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PROCEDURES OF OPERATIONAL RISK ANALYSIS AND MANAGEMENT

This guidance is provided and intended to asist field personnel in developing operational risk management plans by detailing the philosophy and discrete steps necessary to conduct a self-evaluation of operational risk.

OPERATIONAL RISK MANAGEMENT

.01 Principles of Risk Management.

a. Accept risk when benefits outweigh costs. Risk is inherent in boat operations. Risk is also related to gain; normally greater potential gain requires greater risk. The goal of ORM is not to eliminate risk, but to manage it so that mission can be fulfilled with the minimum amount of exposure to potential harm or loss.

b. Accept no unnecessary risk. Only take risks which are necessary to accomplish a mission. Taking unnecessary risks not related to successful mission completion is equivalent to gambling. Gambling is an imprudent activity which does not belong in operational risk management.

c. Anticipate and manage risk by planning. Risks are more easily controlled when they are identified early.

d. Make risk decisions at the appropriate level. Risk-based decisions are made directly by the person in charge of a specific operation, boat, or activity at a given time. Prudence, experience, judgement, intuition, and situational awareness of the person in charge of a specific operation, boat, or activity at a given time are critical elements in making effective risk management decisions. When the person in charge of a specific operation, boat, or activity at a given time determines that the risk associated with their decision cannot be controlled at their level, or is not in accordance with the Senior Field Manager's operational intent, the decision must be elevated to the next level of supervision.

.02 Risk Management Process. Risk Management entails a process of identification, ranking, abatement, communication, and supervision of risks and associated controls.

a. Identification.

1. Potential hazards are first identified and must include potential dangers to:

(a) Personnel;

(b) Vessel;

(c) Environment; and

(d) Mission success.

Identified hazards are later ranked according to the severity and probability of occurrence.

2. Typical Causes. The following are common causes of injury or accident for boats. Causes must be considered in the risk identification phase in order to develop and implement logical and cost effective risk control measures.

(a) Human Systems Failure;

(b) Structural Failure;

(c) Mechanical/Systems Failure;

(d) Collision;

(e) Allision;

(f) Fire;

(g) Inadequate Stability;

(h) Grounding; and

(i) Hazardous Material Reactions;

3. Contributing Factors. The following is a list of contributing program or vessel-specific factors which must be considered when determining risk hierarchy rankings for identified hazards:

(a) Vessel Design Limits;

(b) Repair Standards;

(c) Stability Tests/Reports;

(d) Emergency Drills;

(e) Safety Systems;

(f) Operator Qualifications;

(g) Night Operations;

(h) Proximity or Probability of Emergency Assistance;

(i) Embarked Personnel;

(j) Staffing Levels;

(k) Management and Funding;

(l) Inspection Suitability;

(m) Material Condition;

(n) Nature of Operations;

(o) Operating Environment; and

(p) Safety Record.

b. Ranking.

1. Hazard Severity. The following is a classification of hazard severity and is intended to assist in developing a risk hierarchy.

(a) Category I - The hazard may cause death, complete loss of boat or gear, severe or irreparable damage to the environment, and result in great loss of trust or support from any group of stakeholders.

(b) Category II - The hazard may cause severe injury, chronic illness, substantial property or environmental damage, temporary loss of boat use, and result in a loss of trust from any group of stakeholders.

(c) Category III - The hazard may cause minor injury or property damage, temporary damage to the environment or a boat, and result in a loss of trust from a group of stakeholders.

(d) Category IV - The hazard presents minimal threats to personal safety, property, or health and will result in decreased mission accomplishment or represents inefficient use of Government resources.

2. Hazard Probability.

(a) Category A - Likely to occur in time, or repetitively over time. Expected to occur frequently to a person or item of property, or continuously throughout the small boat user community.

(b) Category B - Probably will occur in time. Expected to occur several times to an individual person, item, or frequently to the small boat user community over time.

(c) Category C - May occur in time. Can reasonably be expected to occur some time to an individual person, or item, or several times to the small boat user community over time.

(d) Category D - Unlikely to occur to any person, or item over the period of one year. May occur within the small boat user community rarely over time.

3. Risk Hierarchy.

(a) Ranking hazards in terms of severity leads to the development of more informed and cost effective risk control measures. In determining the rank of a particular hazard, the hazard severity and probability are evaluated to arrive at a relative risk ranking. A relative ranking for each hazard based on the following matrix should aid in compiling a risk hierarchy. A Risk Hierarchy rating of 10 represents the greatest risk, a rating of 1 represents the least risk.

(b) In some cases, the worst credible consequence of a hazard may not correspond to the highest ranking for that hazard. For example, one hazard may have two potential consequences. The severity of the worst consequence (I) may be unlikely (D), resulting in a ranking of 8. The severity of a lesser consequence (II) may be probable (B), resulting in a raking of 9. Therefore, it is also important to consider less severe consequences of a hazard if they are more likely to occur than the worst consequence of a hazard since the more likely occurrence may present greater overall risk.

c. Abatement. After identifying and ranking risk, possible control measures are considered. Control measures are implemented based on applicable regulation, lessons learned, mission impact, cost, effectiveness, and prudent seamanship. Control measures shall be written and form the basis for Vessel Operations Manuals and Vessel Policies. An example of policy derived from abatement measures could appear as a written policy, for example, prohibiting drugs and alcohol aboard Government vessels, or requiring personal floatation devices (PFD) while working near or over the side of a boat. Other results of abatement procedures could require specific outfitting with respect to safety gear such as EPIRBs (emergency position indicating radio beacon), PFDs, or GMDSS (global maritime distress and survival system) approved electronics. Abatement measures could also entail developing policy for administrative procedures such as requiring procurements based on "best value" instead of "low bid."

d. Communication. Risks for which no method of abatement or control are available, or for which a method of control or abatement would be impractical for reasons of adverse impact on mission accomplishment, or insufficient benefit for cost, are controlled through communication of the risk. For example, working from a hero platform presents significant risk because personnel can easily fall overboard. Simple control measures would require wearing a PFD and/or a tether. There are many more risk abatement measures which could be used but would not be feasible due to cost or adverse impact on mission. Therefore identification, such as black and yellow hazard striping or signage can remind the person on the platform to mind their step. Communication serves the best means of reducing uncontrollable risk by reminding personnel of the innate hazards of certain activities.

Note: It is important to recognize that not all risk is bad. In conducting daily operations a certain amount of calculated risk is necessary for a program to remain dynamic or focused on goals and operational needs. In the most general and extreme sense, setting foot on board a small boat constitutes taking a risk. It is the goal of NOAA Small Boat Operational Risk Management to make the inherent risks associated with operating small boats reduced, calculated, or at least identified and communicated.