Development of a Novel Incident Potential Matrix and Severity Index for Risk Quantification and HES Performance Analysis
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1 Development of a Novel Incident Potential Matrix and Severity Index for Risk Quantification and HES Performance Analysis Jose Condor-Tarco Koorosh Asghari, Ph.D. 56 th Canadian Chemical Engineering Conference Delta Sherbrooke Hotel and Convention Centre in Sherbrooke, Quebec, Canada October 15-18, 2006 Regina, Saskatchewan, Canada
2 CONTENT 1. Definition of the Problem Some statistics 2. Some theoretical background The HES Management System The Incident Potential Matrix (IPM) 3. Results 4. Importance 5. Conclusions Slide # 2
3 DEFINITION All jobs present risks in Health and Safety Slide # 3
4 DEFINITION Some Statistics - UofR Incident 2002 Stats SECURITY ALARM THEFT UNDER $5000 MISCHIEF SPECIAL INQUIRY MEDICAL EMERGENCY MECHANICAL FAILURE MECHANICAL FAILURE - ELEVATOR SUSPICIOUS PERSON No Time Loss Time Loss Fatalities Slide # 4
5 DEFINITION 60 Some Statistics Fatalities in Saskatchewan Fatalities Fatalities Year Fatalities ( ) Fatalities by Age ( ) 40 Fatalities Contact 25 Falls 15 Body 7 Subst 16 Transport 58 Fires 3 Violence 1 Other 38 Fatalities Unknown Slide # 5
6 DEFINITION Some Statistics Costs (thousands) Some facts Medical Aid Compensation Total , , , , , , , , ,166.2 Average cost per claim: 2,928 $ Average days per claim: 24.5 % of workers injured with time loss: 4.7% Occupational Disease Claims: 1,830 per year What can we do? Slide # 6
7 DEFINITION The first duty of a business is to survive. The guiding principle of business economics is not the maximization of profits - it is the avoidance of loss. -- Peter Drucker Effective QHSE Management = Good Business Human Loss Asset Loss Time Loss Information Loss Slide # 7
8 DEFINITION Accident Cost ICEBERG $1 Medical Compensation costs Property costs (Insured) Property costs Decreased production Legal expenses Emergency supplies Interim rentals $ 5-50 Ledger cost of property damage (Uninsured costs) $ 1-3 Uninsured misc.. Costs Investigation time Wages for time lost Temps and training Overtime Extra supervisory time Clerical time Decreased output from worker Slide # 8
9 DEFINITION The Hidden High Cost of Accidents 16% Medical Costs 50% Wages & Productivity Losses 9% Emergency Response & Investigation Costs 3% Property Damage 22% Administrative Costs Slide # 9
10 DEFINITION How Accidents Happen? Accidents are the result of energy transfer from a contact with a substance or a source of energy (Kinetic, chemical, thermal, acoustic, mechanical, electrical, etc.) above the threshold limit of a living body or structure Findings Accidents are seldom, if ever, the result of a single cause The vast majority of accidents are cause by unsafe acts or practices Slide # 10
11 DEFINITION Comments from the Dark Ages Accidents are the inevitable cost of doing business. Accident costs are low compared to other expenses. We are covered by insurance for accidents. We have incentive and punishment programs for people to be more careful and work safely. Should these statements & beliefs have a place in our Business Today? Slide # 11
12 DEFINITION Does this really happen in the industry? Slide # 12
13 THEORY The Risk Pyramid 8 Catastrophic Accident Investigation Reactive Major Serious Accident Prevention Proactive ,052 Light Near Accidents Slide # 13
14 THEORY Risk Reduction Control Loop Reporting Follow up Analysis Preventive Action Corrective Action Slide # 14
15 The HES - MS THEORY HES Management System Leadership & Commitment Policies & Strategic Objectives Organization Resources & Documentation Evaluation & Risk Management Design & Planning Correction Improvement Implementation & Monitoring Control Auditing & Reviewing Slide # 15
16 The IPM Risk Qualification THEORY Exposure Very high (weekly occurrence) E High (annual occurrence worldwide) D Medium (may occur annually) C Low (known to have occurred) B Very Low (not known to have occurred) A Light Serious Major Cat. Multi-Cat. Potential severity High Risk Medium Risk Low Risk Intolerable Unacceptable Improve What if we put values in risks? Risk Quantification! Slide # 16
17 THEORY POTENTIAL SEVERITY LEVELS Loss Category Light ( L ) Serious ( S ) Major ( M ) Catastrophic ( XC ) Total $ loss Non Productive Time (NPT) <10K < 4 hrs 10K< loss < 100K 4 hrs < NPT < 24 hrs 100K< loss < 1,000K 24 hrs < NPT < 48 hrs > 1,000K > 48 hrs Personnel First aid, return to normal duties by next day Lost Time Injury No permanent disability 1 day < Lost Time <100 days Major LTI Could be permanent disability Lost Time > 100days Loss of Life Automobile Damage < 1K Any vehicle rollover 1 K < Loss < 10 K 10K < l oss < 100K Loss > 100K Environment Damage less then 10 K Minor Damage Immediate Internal Remediation Serious remediation Local/regional media coverage. Regulatory notice Regulatory / International Scrutiny Loss > 1,000 K Information Loss less than 10 K 10 K < Loss < 100 K Any computer loss or theft Loss > 1,000 K Assets Damage less than 10K. Not disruptive to business Minor damage. Can cause minor business inconvenience Short term local business loss and any loss or theft of radioactive sources or explosives, even if temporary Business disruption at Geomarket Level. Loss > 1,000 K Process 30 min. of real time data loss or any memory data loss. Unexplained shut-in of BOP without kick or pressure Unintentional weak point breakage. Data delivery delay at well or facility. Serious miscommunication Off-depth perforation Letter of complaint from client Loss of primary data Fishing caused by our failure or error Well repair caused by our failure or error Unplanned cement left in pipe Data to the wrong client Well to well collision Loss of well control blowout underground blowout Treating equipment burst/parting failure Security Physical aggression Attempted abduction Kidnapping Slide # 17
18 THEORY The IPM The Incident Potential Matrix (IPM) In the context of HES, risk is defined as a measure of the probability (exposure) for an incident to happen and of the potential severity of the consequences (severity) Exposure V. High (E) Risk = Exposure X Severity E1 Low Risk E2 Medium Risk E3 E4 High Risk E5 High (D) D1 D2 D3 D4 D5 Medium (C) C1 C2 C3 C4 C5 Low (B) B1 B2 B3 B4 B5 V. Low (A) A1 A2 A3 A4 A5 Light (1) Serious (2) Major (3) Catastrophic (4) Multi Catastrophic (5) Severity Slide # 18
19 THEORY The Weighting Factor The IPM Exposure V. High (E=5) High (D=4) Medium (C=3) E 1 =5 D 1 =4 C 1 =3 E 2 =10 D 2 =8 C 2 =6 E 3 =15 D 3 =12 C 3 =9 E 4 =20 D 4 =16 C 4 =12 E 5 =25 D 5 =20 C 5 =15 Risk Classification High Risk Medium Risk Weighting Factor 4 2 Low (B=2) B 1 =2 B 2 =4 B 3 =6 B 4 =8 B 5 =10 Low Risk 1 V. Low (A=1) A 1 =1 Light (1) A 2 =2 Serious (2) A 3 =3 Major (3) A 4 =4 Catastrophic (4) A 5 =5 Multi Catastrophic (5) Severity Exposure V. High (E=5) E 1 =10 E 2 =20 E 3 =60 E 4 =80 E 5 =100 High (D=4) D 1 =4 D 2 =16 D 3 =24 D 4 =64 D 5 =80 Medium (C=3) C 1 =3 C 2 =12 C 3 =18 C 4 =24 C 5 =60 Low (B=2) B 1 =2 B 2 =4 B 3 =12 B 4 =16 B 5 =40 V. Low (A=1) A 1 =1 A 2 =2 A 3 =3 A 4 =4 A 5 =10 Light (1) Serious (2) Major (3) Catastrophic (4) Multi Catastrophic (5) Severity Slide # 19
20 THEORY/RESULTS The Severity Index (SIx) is a weighted average severity for all the events in the Incident Potential Matrix (IPM). While the absolute value has almost no meaning, it is a good indicator of trends 1 st Period ( incidents risk value) Severity Index = incidents 10 events rated A 2 7 events rated C 1 3 events rated A 3 2 nd Period 5 events rated C 2 2 events rated D 4 (10 2) + (5 12) + (2 64) SIx = = event rated C 3 2 events rated B 4 1 event rated D 4 (7 3) + (3 3) + (1 18) + (2 16) + (1 64) SIx = = Slide # 20
21 RESULTS Practical Results Fatalities Auto fatalities LTIR AAR/1000vehicles AAR/1000 drivers YTD Q3 Slide # 21
22 IMPORTANCE Developing a Proactive Participation 1) By creating a culture of reporting ANY kind of: Incidents Potential Incidents Improvement Opportunities 2) By a visible commitment of: Authorities Managers 3) By proposing a change in the current H&S Management System Not just H&S, but an integral QHSE-MS Improve current procedures Management Tools Establishing a Follow-up Program Slide # 22
23 IMPORTANCE 1) For the University: Leadership Expertise Recognition 2) For the Students: Business Immersion Competitive Advantage 3) For the Society: The Application of the QHSE-MS has saved $, time and most important, lives. The job place is more pleasant Slide # 23
24 CONCLUSIONS The Objective of HES Management is LOSS PREVENTION. We have no choice in efficiency, finance, commerce, legal, and ethic. A Good HSE Program Has Long Term Benefits for the Company and Its Employees Motivated and well educated people are essential Partial results probe that IPM and SIx have been a useful in the HES management system Control Planning Goals and Objectives Slide # 24
25 ACKNOWLEDGMENTS Slide # 25
26 Development of a Novel Incident Potential Matrix and Severity Index for Risk Quantification and HES Performance Analysis Jose Condor-Tarco Koorosh Asghari, Ph.D. 56 th Canadian Chemical Engineering Conference Delta Sherbrooke Hotel and Convention Centre in Sherbrooke, Quebec, Canada October 15-18, 2006 Regina, Saskatchewan, Canada
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