Risk Management and Risk Acceptance

D. Diamantidis, University of Applied Sciences, Regensburg, Germany

OUTLINE

1. Introduction2. Risk definition3. General risk acceptance criteria4. Developments in current standards5. Risk Management and Safety measures6. Conclusions

Risk definition

a) Individual Risk

b) Societal Risk

Risk = Likelihood x Consequences

R = p x C (expected losses per year)

4

Direct Consequences“ those first order consequences which occur

immediately after an event”

• Fatalities• Injuries• Repair and replacement of damaged or

destroyed public and private structures• Relocation costs/temporary housing• Loss of business inventory/agriculture• Loss of income/rental costs• Community response costs• Cleanup costs

5

Indirect Losses“ may emerge much later, and may be much less

easy to attribute directly to the event”• Loss of income• Input/output losses of businesses• Reductions in business /personal

spending – “ripple effects”• Loss of institutional knowledge• Mental illness• Bereavement

Factors affecting risk acceptance

» Voluntary vs. involuntary» Controllability vs. uncontrollability» Familiarity vs. unfamiliarity» Short/long-term consequences» Presence of existing alternatives» Type and nature of consequences» Derived benefits» Presentation in the media» Information availability» Personal involvement» Memory of consequences» Degree of trust in regulatory bodies.

General Risk Acceptance Criteria

• Human Safety (Societal Risk - ALARP)

• Calibration

• Optimization (including human life - LQI)

II General Risk Acceptance Criteria

II General Risk Acceptance Criteria

Domains of experienced fatalitiesDomains of experienced fatalitiesDomains of experienced fatalitiesDomains of experienced fatalities

ALARP Risk Acceptance Criteria(societal risk)

1,00E-09

1,00E-08

1,00E-07

1,00E-06

1,00E-05

1,00E-04

1,00E-03

1,00E-02

1,00E-01

1,00E+00

1 10 100 1000

Number of Fatalities

Annual Frequency

Maximum allowable frequencyLower limit of ALARP region

ALARP Region

Hazard probability levels

Class Frequency Events / year

A frequent >10

B occasional 1-10

C remote 0.1-1

D improbable 0.01-0.1

E incredible 0.001-0.01

Hazard severity levels (Consequences)

Class SeverityCategory

Human losses

1 insignificant ---

2 marginal injuries

3 critical 1

4 severe 5

5 catastrophic 50

Risk Acceptability Matrixfor risk verification

AC: Acceptable NAC: Not AcceptableALARP: As Low As Reasonably Practicable

1 2 3 4 5

A ALARP NAC NAC NAC NAC

B ALARP ALARP NAC NAC NAC

C AC ALARP ALARP NAC NAC

D AC AC ALARP ALARP NAC

E AC AC AC ALARP ALARP

Example: dikes in Netherlands(Vrouwenvelder)

4.5 5 5.5 6 6.5 70

2

4

6

8

10x 10

8

H [m]

Economical optimal dike height

Optimum

Damage costs

Construction costs

Total costs

Relation between Failure Probability p f

and Reliability Index ββββ

p f 10-2 10-3 10-4 10-5 10-6 10-7 10-8 10-9

ββββ 2,33 3,09 3,72 4,27 4,75 5,20 5,61 6,00

Calibration through computation of ββββ values for various member types (piles, columns, beams etc. inherent i n the codes)

Cost evaluation including loss of human life

Life Quality Index (LQI)

LQI = gw e (1-w)

g: g: g: g: the gross domestic product per person per yearthe gross domestic product per person per yearthe gross domestic product per person per yearthe gross domestic product per person per yeare: the life expectancy at birthe: the life expectancy at birthe: the life expectancy at birthe: the life expectancy at birthw: w: w: w: the proportion of life spent in economic activity.the proportion of life spent in economic activity.the proportion of life spent in economic activity.the proportion of life spent in economic activity.

ICAF ICAF ICAF ICAF –––– ImpliedImpliedImpliedImplied costcostcostcost ofofofof avertingavertingavertingaverting a a a a fatalityfatalityfatalityfatality

ICAF = ge/4 (1-w)/(w)

ICAF = 2 – 5 Mio. $

� ∆∆∆∆gmax = g/2 (1-w)/(w)

g = gross domestic product

per year per person

e = life expectancy at birth

w =proportion of life spent in

economic activity

Optimization criterion

Costs:• Annualised investment costs• Annual maintenance/operation costs

Benefits:• Human risk reduction• Direct/Indirect financial loss reduction

Developments in current Standards

Limit State DesignPartial safety factor format (Eurocodes)LRFD format (ACI)Checks at member level

Performance Based DesignFEMA, ASCE, ATC, NZBCOverall check of the structure under extreme loads (earthquake, blast, fire)

Target Reliability (1 year ref. Period)new structures, ULS, component level

Minor Moderate Large

Large 3.1 3.3 3.7

Normal 3.7 4.2 4.4

Small 4.2 4.4 4.7

ConsequencesC

ost o

f saf

ety

Background Eurocodes, JCSS, 2001

Performance Based Design PBD

Loma Prieta earthquake, October 17, 1989Oakland, CaliforniaMagnitude: 6.9

Performance objectivesPerformance Level

NEHPR (ATC, 1996)

Performance LevelVision 2000

Short Description

Operational Fully FunctionalNo significant damage to

structural and non-structural components

Immediate Occupancy

Operational

No significant damage to structure; non-structural

components are secure and most could function if utilities

available

Life Safety Life SafetySignificant damage to

structural elements; non-structural elements are secured

but may not function

Collapse Prevention

Near CollapseSubstantial structural and non-structural damage; limit margin

against collapse

EQ Probability levels

EQ -Level Event Annual Exceedance Probability

Mean Return Period

I Frequent 4% 25

II Occasional 1.4% 72

III Rare 0.125% - 0.4% 250 - 800

IV Max Con-sidered

0.04% - 0.125% 800 - 2500

Performance Based Design

Hazard Levels Performance Levels

Hazard Levelfor EQ

Operatio-nal

OccupiableDamaged

Life Safe,Major Damage

Near Collapse

Frequent(50%/ 50yrs)

a b c d

Occasional(20%/50yrs)

e f g h

Rare(10%/50yrs)

i j k l

Max considered(2%/50yrs)

m n o p

Commonly selected performance objectives

PBD criteria

pE . pNP|E < pT

pE :propability of event

pNP|E:conditional probability of no

performance given event

pT :acceptable probability

PBD criteria (new structure)

pE . pNP|E < pT

pE : 2% in 50 years

pNP|E: 10%

pT : 4x10-5 per year

PBD criteria (old structure )

pE . pNP|E < pT

pE :4% in 50 years

pNP|E:25%

pT :2x10-4 per year (5 times larger)

P(C) = P(C|LE)P(L|E)P(E) < PA

P(E) : probability of occurrence of EP(L|E) : probability of local failure, L, given the occurrence of EP(C|LE): probability of collapse given the occurrence of L due to EPA : acceptable probability of global failure

RISK R:

R = P(C) x C < RA (acceptable Risk)

Probability of collapse

Consequences of collapse

Global failure extreme events (storm, flood)

Identifical and modellingof relevant accidental

hazards

Assessment of damage states to structure from

different hazards

Assessment of the performance of thedamaged structure

Assessment of the probability of occurence of different hazards

with different intensities

Assessment of the probability of different states of damage and corresponding consequences

for given hazards

Assessment of the probability of inadequate performance(s) of the damaged structure

together with the corresponding consequence(s)

Step 1 Step 2 Step 3

Identifical and modellingof relevant accidental

hazards

Assessment of damage states to structure from

different hazards

Assessment of the performance of thedamaged structure

Assessment of the probability of occurence of different hazards

with different intensities

Assessment of the probability of different states of damage and corresponding consequences

for given hazards

Assessment of the probability of inadequate performance(s) of the damaged structure

together with the corresponding consequence(s)

Identifical and modellingof relevant accidental

hazards

Assessment of damage states to structure from

different hazards

Assessment of the performance of thedamaged structure

Assessment of the probability of occurence of different hazards

with different intensities

Assessment of the probability of different states of damage and corresponding consequences

for given hazards

Assessment of the probability of inadequate performance(s) of the damaged structure

together with the corresponding consequence(s)

Step 1 Step 2 Step 3

Risk management and safety measures

a) Interpretation of new data

b) Definition of cost-based acceptance criteria

c) Implementation of safety measures

d) Periodic review

Evaluation of safety measures

• CIk investment costs (including design and construction costs)• CAk annual maintenance/operation costs• T desired lifetime of the measure • dRk risk reduction due to measure k divided into :

– dRHk reduction related to human risk– dRCk reduction related to economic risk (direct and indirect costs)

(CIk x δδδδ(T))/T + CAk < ICAF x dR Hk + dRCk

Conclusions

� Use of risk based methodologies� Implementation of risk acceptance criteria� Performance based approach� Protection/mitigation measures� Cost-benefit analyses� Periodic review