Risky business

From the moment we get up, life plots to throw all sorts of risks at us. Getting up? Bleary eyed and half asleep? Watch out for those stairs. Walking down the street? Worrying about what the day's got in store? Look out for that bit of loose pavement. Driving along the road? Enjoying the ride? Beware of that crazy fast driver.

It's no wonder that a career in risk management is big business. As Professor Edward Borodzicz of the University Of Portsmouth Business School says: “Risk management is a large industry at the moment: from quantified risk management to health and safety. Anyone wishing to pursue a career in risk management should have rosy prospects because of the growth in this sector.”

The University of Portsmouth Business School offers a course in risk management. The course touches all bases, including people skills and behaviour; organisational and environmental risk; and crisis management and governance. Vital tools for preparing for risk management at any business, company or organisation: including ports.

David Fairnie, global ports solutions director at G4S, says: “All port operations carry a myriad of associated risks, primarily around occupational health & safety, environmental issues, and security.” Adam Fitzpatrick of Torbay Harbour Authority adds that there are a number of potential risks: “Accidents such as slips, trips and falls, as well as collisions and water risks – such as falling in or deep water, plus pollution.”

Correct action

Risks are inevitable while operating in a busy environment such as a port: heavy industrial equipment; people; simultaneous operations and so on. Mr Fairnie comments: “The primary focus for any port operator should be to ensure that appropriate measures are taken to prevent health and safety incidents involving impact injuries, right the way through to providing suitable procedures that help to mitigate worse case scenarios such as tragic fatalities.”

Mr Fairnie adds that further consideration should be given to processes that tackle localised environmental impacts which could result in closure: “For example, any incorrect movement of containers containing hazardous goods could lead to spillages, causing the closure of all or part of the port. This would naturally have significant commercial impacts.

"There are the natural security issues that all ports will face, either via opportunistic or organised criminality. All ports should have a risk management strategy to manage these.”

In theory, risk management poses a problem. As Professor Borodzicz explains, the theory of how people deal with risks may be different in practice. “In theory, if you can identify a hazard, you should be able to take precautionary measures to prevent this from happening. In reality, it's more problematic. With the best intentions, the likelihood of things going wrong is high. Human beings are irrational in the way in which we respond to risks. A potential problem may not be picked up until something goes wrong.”

Without interruption

The right approach to risk management is crucial in keeping operations flowing smoothly. A core element of this is to constantly monitor risk management strategies and ensure that they are as accurate as possible. “It is hugely important to adopt a joined up and integrated approach to risk management,” says Mr Fairnie. “This means that any enterprise risk framework must ensure that risk processes and management procedures are linked and working together. Companies must ensure that their risk management systems are rigorous at every level, and not simply a tick box exercise. All subsets of a port’s risk management strategy e.g. health and safety, environmental and security need to be based on a model of continuous improvement.”

Mr Fairnie explains that all stages of the process need to be constantly reviewed and acted upon, if required, for improvements. “The cyclical process will maintain high standards and ensure that systems are in a constant state of progression.”

Another effective aspect of risk management for ports is ensuring an understanding of how to weave together different sectors for a harmonious, risk-free operation. “For example, it is important to identify where security can help mitigate health and safety issues as well as support environmental strategies,” says Mr Fairnie. “A simple example of this would be around surveillance. Security mechanisms already in place, such as CCTV, can also act as a way in which security operators can monitor health and safety risks around the geography of a port.”

Ports should also implement some sort of contingency or prevention method for risks that cannot be identified in advance. “It's hard to imagine every kind of scenario, but not impossible,” says Professor Borodzicz. “For example, in a port, if someone was involved in illegal smuggling and attempted to bypass customs and knocked someone over while trying to get past. What we need are generic solutions to allow ports the capacity for dealing with a scenario that you cannot foresee.”

Overactive

Is there, however such a thing as too much risk management? A common dilemma facing organisations (including ports) is how to provide good risk management service without affecting business. Adam Fitzpatrick of Torbay Harbour Authority says that “clear, concise information” is a key factor of ensuring this, as well as good standard operating procedures and solid training.

But as Professor Borodzicz explains, the balance needs to be right. Good risk management is one thing, but an over-abundance of red tape could threaten operations. “Because so many standards have been devised for risk management, it's hard to run a business (including ports) without breaking a rule. Looking at big organisations, every time something bad happens, a new procedure is introduced to stop this from happening again. The danger with that is that this can create an over-abundance of forms and red tape. It may be more difficult in the port's case to smoothly run operations without that red tape getting in the way.

“Some organisations have become too process-oriented and they have lost sight of what they are supposed to do because they are too busy sticking to the procedure. The tide has gone too far: we need to roll it back a little by making rational, pragmatic decisions in order to avoid too many jobsworths and unnecessary forms.”

On the other side of the coin, however, poorly conceived risk management strategies can cause just as many headaches. Mr Fairnie comments: “Poor practises have broad impacts - directly through the immediate loss or damage of products and goods, and more indirectly through reputational and brand issues. In extreme circumstances, it can result in security breaches leading to terrorism, injury or fatalities.

“More common financial consequences of poor risk management systems can include individual loss of income, compensation payments, health and rehabilitation, and administrative costs to the individual. Employers will also be impacted through sick-pay payments, insurance premiums, production disturbance costs, and legal/administrative costs.”

Successful risk management for ports is a question of balance. Implement the right procedures at the right level without scrimping or going too far, and this will result in a smoothly run, risk-free environment. “A port operator’s risk management system could ultimately define the success or failure of its business,” says Mr Fairnie. “Good risk management systems will support better safety and security for commodities, staff and equipment, as well as broader H&SSE operations.”