The weekly Reflektion Week 35/2019

This week’s Reflektion is on the question ‘Is good enough, good enough?’

Is good enough, good enough? Is this just a matter of semantics or is there a deeper question to be considered?

The Petroleum Safety Authority (PSA) in Norway issues a regular newsletter with their reflections on the petroleum industry in Norway. One of their reflections was that ‘Good enough is not good enough’. The message is clearly intended to focus the industry on continuous improvement and not to relax in the objective of improving safety and reducing risk.

Over the past five years the operators in Norway have had a focus on cost reduction and efficiency. Some of the operators emphasize the importance of processes that are ‘good enough’. The message is clearly not to do more than what is absolutely necessary to make sure activities are carried out safely and with an acceptable risk.

It is unfortunate that PSA has a view that ‘good enough’ is not good enough and the operators have a view that ‘good enough’ is actually good enough. The industry needs to promote a common message with language that is unambiguous and not open to interpretation.

Reflekts view is that the ‘good enough’ dilemma with regards to risk is partly related to the perception of the application of the ALARP principle. The dilemma is emphasized by some contradictions in PSA regulations and associated guidelines and guidance notes.

In the PSA memorandum on risk management ‘Integrated and unified risk management in the petroleum industry’, the following footnote is made on page 20.

As low as reasonably practicable (ALARP) is an established process in the industry, based on British legislation. The PSA notes that ALARP is often understood as risk-reduction processes which also meet the requirements for risk reduction in the Norwegian regulations, but it has also seen examples where ALARP is used in a way which does not contribute to risk reduction (PSA 2007). Because of these varying interpretations, ALARP is not a concept used in the Norwegian regulations.

In the guidelines to the Framework Regulations section 11 Risk Reduction Principles, the following statement is made.

Such risk reduction shall take place according to the principles in the subsequent subsections. This means that the risk shall be reduced beyond the regulations’ minimum level if this can take place without unreasonable cost or drawback.

This statement is in line with the intention behind the ALARP principle.

There are two foundations for the ALARP principle. The first is based on the sentiments above and the principle that further risk reduction cannot be made without a cost that is grossly disproportionate to the risk reduction achieved. The second is related to risk tolerance. The risk must be considered tolerable before any attempts should be made to apply ALARP. The second foundation is often the one that gets missed. There are examples where the ALARP principle has been applied to demonstrate that a risk cannot be reduced further without significant additional cost, and therefore it is acceptable. The correct application of ALARP is to reduce the risk to a tolerable level, and then apply ALARP to determine if it can be reduced further. Without the consideration of risk tolerance then any risk could probably be justified by ALARP.

Reflekt will return to this subject in future Reflektions since it is critical for how companies manage their risks.

Reflekt AS