HEALTH AND SAFETY MANUAL

DHI-EHS-HSM-001

EHS RISK MANAGEMENT

Copyright This document is the property of Doosan Heavy Industries and Construction and all rights are
reserved in respect of it. This document may not be reproduced or disclosed in any manner what so ever, in
whole or in part, without the prior written consent of Doosan.

Doosan expressly disclaims any responsibility for or liability arising from the use
of this document by any third party. Copies printed are UNCONTROLLED.

Revision Details Next Review: January 2015

Rev. Date Revision Status Checked Approved

00 31/03/2014 Draft Yonghyun Kim Seungmin Park

DHI-EHS-HSM-001 (March 2014), Page 1 of 22

PURPOSE AND SCOPE

This procedure describes the Company’s requirements on the processes to be used for the management of
identified hazards in order to minimize incidents, damage and losses.

The main focus of this procedure is on the protection of people, the environment, plant and property. The risk
management principles described in this procedure may also be used to prevent financial and reputation losses.

DEFINITIONS

Risk: The chance of something happening that shall have an impact upon objectives.
Note: A “risk” is often specified in terms of an event or circumstance and the consequences that may flow from it.
It is measured in terms of a combination of the consequences of an event and their likelihood. A risk may have
either a positive or negative impact on a project.

Risk Management: The identification, assessment, and prioritization of risks followed by coordinated and
economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate
events or to maximize the realization of opportunities.

Consequence: The outcome of an event expressed qualitatively or quantitatively, being a loss, injury,
disadvantage or gain. There may be a range of possible outcomes associated with an event.

Frequency: A measure of the rate of occurrence of an event expressed as a number of consequences of an

event in a given time. See also Likelihood and Probability.

Hazard: A source of potential harm or damage or a situation with potential for harm or damage.

HAZOP Study: Examination of a task or process by a team of people familiar with the process to identify actual
and potential hazards in the operations, so that they may be eliminated or mitigated.

Job Safety and Environmental Analysis (JSEA): A systematic method of hazard recognition, evaluation and
control that can be used to devise measures to eliminate hazards and protect persons and the environment in a
workplace.

Likelihood: Used as a qualitative descriptor of probability or frequency

Probability: The likelihood of a specific outcome, measured by the ratio of specific outcomes to the total number
of possible outcomes. Probability is expressed as a percentage between 0% and 100%, with 0% indicating an
impossible event or outcome and 100% indicating an event or outcome is certain.

Qualitative Analysis: Those analyses that use word form or descriptive scale to describe the likelihood of each
event arising and its consequences. These scales can be adapted or adjusted to suit the circumstances and
different descriptions may be used for different tasks in the process.

Quantitative Analysis: This uses numerical values (rather than the descriptive scales used in qualitative
analysis) for both consequence and likelihood using data from a variety of sources. The value of the analysis
depends on the accuracy and completeness of the numerical data used.

Residual Risk Number (RRN): A risk level number generated from an assessment of the likelihood and severity
of injuries arising from a hazard with mitigating controls in place.

Risk Assessment: Can be defined as the systematic identification, analysis and evaluation of the risks present
in a workplace.

Risk Evaluation: The process used to determine risk management priorities by comparing the level of risk

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against predetermined standards, target risk levels or other criteria.

Risk Factor Number (RFN): A risk level number generated from an assessment of the likelihood and severity of
injuries arising from a hazard.

Safety and Environmental Verification Checklist (SEVC): An action summary for the individual responsible
for the works to ensure required controls are in place to maintain potential risks at an acceptable level. The
checklist is to be completed on a regular basis determined during the course of the project.

Severity: Used as a qualitative descriptor of an undesirable outcome.

EHS: Acronym for Environment, Health and Safety

RESPONSIBILITY
Refer below.

PROCEDURE

1.0 General

There are a number of processes used to manage EHS risk at various stages of a project, from development,
design, and construction, through to operation and maintenance.

Refer to Figure 1 – Risk Management Life Cycle of a Project. Additionally, different functions (e.g. financial,
safety etc.) require different risk management processes. For an example of a basic risk management process
for construction operations refer to Figure 2 - Basic Risk Management Flowchart below.

Additionally, different industries require different risk management processes. As an example, road works
projects have different regulatory requirements compared to those of an oil refinery.

1.1 Effective Risk Management System

An effective risk management system shall comprehensively cover all parts and processes of the project and
shall address all identified potential risks to a particular project. As an example of identified risks, consider all the
risks below:

 Natural disastersIndustries and Construction

 Deliberate acts
 Hazardous events in the vicinity of the project
 Unusual, atypical or abnormal events and conditions

An effective risk management system shall also provide a process to:

 Assess such risks in a quantitative manner (if possible) based on collected data (in order to minimize
guesswork)
 Ensure regulatory compliance
 Aim for risk elimination, or, at the very least, reduce risk to an acceptable level. But most of all, an
effective risk management system shall protect people, the environment, property and as a result of that,
the Project and the Company.

1.2 Risk Areas/Types

All aspects of a project can be exposed to some form of risk.

This exposure includes:

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  Human loss (through injury and illness)
 Environmental loss (including cultural heritage and the community)
 Financial loss (including property damage, commercial and legal penalties/loss)
 Asset loss (including plant and equipment, knowledge and personnel)
 Reputation loss (which could mean loss of business opportunities).

1.3 Risk Management by Functions

Some functions have different methods of managing risk. For example, the commercial department may prefer
to insure against a risk of financial loss, whereas the construction/mining divisions will prefer to treat the risk
through utilizing a number of control strategies including the JSEA, as one the most important and effective
types of control. Refer to Section 6 - Risk Treatment for options.
It may be said that one of the main reasons why procedures are written is because the process involved has
some adverse risk inherently associated with it. In that sense, all procedures may be classed as risk controls.

2.0 Hazard / Risk Identification

The first step in risk management is to identify hazards. There are many methods which can be employed for
hazard/risk identification. These include:

a. Interviews/group discussions
b. Personal or group experience
c. Local or overseas experience
d. Brainstorming
e. Scenario analysis
f. Operational modeling
g. Inspections and audits
h. Work breakdown structure analysis
i. Judgmental — consensus, speculative / conjectural, intuitive
j. Strengths, weaknesses, threats & opportunity (SWOT) analysis
k. Decision trees e.g. Event Tree Analysis l. Survey / Questionnaires
m. Flow charting, system design review, systems engineering techniques; systems analysis, e.g. HAZOP
studies.
n. History/failure analysis e.g. Failure Modes & Effect Analysis (FMEA); Fault Tree Analysis

The first four methods (“a” – “d”) are commonly used in a Preliminary or an initial Hazard Analysis where design
and other information may be lacking. These methods are generally most suited to uncomplicated systems.
It is also very important to determine who faces these hazards, how many are at risk, and the degree of
exposure to that risk.

Other important considerations whilst identifying hazards are:

 The more input / data, the better the result.

 There are particular risks associated with each life cycle phase of the project (design, procurement,
construction (and subcontracting), commissioning, operation (and maintenance) and decommissioning).
 Hazards/risks can arise from sources both internal and external to the Company, and may affect any
levels / contexts / work processes within the Company.

3.0 Existing Risk Controls

When considering risk controls, it is to remember that – with few exceptions – it is likely that all current work
activities use some form of risk control, either documented (as in a JSEA), or as accepted industry practice.

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The object of a risk assessment, therefore, should be to ascertain whether these existing risk controls are
adequate and what risk controls are necessary to reduce the risk to an acceptable level.
So the second step in a risk assessment should be to determine what existing or standard risk controls are
normally used.

4.0 Risk Assessment

This section examines the issues of consequence and likelihood and the different types of assessments.

4.1 Risk Assessment Reports

All EHS risk assessments shall use Appendix A - Risk Assessment Report as the basis of the process.

The outcomes of risk assessments shall be communicated as Manual, Work Method Statements, JSEAs as well
as Work Checklists as required.

4.2 Timing of Risk Assessments

Risk assessments shall be conducted as and when necessary with the following points as mandatory:

 Project Start Up

Appendix A - Risk Assessment Report shall be prepared at the start of a project. This gives an overview of the
hazards associated with tasks involved in a project. It should not be too detailed, but should be specific enough
to accurately determine which tasks need closer examination with a JSEA.
Heavy Industries and Construction
The Site Manager shall convene a meeting with as many senior operational and management personnel as
necessary and possible in order to complete the form Appendix A - Risk Assessment Report.

This meeting shall also determine the programmers for preparing Manual, Work Method Statements and task-
specific JSEAs as well as preparing and managing work Checklists.

 As part of a change management programmed

 As part of incident investigation close outs
 Supplementary to Method Statements
 Permit To Work Documentation / Applications

4.3 Assessment Types

One of the most common form of risk assessment is to examine a hazard in light of the possible consequence of
exposure to that hazard, and the likelihood of that particular consequence eventuating. This risk assessment
results in what is called the risk level. In other words, risk level is a function of consequence and likelihood.
Risk assessment can be quite difficult. However, it can be made a lot easier by using a qualitative analysis,
where descriptive words are given to various levels of consequence and likelihood.

At the other end of the scale is quantitative analysis, where numerical data is used instead. This is the preferred
method and can be more accurate, depending on the accuracy of the data. Data for a quantitative analysis may
be obtained from external sources (such as industry figures, other projects etc.), or from the project itself.
However, it may take considerable time to collect sufficient data from a project for the analysis to be meaningful.

Quantitative consequences may be estimated by modeling the outcomes of an event or set of events, or by
extrapolation from experimental studies or past data. Quantitative likelihood is usually expressed as a function of
any of the below:

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  Probability
 Frequency
 A combination of exposure and probability

A common method of risk assessment is to use what is termed a semi-quantitative analysis, where the
qualitative descriptors of consequence and likelihood are given numerical values which are then used to give a
risk level.

4.4 Determination of Consequence

For a particular event, there may be a range of possible outcomes. For example, a person who slips on wet
steps could:

 Stagger but not fall

 Fall which may result in any combination of the of the following :
- Bruise
- Abrasion
- Laceration
- Broken limb
- Broken back (possibly quadriplegia), or in the worst case scenario
- Broken neck resulting in death

So there is a range of possible outcomes, of which the two most important are:

 The most likely outcome

 The worst possible outcome.

Although it is relatively easy to select the worst possible outcome, it is far harder to select the most likely
outcome without adequate information.

Table 1 - Consequence Levels below assigns a number to a consequence level, but offers some useful
definitions as to what that level means for impacts to environmental, health and safety, production loss and
property damage. Where there is doubt as to which outcome would have the highest risk level, both should be
considered, with the highest one being selected.

A more detailed set of consequences for environmental risk assessments is shown as Figure 5 –
Environmental Severity Description below.

Where there is doubt as to which outcome would have the highest risk level, both should be considered with the
highest one being selected.

4.5 Determination of Likelihood

Likelihood can be examined with regard to the chance that a particular outcome will happen to any of the
following:

 A single person or member of the general public

 The project (more persons potentially exposed)
 The Company (many more persons potentially exposed)

Table 2 – Likelihood Levels below assigns a number to the likelihood. As can be seen, likelihood can be very
variable. In order to protect people on a Project, the Likelihood Level for “Project” should be used.

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DHI-EHS-HSM-001 (March 2014), Page 7 of 22
5.0 Risk Evaluation and Risk Level

This section describes the process to evaluate risk, assign levels of risk and determine tolerance to risk.

5.1 Risk Level Matrix

A combination of Tables 1 and 2 can be used to evaluate the risk by determining the overall risk level of a
particular outcome eventuating.

The matrix (Table 3 - Risk Level Matrix) below is shown in the conventional format of Consequence on the
horizontal axis increasing to the right and Likelihood on the vertical axis increasing with height.

A note regarding terminology:

 For an initial risk assessment, the Risk Level is known as the Risk Factor Number (RFN).

 For a residual risk assessment, the Risk Level is known as the Residual Risk Number (RRN).

 In both cases, the risk level dictates the response and timing of risk controls required.

5.2 Financial Risk Assessments

For financial risk assessments, a cost-benefit analysis, cash flow analysis or other relevant analysis may be
required to determine the return on investment.

5.3 Risk Management Action

The risk level will determine what type of risk management action is required and the timeframe for
implementation. The higher the risk level, the more senior the management level responsible for risk control
action approvals and the more urgent the action timeframe (unless work has not yet started, or has been
stopped pending risk control action).

It should be remembered that all incidents must be reviewed in light of the proposed and actual risk controls
existing at the time of the incident. Any necessary re-assessment of the risk level associated with that incident
shall be communicated to all relevant persons both on and off site.

Table 4 - Risk Management Action Matrix below combines the Risk Factor Number or Residual Risk Number
as determined from Table 3 - Risk Level Matrix with a Tolerance Descriptor and a management action
requirement.

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5

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6.0 Risk Treatment

This section describes the processes to treat risk.

6.1 General

The options for risk treatment are:

 Accept – accept the risk where the risk level is estimated to be within the acceptable range. If some risk
remains, it is called retained risk and financially may be treated by self insurance.
 Avoid – by deciding not to proceed with that activity.
 Transfer – in full, or in part, to another party (e.g. a specialist). However, it is important to note that some
liability for that risk may still remain with the Company.

Methods used include transfer by subcontracting the work, obtaining suitable insurance or hedging.

 Reduce – Reduce the risk level to an acceptable level, either through reducing the consequence, the
likelihood, or (preferably) both. Risk reduction shall utilize the generally accepted hierarchy of risk
control.

6.2 Hierarchy of Risk Control

Control of identified hazards and risks shall, in the first instance, be in accordance with any regulatory authority
requirement or mandatory Code of Practice. Where no regulation applies, the basic hierarchy of risk control is
shown below.

Note that the list is shown in reducing order of effectiveness. Eliminating the risk or the hazard remains the most
effective control and PPE the least effective control. PPE is the Control of Last Resort.

 Elimination – Eliminate the task or hazard/risk. This is a permanent solution, and the preferred option.
 Substitution – Substitution refers to the replacement of the source of the hazard / risk with a less
hazardous one. This control basically reduces the possible consequence but not the likelihood.
 Engineering controls – Engineering controls involve some structural change, or redesign (including
isolation) to the work process or work environment, to physically prevent, or reduce, exposure to the
hazard. Generally speaking, these controls reduce likelihood.
 Administrative controls – These controls include such measures as:

- Job Rotation to Restrict Exposure

- Controlled or Limited Entry to Hazardous Areas
- Suitable, And Effective Supervision
- Training, Education and Instruction Programs
- Preventative Maintenance Procedures
- Proper Housekeeping
- Warning Signs

Note that administrative controls are dependent on appropriate human behavior for effectiveness. These
generally reduce likelihood.

 Personal Protective Equipment (PPE) – PPE places a barrier on the wearer to prevent exposure to
the hazard, the success of which is dependent on:

- The suitability of PPE selected and used

- Appropriate human behavior by the wearer PPE generally reduces consequence.

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Wherever possible, elimination of a hazard/risk shall be the preferred control, followed by substitution, then
engineering controls. These are permanent solutions, which are not dependent on compliance by people for
success.

Administrative controls and the use of PPE are the least desirable options, as they are dependent on compliance
by personnel, which may necessitate increased levels of supervision.

It is with these Risk Controls in place that Consequences and Likelihood are determined and the Residual Risk
Level calculated and documented on the Appendix A - Risk Assessment Report.

6.3 Residual Risk

Where some risk remains after controls are put in place, this Residual Risk shall be assessed and evaluated
(using the above processes) to see if that residual risk meets acceptable company standards.

Where the Residual Risk Number is 6 or greater, a detailed JSEA for the particular task is to be prepared with
controls established to manage the risk.

Where the Residual Risk Number is greater than 16 a HAZOP study of the task shall be undertaken before the
JSEA is prepared.

The Site Manager shall convene the HAZOP study which shall include supervisory staff responsible for the
operation, subcontractor’s supervisory staff and the EHS Manager.

Where the initial Risk Factor Number was greater than 6 and subsequently reduced to a Residual Risk Number
of less than 6 through risk mitigation, an SEVC shall be produced and completed to ensure that the mitigating
actions are in place and are effective.

The completed JSEA must be signed off as approved by the Site Manager prior to the commencing the task.

7.0 Communication of Risk Management Controls

Workers and other relevant parties identified through the risk management process as being at risk shall be
given suitable information and training in the risk management controls selected and documented on the JSEA.

The most usual format for the dissemination of this is on site is by Pre-start and Tool Box Meetings. Should there
be specialist training identified (e.g. Tag out Lock Out, special insurance requirements, etc.), this shall be given
by suitably qualified and competent personnel to those people who require it.

7.1 Communication Tools

The outcomes of risk assessments shall then be communicated as Manual, Work Method Statements, JSEAs as
well as Work Checklists as required. Refer to the following documents:

 Appendix B - Job Safety and Environmental Analysis Worksheets

 Appendix C - EHS Verification Checklist

7.2 Preparation of a JSEA

JSEAs (Appendix B) for identified tasks on a project shall be prepared in for all tasks identified through the risk
assessment process as having a Residual Risk Number greater than 6. A sample of a JSEA is shown in Figure
4 – Job Safety and Environmental Analysis Worksheet (sample).
The task supervisor shall be responsible for all of the following in the preparation of the JSEA:

DHI-EHS-HSM-001 (March 2014), Page 11 of 22

  Before the task starts
 Based on previous examples, if available and applicable
 In conjunction with a Project EHS Manager
 Together with workers from the work crew experienced in the task (if possible).

The completed JSEAs shall be approved by the Site Manager before starting the activity.

8.0 Responsibilities, Supervision, Review and Audit

This section describes the requirements for reviews and audits.

8.1 Supervision

It is of paramount importance that all personnel understand their responsibilities for the implementation of the
Risk Management System and ensuring the subsequent control measures of JSEA and SEVC are suitably
supervised and monitored.

Figure 3 – Flowchart for EHS Risk Management sets out the levels of responsibilities required to ensure that
the system is managed effectively.

8.2 Review

The risk management process for a particular task or process shall be reviewed:

 As a result of any incident associated with the works;

 At the end of the task if it is considered that a better method could be employed;
 Prior to the task commencing the next time;
 As a result of an inspection or audit finding; and/or
 Prior to the task commencing on the next project.

Where it is considered that a better way or more effective controls could be used, or in the light of any incident,
the risk management process shall be reviewed and revised accordingly. Any changes shall be approved by the
Site Manager and communicated to all relevant persons both on and off site in a timely manner.

8.3 EHS Verification Checklist

Form Appendix C - EHS Verification Checklist (EHSVC) is to be used as an action summary for individual
person responsible for that action item(s).

The EHSVC should be prepared by Supervisory staff with EHS staff providing assistance. The frequency of
inspection should be determined based on the type of work involved.

The nominated person is required to regularly complete the checklist to confirm that actions and items required
to mitigate risks have been put in place.

The completed checklist will be forwarded to the EHS Manager for verification and comment.

Example of Using an EHSVC:

Whilst doing road works adjacent to public roads, the initial risk level of a worker being struck by a vehicle may
be very high (e.g. risk level 20). However, this could be mitigated to risk level of 6 by having such things as
barricades, flashing lights, signage, reflective vests, lollipop man etc in place. However, if no one is checking
daily that these controls measures are being used, workers in the area may be exposed to a risk level of 20
again.

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8.4 Records

The Risk Management Report, JSEA and EHSVC shall be kept in a designated file for record and reference
purposes by the EHS Department.

8.5 Audit

The risk management process shall be audited as part of the EHS Management Systems Audit according to the
audit schedule and appropriate recommendations made and subsequently implemented as required.
REFERENCES FORMS

9.0 Appendix

Figure 1 Risk Management Life Cycle of the Project

Figure 2 Basic Risk Management Flow Chart
Figure 3 Flow Chart for EHS Risk Management
Figure 4 Job Safety Environmental Analysis Worksheet Sample
Figure 5 Environmental Severity Level Description

Appendix A - Risk Assessment Report

Appendix B - Job Safety and Environmental Analysis Worksheet
Appendix C - EHS Verification Checklist Template

Leighton In

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Doosan Heavy Industries and Construction

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 A
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Heavy Industries and Construction

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DHI-EHS-HSM-001 (March 2014), Page 19 of 22
 Appendix A EHS Risk Assessment Report

RISK ASSESSMENT REPORT

Country Office
　 　 　 　 　
/ Project: Assessor(s) :
Ref. No.: 　 　 　 　
　 　 　
(Preparation/Supplementary to method statement/following
Activity: 　 　 Assessment Purpose:
accident, etc.)
　 　 　 　
　 　 　 　 　 　 　 　 　 　 　 　 　
People Cause of Adverse
Job / Task L1 S1 RFN ** Mitigating Controls L2 S2 RRN * Assessment
at Risk Adverse Effect Effect
　 　 　 　 　 　 　 　 　
　 　 　 　 　 　 　 　 　 　 　 　
　 　 　 　 　 　 　 　 　 　 　 　
　 　 　 　 　 　 　 　 　 　 　 　

Prepared By: 　 　 Approved By : 　 　

Signature: Signature :
Position: 　 Date: 　 Position : 　 Date : 　
　 　 　 　 　 　 　 　 　 　 　 　 　

Residual Risk Number Prepare Job Safety Analysis and Safety

Frequency Severity Risk Factor Number (RFN) *
(RRN) Verification
1: Unlikely/Improbable 1: Negligible 1-2: Trivial/Acceptable 1-2: Trivial/Acceptable Checklist when RRN is > 6
Prepare Safety Verification Checklist
2: Remote 2: Slight 3-5: Tolerable 3-5: Tolerable **
when RFN is > 6.
6-9: Moderate/Acceptable with
3: Quite Possible/Occasional 3: Moderate 6-9: Moderate/Acceptable with Review L1 Likelihood as is
Review
Likelihood with mitigating controls in
4: Likely/Probable 4: Critical/High 10-15: Substantial 10-15: Substantial L2
place
5:
16-25:
5: Very Likely/Frequent Catastrophic/Very 16-25: Intolerable/Unacceptable S1 Severity as is
Intolerable/Unacceptable
High
S2 Severity with mitigating controls in place

DHI-EHS-HSM-001 (March 2014), Page 20 of 22

 Appendix B EHS Risk Assessment Report
Country Office / Project:       Tools and or Equipment required: JSA No:      

Job Location & Details:             Date Prepared:

JSA Participants:            

            Approved by PM:

Responsible Supervisor:            

            Date:      

CONTROLS REQUIRED
(Eg. Remove overhead cable or
JOB STEP HAZARDS IDENTIFIED ACTION BY/RECORD
isolate/sheath overhead or monitor
(Eg. Set Up Crane) (Eg. Electrocution from 11Kv Cables) (Eg. Supervisor)
with spotter) or Training, PPE
Needs
                       
                       
                       
                       
                       
                       
                       
                       
                       
                       
                       
                       

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Appendix C EHS Verification Checklist Template

EHS VERIFICATION CHECKLIST

Responsible
PROJECT: 　　 Person : 　
Frequency of
REF. NO.: 　 review : 　
Activity : 　

Action Taken 　
ITEMS TO BE CHECKED (indicated by tick) Result of Check
Yes No 　
　 　　 　 　 　
　 　　 　 　 　　 　 　　
　 　　 　 　 　 　 　
　 　　 　 　 　　 　 　
　 　　 　 　 　
　 　　 　 　 　
　 　　 　 　 　
　 　　 　 　 　
　 　　 　 　 　
　 　　 　 　 　
　 　
All Items must be completed prior to works
starting. 　
　 　
Verified by: 　 Date: 　 　
　 　
Position: 　 　
　 　　 　 　 　　 　 　　

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