Dr Sukhy Barhey and Emily Sin from BMT Group examine some of the opportunities and challenges for storage operators in Singapore when submitting a safety case
Requirements to provide safety cases for storage terminals are increasingly global. In line with this trend, the implementation of the safety case regime in Singapore provides an opportunity for terminals to review lessons learnt and apply them in developing compliant safety cases. Terminals can also gain a greater understanding of operations and Capex projects, and optimise current processes.
The development of a safety case is a communication exercise through which operators demonstrate that they fully appreciate the potential hazards present at their terminals and how these are managed, such that the risks are reduced to as low as reasonably practicable (ALARP). While it is recognised that terminals are good at managing the well understood hazards, often of high frequencies and low consequences (e.g. occupational health and safety hazards), the need to appropriately assess and manage risk from low frequency events with high consequences (defined as major accidents) may present challenges.
Aside from safety teams and senior management, the complexity involved in understanding and managing risks from major accidents required in developing a safety case is often not fully appreciated. It involves a combination of predictive and technical assessment.
The predictive aspect is the assessment of major accident risk arising from terminal operations. It requires a structured and systematic approach so that the risk to people is assessed and controlled. This involves identifying potential major accident hazards (MAHs) and major accident scenarios (MASs) through comprehensive reviews of safety and risk studies (e.g. QRAs, HAZIDS and HAZOPs), incident records and major accident reports such as the Buncefield fire.
The technical aspect requires an in-depth review of the reliability and adequacy of the safeguards used to manage risks. This involves concerted effort from all terminal departments to provide their expertise and facilitate the understanding of critical safety systems.
Challenges in developing a safety case
Establishing a representative operational basis
In developing a safety case, one of the challenges is to consider how best to represent the operational flexibility that is possible in terminals. How does one present the risk in storage terminals, where the range of materials, quantities and locations may vary daily?
For the purposes of a safety case this variability must be represented by a single configuration. If a prudent basis for risk assessment is adopted, the representation would be one that is the worst case possible for all locations within the terminal. This would result in situation where the assessed risk will be unacceptably high. Under such circumstance, in theory, the terminal must implement measures that reduce risk to ALARP, requiring the implementation of extensive controls. The investment in Capex and increased Opex to achieve this reduction would be prohibitive, leaving the only option of ceasing operations. This is neither a viable approach, nor a realistic representation of normal operational risks.
To address this, a baseline must be agreed with the regulator. This baseline should reflect daily operations (a good starting point is to select a configuration on a specific day) but also consider locations where risk to people may be higher should a hazardous material be stored in a specific location. This requires careful analysis and consideration. If the configuration leads to an underestimation of risk, the safety case will not be accepted or fail verification or inspections. Should the configuration unreasonably restrict operational flexibility, there could be commercial implications. If operational demands require a configuration significantly different from that used as a baseline, the safety case may need to be updated. This can be avoided by spending time in a workshop with the key stakeholders; operations, maintenance, commercial, safety and management to agree the baseline, before the development of the analysis and risk arguments in the safety case.
Defining an appropriate risk appetite
Having established a baseline configuration and identified the major accident hazards (MAHs) and scenarios (MASs), a set of safety critical events (SCEs) can be derived, through a process of grouping and filtering, to represent major accidents. These SCEs are used to demonstrate how risks are managed. This simplification is necessary to significantly reduce the large volume of work that would otherwise arise. For this process to work effectively, it is necessary to have an appropriately calibrated risk matrix and a clear and logical grouping and filtering process.
Every organisation has its own risk matrix. The regulations do not present, and indeed should not present, a risk matrix, since this is the tool that defines the organisation’s risk appetite and tolerance. However, experience in developing safety cases demonstrates that organisations need to appreciate that a risk matrix designed for occupational health and safety risk will not be appropriate for assessing major accidents. Such a risk matrix will not have the granularity required to identify a safety critical event. Applying a poorly calibrated risk matrix to evaluate MASs will create problems in demonstrating the risk reduction impact of controls, which would lead the organization to identify and implement new controls that may not be necessary.
Opportunities resulting from developing a safety case
Understanding of terminal operations through Bowtie diagrams
One of main advantages of going through the development of a safety case is the clarity it brings in understanding the major risks and how risk controls are organized to reduce risk. This is well demonstrated through the use of Bowtie diagrams, a simple yet a powerful way of understanding major accident scenarios, the risk controls and how the integrity of those controls is maintained.
Bowtie diagrams give clarity on the balance between preventative controls (those that prevent an accident) and those that mitigate the impact. Through appropriate use of the Bowties, organisations can ensure that the resources they have committed are targeted to gain the maximum return in terms of risk reduction.
Identifying areas of improvement through ALARP demonstration
Safety cases also provide inputs into terminal development and improvements plans through the ALARP demonstrations, a critical element that shows considerations have been given to implement new controls or enhance existing controls. It is recognised that the implementation of all suggested measures is impracticable, hence appropriate cost benefit analyses (CBA) are conducted to select the controls that would provide significant risk reduction compared to the effort and cost involved.
The drawback of this approach is that it can be contentious when the benefits are evaluated and monetized as the risk to people is considered. In addition, the principle of gross disproportionality must be applied.
To help perform CBA at a level acceptable to the regulators and avoid the pitfalls, BMT implements a framework that allows us to select (or reject) measures in a way that stands up to detailed scrutiny and addresses the challenges of the traditional CBA. This framework gives appropriate consideration of benefits, cost and effort in selecting the measure to be impended and uses risk to guide implementation. The simplified approach has shown to be extremely useful in guiding terminals to make sound risk-based decisions.
In summary, while safety case regimes are often government mandated, experience tells us that the value beyond achieving compliance is in the process itself. By developing a safety case and going through the exercise, an organisation opens up opportunities to deepen their understanding of major accident risk and improve their preparedness and capacity for an effective management of risk in line with the resources available.
Dr Barhey will be speaking more about submitting a safety case and how terminals should navigate this new regulation on the first day of the Tank Storage Asia conference on September 26 & 27. For more information, visit www.tankstorageasia.com.