Risk Assessment for Major Chemical Company - Case Study Example

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CORPORATE RISK ASSESSMENT Risk Assessment for Major Chemical Company Table of Contents Contents CORPORATE RISK ASSESSMENT 1 Table of Contents 2 1 Scenario and Important Issues 3 1.1 The Chemical Company 3 1.2 Important Points and Issues 4 1.3 Project Hazard and Harmful Effects 4 2 Operation Risk Assessment Measures 5 2.1 Identification of Hazards Associated with Storage and Transport of Formaldehyde 5 2.1.1 Risks Initiating Events (RIE) Identification 5 2.2 Analysis of Risk Associated with RIE or Causes and Likely Consequences 6 2.3 Risk Prioritization 7 2.4 PESTOL Risk Analysis 7 3 Risks Evaluation 9 3.1 Probability Rating and Ranking 9 3.2 Severity Rating and Ranking 10 3.2.1 Calculating Average Probability and Severity 10 3.3 Risk Register 12 4 Risk Rating Matrix 16 5 REFERENCE 18 1 Scenario and Important Issues 1.1 The Chemical Company Located outside the Industrial Centre of the City and near three housing estates and a small village, the Chemical Company produced Formaldehyde and sold to customers in UK and Europe. It is near River Ure, a habitat for salmon and sanctuary for other wildlife and surrounded by a community with about 3,000 people. The most profitable product of the Chemical Company is processed Formaldehyde which the company manufacture and transporting from its present location for over 40 years. There was a leak reported 3 years ago but was contained within the tank storage bund. Aware of the incident and danger of Formaldehyde, the local community openly express their objection over the operation but the site immune under the planning law and employing 1250 people majority of which are members of the surrounding community. 1.2 Important Points and Issues a. Plant located in near populated area b. Plant has 1,250 employees c. Plant is near a River d. Community is openly opposing Formaldehyde production and transport. e. One incident of on-site storage leak three years ago but was contained. f. Plant is more than 40 years in its current location. g. Formaldehyde processing is the most profitable product of the company. h. Formaldehyde exposure is dangerous to health. 1.3 Project Hazard and Harmful Effects FORMALDEHYE Chemical Name Formaldehyde Exposure Limit OSHA TWA -1 ppm Formula HCHO OSHA STEL – 2 ppm Mol. Weight 30.3 Physical appearance Colourless liquid, pungent odor CAS No. 50-00-0 Boiling point 101 deg. centigrade Other name Formalin, Aldehyde Specific gravity= 1.08 (H2O=1 at 20 deg. centrigrade) Components and Contaminants 37% Formaldehyde, 63% Water Fire and Explosion Moderate fire and explosion hazard when exposed to heat or flame. Flash Point: 185 °F (85 °C) closed cup Lower Explosion Limit: 7 percent Upper Explosion Limit: 73 percent Autoignition Temperature: 806 °F (430 °C) Flammability (OSHA): Category 4 flammable liquid Extinguishing Media: Use dry chemical, “alcohol foam”, carbon dioxide, or water in flooding amounts as fog. Source: Harmful exposure is considered at: a. Exposure greater than 0.1 percent is considered dangerous. b. Airbone concentration exceeding 0.75 parts of formaldehyde per million parts of air (0.755 ppm ) as an eight-hour time-weighted average. c. Short-term exposure limit (STEL) is about two parts formaldehyde per million parts of air (2 ppm) as a 15-minute STEL. d. It can enter the body by ingestion, inhalation, skin absorption, and eye contact Harmful effects due to exposure above: Harmful if inhale or swallowed, causes irritation of skin, eyes, nose and throat, cancers of the lungs and nasal passages. 2 Operation Risk Assessment Measures 2.1 Identification of Hazards Associated with Storage and Transport of Formaldehyde 2.1.1 Risks Initiating Events (RIE) Identification Table 2.1‑A - Formaldehyde Processing Identified RIE Risk Associated with Formaldehyde Storage and Handling Requirements Storage Requirements Identified RIE or Causes Codes 01 Well-ventilated storage, free from sunlight, heat, oxidants, and combustible materials. Under ventilation, exposure to sunlight, ignition sources RIE-1 02 Storage temperature 60 degrees w/out inhibitor. Storage temperature 15 degrees centigrade w/ inhibitor Storage temperature setting error RIE-2 Temperature above 60 degrees and RIE-3 Temperature below 15 degrees centigrade RIE-4 04 Respiratory protective equipment Poor safety management practices RIE-5 05 Source of water at a high flow rate for exposure protection 06 Safety showers and eye showers be available nearby, outside the storage area for exposure protection 07 Chemical incompatibility results to explosion, fire, and toxic gases Error in formaldehyde processing RIE-6 08 Ordinary steel should not be use as formaldehyde tank or drum to avoid corrosion and leak Error in tank design and specifications RIE-7 09 Manholes for cleaning of storage tanks 10 Tanks should have positive sealing connections for filling and draining tank 11 Pressure and relief vents in tank. 12 Used in closed circuit to avoid any exposure through skin contact or inhalation. Poor work practices RIE-8 13 Drums and barrels of formaldehyde solution shall be stored with the bungs up and tightly placed. Improper storage and handling RIE - 9 14 All containers must be securely closed or sealed while being transported Negligence and inadequate inspection and monitoring RIE -10 15 Vents must be cleared and regularly inspected and cleaned Inadequate maintenance/monitoring RIE-11 16 Tanks must be grounded to discharge static electricity Improper installation RIE-12 17 Updated processing technology and measuring devices Outdated technology and devices RIE-13 2.2 Analysis of Risk Associated with RIE or Causes and Likely Consequences Table 2.2‑B – Risks Associated with RIE and Likely Consequences RIE or Causes Codes Risks Likely Consequences 01 Limited ventilation, exposure to sunlight, ignition sources RIE-1 R133, R253, R324, R424 (see Table 3.1-A) Political pressure, economic loss, social or public protest, environmental pollution, legal dispute, damaged reputation, penalty 02 Storage temperature setting error RIE-2 R133, R253, R324, R424 (see Table 3.1-A) Political pressure, economic loss, social or public protest, environmental pollution, legal dispute, damaged reputation, penalty Temperature above 60 degrees and RIE-3 R133, R253, R324, R424 (see Table 3.1-A) Political pressure, economic loss, social or public protest, environmental pollution, legal dispute, damaged reputation, penalty Temperature below 15 degrees centigrade RIE-4 R133, R253, R324, R424 (see Table 3.1-A) Political pressure, economic loss, social or public protest, environmental pollution, legal dispute, damaged reputation, penalty 03 Poor safety management practices RIE-5 R133, R253, R324, R424 (see Table 3.1-A) Political pressure, economic loss, social or public protest, environmental pollution, legal dispute, damaged reputation, penalty 04 Error in formaldehyde processing RIE-6 R133, R253, R324, R424 (see Table 3.1-A) Political pressure, economic loss, social or public protest, environmental pollution, legal dispute, damaged reputation, penalty 05 Error in tank design and specifications RIE-7 R133, R253, R324, R424 (see Table 3.1-A) Political pressure, economic loss, social or public protest, environmental pollution, legal dispute, damaged reputation, penalty 06 Poor work practices RIE-8 R133, R253, R324, R424 (see Table 3.1-A) Political pressure, economic loss, social or public protest, environmental pollution, legal dispute, damaged reputation, penalty 7 Improper storage and handling RIE – 9 R133, R253, R324, R424 (see Table 3.1-A) Political pressure, economic loss, social or public protest, environmental pollution, legal dispute, damaged reputation, penalty 8 Negligence and inadequate inspection and monitoring RIE -10 R133, R253, R324, R424 (see Table 3.1-A) Political pressure, economic loss, social or public protest, environmental pollution, legal dispute, damaged reputation, penalty 9 Inadequate maintenance RIE-11 R133, R253, R324, R424 (see Table 3.1-A) Political pressure, economic loss, social or public protest, environmental pollution, legal dispute, damaged reputation, penalty 10 Improper installation RIE-12 R133, R253, R324, R424 (see Table 3.1-A) Political pressure, economic loss, social or public protest, environmental pollution, legal dispute, damaged reputation, penalty 11 Outdated technology and devices RIE-13 R133, R253, R324, R424 (see Table 3.1-A) Political pressure, economic loss, social or public protest, environmental pollution, legal dispute, damaged reputation, penalty 2.3 Risk Prioritization Table 2.3‑C – Risk Initiating Events Priority by Probability Codes Description Priority Rank R133 Localised industrial accident involving small toxic release 3 R253 Major Pollution of Controlled Waters 5 R324 Localised fire or explosion at a fuel distribution site or tank storage of flammable and/or toxic liquids 2 R424 Local accident involving transport of hazardous chemicals 2 2.4 PESTOL Risk Analysis Figure 2.4‑A PESTOL for CHEMICAL PLANT 3 Risks Evaluation 3.1 Probability Rating and Ranking Table 3.1‑D – Probability Rating and Ranking (Source: Lancashire Community Register) CODE Risk Events Consequences PESTOL Likelihood Impact Rating R133 Localised industrial accident involving small toxic release Up to 1km from site of toxic chemical release causing up to 10 fatalities and up to 100 casualties. Political pressure, economic loss, social or public protest, environmental pollution, legal dispute, damaged reputation, penalty Medium (3) Moderate (3) High R253 Major Pollution of Controlled Waters Pollution incident impacting upon controlled waters (for example, could be caused by chemical spillage or release of untreated sewage) leading to persistent and/or extensive effect on water quality, major damage to aquatic ecosystems, closure of potable abstraction point(s), major impact on amenity (i.e. tourism) value, serious impact on human health. Political pressure, economic loss, social or public protest, environmental pollution, legal dispute, damaged reputation, penalty High (5) Moderate (3) High R324 Localised fire or explosion at a fuel distribution site or tank storage of flammable and/or toxic liquids Up to 1km around site, causing up to 15 fatalities and 200 casualties. Impact on the environment, including persistent / widespread impact on air quality. Political pressure, economic loss, social or public protest, environmental pollution, legal dispute, damaged reputation, penalty Medium Low (2) Significant (4) High R424 Local accident involving transport of hazardous chemicals Up to 50 fatalities and up to 500 casualties (direct injuries from the accident would be similar to road or rail accidents; indirect casualties are possible if substance covers wide area). The extent of the impact would depend on substance involved, quantity, nature and location of accident. The assumption is based on phosgene / chlorine. Political pressure, economic loss, social or public protest, environmental pollution, legal dispute, damaged reputation, penalty Medium Low (2) Significant (4) High 3.2 Severity Rating and Ranking According to “Severity Rating” is the rank associated with the possible consequences of a hazard while probability rating is the likely occurrence of this hazard. A modified rating scale is shown below. Table 3.2‑E Severity Criteria and Ranking Rank Severity Criteria 4 Very High Would prevent goals and objectives from being achieved 3 High Would cause significant problems or delays in objectives being achieved 2 Medium Would cause relatively minor problems or delays in objectives being 1 Low Would probably not affect project implementation 3.2.1 Calculating Average Probability and Severity Calculation of average probability and average severity ranking include adding together their respective value and getting the average. The average is compared with the table of threshold in Table 3.2-D and their respective severity is entered in the table below. Table 3.2‑F Average Probability and Severity Calculation of IE RISKS Category Short Description Probability Severity Average Value of P & S Severity Threshold R133 Operational Localised small scale toxic release 3 5 4 Medium R253 Operational Major water pollution 5 5 5 Medium R324 Operational Localised fire and explosion 2 5 3.5 Medium R424 Operational Accident in transporting hazardous chemicals 2 4 3 Low P1 Political Political pressure 2 4 3 Low P2 Political Change of Policy 2 3 2.5 Low P3 Political Tax Increase 2 2 2 Low P4 Political Employment laws 3 2 2.5 Low P5 Political Trade regulations 3 2 2.5 Low E1 Environmental Pressure from environmental organisations 3 3 3 Low E2 Environmental Penalty 3 2 2.5 Low E3 Environmental Chemical management law 3 2 2.5 Low E4 Environmental Toxic substances control 3 2 2.5 Low S1 Social Public protest 4 4 4 Medium S2 Social Violent strikes 2 3 2.5 Low S3 Social High turnover 3 3 3 Low T1 Technological Rapid change of technology 4 3 3.5 Low L1 Legal Dispute 3 2 2.5 Low L2 Legal Penalty/Fees/ Charges 3 2 2.5 Low L3 Legal Damaged claims 3 3 3 Low EC1 Economics High operational cost 3 3 3 Low EC2 Economics Cost of additional safety measure 3 3 3 Low EC3 Economics Damages 3 3 3 Low EC4 Economics Financial losess 3 5 4 Medium Table 3.2‑G Severity Threshold Severity Threshold Action / Mitigation Recommended High Risk 6-8 Detailed mitigation action/ modification of goals and objectives Medium Risk 4-5 Clearly defined mitigation action Low Risk 1-3 Minimal or No mitigation action required 3.3 Risk Register Table 3.3‑H Risk Register for Chemical Plant RISKS Category Short Description Causes Trigger Treatment Control R133 Operational Localised small scale toxic release RIE-1 -RIE-13 Poor safety management and work practices 1,2, & 3 (see Table 3-B) Regulated by COMAH and the Environment Agency R253 Operational Major water pollution RIE-1 -RIE-13 Poor safety management and work practices 1,2, & 3 (see Table 3-B) Environment Agency has 24 hours response and Incident Management System R324 Operational Localised fire and explosion RIE-1 -RIE-13 Poor safety management and work practices 1,2, & 3 (see Table 3-B) Regulated by the Health and Safety Executive under the Pipelines Safety Regulations 1996 R424 Operational Accident in transporting hazardous chemicals RIE-1 -RIE-13 Poor safety management and work practices 1,2, & 3 (see Table 3-B) Regulated by COMAH and Health and Safety Executive P1 Political Political pressure Violation of law Poor safety management and work practices 1,2, & 3 (see Table 3 Detailed planning/ Close supervision/ Contingency Plan P2 Political Change of Policy Change of government Poor safety management and work practices 1,2, & 3 (see Table 3 Detailed planning/ Close supervision/ Contingency Plan P3 Political Tax Increase Government needs Poor safety management and work practices 1,2, & 3 (see Table 3 Detailed planning/ Close supervision/ Contingency Plan P4 Political Employment laws Safety initiatives Poor safety management and work practices 1,2, & 3 (see Table 3 Detailed planning/ Close supervision/ Contingency Plan P5 Political Trade regulations Safety initiatives Poor safety management and work practices 1,2, & 3 (see Table 3 Detailed planning/ Close supervision/ Contingency Plan E1 Environmental Pressure from env. Organisations Environmental hazards Poor safety management and work practices 1,2, & 3 (see Table 3 Detailed planning/ Close supervision/ Contingency Plan E2 Environmental Penalty Pollution Poor safety management and work practices 1,2, & 3 (see Table 3 Detailed planning/ Close supervision/ Contingency Plan E3 Environmental Chemical management law Leak/ Explosion Poor safety management and work practices 1,2, & 3 (see Table 3-B) Detailed planning/ Close supervision/ Contingency Plan E4 Environmental Toxic substances control Leak/fatalities Poor safety management and work practices 1,2, & 3 (see Table 3-B) Detailed planning/ Close supervision/ Contingency Plan S1 Social Public protest Leak/fatalities Poor safety management and work practices 1,2, & 3 (see Table 3-B) Detailed planning/ Close supervision/ Contingency Plan S2 Social Violent strikes Fatalities / Claims/ Benefits Poor safety management and work practices 1,2, & 3 (see Table 3-B) Detailed planning/ Close supervision/ Contingency Plan S3 Social High turnover Exposure Poor safety management and work practices 1,2, & 3 (see Table 3-B) Detailed planning/ Close supervision/ Contingency Plan T1 Technological Outdate technology Poor planning Poor safety management and work practices 1,2, & 3 (see Table 3-B) Detailed planning/ Close supervision/ Contingency Plan L1 Legal Dispute Violation of law Poor safety management and work practices 1,2, & 3 (see Table 3-B) Detailed planning/ Close supervision/ Contingency Plan L2 Legal Penalty/Fees/ Charges Violation of law Poor safety management and work practices 1,2, & 3 (see Table 3-B) Detailed planning/ Close supervision/ Contingency Plan L3 Legal Damaged claims Violation of law Poor safety management and work practices 1,2, & 3 (see Table 3-B) Detailed planning/ Close supervision/ Contingency Plan EC1 Economics High operational cost Accidents / Oudated tech. Poor safety management and work practices 1,2, & 3 (see Table 3-B) Detailed planning/ Close supervision/ Contingency Plan EC2 Economics Cost of additional safety measure Failues of safety measures Poor safety management and work practices 1,2, & 3 (see Table 3-B) Detailed planning/ Close supervision/ Contingency Plan EC3 Economics Damages Leak/ Explosion Poor safety management and work practices 1,2, & 3 (see Table 3-B) Detailed planning/ Close supervision/ Contingency Plan EC4 Economics Financial losess Leak/Explosion/Pollution/Casualities Poor safety management and work practices 1,2, & 3 (see Table 3-B) Detailed planning/ Close supervision/ Contingency Plan Table 3.3‑I Risk Treatment & Control Criteria Risk Treatment & Control Criteria Criteria Code Treatment Code Control The risk is acceptable to the organisation if there is a contingency plan in case it occurs. 1 Retain/accept A Contingency Planning Organisation see the need to apply control measures 2 Reduce the Likelihood of the risk B Apply control measures, detailed planning, train staff, improve management & supervision, open communication, etc. Organisation decided to undertake contingency planning, disaster recovery & business planning, 3 Reduce the consequences of the risk C Plan and prepare, allocate funds, train staff in safe working procedures Organisation decided to share some part of the risk to another party 4 Transfer the risk D Contract provisions, outsourcing, insurance coverage, and so on Organisation decided to cancel activities that are likely to generate the risk whenever possible 5 Avoid the risk E Cancel risk generating activities 4 Risk Rating Matrix Table 3.3‑J – Data Source for Matrix RISKS Category Short Description Probability Severity Average Value of P & S Severity Threshold R133 Operational Localised small scale toxic release 3 5 4 Medium R253 Operational Major water pollution 5 5 5 Medium R324 Operational Localised fire and explosion 2 5 3.5 Medium R424 Operational Accident in transporting hazardous chemicals 2 4 3 Low P1 Political Political pressure 2 4 3 Low P2 Political Change of Policy 2 3 2.5 Low P3 Political Tax Increase 2 2 2 Low P4 Political Employment laws 3 2 2.5 Low P5 Political Trade regulations 3 2 2.5 Low E1 Environmental Pressure from environmental organisations 3 3 3 Low E2 Environmental Penalty 3 2 2.5 Low E3 Environmental Chemical management law 3 2 2.5 Low E4 Environmental Toxic substances control 3 2 2.5 Low S1 Social Public protest 4 4 4 Medium S2 Social Violent strikes 2 3 2.5 Low S3 Social High turnover 3 3 3 Low T1 Technological Rapid change of technology 4 3 3.5 Low L1 Legal Dispute 3 2 2.5 Low L2 Legal Penalty/Fees/ Charges 3 2 2.5 Low L3 Legal Damaged claims 3 3 3 Low EC1 Economics High operational cost 3 3 3 Low EC2 Economics Cost of additional safety measure 3 3 3 Low EC3 Economics Damages 3 3 3 Low EC4 Economics Financial losess 3 5 4 Medium 5 REFERENCE El-Haik, B. S. & Shaout, A. (2011). Software Design for Six Sigma: A Roadmap for Excellence, Wiley Epstein, S. S. (2013). Avoidable Causes of Childhood Cancer, Xlibris Corporation NIOSH (2014). Recommendations for a Formaldehyde Standard, The National Institute for Occupational Safety and Health UK Travers, A. A. & Buckle, M. (2000). DNA-protein Interactions: A Practical Approach, Oxford University Press  Read More