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.