Role of Management in the Minimising Risk in the UAE - Research Paper Example

Role of Management in the minimising Risk in the United Arab Emirates Introduction The United Arab Emirates (UAE) is a country located in the South of the Arabian Peninsula in Asia. It is a federation of seven emirates, each under a hereditary emir. The UAE has a single national president. It is comprised of Abu Dhabi, Sharjah, Ajman, Dubai, Ras as- Khaimah, Unn al-Quwait and Fujairah. The capital of UAE is situated in Abu Dhabi, which is a hub of industrial, cultural and political activities. With regards to the economy, The UAE has an open economy. It is among the highest per capita incomes in the globe. The economy is majorly based on petroleum and natural gas (Terterov & Shoult, 2006). The UAE government has however embarked on a plan to diversify the economy. This has enhances a massive construction boom especially in the manufacturing sector as well as flourishing the service sector. Occasion of the report There is a wide variety of industries in the United Arab Emirates. The tremendous growth of these industries can be attributed to favorable taxes, low labour cost, political stability and excellent infrastructure among other factors. The main industries in the UAE include: cement, furniture, aluminum, foodstuffs, garments, building materials, plastic industries among others. However, most of the industries in the UAE involve petroleum, oil and gas products. The nature of these products is usually of high risk (Terterov & Shoult, 2006). This implicates that most industries in the UAE have to spend a lot in trying to come up with strategies to minimize the possible occurrence of risks and hazards. Thus, this necessitate this report, which is aimed at analyzing the role of management, the safety plans as well as Health Safety Environment programs in minimizing the risk of hazards in these industries. Terterov, M., & Shoult, A. (2006). Doing business with the United Arab Emirates: Global market briefings. (2 ed., pp. 111-113). Abu Dhabi: GMB Publishing. Subject of the report Within many industries in the United Arab Emirates, a hazard is regarded as any substance, physical effect or condition which has the potential to harm people, property the environment or even have an adverse effect on the reputation of the industry (Tripp & Tripp, 2001). A hazard has the ability to result in an accident or a loss. On the other hand, a risk is the product of the measure of the likeliness of occurrence of an undesirable event and the potential adverse consequence by which the occurrence of the event may cause to people, property, environment and the company reputation (Tripp & Tripp, 2001). Currently, there are no specific laws in the UAE governing the control of major hazards. Nonetheless, the existing laws protecting the environment and people are applicable in situations where the consequences which occur as a result of a major hazard may have adverse effect on people or the environment. Such laws include the Federal Law No.24 (1999) for the protection and development of the environment.teh other one is the Federal Law No.8 (1980) for the regulation of Labour Relations (Tripp & Tripp, 2001). The main subject of this report therefore, is to examine the situation of risk management in the United Arab Emirates with and how risk management process may be carried out. Purpose of the report This report is aimed at defining the roles of managements of various industries, defining various safety plans as well as Health Safety Environment (HSE) programs in minimizing the risk of hazards in these industries and recommendations regarding the proper use of quantitative risk assessment. Terterov, M., & Shoult, A. (2006). Doing business with the United Arab Emirates :Global market briefings. (2 ed., pp. 118-119). Abu Dhabi: GMB Publishing Tripp, H., & Tripp, M. (2001). Success secrets to maximize business in United Arab Emirates (culture shock! success secrets to maximize business). (1 ed., pp. 54-58). Portland: Graphic Arts Center Publishing Company Also, it give a preview of the HSE risk management providing technical support to the various managements carrying out risk and hazard minimization in their various industries. There is need for managements to reduce risks in their respective industries to a level that is a low as reasonably practicable. This involves the balancing of risk reduction against time, difficulty and the costs of achieving it. Main Body of Report Introduction Risk management is the systematic application of management policies and practices to the management of risks identified. The main reason for practicing risk management is to enhance the protection of human health, the community, property and the environment within which industries operate. This way, there is need to define the role of management in managing exposure to the risks that arise from workplace hazards in their various industries. To effectively do this, it is important for management to be conversant with the various methodologies by which they can conduct risk identifications (Asbury, & Ashwell, 2007). The first and commonly used hazard identification technique in the UAE is the Hazard and Operability Study (HAZOP). It is more often than not, used in the oil and gas industries. HAZOP technique uses a series of guides to prompt those participating in the study to identify the possible hazards and their corresponding causes and consequences using their intuition. Another technique is the Task Risk Assessment. This involves systematically reviewing various activities with the aim of identifying potential hazards at each stage. This technique is recommended for non-routine activities that are HSE critical (Asbury, & Ashwell, 2007). Asbury, S., & Ashwell, P. (2007). Health & safety, environment and quality audits: A risk-based approach. (1 ed., pp. 95-96). London: Butterworth-Heinemann. The third technique is known as checklist technique. In this regard, a checklist refers to a list of various hazards associated with a particular industry or operations within an industry. A checklist specifies the various aspects of the industry which require attention. It is effective in ensuring that designers address the hazards which are well known and obvious. The final technique discussed in this report is known as the Failure Mode and Effect Analysis (FMEA). This technique considers each item in the industry or each operation in the industry and evaluates the consequences of each failure. FMEA provides a detailed analysis of the causes and the consequences of single failures. This analysis is useful especially when the main danger originates from equipment breakdown (Asbury, & Ashwell, 2007). Problem Description Usually, the process of risk management is divided into five stages. With reference to the first stage, it involves the process of identifying the hazards and risks to be managed. The aim of this stage is to come up with a comprehensive list of the risks and events whose occurrence may prevent, delay or enhance the achievement of set goals in an industry. The management has to use various approaches including the ones discussed above plus many others like, judgment based on past experience and records, brainstorming, checklists, systems analysis and systems engineering techniques. The selection of an approach to use is contingent on the nature of activities in the industry, the types of risks, and the aim of the risk management study, among others. The findings during this process are documented in a Risk register, which has to be reviewed and updated more often. Asbury, S., & Ashwell, P. (2007). Health & safety, environment and quality audits: A risk-based approach. (1 ed., pp. 100-101). London: Butterworth-Heinemann. The second step involves analysis of risks. This implies the development of proper understanding of the risks identified. Here, the factors considered include the sources of the risk, the consequences of the risk and the probability of its occurrence. Thus, analysis of risk is usually done by integrating their consequences and their likelihood. In this purview, there is a detailed analysis of the magnitude and the occurrence of a risk within the framework of the effectiveness of the existing controls. At times, the management may be required to us statistical analysis and calculations to estimate the likelihood of occurrence and the consequences involved. The third stage involves the selection and implementation of control measures. After the categorization of risk, the management is charged with the responsibility of identifying the appropriate control measures to manage the hazard at as acceptable and as low as reasonably practical level. The hazards whose risks are low are neglected. There is need to develop procedures corresponding to the identified control measures. Also, the relevant personnel are to be notified about the control measures to be implemented during this stage. The risk control measure and the safety procedures have to be reviewed at specified intervals so as to enhance the effectiveness and adapt to any changes in place. Proper documentation on how the implementation process is carried out is necessary. The fourth stage is the implementation of the selected control measure, whereas the final stage involves monitoring the control measure to ensure that there is no discrepancies and that the control measures are working correctly to control the risks. The evaluation is undertaken by management through a systematic monitoring and reviewing of the whole process. Owing to the dynamic and changing likelihood and consequences of risk occurrences, it is important for regular review of the risk management process so as to ensure that the management plans maintain relevance. The monitoring process could be done by measuring the actual progress against the risk control plans. Solution Proposals Apparently, effective risk management involves the proper identification of all the hazards in the industry and then carrying out a risk evaluation for each of the identified hazards so as to asses the severity of the risk and ultimately deciding upon its priority. During the risk assessment process, it is important to determine the risks which carry a high potential of causing harm, and risks which have greater likeliness to occur. Such risk ought to be given the first priority, and then the control of lesser serious risks should follow. This is to say tat managements should pay much attention to risks which seem very unlikely to cause harm but their occurrence may lead to major consequences. Solution Implementation Therefore, risk assessment ought to be a continuum rather than a discrete process. In this regard, risk management is an ongoing process and should be undertaken at various times in the management process. For instance, risk assessment may be carried out during the initial planning stage or when management is trying to implement changes in the work procedures. It may also be carried out when the industry is introducing a new plant, a new equipment, new people, new material or new substances in the industry. Risk assessment may also be carried out at regular or scheduled intervals which the management feel is appropriate in correspondence to the nature of the industry or the hazards present. Also it may be carried out as an obligation to legislative directions. There is need for management to carry out extensive consultations prior to implementation of any risk assessment program. The consultations are aimed at fostering cooperation among the employees, the management and all the other stakeholders involved. In this regard, consultation has to be undertaken during each and every stage in the risk management process. This may include during the initial planning, during the development of new work processes, fitting of new tool, machinery and equipment, during the identification of a hazardous activity among others. Those to be consulted during the risk management process include: workers, health and safety officers, health and safety representatives, health and safety committees, supervisors, contractors and any other stakeholders involved(English, 2011). Consultation has proven to be important in various ways. For instance, through consultation, the management is able to gather different expertise which is a prerequisite in the identification and analysis of hazards and risks. Consultation also provides the workers the opportunity to have ownership of the risks and the available solutions. Through the consultations, workers’ morale, motivation and satisfaction are bolstered. They feel appreciated and involved in the risk management process. This guarantees their undivided devotion and commitment to the implementation of the risk control measures as they tend to have a better understanding as to why they are being imposed. The consultations also boost teamwork among the workers. Thus, they are able to trust each other and communicate effectively. Consequently, there is an increase in productivity owing to the proper decision making procedures. Finally, consultation in the risk management process contributes to the positive development of a safety culture in the industries (English, 2011). In some industries, managements are obliged to apply various requirements by the Competent Authority and the Sector Authority. This is usually in specific instances where the industries are believed to be involved in high risk activities or materials or if the industry is English, P. F. (2011). Safety performance in a lean environment: A guide to building safety into a process (occupational safety & health guide series). (1 ed., pp. 22-12). Florida: CRC Press. considered a major hazardous facility. In this regard, a major hazard facility is an industry which produces, handles, processes or stores large amounts of hazardous chemical and goods/materials which are dangerous in nature. These include petroleum products. Such industries may include: gas-processing industries, chemical manufacturing industries and oil refineries inter alia. It is apparent that such industries are vulnerable to more catastrophic consequences to its employees, property, environment and the surrounding community. Therefore, the major hazard facilities are obliged to demonstrate their operational safety through a set of safety requirements specifically designed for them. This is known as the Safety Case. It stipulates the adequacy of such industries’ safety management systems. It specifies the prevention measures and strategies to be implemented so as to enhance a reduction in the consequences that may occur following a major incident.The managements of such industries are therefore expected to carry out a thorough assessment of the industries’ activities so as to identify all the prevalent hazards and potential major incidences after which they have to determine the appropriate control measures. As a requirement, the safety case implementation has to involve employees, health and safety representatives from various works groups and functional areas in the industry. Further consultation has to be made to the local municipal councils who are required to provide emergency plan preparation involving the safety of the local people just in case an occurrence of any major incident. Conclusion Comments on the project In conclusion, it is apparent that, irrespective the nature of an industry, risks and hazards are likely to occur. This necessitates the need for industry managements to put measures in place to avert the occurrences and consequences of such risk and hazards. Proper understanding of the techniques of hazard identification is a necessity for any management undertaking risk and hazard control. In the United Arab Emirates, thought there are no specific laws governing the management of risks, it is important for the industries to embrace risk proper risk control. Problems encountered The major challenge faced during this project is lack of detailed literature and information material covering the topic of management roles in the management of risks and hazards in with specific reference to the United Arab Emirates. Suggestions for further work Basing on the lack of extensive research within the framework of role of risk management in the UAE, I would recommend scholars especially those in the risk insurance discipline to carry out more extensive research and provide more quantitative as well as qualitative data to be used for more studies about risk management in the near future. References Asbury, S., & Ashwell, P. (2007). Health & safety, environment and quality audits: A risk-based approach. (1 ed., pp. 95-96). London: Butterworth-Heinemann. English, P. F. (2011). Safety performance in a lean environment: A guide to building safety into a process(Occupational safety & health guide series). (1 ed., pp. 22-12). Florida: CRC Press. Terterov, M., & Shoult, A. (2006). Doing business with the United Arab Emirates: Global market briefing. (2 ed., pp. 111-113). Abu Dhabi: GMB Publishing. Tripp, H., & Tripp, M. (2001). Success secrets to maximize business in United Arab Emirates : Culture shock! Success secrets to maximize business. (1 ed., pp. 54-58). Portland: Graphic Arts Center Publishing Company. Read More