LOSS EVENTS

Loss Events

Table of Content

Introduction1

Discussion1

Risk assessment background7

Systematic accident investigation16

Conclusion—the future20

References21

Loss Events

Introduction

In the past 15 years, there has been a major safety improvement in the UK mining industry. Part of this change can be attributed to the development and application of risk assessment methods. These systematic, team-based techniques identify, assess and control unacceptable risks to people, assets, the environment and production. (Denny 2004:22)The outcomes have improved mine management systems. This paper discusses the risk assessment approach applied to equipment design and mining operations, as well as the specific risk assessment methodology. The paper also discusses the reactive side of risk management, incident and accident investigation. Systematic analytical methods have also been adopted by regulatory authorities and mining companies to investigate major losses.

Discussion

Across the globe, laws regulating the health and safety of workers are increasingly including requirements for risk assessment and risk management. In the European Economic Community and in UK, codes of practice have been developed to include risk assessment as part of the methodology to address areas such as plant safety, and the storage of hazardous chemicals . (Minerals Council of UK 2004)

Highly publicized job accidents, such as mining disasters, create the impression that occupational safety is a haphazard enterprise. Although accidents are random events, occupational safety levels are governed by a variety of social institutions and display systematic patterns across time and across different types of industry. Thus, the probability of occupational injuries and illnesses varies in a quite predictable manner even though the occurrence of particular accidents usually cannot be foreseen. (Mine Safety & Health Administration 2004:10)From the standpoint of economic analysis, firms provide specific safety levels by striking a balance between the costs to the firm of accidents and the costs of providing greater safety. The differences across industries in the costs of providing safety account for the higher risk levels of industries such as mining and construction, where eliminating risks is very costly, as compared to safer industries such as banking. Firms will incur these costs to promote safety if they have a financial incentive to do so. The chief sources of the financial incentives that lead firms to provide a safe workplace are wage premiums that they pay to workers on risky jobs, workers' compensation costs, and government health and safety regulations.

The economic analysis of occupational safety dates back to Adam Smith. Workers require higher pay, or compensating differentials, to be attracted to dangerous jobs. This wage premium usually is not in the form of hazard pay but rather is part of the higher overall pay package required to attract workers to risky jobs. In the UK, these wage premiums totaled £ 229 billion in 2000, or about 5 percent of all worker wages. Studies have documented similar but lower wage premiums throughout the world in countries ranging from India and Taiwan to the United Kingdom. (Battelle Pacific Northwest Laboratories 2004:1)A useful shorthand puts these wage premiums in perspective: Suppose that the average worker faces an annual occupational fatality risk of 1 in ...