Conventional Loss Prevention goes Advanced Risk Management

Conventional Loss Prevention goes Advanced Risk Management

Dr. Michael Buser AssTech Risk Management Service

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Conventional Loss Prevention goes

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Advanced Risk Management

Content „ Risk Management – Basic Principles - Probability / Consequences of Losses - Individual Risk Perception - Risk Assessment „ Conventional Loss Prevention - Structural / Spacial - Technical / Physical - Operational / Organisational Dr. Michael Buser AssTech Risk Management Service

„ Advanced Risk Management - Multi Level Protection - Hardware, Software, Lifeware - Human Element

Conventional Loss Prevention goes Advanced Risk Management

ab Risk Management – Basic Principles

Conventional Loss Prevention goes Advanced Risk Management

ab Risk: Definition

R=P C x

RISK = Probability x Consequence

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Probability

Consequence

- frequent - often - rarely - unlikely

- catastrophic - critical - disruptive - minor

Conventional Loss Prevention goes Advanced Risk Management

Likelihood of a Loss Occurrence

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„ 4 - frequent: >1 per year Losses occur in comparable systems frequently and are statistically reported „ 3 - often: every 2-5 years Losses occurred in comparable systems and are statistically reported. „ 2 - rarely: 10 -20 years Losses are reported in comparable systems Dr. Michael Buser AssTech Risk Management Service Page 5

„ 1 - unlikely: > 100 years Losses theoretically possible but based on experience, losses not very likely

Conventional Loss Prevention goes Advanced Risk Management

Consequence of a Loss Severeness „ 4 - catastrophic irreversible losses, system destroyed e.g. company is out of business „ 3 - critical reversible losses, critical for system e.g. total loss of annual earnings „ 2 - disruptive system damaged e.g. loss of1/10 of annual earnings

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„ 1 - minor minor damages e.g. loss not relevant to balance sheet

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Conventional Loss Prevention goes Advanced Risk Management

ab Risk Assessment Probability of a Loss

non acceptable

regular prevalent

average

rare

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never

acceptable negligible

minor

average

serious catastrophic

Consequence of a Loss

Conventional Loss Prevention goes Advanced Risk Management

ab Primary Cover: FLEXA

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„

F

ire

„

L

ightning

„

Ex

plosion

„

A

ircraft

Conventional Loss Prevention goes Advanced Risk Management

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Fire Hazard: Effects and Consequences

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Fire

Explosion

Smoke

Heat Radiation

Shock Wave

Corrosive Gases

Conventional Loss Prevention goes

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Advanced Risk Management

Conventional Loss Prevention Structural / Spacial

Conventional Loss Prevention goes Advanced Risk Management

ab Fire Separation Spatial and structural separation avoid fire spread and smoke contamination „ production / storage „ machinery / installations

Storage Lager

„ protected / unprotected aras

Büros Office

„ fire load / ignition sources „ value concentration Dr. Michael Buser AssTech Risk Management Service Page 11

A

Produktion Production

Conventional Loss Prevention goes Advanced Risk Management

ab Construction Materials

Classification B

Hazard Potential

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A

Description B3

easily flammable / combustible

B2

normally flammable / combustible

B1

hardly flammable / combustible

A1 / A2

non-flammable non-combustible

Conventional Loss Prevention goes Advanced Risk Management

ab Non Combustible = Fire Resistant ??? Total destruction of steel construction and concrete

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Conventional Loss Prevention goes Advanced Risk Management

ab Building Construction „ Concrete - excellent fire resistance - best fire protection properties „ Brick, masonry, plaster - good fire resistance - critical in terms of explosion hazards

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„ Steel - at 500°C → 50% strength - critical in terms of loss prevention

Conventional Loss Prevention goes Advanced Risk Management

ab Hidden Fire Load „ Cable insulation „ Plastic piping „ Electrical installations „ Insulation material „ Lubrication fluids „ Heat transfer fluids

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„ Roof Construction

Conventional Loss Prevention goes Advanced Risk Management

ab Hidden Fire Load Cable Insulation

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Electrical Installations

Conventional Loss Prevention goes Advanced Risk Management

Smoke Contamination: Corrosive Fire Gases (e.g. PVC) „ 100 kg PVC burning „ 40 m3 Hydrochlorine gases „ 200 l conc. Hydrochlorine-acid (in contact with water) „ Contamination / Corrosion: - 500.000 m2 Metal-Surface - 2.700 m2 Concrete-Surface

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„ Other fire gases CO, HCN, NOx

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Conventional Loss Prevention goes Advanced Risk Management

Openings in Fire Partition Walls „ Openings in fire partition walls in general are inacceptable „ If openings in fire partition walls are necessary for operational reasons they have to be provided with fireproof devices (90 minutes fire resistance) „ e.g. fire doors and gates, fire dampers, expansion joints, cable and pipe fire interlocks

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Conventional Loss Prevention goes Advanced Risk Management

ab Fire Doors „ Fire doors always have to be closed „ If it is necessary to keep fire doors open for operational reasons, they shall be provided with self-closing devices, controlled by smoke detectors, which close automatically in case of a fire „ The required smoke detectors shall be fitted at both sides of the wall under the ceiling

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Conventional Loss Prevention goes Advanced Risk Management

ab Fire Doors for Conveyor Systems

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Conventional Loss Prevention goes

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Advanced Risk Management

Conventional Loss Prevention Technical / Physical

Conventional Loss Prevention goes Advanced Risk Management

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Fire Water Supply: Design Criteria Type of risk

Number of pipes

Water demand [l/min]

Duration [min]

Water capacity [m3]

residential

2

600

45

30

farming

3

900

60

50

light industry hospitals, hotels

12

3.600

180

600

heavy industry chemistry, warehouses

16

4.800

180

800

petrochemical, paper, tyre

40

12.000

240

2.500-3.000

Conventional Loss Prevention goes Advanced Risk Management

ab Sprinkler Systems Rooms, plants and installations with substances of fire class A „ Warehouses „ High-rack storage „ High-rise bildings „ Process units

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Conventional Loss Prevention goes Advanced Risk Management

ab Gas Extinguishing Systems Rooms or local applications with substances of fire class B or C, or fast melting substances „ Electrical installations „ Paintshops „ Explosion Protection: For inertising atmosphere in silos and mills (alternative to nitrogen)

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Conventional Loss Prevention goes Advanced Risk Management

ab Foam Extinguishing Systems Outdoor installations and process areas with substances of fire class A and B „ Tank farms „ Storage of solvents „ Installations and units of petrochemical industry

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Conventional Loss Prevention goes Advanced Risk Management

ab Powder Extinguishing Systems Outdoor installations and process areas with substances of fire class A, B, and C. „ Filling stations for flammable liquids and gases „ Installations and units with high-pressurised liquids or gases

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Conventional Loss Prevention goes Advanced Risk Management

Water Spray / Deluge Extinguishing Systems

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Rooms, plants and installations with very quick or violent burning substances of fire class A or liquids with flash points below 100°C „ Paper industry „ Wood processing industry, „ Storage of foamed plastics „ Storage of garbage Dr. Michael Buser AssTech Risk Management Service Page 27

„ Water spray for cooling purpose of tanks

Conventional Loss Prevention goes Advanced Risk Management

ab Foam Monitors „ Tank farms „ Large-scale storage Areas „ Petrochemical process areas

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Conventional Loss Prevention goes Advanced Risk Management

ab Fire Detection Systems „ Smoke detectors (Optical sensors or Ionisation Sensors) „ Flame Detector (Infra-Red Radiation Sensors) „ Heat detectors (Temperature Sensors)

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Conventional Loss Prevention goes

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Advanced Risk Management

Conventional Loss Prevention Operational / Organisational

Conventional Loss Prevention goes Advanced Risk Management

ab Organisatorischer Brandschutz „ Fire Brigade / Emergency Response Team „ Safety Officer / Security Organisation „ Inspection / Maintenance „ Work Permits / Audits

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Conventional Loss Prevention goes Advanced Risk Management

ab Organisatorischer Brandschutz „ Safety Trainings / Emergency Drill „ Smoking Ban / Safe Work Practice „ Housekeeping / Order „ Storage Procedures / Waste Management

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Conventional Loss Prevention goes Advanced Risk Management

Fire Brigade: Rating Criteria

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„ Public fire brigade ↔ Plant fire brigade „ Professional fire brigade ↔ Voluntary fire brigade „ Response time / intervention delay „ Equipment „ Experience / training „ Accessibility of site / Free access ways Dr. Michael Buser AssTech Risk Management Service Page 33

Conventional Loss Prevention goes Advanced Risk Management

ab Fire Prevention Officer „ Consulting of management in terms of safety-relating aspects, fire protection and loss prevention „ Arrange for to eliminate deficiencies in terms of fire protection and loss prevention „ Organisation and monitoring of operational requirements in terms of fire protection and loss prevention

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„ Organisation and lead through factory assessments and risk management audits

Conventional Loss Prevention goes Advanced Risk Management

ab Training, Exercise and Practice „ Knowledge and practictice of functional mode and effect of manual fire fighting equipment „ Elimination of fear and reticence to use fire fighting equipment

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Conventional Loss Prevention goes

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Advanced Risk Management

Conventinal Loss Prevention Opportunities

Conventional Loss Prevention goes Advanced Risk Management

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Risk Assessment: Structural Loss Prevention

Complex Separation Fire Compartments

Probability of a Loss

non acceptable

regular prevalent

average

rare

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never

acceptable negligible

minor

average

serious catastrophic

Consequence of a Loss

Conventional Loss Prevention goes Advanced Risk Management

Risk Assessment: Operational Loss Prevention

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Fire Prevention Officer Inspection, Maintenance

Probability of a Loss

non acceptable

regular prevalent

average

rare

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never

acceptable negligible

minor

average

serious catastrophic

Consequence of a Loss

Conventional Loss Prevention goes Advanced Risk Management

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Risk Assessment: Technical Loss Prevention

Fire Detection Fire Extinguishing System

Probability of a Loss

non acceptable

regular prevalent

average

rare

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never

acceptable negligible

minor

average

serious catastrophic

Consequence of a Loss

Conventional Loss Prevention goes Advanced Risk Management

Handling with Risks: Financial Resources

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We should stop asking ourselves whether we can afford to invest in loss prevention measures ...

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... the question really should be whether we can afford NOT (or not adequately) to provide such investments.

Conventional Loss Prevention goes

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Advanced Risk Management

Advanced Risk Management

Conventional Loss Prevention goes Advanced Risk Management

ab Major Losses / Catastrophic Events major losses always caused by "failure of a system" or "deficiencies in procedures" by a combination of: „ technical failures „ organisational deficiencies „ conceptual weakness

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„ human errors

Conventional Loss Prevention goes Advanced Risk Management

ab Major Losses / Catastrophic Events major losses can only be controlled by a combination of „ appropriate Loss Prevention Programmes and „ adequate Fire Protection Measures and „ proper (advanced) Risk Management Procedures

STOP

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Conventional Loss Prevention goes Advanced Risk Management

ab

What do these desasters have in common ?

Pampa

Flixborough

Pasadena

Bintulu

Chiapas

Al Ahmadi

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Tschernobyl Challenger

Zeebrugge

Conventional Loss Prevention goes Advanced Risk Management

ab “Unforseen” Incidents Human Elements „ wrong operation „ management mistakes „ lack of organisation „ human errors

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Conventional Loss Prevention goes Advanced Risk Management

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Who is responsible for the Errors ? Human Beings = Risk ?

ab

Conventional Loss Prevention goes Advanced Risk Management

ab The Human Element

Safety through human action

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Safety despite human errors

Conventional Loss Prevention goes Advanced Risk Management

ab Lifeware: “Human Errors” „ mistakes of operators must be seen in the context of systems vulnerable to fail „ vulnerability of systems arises from a complex interaction of various factors: - organisation + management systems - training + education - procedures + practice - regulations + guidelines

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- inspection + checks

Conventional Loss Prevention goes Advanced Risk Management

ab Advanced Safety Management safety culture

Lifeware Interactive Risks

Hardware Software Dr. Michael Buser AssTech Risk Management Service Page 49

Conventional Loss Prevention goes Advanced Risk Management

ab Hardware „ plant layout (spacing) „ construction (non-combustible) „ process design (fail-safe) „ protection systems (sprinkler)

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„ safety features (fire detection)

Conventional Loss Prevention goes Advanced Risk Management

ab Software „ management programmes „ guidelines, rules, prohibitions „ work instructions, permits to work „ control, checks, audits

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„ inspection, maintenance

Conventional Loss Prevention goes Advanced Risk Management

ab Lifeware „ safety culture „ risk awareness „ motivation

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Conventional Loss Prevention goes Advanced Risk Management

ab Protection Systems

System 1

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System 3

System 5

Hardware-Defense

Software-Defense

Lifeware-Defense

- plant layout - construction - process design - protection systems - safety features

- management systems - guidelines, rules - prohibitions - permits to work - control, checks,audits - inspection

- motivation - safety culture - risk awareness

Conventional Loss Prevention goes Advanced Risk Management

ab Failure of Protection Systems

System 1

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System 3

System 5

Hardware-Failure

Software-Failure

Lifeware-Failure

- conguested layout - combustibles - deficient detection systems - inadequate protection systems

- no permit to work procedure - poor maintenance - lack of inspection

- no motivation - underdeveloped safety culture - risk awareness is not enforced

Conventional Loss Prevention goes Advanced Risk Management

ab Multi-Level Protection

Triggering Event

Tra j

System 1 System 2

ect o

ry

of

System 3

an

acc ide

nt

System 4 System 5 System 5

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Conventional Loss Prevention goes Advanced Risk Management

ab Failure of all Protection-Systems

Triggering Event

Tra j

System 1 System 2

ect o

ry

of

System 3

an

acc ide

nt

System 4 System 5 System 5

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accident

Conventional Loss Prevention goes Advanced Risk Management

ab Catastrophic Event

emergency response crisis management

accident

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economical Chaos

Conventional Loss Prevention goes Advanced Risk Management

ab Multi-Level Protection

processdesign operator control process control (DCS) pressure release valves (PSV) emergency shut-down (ESD) Dr. Michael Buser AssTech Risk Management Service Page 58

constructural protection emergency response crisis management

Conventional Loss Prevention goes Advanced Risk Management

ab Holistic Risk Assessment inspections

response to recommendations

maintenance loss history risk awareness

near misses investigation

physical protection safety audits

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process design

exposureanalysis

risk management philosophy

instructions emergency planning

safety culture

Conventional Loss Prevention goes Advanced Risk Management

ab Advanced Risk Management… … requires scenario-thinking !

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Conventional Loss Prevention goes Advanced Risk Management

ab Advanced Risk Management

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Conventional Loss Prevention goes Advanced Risk Management

ab Your Contact Dr. Michael Buser AssTech - Risk Management Service Swiss Re Group Loss Prevention Manager

telephone: +49 89 3844 1841 Dr. Michael Buser AssTech Risk Management Service Page 62

email: Michael_Buser @ AssTech.com

Conventional Loss Prevention goes Advanced Risk Management

ab Your Contact Dr. Michael Buser Loss Prevention Manager (project manager) „ risk management services and business interuption studies in process industry, trade and commercial business - fire protection, process safety, emergency planning, etc. - risk surveys, loss inspections, Bi-studies, etc. - loss control programmes, safety audits, etc. - lectures, seminars, training, workshops, etc. - valuation, cost appraisal in selected industries „ instructor and teacher of German Insurance Academy

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„ member of expert committees: - technical expert council of German Insurance Association, GDV - expert advisor of Federal Fire Brigade Association - Munich expert panel for loss prevention