Risk

Risk 3.0 Introduction The differentiation of risk definitions depends on the losses context, their assessment and measurement, as well as, when the losses are clear and invariable, for example a human life, the risk assessment is focused on the probability of the event, event frequency and its circumstances. We distinguish two types of risk, the first is based on scientific and engineering estimations and the second, called effective risk is dependent on human risk perception. In practice, these two assessments are in continuous conflicts in social and political sciences. Engineering risk, can be expressed as: In the nuclear, defence and aircraft industries, where the possible failure of a complex series of engineered systems could result in severe consequences. The measure of risk for an event is: In the nuclear safety engineering, 'consequence' is often measured in terms of off-site radiological release, and banded decade band widths. The risks are evaluated using Fault Tree/Event Tree techniques, where these risks are low they are normally considered to be 'Broadly Acceptable'. A higher level of risk (typically up to 10 to 100 times what is considered broadly acceptable) has to be justified against the costs of reducing it further and the possible benefits that make it tolerable - these risks are described as 'Tolerable if ALARP'. Risks beyond this level are classified as 'Intolerable'. The level of risk deemed 'Broadly Acceptable' has been considered by Regulatory bodies in various countries - an early attempt by UK government regulator (HSE NII) & ac ademic F. R. Farmer used the example of hill-walking and similar activities which have definable risks that people appear to find acceptable. This resulted in the so-called Farmer Curve, of acceptable probability of an event versus its consequence. The technique as a whole is usually referred to as Probabilistic Risk Assessment (PRA), (or Probabilistic Safety Assessment, PSA). 3.1 Operational risk Operational risk is defined as the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events but excludes strategic risk. An Operational Risk Management framework should include identification, measurement, monitoring, reporting, control and mitigation frameworks for Operational Ris