Risk Management - A fundamental aspect of your asset by lindayy

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									      Risk Management -
 A fundamental aspect of your
asset management programme



MATTHEW LECOUTEUR, CMP RISK MANAGER
 MAV INTERNATIONAL LOCAL GOVERNMENT
ASSET MANAGEMENT CONFERENCE 25.05.05
The (Good) Old Days - Non-Feasance
     RISK AND ASSET MANAGEMENT



                    Civic Mutual Plus
    Liability Insurer, Claims and Risk Management
   • Victorian Local Government Mutual Liability Self
     Insurance Scheme - Established under
     Legislation (Municipal Association Act, Vic.)
   • Provides Broadform Liability Insurance (Public
     Liability, Prof. Indemnity, Products Liability)
   • Owned and controlled by local government, for
     the benefit of local government/local authorities.
   • Emphasis on working with members towards
     prevention - not just management of - public
     liability claims (Risk Management).
   • Similar schemes in other states (eg Statewide) -
     c. law can be established in other jurisdictions
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The (Good) Old Days - Non-Feasance
     RISK AND ASSET MANAGEMENT



    Risk Management Standard AS/NZS4360:2004

                  Establish the Context

   • Large majority of public liability claims arise from
     the assets under a Local Government’s control

   • Broad range of assets for which Councils are
     responsible
       - roads, paths, bridges, signs, bus stops, etc
       - drainage and associated infrastructure
       - buildings - occupied, vacant, leased, hired
       - recreation reserves, playgrounds, pools
   • Insurance does not cover all costs, nor outcomes

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     RISK AND ASSET MANAGEMENT



       Identify, Analyse and Evaluate the Risks
        - What could go wrong, what would the
          outcomes be, what are the priorities?

   • Risk is an inherent element of providing an
     asset for public use - risk to users of an asset,
     risk to users’ property, risk to the asset - from
     users or other sources of damage, loss.
   • OH&S law, Common law, Statute law all require
     that an asset manager/provider does not
     (unreasonably) breach their duty of care
   • Duty of care defined by community expectation,
     Codes of practice, Regulations, competing
     priorities of asset managers, and “the law”

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The (Good) Old Days - Non-Feasance
     RISK AND ASSET MANAGEMENT



   Liability of Occupiers (Wrongs Act 1958)
     “14B (3) An occupier of premises owes a duty to
     take such care as in all the circumstances of the
     case is reasonable to see that any person on
     the premises will not be injured or damaged by
     reason of the state of the premises or of things
     done or omitted to be done in relation to the
     state of the premises.
     “14B (4) Without restricting the generality of sub-
     section (3), in determining whether the duty of
     care under sub-section (3) has been discharged
     consideration shall be given to -
     a) the gravity and likelihood of the probable
     injury;
            (Likelihood x Consequence)

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The (Good) Old Days - Non-Feasance
     RISK AND ASSET MANAGEMENT



   Liability of Occupiers (Wrongs Act 1958)
     14B (4) (Cont.)
     b) the circumstances of the entry onto the
     premises;
     c) the nature of the premises;
     d) the knowledge which the occupier has or
     ought to have of the likelihood of person or
     property being on the premises;
     e) the age of the person entering the
     premises to appreciate the danger;
     f) the burden on the occupier of eliminating the
     danger or protecting the person entering the
     premises from the danger as compared to the
     risk of the danger to the person.”
     (“what is reasonably practicable”)
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The (Good) Old Days - Non-Feasance
     RISK AND ASSET MANAGEMENT



      Identify, Analyse and Evaluate the Risks
       - What could go wrong, what would the
            outcomes be, what are the priorities?
   Suggested means in analysing what the asset
     management issues that should be of priority:
        •     systems and tools provided in AS4360
              (relative risks of identified issues.)
        •     claims analysis - yours, peers, and
              industry-wide (typical losses)
        •     value at risk - worst case scenarios
        •     ease of replacing/repairing the asset
        •     impact of having the asset unavailable
        •     injuries - not always worst case scenario
   Should be synergy with insurance, emergency, and
     business interruption strategies/planning
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The (Good) Old Days - Non-Feasance
     RISK AND ASSET MANAGEMENT



      If risk management is not considered
      - learning from the example of losses




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The (Good) Old Days - Non-Feasance
     RISK AND ASSET MANAGEMENT



     Identify, Analyse and Evaluate the Risks
      - What could go wrong, what would the
       outcomes be, what are the priorities?




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The (Good) Old Days - Non-Feasance
     RISK AND ASSET MANAGEMENT



                    Treat the Risks
   - What can be done to minimise the risks posed
      by the provision and management of assets?
   Key elements of discharging a duty of care, and
     ensuring that losses are prevented:
   • Inspection-driven maintenance
   • Inspection criteria and maintenance standards
     determined by current knowledge/Standards
   • Clear records of inspection and maintenance
     activities generated - dates, name/position of
     asset inspector, nature of defects, cross-
     reference to subsequent work schedules
   • Rational/consistent means of prioritising maint.
     items, and recording what was done and when
   • Retaining/accessing records when required
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The (Good) Old Days - Non-Feasance
     RISK AND ASSET MANAGEMENT



    Your day-to-day decisions do have an impact




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