Risk: Concept & Components

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Whenever there is a likelihood scenario of losing someone or something of value, there is risk associated. In a broader perspective, risk can also be understood as potential for loss. In financial terms, risk is either pure or speculative. If there is no chance of gain, the risk is pure while in the case of speculative risk, there is some chance of winning or gaining as well. Not taking care of your health implies pure risk while buying an insurance plan for the same is speculative risk.     

‘Risk’ can also be categorized as ‘Voluntary’ such as, betting on a cricket match and ‘Involuntary’ such as, an earthquake or any other disaster for that matter. Although widely communicated, the usage and meaning of the term ‘Risk’ differs with different activities or events and their nature or characteristic. Therefore, it is hard to come down to a single definition of the word, suitable for all the possible cases.

In the field of Environmental Health and Safety (EHS), the term ‘Risk’ is widely accepted as the product of ‘Probability’ and ‘Severity’ i.e. Risk = Probability x Severity; Where Probability means a loss event in terms of frequency of occurrence and Severity means the impact of the event in terms of fatality and loss. This Risk Matrix is used during risk assessment to designate the level of risk involved with a certain action, event or condition.

The definition, explanation and interpretation of ‘Probability’ and ‘Severity’ depend on the risk tolerance level of the concerned entities, be it an individual, organization, community, businesses or an entire nation. Further, after interpreting the ‘Probability’ in terms of frequency of occurrence and the ‘Severity’ of impact in terms of loss, the ‘Risk Assessment Matrix’ can also be used to calculate the risk quantitatively. In industrial sector the Matrix is commonly used as risk assessment tool to eliminate the risk associated with hazardous condition or unsafe act. The quantitative analysis and thus obtained numerical representation of potential risk event makes it easier for the concerned supervisors to prioritize mitigation actions based on the level of damage or loss predicted by the matrix.

Sometimes, risk is mistaken for other similar terms such as hazard, threat or vulnerability. Although they all help to explain risk more clearly, essentially they carry different meanings. Hazard is potentially damaging physical event or condition that may cause loss of life, property or environment. A hazard does not take probability of the event occurring into account whilst stating a risk we need to incorporate the probability factor as well.

Threat, on the other hand, is more of an abstract concept where both probability and severity of impact is hard to specify and analyze. For example, terrorism is a threat but very hard to specify its extent of impact and frequency of occurrence. Vulnerability can be simply understood as a fault within the system itself which is often exploited by external threats. For example, not having adequate security measure is a vulnerability which can be exploited by terrorists to create disaster.

In Disaster Risk Management (DRM) context, a disaster risk is a function of hazard, exposure and vulnerability i.e. Disaster Risk = function (Hazard, Exposure and Vulnerability). A hazard can be natural or human-induced and same is true for a potential disaster event. A hazard seems to be the primary component which, in combination with vulnerability and exposure, could give rise to the potential for loss, we call risk. Failure to mitigate such risks and/or their impacts beforehand could eventually cause a disaster.     

We may not be able to control all the hazards or mitigate their impacts so the rationale behind the DRM planning is to reduce the vulnerability and the exposure, instead. For example, to control probable impact of a disaster caused by a natural hazard, such as an earthquake or a landslide, we can minimize our vulnerabilities by building earthquake safe buildings and resilient infrastructures. Similarly, disaster exposure can be contained by relocating populations and property away from hazardous zones such as earthquake fault lines or landslide prone areas.

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Man-Made Disasters: A Quick Inquiry!

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Man-made disasters are essentially the results of human activities or to put it more accurately, incoherent activities. Unlike natural disasters where a natural hazard is a direct contributing factor, human-induced disasters are caused by unsafe act or existing unsafe conditions. The development of unsafe or hazardous condition is the accumulation of various unsafe activities over a period of time, often inter-related.

Sometimes, man-made disasters are also resulted from natural disasters. For example, floods or earthquake could lead to social unrest, political upheaval and economic stress which then increase the vulnerabilities of people. Another broader perspective emphasizes that all disasters, natural or man-made, are basically caused by human, since we choose to stay in close proximity to a hazard without realizing our vulnerabilities to the same.

Usually it is hard to provide warning or forecast a man-made disaster. In many cases we have to rely on historical data, our social conditioning, vulnerabilities, probability theories and statistics to assume the likelihood and severity of man-made disasters. Still, the nature and extent of man-made disasters cannot be predicted accurately.

Although safety can be improved through awareness, monitoring, maintenance and capacity building, one hundred percent security from man-made disaster is practically unattainable for any system. There is always something which can go wrong. Suddenly, 1984 Bhopal Gas Tragedy in India and 1986 Chernobyl Nuclear Catastrophe in Ukraine come to mind.

In the event of industrial or technological failures, often the accidents occur due to human error (unsafe act) or technical malfunction (unsafe condition). The disaster can also spread out beyond the neighborhood thru wind, water as well as travellers. Besides, lack of awareness and preparedness may also contribute to a serious man-made disaster. Rapidly growing population, infrastructures and industrialization are also increasing our vulnerabilities, especially in developing countries such as ours, hence the high frequency of man-made disasters.

Newspapers are crowded with various types of man-made disasters every day. Most common are road accidents and building fires. In the month of August of 2016 alone, Nepal witnessed two major road accidents in Kavre and Chitwan districts killing dozens of people in each. Industrial accidents including chemical spill, fire, leaks, explosions, cyber-attacks, etc. are also commonly reported in media these days. Unfortunately airplane accidents are also frequently reported in Nepal, pretty unusual considering the flight safety statistics of other countries.

Man-made disasters such as, civil conflicts, warfare, arson and terrorism are becoming more frequent in today’s world. Nuclear hazards cannot be termed as common but their impact could be no less than catastrophic. After the 2011 Earthquake and Tsunami in Japan, the Fukushima Nuclear Disaster brought terror not only for the Japanese but to the entire world. Same was true when a couple of Boeing planes hit the twin towers in New York City.  

It shouldn’t sound overrated to state that the environmental and ecological disasters, as we understand them, are basically man-made events. Air, water and soil are being polluted left and right, especially in developing countries where policies are unable to provide adequate scrutiny. Very little is being done to manage ever growing garbage and industrial toxic wastes. This in turn is causing chronic health hazards, hence more diseases, epidemics and loss of lives.

In one way or another, humans are greatly responsible for the loss of biodiversity, species, forests and natural habitats of wildlife, causing adverse effects to natural ecosystems beyond borders. In the meantime, global warming, climate change and ecological disorders are also the result of human activities accumulated in just over the last few centuries. The climate change effects may not be local, direct or prompt but they are showing up in global scale as weather patterns are changing all over the planet, several species are going extinct, glaciers and polar ice caps are melting rapidly, and sea level is rising faster than ever before:(

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Natural Disasters: A Brief Display of Categorization

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Natural disasters can strike us in many forms including earth’s seismic activities or catastrophic weather events. With every passing year the worldwide data shows that both the frequency and magnitude of natural disasters are in the rise. Since these disasters occur often unexpectedly or with minimal warning, those who are not prepared and don’t respond swiftly, suffer immense damages and loss.

A recent report by the United Nations Office for Disaster Risk Reduction (UNISDR) stated that around 1.35 million people were killed by natural hazards over the past 20 years, not to mention the sufferings they brought to millions of others who survived or were left behind. It is also important to note that majority of these deaths occurred in low- and middle-income countries and that over half of them died in earthquakes, while the rest lost their lives to weather and/or climate related disasters.

In broad categorization, natural disasters could be divided into four major sections based on their origin namely, geological disasters, mountain area disasters, wind or water related disasters and climate related disasters.

Geological Disasters

Earthquake and volcano are the result of violent seismic activities below the surface of the earth, hence called geological disasters. Research shows that there is an intimate relation between the movement of the Earth’s crust, the occurrence of earthquake and the formation of the great Himalayan range in this part of the world. Even today, the Indian plate is squeezing underneath the Tibetan plate at the rate of about 25 millimeters per year. The consequence is evident in the form of major earthquake impacts, such as the recent 2015 Gorkha Earthquake-Nepal, around the Northern Indian-Subcontinent region for centuries.

Volcano could be described as outpouring of magma from the core of the Earth. Japan, Italy, Indonesia and Iceland are frequently affected by this disaster.

Mountain Area Disasters

Although occurring above the Earth’s surface, mountain area disasters such as landslides and avalanches are yet another type of disasters which can make life vulnerable in the mountains and Himalayan regions. The basic disaster mechanism is similar in landslide and avalanche as both occur in slopes and could be the result of heavy rain, soil erosion, earthquake, storm or volcanic eruptions. Most often, landslides involve soil, rock and mud while avalanches involve snow and ice.

The 2014 avalanche, caused by the effect of Hudhud Cyclone, in the high-mountains of Himalaya is still fresh in Nepalese memory. Unlike avalanches which are mostly observed in high mountain ranges, landslides occur in smaller hilly slopes.

Wind or Water Related Disasters  

Tsunami, Cyclone, Flood and Drought are some of the major wind and water related disasters frequently occurring in Indian-Subcontinent region. Due to undersea earthquake or volcanic eruption, Tsunami brings high sea waves and massive destruction to the coastal regions and beyond. The 2004 Indian Ocean Tsunami was the result of an earthquake which occurred off the west coast of Sumatra, Indonesia.

Cyclones cause massive sea-water flooding especially along the coastal region due to heavy wind, storm and extensive rainfall. They are also known as typhoon in Japan and as Hurricane in the USA. On the other hand floods occur due to heavy rainfalls, river blockage, dam failure, snow melting, etc. and can be divided as flash floods, river floods and coastal floods. While floods are inundation or accumulation of water, droughts are shortage of the same which may last for months or years.

Climate Related Disasters

Heat wave, cold wave, global warming, sea-level rise and ozone depletion are some of the examples of the climate related disasters. Heat waves and cold waves are the result of extreme surface air temperatures over an extended region for several days or weeks. Every year hundreds of fatalities are recoded in India, Pakistan, Bangladesh and Nepal due to this calamity.

Due to the rise of greenhouse gases such as methane, carbon dioxide, and nitrous oxide, the Earth is warming up causing or influencing other chain of disasters globally, hence the term Global Warming. Directly or indirectly, Global Warming is also responsible for seal-level rise and ozone depletion which are lately spreading a sense of havoc around the globe. Indian Subcontinent countries such as Bangladesh and Mauritius are highly vulnerable to the impacts of Sea-level rise.

Observing the high death tolls of last 20 years, the Sendai Framework for Disaster Risk Reduction makes it one of the highest priorities to save lives around the world, especially in underdeveloped and developing countries. Since the countries which contribute least to greenhouse gas emissions are the ones suffering greatest threat of climate change, it makes more sense to focus on mitigating the impacts of climate change in these underprivileged countries.

The disaster risks and vulnerabilities in low and middle-income countries need to be addressed through improved policies and better preparedness initiatives. Building resilient infrastructures and societies should undisputedly be embedded into the comprehensive development plans at local, national as well as regional levels. Although, the 21st International Conference of Parties (COP 21), United Nations Framework Convention on Climate Change (UNFCC), in December 2015 seemed to have taken promising steps in this direction, somehow it felt too little too late. We may not realize this in our everyday hustle, but we are seriously running out of time and plentiful needs to be done.

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Earthquake Impact: Iron & Steel Industries in Nepal

Nepal Steel and Iron Rolling Mills Association (NSIRMA) assured that although post-earthquake Nepalese steel and iron industry might be utilizing around 48% of its production capacity, it would be sufficient to meet the demand. When the Gorkha Earthquake rocked the nation, there were around 20 steel and iron factories operating across the country. This sector consists of industries like the rebar industry, corrugated iron industry, and wire industry, among others. The steel rod industry, under normal conditions has an estimated annual production capacity of 1.5 million tons. Likewise, the corrugated iron industry and wire industry has an annual production capacity of around 300,000 tons and around 200,000 tons respectively. (New Business Age, July 2015)

Reinforcement Steel Bar Industries….

CGI Sheet Industries….

GI Wire Industries….

(Note: Please click the link below to see the detail findings

Gorkha Earthquake Impact: Nepalese Iron & Steel Industries

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Earthquake Impact: Cement Industries in Nepal

Cement Manufacturers Association of Nepal (CMAN) claimed that the ban on building construction immediately after the Gorkha Earthquake induced an estimated 85 percent dip in the demand for cement. As per CMAN there were 46 cement industries producing a total of around 4 million MT cement every year before the earthquake. Major 16 cement industries had the annual production capacity of around 3.5 million MT cement nationwide. Please see Table 1.

Table 1. Factory location and production capacity of Cement industries in Nepal (Source: NSET)

table-1

The national annual demand for cement before the earthquake was around 5 million MT while the annual projected demand increased to 7 million MT after the earthquake. 

It is worth mentioning here that around 2 million MT of additional cement would be required to meet reconstruction demand alone; as projected by Post Disaster Needs Assessment. This demand would spread out in next couple of years or so hence might not overburden the industries’ annual targets in the future. Also, CMAN estimated that due to reconstruction activities there would be only 25% hike in total demand which could be easily sustained by Nepalese cement factories as most of them were operating 50% below their installed capacity even before the earthquake….

(NOTE: Please click below link to view the entire article)

Cement Industries in Nepal: Aftermath of the Gorkha Earthquake 2015

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Earthquake Impact: Brick Industries in Nepal

As per FNBI (Federation of Nepal Brick Industries) estimation there are a total of 850 registered brick industries in Nepal. Around 108 brick factories residing inside Kathmandu valley produced around 430 million bricks while nearly 3 billion bricks were produced by 742 brick industries outside the valley. The total estimated annual production capacity was around 3.4 billion bricks before the earthquake. Please see Table 1.

Table 1. Brick industries and their production capacity in Nepal

table-1

After the Gorkha Earthquake, there were 2 recorded fatalities and 6 injuries in brick factories all over the nation. Extensive major and minor damages to chimneys, kilns and green bricks were recorded in factories throughout the nation. The total damage loss was estimated to be NPR 1,126,111,700. Please refer the Table 2 below for a detailed earthquake damage loss estimation of brick industries in Nepal.

Table 2. Earthquake damage loss estimation of brick industries in Nepal (Source: FNBI)

table-2

(NOTE: Please click below link to view the entire article)

Brick Industries in Nepal: Before and after the Gorkha Earthquake 2015 

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Emergency Preparedness & Response (EPR) Planning for Business Organizations

Although an EPR planning seeks inputs from various layers of management within an organization, the leadership of top level management is critical for its successful implementation. First off, business managers should sincerely set their organization-level resilience objective and scope while formulating their contingency plan. She/he could start with a basic understanding of the EPR planning activities and later move ahead with an easy-to-follow steps to develop her/his own customized EPR plan.

At times, developing an effective Emergency Preparedness & Response plan can be a very challenging, time-consuming as well as cumbersome task for organizations. Thus, it is important to grasp the overall picture by first breaking it down into simple steps to follow. For the ease of understanding below we’ve divided the EPR planning into 5 major steps.

Step 1 – Committing to EPR planning

Step 2 – Conducting a thorough assessment of hazards/ vulnerabilities in and around the facility

Step 3 – Developing an emergency response plan

Step 4 – Implementing emergency response plan

Step 5 – Helping communities prepare for and respond to emergencies

(Note: Please click below link to view the entire article)

EPR planning in Nepal: How relevant today?

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