“ALARP to SFAIRP: The tipping point in the paradigm shift from

hazard to precaution based safety”

Richard Robinson Director R2A Due Diligence Engineers

DUE DILIGENCE ENGINEERSr2a

Engineered Safety Group (SA)A paradigm is a universally recognised knowledge system that for a time provides model problems and solutions to a community of practitioners (after Kuhn, 1970).

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Paradigms

SFAIRP

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The Rail Safety National Law and the model Work Health and Safety Act both require safety risk to be eliminated or minimised so far as is reasonably practicable (SFAIRP). SFAIRP requires a positive demonstration of due diligence.!

SFAIRP is precaution based.

ALARP

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Most technical safety work is done in the context of ensuring technical safety is as low as reasonably practicable (ALARP).!

ALARP is hazard based. SFAIRP ≠ ALARP

Hazard vs Precaution

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Judicial Scrutiny

TimeDecision Unwanted Event/s Judgement

Precaution focussed

Hazard focussed

Future Uncertainty

Future Uncertainty

Technical risk

targets

Safety critical

Reasonableness (after Sappideen and Stillman 1995)

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SEVERITY OF HARM UTILITY OF CONDUCT

PROBABILITY OF

OCCURANCE

DIFFICULTY AND

INCONVENIENCE

MAGNITUDE OF

RISKEXPENSE

Risk Management of downside (negative or pure) risk

Hazard identification(Foreseeability)

Implementationof reasonably practicable

precautions

PreventabilityIdentify all practicable

precautions for each hazard following the hierarchy of

controls

Reasonableness Determine which practicable precautions are reasonable

based on the High Court established balance

Hazard analysis and risk calculationprocess to determine the nature of risk

and the level of risk(inherently unrepeatable)

Compare against criteriaprocess of comparing the results of risk

analysis with risk criteria to determine whether the risk and/or its magnitude is acceptable

(may eliminate further consideration of acceptable or tolerable risks)

Selected risk criteriaterms of reference against which the

significance of a risk is evaluated (inherently subjective)

Risk mitigation and management optionsprocess to modify risk.

(may not follow the hierarchy of controls)Monitoring and Review

(Quality assurance)

Due Diligence

Common law approach(precaution based and criticality driven)

Target risk approach(hazard based and risk driven)

ISO 31000 vs Due Diligence

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Establish the context!Risk assessment (hazard based):!! (Hazard) risk identification!! (Hazard) risk analysis!! (Hazard) risk evaluation*!Risk treatment!

Establish the context!Risk assessment (precaution based):!! Identify credible, critical issues!! Identify precautionary options!! Risk-effort balance evaluation!Risk action (treatment)

AS/NZS ISO 31000 Due Diligence

The point is to ensure that all reasonable practicable precautions are in place, not to achieve an indefensible target level of risk or safety.

* From the definition in the standard: 2.24 risk evaluation process of comparing the results of risk analysis (2.21) with risk criteria (2.22) to determine whether the risk (2.1) and/or its magnitude is acceptable or tolerable

Due Diligence

Due diligence is a legal concept that seems to manifest itself in at least two ways: !

1. As a defence against negligence in common (case) law, and

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2. In statute law, especially for investment advice and, more recently, OHS matters.

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The Common Law

According to Tony Robinson (Baldric): !

The common law particularly flows from King Henry II (circa 1266) and a desire to extend the influence of the King’s justice by sending Lord Judges on circuits, consistently applying the ‘common’ laws observed in the various feudal fiefdoms, thereby superseding the justice systems of the local aristocracy and enhancing the power of the king.

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Professor Ben Ale (Delft University)

The UK is traditionally regulated by a common law system, which is based on the principle that what is not explicitly allowed is forbidden, unless it can be justified, where necessary, in court (Ale 2005). The legal responsibility for the safety of workers and the public is placed on whoever controls the activity.

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Negligence

The case that launched the negligence tide is generally recognised as Donaghue vs Stevenson (1932). Essentially this tested the responsibility of a drinks manufacturer for a stomach ache resulting from a late discovered decomposed snail in an opaque soft drink bottle, purchased by one of two friends to share. Until that time, the liability for a bad product rested with the contractual arrangement between the seller and buyer, not a third party friend with whom the drink was shared and who fell ill.

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See http://www.bailii.org/uk/cases/UKHL/1932/100.html viewed 17 July 2013

Donoghue v. Stevenson (1932)

M'ALISTER or DONOGHUE (Pauper) Appellantv.

STEVENSON. Respondent-------------

Lords Present

Lord Buckmaster Lord Atkin Lord Tomlin

Lord Thankerton Lord Macmillan

Judgment

13See http://www.bailii.org/uk/cases/UKHL/1932/100.html viewed 17 July 2013

Due Diligence

Interestingly, it was a split decision by the 5 judges in the UK House of Lords as to whether or not the case could proceed at all since the potential liability to the manufacturer lay outside existing buyer-seller contract. The minority was concerned that a finding for the plaintiff would launch an uncontrolled avalanche of negligence claims in common law jurisdictions, a concern that has pretty much eventuated.

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Due Diligence

The majority decision favoured to adopt the golden rule of most major philosophies and religions. This is usually expressed in the Christian tradition, as: do unto others as you would have done unto you. That is, it was felt that the soft drink manufacturer owed a duty of care to any reasonably foreseeable consumer, not just the one who purchased the soft drink.

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Lord AtkinThe rule that you are to love your neighbour becomes in law you must not injure your neighbour; and the lawyer's question "Who is my neighbour?" receives a restricted reply. You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour. Who then in law is my neighbour? The answer seems to be persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question.

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Due Diligence

Possibly the most curious aspect of the case was that it apparently never actually came to court as both the plaintiff, Donaghue, and the defendant, Stevenson, had died whilst all the procedural matters (whether the friend could sue outside the buyer-seller contract) matters were considered. The snail was never proved to have legal existence.

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Australia Act(s) 1986

These  Acts  eliminated  the  remaining  ;es  between  the  legislature  and  judiciary  of  Australia  and  their  counterparts  in  the  United  Kingdom  and  makes  the  High  Court  paramount  for  the  common  (case)  law  in  Australia. 18

HIGH COURT OF AUSTRALIASHIPPING CORPORATION OF INDIA LTD. v. GAMLEN CHEMICAL CO. A/ASIA. PTY. LTD. [1980] HCA 51; (1980) 147 CLR 142

STEPHEN J. This appeal involves interpretation of the Hague Rules. During heavy weather in the Great Australian Bight, the severity of which was unusual but not unforeseeable, a number of drums of cleaning solvent stowed in a ship's hold broke adrift, were damaged and their contents lost. The means of securing them in place in the hold had been inadequate.

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HIGH COURT OF AUSTRALIASHIPPING CORPORATION OF INDIA LTD. v. GAMLEN CHEMICAL CO. A/ASIA. PTY. LTD. [1980] HCA 51; (1980) 147 CLR 142

HAGUE RULES:Article IV Rights and Immunities 1. Neither the carrier nor the ship shall be liable for loss or damage arising or resulting from unseaworthiness unless caused by want of due diligence on the part of the carrier to make the ship seaworthy, and to secure that the ship is properly manned, equipped and supplied...!Whenever loss or damage has resulted from unseaworthiness, the burden of proving the exercise of due diligence shall be on the carrier or other person claiming exemption under the section. (Bolding by R2A).

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HIGH COURT OF AUSTRALIASHIPPING CORPORATION OF INDIA LTD. v. GAMLEN CHEMICAL CO. A/ASIA. PTY. LTD. [1980] HCA 51; (1980) 147 CLR 142

Reynolds J.A. summed up the conclusion of the Court (of Appeal of the Supreme Court of NSW) in the following words:!"Loss or damage does not arise or result from perils of the sea where negligence is a concurrent cause. Where negligence allows or facilitates the perils of the sea to inflict damage on cargo, then in all relevant respects the loss or damage arises or results from the negligence. The perils of the sea must be guarded against by the use of due care."!The judges of the High Court (Gibbs, Stephen, Mason, Aickin, and Wilson) unanimously dismissed an appeal to the High Court and supported the view of the NSW Court of Appeal summarised by Reynolds above. 21

Due Diligence

Where it is possible to guard against a foreseeable risk, which, though perhaps not great, nevertheless cannot be called remote or fanciful, by adopting a means, which involves little difficulty or expense, the failure to adopt such means will in general be negligent.Turner v. The State of South Australia (1982) (High Court of Australia before Gibbs CJ, Murphy, Brennan, Deane and Dawson JJ).

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Due Diligence

In Australia due diligence has been a defence against common law negligence.

Now, with the commencement of the model WHS Act in all jurisdictions except Victoria and Western Australia, due diligence is a

statutory defence against criminal breach of of that legislation.

Model WHS Act history

The Worklace Relations Ministers’ Council (WRMC) at its 81st meeting agreed to a framework for uniform OHS laws. Attendees included:• Deputy Prime Minister the Hon Julia Gillard MP, Minister for Employment and Workplace

Relations (Cth)• The Hon Joseph Tripodi MP, Minister for Finance (NSW)• The Hon Tim Holding MP, Minister for WorkCover (VIC)• The Hon Cameron Dick MP, Minister for Industrial Relations (QLD)• The Hon Paul Caica MP, Minister for Industrial Relations (SA)• The Hon Troy Buswell MLA, Minister for Commerce (WA)• The Hon Lisa Singh MP, Minister for Workplace Relations (TAS)• Ms Liesl Centenera, proxy for Mr John Hargreaves MLA, Minister for Industrial Relations (ACT)• Ms Laurene Hull, proxy for the Hon Robert Knight MLA, Minister for Public Employment (NT)Apologies:• Mr John Hargreaves MLA, Minister for Industrial Relations (ACT)• The Hon Robert Knight MLA, Minister for Public Employment (NT)• The Hon John Hatzistergos MLC, Minister for Industrial Relations (NSW)• The Hon Martin Pakula MP, Minister for Industrial Relations (VIC)• The Hon Kate Wilkinson MP, Minister of Labour (NZ)

24The model act is summarised in Chapter 16, page 171

Recommendations 88 & 96 (amongst others) of the OHS Review was not agreed. Instead the WRMC agreed that:Case law should be relied upon to define ‘due diligence’ andThe concept of ‘reasonably necessary’ should be replaced with ‘reasonably practicable’.Communiqué  from  Australian,  State,  Territory  and  New  Zealand  Workplace  Rela;ons  Ministers’  Council  (18  May  2009).    

Originally based on common law due diligence

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The Model WHS Act

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Commenced in all jurisdictions except Western Australia and Victoria.

Due Diligence

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‘(5) In this section, due diligence includes taking reasonable steps— !(a) to acquire and keep up-to-date knowledge of electrical safety matters; and (b) to gain an understanding of the nature of the operations of the business or undertaking of the

person conducting the business or undertaking and generally of the hazards and risks associated with those operations; and

(c) to ensure that the person conducting the business or undertaking has available for use, and uses, appropriate resources and processes to eliminate or minimise risks to electrical safety from work carried out as part of the conduct of the business or undertaking; and

(d) to ensure that the person conducting the business or undertaking has appropriate processes for receiving and considering information regarding incidents, hazards and risks and responding in a timely way to that information; and

(e) to ensure that the person conducting the business or undertaking has, and implements, processes for complying with any duty of the person conducting the business or undertaking under this Act; and

(f) to verify the provision and use of the resources and processes mentioned in paragraphs (c) to (e).’.

EXPLANATORY MEMORANDUM – MODEL WORK HEALTH AND SAFETY BILL (100 pages)

Page 228 2011 Act No. 18

125. Subclause 27(5) contains a non-exhaustive list of steps an officer must take to discharge their duties under this provision, including acquiring and keeping up-to-date knowledge of work health and safety matters and ensuring the PCBU has, and implements, processes for complying with any duty or obligation the PCBU has under the Bill.

Duty of officers

!Bolding by R2A

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Health & Safety Executive

You may come across it as SFAIRP (“so far as is reasonably practicable”) or ALARP (“as low as reasonably practicable”). SFAIRP is the term most often used in the Health and Safety at Work etc Act and in Regulations. ALARP is the term used by risk specialists, and duty-holders are more likely to know it. We use ALARP in this guidance. In HSE’s view, the two terms are interchangeable except if you are drafting formal legal documents when you must use the correct legal phrase. !UK HSE’s document, ALARP “at a glance”

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Worksafe Australia

There are two elements to what is ‘reasonably practicable’. A duty-holder must first consider what can be done - that is, what is possible in the circumstances for ensuring health and safety. They must then consider whether it is reasonable, in the circumstances to do all that is possible. This means that what can be done should be done unless it is reasonable in the circumstances for the duty-holder to do something less.

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Set the law aside?

Engineers often argue that, if you set the law aside, the only way to demonstrate due diligence is the ALARP approach. This is simply not a viable proposition. The laws of man may not be ignored. Our parliaments and courts necessarily reject this.

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Unintended consequences?

Rejection of the risk management standard (ISO 31000) approach as a competent method of demonstrating safety due diligence in Australia, at least of high consequence, low likelihood events. !

Rejection of number of well recognised technical standards that encourage the use of risk targets including the SIL (Safety Integrity Level) standard, IEC 61508; the high voltage earthing standard EG(0), QRA land use planning and others.

Land Use Planning

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Major hazard facility

Calculated 10-6 pa risk contour

No special precautions

neededIncreasing precautionsExclusion zoneNormal building

standards apply

Credible worst case consequence contour

Target risk level approach Precautionary approach

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Why SFAIRP?

The point of the SFAIRP approach is to demonstrate, that provided something is not prohibitively dangerous that it ought not to be done at all, that all reasonable practicable precautions are in place for foreseeable critical hazards. Essentially, arguing over degrees of rareness for high consequence outcomes pre-event is simply indefensible, post-event.

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Precautionary approach is normal

The precautionary approach is very output-focussed. It is invariably the one adopted by the courts post event. Precautions and mitigations are implemented unless it is unreasonable to do so.!

And, it’s what we do in real life.36