Facilitator Judy Clarey CPRM FRIMA RiskAlign Training & Advisory Services October 2012

1. RRTO Mining Conference Risk Management Effective Risk Assessment Techniques Professional Development Workshop Yeppoon 19thOctober 2012 Facilitator Judy Clarey CPRM FRIMA RiskAlign Training & Advisory Services October 2012

2. “Humans - Pre-programmed to take Risks” Chronically Uneasy Stewart Bell 2012

3. Effective Risk Assessment Techniques Risicare – Early Italian word for “To dare” To take a chance on a favourable outcome

4. Introduction & Check-in 1.0 Introduction 1.1 Legislative Drivers of Risk management 1.2 Global Business Drivers 2.0 Impact of National & International Standards 2.1 Improved RM Process 2.2 Fit-for-purpose Techniques 2.3 Common Risk Assessment Tools 2.4 Risk Matrix-based Analysis 2.5 Inherent Vs Residual Risk 3.0 Recalibrating Risk Management Systems 4.0 Group Feedback

5. 1.1 Legislative Drivers of RM “Acceptable” Level Of Risk

6. 1.2 Global Business Drivers Adapted from BHP Billiton’s Sustainable Development Plan Business and Commercial Performance Social Responsibility Health & Safety Good Corporate Citizen Managing the Environment Political, Economic , Natural Sustainability Reputation Brand/mage Market Share 6

7. Plan Do Act Check

8. 2.2 Fit-for-Purpose Risk Assessment Techniques Hazard - something with the potential to cause harm / injury / illness Risk – Chance of injury or loss occurring from a hazard

9. Risk Assessment Techniques Applicable To Mining Operations. Informal risk assessment (RA)—identification & communication of hazards & risks in a task by applying a way of thinking, often with no documentation. Job safety/hazard analysis (JSA/JHA)—identification of hazards & controls in a specific task, usually for determining standard work practice (SOP). Preliminary hazard analysis/ Workplace Risk Assessment and Control (PHA/WRAC)—identification and analysis of risk issues/events, often to determine the need for further detailed study. Hazard & operability study (HAZOP)—systematic identification of hazards in a process plant design. · Fault tree analysis (FTA)—detailed analysis of contributors to major unwanted events, potentially using quantitative risk analysis methods. Event tree analysis (ETA)—detailed analysis of the development of major unwanted events, potentially using quantitative methods. Failure modes, effects and criticality analysis (FMECA)—general to detailed analysis of and other potential consequence areas. (7

10. 2.3 Common Risk Assessment Tools PHA PRA Figure 10 QLD Guidance Note 17

11. 2.4 Risk Matrix-based Analysis Estimate the “Residual” Level with appropriate Controls in place ?

12. 2.5Inherent Vs Residual Analysis WCGW

13. Residual Risk Assessment Hazard Risk WCSGW Controls “Acceptable” Residual Risk

14. Group Review Activity 1 Do current Job safety Analysis and Risk Assessment tools help us to decide: • The context or scope of hazards and risk associated with an activity, including? • The objectives, purpose or outcomes of the activity? • Whether or not to undertake the activity? • Are the hazards and their associated risks clearly defined in relation to “outcome/s” • Which risks can be accepted without further control? • Which hazard should be controlled first (or to prioritise hazards? • Whether existing controls are being applied effectively? • Are there gaps in the margin of safety or hazard controls? • What new or additional controls need to be implemented / type of control required? • Whether more detailed studies or major risk assessment needs to be conducted? • The owner/s of risk controls and actions? Workshop Notes Page

15. 3.0 Recalibrating Risk Systems • Existing Operations • Changes to operations • New Projects • Acquisition/Divestment

16. 3.1 Taking “Stock” of RM Systems • The definition of risk in the new Standard is: • “the effect of uncertainty on objectives” • This change in definition should shift our thinking and emphasis of analysis ‘the risk event’ (something happens) to analysis of ‘the effect’ and, in particular, the “effect” on objectives. • By way of illustration, risk isn’t the chance of the commodity processes falling - but the chance that a crash will disrupt or affect the company objectives - for example, limiting capital for expansion. • Notes: • Aneffect is a deviation from the expected — positive and/or negative. • Uncertainty is the state, even partial, of deficiency of information related to, understanding or knowledge of, an event, its consequence, or likelihood. • Objectives can have different aspects (such as financial, health and safety, and environmental goals) and can apply at different levels (such as strategic, organization-wide, project, product and process).

17. 3.2 Risk Assessment In mature organisations: • Risk Assessment is linked to risk appetite, and begin and end with specific objectives; • Accountability & ownership is clearly established when scoping the assessment; • Reliable & relevant information on Likelihood & Consequence is always considered; • Additional analysis techniques & advice are included as required; • Estimation of residual risk is based on the adequacy and effectiveness of existing controls • Group feedback on additional considerations

18. Group Review Activity 2 ISO 31000 Principles & Attributes Grant Purdy Broadleaf Capital

19. Group Feedback & Check out

20. Train the Trainer Workshop Feedback The risk assessment process should: • Provide a clear scope of the job or activity to be analysed, • Clarify / qualify all of the hazard risk/s associated with the job /activity, • Determine the potential sources, causes and exposure levels of these risks, • Identify and record those risks that are “acceptable” without further treatment • Acknowledge risks that will / should always remain in the “high / unacceptable” consequence categoryfor the job/activity. • Rank risks in order of priority for the job, then “estimate” the likelihood of the risk occurring with “known or existing controls” in place, • Then estimate the “most credible /reasonable” magnitude of the consequences of the risk should it occur - before deciding on the level of “residual risk” etc etc

21. Tips for facilitators • Do your pre-workshop research & preparation; • Pre-clarify scope, context and accountability for the risk assessment outcomes; • Select a multi-disciplined team – make sure they understand the problem, the process & their role; • Use ‘fit for purpose” tool/s that you are confident with; • Additional analysis techniques & advice may be required; • The facilitator should lead and support the team, not instruct them.