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Risk Mitigation and Corporate Response Planning

Posted on Thu, Aug 24, 2017

“For every action, there is an equal and opposite reaction.” - Sir Issac Newton

In an industrial facility, every action has the ability to become an emergency, incident or disaster. Most “actions” are intended to contribute to the financial bottom line, but others may put your employees, the facility or surrounding environments at risk. These actions can create unsafe conditions, operational risks, or environmental damage. Once recognized and evaluated, these hazards, threats and risks may be eliminated or controlled through mitigation measures and procedural planning.

The Corporate Risk Assessment

In order to identify necessary responses to incidents or emergency situations, a detailed risk assessment should be should conducted for potential emergency scenarios.  As risk assessment may include but is not limited to the following:

  • Identify your site-specific hazards, threats or risks. These may include, but are not limited to:
    • Fire
    • Explosion
    • Natural Hazards
    • Terrorism
    • Hazardous materials spill or release
    • Workplace violence
    • Employee pandemic
    • Utility outage
    • Mechanical breakdown
    • Supply chain failure
    • Cyber attack
  • Based on the hazards, identify if the impact is low, medium or high for each of the following:
    • People
    • Property
    • Operations
    • Environment
    • Financial
    • Regulatory or legal
    • Contractual
    • Reputation
  • Identify your site-specific hazards and consider:
    • High probability/low impact scenarios
    • Low probability/high impact scenarios

The probability and impact severity of a risk should determine the priority level for planning and mitigating the hazard.

Minimize Impacts through Mitigation

Current processes, procedures, and assets can directly minimize the impact or likelihood of unsafe actions or circumstances. These may be unique to each specific industry, company, and site. Some processes, procedures, or assets may simplify or automate reactions, responses or recovery requirements.

It is important to understand that a single asset may be able to mitigate multiple hazards. Examples of assets include, but are not limited to;

  • Local response groups
  • On-site fire brigades
  • Backup generators
  • Response equipment
  • Routine data backups

Continuous Improvement on the Mechanism of Metal Gears..jpeg

As you assess potential impacts, identify any vulnerabilities or weaknesses in your current processes, procedures, and assets that would make them susceptible to loss. When these vulnerabilities are identified, it presents opportunities for hazard prevention through procedures/processes upgrades or risk mitigation.

Your company should review or initiate a risk mitigation budget based on the results of the risk analysis. The probability and impact severity should determine the priority level for correcting the hazard. The higher the probability and impact severity, the higher the emphasis should be on corrective action. With priorities in place, mitigation measures may include:

  • Changing operational processes and procedures
  • Eliminating the cause of a potential threat
  • Addressing regulatory compliance issues resulting from internal or external audits
  • Introducing risk reducing engineering controls, when applicable
  • Implementing proactive administrative controls or work place practices
  • Establishing systematic equipment inspection processes
  • Developing a communication plan that includes a contact verification system
  • Updating or develop applicable response plans

Business Continuity Plans

Business continuity and response plans should address the results from a site-specific risk assessment. When companies utilize systematic methods to identify objectives and implement potential response in conjunction with intuitive formats, the process of recovery, continuity, and sustainability can be streamlined.

At a minimum, a business continuity plans should identify the following:

  • Key operations and critical activities
  • Critical processes and strategies for recovery
  • Resources necessary for recovery
  • Evacuation and relocation information and policies
  • Key response personnel

 

Need information regarding crisis and emergency management industry standards and best practices, click the image below to submit form information: 

Corporate Crisis Management

Tags: Business Risk, Mitigation, corporate preparedness