How can you assess risk for a marine engineering project?

1 Hazard identification

The first step in risk assessment is to identify the sources and scenarios of potential harm or loss that may affect the project. This can be done by using various methods, such as brainstorming, checklists, historical data, expert judgment, fault tree analysis, event tree analysis, or hazard and operability analysis. The aim is to generate a comprehensive list of hazards that cover all aspects of the project, such as technical, operational, organizational, human, environmental, and external factors. Each hazard should be clearly defined and described, along with its causes and effects.

2 Risk analysis

The second step in risk assessment is to estimate the severity and probability of each hazard. Severity is the measure of the impact or consequence of a hazard on the project objectives, performance, safety, or environment. Probability is the measure of the likelihood or frequency of a hazard occurring. Risk analysis can be qualitative, quantitative, or semi-quantitative, depending on the availability and quality of data, the complexity and uncertainty of the project, and the level of detail required. Qualitative risk analysis uses descriptive scales or categories to rank the severity and probability of hazards, such as high, medium, low, or rare, likely, unlikely. Quantitative risk analysis uses numerical values or models to calculate the severity and probability of hazards, such as dollars, fatalities, or failure rates. Semi-quantitative risk analysis combines qualitative and quantitative methods to assign scores or ratings to the severity and probability of hazards, such as 1 to 5 or A to E.

3 Risk evaluation

The third step in risk assessment is to compare the results of risk analysis with the criteria or standards for acceptable risk. Acceptable risk is the level of risk that is considered tolerable or manageable by the project stakeholders, such as clients, regulators, contractors, or public. Risk evaluation involves judging whether the risk of each hazard is acceptable, unacceptable, or borderline, and prioritizing the hazards that need further attention or action. Risk evaluation can be done by using various tools, such as risk matrices, risk curves, or risk maps. These tools help to visualize and communicate the risk level of each hazard and the overall project.

4 Risk treatment

The fourth step in risk assessment is to select and implement the most appropriate and effective risk mitigation strategies or actions for the hazards that are unacceptable or borderline. Risk mitigation can be done by using various options, such as avoidance, reduction, transfer, or retention. Avoidance is the option of eliminating or avoiding the hazard or the project altogether. Reduction is the option of minimizing the severity or probability of the hazard by modifying the design, operation, or management of the project. Transfer is the option of shifting the responsibility or liability of the hazard to another party, such as insurance, contract, or partnership. Retention is the option of accepting the hazard and its consequences, either voluntarily or involuntarily. Risk treatment should be based on the cost-benefit analysis, feasibility, and suitability of each option, and should be documented and monitored throughout the project lifecycle.

5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?