192
13 Tolerance and Acceptability
is obviously a source of ill-conditioned behaviours and conclusions. In order to
perform sensible prioritization, risks must be compared to corporate and societal
risk tolerance.
13.2.1 Corporate Risk Tolerance (CRT)
Corporate Risk Tolerance (CRT) is a “business” function linking the financial
consequences a corporation views as a tolerable losses at various levels of probability.
Thus CRT should be seen primarily as a perceived tolerance risk threshold, the real
financial limit being generally higher.
CRTs are unique to each corporation, operation, project and timing (within the life
cycle) and can be determined through facilitated questions/answers using a methodology we have developed over the years, after developing “point-by-point” curves
in workshops with boards of directors around the world and looking at examples
developed by others.
In recent decades “standardized levels of risk reduction” have been formulated, and
at least three of these definitions are now in common use among analysts. These three
levels of risk mitigation also represent a convenient way to elude explicit tackling of
risk acceptability, especially when the delicate theme of human life has to be dealt
with.
ALARA is an acronym for the phrase “as low as reasonably achievable” (Wilson and
Crouch 1982). It is most often used in reference to chemical or radiation exposure
levels.
ALARP stands for “as low as reasonably practicable”, and is a term often used in
the milieu of safety-critical and high-integrity systems. The ALARP principle is that
the residual risk shall be as low as reasonably practicable (Wilson and Crouch 1982).
For a risk to be ALARP it must be possible to demonstrate that the cost involved in
reducing the risk further would be grossly disproportionate to the benefit gained. The
ALARP principle arises from the fact that it would be possible to spend infinite time,
effort and money attempting to reduce a risk to zero. It should not be understood as
simply a quantitative measure of benefit against detriment. It is more a best common
practice of judgment of the balance of risk and societal benefit.
BACT (best available control technology). For example: an emission limitation based
on the maximum degree of emission reduction (considering energy, environmental,
and economic impacts) achievable through application of production processes and
available methods, systems, and techniques. BACT does not permit emissions in
excess of those allowed under any applicable Clean Air Act provisions. Use of the
BACT concept is allowable on a case-by-case basis for major new or modified emissions sources in attainment areas and applies to each regulated pollutant.
13 Tolerance and Acceptability
is obviously a source of ill-conditioned behaviours and conclusions. In order to
perform sensible prioritization, risks must be compared to corporate and societal
risk tolerance.
13.2.1 Corporate Risk Tolerance (CRT)
Corporate Risk Tolerance (CRT) is a “business” function linking the financial
consequences a corporation views as a tolerable losses at various levels of probability.
Thus CRT should be seen primarily as a perceived tolerance risk threshold, the real
financial limit being generally higher.
CRTs are unique to each corporation, operation, project and timing (within the life
cycle) and can be determined through facilitated questions/answers using a methodology we have developed over the years, after developing “point-by-point” curves
in workshops with boards of directors around the world and looking at examples
developed by others.
In recent decades “standardized levels of risk reduction” have been formulated, and
at least three of these definitions are now in common use among analysts. These three
levels of risk mitigation also represent a convenient way to elude explicit tackling of
risk acceptability, especially when the delicate theme of human life has to be dealt
with.
ALARA is an acronym for the phrase “as low as reasonably achievable” (Wilson and
Crouch 1982). It is most often used in reference to chemical or radiation exposure
levels.
ALARP stands for “as low as reasonably practicable”, and is a term often used in
the milieu of safety-critical and high-integrity systems. The ALARP principle is that
the residual risk shall be as low as reasonably practicable (Wilson and Crouch 1982).
For a risk to be ALARP it must be possible to demonstrate that the cost involved in
reducing the risk further would be grossly disproportionate to the benefit gained. The
ALARP principle arises from the fact that it would be possible to spend infinite time,
effort and money attempting to reduce a risk to zero. It should not be understood as
simply a quantitative measure of benefit against detriment. It is more a best common
practice of judgment of the balance of risk and societal benefit.
BACT (best available control technology). For example: an emission limitation based
on the maximum degree of emission reduction (considering energy, environmental,
and economic impacts) achievable through application of production processes and
available methods, systems, and techniques. BACT does not permit emissions in
excess of those allowed under any applicable Clean Air Act provisions. Use of the
BACT concept is allowable on a case-by-case basis for major new or modified emissions sources in attainment areas and applies to each regulated pollutant.