Implementing Risk Management
‘Risk management’ has become a buzz phrase in the international water utility sector. Spurred on by new codes of corporate governance, international initiatives on safe drinking water and a critical need to prioritise capital spend on ageing infrastructures and assets, the sector is reaching out for risk tools and techniques that can inform better and more credible decision-making. Of course, the water utility sector has been managing risks to public health through drinking water treatment and risks to the environment through wastewater treatment and discharge control for centuries, but the new emphasis within the stakeholder society of transparent decision-making, particularly with respect to balancing costs and benefits is requiring a right-to-know on how decisions are made and the analyses that support them.
Content Table
- Risk Analysis Strategies for Credible and Defensible Utility Decisions
- Resources
- References
- Related Articles
Risk Analysis Strategies for Credible and Defensible Utility Decisions
Risk analysis strategies for Credible and Defensible Utility Decisions is the theme of research funded by the American Waterworks Association Research Foundation (AwwaRF). Utility led, the report aims to:
- Complete an authoritative review of risk tools used in practice
- Benchmark the risk management capabilities of a selected water utilities
- Provide guidance on the implementation of risk management within the sector.
- Address the aspects of organisational cultures that foster good risk management practice.
- Move beyond the standards, frameworks and guidance manuals on risk management to secure good practice and supportive organisational culture on the ground
The research addressed in the report has developed a series of high level messages for utility managers on risk management, developed from the in-depth interviews, case studies and utility placements that informed this research. Their results are entirely transferable across the multi-utility sector:
- There remains a tendency to view risk assessment as an end rather than as a means to inform company exposures and opportunities for innovation.
- The value of risk management requires greater advocacy at a sectoral level and within individual organisations.
- The promotion of water safety plans is driving an integrated approach to public health risk analysis from catchment (watershed) to tap. Implementation of the water safety plan approach is now a powerful vehicle for a renewed emphasis on risk management within water utilities.
- Risks and values are intimately linked. However, there is little explicit expression, at present, of the risks that utilities are prepared to accept, whether the utilities have private, public or corporatised governance structures.
- Failure to manage risk in a climate of efficiency gains may leave the sector exposed to the types of organizational disaster witnessed with the fatal outbreak in Walkerton, Ontario. Regardless of its complexity, the tolerance of risk within an organization must be discussed and confronted.
- Securing a risk management culture on the ground within a water utility requires effective knowledge management, tenacity in addressing the underlying causes of incidents and strong leadership. Further research that addresses risk management cultures within the sector is warranted.
- The compelling case for effective risk management should be used by water utilities as the core argument for moving towards an organizational structure that can be more strategic and forward-thinking.
Resources
The issues in this article are addressed in the research, Risk Analysis Strategies For Credible and Defensible Utility, led by Prof. Simon Pollard of Cranfield University UK and Prof. Steve Hrudey of the University of Alberta.
AwwaRF Report 91168
Author(s): Simon Pollard, Steve Hrudey, Paul Hamilton, Brian MacGillivray, John Strutt, John Sharp, Roland Bradshaw, William Leiss, and Alan Godfree
Publication Date: 04 Aug 2007 • ISBN: 9781843398240
References
S.J.T. Pollard, J.E. Strutt, B.H. MacGillivray, P.D. Hamilton and S.E. Hrudey (2004) Risk analysis and management in the water utility sector – a review of drivers, tools and techniques, Trans. IChemE Part B: Process Saf. Environ. Protect., 82(B6): 453-462.
Pollard, S.J.T., Hrudey, S.E., Reekie, L. and Hamilton, P.D. (2005) (eds.) Proc. AwwaRF International Workshop “Risk analysis strategies for better and more credible decision-making”, Banff Centre, 6-8th April, 2005, Banff, Alberta, Canada, ISBN 1 861941 15 3.
MacGillivray, B.H., Hamilton, P.D., Strutt, J.E. and Pollard, S.J.T. (2006) Risk analysis strategies in the water utility sector: an inventory of applications for better and more credible decision making, Crit. Rev. Environ. Sci. Technol. 36: 85-139.
S.J.T. Pollard, J.E. Strutt, B.H. MacGillivray, J.V. Sharp, S.E. Hrudey and P.D. Hamilton (2006) Risk management capabilities – towards mindfulness for the international water utility sector. In: Water Contamination Emergencies: Enhancing our Response, Thompson, K.C. and Gray, J. (eds.), Royal Society of Chemistry, Cambridge, ISBN 0 85404 658 5, pp. 70-80.
