robinson (05:54):

At least in Victoria. That's correct. I'm not aware of any other state doing it yet. And we did suggest that Engineers Australia in their role as the intellectual body of engineers should actually get their act together on this one lickity split, but that's another matter. But what was interesting about this was, you see the business of science is to know about things. So this is not an attack on scientists in any way because the better scientists know, the better engineers can do. That's the whole point of the exercise.

Gaye Francis (06:23):

The better you're able to design for those things.

Richard Robinson (06:25):

That's correct. And then the lawyers have decided they're going to consider what the engineers are doing and do design reviews of, at least, what the engineers have designed. That means there's a remarkable alignment going on. I mean obviously there's a bit of a flow between the scientists and the engineers because sometimes engineers turn more into scientists and vice versa about what can be done.

Gaye Francis (06:48):

And I think that process is a bit more back and forth, isn't it? But if you focus on the credible critical issues, that's sort of where you can get your design the most robust and it usually then designs for the lesser issues as well.

Richard Robinson (07:02):

Correct. And the other reason why this is actually important, all of a sudden it puts the responsibility of the respective parties in the right place because the scientists -- it is important they keep figuring out how the world behaves, how a gas cloud under certain circumstances will behave and all the modeling things that they wish to do -- but it's the engineer's responsibility to make sure that every reasonable practical control is in place to deal with that credible critical issue. And then it's the lawyer's responsibility to retrospectively test that understanding, because in an advanced industrial society, we do create the most enormous hazards. And when you think of where AI's going, I mean that's what they're actually talking about now. Because what an AI can do, it could do a much better job of the consequence modeling probably because it will take a whole lot of parameters into account. Will it do the design review? Now, that is an interesting question and I don't think people have thought about it because what the philosophical framework for that design and then the design review, that's never going to be the job of an AI. I would have thought.

Gaye Francis (08:04):

It's a really interesting question. I gave a board presentation last week and one of the board members asked, what's the role of AI and how as a board do we demonstrate due diligence around it? And I think it's going to go more as a governance and boards and things like that are going to have a responsibility to test the AI where it's going to be used. And I don't know that we can use it for safety critical things yet, but that's just sort of an opinion. I don't know how you put a quality assurance system around it to make sure that it is? But there's going to be some interesting questions around that and quality assurance and how boards govern AI going forward.

Richard Robinson (08:46):

Well, it fascinated me because remember the first, pretty much one of the first jobs you got with R2A as a young engineer was doing the SIL study, the safety integrity study on how two trains would get past each other on a single line track in New South Wales.

Gaye Francis (09:00):

Correct.

Richard Robinson (09:00):

And you had the job of basically testing every track, every intersection, every points and testing to see whether the watchdog that was being created would actually...

Gaye Francis (09:09):

Bark... Or bring up that the hazard existed.

Richard Robinson (09:15):

That's the sort of task you'd think they'd probably throw an AI. But are you going to trust an AI to make sure that every possible configuration is tested or are you going to choose a Gaye to do it in the future?

Gaye Francis (09:28):

<laughs> Well, I think that's where quality assurance comes in, doesn't it, Richard? Because you're going to have to have a confidence around the technology that you're going to use and the AI and the information that it gives out. You're going to have to test it in some way as part of your due diligence process to make sure that you've got confidence in the information that it's delivering to you.

Richard Robinson (09:46):

Well, you might remember my then business partner, Kevin, basically what he had to do... He worked out a process to make sure that none of the collisions or head-ons - all the train collisions - could occur. And then when the designer decided that was the way it was going to be designed, to use that test (they) had to dream up a different test in order to test whether or not what the designer put together...

Gaye Francis (10:12):

Actually worked.

Richard Robinson (10:13):

Actually worked. And so a different kind of risk model had to be put in place to examine what was being done by these large defense-based software players. And we had to dream up, well, Kevin was doing that part and I was doing the checking and you were doing the work as I recall.

Gaye Francis (10:31):

<laughs> But I think that's really interesting because I think those sort of things will require this independent check. And that's part of what, I guess, if you go back to our idea that the courts are testing after the event whether all reasonable practical precautions are in place, so that retrospective design review, they're looking for other tools and techniques to test the governance processes before the loss of control point in a way.

Richard Robinson (10:56):

Correct. So you need different ways of doing that. And I think we have talked about this in another podcast, but perhaps that's another one we should revisit? Particularly because, obviously from our point of view, the Victorian major hazard people have actually ditched what was the target level of risk ALARP process in favour of what we've always understood to be...

Gaye Francis (11:16):

So discounted the likelihood; they don't consider likelihood anymore. So it's consequence base. But we've said it in a number of our podcasts and we will continue to say there's a whole lot of tools and techniques out there that give you all different insights into risk issues or due diligence issues. It's not a one size fits all, it's that you have to think these things through and you will get different insight depending on what you use. So I think that's one of the key things that we would say is your retrospective design review, think about the questions that a lawyer might ask you in the event that an incident happens. And have you demonstrated due diligence?

Richard Robinson (11:58):

Yes. Well, I did observe I've worn my glasses today, so as I commented to Gaye earlier, she's actually been in focus for the entire session, which is nice.

Gaye Francis (12:06):

I hope my words as well as your vision! <laughs>

(12:09):

Alright, I think on that note, we might wrap podcast number one for season three here. Thank you for joining us and hope you can join us next time. Thank you.

Richard Robinson (12:19):

Thank you.

De-engineering of Technical Roles and Engineering Education & Philosophy (Season 2 Wrap)

Risk! Engineers Talk Governance
Season 2, Episode 10

In the final episode of Season 2, Richard and Gaye discuss the de-engineering of technical roles in organisations and engineering education and philosophy.

They reflect on their experience as expert witnesses at a recent hearing where technical knowledge was lacking in person, and they highlight the importance of having engineers involved in and/or advising on technical roles. They also discuss the de-engineering of organisations and the shift towards a more compliance-focused approach. They touch on the need for engineers to have a global view and the importance of questioning and thinking critically.  

Also discussed is the lack of emphasis on ethics in the engineering profession and the need for a holistic approach to problem-solving and the role of engineering philosophy in driving change. The episode concludes with a reminder of the importance of thinking and the need for engineers to embrace a philosophy of change.

 Read the 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 wrap up a few topics they've discussed throughout Season 2 and chat about de-engineering in organisations and engineering philosophy. Please enjoy the chat and if you do give us a rating. Also, don't forget to subscribe on your favourite podcast platform. If you have any feedback or topic ideas, get in touch via admin@r2a.com.au and look out for Season 3.

Gaye Francis (00:37):

Hi Richard, welcome to our last podcast for Season 2.

Richard Robinson (00:41):

Welcome Gaye.

Gaye Francis (00:42):

Today we're not really sure what we're going to talk about. There's a few topics that we've sort of touched on in the podcast throughout this season and there's been some comments about de-engineering and engineering education, engineering philosophy, so we thought we'd make this a little bit of a mismatch.

Richard Robinson (01:02):

Well, and I think the core reason why it sort of popped up is when we were at the VCAT (Victorian Civil and Administrative Tribunal) hearing acting as an expert witness, the member actually asked the major hazards facility and the council and the major hazards regulator to provide information.

Gaye Francis (01:17):

Some technical information.

Richard Robinson (01:18):

Technical information. And what we sort of discovered was they all sent lawyers. There were no technical engineering type knowledge people there at all.

Gaye Francis (01:29):

Just clarifying that they weren't in the session, but our understanding was that the facility, the major hazard facility, had gone back to their technical people to confirm the understanding, but they were not represented as such at the hearings.

Richard Robinson (01:44):

And likewise with the major hazard regulator, the actual technical people giving the technical advice weren't there. They were being represented and interpreted by lawyers.

Gaye Francis (01:54):

Correct.

Richard Robinson (01:58):

And when it actually came down to the final hearing, in fact, I was the only technical expert witness there, which surprised me greatly because I would've thought the council, for example, would've thought to have their own technical expert witness and that was not the case. They were actually represented by a lawyer and a town planner officer.

Gaye Francis (02:21):

Who were both consultants to the council.

Richard Robinson (02:22):

Who were both consultants to the council.

Gaye Francis (02:24):

I think the other one was that they actually commented and said it during the hearing: Oh, we don't have that technical expertise.

Richard Robinson (02:31):

Correct.

Gaye Francis (02:33):

On a technical matter, which was a bit of a shock.

Richard Robinson (02:35):

Which was the whole point of the exercise. And obviously the town planner and the lawyer's knowledge of town planning, legal and past cases, and all that sort of thing, is obviously something which we had very little knowledge about and chose not to comment on at all. But when it actually came to the technical matters over-pressures and how these things would happen and what sort of controls you could put in engineering design and safety design, all these other matters, it simply wasn't considered, so far as we can tell from their point of view. Now, when you stand back and look at this, this is something that's been happening in local government for some time and we've noticed this all over the place. I mean, once upon a time you used to have the town clerk who did the administration and a municipal or city engineer who ran the outside things, but that means they also did planning permits, building permits and everything.

(03:24):

These days that's all been disaggregated and so now you have the building permits basically run by building surveyors and the planning permits run by town planners and you have no holistic overview of what can be done or how things could be done to manage things. And so when some curious recommendation, from our point of view, pops out to say the way to manage risk from an explosion overpressure is just to reduce the number of people that live there, rather than building the building so it can withstand and prevent the hazards from actually causing pain and suffering to people - it just wasn't contemplated so far as we could tell.

(03:59):

Now this is something that's been popping up all over the place. It actually has higher level consequences for your society. What seems to happen in local government, at least, is that all the engineers have basically been pushed into water and wastewater and sewage and stormwater, but they've all been pushed into silos. There's no overarching philosophy, engineering philosophy put in.

(04:21):

Now you might ask the question, what's engineering philosophy? I do have to report that as a group, engineers really haven't been that interested in the subject. I tend to mention it every now and then to you and you sort of roll your eyes at me, to be fair.

Gaye Francis (04:33):

Richard has been trying to write an engineering philosophy book and course for, I've been working with him for over 20 years and I think he's been trying to do it in all of that time since I've been working with him.

Richard Robinson (04:44):

Well, yes, and I keep trying different universities trying to get them interested and to say they're not particularly interested in me, but that's the way universities have gone - if you don't have a PhD these days, you really don't get much of a look into any of these courses, as we have discovered. It doesn't matter how intellectually useful, what you're saying is so far as we can tell.

Gaye Francis (05:01):

It is an academic qualification.

Richard Robinson (05:03):

Yeah, that's right. And I guess in that sense there used to be a fair transfer between industry and tertiary education and engineers. I haven't seen that occurring as much as it used to. I can quite distinctly remember I was at Monash as a student doing engineering, they actually appointed a professor who was definitely industry based and they did that as a matter of policy as I recall correctly. Whether that's still happening or not, I get the feeling it's not, I think academia has become very closed, let's put it that way.

(05:38):

Anyway, the point about all this though is you see what's engineering and what's engineering philosophy and what's engineering education about now? This is something I've had a bit to do about, I mean a long time ago before we started the risk engineering, well, it was the Loss Control section of the Management Branch of Victoria Division, which turned into the Risk Engineering Society, but we're also doing things running engineering education programs for engineers; CPD, basically, for engineers, and we got a lot of very interesting speakers, one of the talks was Bernie Callan giving me help on a couple of things too, because he was interested in the subject as well. But I also dug out some papers by Sir John Monash. He gave a very interesting paper on engineer education, his retiring address as the President of the Victoria Institute of Engineers, and he was explaining how the need for engineers to have sort of a global view on what was going on, and this was before he basically went off to the first World War and became a very successful General, because, again, he had a very global view of how things should be thought about.

(06:40):

Now, from my point of view, engineering philosophy has always been the philosophy of change, meaning if you don't like it, change it. And one of the characteristics of engineers, and I know I've talked to a number of spouses of engineers and one of the things they always observe about them, they've said, is when something they don't think is quite right, they go and fix it. They go and do something about it. That's one of the characteristics that they've always observed.

Gaye Francis (07:03):

I think it's a curiosity and ability to question things if you don't, you don't just take it as the status quo.

Richard Robinson (07:10):

But that's one of the problems we've been having with engineer education because we've been running some post-grad programs for different universities at different times and one of the things we've noticed is some of these graduate engineers we've been getting haven't been as curious or wanting to change as much. They just want whatever the information is so they can go and apply it, and want it to be a cookbook recipe and, if you like, that's one of the frustration we have with the whole ALARP business, from our point of view, there's a process; you use quantified risk assessment, use a target level of risk, if you don't satisfy your criteria, then you do something rather than sort of saying, is there something else that needs to be done?

Gaye Francis (07:45):

I think that's being extended more into industry as well. A number of clients that we talk to and potential clients that we talk to: What's the answer? What's the process to get the answer? And risk's one of those subjects that it's not a cookie cutter approach, it's not black and white. You will get subtly different answers to every problem you apply it to. And so you've got to think and thinking is hard (we touched on this in another podcast) and we've found that people want a process. What's the process that I need to do to get the answer? And I don't know whether it's because it's gone down a more compliance or an audit type process, black and white, it's right or wrong. But in risk it's not right or wrong. It's about thinking it through and putting in the best option that you can.

Richard Robinson (08:39):

Well, I think that's the point. Remember how we had promoted the Professor of Public Policy and Law from Cambridge University, David Howeth, and the point he made was, and this is where the big law firms in the UK and US have gone to, and that it's law as engineering and what he meant by that, and they're literally following the engineering design process: A client turns up they've got a problem or they want to do something, in the circumstances what are the options? Well, what are the options? And in the circumstances, which is the best? That's a straight-out engineering design option. It's not a cookie cutter approach in the sense of 'here's the process, we'll go through and we'll definitely get you the best answer', because you don't what the options are until you look for them. And then we don't what your circumstances are and so what might actually be the best thing to do at that time. And it can change.

Gaye Francis (09:27):

Yes.

Richard Robinson (09:29):

But that's the best advice you're going to get. Now that is what the Consulting Engineers used to do, but they've stopped calling themselves Consulting Engineers who've turned into Consult Australia. I don't quite understand what that is. And they've dropped their code of ethics. I mean for those of you don't remember these things, I do, but because I used to talk to Ben Fink, the Managing Director of GHD, he was very strong on this, to be a member of the ACA, the Consulting Engineers, the majority ownership had to be engineers who were corporate members of Engineers Australia. And the reason for that was to ensure that the code of ethics of Engineers Australia, the consulting engineering practice had to comply with the code of ethics of Engineers Australia, which basically said you had to put the interest of a client first. Once you just become owned by general shareholders, it's all about the money for the shareholders. Nobody cares about the ethics.

(10:18):

If to pull a plug on the job is the commercially intelligent thing to do for your shareholders, then you do that. Whereas from a consulting engineering viewpoint, you have to finish the job in the best interest of a client, even if it meant you might lose some money. And you can only do that if the majority of the directors are actually bound by a code of ethics. And then the question becomes what's a profession? Well, generally it's applying a code of ethics and if you can't apply a code of ethics, then what are you?

Gaye Francis (10:46):

But I think that has dropped down even in Engineers Australia, the code of ethics is not as promoted as it once was.

Richard Robinson (10:53):

Well, Ben Fink made it absolutely crystal clear to me, although he said there was three, although I think there's actually five. Stick to your area of competence, no kickbacks, he who pays you is your client, be responsible for your own negligence and give credit where credit's due. And wow, has that one been gone missing lately?

Gaye Francis (11:11):

Yes. And that was instilled in Richard and being Richard's business partner that had been instilled in me from a very, very young age as an engineer, young engineer. I think what we're also seeing, and maybe this is the reason why people are looking for more that cookie cutter approach and those systems and processes in place, is the idea that organisations are being de-engineered. We are coming across a lot of people in engineering roles or technical roles that don't have a technical background.

Richard Robinson (11:41):

Correct.

Gaye Francis (11:42):

And so they're looking for processes and systems to put in place to be able to understand, but they don't have the background to be able to question. Is that the right idea?

Richard Robinson (11:56):

That's one way of saying it.

Gaye Francis (11:59):

Of those in technical organisations. So we've come across quite a lot of people that are running big technical projects that don't have any technical background.

Richard Robinson (12:11):

It can be done if you have the right technical advice, but that means you're going to have the right people working with you.

Gaye Francis (12:15):

So it's about that team approach. Again, you can't do these things in isolation.

Richard Robinson (12:20):

I suppose there's two other points I'll just make in passing. There was this thing, I think it was the University of Wollongong actually who started it and then the medical faculties took it over, but one of the things they sort of said and it was a frustrations I had when I was doing engineering was that you were taught all this science basically and you were basically made an applied scientist, in effect, and all the ethics stuff and all the legal stuff that you need to know to be effective in practice, you learned after you'd got a qualification of some sort. And you'd just been pumped science at you and you didn't really understand what use it was going to be, and I've got to say an awful lot it wasn't of a great use the way my career went, it never made sense to me.

(12:58):

Now, the University of Wollongong, I think it was, decided that what they would do first was the first thing they ever give a bunch of engineers in first year the first thing you got was a design exercise and you found out what you needed to know in order to make it work. And then you need to work out, well, if I need to know this, I'd better go and study that. And that's what the medical faculty started doing. They take a bunch of first year students and show them some poor soul on a bed who's not well and they say: What's wrong with them?

Gaye Francis (13:26):

What are you going to do?

Richard Robinson (13:27):

And force them to understand what they needed to know in order to bring about a successful conclusion. I understand the medical, that's one of the reasons why we started an education branch in Victoria because we were trying to expand that sort of understanding to the local universities. Don't think it actually succeeded, although every now and then sometimes you see a spark of life in a different place you weren't expecting. But this overall philosophical view, it does seem to me to be important, still is. And the other way I think it might've popped up, if you start the engineering society as a whole, one of the consequences of trying to fix that is to start registering engineers. I would've preferred to be the other way around that the engineering philosophy was still endemic in society and the engineers weren't registered. But if the only way to actually get the engineering philosophy back into the system is to register them and force it back into the system that way, then that might be a necessary consequence. But I'm still not absolutely sure that's going to work.

Gaye Francis (14:23):

But that's not what they're using registration for engineers for. It's a liability.

Richard Robinson (14:29):

No... But it has that consequence whether or not that's what was intended. And certainly the way the engineers were going about it, it's more about being a status thing rather than a functional thing. Whereas I'm more interested functionally. But it's like us, we don't find that being registered in Queensland or Victoria is essential to us because from the point of view of signing off on the design, which is where the crunch really comes, we can't do that anyway. And by the time we've finished doing our due diligence approach, everybody's got to have agreed that it's a good idea and then the individual design flows from that.

Gaye Francis (15:01):

Yes. So I think taking all of this and wrapping up our last podcast for the season, it's really about engineering is about that philosophy of change and being able to change things. And to be able to change things, you've got to think.

Richard Robinson (15:16):

Well, Karl Popper in is a book Objective Knowledge, he makes the point, he gives an example of a mechanical engineer and said: Look, when you're designing a society, no mechanical engineer would design a car without testing it hard and running it through all sorts of things. You don't just get the design, get it right the first time and everything works. You work hard to make it function. I mean, (Elon) Musk just got his rocket off again, they both blew up, but the separation that got into space, it really is a progressive evolutionary design and I suspect the next one will actually get there. This takes time and it's hard work. Societal change and issues require the same effort. And for the life of me, I've never understood how that understanding which sort of exists in philosophy, generally, isn't understood to apply in engineering philosophy. Philosophical terms too. But that's just me, obviously not everybody frets about this stuff.

Gaye Francis (16:19):

Alright, so I think on that note, we might finish our podcast for today. Richard, Thank you for joining us for Season 2. We hope you've enjoyed it! And we will be back for Season 3 very soon.

Richard Robinson (16:33):

Thanks Gaye.

Gaye Francis (16:34):

Thanks Richard.

Nuclear Power Safety: How The Finnish Get It Right Before They Proceed

Risk! Engineers Talk Governance Podcast
Season 2, Episode 9

In this episode, Richard and Gaye discuss nuclear power safety with reference to Finland. 

Gaye shares her personal experience as an exchange student in Finland and her connection to the Olkiluoto Power Station. They discuss Finland's approach to nuclear power, including their focus on managing nuclear waste with a whole-of-life appreciation for nuclear power, and that they involve the community as stakeholders in decision-making. They also highlight Finland's commitment to safety and their precaution-based approach rather than risk-based. 

Read 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 nuclear power safety, especially in relation to Finland and how they focus on getting it right before proceeding.

(00:18):

Please enjoy their chat, and if you do, please give us a rating. Also, don't forget to subscribe on your favorite podcast platform. If you have any comments or topic ideas, please get in touch via admin@r2a.com..com.au.

Richard Robinson (00:36):

Welcome Gaye to your session on nuclear safety.

Gaye Francis (00:40):

Oh, thank you, Richard.

Richard Robinson (00:42):

Now, the reason why we're doing this is that a long time ago, or perhaps a short time ago, depending on how you look at these things, Gaye was an exchange student of Finland and one of her host fathers was in fact the safety manager manager for the Olkiluoto, you better pronounce it more correctly.

Gaye Francis (00:59):

Olkiluoto

Richard Robinson (01:01):

Olkiluoto Power Station, which is a nuclear power station in Finland. Now interestingly, Gaye's taking her whole family, husband and two kids, on a holiday to Finland and she's going to go to the host family because they've been keeping communication ever since. And her daughters apparently deserve to see a real Christmas in Finland, which is about as chill as you're going to get!

Gaye Francis (01:25):

Hoping for a white Christmas, Richard.

Richard Robinson (01:26):

Really peculiarity, we're just doing some work for Tasports and it turns out that Tasports are having their two new ferries built at, I can't remember how you pronounce that exactly.

Gaye Francis (01:36):

Rauma.

Richard Robinson (01:37):

Rauma, which is a town of about 5,000 people or something. It's not a big place. And you're actually staying where they're building the ferries for Tasmania, which is even more peculiar.

Gaye Francis (01:48):

Yes, Finland's not a very big place, but they do some pretty heavy lifting in industrial terms.

Richard Robinson (01:54):

Well, more than that, just in educational terms, Finland's one of those remarkable places where teachers have, for example, have a very high standing, a very high status. And university, if you qualify, it doesn't matter where on the planet you are, if you qualify, you can be educated, there free, but you have to obviously achieve the academic standard that Finns expect of you. And they just find that that approach to life actually substantially enhances the way in which people look at them in the world. I've also been advised because there was an interesting sort of holiday trip going from up the Gulf of Bothnia to St. Petersburg a while back, and I made some passing remark and Gaye just looked at me blankly and said: Finns do not holiday in Russia.

Gaye Francis (02:33):

They do not holiday in Russia, that's definitely right.

Richard Robinson (02:37):

I'm sure that's probably reinforced in recent times.

Gaye Francis (02:42):

So back to the topic. <laughs>

(02:45):

So one of the interesting things that, and I gave a presentation probably 2015, so a number of years ago, and it was when the nuclear power debate was happening in Australia and I said to Richard, I don't understand. You know the Finns have had nuclear power for a long time.

(03:01):

As you said, I went on exchange and that was 1990 that I went on exchange. So during high school. So the Finns have had nuclear power for a very long time and been able to manage it.

Richard Robinson (03:13):

But they actually do it better than that because they're one of the few places that actually decide that they're going to manage their own nuclear waste.

Gaye Francis (03:18):

They do. And that's what I think one of the key things for me is, they really have a whole-of-life appreciation of nuclear power. So their main research area is actually where to put the spent fuel rods and how they're going to store that and manage that in years to come.

(03:40):

So Olkiluoto is on the west coast of Finland, quite down south about four hours from Helsinki, and I stayed in a little town called Eurajoki, and it's in the municipality of Eurajoki, and the community are definitely aware of the nuclear power station in their community and they actually lobby for it. One of the interesting things was, and we've talked about stakeholders and interested parties before, the community is definitely a key stakeholder in the decisions of the nuclear power station and whether new reactors are built and things like that. And they actually have a right of veto. So if the community doesn't think that this should be done, then it's not done, which is really interesting.

(04:28):

The other thing, so Olkiluoto 3 has just come online in, I'm just looking at my date here, April 2023, it started full regular production, and that's after an 18 year delay. So it was approved in 2005 and it's just come online in 2023. And one of the key reasons was there was some safety concerns around it and basically the regulator in Finland said: No-go until you can prove otherwise that this is safe to go.

Richard Robinson (04:57):

So the commercial imperatives do not rule the day, the safety imperatives rule the day.

Gaye Francis (05:01):

Yes, absolutely. And there's a lot of media and stuff online that basically says this has gone way, way over budget as you could imagine with an 18 year delay and cost blowouts and everything. But the safety regulator, which is the Radiation and Nuclear Safety Authority in Finland, just basically said no go. And it's sort of interesting because for Finland, as Richard said, they used to get about 60% I think, of their coal from Russia. So they don't want to rely on Russia to get coal to produce electricity, but they're also marketing this, or I dunno whether marketing's the right word, but also advertising this as one of the greatest single climate acts in Finland. So they're going to nuclear power to address the climate change issues.

Richard Robinson (05:54):

Well, also they're up to, I think on EVs, I think aren't they over 50% now? I think.

Gaye Francis (05:59):

Yeah, so they're very, very advanced. And I think when we had this conversation in Australia, I just feel that there's a lack of maturity. Yes, there's been some pretty awful incidents around nuclear power and there's been some lessons learned, but there's some countries that are really, really doing it well that we could learn from. And I don't think you have to start from scratch to be able to plan for that.

(06:26):

But one of the key takeaways for Finland was that that final disposal, and they basically go from reactor safety and the management of the spent fuel. It's actually all done onsite in Eurajoki at the facility. So it's disposed of in sealed, encapsulated steel containers and then finally disposed of, just put in the bedrock.

Richard Robinson (06:58):

Yeah, down quite a decent distance down.

Gaye Francis (06:59):

Oh, very, very distant distance down.

Richard Robinson (07:03):

But they specifically dug that out for the purpose of containing...

Gaye Francis (07:07):

Spent fuel rods.

Richard Robinson (07:08):

And it's so far down that the background radiation and all those sorts of things is not relevant.

Gaye Francis (07:12):

That's right.

(07:13):

This is monitored and they've got QA systems in place to monitor their staff for safety, for radiation exposure. They also do community testing and stuff like that. I have been down into the nuclear power site and you get kitted up in all your (protection wear). You go down in a very, very a bus sort of thing. And it's very interesting as a geeky engineer!

Richard Robinson (07:39):

Well, you compare that to the way which you might remember the low level radiation storage facility we vaguely had a consideration of in Victoria, you might recall that? And so far as I know our low level radiation is still being stored in drums out in the open in various places, and we don't actually have a way of disposing of it. And we've just withdrawn from the whole thing.

Gaye Francis (07:59):

So sort of away and forgotten.

Richard Robinson (08:02):

Yep. Well, we haven't done anything about it, so presume it's just accumulating in the wrong places around the place. And yet if you look at the way the Finns do it, you say: We've got a problem, let's think it through and let's get it right and do it properly the first time.

Gaye Francis (08:15):

And it is that very much precaution-based approach. It's not a risk-based target level of safety approach. It's either right and you proceed or it's not there and you don't go any further until it's fixed.

(08:31):

Which I think is a very, and as I said, I went to Finland in 1990 and the power station had been there for a long time. And one of my host dads was the safety manager there and they were passionate about it. It was safety first at all costs for both their workers and the community as a whole.

Richard Robinson (08:52):

Yeah, it is rather interesting, isn't it? I mean, this is the second time you've been back, I believe?

Gaye Francis (08:56):

I've been back three or four or five times to Finland. It was a life-changing experience exchange and yeah, I've taken my husband, he's been to the nuclear power station. He did say to me that probably not a day out for the two girls at 10yo and 7yo, but maybe next time I take them back I could get them involved in that. But we might do the drive by the Rauma shipyards and have a look at the new Spirit of Tasmania being built. That'd be pretty cool.

Richard Robinson (09:26):

Yeah, it's just fascinating, isn't it? It's fascinating that the Tasmanians, when they went scouring the planet to build ferries basically decided on Finland. It does tell you a bit about the society and the culture as a whole, and it does reflect a bit on the Nordics generally. I mean, as I said (in previous episode), I was at the AMPI conference, the Australasian Marine Institutes, as a keynote speaker and the majority of the women marine pilots were Nordics, I've got to say that. And that was just an obvious thing. And they talk about particularly well educated and competent people. You just realised how obvious it was.

Gaye Francis (09:59):

It's just part of their life. I mean, you jump on a ferry between Finland and Sweden, you jump on a ferry between Estonia and Finland. That's just getting around on ships is what you do.

(10:13):

So I hope you found that interesting. That's sort of just a little bit of a takeaway that I had from my time in Finland. And as an engineer, I always recoil a little bit when we don't even seem to be able to have a nuclear power debate in Australia. There's a lot of good stuff happening out there. And I think that we can learn from other cultures and other places as well.

Richard Robinson (10:40):

I think the Finns, particularly in their educational program. In one of my former lifes, I sort of started the education branch in Victoria division of Engineers' Australia, and getting the engineers interested in education, the philosophy, education, I found it quite a difficult thing to do. And I've always, always been remarkably impressed with the Finns. I forget which Australian University has got a Finnish connection. Actually, I remember seeing it advertised at Melbourne Airport when I was coming out one time.

Gaye Francis (11:04):

Okay. I'm not sure.

Richard Robinson (11:05):

I can't remember, but one of the Australian universities has.

Gaye Francis (11:09):

There you go. So thank you for joining us again, and we'll be back next time with hopefully another interesting podcast.

Richard Robinson (11:15):

Thank you.

Safety Culture & Women's PPE

Risk! Engineers Talk Governance Podcast
Season 2, Episode 8

In this episode, Richard and Gaye discuss the importance of safety culture for women's personal protective equipment (PPE) in the workplace. 

Gaye shares her experience of encountering ill-fitting and uncomfortable PPE during her consulting career, which led her to advocate for better-fitting PPE for women. She explains the journey of founding Apto PPE, a women's and maternity fit-for-purpose safety workwear business, with the support of R2A. They discuss the challenges of getting proper fitting PPE for women in the market and the slow uptake of these options. 

They also highlight the importance of organisations prioritising the safety of women onsite; that from a WHS/OHS legislation perspective the objective is to achieve the highest level of protection, organisations need to ask: “Is this reasonably practicable?” The answer should be “Why not?”; not “Why would we?” 

You can purchase Apto PPE via our online store, or contact Gaye to discuss your specific needs.

Full episode 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 safety culture in terms of women's PPE and Gaye's role in founding Apto PPE, a women's and maternity fit-for-purpose safety workwear business.

(00:22):

We hope you enjoy their chat. As always, if you do, please give us a rating. Also, please subscribe on your favourite podcast platform. If you have any questions or topic ideas, please get in touch via admin@r2a.com.au.

Gaye Francis (00:39):

Hi Richard and welcome to another podcast session.

Richard Robinson (00:43):

Hi Gaye. We're back again.

Gaye Francis (00:45):

We are back again. Today we're going to talk about something that's probably dear to my heart and you've been on the journey with me and that's about women's PPE onsite and the safety of women onsite. And I guess I've been an advocate for this for 15 years or so, maybe a bit more. And the journey that we've been on, and the setting up of Apto PPE, which R2A have supported for such a long time and continue to support, I'm happy to say.

(01:17):

I guess it all started as a Women in Engineering project many, many years ago when I was National Deputy Chair. And there was a project of some girls coming and saying that there was no proper fitting PPE for women. All the PPE for women was ill-fitting. And I can say that I have experienced that myself in my consulting career.

Richard Robinson (01:43):

I can confirm that I have witnessed this. I have actually sent photos of you to your new husband in your ill-fitting PPE they parked you in when we were in New Zealand one time inspecting things.

Gaye Francis (01:52):

It wasn't really attractive and it certainly wasn't comfortable to wear and it wasn't safe. One of my clear recollections is for being in a mine in New South Wales and I have quite a small foot, I'm a size seven ladies and I needed to have gumboots to go underground to have a look and my actual steel cap boots that were my own supply actually fitted inside the gumboots, the smallest gumboot that they had. And I remember walking around the mine and my foot coming out of that gumboot and my gumboot being left there. And I said to Richard, I said: If anything happens, Richard, I can't get out of here if my gumboots don't stay on. And I recall you saying to me: It's all right. I'll pick you up under my arm and run with you. So I sort of felt good that I wouldn't be left behind.

(02:44):

But it sort of made me think about why didn't women have proper fitting and fit for purpose PPE on site. So as I said, we are involved in Women in Engineering and one of the girls came and said: Ehy don't we have any of the proper fitting PPE for women onsite. Shoes was one thing, but also shirts and pants. And so we started to do a little bit of research. And the research that we came up with was there were a few organisations that had inverted commas "women's PPE", but all that they seemed to do was change the buttons from one side to the other. They weren't any different design, they weren't a different shape.

Richard Robinson (03:26):

For the males you probably don't realise that women's buttons actually do up on the other side.

Gaye Francis (03:30):

So when we talk to the larger organisations or the larger manufacturers of PPE, they said: Oh yes, we have a unisex range. So I sort of thought, well, women come in all different shapes and sizes and we have different body parts that are in different places and things like that that men's shirts don't necessarily fit the female form. So we did this pilot study through Women in Engineering. We had some designers from Challenger University in WA who came and did some prototypes for us. And that sort of went on and then we launched it at the international conference in Adelaide and it was really, really well received. And so Women in Engineering then did a trial with John Holland at the time and we got some really good feedback. But as a not-for-profit organisation, where does it go after that?

(04:22):

So we sort of started Apto PPE to see if we could get some proper fitting female PPE that was designed and tested by women that actually fitted the women's shape but also looked a bit different to what was on the market. No pockets on the breast line, no pockets on your thighs where you are a bit bigger. We need things in different shapes and sizes. So that's sort of how Apto started. And I remember at the time three of us had the idea of to start Apto and we called Richard down the back of the office and said: Richard, we've got an idea for you. And that's where we pitched it. I'm not sure he had any chance of...

Richard Robinson (05:05):

I was not in a position to say no, as I recall.

Gaye Francis (05:09):

You also thought it was a good idea at the time.

Richard Robinson (05:12):

Yea, well!

Gaye Francis (05:13):

And it sort of fitted with R2A's due diligence aspect as well in that it was safety onsite and how do we make sure that women are safe onsite so far as is reasonably practicable.

Richard Robinson (05:24):

I could actually identify vaguely with it because kind of lanky and having shirts that are a bit too short for you, you're just not comfortable. And the same thing happens when you're buying PPE for males. I mean I have to have an oversized body in order to get the right length arms and things like that. So you just notice these things and I presume women who sometimes fret about these things from my observation, more than a lot of males do, it would've obviously have much greater concern.

Gaye Francis (05:50):

So yeah, we've always pushed Apto from the safety aspect and making sure that women were safe onsite. And I think as you said, if you have Ill-fitting PPE that's too big in some areas it can get caught on machinery. It just gets in the way of you being able to do your job.

(06:10):

But one of the interesting things, as I said, we started Apto almost 15 years ago and there was not much on the market at that time.

Richard Robinson (06:21):

And the point I do remember, you were quite clear at the time, you weren't expecting to make money, but what you were hoping to do is change the world.

Gaye Francis (06:28):

Change the world. We've all got those aspirations whether we get there or not. And I think Apto has done that. There is certainly a lot more PPE options on the market now for females than there ever were. And it's really interesting to see, but the takeup is still really slow.

Richard Robinson (06:48):

Oh, and you've tried to get into a couple of organisations where, shall we say, the PPE operation is actually operated by a male who really doesn't get the point that women would like some different stuff around.

Gaye Francis (06:58):

I agree. And the procurement processes that go with it. And because they're still a minority, you are looking for specific PPE for tens of women rather than hundreds of women. So that bulk...

Richard Robinson (07:12):

Although I've got to say the pregnancy gear has actually been quite well accepted.

Gaye Francis (07:18):

That's correct. And one of the interesting things that a couple of organisations have done is actually put in a maternity bank in their organisation. So rather than having a personal issue PPE, they've had a bank of maternity pants and shirts from our range that the HR area actually keep. And so when you're pregnant and you change sizes during your pregnancy, you can go and get the size that fits you now and then in a couple of months time you go and get the next size if you need it. So that's a really interesting initiative I think from a number of Queensland organisations, mining organisations up in Gladstone that have done that.

(07:55):

So I think from Apto's viewpoint, we are sticking around to challenge the big guys that it's still not good enough. And even these 15 years later, I went to a NAWIC (National Association of Women In Construction) International Women's Day event in March this year, and they were talking about that we are still challenged on the basics in the construction industry; female facilities, toilet facilities, and change rooms on site. And PPE was still there (as an issue). And that was really mind blowing to me because I thought people had embraced that and organisations were just getting on with it. But I think it still shows that there's some women's workwear out there that is still unisex workwear that's sold as women's wear that not necessarily designed to fit a woman's shape and size.

(08:51):

You also went to an AMPI conference, Australian Marine Pilots conference, in October, I think it was, in Perth, and you listened to one of the... They were called the WISTA Group and they're the Women's International Shipping and Trading Association. And it was just a women's session on...

Richard Robinson (09:08):

Well, these are women/female marine pilots and marine pilotage is a particularly blokey sort of a place, I've got to say. Although the new president of AMPI's female. But the one that was particularly impressive was the female marine pilot from Papua New Guinea because that's a very paternal society. And to be a female marine pilot of Papua New Guinea, it was truly impressive. I wasn't so surprised by the Finnish and some of the Norwegians and the Nordic countries having female marine pilots. But there are some cultures where to be a female marine pilot is absolutely quite remarkable. It means you've been a ship's master generally on international shipping. So it's really quite impressive.

Gaye Francis (09:47):

But one of the issues that they were still bringing up was Ill-fitting PPE when we are in the 1920s - gosh, that's really a faux pas isn't it? The 2020s that would be! And we're still having these conversations when there's so much stuff that should be done. So from R2A's viewpoint and Apto's viewpoint, we're asking the question: Why shouldn't females have proper fitting, safe workwear onsite? Why wouldn't they?

Richard Robinson (10:19):

Well, from our point of view, it's been the WHS question. If the objective is to achieve the highest level of protection, is this reasonably practicable? The question is: Why not? But when you actually go to industry and talk to people, the reason is: Why would we? Which is the wrong way around and always has been.

Gaye Francis (10:39):

So that's Apto's challenge to organisations out there is make your women safe on site. There is options out there and there's quite a few options out there. They are smaller organisations, they're not the big guys, but there's some really good fitting female PPE out there. So make you girls safe on site.

Richard Robinson (10:59):

I think it goes a bit further than that. If the women in the office aren't happy, life gets more difficult. I recommend keeping the women in the office and onsite cheerful, life goes better.

Gaye Francis (11:10):

Well that shouldn't be the primary reason, but yes, that's right Richard.

Richard Robinson (11:14):

It does.

Gaye Francis (11:15):

Alright, so thank you for joining us today and listening to my rant. I hope you found it interesting and if Apto can help in any way, I'm more than happy to talk Apto further with anybody that's interested. So have a great day.

Richard Robinson (11:30):

Thanks Gaye.

Has WHS Legislation & Risk Management Standards stopped people thinking?

Risk! Engineers Talk Governance Podcast
Season 2, Episode 7

In this episode of Risk! Engineers Talk Governance, due diligence engineers Richard Robinson and Gaye Francis discuss whether the WHS legislation and Risk Management Standards have hindered critical thinking in organisations. 

They observe that some organisations have become stagnant and resistant to change, relying on third-party consultants to handle risk management instead of actively engaging in the process themselves. They emphasise that risk management should be a line management function and that organisations need to adopt processes and procedures rather than simply outsourcing them. 

They also discuss the importance of curiosity in risk management and the need for organisations to embrace a variety of tools and techniques to gain different insights into risk issues. They caution against relying solely on single processes and techniques, as they may not capture all potential risks, particularly rare critical ones. 

Read the full transcript below.

Episode transcript

Megan Barrow (00:03):

Welcome to Risk! Engineers Talk Governance. In this episode, due diligence engineers Richard Robinson and Gaye Francis discuss whether the WHS legislation and risk management standards have stopped people thinking. We hope you enjoy their chat. If you do, please give us a rating. Also, don't forget to subscribe on your favorite podcast platform, and if you have any feedback or topic ideas, get in touch via admin@r2a.com.au.

Gaye Francis (00:43):

Hi Richard. Welcome to another podcast session. Today we're going to talk about has the WHS and risk management standard stopped people thinking?

Richard Robinson (00:55):

Yes, and that is a big subject and it's one which has actually puzzled us greatly because we've been watching a lot of organisations go into a form of stasis, which apparently is a word which Gaye doesn't use very often, but by stasis I mean they've actually got a fixed process and they're not going to change it even though there's evidence to say they possibly should.

Gaye Francis (01:16):

Or it's not being as useful as it could be in giving the results that they needed to deliver.

Richard Robinson (01:21):

And we've wondered why this might be the case. And we've noticed with a couple of large organisations that what seems to have happened is that this whole risk area has become so important to senior management that they've basically said, well, look, this is all too hard for us, so what we're going to do is employ people, put a process in place and it'll all happen and we won't have to think about it anymore.

Gaye Francis (01:40):

But when you say employ people, you mean third parties as in consultants or advisors that give the advice and then walk away?

Richard Robinson (01:46):

Well, they actually try to, yes. And they walk away. And our observational, the whole point of the WHS legislation and environmental legislation and company law is to say, no, you can't walk away if you are the decision maker, if you are the mind of the corporation, you have to actually be responsible. And this whole thrust of legislation the last 10 years has been hammering that point harder and harder and harder.

Gaye Francis (02:07):

And I think we've covered it in another podcast, is that risk management is a line management function.

Richard Robinson (02:14):

It's always been that.

Gaye Francis (02:15):

And that's where the reliability.

Richard Robinson (02:17):

That was that point I failed to mention in another session because I do remember going to an AREMA (American Railway Engineering and Maintenance-of-Way Association) conference, it must've been the late 1990s, and I was listening to all these insurance people and they'd expanded themselves into risk management because that's how that sort of area came from where the risk management came from. My question was, when are you going to drop the insurance term and just make it risk management and make risk management the line management function? If you've ever asked a question at a large conference and the speakers have just looked back at you, the panel, and it's been a stony silence, that was the one that was the stony silence.

Gaye Francis (02:50):

Right. So you didn't get a response?

Richard Robinson (02:52):

I did not get a response!

Gaye Francis (02:56):

Now you've lost my train of thought. Okay. So yeah, it's a line management function and the organisation has to adopt the processes. And the one thing that we have seen fail is that you can get third parties to put in processes and procedures to do things, but unless the organisation adopts it, then it's useless.

Richard Robinson (03:21):

Yeah. It's got to be something people want to embrace in the first place. We're seeing people just try to force people to do things and that doesn't work. They've got to want to do it. And the other thing we've noticed with the risk management standard is people just push the risk management standard approach. And remember, we sort of hammered this point before, the point is that all reasonable practical precautions - ALL - so you've got to go through all the different ways ideas can be found. I mean, the legislation, for example, tries to do the generative thing saying, you must talk to people, you must consult widely. But that doesn't mean to say you can't have technical process where you've got technical experts looking at the core issues and things like that. And indeed, senior management should know about some of these things and should think about these things. Our frustration with senior execs not knowing the hazards, I mean, I shouldn't pick on lawyers, but I do remember meeting a lawyer of a very large underground mining company back in the 2000s; he'd never been underground, he'd never seen the dangers and the risks that the people who generated the wealth that were supporting them were actually involved in. And I never quite understood that. I mean, we have the same thing with marine pilots. You've got marine pilot boards who've never been out on a pilotage to see what the marine pilot's actually doing.

Gaye Francis (04:28):

And I think that's one of the key things, isn't it? They should know about those things and if you're a member of the board, you have a responsibility to inform yourself to do that and make sure you're getting the right information from your senior executive to make sure you can make informed decisions.

(04:45):

But just going back to the tools and techniques, and I think that's one of the ways that R2A is different and we often come unstuck when a client comes to us and asks for something that this is the way we want things done. And even though it doesn't quite make sense to us. So there's a whole lot of different tools and techniques. As you said, there's generative techniques; there's the technical hazops, and fmeas; there's threatened vulnerability studies. And I always say at the end of Richard's courses, which we do through Engineering Education Australia, is be aware there's a whole lot of tools and techniques out there. They will all provide insight for you.

Richard Robinson (05:20):

And none of them are wrong.

Gaye Francis (05:21):

None of them are wrong, but they do provide different insight. You need to be aware of the pros and cons and you got to pick the tool that works best to solve the problem. And I think some organisations are getting unstuck or becoming unstuck because they have a process that you do for risk management.

Richard Robinson (05:39):

Often the risk management standard.

Gaye Francis (05:41):

Which is the way to do all risk management tasks and it's not providing the value for money, it's not providing the insight that they need to make their organisation safe.

Richard Robinson (05:52):

It's worse than that. They're spinning the wheels at great costs than expense to the organisation. And what's probably worse is that the really competent people who are actually trying to think this stuff through it causes a blockage and stops those competent people from actually making substantive and useful change.

Gaye Francis (06:07):

So yeah, I think some of those processes have stopped people thinking, haven't they?

Richard Robinson (06:12):

Yep. I mean, one of the things people ask me at different times, what makes a competent risk person and the answer I usually give them is very Rudyard Kipling answer: insatiable curiosity. Again, Gaye always looked at me strange when I say that because that's from my point of view, it's one of your underlying characteristics. It's the kind of person... They're doing something, and we've hired lots of engineers over time, so you and I have watched different engineers doing things in different ways, for example, and some of them get so focused inside the thing that they don't sort of become aware of what's happening around them. Whereas the one that looks up and sees other things happening and wonders, well, I'm doing this, sure, but that's happening over there and that's not quite consistent with what's going over there. Should I have a way of aligning this? And that's what I mean by a satiable curiosity. It's that nosiness. After watching your program of life, I've got a funny feeling that may be genetic as your daughters have the similar traits, but that curiosity is something, and not all people have it. I haven't quite understood this one. It's almost like a childlike nosiness.

Gaye Francis (07:19):

It's an ability to question, isn't it? And not being afraid potentially of the consequences that come that way, speaking up, but also being aware of the bigger picture.

Richard Robinson (07:30):

But an organisation that can let people like that prosper is a complex organisation.

Gaye Francis (07:35):

Yes.

Richard Robinson (07:36):

And I think that's where one of the things that our society is doing and this formalisation of risk management, particularly with the WHS legislation and the ISO 31000, I'm not sure in many ways it's actually doing, it's achieving the success people think it should. I mean, we spent a fair part of our life overturning Australian Standards because the difficulty we've got is that it's not an Australian Standard that's right. The standard isn't recognised good practice. It's the worthwhile ideas contained in the Standard. And very often there's a lot of good ideas and a lot of Standards, but not all the ideas and all standards are worthwhile.

Gaye Francis (08:12):

But you have to think with that. And I think a couple of courses that we've done recently with some transport organisations is you have to solve it from first principles first, come up with the best solution and then you go and check against the Standard. Whereas some of the engineers were saying, oh, but we just designed to the Standard. And the chief engineer was sort of saying, no, no, no, no. What are we trying to solve? What is the best solution that we can get.

Richard Robinson (08:37):

In order to achieve the outcomes that we want? And then we check back against the Standard. That's that quote I always give from that 1939 Chairman of Victoria Division of Engineers Australia: "Standards have two purposes to prevent fools from their folly and rogues from their roguery". Because you're meant to work at from first principles how it's supposed to be, and then you test back against the Standard, make sure you haven't stuffed something up. And likewise, if somebody, a contractor's done the work and it's wrong, the simplest way to hang the poor sod is to generally say you haven't complied with the Standard, you're toast. But I've seldom found a Standard that applies in all circumstances, in all ways. That's not the case, not a technical standard.

Gaye Francis (09:14):

And they're also lagging indicators as well. They're often five and 10 years old. And technology is improving at pace at the moment. And what was reasonable, what may not have been reasonable five years ago certainly should be considered again now. And with the technology that's available and the ideas that are available.

Richard Robinson (09:37):

Well, that's like underground mining in the shipping business where you're watching the changes. I mean, the first time I went underground, which was a long time ago now, but people are still talking nostalgically about air leak miners. That's where some guys have got a jackhammer basically supported on the leg hammering away, and they dug the rock out and then they put the chargers in, they lit it themselves, and then they came back and mucked it out themselves and did the whole thing by themselves. These were all lean people. There was never a plump air leak miner that I've ever seen. When I turned up, pretty much that was all gone and people were driving vehicles underground with giant machines doing various things.

Gaye Francis (10:18):

And now it's all remote control from above the surface.

Richard Robinson (10:22):

They're on Perth airport, just drive it remotely.

Gaye Francis (10:24):

Which is quite incredible.

Richard Robinson (10:26):

And that happened in about 30 years ago, I think.

Gaye Francis (10:28):

Yeah, it doesn't take long at all. I think one of the other things that is potentially happening is that the corporate memory is failing safety. So by having these really structured processes, it's stopping people talking within the organisation across different departments and projects across an organisation of all the studies that have been done. Some of the work and the questions that we've been asked recently; Richard and I've been in business for 25 years or a bit more together is: "Oh, we didn't know you did that study for us". And they've been done for different parts of the organisation and it's really a technique or a methodology that would help solve the current problem that they're coming to talk to us about and they don't know. So it's really interesting that the corporate memory in safety doesn't seem to be being shared and propagated throughout the organisation.

Richard Robinson (11:25):

Well, it's certainly more than that because R2A's modus operandi has always been: We'll train you to get it done and then you keep doing it. And that obviously works for a while until that person or people or that team moves on. So it's probably about a five year cycle the way it's going, because people don't seem to be lasting. It is not a career in the way in which things used to be these days.

Gaye Francis (11:48):

No. People are moving on from jobs and the turnover's quite high - two to five years.

Richard Robinson (11:53):

Correct. In fact, we still keep coming across people. Now, remember we did some lecturing at different universities at different times and 10 years later there's guys just looking at us going, ah, I remember you.

Gaye Francis (12:06):

So yes, we are the exception, Richard, we're still working together after that long.

Richard Robinson (12:11):

It's curious. Anyway.

Gaye Francis (12:13):

So all of these things is sort of making safety and the subject of risk management, I guess, in organisations, the management of safety, more complex and harder.

Richard Robinson (12:27):

Well, the one that I've noticed particularly is this Monte Carlo simulation for project risk. And people are signing off on that. And yet our experience has been, and you just commented at the recent risk conference you went to, you gave a paper at, what, eight weeks ago now or something? Not long ago. The ones that bite you is the big rare ones that you didn't think about. And that wasn't in your probability distribution. And that's why the big projects are failing.

Gaye Francis (12:50):

People aren't using a whole lot of techniques.

Richard Robinson (12:53):

We're not saying don't do Monte Carlos, by the way, because that'll tell you the most likely projects outcome, which is well worth knowing.

Gaye Francis (12:59):

But I think you need to do more than one. I think what we're finding now is one risk technique is not sufficient to find all of the risk issues just because they're such a merit of them.

Richard Robinson (13:12):

And hazops, for example, is not the only way to do it in the chemical industry. It never has been.

Gaye Francis (13:19):

So what we would suggest to you is, I guess that there's a whole lot of tools and techniques out there. They provide different insight into different risk issues. But if your organisation's doing only a single or using a single process and technique, then you're probably missing, particularly, the rare critical items.

Richard Robinson (13:41):

And when you're trying to address all issues of concern and demonstrate that all reasonable practicable precautions in place, you need to think generally more widely than most people we see are currently doing.

Gaye Francis (13:56):

I think we might leave it there. We could talk about this topic for quite a while and we might go into some depth on some of these topics a little bit further.

Richard Robinson (14:04):

It's not exactly a chat on Chatham Rules thing too. We might say something we shouldn't say.

Gaye Francis (14:10):

We do have that issue sometimes. So thanks for joining us again. Hope you found this episode interesting and we hope you can join us next time.

Richard Robinson (14:18):

Thanks, Gaye. Bye.

Safety Integrity Levels (SIL) Allocation and its implications under WHS Legislation

Risk! Engineers Talk Governance
Season 2, Episode 6

In this episode, Richard and Gaye discuss Safety Integrity Level (SIL) allocation and its implications under WHS legislation. 

They discuss their long history of working with IEC /AS 61508 and that their biggest caution is around Part 5 because it uses target levels of risk and safety as the basis for the SIL allocations. 

They share that they’ve seen SIL ratings work really well and, at other times, where there's been a misunderstanding of what SIL is. They explain the importance of getting the context right, put your hazard in, identify what your critical hazard is, and then look at all the controls that can be put in place. And often they're the civil design sort of things and mechanical designs before you even go to the electronic systems.

Read the full transcript below.

Episode transcript

Megan (Producer) (00:01):

Welcome to another episode of Risk! Engineers Talk Governance. In this episode, due diligence engineers Richard Robinson and Gaye Francis talk about Safety Integrity Levels (SIL) allocation. This was actually a suggestion from Ben on YouTube, so we thank him for the idea.

If you enjoy the episode, please give us a rating and help us spread the word and also subscribe on your favourite podcast platform. Enjoy and just like Ben, if you've got any feedback, please drop us a line.

Gaye Francis (00:37):

Hi Richard, welcome to another podcast session.

Richard Robinson (00:40):

Hello, pre-holiday Gaye. How are you?

Gaye Francis (00:41):

I know, I know. It's coming around fast.

Gaye Francis (00:45):

Today we're going to talk about, its actually a request for a podcast topic, which is very exciting. So we're going to talk about Safety Integrity Level Allocation, so SIL Allocation, and the implications of that, especially under the WHS legislation (OHS Act). So as always, Richard, hit us hard first and then I'll chip in as we go!

Richard Robinson (01:06):

Excellent Gaye!

Richard Robinson (01:08):

Well there's a whole chapter in our larger textbook (Engineering Due Diligence) about this because this is something that's been a frustration for us for a long time. I don't know if anyone's aware, but R2A was the functional safety assessor under IEC 61508 when it was a drafted in the late 1990s, I guess. And in fact, I think that was your first job (Gaye) when you signed up because we were literally doing the functional safety assessment for how two trains would get past each other on single line track in New South Wales. And that was your job; to test that their allocation and the way in which the watchdog, in particular, was going to work and would deal with every crossing, turnout and every other aspect of the system. So that started life as TOCS - -Train Order Control system -- and turned into TMACS -- Train Management and Control System. And I think our certification stopped about 2015.

Gaye Francis (02:03):

Yeah, it was about 15 years (ago). I think.

Richard Robinson (02:04):

It was only meant to be 10 years, as I recall. And they kept asking us to extend it. Obviously we were slightly anxious about this because if there ever had been a railway collision in that time, I doubt that we'd still be in business.

Gaye Francis (02:19):

Yes.

Richard Robinson (02:20):

Anyway, so at the time my signature was on the train control room at Orange, which I gather has now moved somewhere else, together with my then business partner, Kevin Anderson.

Richard Robinson (02:29):

Now this means we sort of spent a lot of time on this 61508 and it didn't become formalized I think until about 2001/2002, and they're now up to the second edition, which is 2010. Although because when Australia adopts it about a year later it turns into IEC 61508 or AS 61508 2011, which is incredibly frustrating.

Richard Robinson (02:52):

Anyway, I think it's, from memory in seven parts. Part 0 I think has been a more recent thing. The first four parts relate to a general functional safety assessment standard, which is used for the 61511. The functional safety assessment standard for control systems 62065, I think it is, for safety systems and I can't remember what the nuclear one is, but since that's going to be one of our next podcasts, you might recall that.

Gaye Francis (03:16):

I'll make a note.

Richard Robinson (03:18):

Excellent!

Richard Robinson (03:19):

Now the bit that's caused us the greatest grief in which the chapter is all about is basically the SIL Allocation because it uses target levels of risk and safety as the basis for the SIL allocations. So what it asks you to do, and this is in Part 5, what it asks you to do is a hazard risk analysis, work out what the current risk levels are. Then you have to work out what your tolerable or target risk levels are. Then you look at what the different control aspects are, like the existing external ??? think they call them, they change their name between the additions, which external risk reduction facility. And then whatever's left that becomes your SIL allocation. So if you need another two orders of magnitude risk reduction, well then arguably that would be a SIL 2 depending on whether it's continuous or low demand and all that sort of thing.

Richard Robinson (04:07):

Now so far as we're concerned, and that's where the crunch comes, using target levels of risk and safety, which was what the previous ALARP discussion was all about, is absolutely verboten under the provisions of the WHS legislation. And that's why we've always felt that 61508 was a particular problem.

Richard Robinson (04:27):

Now I think it's worth just commenting. I remember looking up the websites internationally a while back just confirming about 61508 and I remember reading a website, which I thought was particularly helpful, where it made the point that it's not a standard that's recognised good practice, it's the worthwhile ideas in the standard. So saying that the cell allocation is an error in 61508, which is one section of one part of seven parts, doesn't mean that the whole thing's futile or anything like that. I mean if you have to go through the process of actually realising the SIL level that you've actually selected, then so far as we know the standard works particularly well. But the problem is the initial SIL allocation, which as we've demonstrated in all the studies we've done, is usually where the greatest cost occurs in the sense that it commits you to a huge cost. I mean basically, as far as we're aware, going from SIL 1 to SIL 2 to SIL 3 to SIL 4, pretty much it means an order of magnitude increase for every SIL number that you go up by.

Gaye Francis (05:33):

In cost. That is.

Gaye Francis (05:36):

But we've also seen it being used in a number of other ways and I think this is where people get confused about it, isn't it? We've often seen it used to allocate a reliability target for a system and we've also seen it being used in isolation and allocating SIL levels to the electronic components without taking into account all of the other controls that are in the system to begin with. So they're often elevated SIL ratings than may necessarily be required.

Richard Robinson (06:07):

Well, the WHS legislation is particularly clear. You've got to eliminate if you can, and that's an absolute categorical imperative. And then if you can't eliminate, then you reduce. And it's weird because you find this remark and I sort of dug it out again, it's about halfway into the first part one and it says something to the effect that, well, no, not within the scope of this standard. It is a primary importance that the determined hazards of the equipment under control are eliminated at source, for example, by the application of inherent safety principles and the application of good engineering practice. But that's just a note like a footnote. It's not saying, you start with saying, can we eliminate this thing? And you might recall the Gateway bridge example in Queensland. We got called in to do a SIL study on an anemometer, an electronic variable message system for the top of the Gateway bridge, which is up in the air. So you can get high winds up there and high sighted vehicles, vans and so forth can get knocked around by wind at that elevation if you're not expecting it. And so they wanted to provide people with...

Gaye Francis (07:14):

Information of what the...

Richard Robinson (07:16):

About wind speeds. The problem was of course, if that information is an error, ie too high or too low or not there at all and people are relying on it, that could then cause...

Gaye Francis (07:24):

An incident or an accident. And they were wondering what SIL level that this needed to be.

Richard Robinson (07:30):

That's Right. And this is where the IT people sort of encouraged this process, as I recall.

Gaye Francis (07:33):

They do.

Richard Robinson (07:34):

Now this... Perhaps you should take over here.

Gaye Francis (07:38):

So we sort of spent the morning workshopping this and arguing for about a morning and then we didn't really come to any landing on it at lunchtime. And then somebody asked, well you've got the Westgate Bridge in Melbourne, what do you use in Melbourne? I said, there's flags on the top of it. So we don't have an electronic system saying what the wind speeds are in Melbourne, but you can tell by the direction of the flags which way the wind's going, whether it's a strong wind, whether it's not a strong wind -- a visual indication. So we came back after lunch and we sort of landed on the control of putting a wind sock on the Gateway bridge that if it was missing, it didn't give incorrect information. It couldn't give incorrect information. And if it was missing then the wrong information wasn't given to the drivers. So I think that's what they ended up landing on, wasn't it? And the electronic system was ditched altogether.

Richard Robinson (08:42):

Yeah, that's right. And so basically just put up a standard wind sock. You see it at an airfield with a light on it so you can see it at night and if it's obviously blowing in one direction and it's rock hard and sitting out to one side, it's blowing a gale in that direction. And that's what was done. And all the SIL status we've done with rare exception, we've downgraded the SIL rating by at least the order of magnitude very often by two.

Gaye Francis (09:07):

Yes. Or no SIL rating at all.

Richard Robinson (09:09):

Because it just didn't make sense. And the only way to do that, and particularly we do it within the context of the WHS legislation. Now you might remember that other study we did in Queensland where the tunnel, the jet fans, in order to sort of manage a fire in the tunnels and it had been given a SIL rating and the contractor, because it had to work for the OMCS and I can't remember what OMCS stands for, but it's an operating management system for the tunnel. The OMCS ran the ventilation system and the idea was, I think it was size that if you turn the jet fans on, you could actually manage a 50 megawatt fire from memory. Design was for a, I think was for a heavy commercial vehicle type fire.

Richard Robinson (09:56):

We turned up to do this review and it was kind of strange actually because first of all, they'd obviously called it up as a reliability standard as I recall, but they'd completely ignored the fire supression system which is an utterly independent system. And so when you looked at both these systems together combined, there was a SIL rating in effect on the fire system which could already be incorporated. And therefore from our point of view, the OMC system didn't actually need accelerating at all. But what was particularly entertaining, if we recall, this was just before the WHS Act commenced in Brisbane on the 1st of January, 2012. So we were working this in November/December, 2021.

Gaye Francis (10:37):

2011.

Richard Robinson (10:38):

2011, yeah, that's right. And I remember distinctly saying, guys, if we sign off under the old tolerable risk basis of things and we sign off, there's a clause in the legislation that says anything that's signed off beforehand doesn't have to be done under the new one as long as you've sort of got it underway. But if you fail to sign off it before Christmas this year and the legislation commences on the 1st of January, we'll all be back here again in the new year doing it again. And all the technical people laughed at us. Remember? <Yes.> They said, oh, you're kidding. And that was before the lawyer turned up and told them all to come back.

Gaye Francis (11:10):

Yes, we were back in the February of 2012, weren't we?

Richard Robinson (11:14):

Yeah we were.

Gaye Francis (11:15):

But again, because they hadn't sort of had the context right of the two systems operating independently, they had over allocated a SIL level to the OMCS as you said, but they didn't take into account the other system.

Richard Robinson (11:32):

Well, a fire system's normally a low demand system, that means it acts less than once per year and it normally has about a SIL 2 low demand rating. Now the ventilator system with regards to fire would have sort of the same frequency, low demand. And so if you add two systems together, you're sort of up to SIL 4, which obviously doesn't make any sense at all for something like that. So anyway, I can't actually recall what did we do there. I think we said it didn't need a SIL rating and I think we worked out, we actually did the numbers to work out what the reliability was and the reliability was considered so high. So whilst it wasn't formally SIL rated t was sort of seen to be adequately reliable as I recall.

Gaye Francis (12:13):

That's my recollection of it as well, that when we actually dug deeper into it, it was more a reliability target for operations rather than a SIL rating per se. Just before, I guess we move on from the SIL ratings. I know that you've said we really don't know how they got the numbers.

Richard Robinson (12:31):

No, what the 10 to the minus 1, 2, 3, 4 low demand then 5, 6, 7, 8 for high demand.

Gaye Francis (12:38):

They just seem to roll over from each other. So we've never been able to ascertain where those numbers were derived from or how they came about.

Richard Robinson (12:47):

No, I've asked at a number of conferences I've been to on SIL studies and things like that and given papers and I've always asked people and it's just one of those things. I mean I don't think we have a philosophical problem with orders of magnitude. I think we've always found it to be quite useful.

Gaye Francis (12:59):

Yes.

Richard Robinson (13:00):

But I've never seen any sort of scientific basis, as it were, for that understanding.

Gaye Francis (13:06):

Yes. Now we have seen SIL levels work well in other cases and we did do a bypass again in Queensland and it was a very narrow bypass that if a wider vehicle, wider truck was going along the bypass, it was one vehicle at a time, they needed traffic signals at either end to stop the traffic. And that was a blind spot. So they did end up SIL rating that, but it didn't have a super high SIL rating.

Richard Robinson (13:34):

That's correct.

Gaye Francis (13:35):

But it was a combination of safety integrity levels as well as a reliability target that these things worked when they were required. So we've seen SIL ratings work really well. We've seen other times where there's been a misunderstanding of what SIL is and they've been more aimed at reliability targets. So I guess with SIL it's one of those things that you have to have an understanding of what you're trying to achieve. Always look at it in the context of all the other controls that you've got in place when you're trying to solve the hazard that you're doing, not just looking at the electronic component of it.

Richard Robinson (14:11):

Well that was the other one, the tunnel under the freeway, remember under the airport

Gaye Francis (14:18):

The Tugan bypass at the Gold Coast airport.

Richard Robinson (14:21):

They wanted to accelerate the VMS system for that you might recall. And again, it was IT people working in isolation because they failed to reflect on the fact that these civil engineers had gone to a lot of trouble to design the tunnel, so as you came around the corner, you've got a clear view from one side of the tunnel to the other. And from a very practical viewpoint, if there's a fireball erupts in the tunnel, do you believe what you see through the windscreen or do you believe the variable message on the side of the road? And the answer is you look through the windscreen and respond to that. So if there's a fireball on the tunnel that you can see, don't go in the tunnel. You don't need a variable message sign to be a high reliability saying don't go there.

Gaye Francis (15:02):

And I think that's what it is. A lot of the time the SIL reviews have been done out of context.

Richard Robinson (15:07):

I think that's correct.

Gaye Francis (15:08):

So that would be probably our takeaway from this SIL podcast is make sure you've got the context right...

Richard Robinson (15:15):

Because that will normally reduce the SIL level and save you generally an order of magnitude of cost.

Gaye Francis (15:20):

Reduce the SIL level or eliminate the requirement for a SIL level sometimes, many times actually. So get the context right, put your hazard in, identify what your critical hazard is, and then look at all the controls that can be put in place. And often they're the civil design sort of things and mechanical designs before you even go to the electronic systems.

Richard Robinson (15:42):

And don't do the target level of risk approach described in 61508 Section 5 because so far as we know, you'll be setting yourself up for some kind of potential criminal charge under the WHS legislation, the way the world has currently gone.

Gaye Francis (15:58):

Alright. So I hope you found that interesting and as we said, again, if anyone's got any topics they'd like to shoot us, we're happy to talk about those as well. So thank you Richard.

Richard Robinson (16:07):

Pleasure Gaye.

Gaye Francis (16:10):

See you next time.

Richard Robinson (16:11):

Indeed.

The Journey to WHS Criminalisation: How the Risk Management profession has changed over the last 40 years

Risk! Engineers Talk Governance Podcast
Season 2, Episode 5

In this episode, Richard and Gaye discuss the journey to WHS (Work Health and Safety) criminalisation and the evolution of the risk management profession over the past few decades.  

Richard discusses his working history and experience watching the application of risk management change from the 1980s to 2010s from engineers to psychologists and culture, to the lawyers.

They highlight the increase in prosecutions in the last 18 months under WHS legislation, particularly targeting small and medium-sized organisations, and recent cases, such as the Dreamworld incident and the White Island explosion, with the introduction of criminal manslaughter provisions. 

Overall, Richard and Gaye emphasise the importance of considering all reasonable practical precautions to ensure safety in organisations, rather than solely relying on compliance audits. 

Read the full episode transcript below.

Episode Transcript

Megan (Producer) (00:01):

Hi, welcome to the latest episode of Risk! Engineers Talk Governance. In this episode, due diligence engineers, Richard Robinson and Gaye Francis talk about the journey to WHS criminalisation and more specifically, the journey of the risk management profession over the past few decades.

(00:25):

We hope you enjoy the episode. If you do, please give us a rating. Also, remember to subscribe on your favorite podcast platform, and if you have any feedback, please drop us a line. Enjoy the episode.

Gaye Francis (00:40):

Hi Richard, and welcome to another podcast session. How are you today?

Richard Robinson (00:44):

I'm well, Gaye. It's a very fine day. Pleasant temperature.

Gaye Francis (00:48):

Today we thought we'd talk about the journey to WHS criminalisation and the journey, I guess the risk management standards been on and, or, the risk management profession has been on in the last 30 years. And I guess this came out of, I gave a conference paper late last year, I think it was, and I was the only engineer amongst a whole lot of lawyers. And so we were sort of saying, how do you demonstrate due diligence in accordance with the WHS legislation? But there was a lot of lawyers talking about how to comply with the legislation. And it was interesting that the two different aspects of what the lawyers were saying as in a compliance check against the legislation compared to what we were saying, to keep things safe in your organisation -- this is the due diligence process that you need to go through. And one of the speakers was talking about that, and an observation from us is that there's been a lot more prosecutions under the WHS legislation, probably in the last 18 months to two years.

Richard Robinson (01:55):

Correct

Gaye Francis (01:55):

And that observation was quite confronting that we didn't expect that to happen because it hadn't happened in the past. And the observation was that they were mainly prosecuting small and medium sized organizations rather than large businesses.

Richard Robinson (02:10):

Well they were the successful prosecutions, at any rate.

Gaye Francis (02:13):

That's correct. And one of the lawyers was saying that there was still an observation that there was still quite a number of levels between the executive management in large organisations and what was happening on the ground or its site between those large organisations. So there was still a corporate veil protecting some of the larger organisations against the WHS criminal manslaughter...

Richard Robinson (02:42):

Criminal manslaughter.

Gaye Francis (02:42):

Criminal manslaughter provisions. But I think that's starting to change even in the last little while. That excuse that there is that power distance is no longer an excuse or a reason they won't be prosecuted against.

Richard Robinson (02:58):

Well, I mean, see from an engineering viewpoint, we've always had held the view, the objective is to stop things going wrong in the first place rather than just to stop yourself going to jail. We agree that's a worthwhile thing to do, but the objective is to prove, demonstrate to you're safe first in a way that satisfies your legal obligations, which has always been our proposition. Whereas the lawyers just sort of say, a lot of 'em say, let's just go and do a compliance audit.

Gaye Francis (03:21):

So it's a liability management exercise rather than an improved safety exercise.

Richard Robinson (03:26):

Correct. What was that line that somebody gave us? Remember they gave us a new acronym? I can't remember what it was now in LinkedIn channel, I think it was. Anyway.

(03:38):

Well, one of the consequences of all this that we're talking about, we're trying to reflect on the actual history of this whole risk management business and how we actually got to this thing. And one of the slides in our book I originally pitched from KPMG, basically from the 1990s I think it was, but they had sort of had an observation in the 1980s, in effect, the technologists, the engineers particularly hopped into this risk management business with enthusiasm. That's basically when I showed up. I mean, I was just commenting that one of the first papers I ever gave was "The rise, the future of risk engineering" with Derek Viner back in 1983. And the engineers had seized on this with great enthusiasm. I remember <inaudible> of advanced engineering from Sydney Uni was big on it too. I dunno if you remember then. No, you wouldn't actually.

Gaye Francis (04:17):

No, it's before my time, Richard. I can say.

Richard Robinson (04:20):

Anyway, the engineers were big on this in the 80s and in fact, that's how I got into it and how I sort of got into the business in the first place. And the risk management standards started in that time, which was based on the insurance downside risk management. But then the commercial people turned up in the 90s and said "No, no, no. Well, you technological people. Technological risk is a subset of business commercial risk. And we believe an upside downside risk, not just managing downside. We talk about optimising upside as well. And so all your technological people, you're a subset of business risk" which is what the message KPMG was basically promoting.

Gaye Francis (05:00):

So you could have rewards and you could have opportunities as well as downside risk.

Richard Robinson (05:05):

They're still talking about it now. If you manage your own super fund, they still talk about risks and opportunities, all these financial people.

(05:12):

Anyway, what then happened, which have kind of amused me, was that the psychologists then turned up in the 2000s, said "No, no, no, all you commercial people, this is all a matter of risk culture". I know the APRA review of the National Australia Bank foreign currency trading scandals said that the risk management standards were seen as 'trip wires to be avoided rather than genuine attempts at risk control' and all that sort of thing. And so the aviation psychologist particularly appeared and said "No, no, no". And a number of the regulators turned into aviation. Aviation psychologists became the regulator, different industries. And it was the psychologists.

(05:46):

And then that's what sort of happened next was that it's almost as though the lawyers felt 'we're missing out on this, we've got to get back into this', or something like that, because obviously the 2004 OHS Act came into Victoria, but the WHS legislation commences at the start of the 2010s and number of jurisdictions actually put criminality in for recklessness, knew or made or let it happen. That means you had to be a known problem, which for some reason you failed to manage. And Queensland put that in and a number of others. Anyway, that decade sort of moseyed on and then, particularly, we had the Dreamworld incident where the raft flips and the four young people got killed. And when they tried to prosecute in Queensland the managing director and the chairman, it seems that they didn't know anything about it, the issue. Even though the organisation knew. And so they could have done something about it.

Gaye Francis (06:40):

In the background was that the rafts had actually flipped during a maintenance cycle when they were empty, so they knew when the water levels were low that these rafts could flip. So as an organisation, as you said, they did know about it. But did the chairman and the managing director know?

Richard Robinson (06:57):

Clearly the organisation was negligent and they wanted to press that negligence onto the senior decision makers and they couldn't do it because recklessness said you'd have to have shown that they knew beyond reasonable doubt that the hazard existed. And I doubt that they did. And so the Boland review kicked in and they basically chucked in criminal manslaughter, knew or ought to have known, which has been busily flying around the place since about 2018. And Victoria, for example, adopted in 2020. So you can see in that sense that there's been a sudden rise in

Gaye Francis (07:26):

Prosecutions and

Richard Robinson (07:28):

Well, the legislative framework's been put in place to facilitate it. So what competent regulator wouldn't say: Well, they've gone and given us all the tools, doesn't that mean we're supposed to? And it just sort of roll onto the White Island explosion where they started us by prosecuting 13 parties. You were telling me that (latest information) had popped out somewhere.

Gaye Francis (07:48):

Yeah. They've dropped the charges against the three individuals, but the organisation has been found guilty as a management organisation and sentencing's now not due till sort of early next year, 2024.

Richard Robinson (08:00):

But if you look at the journey like that, you're going from the technologists to the commercial people to this aviation psychologists and culture to the lawyers, sort of reinserting, criminal manslaughter in there. And you sort of wonder why in the 2020s that there's a sudden burst of prosecutions... Probably seems like a reasonable possibility view if you just look at that from a helicopter view of the secrets of events.

Gaye Francis (08:22):

I think we've always had a problem though, Richard, when you set back to it and you say: Hold on, we're trying to make our organisations safer and the tasks that we do safer for the individuals that do it. By breaking 'em up into all of those little silos again, you've got this different insight and I don't know that risk should be separated out as a separate function. It's almost should be business as usual and thought about in all of those different ways. And I do get that they give you different insights. But if you take, and we use the word SFAIRP, and I think we're moving away from using the word SFAIRP because that is creating a language confusion again. Whereas the intent is to make sure that all reasonable practical precautions are in place.

Richard Robinson (09:07):

With the emphasis on ALL. I think that's where some of the lawyers are getting a bit confused out there. You have to demonstrate that all reasonable practical precautions place is not just a matter of reasonable practicability, it's all of them. And if you adopt a process which can miss one that was reasonable and that could have worked and it's identified after the event, that's problematic.

(09:32):

That's the other point I wanted to make goodness just escape me again, which is irritating. But anyway, that's what happens when you get a bit older.

Gaye Francis (09:39):

So I think none of these things are wrong. There is a different focus and there's definitely a liability management exercise; a lot of liability management exercises going on at the moment. But as we said, to make your organisation safe, you've got to consider all of the reasonable practicable precautions that can be put in place. And that requires a whole lot of different processes, not just a compliance audit against the legislation.

Richard Robinson (10:06):

I suppose what I think has puzzled me a bit is that I remember, I think we made this observation before, when we were doing some work for what was in the Office of Gas Safety. We sort of worked out there's two types of regulators, those who think that the number of successful prosecutions are a measure of success. And those who think that the number of successful prosecutions are measure of their failure. We've noticed abrupt decline in the number of who think the successful prosecution are measure their failure. And I'm not quite sure whether that's because they basically said: Tried to do it, that's all too hard and prosecuting is just so much simpler. And it is easier at one level. You just sort of have a few prosecutions say, well, if you don't do it...

Gaye Francis (10:40):

It's black and white isn't it. Whereas you're not trying to help. I think another observation we're trying to, we have seen is, when the legislation first came out was, we thought there may be a lot more technical directors put on Boards who had an understanding of the organisations and the issues that they were exposed to. But that certainly doesn't appear to have been the case. There still seem to be mainly lawyers and accountants on there. And I wonder whether this new view or new move towards, or a recent move towards the liability management tool, that's where the lawyers come into being on Boards. But they still have to have an understanding now that it's knew or ought to have known. They still are required to have an understanding of what the issues that their organisation are exposed to.

Richard Robinson (11:31):

Well, I would've thought so, but we'll see what happens.

Gaye Francis (11:36):

So thank you for joining us today. It's a short and sweet one today, but we just thought that that was an interesting observation, the journey that the risk management subject I guess has gone through in the last 30, 40 years or so. And it'll be interesting to see where it goes next.

(11:55):

Thank you. Have a great day.

Richard Robinson (11:57):

Thanks, Gaye. Bye.

Safety Culture Change Agents | The role of engineers in change & safety

Risk! Engineers Talk Governance
Season 2, Episode 4

In this episode Richard and Gaye discuss their work as change agents for safety culture. They reflect on feedback after a recent presentation at the Australasian Marine Pilots Institute (AMPI) Conference, and how they reflected their importance in reminding industry of how to review safety.

They discuss that engineering is about driving change to improve safety, and that's what they at R2A do. Engineers are not supposed to do the same thing again and again and just focus on Standards. That you need to design for what you need to do and then you check against the standard to make sure you haven't missed anything. 

They also touch on Apto PPE, Gaye’s women’s and maternity PPE range (available online in our store).

Read full transcript below.

Episode transcript

Megan (Producer) (00:00):

Welcome to this episode of Risk! Engineers Talk Governance. In this episode, due diligence engineers Richard Robinson and Gaye Francis talk about their work in due diligence engineering and how they are change agents for safety culture. We hope you enjoy the episode. Please give us some feedback and if you have any topics you'd like us to talk about, please drop us a line. Also, make sure that you subscribe on your favourite podcast platform and that you give us a rating. Enjoy the episode.

Gaye Francis (00:40):

Hi Richard. Welcome back for another podcast episode.

Richard Robinson (00:44):

Good to be here Gaye. Always entertaining!

Gaye Francis (00:46):

Always entertaining, always have a bit of a laugh! Today we're going to talk about safety culture change agents. And I guess just a little bit of an introduction for our listeners is Richard recently gave a presentation at an AMPI conference, which is the Australasian Marine Pilots Institute Conference, in Perth and we've had a good relationship with AMPI for a number of years now, probably over 15 coming up 20 years. And after Richard's presentation, he said: "I feel like a broken record. I've said the same thing over and over for a number of years. Are we actually still adding value?" And he asked this question, only Richard can to a number of people that he met at the AMPI conference. And one of the interesting feedback, and he shared it with me when he came back, was that they saw R2A as change agents. So they were trying to get a change in safety culture within their, either, organisation or profession in the industry. And the way that Richard explains it, and R2A explains it, gave them that way to be able to do it. So it was really interesting because I said to him "Well, are they all new people that haven't heard you speak before? So it's still interesting. Or are they still on the journey?" And the feedback was that partly there are new people coming into the maritime industry...

Richard Robinson (02:11):

Well particularly the overseas ones because the overseas contingent we had Finnish, Norwegian, French, English, the marine pilotage American Canadian, the actual pilotage around the planet was all there. And the thing they kept saying, all the innovation, all the changes coming from Australia, we want be here. And then, I think I told you, I showed you that picture of all the (women). The new president's female and the president of AMPI's female and all the female marine pilots. There was a cluster, I think we put the picture in our recent blog or something, I forget what it was. But anyway, it was really quite impressive. That was really the best session (females in marine pilotage). I was hanging around listening to that one, thinking these are remarkable people. They really were.

Gaye Francis (02:53):

So that was sort of, yes, there were a whole lot of new people there. And the other feedback that there was is that not only are there new people coming into the maritime industry, but it's really easy to slip back to the old way of doing hazard based risk assessment. And so somebody basically said: "No, no, no, we need to keep you around to keep reminding us that there's a better way to do it." And safety culture requires...

Richard Robinson (03:17):

This is partly because the IMO process has got the quantified risk assessment using targeted levels of risk and safety, in other industries known as ALARP, sitting around causing endless grief. I remember that paper we did, the safety case for Sydney Ports with the Captain Philip Holiday who was the previous Harbour Master Southampton and the IMO process using total as risk and safety just killed him. That's one of the reasons I think he was in Australia. And when we did our process with him, I mean it was just a breeze. He was just so pleased. That's why he let us publish with him.

Gaye Francis (03:48):

And I think we talked about it before that it's really about, it's not about the level of risk, it's are all reasonable practicable precautions in place. And that's why the SFAIRP approach works so well for these high consequence, low likelihood events.

(04:03):

So we sort of came back and said, alright, so we are adding value to these sort of industries and they're the change agents. And as consultants we can come in and I guess some of the work that we've done more recently with local council in particular, they wanted to change the way that they were doing their safety assessments within their organisation.

Richard Robinson (04:25):

And presenting the safety. I mean they'd wound up in situations as Sydney Decker makes the point, he's that airline pilot turns professor of psychology at Queensland University, he just points out there's so many rules out there these days that nobody, not even the people doing their job knows what all the damn rules are, which is really kind of weird. And he's absolutely correct. And the paperwork, and again this council was complaining about it, the paperwork they were getting, the people who are doing the job, third parties were writing it for these people to do it. They didn't understand, well, I don't think the people writing it necessarily properly understood what they were writing. And certainly the people receiving it wasn't a position to implement it or effectively or usefully. It was just paperwork everywhere.

Gaye Francis (05:05):

So it was sort of becoming almost a liability management tool, wasn't it. A butt covering exercise that we have all of these processes and procedures and policies in place, but is it actually making it safer for the people on the ground doing the job? And even a comment in one of our recent Engineering Education Australia courses was that: "We feel like as people that are putting these things together, we've got to tell the people that are doing the job about every single little thing. And at best they're getting skimmed over. At worse they're not even being looked at all." And so are we sending these...

Richard Robinson (05:45):

The big bad ones. The rare ones. The big bad rare ones.

Gaye Francis (05:49):

So are we actually sending these people up almost for a fall? We're covering our own... the people that are writing these things are covering their butts, but they're not necessarily making it safe for the people that are doing the job.

Richard Robinson (06:03):

And we've done this a number of times. We've sort of looked at people's risk registers for a particular issue or hazard and the one that can kill and maim them is right down the bottom because it's considered to be so unlikely it's not worth thinking about. Whereas in fact, that's the one you've really got to make sure you've got right.

Gaye Francis (06:16):

So, we've said this on a number of occasions before, your risk register should really have tens of items in it, not hundreds of items. If you've got hundreds of items in your risk register, you've missed the plot.

Richard Robinson (06:28):

And you want to rank it by consequence in the first instance.

(06:32):

Now the point about this is because if you're looking at what R2A does, we just sort of recognised we're change agents in the sense that people get us in to actually change the system and have a different thing. And once we've done our bit, we leave and we tend to only come back if somebody feels things are slipping away again and they need to bring it back. I know, I think somebody described us once as 'hit-and-run' consultants, if I recall correctly. We turned up, did our thing and we didn't try to just keep doing it on their behalf. Because, again, the whole point of the WHS legislation, for example, it's a governance document. That's what we've always been told. And the whole point of this is business risk management is a line management function.

(07:10):

Anybody who thinks differently is kidding themselves. And the whole point of legislation was to put the responsibility to the highest level of decision makers, the people who have control ultimately and everybody else who doesn't have that control, to the extent that you have control, you've got to do what's reasonably practicable. That's a governance framework. And so we sort of find the situation where you've got third parties actually doing it for people; they can be advisors but they can't take responsibility. And somewhere in there, something hasn't been getting... those two things are somehow getting detached.

Gaye Francis (07:40):

So what you really have to do is... We go in and facilitate that change, I guess, for them, and then hand over the results that it's theirs to run with how they see fit and implement.

Richard Robinson (07:53):

This actually is one of these things because I mean just from my point of view of my experience working with Gaye, if she gets bored, life gets really bad. So she doesn't like keep doing the same thing all the time. <laughing>

(08:03):

Now, but that's actually the reason why Apto PPE exists. And I don't know we've spoken about this before, but Gaye and a number of other women in engineering a while back basically decided they were a bit sick of going to a construction site or work site and having to get in male PPE in order to do an inspection. I've got some pictures of Gaye in male PPE, which I've sent to her husband.

Gaye Francis (08:24):

Not really flattering images. But that's all right, we were married by that time. <laughs>

Richard Robinson (08:31):

Yes. Right!

Gaye Francis (08:31):

And you're right, that was one of the reasons that we started Apto PPE. I was a part of Women in Engineering and we did (women's PPE) from a safety perspective: Is it really safe for females to wear male fitting ill-fitting PPE onsite? And so Apto was sort of born from that and we did it from first principles. We designed them for a woman's figure and that they were safe on site. So yes, that's sort of our...

Richard Robinson (09:02):

Well, I didn't get much choice in this. These women were down the back (of office) doing their thing. But what I have observed in all this, if you're a bloke who works with women, it's better having the women cheerful than not. <laughter> And I recommend it that they wear clothes that they feel pretty good in.

Gaye Francis (09:17):

And that fit properly. So yeah, always happy to talk about Apto. But that's probably an introduction to another podcast at a later date. But just going with this change agent, we really have seen a change in safety culture and the way that it has to be dealt with.

Richard Robinson (09:35):

Well, I suppose the other thing is, I didn't want to drag Gaye off to a place she doesn't necessarily want to talk about, but I've mentioned in the past we had David Howarth out here, Professor from Cambridge Law and Public Policy, R2A sponsored him together with the Victorian bar and he had the book out "Law as Engineering". But the point he was making, which is the point I've always made, it's about change, engineering's about change. And that's what he's talking about in "Law as Engineering". He's talking about design exercise to change things and engineering's about change, and that's what we do. And the business that engineering just does the same thing again and again and again. And it's all about standards and standards and standards. We spend our life overstanding standards. People keep saying we're designed to the standards; no you don't. You design for what you need to do and then you check against the standard to make sure you haven't missed anything. And anybody who thinks to the contrary is kidding themselves. Engineering philosophy is about, it's all about the process. That's basically the position. The meanings and the method, results are only consequences. And that's why I suppose we've always had this that we're not going to keep doing the same thing Gaye, we can't bear it!

Gaye Francis (10:35):

We'd both annoy each other, I think, Richard. But that seems to be exactly what you said. You're supposed to design to first principles, first design for what you want to achieve and then you check against the standard. But we've had a number of discussions with some technological organisations that are building infrastructure and rolling stock, at the moment that, no, we just designed to the standard.

Richard Robinson (10:58):

Well, there's a bit of... Some of the Chief Engineers are refuting that profoundly and saying: No, you design for what we need and then you check back against the standard.

Gaye Francis (11:06):

But it was very, very clear that there were two groups of thought in that. And the one that you designed to what you need first was in the minority, but he was very strong.

Richard Robinson (11:17):

But you might notice that was a lot of Europeans. Remember I gave that paper to the tunneling conference about 2016 and I tried to test the difference between the different approaches. And it's really got to do with Inquisitorial versus the Adversarial legal system. The adversarial legal system hammers the point that it's not just enough to do what you think is a good idea. You're trying to test to see if you've overlooked anything at all times. And so far as I could tell, I thought that was the whole point of western critical philosophy, but maybe I'm missing something here.

Gaye Francis (11:46):

Alright, anything else? Last thoughts on safety culture change agents?

Richard Robinson (11:53):

That's what we (R2A) do. So if you want (your safety culture) to stay the same, don't hire us. If you want to be different, we'll help.

Gaye Francis (12:01):

We'll help facilitate the process.

Richard Robinson (12:04):

And also, just make the record, we're not interested in doing it for you. We're interested in getting you to do it for yourself.

Gaye Francis (12:12):

It has to be embedded in your organisation, that's right. And you have to be willing to make that change and notice that there is a change and the difference between the two.

Richard Robinson (12:21):

Correct.

Gaye Francis (12:22):

So we hope you found our podcast today interesting. And we hope you join us next time.

Project Due Diligence - Using a Military Intelligence Approach & Critical Success Outcomes

Risk! Engineers Talk Governance
Season 2, Episode 3

Richard Robinson and Gaye Francis discuss project governance due diligence.and highlight their unique approach that has incorporated a military intelligence approach and the importance of focusing on critical success outcomes and vulnerabilities rather than threats. They also emphasise the need for early involvement of key stakeholders. They also discuss the airport rail link project in Victoria and the Commonwealth Games in Victoria, and touch on the limitations of Monte Carlo simulations in identifying high consequence, low likelihood events. 

Full transcript below.

Episode transcript

Megan (Producer) (00:03):

Welcome to the latest episode of Risk! Engineers Talk Governance. In this episode, due diligence engineers Richard Robinson and Gaye Francis talk about project governance due diligence. They discuss how they have applied a military approach to their work and also how they focus on critical success outcomes.

(00:26):

Enjoy the episode. Please give us a rating if you enjoy our work, and also ensure that you subscribe on your favorite platform.

Gaye Francis (00:36):

Hi Richard. Welcome to another podcast session.

Richard Robinson (00:38):

We're here again, Gaye.

Gaye Francis (00:40):

We are. Today we're going to talk about project due diligence, which is, I guess, close to our heart. And I attended a recent conference and presented a paper at Risk 2023, which was in Brisbane in September, 2023. And the theme of the conference was Risk Engineering for Resilient 2030. I think one of the key takeaways for me from the conference was that it was a really interesting conference and there were lots of papers given and everything. But there was a real focus, especially from the keynote speakers, around top-down criticality and vulnerability. And the people that were speaking as those keynotes were probably people that were putting projects together, so bigger projects. For example, the cladding replacement in Melbourne, that was one of the guys that spoke. But when you went and talked to people and the participants in the conference, one of the things that was still happening was those rare showstoppers were still bringing projects undone, those things that were critical and rare.

(01:51):

And my presentation was all around project governance and the little booklet that we've got out, "How to demonstrate due diligence - A practical guide for directors". And it really is that top down, focusing on the credible critical things, project showstoppers.

Richard Robinson (02:08):

High consequence, low likelihood.

Gaye Francis (02:11):

Yeah. And we've used this process for very many years on projects that have ranged from - am I going to get this right!? - $500 million to $2.5 billion?

Richard Robinson (02:27):

I think we started about $10 million up to $2.5- $3 billion.

Gaye Francis (02:30):

There you go.

Richard Robinson (02:30):

Australian dollars. I think Marina Coastal Expressway was about $2.5 billion US, as I recall.

(02:38):

And I guess if we just talk through today about what makes our process that little bit different from the traditional processes that we've seen, and we've said in many of our podcasts that there's a whole lot of tools and techniques out there, and they provide you with different insights into the risk issues that you do and some of the safety stuff that we - we've focused on safety in some of these podcasts - but the tools and techniques really do apply to projects as well, or can apply to projects as well.

(03:06):

Yep. Mostly.

Gaye Francis (03:10):

I guess, Richard, do you want to outline the process?

Richard Robinson (03:13):

Well, so far as we're concerned, it's really a military intelligence process, and it was originally developed to deal with people going on missions. So if you get it wrong, you're all going to die. So it's actually worth getting it right. What you don't do is take on a course of action where there's a credible critical showstopper that can come and bite you, even if it's rare, you just don't do it. We just adapted that.

(03:32):

Now, part of the reason why I adapted, I got it off Bob Browning who used to work with us. Unfortunately he is no longer with us. And he used to be the head of protected services for Asia. He said he got it off MI6 because he was working there for three years with the English for a while. And when he came back to Australia, I was working with him, he just explained how it works and what it was, and we just kind of adapted it.

(03:55):

But basically it sort of says, well, the simplest way to describe is to compare it to way most people do project risk management now. And that is what they do is they get people who have suffered pain in similar projects together in a room and they try to express their pain, usually by adapting a risk register from the previous nearest project they've been able to find. And you can normally tell that's the case because somebody has failed to do a global search in the spreadsheet and the name of the price project still buried in there. And then they all pour the pain they've previously suffered on this similar project and augment this risk register.

Gaye Francis (04:31):

So we're talking about hundreds of items in a risk register, which is just unmanageable.

Richard Robinson (04:36):

Yeah. And they do this usually around the tender stage. And as the project goes through, every now and then they drag this thing out and try to make sure they haven't overlooked something. And by the time they get to practical completion, they say, well, this is the end of the risk management process of practical completion. And then they hand it over to the poor sod who's got to live with the result who then has to spend a fair amount of time fixing all up and making sure that it really does achieve the outcomes that everybody intended.

(05:00):

The other way to do it, which is the way we've always done it, and this is what the military intelligence people do, is you actually walk forward in time to the end of the project when it's in and working and it's kicking all the goals you really want it to kick. We call them critical success outcomes. And you get the senior decision makers to explain what those essential critical successful outcomes are. And then having established what this happy place is when it's in and functioning, not just practical completion, it's actually achieving all the things it's supposed to do when it's actually working. This is a happy place, by the way. This is where promotions are possible. Excellence awards abound. And even bonuses can sometimes be represented. But this future happy place. And then you step backwards from that happy place and say, what are the threats to those outcomes? Those threats create vulnerabilities to those critical success outcomes. They are the vulnerabilities. And if you eliminate all those vulnerabilities, then these will be the high consequence, low likelihood ones as a rule, then you'll always wind up at this happy place on time, on budget, to spec, and it's clean and simple.

Gaye Francis (06:06):

I think you said a couple of important things there, and I just want to touch on those. And that was really about that you're focusing on the vulnerabilities. We've seen a lot of projects focus on threats that don't necessarily affect a critical success outcome.

Richard Robinson (06:21):

Correct. And that was one of Bob's special points (that) he kept hammering.

Gaye Francis (06:24):

So the key is to focus on the vulnerabilities rather than the threats per se, because if it doesn't affect one of your critical success outcomes, you don't want to spend resources and time on that particular threat. So you're focusing on the vulnerabilities and they are the ones, the threats that affect your critical success outcomes.

(06:43):

The second thing is about stakeholders and making sure the right stakeholders. Now we've seen large projects and there are a number of interested parties that are very vocal.

Richard Robinson (06:55):

And have opinions

Gaye Francis (06:56):

And have opinions that are often very loud, but they are not necessarily the key stakeholders for the project. So it's really important to make sure that you've identified the key stakeholders.

Richard Robinson (07:09):

And what you mean by that are those who live or die by the success or otherwise of this project.

Gaye Francis (07:14):

And I think sometimes that's the difficulty around this project governance and project due diligence stuff is that there's a number of stages in a project. And unless you can get all of the key stakeholders involved in the project very, very early on, then there's often a mismatch of what the critical success outcomes are for the project.

Richard Robinson (07:35):

It's like the tram project we did the, or Gaye did the project due diligence for the procurement of the Class E trams, the first trams for the Class E trams in Melbourne. And the real problem we had was getting Yara Trams on board as I recall.

Gaye Francis (07:51):

At the design stage.

Richard Robinson (07:52):

At the design stage because until you've actually chosen who the tender was and all that sort of stuff. But obviously the people who have to sign off with the safety cases is the tram operator, and that case, it's Yara Trams. So whilst there's a tendency for them not to be involved at the start, if they're the people who have to live with the final result and actually get the credited safety case up, if they're not involved in the initial design stages, you get something which is quite peculiar.

Gaye Francis (08:18):

So it's almost critical that they're involved. And when we've seen this with other projects as well, that you really do need to get the ultimate operators and maintainers on board very early on because it's a lot easier to make changes at a design phase or at a design stage than it is to be delivered with a piece of infrastructure or vehicle and then it has to be modified once it's had been built. A lot cheaper as well.

Richard Robinson (08:48):

Well also your project will blow out. If you're talking about a five-year project and you only discover at the end of year four that you've got a basic design flaw, you won't fix that. You are over time and over budget no matter what happens.

Gaye Francis (09:00):

And you are looking for work-arounds to deal with that particular issue.

Richard Robinson (09:03):

And we've seen that happen a fair bit. We shouldn't mention any rail projects, which we're familiar, for example.

Gaye Francis (09:09):

One of the interesting other things that I guess we've been, and there's been a couple of high profile projects in the news lately, and one of them is the airport rail link for Victoria out to Melbourne Airport and the project due diligence around that. And we understand that the federal government's just committed to providing half the funding for that particular project and for it to go ahead. And now there's some discussions with the airport around what that project looks like. Apparently they want all underground, and the offer on the table is above ground solution. But working towards that, you need all of the stakeholders involved. And look, don't get us wrong, we've worked on projects and they have gone relatively smoothly. But it doesn't mean that doing this process doesn't mean that issues won't arise. <Correct.> What it does typically mean is if you correctly identify your critical success outcomes in your threats and your key vulnerabilities, credible critical vulnerabilities, those project showstoppers, typically you don't get surprises.

Richard Robinson (10:19):

That's right. You know there's a problem and you know how hard it is and you can make a decision about it, but I don't think we've ever had a surprise with any major project we've dealt with.

Gaye Francis (10:27):

No. We've had to refine some controls before and tighten up those when they did manifest itself. And often that's in terms of quality assurance systems, but it's relatively straightforward. As Richard said: Make sure you got your key stakeholders in the room. Make sure critical success outcomes are clearly articulated. That's where we've also seen projects come undone, where the ultimate owner has been unable to clearly articulate what they're trying...

Richard Robinson (10:58):

You're better off not proceeding with the project if the ultimate owner can't articulate what it is they're actually trying to achieve.

Gaye Francis (11:04):

And trying to second guess that is just impossible. You setting yourself up for a fall.

(11:09):

The other question we've been asked is what are our thoughts around the Commonwealth Games in Victoria saying that they're not going to proceed with the Commonwealth Games? Our understanding was that there was some promised funding from the federal government and that was withdrawn.

Richard Robinson (11:24):

About half, I believe.

Gaye Francis (11:26):

So from a governance viewpoint, if half your funding gets withdrawn, you can't proceed with your project.

Richard Robinson (11:34):

You won't achieve your critical success outcomes. It's just one of those things. It's just simply don't have the resources to make it so.

Gaye Francis (11:40):

And we've seen a number of projects have to be withdrawn and not proceed because there are these potential showstoppers that can't be addressed.

Richard Robinson (11:48):

But the other point is just to make a remark about Monte Carlo simulations, because we see a lot of this and people keep saying, Monte Carlo simulations has solved all your problems. No. We're not against Monte Carlo simulation because it'll tell you the most likely outcomes and that's worth knowing, we're not any doubt about that at all. But what Monte Carlo simulation simply can't do is pick the high consequence low likelihood event, because generally a rare combination of circumstances has to get together. The way I normally explain it, if you've got three probability distributions, you've got to add up from Monte Carlo simulation, the only way to do that is to do a number of trials to get the final probability distribution, and you might only do 15 or 20,000 trials if you're lucky. What happens to the low likelihood long tails of each of those distributions? Well, the answer is they just go missing. So if you had a one in a thousand chance for each of the three probability distributions in order to find the one in a billion chance where those three of those combined to cause a disaster, you'd have to do, well, at least a billion trials or to be statistically significant 10 billion trials. And nobody does that. So that means the long tail low likelihood events that can conspire together are just ignored and thrown away. Our process doesn't do that.

Gaye Francis (12:57):

I think that was my takeaway from the conference was that there was a real want to focus on top-down criticality and vulnerability. And that was from the owner's viewpoint to deliver, because there's a lot of big projects going on in Australia at the moment.

Richard Robinson (13:13):

And they're still going over budget badly.

Gaye Francis (13:16):

But the tools and techniques that are being currently used by organisations to identify the key risk issues for projects is still very much bottom up and lower level, the more likely lower consequence ones. So identify your potential project showstoppers first, and then the other stuff is done secondary. But you do need to do both processes.

Richard Robinson (13:41):

That's correct. And you'll find that all the senior decision makers, once you hit a potential showstopper, they will not let the project proceed. They will not let the tender be let until you have shown why that will not be the case, why it can't happen.

Gaye Francis (13:55):

So this is sort of a passion subject for me in particular, but I hope you enjoyed the podcast today and that you can join us next time.

The Demise of ALARP in Victoria Major Hazards (and the continuing debate on ALARP vs SFAIRP)

Risk! Engineers Talk Governance
Season 2, Episode 2

In this episode of Risk! Engineers Talk Governance, Richard Robinson and Gaye Francis discuss the continuing controversy surrounding ALARP (As Low As Reasonably Practicable) and SFAIRP (So Far As Is Reasonably Practicable) and explain why they believe there is a difference between the two concepts. 

They also recap (further to Episode 1 Season 2) their experience at a recent VCAT case in Victoria where major hazards were assessed based on consequence rather than quantified risk. They conclude that ALARP no longer exists in Victoria - something they're very happy about. 

Please note, it is important to consult with your legal counsel and if they're comfortable with the approach and the method for technical issues.  Contact us if you’d like a chat.

Safety in Design

RisK! Engineers Talk Governance
Season 2, Episode 1

In this episode of Risk! Engineers Talk Governance podcast, due diligence engineers Richard Robinson and Gaye Francis discuss a recent case they were involved in as expert witnesses at the VCAT Tribunal. The case involved a young couple who wanted to build two townhouses on a property that was within a major hazard facility contour line. The local council rejected their planning permit based on advice from WorkSafe. The couple sought help from R2A (Richard & Gaye's consulting business), who advised them on safety measures to address the hazards associated with the facility. 

Watch the podcast recording

Megan (Producer) (00:02):

Welcome to the first episode of Season 2 of Risk! Engineers Talk Governance. In this episode, due diligence engineers Richard Robinson and Gaye Francis talk about safety in design, especially in relation to a recent VCAT tribunal they were expert witnesses in.

(00:24):

We hope you enjoy the episode. Please give us any feedback on topics that you would like us to cover and please subscribe on your favorite platform and also give us a rating.

Gaye Francis (00:37):

Hi Richard. Welcome to another podcast recording.

Richard Robinson (00:42):

Hi Gaye. It's good to be here.

Gaye Francis (00:44):

Today we thought we'd talk about a recent job that we've been working on, which was a hearing in the VCAT Tribunal -- Victorian...

Richard Robinson (00:52):

Civil and Administrative Tribunal.

Gaye Francis (00:54):

Thank you for that! VCAT. And what happened was a young couple came to us and they were trying to put a planning permit in with a local council that had got rejected. And the reason for its rejection... It was a single dwelling at the moment, an old house that they wanted to pull down and put two townhouses on, and it was rejected on advice from WorkSafe that it was now in a major hazard facility contour line, which we'll go into in a little bit more detail. And their argument was that the new two townhouses had a greater exposure, or exposed potentially more people, to this hazard than was existing in the original dwelling.

Richard Robinson (01:44):

That's right. So the argument was that there were four people in the original dwelling with two houses side by side. There'd be eight people and it was unreasonable to increase the number of people on a societal risk basis.

Gaye Francis (01:55):

So for this reason, even though WorkSafe wasn't an authority, a planning authority to be able to reject it, that advice went to the council and it was rejected on those grounds by council under their planning permit scheme. So they sort of turned up here (at R2A) and said: Ah, what do we do with this? Are you able to help us?

Richard Robinson (02:17):

Yeah. But we basically said to them, well, from the point of view of an explosion coming from a major hazard facility and you're now within the consequence contour, there are two core hazards. And the first one, which has always been well known is that if you have an explosion coming your way, windows blow in and you can get the windows that turn into glass shards. This is a particularly well-known terrorist technique, which I've got to say Bob Browning, whom you recall, talked to me all those years ago and it arose from the (Hilton) Hotel bombing in Sydney, which is now so long ago (1978). I don't suppose anybody actually remembers about it, but the notion, and we've done work on major hazards facilities for a munitions plant in

(02:52):

Moama and the other one up in Shepparton, right at the back of Shepparton. And the idea that what you need to do to make sure that windows don't blow in and ensure explosion over pressure don't cause you problems is well known. At that institution, we were using NATO design standards for this purpose. It's not something you traditionally do, I've got to say.

(03:12):

Anyway, we sort of pointed out there's two core hazards, the windows blow in and shrapnel and the other one, which happens particularly if you put up a tile roof and you've got little gargoyles or something on it, the explosion, you pick up the roof tiles, knock 'em off, and the roof tiles can fall to the ground and clunk people down below. And for both these, if they get a pretty serious hazard and you need to address them.

(03:29):

And the two most obvious controls to do here is have a mental roof, a color bond roof of some sort, which they already had on their plans. And the other thing was to have laminated windows, a matter which they thought they had because they had to have energy efficient building. And one of the things, and one of the ways you do that is to have laminated windows. And the reason for that is that if the window blows in, it just holds the glass together. It's not a question of the robustness of the lamination. I mean, if you're really...

Gaye Francis (03:56):

...It just holds the shards together.

Richard Robinson (03:57):

The shards together. If you're really serious about this sort of stuff, you can have a window that'll withstand 3 0 3 bullets, but that's not what we need in this instance. Just got to hold the glass together. And interestingly enough, when you looked at the safety case guideline that the major hazards' site produced, if they said: if you had a problem, go inside and close your window curtains. And the reason we do that is so that when the glass shards happen, the curtains catch 'em.

(04:20):

Anyway, the council in the meantime was then saying, just don't increase the density. And then they started talking about it, or the lawyer for the council started talking about, having emergency procedures, which doesn't make any sense at all because you're talking about an explosion and explosions go sort of just slightly faster than the speed of sound, which is about 340 meters a second. Now they're about 500 meters from the boundary and about 750 meters from the probable hazard source, the explosion's going to arrive to two to three seconds. There's nothing you can do!

Gaye Francis (04:49):

Doesn't give you much time to enact an emergency evacuation plan. And probably the safest place to be would be inside anyway rather than outside and trying to evacuate some way.

Richard Robinson (05:00):

Well, I was living in North Melbourne with my family when the Butler's Transport fire blew up (1985) and I felt the windows rattle, galloped outside to have a look. That was probably about 2km away for me at the time. I knew it was an over pressure. You could feel the shockwave, couldn't see anything. And then I sort of saw it in the news later that day. But I was sufficiently far away that once... In fact, the consequence line was a kilometer away from the site boundary. And I've got to say, based on what we've seen and what popped up in the tribunal, I think that was probably a correct boundary distance.

(05:33):

The next podcast we're going to do is going to talk about the consequences of the major hazards regulator in Victoria, creating a consequence boundary, which we have to say is one of the best things that could ever have happened that we've been waiting for for the last 20 years.

(05:48):

But what I want to particularly just comment on was the actual way in which the VCAT tribunal operated, and from our point of view as experts, what this means. We sort of talked about it and as an overall observation we're pretty impressed with the VCAT process, although we were a little bit cranky about how long it all took.

Gaye Francis (06:05):

It was a very long drawn out process.

Richard Robinson (06:07):

But that's fair enough. And the decision still hasn't been made and we're not sure when that will happen. But for various reasons, and I'm pretty sure VCAT is overloaded, because one of the things that these consequence curves around the major hazard facilities has (resulted in) there's been a deluge of VCAT planning appeal cases going on to the Supreme Court. So the sheer amount of energy and resources going to resolving this is absolutely stupendous.

Gaye Francis (06:34):

And that's based on a single change; that it changed from a risk contour to a consequence contour. And so a lot more buildings or potential properties in these municipalities that have major hazard facilities are impacted by this change.

Richard Robinson (06:48):

Correct. Now one of the problems we had, because we're acting as experts, so when you return up as an expert, you are acting on behalf of the tribunal. You're not meant to be an advocate speaking on behalf of your client. Whereas the council actually had a lawyer representing them. And so an awful lot of the proceedings was taken up by legal argument between what planning rules applied, what planning precedence would take the case, i.e. the laws of man. Now we were trying to articulate the laws of nature. Just as an observation, I was a bit surprised that we were the only experts in the room. I was rather anticipating the council might have a technical expert and maybe the major hazard facility and even major hazards regulator might think it was worthwhile turning up to provide some insight so the laws of nature could be established clearly between all of the technical parties. That did not happen.

Gaye Francis (07:37):

I guess just clarifying that though, the technical arguments that were made during those practice meetings were apparently tested back with the technical experts in each of those organisations of the major hazard facility and WorkSafe, is our understanding. And then it was sort of brought them back to VCAT in the next session that: yes, we can confirm that that is the case.

Richard Robinson (08:00):

Well, that's the way we interpret their presentation as made by their submissions as made by their lawyers that the technical experts had reviewed our expert report and said: yeah, what we've said was fair.

Gaye Francis (08:10):

That's correct.

Richard Robinson (08:11):

That was my understanding. But you see, we were actually acting as, not as advocates but as assisting the tribunal. So we tried to put forward the most comprehensive understanding we could for the benefit of the tribunal. And to do that, we actually adopted our threat barrier technique, which paralleled the major hazards organisation's same process. And we basically confirmed that we thought what they were saying and what the regulator was doing was making a great deal of sense. And so if you look at the hierarchy control, the elimination option, delete the major hazard facility or delete the houses, that wasn't going to happen, nor was anybody contemplating that. Then you're looking at the preventative side to make sure the thing didn't happen in the first place and you had a five-year rolling safety case, which everybody seems to agree is working well because there'd been no incidents from this site and it had been around for a long time. I'm pretty sure I can remember going there 30 years ago and doing various safety case work. And so then it became down right to the mitigation, i.e. the question of how you would deal with the hazards after the explosive over pressure came this way towards these young couples' proposed development. And there were basically five controls.

(09:23):

It's just attenuation, the pressure attenuation by distance and it's generally cube law for at least a point explosion in space because the explosion's expanding as a cubic volume sphere. When it's close to the ground, it just gets a bit more problematic because you've got this pressure wave coming back up so you get a hemispherical wave. So it's a bit hard to sometimes figure out. And also you don't know where the explosion's going to be because it's a gas cloud. You don't know if its reaches, their fuel mixture, you dunno when it's going to find the ignition source. There's such a fabulous array of problems.

Gaye Francis (09:59):

And unknowns that change the circumstances almost every time that condition happens.

Richard Robinson (10:04):

The very rare occasion... I mean one of the ones that always fascinated me was that Professor Dougle Drysdale from Edinburgh University talking about the Bunsfield explosion sort of said the stoic metric mixture could only occur because they pollarded the trees in a way that it actually created a mixing device to get the air explosion mix just right before it found the ignition source, which apparently was a fire pump of vaguely ironically. But anyway.

(10:29):

The point was then you had the attenuation, then you had from our point of view, the controls to stop the explosion, pushing the glass in and knocking things off the roof.

Gaye Francis (10:38):

So building in design type stuff.

Richard Robinson (10:41):

Safety in design, basically.

Gaye Francis (10:42):

Safety in design.

Richard Robinson (10:43):

Then you had let's not have too many people there. And the last one was the emergency procedures, both of which we didn't think were particularly effective. And that came out.

(10:54):

What we didn't do because our young people didn't have any lawyer to cross examine us and draw out from us what were the really important points, i.e. the advocate's point. And as experts were not in a real position to say it. Was to actually just hammer the importance of what we're saying. And that was, and so I guess I'll just summarise it now, if we were the advocate of what we would've said. Now these young people didn't know this problem existed until somebody told them mid last year and they had their planning and building permits ready to roll. They have absolutely no control over this explosion and pressure wave coming their way. There is nothing they can do from their point of view, this is just like a force of nature, something they have to deal with. The two core hazards that they have to deal with after talking to competent consulting engineers, are the windows blowing in and the roof bits coming off.

Gaye Francis (11:43):

That were confirmed by the major hazard facility and WorkSafe.

Richard Robinson (11:46):

Correct. And in order to eliminate that hazard, what they had to do was have a steel roof, colorbond roof, and laminate the windows. And if they did that, they practically would've eliminated the hazard at the distance which they are because the attenuation did give them a lot of benefit.

(12:03):

Under the legislation, that's the OHS Act in Victoria, which is the enabling legislation for major hazards, you have to eliminate hazards so far as reasonably practicable and if you can't eliminate them and only then do you reduce them. The elimination option, they already had a colorbond roof. So you can't say that's prohibitively expensive or difficult. And to laminate the windows, well they actually suspected they already were, but the architect hadn't defined that because of the rejection of the permit. But to actually include that was trivial. You are not allowed to go to the next option, which is to reduce the number of people at risk, if you can eliminate the hazard in the first place. It doesn't matter if there's four or eight people, if the hazard's been eliminated, it is completely irrelevant. And to even discuss emergency procedures for an explosive potential where the best thing to do is just to rush in the house and lock yourself in and be secure...

Gaye Francis (12:59):

Nonsensical, isn't it?

Richard Robinson (13:00):

Nonsensical. But we didn't say that because we weren't allowed to act as advocates. And so I guess we have sort of, that's the one part of the process I didn't like, but we'll have to see what happens.

Gaye Francis (13:14):

And I guess that just also draws out the difference between the requirements under planning permit rules and the planning permit schemes compared to the OHS legislation and how do they fit in together and what councils are expected to do about it. And I think this is something that it's a bigger issue, isn't it? That needs to be thought through.

Richard Robinson (13:36):

Well, what puzzles us, and again we made it clear in our expert statement, which I presume if anybody wants a copy of, we can actually provide because it's our opinion, there's no reason why we can't. But I was pointing out how the gas pipeline people, high pressure gas pipeline, which we've done a lot of work for, we put engineering design calls in regularly and everyone signs off and the council signs off and Energy Safe Victoria signs off. We're actually sort of nonplus as to what's actually going on here. And particularly in terms of the council, it's like the council de-engineered itself. There were no experts from the council.

Gaye Francis (14:09):

Not technical experts.

(14:12):

Especially if your municipality's dealing with these sort of hazards, you would expect some sort of understanding within the council of those and what you can put in place. Because I would think from a council viewpoint, development's good! And as we talked about with our clients or with the young people is their house is actually safer than the older houses. If they put this new design in.

Richard Robinson (14:38):

It's safer for the eight people. If you leave it the way it is, it's more dangerous...

Gaye Francis (14:42):

...for the four people.

Richard Robinson (14:43):

And that means it's in everybody's interest to have it done.

Gaye Francis (14:47):

So if you take this as an overarching principle that you put these safety in design controls in place for new developments, all of a sudden in areas that do have major hazard facilities, you will get a safer community.

Richard Robinson (15:02):

The community will be more resilient, which is what everybody wants.

Gaye Francis (15:06):

So we hope you found our podcast, interesting today. Thank you for joining us and we hope you get to see you all or hear you next time we put it in a podcast. Thank you.

ISO 31000 The Risk Management Standard - The consequences for WHS/OHS legislation

Risk! Engineers Talk Governance
Episode 10, Season 1

In this final episode of Season 1 of Risk! Engineers Talk Governance, due diligence engineers Gaye Francis & Richard Robinson discuss one of the topics they are asked most: ISO 31000, the Risk Management Standard. 

They outline the consequences of ISO 31000 that it does not meet the requirements of the WHS Legislation/OHS Act in Australia & New Zealand, that organisations cannot keep using target levels of risk and safety to make safety decisions -- you can use it as a reporting tool.

Transcript

Megan (Producer) (00:02):

Hi. Welcome to the final episode of Season 1 of Risk! Engineers Talk Governance. In this final episode, due diligence engineers Richard Robinson and Gaye Francis talk about ISO 31000, the Risk Management Standard and its consequences, especially with relation to WHS legislation in Australia or the OHS Act in Victoria.

(00:31):

We hope you enjoy the episode. Please do support our work and subscribe to the podcast and give us a rating. Also, share it across your network if you know other people who may be interested. Also, this is episode 10, so please do check out the other episodes if you haven't done so yet. We look forward to bringing you Season 2. If you want to keep in touch with Richard and Gaye's work and their due diligence consulting, please do head to R2A's website. The details will be in the description and you can also sign up to their newsletter that will keep you up to date. Enjoy the episode.

Gaye Francis (01:12):

Good morning, Richard, and welcome to our podcast; Episode 10 of our first season. Very exciting. How are you this morning?

Richard Robinson (01:20):

I'm good. How are you?

Gaye Francis (01:21):

Good, good, thank you. We're doing this podcast remotely as we've both had the lurgy this week, so keeping away from each other. We thought we'd finish with something that's probably one of the things that we get asked about the most, and that's ISO 31000, the risk management standard and its consequences and the difficulties that this has, especially in relation to the WHS and OHS legislation and the contradictions there.

(01:50):

So Richard, I'll let you launch in and then I'll chip in as we go.

Richard Robinson (01:56):

Well, thank you Gaye. Look, the key point here, I guess that this has puzzled us for a long time because it's been going on for a long time now, is that the OHS Act started in the Victoria in 2004 and the model Act commenced in most jurisdictions in 2011/2012, Western Australia adopted last year (2022) and kiwi land (New Zealand) adopted in 2015. And the legislation's absolutely crystal clear in its objectives that the purpose of the legislation is to achieve the highest level of protection as is reasonably practicable for everyone. It's absolutely crystal clear and we were just talking about... we're doing some stuff on VCAT where we asked to read some case law and one of the points they're making of this that the high court's making at different points is that the more precise a parliament is about the intention of the legislation, the less room that the courts have to maneuver to interpret. If so, if the objective is absolutely crystal clear, then that's what you're supposed to do.

(02:49):

Now, what’s got us completely confused is ISO 31000; that process is contradictory to that (OHS) Act, at least when you're dealing with health and safety. And what puzzles us the greatest is that this confusion is sort of reflected throughout Australian Standards everywhere. Just to give you an understanding that there's no such thing as a target level or tolerable level of risk or safety because the legislation's quite clear you've got to achieve the highest level as you reasonably can.

(03:15):

Now, just to sort of emphasise that this is from the "Managing Health and Safety" handbook thing Standards' Australia, and it says, importantly: "Contemporary WHS legislation does not prescribe an acceptable or tolerable level of risk. The emphasis is on the effectiveness of controls, not estimated risk levels. It may be useful to estimated risk level for the purposes such as communicating which risks are the most significant or prioritising risks within a risk treatment plan. In any case, care should be taken to avoid targeting risk levels that may prevent further risk minimisation efforts that are reasonably practical to implement."

(03:49):

Now, that's an absolutely perfect restatement of what the intention of the Model WHS legislation is.

Gaye Francis (03:56):

And that's in the handbook of the Risk Management Standard. But if we read out what the process of the Risk Management Standard is, it's: establish the context, do a risk assessment hazard base, which is hazard risk identification, hazard risk analysis, hazard risk evaluation -- so that's your criteria and your tolerable and acceptable level of risk -- and then risk treatment. So the two things don't match up there.

Richard Robinson (04:21):

And the weirdest thing is, is that if you look at a Standard like the Network Safety Standard, AS 5577, which is mandated by a lot of regulators, it tells you to use the risk management standard approach. It's absolutely crystal clear about it, even though throughout the words it's saying at different times you shall, for example, initiate action so far as this reasonably practicable (SFAIRP) and then it goes on with all the things you should do. And I've forgotten exactly where it is, but there's one bit there where it says you shall eliminate hazards so far as reasonably practical, and if you can't eliminate them, you'll minimise them as low as reasonably practical. And then at the back it's actually got how to do a formal safety assessment. It basically tells you to comply with the principles ISO 31000 and to choose target levels of risk and safety and so forth, which is specifically against the will of all Australian parliaments. So we find this...

Gaye Francis (05:16):

So I think this is sort of showing that there's a mismatch, isn't there, between the things that the senior decision makers and the boards worry about, which is the WHS legislation and things like that. And I don't think there's any confusion there that they understand what their requirements are and the desire to be compliant with that. But the tools and the processes that the engineers are using to do the day-to-day work in organisations, the Standards is what is creating that confusion. And there's a mismatch between the two.

(05:52):

And what we've sort of found is it hasn't been fed down into the organisation yet. So as I said, the boards and the senior exec understand the requirements of the WHS legislation and what they have to do to achieve it, but because they've got all of these embedded processes and policies that often reflect the processes in the Risk Management Standard, and that's what the engineers are doing on a day-to-day basis, there's this mismatch and they've been trying to put the principles of the WHS legislation within their current framework. And I'm not sure that that's, I don't know that that's been successful.

Richard Robinson (06:28):

I'm sure it hasn't. Now, from the point of view of the engineers, I mean this office was central to the Engineers' Australia Safety Case Guidelines, which was signed off by the National Risk Engineering Society in 2016, I think. It was reviewed by a barrister in Queensland to make sure that it was tightened and consistent with the legislation and all the points we're making here, that was basically making. And what's got us completely stumped, I mean that Safety Case Guideline is a recognised, I think it was a... What actual term the Engineers' Australia used? Practice note. And so if you're a professional engineer working in Australia, you need to understand what the practice notes from intellectual body are saying because you're all wide up in court. And Australian Standard, well I giving you another quote, this is from Paul Wentworth, a partner of MinterEllison: "Engineers should remember that in the eyes of the court, in the absence of any legislative or contractual requirement, an Australian Standard mounts only to an expert opinion about usual recommended practice. In the performance of any design, reliance on an Australian Standard does not relieve an engineer from a duty to exercise here's or her skill and expertise".

(07:33):

So if you know that the legislation says this and you still choose to do it consistent with an Australian Standard, you are talking yourself into a very difficult place if it all goes wrong and all wind up in court. And you have expert witnesses like us acting against you. I suppose it even puzzles us even more because the whole point of the exercise is that Engineers' Australia is meant to be an intellectual body for engineers and engineering in Australia. And yet, and I don't understand why Engineers' Australia keeps encouraging engineers to put their intellectual property into Australian Standards and these Australian Standards are quite contradictory, and as resolved by the practice note from Engineers' Australia.

(08:11):

So there's something that's really mismatching here and not quite right that needs resolution. I don't know that we're going to solve this on the spot.

Gaye Francis (08:20):

What we're saying is Engineers' Australia could have a role in playing to promote what is best practice in the industry outside of Australian Standards and should be doing that.

Richard Robinson (08:31):

Am I allowed to have my little rant about...

Gaye Francis (08:32):

Yes, you can have your little rant.

Richard Robinson (08:36):

See, one of the thing I don't get too, apart from the curious matter of telling engineers to put the intellectual property into Australian Standards rather than to documents that belong to Engineers Australia... Because I've got to tell you, if you look at the American engineering institutions, they don't give up their intellectual property for free to third parties. But under the code of ethics, for example of Engineers' Australia, you've got to give credit where credits to you and Standards Australia just refer to organisations rather than individuals who actually put the intellectual time and effort into the damn thing. Unlike for example, NFPA Standards in the US. It's something I just simply haven't understood that Engineers' Australia keeps promoting Standards Australia like it's a kindred society. It's not, it's a commercial entity doing commercial things.

Gaye Francis (09:18):

Okay, that's your little rant.

Richard Robinson (09:21):

That's probably enough! I could go on but I don't think you need it.

Gaye Francis (09:24):

So if we bring it back to ISO 31000 and its contradictions, what we're saying is we've been advised on a number of occasions when we brief legal counsel for organisations that the ISO 31000 does not meet the requirements of the WHS and OHS legislation. And you cannot keep using target levels of risk and safety to make safety decisions; you can use it as a reporting tool, which is what that paragraph in the handbook says, as a useful tool. And there are ways out there that the engineers have specified that you can put your safety argument together to meet the requirements of the WHS legislation and until organisations realise the mismatch between what the board is trying to achieve and then the processes and policies within an organisation, I think this confusion will continue.

(10:20):

And I think we touched on it last week (Ep 9, The Contest of Ideas), Richard, one of the other confusions or one of the reasons for the confusions is we think that there's been a sudden increase in the number of people from the UK who used to practice in health and safety and risk in the UK coming to Australia after Brexit.

(10:40):

And there's been almost a going backwards... I thought we were way on top of the SFAIRP approach, but ALARP seems to be creeping into more and more processes that we see in organisations and they're trying to say that they're the same. And we've been categorically told on a number occasions by lawyers that they are not the same and you cannot use the same processes to achieve that.

Richard Robinson (11:09):

Yeah. What we've noticed is that, and this is sad because a lot of organisations have to go through this process. If your regulator, for example, calls up like 5577, a Standard that mandates basically ISO 31000 approach, well you're going to be stuck. You're going to have to do it twice. You're going to have to do it to demonstrate the highest level of precautions being achieved on the one hand and then order to get a license to trade, you're going to have to do the ALARP approach to satisfy the regulator. And that's quite regrettable, but that's the way...

Gaye Francis (11:43):

But until the two systems align, there's nothing else you can do, because otherwise you leave yourself open for litigation in the event that something awful happens.

Richard Robinson (11:53):

Correct. And you have expert witnesses like acts against you.

Gaye Francis (11:59):

That is true. Anything in closing comments, Richard, on ISO 31000 and its consequences?

Richard Robinson (12:07):

Oh, I did say before... It's not the whole document. I mean we were talking about IEC 61508, the functional safety assessment standard and it uses targets of safety to decide to do the SIL allocation upfront. That's totally against Australian legislation. I get that, that's not a particular issue. But that doesn't mean the other seven volumes are invalid. And once you decided what the level you'd going go for is, there's a whole lot of validification and verification processes in there.

(12:34):

So remember, it's not a Standard that's recognised good practice. It's the useful ideas in the Standards that are recognised good practice and therefore you must consider. And the same thing occurs with ISO 31000. There are a number of quite important things in there that are particularly useful. It's just that the basic processes acts against the fundamental purposes of legislation. I don't know how anyone doesn't quite get that, but that's the problem.

Gaye Francis (13:00):

I think we also touched on it last week is what we're saying is Standards and policies and things like that are good tools to have, but it doesn't stop an engineer from thinking. You really have to figure it out and use those things, and where Richard said the quote before. But you really have to take with a grain of salt what they say and make sure that it's applicable to what you're applying it to.

(13:27):

Alright. I think we might leave it there, Richard. Thank you for joining us for episode 10 of Season 1. We hope you've enjoyed the season and we will be back with another season soon. So until then, thank you for joining us.

Richard Robinson (13:46):

Thank you.

The Contest of Ideas - Has Australia gone backwards in embracing SFAIRP?

Risk! Engineers Talk Governance
Episode 9, Season 1

In this episode of Risk! Engineers Talk Governance, due diligence engineers Gaye Francis & Richard Robinson discuss the contest of ideas and if Australia has gone backwards in embracing SFAIRP. They also observe how many Australian Standards contradict WHS legislation/OHS Act and how Standards appear to be stopping people and organisations demonstrating SFAIRP.

Transcript

Megan (Producer) (00:02):

In this latest episode of Risk! Engineers Talk Governance, Due Diligence Engineers Richard Robinson and Gaye Francis, talk about the contest of ideas and ask if Australia has gone backwards regarding embracing SFAIRP method.

(00:19):

We hope you enjoy the episode. If you do, please give us a rating. Also subscribe on your favourite podcast platform and please do check out the other episodes. If you have any feedback, please let us know. All details for Richard and Gaye are in the description of the podcast.

Gaye Francis (00:38):

Hi Richard.

Richard Robinson (00:40):

Hi Gaye.

Gaye Francis (00:40):

Welcome to another recording of our podcast. Today we're going to talk about something a bit different than we really haven't talked about in our podcast before, and that's around the contest of ideas.

Richard Robinson (00:53):

That's quoting John Howard from 2017 when he pointed out politics is supposed to be about the contest of ideas and not a public relations exercise.

Gaye Francis (01:02):

And we're sort of talking about it in the context of (that) we've been doing a bit of soul searching lately about what R2A (Richard & Gaye's business) is and what we're doing and where we are going. And I think the key thing that R2A has really prospered from over the years is that thought leadership stuff in the risk and due diligence space. And where we've been and where we've come from and where we're going I guess as the most important things. And I think there's been some observations, especially after Covid and the way that business has done after Covid, we thought we'd all be back to normal, whatever that normal was and pre-covid conditions by now. But I think business has really changed forever. I'm not sure that we'll ever get back to the way that business was done prior to Covid.

Richard Robinson (01:47):

Yeah. And there's a lot of factors in that that we're not too sure about. But see, one of the things we've noticed that people aren't, well, for example, buying books the way they used to. At best, they absorb things online. Everything's become a lot more short-term-ism, I don't know quite the way to put it, but everything comes in short sharp snaps now. You don't buy. Reading "War and Peace" was probably never a particularly popular exercise, but it's only something that some of us did some of the time.

Gaye Francis (02:13):

I think it's called a "now" society, which my children are very much about a now society -- we want it now and we don't want to wait for anything. And if it doesn't get you attention for more than, if you need attention for more than five minutes, then that's about it. But everything wants to be, you're right, easily accessible and people want it now, the information now.

Richard Robinson (02:34):

Correct. And they want the solution now too. But as we've commented, thinking is hard. And if you can get it now, why bother?

Gaye Francis (02:44):

Very much so. Very much so. I think in terms of where we are as risk, we always say we are risk and due diligence engineers and due diligence engineers. But I think due diligence has really gone into the governance space.

Richard Robinson (02:58):

Yes. And as we're just pointing out this governance space up with John Clark would be particularly pleased for you to use.

Gaye Francis (03:06):

So the space of governance and you use due diligence I guess to demonstrate that you have been, that you're showing governance in areas of safety projects, operations, all of those things.

Richard Robinson (03:17):

And that's precisely where our two little new books (Criminal Manslaughter & Project Governance) were aimed at. They were aimed at the governance space in those two particular domains, which were there for extracts out of the larger R2A (Due Diligence Engineering) text.

Gaye Francis (03:27):

So I'm not exactly sure what's happening, but we do seem to be spinning wheels at the moment in the risk space anyway. And I think even the ideas that Australia embraced 10 years ago around the SFAIRP methodology and things like that, I think we've gone backwards.

Richard Robinson (03:46):

I think that's correct, and we've been trying to figure out why that might be the case. To some extent we're putting it down to Brexit and a sudden influx of English colleagues and relying on the notion that the UK Health and Safety sector says ALARP and SFAIRP are the same thing. Which is absolutely quite fascinating and it's certainly true, and we've had lawyers tell this to us. I mean in the WHS and OHS legislation, for example, they only define reasonably practicable. They say you've got to eliminate risks so far as reasonably practicable (SFAIRP) and if you can't eliminate to reduce it so far as reasonably practicable, but the legislation only defines reasonably practicable. And we've always noted quite correctly that if every reasonable practical precaution is in place, then the risk associated with the hazard will be as low as reasonably practicable. The difficulty we've always had is that the process you use to do these two things is quite different. And that if you do use the hazard and risk-based approach to demonstrate

Gaye Francis (04:43):

as low as reasonably practicable (ALARP)

Richard Robinson (04:44):

you come up with a different list of recommendations and an effort and a whole lot of things involved. And if you go around the way that's required in the WHS legislation, it's the basic engineering philosophy -- observation. The meanings and the method results are only consequences depending on which method you used, you will get different results.

Gaye Francis (05:03):

And I think that's what the health and safety executive said in the UK wasn't it, that the basis of the two concepts is reasonably practical, but they are different. I'm not sure about WHS or Work Health and Safety legislation in the UK, whether they actually define it the same way that we do.

Richard Robinson (05:20):

Oh they do! The 1974 Act has got SFAIRP in the legislation.

Gaye Francis (05:25):

But then as other practitioners say, how can you say that the two are the same when they've been defined for different purposes by different groups of people. And the way that you'll be tested in the courts after the event is the SFAIRP approach. So courageous is one of the words that we would use to say (they're the same).

Richard Robinson (05:43):

The "Yes, Minister" of (courageous) term. Yes.

(05:46):

Now to that extent and the contest of ideas R2A, we've tended to walk around this in a polite way. And what we've noticed is in order to get people to think our way, we have to get the lawyers on side first. And we've never had any great problem doing that, although beating people over the head with lawyers is not necessarily the best way to start a starting position in life.

(06:06):

But what we're basically sort of concluded, we're going a bit further than that. There are now so many Standards that contradict the WHS (&OHS) legislation completely that is setting organisations up for a fall. The ones that notably we talk about are ISO 31000, the Risk Management Standard. And since that's mandated by government in all sorts of places, the fact that it actually stops people from actually demonstrating SFAIRP stuns us.

(06:32):

But IEC 61508, the Functional Safety Assessment Standard, it still uses target levels of risk and safety. You're not allowed to do that.

(06:39):

AS 5577, the Network Standard, that one's a classic because it's in one paragraph, it says you shall eliminate hazards so far as reasonably practicable and if you can't eliminate them, you've used them as low as reasonably practical. And the one paragraph, it's just unbelievable.

(06:54):

And then you've got AS 2885, the Pipeline Standard. We've had lots of discussions with the pipeline people. And I have to say their ALARP is looking suspiciously like SFAIRP, but they've still got the confusion with the terms.

(07:05):

And EG 0. There's another blindingly complicated one. We've been sort of complaining about that for the last 10 years. And we don't quite understand because if you actually contradict The Act, you can't go around having standards contradicting Act. And that means Standards Australia and the Board of Standards Australia really needs to get its act together. And from our point of view, Engineers Australia needs to pick up the Board of Standards Australia. The whole point of the Engineers Australia safety case guidelines to point out what you needed to do.

Gaye Francis (07:31):

To demonstrate diligence.

Richard Robinson (07:32):

As engineers. And since that's your intellectual body telling you if you go with an Australian Standard and ignore the Engineers Australia code of practice, as far as I know, engineers are setting themselves up for a colossal legal fall, but people are doing these things.

Gaye Francis (07:50):

I think also that people are using the Standards as license to trade. And when your regulator's asking you to do one thing... But people have stopped thinking. Just because a regulator tells you to do one thing doesn't mean that all of those other obligations that you're required to do disappear.

Richard Robinson (08:07):

Our experience is that regulators don't get it right, regularly.

Gaye Francis (08:11):

And there's no downfall for 'em either. There's no,

Richard Robinson (08:13):

Well, they might be publicly embarrassed when it goes wrong, but it's the organisation that suffers and the board and the relevant board that suffers the legal test.

Gaye Francis (08:20):

So I think there's a lot of wheel churning and wheel spinning going on because it's creating so much work for organisations to do, that they're just missing the picture, the big picture of the things that they really need to do to get on with doing their business safely.

Richard Robinson (08:36):

Correct. And we're sort of agog! I mean from our point of view, due diligence is a governance exercise. You can't always be right, but what the courts demand of you is that you're always diligent. And that's why we have suggested on a number of occasions in the past, for example, the Risk Engineering Society should become the Due Diligence Engineering Society because that is the legal duty of engineers.

Gaye Francis (09:02):

To be diligent.

Richard Robinson (09:03):

To be diligent. It's never been the duty to be risk engineers. The duty is to be due diligent engineers.

Gaye Francis (09:09):

And I think just going on from the risk as well, you got to make sure that you're addressing the vulnerability what can actually negatively impact your business rather than just the threat per-se.

Richard Robinson (09:25):

Yes. Well that was Bob Browning, one of our previous associates went to a lot of trouble explaining that's a security point of view. It's not the threat that counts, it's how you're vulnerable to the threat that counts. And we just had an interesting conversation this morning with the water authority to the effect that we are not entirely sure, but that distinction between the threat and where you're actually vulnerable and that you have to demonstrate due diligence for that vulnerability is what you need to do. Sometimes just because of the practical application, you will address the threat, but that's not always the way that it's done.

Gaye Francis (09:58):

I think the example there was climate change, wasn't it? So climate change is obviously a threat to many organisations, upcoming risk, but how does it actually impact your business going forward and what implications does that have for your business or consequences? And that's what you need to address in terms of the resilience and the availability of your system that you going forward with.

Richard Robinson (10:23):

Correct. And I think that was the other thing which was interesting in the conversation was, you see, the engineers have basically made a feast of hazard risk analysis for the last 30 years. But there's a lot of other different ways to go about this. And the really weird thing about this risk business, and I sort of think we've talked about this before, none of the techniques that people apply are in error. They will all give insight. It's just that this risk thing, the risk space, is a multidimensional creature and you can slice and dice it in all sorts of different ways and you will get the different insight. Where the systems are coming unstuck, so far as we can tell, is that people aren't thinking through what is the analysis type they need to get the answer that they require in order to demonstrate in governance terms that they've been diligent.

Gaye Francis (11:06):

And by getting different insight, they'll give you different insight as you said. But what's the most useful insight? And I think in doing that, you also now have to understand what some of the downfalls for each of the techniques are. Some have different, well, they all have different benefits, but you've got to understand the pitfalls of those techniques as well going forward. So you know what the limitations are and what aspects may be missing from that understanding.

Richard Robinson (11:33):

Well, that's just coming back to the Standards business and there's that quote I give you from the 1939 (or) 1937, I can't remember which one, was Chairman of Victorian Division of Engineers Australia, who pointed at the Standards have two purposes in life: To prevent fools from their folly and rogues from their roguery. And so far as I can tell the points he was trying to make was, you need to think through from first principles as an engineer competently how it ought to be. And then you test back against the Standard to make sure you haven't done anything stupid. Even the Standards I'm complaining about that miss the point of the WHS legislation doesn't mean to say they're entirely in error. There's lots of good bits and pieces in there. Because, remember, it's not a Standard that's recognised good practice it's the relevant ideas in the Standard that's recognised good practice.

(12:14):

But the first one, that's fools from their folly. And practically, if you're trying to hang a contractor who's hashed up a job the quickest way to do it's to say you're rotten sod, you haven't complied with the Standard, you're toast. Well that's rogues from their roguery. But you never want to go there. You want to get it right the first time. Diligence doesn't mean you're hanging people. Diligence means you get it right initially.

Gaye Francis (12:36):

And I think that's the key thing about the due diligence process. It's supposed to get you to enable you to get on with things and make things happen, which is what engineers are about making... changing things.

Richard Robinson (12:46):

And due diligence makes things happen. Risk analysis stops things from occurring.

Gaye Francis (12:51):

That's correct. We had lunch with an associate a couple of weeks ago and said, due diligence is really about, it's the laxative, it makes things happen more smoothly. Hadn't quite thought about due diligence engineers in that way. <laughing> That was a very interesting analogy. And it is. It's supposed to make things happen and get on with things. You've only got limited resources, limited time, limited budget, and what is the best option or optimal option going forward to achieve the things that you want to achieve. So that's why it's super critical to identify what you're trying to achieve, what are your options to get there and what are the best ones in those circumstances?

Richard Robinson (13:39):

Which is what the WHS legislation requires of you. We don't get why people use the Risk Management Standard in contradiction to the legislation. To us this is more than just courageous because this is willfully doing it. The fact that government agencies demand the risk management standard process when the WHS legislation specifically tells you not to do it, is proper reflection on the code of practice, which is also an error. But I think that's the subject of another podcast.

Gaye Francis (14:04):

I think that might be the subject of another podcast. So we've done a bit of a venting session today and just the frustrations of where things are at, but there is a lot of confusion out there and I think it feels like industry has gone backwards with the acceptance of SFAIRP going forward. And the processes that were being implemented and now being eroded, I think. And there's been a lot more emphasis on quantitative risk assessment.

Richard Robinson (14:36):

Correct. Using target levels of risk.

Gaye Francis (14:37):

Using target levels of risk and trying to characterise it. And as we've said on many, many occasions in our podcast and anyone that's ever listened to us before, you ask two risk experts to go and characterise the risk associated with something, you'll always come up with two answers. So which is the right answer?

Richard Robinson (14:54):

And it's always better to be roughly right than exactly wrong, which happens a lot.

Gaye Francis (14:59):

So all that we would say going forward in this is be careful of Standards.

Richard Robinson (15:06):

Think!

Gaye Francis (15:07):

You need to think these things through. There's a whole lot of tools and techniques out there that are useful techniques, but you have to understand the limitations of it. And it's not a one-size-fits-all tickbox exercise when it comes to due diligence and governance.

Richard Robinson (15:22):

And when it comes to the crunch and you're an engineer, a code of practice from Engineers Australia, your intellectual body, unless the Standard is called up by statute of regulation, the code of practice from your intellectual body will always have a higher standing in court than an Australian Standard.

Gaye Francis (15:40):

So thank you for joining us this afternoon. We hope you found it interesting and we hope that you can join us next time. Have a great afternoon. Bye. Thanks.

Richard Robinson (15:51):

Bye.

White Island Volcano Eruption - NZ trial on alleged breach of Workplace Health & Safety laws

Risk! Engineers Talk Governance
Episode 8, Season 1

In this episode of Risk! Engineers Talk Governance, due diligence engineers Gaye Francis and Richard Robinson discuss the current New Zealand trial on the White Island Volcanic Eruption.

The White Island volcano erupted on 9 December, 2019 resulting in 22 deaths. Charges were brought against various parties involved alleging breaches in New Zealand's workplace health and safety laws.

This is one of the first big test cases of the WHS and Workplace Health and Safety laws in Australia and New Zealand. And the outcomes will be fascinating will set a precedence.

Transcript

Megan (Producer) (00:02):

Hi, welcome to this edition of Risk! Engineers Talk Governance. In this episode due diligence engineers Richard Robinson and Gaye Francis talk about the current trial in New Zealand regarding the White Island volcanic eruption and the charges brought against various parties under the potential breach of the New Zealand workplace health and safety law.

(00:29):

We hope you enjoyed the episode. If you do, please give us a rating to help spread the word. You can also check out other episodes in this first season. We also have all the details for Richard and Gaye and their business services in the description. If you have any feedback, please let us know.

Gaye Francis (00:49):

Welcome to another podcast recording session. We're a bit different today. We're doing this remotely. (Richard's) at home and I'm at home. But, we thought we'd record a podcast today on the White Island Volcanic Eruption and the trial that's commenced in New Zealand just recently in the last month or so.

(01:06):

A little bit of background. The White Island volcano erupted on the 9th of December, 2019, and 22 people were killed on the island during the eruption. WorkSafe has bought some charges against some parties involved, who own the island and operate. So I think there were 13 parties charged originally.

Richard Robinson (01:30):

Yes.

Gaye Francis (01:30):

And they've alleged to have breached New Zealand's workplace health and safety laws. In the proceedings today, it looks like that six have pleaded guilty so far. One party, the charges have been dropped. And then there's been six proceeded to trial.

(01:50):

So I think, Richard, you were just gonna give us a bit of an introduction on who those parties were and what the charges were, and then we'll go through some of the insight into what what we've been reading in the press reports.

Richard Robinson (02:04):

Yeah. What, what I found particularly interesting, and again, we're just reading the press on this one here, is that the island, it's actually privately owned. It was bought by some grandfather, stockbroker apparently some time ago, and he passed it on to his son and then the son passed on to his three grandsons. So the island's actually owned by these three grandkids. And they've tried at different times to make money out of the thing. And in the end, the only thing that came up with was having tours to the island. So that's what they've been busily selling.

(02:30):

Now, this is a hydrothermal eruption apparently, which I don't know too much about. I know very little about volcanism and those sorts of things, but basically these things apparently can be primed and ready to go. I mean, if you just think of... obviously it's a volcanic island and it's in New Zealand, and they're on the fault line. And hydrothermal basically means there's a pile of water down there, which is suddenly flash into vapor unexpectedly. And apparently when you listen to the volcanologists, it's a very difficult thing to predict. Although it was actually the case that the volcano was showing some energy and energetics, I think it was at level two activity. And I think level three means it's really underway. So the suggestion was that this volcanism was known, from some form of foreseeability viewpoint, which is what the basis of this action is. And in view of this knowledge or lack of knowledge, in the case of the owners and tour operators, they didn't bother to try and find out, apparently they didn't really understand that this thing was perhaps more closely ready to go than it could have been.

Gaye Francis (03:30):

I think that one, just before the proceedings started, the WorkSafe New Zealand chief executive said in one of his interviews: "This was an unexpected event, but that does not mean it was unforeseeable. And there is a duty on operators to protect those in their care". So they're saying exactly that. And I think one of the interesting things at the start of the trial was they started talking about risk assessment, had a whole lot of risk assessment experts in, and they were arguing about the likelihood of it, which was really quite interesting at the start and how likely an eruption was going to be. And I think, going back to that WorkSafe quote, although it was unexpected, it wasn't unforeseeable and it's now happened. So how do we move on from there?

Richard Robinson (04:16):

Well, it's interesting 'cause I remember, I was telling you, I was just looking at the part of the Wrongs Act in Victoria, it deals with negligence and all that sort of thing. And one of the things that it specifically makes the point is that you can have an obvious risk, but it can be rare. You know, the fact that something's rare doesn't mean that it's not obvious. And that you should know and do things about it. And, I think, what particularly interested you was, I mean, I was looking up, one of the parties that got the charges dismissed against them was their national emergency management agent. In fact, they could awarded $40,000 for their expenses for doing all the work. And that point you made, because what the judge said when they were dismissing it says that the NEMA, this nationally emergency management authority of New Zealand never deviated from its position before and after it was charged. That is (i.e.) they had a position, they'd thought it through, they did what they said they were gonna do, and they followed it through. And that was the point that you just made when we were talking about what we're gonna do here.

Gaye Francis (05:11):

And I think that that's the interesting thing, isn't it? And this is what we tell our clients when we do due diligence review for them. You can't always be right, but you can always be diligent. And by having a plan in place and having it thought through, and then acting on that plan, it shows a process, a governance process, which I think the WHS legislation was always aimed at. It was a governance process for organisations to demonstrate that they thought these things through.

Richard Robinson (05:38):

Well, remember that last expert witness case we were doing for that bushfire in South Australia for the South Australia Supreme Court. The lawyer was just asking us for the process. He wasn't asking whether the decision that they'd finally come to was the right decision. They were testing to see whether the steps they'd gone through were reasonable; that they had tried and they'd thought it through and they talked to the right people and maybe everybody got it collectively wrong, but that still didn't mean they weren't diligent.

Gaye Francis (06:02):

And I think that's one of the things that's coming out of the White Island volcano (case); they're saying, well, New Zealand has a volcano monitoring service, the GNS Science, but they weren't specifically engaged by the tour operators or the owners of the island to do a specific risk assessment -- whether that's the right term or not -- on the island, and the risk of actually running tours through the island. So they're sort of saying: Well, there was this expertise in the country, had they gained the information they needed to make a diligent decision about doing the activities that they wanted to do on the island.

Richard Robinson (06:42):

Yeah. It's interesting that whole risk business pops up again, remember the podcast on (language of) risk, we were talking about the fact that the courts used the term a different way -- after the event the fact is obviously certain. It's actually interesting because it was Kiwi (New Zealand) judges we were quoting, 'cause Frank Stocks put us onto those Kiwi judges and Kiwi cases where the Kiwi courts were making the point that, in court risk means the likelihood of the event that happened; in this case, this rare event.

Gaye Francis (07:10):

Mm. The volcano. One of the other interesting things was the first week sort of focused on that risk assessment process and the information that was sought or provided to the various parties about the volcano. And then the second part of the trial is focusing on what else could have been done. Which is really the focus of the WHS legislation or the Workplace Health and Safety legislation in New Zealand.

Richard Robinson (07:39):

But it's the point it's not who owns the hazard, it's who has control.

Gaye Francis (07:44):

And they were talking about apparently there was a shipping container put in place which could have been as a shelter in the event of a volcano, but the volcano apparently erupted very, very quickly and the likelihood of people being able to get to the shelter in situ was pretty unlikely. So now they're looking at what other controls can be put in place to be able to run these sort of activities there.

Richard Robinson (08:14):

Well one of the things that you were mentioning was the fact that the people weren't wearing special clothing. Obviously PPE is the lowest thing you'd ever think about, but one of the problems that the survivors have got is that their clothes melted into them because they were rather basically plastic.

Gaye Francis (08:29):

Wearing active wear rather than cotton clothing.

Richard Robinson (08:34):

I mean, even if you put people in cotton overalls and things like that and made sure they had big safety boots and things like that, you'd be making a clear statement to people that this thing's serious. You wanna think about it, you're just not a tourist snooping at something hoping it doesn't go off.

Gaye Francis (08:49):

Mm-hmm. Which is sort of the way that chemical plants and things like that can spill out toxic clouds and toxic materials. They sort of deal with that, don't they, when you go out onsite, you have to have the full long sleeves, long pants, cotton, so, as you said, it won't melt into you.

(09:09):

But as you said, that's way down the hierarchy of controls. But I don't know that the... they did talk about some engineering controls and I don't know whether they're reasonable or not, but they're talking about ballistic shelters and refuge shelters. And I know in bushfire terms, people are starting to look at that -- being able to shelter in the place if they get stuck, they can do that. Whether a shelter can be designed for a volcano, I'm not sure?

Richard Robinson (09:39):

Well, it's interesting that the army had been in in shiny suits and breathing apparatus to try and retrieve people. And they spent six days apparently in fairly trying circumstances doing the best they could. But, again, if you were put into a big shiny suit with some breathing apparatus, you'd probably think it was a pretty serious event, wouldn't you? Which you otherwise might not consider that to be the case.

Gaye Francis (10:02):

And I think that's part of it, isn't it? It's that information; was the right information shared with the owners and the tour operators and then with the actual tourists. I know when you do those dangerous activities, they sort of give you a waiver to say, I understand those things. But they have to be in layman's terms that the people actually understand, don't they?

Richard Robinson (10:25):

Well I don't think jumping out of an aircraft that anybody's in any doubt of it goes wrong, it's gonna kill you. I dunno if the clarity...

Gaye Francis (10:31):

I don't if you think about it that way when you're 20 though.

Richard Robinson (10:35):

Well, that's part of the point. I don't know if people have thought about it like that. And so it, it's gonna be an interesting thing to see where the Kiwis actually land. I've gotta say that.

Gaye Francis (10:43):

I'm not sure whether the ones that have pleaded guilty, whether they'll just involve fines or whether it'll be jail time. But as you said, this is really the first big test case, isn't it, of the WHS and Workplace Health and Safety laws in Australia and New Zealand. And the outcomes will be fascinating. I think. Will set a precedence going forward.

Richard Robinson (11:10):

Almost certainly.

Gaye Francis (11:12):

So we hope you found our podcast interesting today. A little bit different with Richard and me online together, and we hope you can join us next time. Have a great afternoon.

Richard Robinson (11:22):

Thanks Gaye. Bye everyone.

Gaye Francis (11:24):

Bye.

Rail Safety National Law - The confusion between it and the WHS Legislation/OHS Act

Risk! Engineers Talk Governance
Episode 7, Season 1

In this episode of Risk! Engineers Talk Governance, due diligence engineers Gaye Francis and Richard Robinson discuss the Rail National Safety law and the confusion with how it stands in relation to WHS legislation, and why if you satisfy the requirements of the WHS legislation, you have, in turn, satisfied the requirements of the Rail Safety National law. 

Access the full CORE conference paper.

Contact us for information on our Rail Safety workshop.

Transcript

Megan (Producer) (00:02):

In this latest episode of Risk! Engineers Talk Governance, due diligence engineers Gaye Francis and Richard Robertson talk about the Rail Safety National Law. This follows Gaye's recent conference paper presentation at CORE, the Conference of Rail Excellence recently held in Melbourne. We hope you enjoy the episode, if you do, please subscribe across your favourite podcast platform, give us a rating and also check out the other episodes. Enjoy.

Gaye Francis (00:37):

Hi Richard. Welcome back for another podcast session.

Richard Robinson (00:40):

Brisk, isn't it?

Gaye Francis (00:41):

It is very brisk today! Today we thought we'd talk about Rail Safety National Law, and this follows on from two things. We currently give a Rail Safety National Law and OHS legislation workshop through Engineering Education Australia. And I also gave paper recently at the CORE conference, Conference on Rail Excellence. And there was a lot of interest in that and SFAIRP. So what we'll do today is we'll outline what the legislation actually is, what it means, and how you go about satisfying that legislation. So it's almost a promo for the course and the paper which we will attach at the end of the session as well. So you (Richard) can do the formal part.

Richard Robinson (01:30):

And you'll just chip in as usual.

Gaye Francis (01:31):

That's the one!

Richard Robinson (01:32):

I got that plan.

(01:34):

Well, first thing is just to understand what the Rail Safety National Law is. Now, just from a philosophical viewpoint, it was explained to us by a bunch of lawyers. There are two basic ways to have harmonised legislation and we need this process because Australia's basically a federation; basically each state is its own little country. Like Victoria had its own Navy for a while. And when we federated, they gave up the minimum powers necessary to create the federation. And that's one of the reasons why we have high court, because we had state Supreme Courts, because they were the High Court in each of the little nations -- 'cause we had our own ambassadors to London, and all the rest of it. And when we federated, in order to put our Superior Court in, we called it the High Court, rather than stopping the term Supreme Court and changing it all around. One of the things we were supposed to sort out was rail safety or rail harmonisation. The legislation sort of says we're gonna have standard gauge and we could go through a little brief history of how we got to the different gauges if anybody's got a passing interest, as explained to me by a Queensland rail engineer a while back.

Gaye Francis (02:34):

But I guess what we're saying is that has yet to be achieved.

Richard Robinson (02:38):

But you see, if we wanted to harmonise rail safety, and literally last time I looked, if you're driving a train from Sydney to Melbourne, for example, and once you cross the border, what means "go" in one state, apparently means "stop" in the other state, which has always mystified me a bit and we haven't resolved that one yet. So kudos to train drivers, I think is the first point!

(03:00):

Now, if you want to get around this problem of harmonisation, you have to have an inter government agreement. And that means like GST, all the states, and all the ministers from the states of the Commonwealth all have to agree and sign to take it forward. And in terms of actually harmonising legislation, there are two core ways you can do it.

(03:20):

You can do it like the model WHS legislation where somebody creates a model WHS Act and everybody says: Yep, we'll adopt that model act and we'll make little additions or ammendments to it to suit ourselves, which is what's actually happened. Or you can do it the way they did the Rail Safety National Law, which is one parliament passes legislation and then all the other parliaments say: Yes, that's our legislation subject to these modifications.

(03:43):

Now in the case of Victoria, for example, the Rail Safety National Act that went through South Australia, which is the one everyone agreed to adopt, that was 191 pages. And the Victoria modifications is 160 pages, which tells you something about the way in which this implementation has been done.

Gaye Francis (04:00):

So there's a lot of confusion 'cause you almost gotta read both lots, both the South Australian Act and then the (Victorian) modifications to get a full understanding of what the law is in that particular state.

Richard Robinson (04:12):

Yes. And it gets really quite confusing. I mean even with the model harmonized WHS legislation, you know, they have Section 18 and then they put numbers after it when they insert their own thing. You know, so for example, in the Commonwealth Act, there's an expression in there that with regards to Department of Defense and nothing in this Act shall interfere with the defense of the realm, basically. Meaning that if we're at war then the WHS legislation, well and preparation for these things, which is what the Defense Department is, it has a certain weight on the scales, which other civilian operations wouldn't have.

(04:50):

Now, the whole point of the Rail Safety National Law was it was meant to implement the core concepts under the model WHS legislation as it applies to railways.

(05:02):

That gets particularly confusing, because when they sort of say: What's the difference? Well, you know, just for example, Section 48: If a provision of the Occupational Health and Safety legislation applies to railway operations, that provision continues to apply and must be observed in addition to this Rail Safety National law. So they're basically saying the WHS Act applies. The Rail Safety National doesn't stand 'instead of', it stands 'as well'. And if the provision of this law is inconsistent with the provision of the Occupational Health and Safety legislation, the provision of the Occupational Health and Safety legislation prevails to the extent of any consistency; which says it's superior to, quite specifically. And compliance with this Rail Safety National law, with any requirement imposed to the law is not of itself a defense of proceedings of an offense against Occupational Health and Safety legislation. And evidence of relevant contravention of this Rail Safety National law is admissible in any proceedings for an offense against the Occupation Safety and Health legislation, which basically means it's superior.

Gaye Francis (06:11):

The health and safety legislation is superior.

Richard Robinson (06:14):

So we find it all a little bit strange because one starts to wonder why on earth you bother having a Rail Safety National in the first place, if all it is going to do is to apply to rail matters as opposed to any other safety obligation. But obviously if two trains run into each other, or a level crossing accident occurs, the provisions of the WHS legislation still apply. So it's curious...

Gaye Francis (06:36):

Our understanding is that the rail regulators then have agreements with the health and safety regulators to prosecute under the OHS and WHS legislation for rail matters. Is that correct?

Richard Robinson (06:48):

Yes, except when you have a complicated matter like the level crossing accident of Wallan Victoria, whereas a New South Wales train running on ARTC tracks. So it's being heard in a Victorian Magistrate's Court.

Gaye Francis (06:58):

Yes, yes.

Richard Robinson (07:00):

Which means it's rather difficult to actually separate out who's gonna be responsible for these things.

(07:06):

But see the other point though, is that in most jurisdictions now, they've actually stuck Criminal Manslaughter provisions in under the WHS legislation. So if they wanted to get you under criminal provisions, they'd have to go under the WHS legislation, not under the Rail Safety National law. Although obviously the five years for recklessness, new or made or let it happens, still applies under the OHS or the...

Gaye Francis (07:29):

the Rail Safety or WHS legislation.

Richard Robinson (07:31):

Or both. The main differences as far as we can tell is that that the Rail Safety National law applies to rail safety work. It obviously creates the regular <inaudible> in Adelaide. And it obviously enables the accreditation of railways, the ARO and all sorts of things. And it promotes safety management systems as applied in the rail business. So that is sort of helpful, because otherwise how would you do that if you didn't have a separate separate Act? But the core duties are identical, and the WHS legislation takes precedence and all the terms and ways that we can see.

(08:11):

Now that sort of leads you on to: What are you actually then going to do? Well, our observation is that if you wanna satisfy your duties under the Rail Safety National law, you've basically gotta satisfy your duties of WHS legislation. There'd be very little point in just satisfying the Rail Safety National law and then being beaten to pulp under the WHS legislation, you would think.

Gaye Francis (08:29):

<affirmative>. So in our terms, we are really saying the SFAIRP approach (so far as reasonably practical) is a modern definition of SFAIRP, and in railway safety terms, it asks the question: If you're affected in any way by a railway network, passenger, driver, at a level crossing or a railway worker, how would you expect that network and rolling stock to be designed and managed in order for it to be considered safe? So we're really applying the SFAIRP process to any of those rail safety matters.

Richard Robinson (09:01):

Well, that's right. The duty (of care) is the same, so that's what you do. I mean there's a few other points we could probably make, but I actually don't know that it actually, you know, it actually comes back to our basic observation that the WHS legislation was a direct spin-off of due diligence as a defense against negligence in the Common law, and they elevated the Statute law and then they continued that elevation through into the Rail Safety National law, so it became far more peculiar and probably effective or focused, I suppose is probably the way to put it, to rail operations. And that's fine. We don't have a philosophical problem with that. But you know, it's a bit like, you know, when we had that incident in Wallan with that level crossing accident there, I mean, which jurisdiction? Well, it happened in Victoria, so it has to be in Victoria, even though, as I said, it's...

Gaye Francis (09:48):

...had different parties involved.

Richard Robinson (09:51):

All different parties. Yeah. So, yeah, it's complicated.

Gaye Francis (09:55):

So I guess that's the difference then between doing a compliance order or a compliance review with, you know, to each letter of the legislation and achieving the requirements of SFAIRP.

Richard Robinson (10:07):

Well, that's always been our point. There's no point in actually... I mean, I keep coming across lawyers who tell Boards that what you need to do is a compliance audit. And it's probably true that if you've done a compliance audit, it probably will be difficult to prove beyond reasonable doubt on a statutory basis, that the Board and the Board members were liable. Will that make their organisation safer?

Gaye Francis (10:30):

Probably not.

Richard Robinson (10:31):

And if you want to be safe, what you've gotta do first of all, is manage things to satisfy the Laws of Nature. Why won't the two trains collide? And then having done that and demonstrated to yourself in engineering or scientific or however terms you wish to think about it: How have you've done that? Functional safety terms, 61508, and so forth. What makes you confident that you've done that in a way which would satisfy post-event legal scrutiny? I mean, you may recall when we did the functional safety assessment on the I IEC 61508 for how two trains would get past each other in New South Wales on a single line track, your (Gaye's) first job, as I recall, was pretty much going through every crossing every time there was a...

Gaye Francis (11:12):

That trains could interact.

Richard Robinson (11:14):

Interact, yeah. Confirming that the watchdog would prevent that interaction from improperly occurring. I don't think it was one of your favourite jobs, but you did it! <laugh>

Gaye Francis (11:25):

And it did take a very long time.

Richard Robinson (11:27):

And I would remind you that in the times that when we were the certifiers and our signature R2A's signatures were sitting on the functional safety assessment in orange of who was then the train controller in New South Wales, there were no rail accidents in that time for any of the mechanisms that we are talking about under the, well, it was TOCS, train order control system, and then it turned to Tmax train management and control system.

Gaye Francis (11:50):

So with any of our rail safety jobs that we do, and in-line with the WHS legislation and the Rail Safety National law, we still always go through our four processes. What's our argument for completeness? Have we got all of key credible critical issues on the table? For all of those, what are the controls that you can put in place.

Richard Robinson (12:11):

The possible practical precautions, those things that can be technically done?

Gaye Francis (12:15):

And this is probably one of the things where railways fall down a little bit. They're very narrow looking in that they're not often looking for new technology and new solutions to apply to railways and the application to railways. But the legislation requires you to look for those further controls.

Richard Robinson (12:33):

Are we allowed to give that example of the GPS system on the trains in New South Wales? You see, without going through the detail of how R2A got involved in this thing, but basically what happened was that they put in this new train control system and it had a whole lot of checks in it and so forth, well, at least it was supposed to have it. And then they had a near miss incident. And apparently it was some redundancy in the software and the processing and all these sort of things. And it turned out that for various reasons, the IT people hadn't quite got the work done. And the near miss occurred, and I wasn't actually at the meeting, but I heard about it afterwards, that, you know, the question was: Well, we had a redundant system here, why didn't it work?

(13:14):

And the answer was from the IT people was: Well, we couldn't get it working, so we just let it go with just the one system. And apparently that was a fairly chill meeting. To cut a long story short, that's where R2A turned up. And the first thing we said: Well, you need a way to independently verify where the trains are. And the obvious thing to do, in this day and age, and this was 20 years ago now, was GPS. And everyone sort of looked at each other and said: Retrospectively and retrofitting GPS on all trains, the freight trains that traveled through New South Wales rural, that'd be hard! That'd be a long (process). How can we do that? Well, we quite literally found out a week later, in order to make the train control system work, you had to have good radio communications with the trains. In order to prevent ghosting between the radio towers i.e. having trains on the same frequency, talking on the same frequency, they have towers on different frequency with different geographic coverage. In order for the train to know which tower and which frequency it was talking to, it had to know where it was. And in order to know where it was, the radio engineers, the communication engineers had put GPS on the train.

Gaye Francis (14:21):

So this control already existed!

Richard Robinson (14:23):

Well, that function already existed. Which was just absurd. Now we only found that a week later.

(14:28):

So the next thing to do is to say: Well, let's do a trial. And the trial was basically whenever the driver pushed a push to talk, the GPS location was in code and sent off to train control. And that meant we could actually formulate a watchdog, which was a safety critical computer platform by the defense people in Adelaide, running a safety critical language called Ada, which was very small piece of software, which gave at least a good overview of what the train and train controllers were actually doing with the train management system. And that was the way in which it was certified. Which you (Gaye) spent a lot of your time sorting out <laugh>.

Gaye Francis (15:02):

And I guess that's the third step, isn't it? Determining what the reasonableness of each of those further controls is. You know, is it reasonable to do?

Richard Robinson (15:10):

Well then the (conference) paper, because we do a lot of work in marine pilotage, all the marine pilots have personal pilotage units these days, which have matured vigorously over the last 30 years. They're all battery controlled. You could quite literally give a driver a marine pilotage personal pilotage unit and the train driver would have a genuine, independent knowledge of where they were and if the communication <inaudible> working properly, what all the environmental factors around the track would be, where all the track gangs are and everything. And because the marine pilotage guys have got so good at, it's looking at, I think, all eight satellite systems now -- Galileo, the Europeans, the American GPS, the Russians, the Indians, the Japanese, the Chinese. There are so many satellite navigation systems and they know to their centimeter where they're, and they also have to put in, you know, G3 and G4 and G5 communications and they're all toughened up and robust to prevent hacking and all sorts of things these days. And to do that for train drivers, probably $3,000 a unit and probably at least $50 million to code all rails train and rail tracks to handle that sort of, where are we and what are we doing here sort of thing.

Gaye Francis (16:24):

But that's one of the other points, isn't it? Technology's become, or has advanced so much in the last 10 and 15 years that what may not have been reasonable 20 years ago may entirely be reasonable now.

Richard Robinson (16:37):

Ubiquitous, I think is the word you're seeking.

Gaye Francis (16:40):

Yes. And then the last step, of course, is to make sure you've got a quality control system to make sure that what you say you're gonna do remains in place and remains robust and effective.

Richard Robinson (16:52):

Yeah. People keep forgetting. I mean, safety means you don't want it to go wrong. But from a legal point of view, liability only rises because of inadequate, insufficient, or failed precautions. It doesn't arise because something's risky per se. That the nonsense. People keep talking about riskiness and I think, they don't what they're talking about. The question is SFAIRP'iness not riskiness,

Gaye Francis (17:12):

I don't know that SFAIRP'iness is actually a word, but...

Richard Robinson (17:16):

SFAIRP isn't a word either, actually <laugh>.

Gaye Francis (17:20):

So I hope you've enjoyed the podcast today. We just wanted to run through that there is some confusion with the Rail Safety National law and its interaction with the WHS legislation. But all the rail organisations that we've talked to said that if you satisfy the requirements of the WHS legislation, you have, in turn, satisfied the requirements of the Rail Safety National law.

(17:44):

So thank you for joining us again. Thanks Richard. And, we'll see you next time.

Richard Robinson (17:50):

Thanks, Gaye.

What do you mean by the term Risk? The language of, and confusion around, Risk.

Risk! Engineers Talk Governance
Episode 6, Season 1

In this episode of Risk! Engineers Talk Governance, due diligence engineers Gaye Francis and Richard Robinson discuss the language of risk, why confusion reigns in organisations, and why they avoid using the term of risk altogether.

Transcript

Megan (Producer) (00:02):

In this episode of Risk! Engineers Talk Governance, due diligence engineers Richard Robinson and Gaye Francis talk about the language of risk and why it's so imperative for people within an organisation to be on the same page when using risk management terms. We hope you enjoy the episode. If you do, please subscribe on your favourite podcast platform and also check out the other episodes within this season of the podcast. Also, give us a rating and if you are after further information, all the details for Gaye and Richard are within the description. Enjoy the episode.

Gaye Francis (00:46):

Hi Richard, and welcome to another podcast session.

Richard Robinson (00:48):

Hello Gaye. Good to be here.

Gaye Francis (00:51):

So today we're gonna talk about the language of risk and some of the confusion that it has and some of the double meanings, I guess, and that you need to be careful when you are using (the word) within your organisation. 'cause it can have different meanings for different people.

Richard Robinson (01:06):

It's a little bit more than just double (meaning)!

Gaye Francis (01:09):

<laugh>. A few more meanings then.

Richard Robinson (01:12):

It depends who you're talking to.

Gaye Francis (01:13):

That's right. So we actually have a section in our book, in the Due Diligence Engineer Chapter 2 of our R2A text, and we're gonna go through that today and then go through what, what the different definitions are, how people use it, and then how we get around that confusion and the sort of language that we've tried to move to, especially in line with the WHS and Environmental legislation that now requires so far as reasonably practical.

Richard Robinson (01:42):

What do you mean: How do we get around it? What we basically do is avoid the term risk as far as possible.

Gaye Francis (01:47):

Well that was our conclusion. Yes. But <laugh>, we might work up to that.

Richard Robinson (01:53):

Well, first of all, I was just gonna go through the five meanings that we understand risk to have as a term. And then when you see it in the term risk management and you see the way different people use it and the different ideas that they have when they're using it, well you can see how these two things get so mixed up and scrambled.

(02:10):

Now the first one is, and this is the way sort of more or less historically as it happens, is risk as a noun. Now, a long, long time ago, I was trained as a highly protected risk engineer by Factory Mutual in the US and when they talk about highly protected risk, they talk about the site itself, the insured site, the risk site, that's a noun, right. They started that terminology in 1840 and so Zacharia Allen, I can take you through the history if you're particularly interested, but possibly not!

(02:38):

But the insurance world has always used risk as a noun because they're basically talking about the insured site. That's what they mean. What happened basically when risk management started and all the engineers turned up with sort of subsequent enthusiasm, was they started treating the word risk as an adjective to describe the risk associated with the hazard. So it's a property of the hazard rather than the thing in itself. And that's where you get that simultaneous appreciation of likelihood and consequence.

(03:07):

Then if you wind up in court, which is, and there's some examples in our book from a (New Zealand) court to that effect. See, once you wind up in court the fact is the thing has happened. So when the court uses the term risk after the event, they're talking about the likelihood of that particular outcome. So they're just using it as a likelihood after the event. But when the lawyers are writing before the event, as in the WHS legislation, they're talking about the risk, you know, the risk to health and safety. What actually are they talking about? Because they're not talking about the way in which lawyers talk about it after the event.

Gaye Francis (03:39):

No, they probably refer to it more as the consequence likelihood, a simultaneous appreciation of.

Richard Robinson (03:44):

Well, certainly when you read Chris Maxwell's review of the 2004 OHS Act, he seems to have that confusion even though he specifically wanted to put in the common law view, which is the hindsight driven view, which basically says that everybody's entitled to an equal level of precaution, which is actually derived from the likelihood side only for particular nasty big things that happen. So there's a bit of confusion there.

(04:10):

Then you get risk as a concept involving future uncertainty, which is just sort of part of the human condition. I mean, what's gonna happen next? I mean, you know, apparently we're not gonna have the Commonwealth Games in Melbourne anymore. We just recently discovered, well that's future uncertainty. And we sort of know a few people involved in that project. And one wonders how, well, we don't know what's gonna happen, do we!?

(04:31):

And then there's the last one, which is the finance people are using, which confuses people even more and which the risk management standard, despite their profession about... they talk about risk and reward, but then they talk about negative risk and positive risk, which is kind of more confusing 'cause the reward side is the positive risk and the negative side would be what we would normally have termed pure risk.

(04:53):

Now, it possibly gets even more muddly when you actually talk about the term risk management, which everybody uses with enthusiasm because it depends on who you're talking to as to what they mean by it. Now we're basically sort of rattling... this is from a fellow called Dr. Ron Bromley who is one of my old bosses from yonks ago, when I used to work for M and M Protection Consultants. M and M Protection Consultants was the lost control division of Marsh McLennan, as one of the Americans put it to us when he jumped off the plane from America and said to the assemble of Australians, two thirds of the world is covered by water, the other third is covered by Marsh McLennan. <laugh> That had about the same effect on you as it had on us! <laugh> But Americans are sometimes enthusiastic in this regard. Anyway, he basically just said, look, if you wanna know what somebody means by it, just look at who they're and what they do with it.

(05:44):

So a safety manager, and that's sort of the person who sort of started to talk about risk management in the first instance, they were talking about maximising safety budgets, getting the greatest resources to the best works they can to minimise loss. That's what they in mind.

(05:58):

When you're talking about a risk manager, which was the next term that sort of popped up from the safety manager, well, they're out to maximise corporate profits.

Gaye Francis (06:07):

Yeah, there was more a corporate organisational approach.

Richard Robinson (06:12):

The problem is they probably didn't really understand the contribution of the sort of the physical management of risk to results in the way that the safety manager did because they were always fretting out what could go wrong.

(06:23):

Then you had the line manager who started using the term risk management and they wanted to maximise production objectives and maximize profits.

(06:30):

Then the legal advisor and lawyers, they sort of hopped in and started using the term risk management. What they meant by that they're out to manage potential conflicts and win court cases.

Gaye Francis (06:39):

So it became almost a liability management tool, didn't it?

Richard Robinson (06:42):

Correct. Disputes equals prosperity too. And sign off is difficult.

Gaye Francis (06:47):

For the law profession. Yes. <laugh>

Richard Robinson (06:48):

For the legal lawyers. That's right. But then the asset managers got a hold of the idea. That's one of the reasons why the risk management standard mutated from being strictly a downside risk asset management process and went upside downside. Well, they wanted to maximise investment returns and minimise downside risks. They wanted to maximize upside, minimize downside. Which gives rise to your frustration....

Gaye Francis (07:12):

The chance between zero harm and risk appetite. Because no one has an appetite for safety. Downside safety outcomes.

Richard Robinson (07:21):

Killing and maiming. Nobody's got an appetite for that. But if you're talking about upside downside, yes, you need a risk appetite statement.

(07:29):

Then you've got the underwriters, well they want to maximise underwriting profits, but that means they have a narrow approach. And I think what's happened is their approach was so narrow, basically they're being ignored now. I think they actually sort of dipped outta that one.

(07:39):

Then you've got the insurance brokers, well, they're out to get more clients and maximize profits, but affordable services only. I remember one broker telling me something along the lines, now look Richard, in order to get the business, we promised the earth and having got the business we conduct "a realistic reassessment of the insured's needs". <laugh>

Gaye Francis (08:00):

Not quite the way to do business. Or get the best... well gets them the best results!

Richard Robinson (08:04):

Gets the best result for them.

(08:06):

Then you've got board members, well, they're out to maximise profits, but they're also out to minimise personal liability. And when you look at the WHS legislation, well the big guys are still as we still seem to have the corporate veil working for them, but the small guys don't, from what we've seen.

(08:22):

And then you've got auditors. Well, their job's to confirm that reality matches history - the two things, history and reality align or what people are saying is what's actually occured are actually aligning. But this is a historical analysis. The past doesn't reflect the future. So if they're saying something about what happened the last five years, who's gonna say what happened in the last five years is gonna be reflective of the next five years. It just doesn't happen.

Gaye Francis (08:45):

No. So with all of those different meanings (of risk) to start with, and then the way that different people use it and organisations use it, then there is a huge confusion out there. So, you know, we often get the requests: Can you come and do some risk management for us or a risk assessment for us? And it's sort of like: Okay, what are you trying to achieve with this? And until you actually sit down and look through what they're trying to achieve and who's asking the question, it depends on sort of the process that we use.

Richard Robinson (09:14):

The call we got this morning about resilience. So people are using resilience both as a pre-emptive and a post-emptive strike, aren't they? They haven't quite decided, have they?

Gaye Francis (09:23):

No. But it all goes towards their risk management.

Richard Robinson (09:27):

The management of risk.

Gaye Francis (09:28):

Yes, of future uncertainty. So, like we were talking before, Richard and I try not to use the term risk and and risk management. So we often do issues workshops. And because the legislation, especially in safety terms, ask for all reasonable practical precautions so far as is reasonable practical, we often call them SFAIRP reviews.

Richard Robinson (09:51):

Correct. Well, that's the only way to do it. Because that is your legal duty.

Gaye Francis (09:54):

And it cuts through all of the knots associated with risk and people's preconcep... Can you help me out with the word? <laugh>

Richard Robinson (10:04):

Preconceptions.

Gaye Francis (10:05):

Thank you. Tongue twisted today!

(10:07):

...on what risk is. Because often they come with that and if they go to a workshop they're expecting for, typically in engineering cases, the consequence and the likelihood to be characterised.

Richard Robinson (10:21):

I'll have to try some more words on you. <laugh>. Transmogrification. How do you feel about that? <laugh>

Gaye Francis (10:26):

That's a very impressive word!

Richard Robinson (10:28):

<laugh>. Well, as you can see, our view about all this is that when you sort of have somebody who starts talking risk management, you've really gotta have a look at how they use the term if you really wanna understand what they're about. And our general experience is if you're sitting around the board meeting and somebody starts using the word risk management and they've all come from different career paths to get there, you basically have instant confusion unless somebody actually gets up and sorts it out.

Gaye Francis (10:54):

So I think for us, absolutely look at at risk as future uncertainty, but it really focus on the controls that you need to put in place to manage it. And then it really doesn't matter from which aspect you come for it, from what position you have or, you know, take you have on it, if you're focusing on what the controls are going forward, it should manage all of those things. It should be a liability management tool. It should improve safety. It should be able to give you good returns on investment. If you do all of that, if you're focusing on the precaution based approach.

Richard Robinson (11:31):

Well, it's a little bit more than that. It's actually, you know, 2000 years of western philosophy. But for some reason we keep forgetting the whole point is your fate isn't fixed. You can change it if you want to.

Gaye Francis (11:42):

That's true. <laugh> That was very deep on a podcast.

(11:48):

So what we're saying is just be careful with the language of risk. Understand who you're talking to. And some of these buzzwords are being used, as Richard said, resilience seems to be the new one, but it is a form of risk management, you're just trying to get the best out of your assets, and it's being required to deliver it. So just be careful around buzzwords and what you actually mean and dig deep enough to get that understanding.

(12:17):

So thank you for joining us again. We hope you found it interesting. We look forward to presenting another podcast in the near future.

Land Use Planning & Major Hazards

Risk! Engineers Talk Governance
Episode 5, Season 1

In this episode of Risk! Engineers Talk Governance, due diligence engineers Gaye Francis and Richard Robinson discuss land use planning and major hazards. They share some work they’ve been involved with and how design engineered controls are very reliable, and there are precautions and mitigations that responsible parties can put in place to protect themselves against major hazards facilities.

Transcript

Megan (Producer) (00:01):

Welcome to this edition of Risk! Engineers Talk Governance. In this episode, due diligence engineers Richard Robinson and Gaye Francis talk about land use planning and major hazards. We hope you enjoy the episode. If you do, please give us a rating. Also, remember to subscribe on your favourite podcast platform and check out the other episodes.

Gaye Francis (00:30):

Hi Richard, welcome to another podcast session. How are you today?

Richard Robinson (00:35):

It's good to be here.

Gaye Francis (00:37):

Now we are going to talk about today land use planning and major hazards. We've been doing a little bit of work in that space at the moment and some of the confusion around that. So where do you wanna kick off?

Richard Robinson (00:52):

Well, I think it might just be worth explaining R2A's current position and where we got to. Basically in Victoria, the 2004 OHS Act came in and from R2A's viewpoint, that changed the way in which land use planning around major hazards ought to be done. Up until that point, what everybody seemed to be doing was this quantified risk assessment using target levels of risk and safety. In Victoria, that's (1 x 10) - 7 /year for a single fatality. And in New South Wales, that's (1 x 10) - 6 /year for a single fatality. As well as some societal risk curves and things like that. Now, from our point of view at R2A after the Buncefield incident, that's where you had the giant vapor cloud explosion in the UK, which basically decimated the fifth largest oil storage facility.

(01:37):

And it might just be worth briefly explaining what that incident was, just so everybody understands the context of all this. Basically, they overfilled a petrol tank by 300 tons of petrol that splashed out into the bun, and there were a whole lot of reasons why that happened; people missing calculations and overflow, the switches which didn't work and a few other things. But the short answer was that about 10% of it turned into a vapor cloud. So that's 30 tons of vapor floating around looking for a problem. That 30 tons of vapor, up until that point, unconfined vapor cloud explosions weren't really deemed to be credible. What was expected to happen in those instances that you get a deflagration, that is a defined ignition source and the flame front would progress through the cloud, but at subsonic speeds; it wouldn't go supersonic and create a shockwave.

(02:26):

Obviously, if you're in the cloud when this was happening, that would be bad. But the detonation wasn't supposed to happen. Now this was a very odd collection of events. In order for the vapor cloud to hang around, you had to have the right atmospheric conditions. And then according to the Professor of Fire Engineering in Scotland, Dougal Drysdale, they'd pollard the trees. You know how when you try to mix chemicals up, you have to have a really interesting sort of shape of twisty things. And apparently the pollarded trees facilitated the mixing of the vapor. So that actually firmed the perfect stoichiometric mixture. So when it found the ignition source, which apparently was a fire pump, sort of ironically, the thing actually detonated, which was obviously, and you can see by all the factors that I've just articulated, a rare event by the definition.

Gaye Francis (03:16):

It wouldn't expect all of those things to come together in one sequence.

(03:19):

Very unlikely and very unlucky. Right. But the consequence was from R2A's viewpoint - and we kept talking with relevant major hazards and regulators in all states, especially Victoria and New South Wales - And they persisted in using the quantified risk assessment approach using target levels of risk and safety.

(03:37):

Where the likelihood just downgraded all of those incidents to say that it wasn't going to happen.

Richard Robinson (03:43):

Correct. Because it was so rare. They just pulled it back to the ten to the minus seven or the ten to the minus six fatality.

Gaye Francis (03:49):

And tick, we got our license to trade.

Richard Robinson (03:52):

Now the problem with all this is, and this is what Maxwell QC specifically said, now I'm actually summarising a conversation I had with somebody who'd been talking to him and an example he was giving, but he's sort of saying, look, it's like this; somebody lost an arm in a press somewhere and a workplace inspector turns up and said, "how the hell did this happen?", and you know, "This is an XYZ press that should have a guard". And the answer was, and under the old Act in Victoria at least you had to do a risk assessment and you could do a risk assessment using target levels of risk and safety, and you could multiply the likelihood by the consequence, and if it would be in the green zone, you didn't have to do anything.

(04:31):

Now, obviously the consequence didn't change. If you put your arm on the press, you lost it. The likelihood factor is determined by multiplying how often you do it by the probability of the event. And so if you only ever use the press every one or two years...

Gaye Francis (04:48):

The probability's really small; likelihood's really small.

Richard Robinson (04:50):

Yes. But you still lost your arm. <affirmative>. And one of the points about the Common Law and the OHS Act so far as we're concerned took the common law and elevated the statute law. It basically says; everybody's entitled to an equal level of protection. <affirmative>. So if you use that press at all, it doesn't matter if you use it 10 times a day or once a year, you are entitled to an equal level of protection. And that equal level of protection, the minimum, must achieve is recognised good practice.

Gaye Francis (05:15):

Yes.

Richard Robinson (05:16):

And that means it's consequence driven. So what happened to R2A was we kept trying to persuade major hazard regulators to adopt a criticality driven consequence, credible risk consequence approach. And they all kept using...

Gaye Francis (05:32):

Risk.

Richard Robinson (05:32):

Quantified risk assessments. And so R2A had to walk away from it.

(05:36):

The other point about that though was, and that's why R2A changed ourselves from being risk engineers to due diligence engineers, because that's what you're trying to demonstrate. And the only way to do that was to actually use the criticality driven vulnerability type approach.

(05:52):

Now, why we're interested in this and why the subject came up and Gaye's looking at me slightly strangely, but anyway, the reason why this popped up was that we got this request to have a look in Victoria at a couple of major hazard proposals that were nearby a major hazard facility. And it turns out very recently...

Gaye Francis (06:11):

Some developments.

Richard Robinson (06:12):

...some developments, very recently, that the area that you have to consider for major hazards planning purpose has suddenly increased.

Gaye Francis (06:22):

The contours have changed.

Richard Robinson (06:23):

The contour's changed. And nobody knows quite why this has happened.

Gaye Francis (06:26):

We have a bit of an inkling that they've gone... they're now being driven by the consequences rather than the likelihood.

Richard Robinson (06:33):

We think they're taking the credible worst case consequences. And the way you normally do that, from R2A's viewpoint, you do a zonal vulnerability analysis. You basically say, where's the largest energy storage on the site? Like a gas sphere, for example. And if that dropped as low, what's the credible worst case that could happen? And the consequence for that is, you then say; well, this is the credible worst case consequence from this site. You then look at where you are in proximity to that and design for that accordingly.

Gaye Francis (07:00):

They've still got a little bit of buffer in there because they're still taking a lot of their measurements from their boundaries.

Richard Robinson (07:06):

Correct.

Gaye Francis (07:07):

So there's a little bit of a buffer in there, but yes, they appear to be consequence driven rather than risk driven. The contours.

Richard Robinson (07:13):

We think so. We don't know so, because nobody's saying. <laugh>

Gaye Francis (07:18):

Very hard to get all of this confirmed.

Richard Robinson (07:20):

Absolutely. Cos all you get is a public summary of whatever the safety case with the major hazard regulator and the major hazard site is. And that actually doesn't tell you. And that is particularly frustrating. We at R2A very much support the view of the US Supreme Court Judge Louis Brandeis in his happy little book "Other people's money and how bankers use it" where he spells out; 'sunlight is the best disinfectant, there is no sunlight in here at all'.

Gaye Francis (07:47):

I think one of the... and I guess where we are coming from now... So yes, they've changed to that consequence driven, what appears to be consequence driven contours. What they're still doing though, is they're not applying the full precautionary approach that's been required by the OHS and WHS legislation. They're still concentrating their controls only in the controls of what they have. So they're not looking at the overall controls that could be put in place to deal with a major hazard facility, that all parties, reasonable parties or responsible parties could put in place.

Richard Robinson (08:23):

Correct. Because, you see, it's not the level of risk that's important. It's a level of control. I mean, if you want to be safe and live next door to a major hazard facility, you might be in an underground reinforced concrete bunker with its own air supply, which will be stupendously expensive and the amenity will be terrible.

Gaye Francis (08:40):

Very ugly!

Richard Robinson (08:41):

But you will be safe.

Gaye Francis (08:42):

Yes.

Richard Robinson (08:43):

That's not the issue. It's just a question of designing for what you've got. And what puzzles us is every site has problems. There can be flood,

Gaye Francis (08:51):

Cyclone,

Richard Robinson (08:53):

Lightning, bushfire, overlays. Designing for bushfires as one of the critical ones that people do now. <affirmative> You've gotta take into account. And the worst part about it is, and this is the bit that really bothers us, is that by not actually articulating this properly, they're leaving the people who are currently there potentially exposed. I mean, if you're dealing with explosions, the things you're really fret about. And I mean this is just a standard terrorist modus operandi, is that you put a bomb outside a building and you let it go 'bang' and if the glass isn't properly laminated and things like that, the glass just turned into shrapnel and pails everybody inside the building. And with an explosion, it's not so much the over-pressure that causes the biggest amount of grief.

Gaye Francis (09:32):

It's the shards of glass exploding.

Richard Robinson (09:34):

It's bits of materials that get picked up, tiles and things like that get flung out at high speed. I mean, that's what killed that poor girl Katie Bender in Canberra when they took the hospital down, remember? And they blew it up and the metal shard came flying across the lake and killed her. I mean, you know, you've got a plan for what the credible, critical worst case consequences are.

(09:54):

And so far as we can tell, all these municipalities that have major hazard facilities, they haven't been told what the credible, critical, worst case is. It's just opaque. And so anybody who's living there doesn't really know what they should or should not be designing for. And the council's actually not actually in a position, in terms of building and planning controls, to actually answer that question correctly. And what's probably something I don't think they fully comprehend... Whilst the OHS Act of Victoria and the WHS legislation in all the other jurisdictions, is the enabling legislation for major hazards. And whilst Ministers are exempt from the legislation, they make the rules. And local government elected counselors, I think are too, although I'd have to double check, that's a legal question. That doesn't invalidate the responsibility of the planners, designers, architects, engineers, all the other people from not providing appropriate safe (advice) consistent with their obligations.

(10:53):

And since, Victoria in 2020, Premier Andrews made Criminal Manslaughter, following the rules from the Common Law, admittedly it's gotta be on a beyond reasonable doubt basis. But what disturbs us about this is, we're fairly confident that the major hazards facilities and the major hazards regulator know what these credible worst case consequences are.

Gaye Francis (11:15):

And maybe not sharing the details with the responsible, other parties that really need to know about them.

Richard Robinson (11:21):

Well, yeah. Like the people who are actually at risk, for one! And it's a duty under legislation, you must consult. It's an offense if you do not consult at the front. So there's something really peculiar here that hasn't properly been addressed.

Gaye Francis (11:34):

But I think if all of the responsible parties take that role of what they can do, you're gonna make those developments so much safer than what they currently are. There's so much more that you can do outside of just what the major hazards facilities can do.

Richard Robinson (11:50):

Remember we did that place in Queensland all those years ago now where they had the hospice on the hill overlooking the

Gaye Francis (11:57):

Major hazard

Richard Robinson (11:57):

And they had four major hazard facilities. <affirmative>. And remember we turned up... You see, I do have a certain sympathy for the major hazard facilities because they're kind of cranky because they keep getting all these people building closer and closer to them.

Gaye Francis (12:09):

Yes. They have been there for a very long time.

Richard Robinson (12:11):

And I can see why they're frustrated. In this particular case, the hospice on the hill was there before the major hazard facility. So there's some moral...

Gaye Francis (12:19):

Yep.

Richard Robinson (12:20):

..there. But when we turned up to talk to them, the question we asked them; "Right guys," Cos they're so used to being beaten to a pulp by the community for creating dangers for the community. Right. And we sort of turned up and said, "Look, we gotta live together here. What do we have to do as a site to protect ourselves against the credible worst case consequences that you guys can produce?" And I remember them looking back at us saying, "You're not here to beat us up? You're just here to ask something?"

Gaye Francis (12:45):

"Did you really ask that question?" <laugh>

Richard Robinson (12:47):

"We're really here to find out what we need to do to protect ourselves against you from the credible worst case things you can do. That's in the interest of the major hazards facility and that's in the interest of the,

Gaye Francis (12:56):

the site.

Richard Robinson (12:57):

Tthe site and the people doing things. It's in everybody's interest. Remember we had to go and see the Deputy Premier about that one.

Gaye Francis (13:03):

But what was interesting about that was there were things that could be put in place, to make the facility safe or the site safe, against the major hazards. And it wasn't that complicated and didn't cost a lot more money when they were in the planning and the development stages to put in at a site that already existed.

Richard Robinson (13:23):

Well, I think it actually has a larger social implication too. Because one of the things we suddenly realised dealing with the council, and so forth, there were no engineers around. Council had just been de-engineered. Now this has all been decided by town planners and building surveyors. I don't think they had a clue about what could actually be done. And, I mean, I was trained as a highly protective risk engineer in the US with Factual Mutual all those years ago. I'll perhaps not go into too much history, but the whole point of the Factory Mutual system, it's an engineering underwriting organisation. You can't join the pool unless you have achieved and developed your site and facility to recognised engineered management standards. You simply can't join the pool. So the idea that you can't engineer this sort of stuff, it was just preposterous. It's been being done from Factory Mutual since the 1840s. And the idea that major hazards, regulators and councils aren't fulfilling their duties under our legislated obligations by our parliaments, I just find extraordinary.

Gaye Francis (14:18):

And I think they're, they're really doing themselves a disservice in and in the development stages or in the development of their communities as well because they're really relying on one set of controls that are often after the fact, and not concentrating on a set of precautions that could easily be put in place.

Richard Robinson (14:35):

Following the hierarchy of controls. There's something really peculiar. And the idea that people are actively breaching the legislation and knowingly doing so, well, perhaps, I wouldn't say knowingly, it's inadvertent, but from the way in Victoria passed the legislation, it is not just recklessness anymore - you knew or made or let it happen - it's also ought to have known.

Gaye Francis (15:00):

Yeah. And I think that makes a big difference.

Richard Robinson (15:02):

And, and I'm confident major hazards and the major hazard site, they have studied their site, they know what the credible worst case consequences are. And by spelling these inner and outer safety areas, they're actually ineffectively spelling out what they believe the relative consequence around the site would be. And that should enable appropriate design controls.

Gaye Francis (15:24):

And I think that's the summary of this podcast, isn't it? That major hazards have existed in our communities for a long time. There's some controls that are there, that they put in place. But there's a whole lot of other controls and precautions and mitigations that other parties, responsible parties, can put in place to protect themselves against these facilities.

Richard Robinson (15:44):

Design engineered controls are very reliable, robust controls, not emergency procedures. So if you're dealing with an explosion, I mean explosion of travel at the speed of sound.

Gaye Francis (15:53):

You're not gonna get anyone out in that time.

Richard Robinson (15:54):

It's 340 meters per second. Okay. The inner outer safety area is sort of between 300 to 1,000 meters. This is all going off in three or four seconds.

Gaye Francis (16:05):

But robust building designs and precautions you can put in place and they will be very effective.

Richard Robinson (16:12):

Always.

(16:13):

Otherwise you abrogate the entire basis of an industrial civilisation and 200 years worth of effort and it's quite peculiar.

Gaye Francis (16:21):

Okay. So that's sort of our summary. Don't sterilse a whole lot of land from major hazards facilities, just because you don't think there's other precautions that can be put in place, because there are.

(16:34):

So we hope you found our podcast interesting and we look forward to you joining us next time. Thanks, Richard.

Richard Robinson (16:40):

Thanks Gaye!

Regulations & Licence to Trade

Risk! Engineers Talk Governance
Episode 4, Season 1

In this episode of Risk! Engineers Talk Governance, due diligence engineers Gaye Francis and Richard Robinson discuss regulations and licence to trade, the difference between the two and some of the confusion and difficulties it's causing for organisations, especially in major hazards.

In their chat, they highlight the need for organisation to have their legislative requirements met and also their license to trade, and that managing and balancing both in an effective and efficient way is a big battle. And, ultimately, it doesn't work long-term to simply satisfy the regulator whilst ignoring the legal (legislation) issues.

Transcript

Megan (Producer) (00:02):

Hi,; welcome to this edition of Risk! Engineers Talk Governance. My name's Megan, and I'm a producer of the podcast. In this episode, due diligence engineers, Richard Robinson and Gaye Francis talk about regulations and licence to trade, the difference between the two and the confusion and difficulty it's causing for organisations, especially those that work in major hazards.

(00:35):

You can listen to the podcast across all major platforms, including Apple, Spotify, and Google. And if you enjoy the episode, we'd love you to give us a rating to help us spread the word.

(00:49):

Enjoy the episode. If you have any feedback, we'd love to hear from you.

Gaye Francis (00:55):

Good morning, Richard, and welcome to another podcast.

Richard Robinson (00:58):

Morning Gaye. We're just rolling on from the previous one, which we've never done before.

Gaye Francis (01:03):

That's all right. We thought we'd talk about regulations and licence to trade and the difference between the two and some of the confusion and the difficulties that it's causing for organisations, especially in the major hazards facilities. And the difference between that. So I guess where do we start?

Richard Robinson (01:26):

Well, I guess I'll explain what the issue is. Particularly this flows from the WHS legislation and particularly since the WHS legislation is the enabling legislation for major hazards and high risk work generally. And an awful lot of regulation has been made around this. Now, the difficulty you have is that the WHS legislation basically has a hierarchy of two in its hierarchical controls. You've gotta eliminate risks to health and safety, and if you can't eliminate them, you've gotta reduce them all so far as reasonably practicable.

(01:55):

But then when you go and look at what the regulators are doing, they're all using this risk-based approach. And particularly, for example, if you consider the hierarchical controls of most jurisdictions, most of 'em have got six (hierarchy controls). They talk about elimination, which is obviously the highest one, but then they usually go through substitution, isolation, engineering, administration, and PPE. I think that's one that's about six.

(02:17):

Now, the difficulty there is that the legislation's clear the hierarchies too. Eliminate or minimise, yeah. When you act as an expert witness, the thing you find out fairly fast in which we've always done and all the barristers and all the expert witness cases before all the Supreme Courts, which we've done these cases before, it's broken into three. You eliminate, you prevent it from happening. And if it does happen, you then reduce the scale of the outcome.

Gaye Francis (02:42):

Which is mitigations.

Richard Robinson (02:44):

Which is mitigation. So there's crash-worthiness in the cars and airbags, whereas for elimination is let's not have have cars and road at all. And prevention would be Elon Musk's self-drive cars because you don't have to rely on people after that. We'll just keep you away from the accident althogether.

Gaye Francis (03:01):

I guess what Richard's trying to say is the engineering aspect of hierarchy controls can work in all of those three. It can eliminate the hazard, can prevent it from happening, and it can mitigate the consequences. So it never quite made sense to us that hierarchy control of six or seven, because engineering could fit into a number of places depending on what you were talking about and what the control was.

Richard Robinson (03:27):

Well, it always did. That was one thing. I've never; it's never made sense to me why engineering was deleted from those other ones. I could never figure out why that happened. But from the point of view of the judiciary, it's only in three categories anyway. Now, the only jurisdiction we're aware of that's sort of got three categories is Queensland. Victoria's got four. Western Australia and New South Wales prefer the six, as does Comcare (Federal Government). Although I have noticed in New South Wales, they've been looking at obviously the Queensland version of three. But even that doesn't quite line up with the...

Gaye Francis (03:59):

Because they've still got substitution isolation engineering in that middle box. That level two. And then they sort of put their admin and their PPE in the lower level of a level three control.

Richard Robinson (04:10):

But the real point about this, and this is from the point of view of being expert witnesses, what this means is that in order to get a license to trade, you've gotta satisfy your regulator. So your regulator says, I want you to do these things, or they ask you to do prepare safety cases in certain ways. So you do all these things. But if you are filing that hierarchy control, that's very likely to be not consistent with the hierarchy control as articulated by the legislation.

Gaye Francis (04:35):

And I think a lot of the regulators are actually specifying in some of those safety cases and in those requirements of boards that the process is actually in line with ISO 31000, the risk management standard. And so not only are the hierarchy controls at odds with the legislation,

Richard Robinson (04:54):

And the common law as interpreted by expert witnesses,

Gaye Francis (04:57):

But also the process is in contradiction. So you've got organisations spending a whole lot of extra time doing something to get a license to trade, which doesn't necessarily meet their legal and their legislative obligations.

Richard Robinson (05:12):

Obligations.

Gaye Francis (05:13):

<laugh>, thank you. I was a bit tongue tied there for a minute. Um, so it's creating a whole lot of extra work for these people for very, very little value.

Richard Robinson (05:23):

But it's more problematic than that. You see if, and particularly in major hazards who've been using the quantified risk assessment approach. We're, we're about to, we're giving some pro bono advice to somebody at Melbourne, for major hazards, and the fact that, I think they, the major hazard regulated Victoria suddenly lifted their game and realised that it's all about consequence and the SFAIRP obligations, because remember, major hazards is enabled by WHS legislation. And so you get this silly situation that it really is bizarre. You're gonna have to spend all this money to get a license to trade, and then you have to do all again in order to make sure you satisfy your legal obligations under the common law and the WHS legislation or in Victoria, the OSH Act.

Gaye Francis (06:05):

And I'm not sure that the board and the senior executive understand that those two processes contradict each other.

Richard Robinson (06:12):

But they only understand when... Remember I told you about that... we were there for that rail operator. He was fretting about locos on Code Red days, diesel locos starting bushfires from the cinders from the stacks. And remember we had the lawyer on one side, the risk manager on the other side, and us from the middle, and we finished our little presentation and the GM looked to his lawyer and said, is what these two just said, right?

(06:38):

And the lawyer said, yes. That's the point at which he told us we were under privilege, and he turned to the risk manager and said: "Fix it".

Gaye Francis (06:46):

So from a top down viewpoint, and as risk advisors, I guess we always tell our clients to make sure that you satisfy your requirements of the legislation first...

Richard Robinson (06:54):

And get your lawyer standing with you once you're doing it.

Gaye Francis (06:57):

...to make sure that they agree with that. And then you do the extra parts, you know, by exception, that's required in the license to trade aspect.

Richard Robinson (07:06):

Correct. And you in that order.

Gaye Francis (07:08):

You do it in that order. And that sort of still brings you workload down, but if you do it the other way around or is two separate processes, you're potentially setting yourself up for a fall because you can come up with two very, very different results.

Richard Robinson (07:21):

Ah, but it's actually worse than that because if you've actually got yourself a risk manager, so-called who's taken responsibility for this thing, and therefore the decision maker, it actually creates a blockage to that understanding to the board. And that's been our experience of briefing the boards.

Gaye Francis (07:35):

Yes. That they don't have an understanding that there's two different requirements.

Richard Robinson (07:39):

You might recall we were just doing it for the very large international miner of which there were two on the planet from an Australian perspective, and we weren't allowed to speak to the board or senior management until the lawyer confirmed that what we were saying was the way to do it.

Gaye Francis (07:53):

Mm-hmm. <affirmative>. So getting in engineers...

Richard Robinson (07:56):

We did 13 briefing sessions, I think, didn't we?

Gaye Francis (07:58):

We did end up doing a lot of briefing sessions for him, so he was obviously happy with what we were saying and happy for his troops to do it.

(08:07):

But coming back to that, you know, I think there is a misunderstanding or a lack of understanding between the two processes and the requirements of that. And engineers, and I guess the risk advisors in organisations have that responsibility to bump it up to the people that can make the decisions. We understand that organisations have to work within their regulatory framework, but it can't contradict the requirements of the legislation either.

Richard Robinson (08:34):

And that happens more often than you might believe. So it's back to the original purpose of this. You need to do two things. You need to satisfy your duties, your governance duties under environmental, corporations law, WHS legislation, the mind of the corporation via the CEO

Gaye Francis (08:55):

And the board

Richard Robinson (08:56):

and whatever the organisation is. And in addition to that, you need to satisfy your regulator in order to get a license to trade. As it's been pointed out in the past, you know, being a board member and being in jail is not a good result.

Gaye Francis (09:12):

No. So we hope you found that chat. Interesting. We've got a few more chats that we will roll out over the next couple of weeks. And if you've got any comments or questions and other ideas, we're happy to hear.

Richard Robinson (09:27):

One of the points we're just having this chat, obviously, and we hadn't particularly planned this because it had been our experience that Gaye and I have these conversations and this office about various points sometimes to Gaye's surprise...

Gaye Francis (09:39):

Some random discussions, yes, do happen to in our office, Richard.

Richard Robinson (09:42):

Yes. But it actually is directed at critical issues that in governance terms that organisations have to live with.

Gaye Francis (09:51):

And you have to deal with both of 'em. You can't just satisfy you know, you need both, don't you? You need to be able have your legislative requirements met, but you also have to have your license to trade. So managing and balancing those two things in an effective and efficient way is a big battle for organisations.

Richard Robinson (10:11):

And I have to say, it's been our experience too, when you're working with clients where they've just been trying to satisfy the regulator, ignoring the legal stuff, it actually doesn't work long term. You just run into a wall.

Gaye Francis (10:21):

Mm-hmm.

Richard Robinson (10:21):

But anyway.

Gaye Francis (10:23):

All right. Thanks for joining us. Have a great afternoon.

Richard Robinson (10:26):

Thank you.

Role of Standards & Do They Meet Your Legislative Requirements?

Risk! Engineers Talk Governance
Episode 3, Season 1

In this episode of Risk! Engineers Talk Governance, due diligence engineers Gaye Francis and Richard Robinson discuss the role of Standards, why it's important to understand the different types of Standards, the information they contain, and why some Standards may not satisfy your legal obligations under the OHS/WHS legislation. 

Transcript

Megan (Producer) (00:02):

Welcome to this episode of Risk! Engineers Talk Governance. My name's Megan. I work behind the scenes as producer. In this episode, due diligence engineers Richard Robinson and Gaye Francis talk about the role of standards, particularly within the role of risk management and governance. We hope you enjoy the episode. If you do, please subscribe on your favourite podcast platform and give us a rating.

Gaye Francis (00:32):

Hi Richard. Welcome back to another podcast session.

Richard Robinson (00:36):

Okay, it's good to be here again.

Gaye Francis (00:37):

It's good to be here again. Today we're gonna talk about the roles of standards and some of the confusion that standards is creating and the different types of standards. We do outline this in our booklet "Criminal Manslaughter, How Not To Do It". So Richard's just gonna run through a quick summary of the different types of standards or have you got a bit of an introduction first, Richard? [I have a bit of an introduction first.] Go for your introduction.

Richard Robinson (01:01):

It's one of these important things. You see once upon a time, Australian Standards particularly was called by regulation and legislation. Now, one of the consequences of the OHS Act in Victoria and the harmonised WHS legislation around Australia is, we've been told this a couple of times by different lawyers, the parliamentary council's advice is that it's inappropriate to delegate the power of Parliament to unelected standards committees because if the committee changes their mind about something, then everybody's gotta follow because effectively it's got the power of Parliament behind it. Now, that was hammered into us when -- remember we did the dangerous goods review for defense and we were going around all the defense installations? We had a member of the Dangerous Goods Committee with us. And that fellow said, well, I'm on the committee. And so if we change our mind, it happens. And we sort of looked at him strangely and thought that can't be right. And that's why we found out about this question, the WHS legislation changing all this.

(01:51):

Now this is how the consequence of bumping down the role of standards. Because standards, if they're called up by regulation or by the Act, obviously have the same level of understanding. But after that, they got pushed all the way down. And I don't think it's something Standards Australia really has quite figured out yet. Now, the reason why it's also important is that people keep saying, well, I, if I've done something to the Standard, I must be good.

Gaye Francis (02:14):

I've complied with the Standard.

Richard Robinson (02:16):

I've complied, I must be good with the legislation. And the problem is that's not what the legislation intends. Now the legislation says you've gotta achieve the highest level...

Gaye Francis (02:25):

of precaution as is reasonably practical.

Richard Robinson (02:27):

That's right. Now it is true that the Act only defines reasonable practicability as one lawyers pointed out to us. But if that's the case, why does the intention of the Act say the highest level? Now it may be true that from a beyond reasonable doubt basis, the test of reasonable practicability would only be applied. But from a common law viewpoint, I would've thought the highest level that's reasonably practical would be the one that you'll be tested against.

(02:52):

Anyway, that sort of introduction then brings us to the question, what is a Standard? And the problem that we've noticed is that Standards, the fact that something is standard doesn't mean it's really a Standard. And that's really the problem. Now, historically, Standards have been developed in different ways and I'm just gonna read out the five standard types that we're aware of from our little book that Gaye mentioned before.

(03:16):

The first one is Standard as Measure -- weights and measures. I mean, what's a kilogram? You know, what's a lumen? What are those? [They're measurable things.] Yeah, measurable scientific things. Although the way they've been defining them lately is all in other physical properties like mass has now been defined in terms of energy just recently, follow from Einsteinian type things, which is really quite interesting. Well, the problem they had; they had this massive kilogram after the revolution in France and they had defined kilogram. And every time they measured it, after a few years, for some reason it was slightly decreasing. Only minusculely, but it was inconvenient! Anyway, nobody argues about Standards like that. They're not... it's not a moral question. They're factual. The next one was Specification Standards. And this is the one... Standards Australia was created by the engineers and it was particularly the engineering standards organisation.

(04:04):

And it was particularly a military thing in the sense that if you're manufacturing bullets, they have to fit the barrel or it's just kind of stupid. And so Specification Standards, they're not particularly arguable either. You know, they're sort of, either you're gonna meet the standard or you're not.

(04:18):

The next Standard is Standard is Rules. And that's like AS3000 wiring rules. Now AS3000 is a pretty good Standard. It's pretty robust sort of Standard. Okay. If you're building a house, you'd normally build it to AS3000. But as we mentioned another time, it's a Standard and that means it tends to inhibit thing and new developments from occurring. For example, I think I used this example another time, if you're wiring up a house, if you've gotta achieve the highest level of precaution you can, the home handyman fiddling with the wires of the roof space, doing them in.

(04:50):

And you might remember the Royal Commission we had where people were stapling the new installation. And people got killed. And the whole Royal Commission into that. Well, these days you could buy the house with power of ethernet, which uses extra low voltage wiring, 48 volts AC in the roof. All the lights could be power of ethernet. You can get 25 volt lumineers these days for the power of ethernet. A new building, a new house should probably be wired with extra low voltage wiring and not up to AS3000, 240 volt low wiring. That's what the legislation requires you to do. I'm yet to see a house that's been built because of the WHS legislation imperatives. But anyway... [Or it has to be thought through anyway] The point is this one does have some arguability, but for the most part, AS3000 is a pretty robust standard. And if somebody's doing something to that, you wouldn't normally argue the point.

(05:40):

But that leads on to Design Standards. And boy, (Australia's) Design Standards are arguable, because there's any number of ways, if you're an engineer, you could do Design Standards. The case that I'm thinking of in particular is... Remember there was that large digger? The big spinning rotary digger that got a crack in it? <affirmative> And um they imported a German Professor of Mechanical Engineering; I think he was a doctor. And he basically, he was a member of the... the German's have two mechanical design codes. And he was a member of one committee. And he chose to apply the standard with which he was familiar. And it went wrong. And so one of the big mining companies took it to Australian courts. And that, that's where that line comes out; now, engineers should remember that in the eyes of the court, an Australian Standard is only about recommended practice. You've gotta do better than that if you can. And they took him out for that reason. They took him down for I don't know how much cost.

Gaye Francis (06:39):

And that was because the second Standard that was there knew of this deficiency of the first Standard.

Richard Robinson (06:45):

And he was of that.

Gaye Francis (06:45):

And he was aware of it. And the second Standard addressed that deficiency and he chose not to adopt that for that particular purpose.

Richard Robinson (06:54):

Yep. And so that means design things... And that's the quote I've got here (reading from Criminal Manslaughter booklet). "Engineers should remember that in the eyes of the court, in the absence of any legislative contractual requirement, an Australian Standard amounts only to an expert opinion about usual recommended practice. In the performance of any design reliance on an Australian Standard does not relieve an engineer from a duty to exercise his or her skill and expertise." And that's Paul Wentworth commenting on AS7000, which is the high voltage transmission standard.

(07:22):

That then leads you to the last category, which is the one that drives us crackers! And that is Technique or Method Standards like ISO31000 or the COSO Risk Management Standard.

Gaye Francis (07:35):

It's about a process; how to apply a process.

Richard Robinson (07:37):

A process.

Gaye Francis (07:38):

And it might or might not work for your organisation.

Richard Robinson (07:42):

Yeah. Such Standards, I mean I understand that you do need certain sorts of Standards like that, like Accounting Standards. If you don't have some kind of commonality, how can you compare and understand what's going on? But this is more a question.

Gaye Francis (07:55):

But they're almost guidance documents then, aren't they? Or methodology guidance documents of different ways.

Richard Robinson (08:00):

It's not Standard Standard. It's not like a Weights or Measures Standard. And so from my our point of view, I think we sort of came to the view that a lot of... When when somebody says: It's the Risk Management Standard, that's actually a marketing term. That's not a Standard. It's just an idea.

Gaye Francis (08:17):

And I think with the Standards, in particular the Design Standards and things like that, they're all re always retrospectively looking at it. They're what's been done in the past and it always takes Standards a long time to catch up. So it's not even almost recognised good practice. Sometimes it's recognised good practice three or four years ago when the Standard was written.

Richard Robinson (08:39):

Well the one that sort of, I mean this is historic because I haven't actually looked at it lately, but you see I was trained by Factory Mutual as I've pointed out (previously). They actually designed theSprinkler Standard for North America NFPA 11 or NFPA 13. NFPA 13 was in fact the Factory Mutual Standard. And they're a bunch of engineers and if they have an unfortunate incident, they get into their research facility in Norwood, Massachusetts, they rack it up and burn it down and find out what the sprinkler standard has to be to put it out. The Australian Standard AS 2188 on sprinklers is based on the fire offices committee of the UK, which is the insurance officers. And what they basically do is after a few buildings are burnt down, they sort of think, huh, maybe the Standards are not quite right, perhaps we should improve it. But it's not an Engineering Design Standard.

Gaye Francis (09:23):

So they haven't actually tested it the way in that Factory Mutual test it.

Richard Robinson (09:27):

Well they are doing it, and they've now got their research facilities. Australia's starting to do that. But there's been a tendency to sort of... these things kind of osmosed, they're not sort of engineered Standards in the the way the Factory Mutual certainly is.

Gaye Francis (09:39):

Mm-hmm. I think also in James Reason terms, and we talked about James Reason in a number of ways, we always think that Standard approach is the bureaucratic approach, isn't it? The base standard. You know, it's sort of that minimum thing that you must achieve. And the WHS legislation's really saying generative, what is the highest level of protection that you can achieve? Rather than just what the minimum standard is. And you know, it changes the question from: Is it bad enough that we need to do something about it creeping up to that standard level; to: Here's a really good idea, why wouldn't we do it?

Richard Robinson (10:12):

Correct.

Gaye Francis (10:14):

So, you know, Standards can be as useful or not. And, and I think everyone's got it that you have to comply with the Standard and we say to our clients sometimes when you're doing work, sometimes Standards actually aren't relevant to the piece of work that you're doing. But you have to have an argument as to why it's not relevant and you can still be diligent by not applying a Standard.

Richard Robinson (10:36):

Well, it's a long time ago now, but I was doing a, a job on an old folks' home and the reason was is because they'd installed it to what was then the Australian Smoke Detection Standard.

Gaye Francis (10:47):

So that was their fire alarm system.

Richard Robinson (10:49):

Their fire alarm system. And there was some old souls in this place who were doing various things like smoking when they shouldn't be in bits and pieces in their rooms and so forth. And the alarm kept going off and they kept evacuating the place and more people were dying from the evacuation process than

Gaye Francis (11:03):

More from heart attacks than from the alarms.

Richard Robinson (11:05):

That's right! And so we turned up and said, well, applying the Standard was not the right solution to the problem. It might be true for example in a student accommodation. But even there, I remember doing the work in the US all those years ago, you know, if you've got people waxing skis and doing wacky things that students do around the place, the fire alarm goes off regularly (and) after a while they just don't respond, they just ignore it. And that's even worse! You only ever want fire alarms to go off when there actually is an incident and then you want people to respond appropriately.

Gaye Francis (11:33):

So false alarms are worst thing that you can almost have.

Richard Robinson (11:37):

Well the 1937 Chairman of Victoria's Division of Engineers Australia got it right when he was talking about Standards, I think. He commented, I think it's one of those Kernots -- you know, the first professor of Engineering at Melbourne (uni) was a Kernot. I think, I can't remember it was a brother or son. I got a bit lost in those brothers. You (Gaye) live in a street in where your suburb, where all the engineering professors are lined up. I've gotta point out. But, he made the point that the Standards really only have two purposes in life: To prevent fools from their folly and rogues from their roguery. And the reasoning is, if somebody's made a mistake and you want to hang the poor sod, the quickest way to do it is say 'you rotten bastard, you haven't complied with the Standard, you are toast'. And that's rogues from the roguery. <affirmative>. But what you ought to be doing from an engineering design viewpoint is figuring out how you think it ought to be and then you check back against the Standard, which is the sort of cumulative history of good designs to test to see whether you overlooked something.

Gaye Francis (12:37):

That you haven't looked overlooked something. Yeah.

Richard Robinson (12:40):

That's fools from their folly. <affirmative>. And if you do that, that's the right way to do it. That's 19... when did I just say?

Gaye Francis (12:47):

1932. A long time ago.

Richard Robinson (12:50):

You know, it's almost a hundred years ago. And we're still arguing about what is the utility of a Standard and we're still misusing them.

Gaye Francis (12:55):

Just going back to your story about the older folks' home and you're realising that the Standard, or the Building Code, wasn't appropriate for that case, but you could put in place things that were in-line with the intent of the Standard.

Richard Robinson (13:10):

Correct. And that's what we did.

Gaye Francis (13:11):

To make sure, because you're looking at the function of it. You wanna evacuate people and make sure that if a fire does occur that the residents are notified and accordingly. So what you can do is you can actually put the first alarm to the nurses' station, which is what you believe I did. Someone then had time to go and have a look to make sure there was a fire and it wasn't just somebody, you know, who'd burnt their piece of toast or whatever before the full evacuation alarm went off. So you just have to think these things through and it's not just the automatic: The Standard says this, we'll do this without thinking these things through. I think standards are stop people from thinking what needs to be done. And I think you've said it at the start of this podcast, was they're really become almost inhibitors to what can be done better. You know: 'This is what the Standard says, so that's all I'm going to do'. Whereas the legislation asks you to put in place what's reasonable, practical, and the reasonableness of some of those things that are emerging now is becoming more and more reasonable than it was 10 years ago, for example. And some Standards are still 10 years old.

Richard Robinson (14:13):

Correct. I mean that's one of the reasons, I mean I think in this sense, Engineers' Australia's abrogated its role to some extent when they basically just gave all intellectual property over to Standards Australia, breaching the Code of Ethics of Engineers' Australia, by-the-by, because there is a duty to give credit where credit's due. The NFPA Standards, for example, the members of the committee are listed by name and which organisation they work for and who the alternates are, in Standards Australia, it's just organisational. You have no knowledge of who's on the committee or what they've done and who's ultimately responsible for this thing. But that transparency question just isn't there. I just find the whole thing incredibly annoying. And it inhibits engineers from doing their role and their duty under all this legislation that's popped up. It's really gonna be fascinating with the Registration of Engineers, which is popping up everywhere, just how well that's gonna roll out. Cuz I don't really think people have been thinking this through. But you know, we'll see.

Gaye Francis (15:12):

We'll watch that with interest.

(15:15):

So I guess for this podcast, what we're saying is Standards aren't necessarily wrong, but you need to be aware of the different types of Standards, the information that they contain, and be careful that they may not satisfy your legal obligations under the OHS/WHS legislation.

Richard Robinson (15:33):

Especially ISO 31000. But that's probably its own podcast, I think.

Gaye Francis (15:39):

Yes. I think we might cover that topic at a different session. So have a great day everyone. Thanks for joining us again.

Richard Robinson (15:45):

Thanks everyone.

The Role of Risk Managers in Project Governance. Does your organisation need one?

Risk! Engineers Talk Governance
Episode 2, Season 1

In this episode of Risk! Engineers Talk Governance, due diligence engineers Gaye Francis and Richard Robinson discuss the role of risk managers and who the function of risk actually belongs to within an organisation. And why having a really good risk advisor (internal or external) on your project makes a huge difference.

Transcript

Megan (Producer) (00:02):

Hi. Welcome to the latest edition of Risk! Engineers Talk Governance. My name's Megan and I work behind the scenes as producer of the podcast. In this episode, due diligence engineers Gaye Francis and Richard Robertson talk about risk managers and their role in organisations, in particular, their role in project governance.

(00:29):

The podcast is available across all podcast platforms, including Apple, Spotify, and Google. And if you like the episode, we'd love you to give us a rating just to help us spread the word.

(00:43):

Please enjoy this episode and if you have any feedback, please drop us a line.

Gaye Francis (00:50):

Good morning, Richard.

Richard Robinson (00:51):

Good morning. Yeah, good morning Megan.

Gaye Francis (00:53):

All ok for Monday morning. Today we thought we'd talk about risk managers and the role of the risk manager in organisations and projects. And part of this has led on from our book launch of project governance, which we're actually doing later in the week, and the role the risk manager plays in projects in particular. There's a lot of infrastructure projects going on in Australia at the moment and a lot of jobs being advertised, asking for risk managers and risk advisors.

(01:28):

For us that seems a bit of a strange request in risk management because we've always understood that the function of risk belongs with a line management function and belongs with the project director in the case of projects, or the board and the executive management team. So it's a line management function of business as usual.

Richard Robinson (01:46):

That's correct. So unless the risk manager, so called, is line management, then they can't be the risk manager, the best they can ever be as a risk advisor on whose advice line management can rely when they're talking their area of expertise. But to actually say that risk management is a separate function, we think is fundamentally a failure of corporate governance. And that seems to be happening an awful lot around Australia.

Gaye Francis (02:10):

That's right. So as you said, they can facilitate the process. They can provide advice. But what they can't be responsible is for the risk or the risk register for the organisation or the project.

Richard Robinson (02:26):

They can maintain it, but they're not the decision makers. And all the legislation that's been happening later and has just been focusing on that point. I mean the corporation's law basically says that directs have to demonstrate diligence that they can business can pay bills when they fall due. The environmental legislation has always been like that. And obviously the WHS legislation, we've been informed by various lawyers that the whole point of the WHS legislation was a governance document. And the intention was that if businesses couldn't comply with that legislation, they should be put outta business. Now, the idea that you appoint a risk manager to facilitate that compliance that's, or the function seems reasonable, but the actual decision making, the responsibility, which is the whole point of legislation, is Board, CEO and depending on the function of project manager or general manager or whatever you're doing.

Gaye Francis (03:15):

Yeah. I think one of the interesting things in the, the project space as we said was that there's been a lot of risk managers being advised for big infrastructure projects and there've been a request for to look at risks and opportunities. So there's still some confusion around what project due diligence or project governance's about. Most of the benefits for projects have actually been stated up front and you're doing a downside risk assessment to make sure that they don't manifest or impact those critical success outcomes.

Richard Robinson (03:47):

Before any of these big projects get up, and that's admittedly what the large Commonwealth government review seems to be about now, there's meant to be a proper upside downside to work out what all the value that this project will provide, like a new freeway or a new high speed rail. You do all these assessments and studies to sort of confirm what the commercial benefits and the societal benefits will be. But that's all done up front. When you actually decide to implement it and you go to spend the money, you're now basically having an argument about why you won't achieve the things that have been agreed to be achieved.

Gaye Francis (04:16):

So there's usually very little opportunities that can be wrung out of a project once it's sort of been specified what it is. And I think in the delivery team in particular, and unless you understand what those critical success outcomes are for the project overall, then it's really hard to do your delivery. One, you might get some minor benefits, opportunities in relation to, you know, you have really good weather, for example, so you say some of your contingency on wet weather. But they're relatively small compared to potential showstoppers that have the chance of threats that have the chance to impact on....

Richard Robinson (04:57):

And that sort of leads onto the point. I mean, our experience has been, and we were talking about that in other webinars and things like that, but our experience has been that the successful projects, and we've never had one which hasn't gone successfully adopting our, you know..

Gaye Francis (05:12):

Governance approach.

Richard Robinson (05:14):

Governance approach. But the ones we've watched, if there's been a risk manager in the place, they've tended to be ditched if they're acting with people like us around. I can remember that large road project, which we perhaps possibly won't talk about in great detail, but they'd imported at great expense this risk manager - about $2.5 billion project - they imported a risk manager at great expense from the UK. And when we were running the high level risk workshop with all the senior decision makers from the three large organisations, it was just being done in the morning. We were doing criticality, downside risk assessment with the promised upside risk position. And he kept talking about upside, downside risk. It took a couple of hours, but they've just chucked him outta the room and said just forget it.

Gaye Francis (05:58):

He was still trying to do the opportunities.

Richard Robinson (06:01):

That's been the case with all the big projects that we've done. Remember the large project in Queensland, they had two competing projects in that tunnel and we ran our vulnerability workshop coming top down and we were told afterwards that's the reason why they won it. Because the government's agencies were so impressed that all the things that they didn't want have happened. They knew what the benefits were already. That's why they'd asked the tenderers...

Gaye Francis (06:21):

to achieve...

Richard Robinson (06:22):

...to do the job. That, but we convinced them that they had the best grasp of what would make sure that none of the bad things, the downside stuff, would occur.

Gaye Francis (06:31):

And I think sometimes upfront getting all the stakeholders to agree on what all of those upside benefits are is half the battle. And being able to articulate that.

Richard Robinson (06:40):

Well, you remember that all the studies we have done, the owners or the final asset owner, and what their critical success outcomes are, is quite often different to the contractor's who wants to deliver on time, on budget and to spec, and so forth.

Gaye Francis (06:57):

Whereas the project performance one's about functionality. What if we're gonna get improved travel times, improved conductivity and we're gonna get all of these other benefits to be able to move for the infrastructure projects.

Richard Robinson (07:09):

Well, that's the other point. But if you've got this risk manager, they're doing upside downside on the contractor's side, against whom is their upside being against and tested? It's obviously against the owner or the client because that's the only place where they can extract further funds from their point of view. If they delivered on time and budget to spec, the only upside they can get is more money.

Gaye Francis (07:30):

From their client. Or done quicker.

Richard Robinson (07:31):

Yep. Or or they finish it earlier. But that's a positive benefit for everybody. Whereas you watch some of these contracts and then you see there's some inspected thing and there's a large couple of projects around Melbourne involving tunnels where some contamination was found and the delays in costs and the ultimate cost in that case to the government, and that means the taxpayer, was stupendous.

Gaye Francis (07:53):

Yeah, yeah. And that should have been identified way upfront.

Richard Robinson (07:58):

Yes. And I can't believe that wasn't a known issue, that would've been...

Gaye Francis (08:02):

But if you take the risk aspect of it and rather than just saying from criticality viewpoint, you know, is this credible and critical? The answer is yes. Well, we'll manage it from a governance viewpoint. If you take a risk look at it, yes, it has potential for high consequence, but what's the likelihood?

Richard Robinson (08:20):

You might remember that government, the cabinet in confidence project that we stopped and we're still not allowed to talk about.

Gaye Francis (08:27):

Yes.

Richard Robinson (08:28):

After we round a workshop.

Gaye Francis (08:29):

So we probably won't talk about it in this podcast, Richard.

Richard Robinson (08:33):

Possibly not.

Gaye Francis (08:36):

So from our viewpoint the role of... We don't think organisations really need a risk manager. It should be part of business as usual.

Richard Robinson (08:45):

Correct. Line manager is the risk manager.

Gaye Francis (08:47):

You should have risk advisors. And they can be internal or external. It doesn't really matter. And they need to understand a number of processes that can be undertaken, because it's not a one size fits all, tick box exercise, black/white.

Richard Robinson (09:01):

And just do not keep using the risk management standard. We cannot believe how many people are getting into trouble just using that, particularly from project point of view.

Gaye Francis (09:10):

So by having these good people around you that can advise you on projects, they can help you manage the process, they can help you manage the risk register or the precaution register, but they don't own it. And what we've found is sometimes when the risk manager owns the risk register or the precaution register, as we like to call it, the responsible people walk away from it and they make it so complicated that it's really, really tricky to understand and difficult to understand. And so they overcomplicate the risks' register...

Richard Robinson (09:48):

So the senior decision makers do not get it.

Gaye Francis (09:50):

No. And so your risk register for a project should be in the tens, not in the hundreds. If you've got a risk register as an organisation, as a project, that has hundreds of items on it, you miss the point.

Richard Robinson (10:04):

Correct. Cause it's not the big ones that will to kill the project. And we just find that what happens if you've got one of these sort of professional risk managers in there, you get such ginormous risk registers that the important thing is get lost in the dross. And senior management doesn't find out until it's too late.

Gaye Francis (10:19):

And as we said, they're the ones responsible for making the decisions. So, part of it, some of these topics build on each other. And then I guess that's a then a reporting discussion and mechanism of how the credible, critical things, the high level things, get escalated to the right level. And we don't see that done particularly successful at organisational, project level either. As we said (they) mainly have really, really big risk registers, hundreds of items instead of tens of items. So how do you make sure the important things get up to the people that do need to make the decision? Cuz as we said the risk management does not make the decision on what needs to be done to manage those risks.

Richard Robinson (11:01):

What seems to happens, the risk management turned into its own industry and it doesn't always necessarily act in the best interest of the business or the projects. And from our point of view, the effort and the costs that are going into these process, particularly when you create this own empire, I suppose, is just simply not commensurate with the value of the organisation's getting. And it's something we just have not understood. And it's never made sense to us. I can fairly say, over the last 30 or so years. And every time we've come across it, I suppose the risk management functions tends to suffer some slings and arrows. But that's perhaps what happens?

Gaye Francis (11:39):

So I hope you found our discussion interesting. This is sort of one of the topics that annoys me a little bit that this is not as valuable as it could be. Because if you've got a really good risk advisor in your organisation or on your project, it just makes a huge difference. You don't necessarily have to spend, you know, it's not a necessarily a 30 hour a week or a 40 hour a week job to maintain it. But at the right time, you get the right advice from people who know what they're doing.

(12:11):

So thank you for joining us again, and we hope to see you next at the next podcast. Have a great day.