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PRESENTATION OBJECTIVES
At the end of this presentation you will know about:
• Consideration and determination of risk-treatment options using
agreed consultative methods
RISK-TREATMENT
Risk-treatment options may include:
Accept risk
Mitigate risk
Transfer or share risk
Avoid risk
Treat the risks
Identify options
Select the best response
Develop risk treatment plan
Implement
RISK-TREATMENT
• Consider and determine risk-treatment options using
agreed consultative methods
• Your “agreed consultative” methods MAY depend on the
organisation’s policy and procedures in this regard.
• Does your organisation have a policy detailing the agreed
consultative method for risk treatment?
• Consultative methods:
• WHS consultation arrangements • Some legislation can differ in their
consultation requirements• WHS consultation committees
• Risk management representatives• Workplace Health and Safety Officer• Other agreed arrangements
HIERARCHY OF CONTROLS
• An important aspect to consider when deciding on your
appropriate risk treatment options is that some risk control
measures are more effective than others
• A commonly accepted measurement of risk control is hierarchy of
controls. This is used extensively with Health and Safety risk
management
HIERARCHY OF CONTROLS
• Where a decision has been made to implement a control measure,
someone has to be responsible for this and for reviewing its
effectiveness
• Ensure the level of responsibility and authority allocated to
managers and supervisors represents the control aspect for which
they are responsible
• Both the selected control measure and the person responsible
should be documented accordingly
HIERARCHY OF CONTROLS
Prior reference to risk treatment
• Risk-treatment options have been extensively detailed in earlier
parts of this session, so reference to those will help reinforce the
typical methods used for risk treatment in most project
circumstances
• Industry types vary options considerably as to focus, priority and
order but generally there are acceptable actions to adopt across a
wide variety of industries
ACCEPT THE RISK
• Certain risks are unavoidable
• Best used when the risk is low
• Still requires planning for such things as “determining when the
project will be exposed to the risk”
• You can still make small adjustments
• Treatment of acceptance is regarded as a “passive risk” since no
action is taken
MITIGATE THE RISK
• Risk mitigation is a control process that essentially stops a risk
before it starts making an impact and bringing it to an acceptable
level
• Mitigation, as referred to in other areas of this session, is usually
part of a contingency plan and used to prevent the risk
AVOID THE RISK
• Avoidance requires identification of the risks in the first instance
• As also mentioned previously, this can be achieved through
reference to other project experiences and data
• Further analysis is needed to identify those risks that would likely
occur upfront at the project initiation so you can avoid them at the
outset
• A final decision can be made after assessing the relative impact of
those risks
TRANSFER THE RISK
• Risk transfer is a common method in treating risk as it can be
used to dilute the impact of the risk if not totally remove it
• In project management, risk transfer is often made to a third party
or sharing risk with others through contracts, insurance,
outsourcing or leasing
• Reducing risk by transfer means the project will not bear the total
impact of the risk