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INTRODUCTION

Figure 1.1: Workplace safety signs


Source: http://hospitalityrisksolutions.com
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Introduction to
OSH Risk
Management
1
1

4. Describe the process of OSH risk management; and
5. Relate OSH risk management to OSH management systems and
business management.
LEARNING OUTCOMES
By the end of this topic, you should be able to:
1. Describe management commitment in managing OSH at the
workplace;
2. Apply basic OSH terminology;
3. Explain the importance of OSH risk management at the workplace;
TOPIC 1 INTRODUCTION TO OSH RISK MANAGEMENT

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Look at Figure 1.1 that depicts several workplace safety signs. Do you know that
work activities pose potential risks and hazards? The safety and health of
employees are jeopardised especially if these risks are not properly monitored
and controlled. All employees are entitled to safe and healthy work conditions,
regardless of whether they are working in field work, at the office or at any other
workplace setting. They deserve a safe work environment. Hence, employee
safety and health should be a primary concern of all organisations. In other
words, employers should develop strategies and policies to ensure the
establishment of safe and healthy workplaces.
MANAGEMENT COMMITMENT IN
MANAGING OSH AT THE WORKPLACE
1.1
In managing Occupational Safety and Health (OSH) issues at the workplace, top
management commitment is crucial. Management must acknowledge that OSH
matters are critical as part of the business operations. Management shall oversee
the OSH matters from four points of view (Stranks, 1994) as listed below:
(a) Legal requirements
All organisations need to comply with certain legal requirements related to
OSH. In Malaysia, the most widely used OSH laws are Occupational Safety
and Health Act (OSHA) 1994, Factories and Machinery Act (FMA) 1967,
Atomic Energy Licensing Act (AELA) 1984 and Petroleum Act (Safety
Measures) 1984.
(b) Social perspective
Management should remember that employees are an important feature in
the operation of an organisation. They are the assets through which the
company can achieve its objectives. Therefore, management should ensure
that the workplace is safe for their employees.
(c) Financial aspects
Management should be aware of the financial impact of any accident that
occurs at the workplace. The impact might be significant and result in
additional costs to the organisation. Hidden costs incurred through loss of
productivity, a tarnished company image, loss of purchase orders, customer
dissatisfaction and legal implications should also be considered by
management.
(d) Human factors
This factor involves the influence of human values on employees
understanding of OSHs importance at workplace. It involves organisation
culture, top management leadership and commitment and also system
approach, by taking into account human capabilities and capacities to
deliver their work.
TOPIC 1 INTRODUCTION TO OSH RISK MANAGEMENT 3
As part of the legal requirements under Section 16, OSHA 1994, management
must establish a Safety and Health Policy for the workplace. This is considered a
pledge by top managements in terms of their commitment to protect the safety
and health of employees at the workplace. This document is the basis for all OSH
activities within the organisation. As part of the management commitment, this
document should be reviewed regularly especially with regard to individual
responsibilities and accountabilities. Once the document is approved, it should
be communicated to all employees.


1. What is the importance of managing OSH at the workplace?
2. What is the role played by top management in managing OSH at
the workplace?
SELF-CHECK 1.1
TERMINOLOGY
Table 1.1 shows the commonly used terminology in relation to OSH risk
management.

Table 1.1: Commonly used OSH Terminology
Terminology Meaning
Hazard Source, situation or act with a potential for harm in
terms of human injury or ill health or a combination of
these. (OHSAS 18001:2007 Standard)
Hazard Identification Process of recognising that a hazard exists and defining
its characteristics. (OHSAS 18001:2007 Standard)
Risk Combination of the likelihood of an occurrence of a
hazardous event or exposure and the severity of injury
or ill health that can be caused by the event or exposure.
(OHSAS 18001:2007 Standard)
Risk Assessment Process of evaluating the risk that arises from a hazard,
taking into account the adequacy of any existing
controls, and deciding whether or not the risk is
acceptable. (OHSAS 18001:2007 Standard)
Risk Management Total procedure associated with identifying a hazard,
assessing the risk, putting in place control measures,
and reviewing the outcomes. (DOSH HIRARC
Guidelines)
1.2
TOPIC 1 INTRODUCTION TO OSH RISK MANAGEMENT

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OSH RISK MANAGEMENT
1.3
OSH risk management is crucial to industry and is closely related to the
performance of the organisation. Ridley & Channing (1999) addressed the roles
played by OSH risk management in the industry, describing them as follows
below:
Consider the impact of certain risky events on the performance of the
organisation;
Devise alternative strategies for controlling these risks and/or their impact on
the organisation; and
Relate these alternative strategies to the general decision framework used by
the organisation.

OSHA 1994, under General Duties of Employer and Self-Employed Person,
stated that the employer, as far as it is practicable, is to provide and maintain a
safe plant and system of work and also to make arrangement for safe use,
operation, handling, storage and transportation of plant and substances. Hence,
the employer must systematically identify and assess hazards to which
employees are exposed. The employer must also conduct inspections of the
workplace review safety and health information; evaluate new equipment,
materials, and processes for hazards before they are introduced into the
workplace; and assess the severity of identified hazards and rank those hazards
that cannot be corrected immediately according to their severity. This whole
process is known as risk management.

In achieving a safe and healthy workforce and work environment, the
organisation must integrate OSH risk management into its daily operations.
According to Commonwealth Australia 2005, there are six elements of effective
OSH risk management.

Now let us look at each element.
(a) Senior management leadership and commitment means that senior
management is actively involved in and committed to improving OSH
performance within the workplace.
(b) The active involvement of each individual at the workplace means that
each person contributes to the consideration of safety at every level of the
work environment. In other words, OSH is everybodys business.
TOPIC 1 INTRODUCTION TO OSH RISK MANAGEMENT 5
(c) Effective communication through consultation will establish a framework
that allows for active communication between all parties so that:
Different points of view can be presented;
All views can be considered before decisions are made; and
There is room for negotiation about the different points of view with the
aim of achieving resolution of any disputes.
(d) Provision of appropriate information, education and training means that
each individual has the necessary knowledge, skills and information to
undertake their functions and responsibilities in a safe manner.
(e) Hazard identification, risk assessment and risk control at workplace level
may be defined as the systematic application of management policies,
procedures and practices to the four-step process of:
Identifying the hazard;
Assessing the risk;
Controlling the risk; and
Monitoring and reviewing the risk management process.
(f) An OSH Management Information System is designed to provide up-to-
date information on an organisations OSH performance.


1. How do you ensure the effectiveness of OSH risk management at
the workplace?
2. What are the roles of OSH risk management in industry?
SELF-CHECK 1.2

TOPIC 1 INTRODUCTION TO OSH RISK MANAGEMENT

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OSH RISK MANAGEMENT PROCESS
1.4
OSH risk management is a term given collectively to the process of identifying
workplace hazards, assessing their risks, taking action to eliminate, contain or
reduce the risk, and maintaining a system of review to ensure the effectiveness of
the control measures. Figure 1.2 illustrates the common process flow of Health
and Safety risk assessment.


Figure 1.2: A common process flow of safety and health risk management

Implementing an OSH risk management process will enable a business to:
(a) Identify areas of OSH risk in the business and in associated work activities;
(b) Help to demonstrate due diligence by directors, managers and other key
persons involved in the process;
(c) Reduce exposure to prosecution of the business and reduce employees
exposure to the risk of injury and work related health effects;
(d) Provide a systematic approach to the management of risks in the
workplace; and
(e) Allow for standards to be developed against which a business can be
audited for continuous improvement.
TOPIC 1 INTRODUCTION TO OSH RISK MANAGEMENT 7
OSH RISK MANAGEMENT IN OSH
MANAGEMENT SYSTEMS
1.5
There are several widely known OSH management systems. These systems have
been accepted as consistent approaches to prevent or minimise work related
accidents and injuries as well as to enhance safety and health awareness in an
organisation. In Malaysia, there are two most common OSH management
systems namely MS1722:2005, which originated from ILO-OSH2001, and OHSAS
18001.

According to (Bakri, et al., 2006) the OSH management system (OSHMS) is an
integral part of the overall management system of the organisation. It facilitates
the management of the OSH risks associated with the business of the
organisation.

The MS 1722:2005 OSH system is grounded in the following elements:
(a) Policy;
(b) Organising;
(c) Planning and implementation;
(d) Evaluation; and
(e) Action for improvement.

OSH risk management is one of the elements in planning and implementation. It
is stated in MS1722:2005 that hazards and risks to employees safety and health
shall be identified and assessed respectively on an ongoing basis.

OSH risk management is also covered in OHSAS18001:2007 under Clause 4.3:
Planning, where it is mentioned that the organisation shall establish, implement
and maintain a procedure(s) for ongoing hazard identification, risk assessment
and determination of necessary controls.
OSH RISK MANAGEMENT IN BUSINESS
MANAGEMENT
1.6
Risk is a part of everyday life. There are many types of risk that will be
encountered in business. Some will have a minimal impact and can be managed
easily; others may threaten the longevity of a business. Understanding the
principles and processes for effective risk management will help a business
owner make the decisions necessary to ensure the best possible outcome for the
business.
TOPIC 1 INTRODUCTION TO OSH RISK MANAGEMENT

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According to Risk Management Guide for Small Business by New South Wales
Department of State and Regional Development, good governance focuses on
areas such as:
(a) Good business conduct including management of areas such as customer
relations, transparent finances, resources and staff management;
(b) Quality outcomes ensuring that the products developed or the services
provided by the business are of the highest quality and standard;
(c) Compliance ensuring that the business complies with all required
regulations, legislation and standards on an ongoing basis; and
(d) Risk management protecting the business from possible negative
occurrences, as well as recognising opportunities and capitalising on these
when they arise.

Effective governance can help improve performance, satisfy customer needs and
meet compliance requirements. Risk management is an integral part of business
governance.

Every risk has its own distinct characteristic that requires particular management
or analysis. Most people will recognise the obvious, or most apparent, risk that
they are facing. For example, the owner of a take-away restaurant will
immediately recognise the risk to the safety of their staff from using hot cooking
oil and implements. However, the risk to the business from a new local
competitor may not be as readily identified. An emerging concept in risk
management is that there are three types of risk:
(a) Opportunity-based risk
(b) Uncertainty-based risk
(c) Hazard-based risk
1.6.1 Opportunity-based Risk
There are two main aspects of opportunity-based risks: risks associated with not
taking an opportunity and those associated with taking an opportunity. The
latter is a conscious decision to accept identified risk associated with an
opportunity and then to implement processes to minimise any negative impacts
and maximise gains.

Opportunity-based risk may or may not be visible or physically apparent; it is
often financial. It can have a positive or negative outcome; and it can have both
short-term and longer-term outcomes.
TOPIC 1 INTRODUCTION TO OSH RISK MANAGEMENT 9
Opportunity-based risks for small business include: moving a business to a new
location; acquiring new property; expanding a business; and diversifying a
product line.
1.6.2 Uncertainty-based Risk
Uncertainty-based risk is the risk associated with unknown and unexpected
events. This type of risk has attracted more recognition as a result of events such
as Y2K, September 11 and recent natural disasters such as the Asian tsunami.

Uncertainty-based risks are: unknown or extremely difficult to quantify;
catastrophic or disastrous in nature; associated with negative outcomes; and not
possible to control or influence.

Uncertainty-based risks for small business include: physical damage or damage
to buildings by fire or flood; financial loss; loss of a vital supplier; unexpected
loss of insurance; and loss of market share.

Preparing for uncertainty: By their very nature, disaster and the unexpected are
unpredictable. A business owner must plan accordingly and determine how to
minimise business disruption.

There are various management methods to minimise the impact of uncertain
events on a business. Examples are:
Disaster and emergency planning
Planning to recover from a disaster
Business continuity planning to ensure a business can continue to operate
after a major disruption.
1.6.3 Hazard-based Risk
Hazard-based risk is the risk associated with a source of potential harm or a
situation with the potential to cause harm. This is the most common one
associated with business risk management, as addressed by occupational health
and safety programmes.

TOPIC 1 INTRODUCTION TO OSH RISK MANAGEMENT

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Hazard-based risks for small business include:
Physical hazards including noise, temperature or other environmental
factors
Chemical hazards including storage and/or use of flammable, poisonous,
toxic or carcinogenic chemicals
Biological hazards including viruses, bacteria, fungi and other hazardous
organisms
Ergonomic hazards including poor workspace design, layout or activity and
equipment usage
Psychological hazards that may result in physical or psychological harm,
including bullying, sexual discrimination, workload or mismatch of job
specification to employee capability.

Integrating OSH into business management will enable a business to provide a
safe and healthy environment for all its employees and customers. All employees
are also expected to support the risk management framework and to be
responsible for identifying, reporting and participating in the management of all
risks in our operations. OSH is relevant to all businesses.



Management commitment plays a crucial role in managing OSH at the
workplace. Management shall oversee the OSH matters from four points of
view, i.e., legal requirements, social perspective, financial aspects and human
factors.
Hazard, hazard identification, risk, risk assessment and risk management are
commonly used terms related to OSH risk management.
OSH risk management is one of the elements in the OSH management
system. There are six elements of effective OSH risk management: senior
management leadership and commitment, active involvement of each
1. What is the process of OSH risk management?
2. How is OSH risk management able to enhance business
management?
SELF-CHECK 1.3
TOPIC 1 INTRODUCTION TO OSH RISK MANAGEMENT 11
individual at the workplace, effective communication through consultation,
provision of appropriate information, education and training, hazard
identification, risk assessment and risk control, and OSH management
information systems.
OSH risk management is a term given collectively to the process of
identifying workplace hazards, assessing their risks, taking action to
eliminate, contain or reduce the risk, and maintaining a system of review to
ensure the effectiveness of the control measures.
OSH risk management is important in accident prevention strategy.
There are three types of risk: opportunity-based risk, uncertainty-based risk
and hazard-based risk.



Accident
Hazard-based risk
Hazards
Management System
Occupational safety Safety and
healthHealth (OSH)
Opportunity-based risk
OSH
Risk assessment
Risk control
Risk Management
Uncertainty-based risk

Andrews, J.D., & Moss, T.R. (2002). Reliability & risk assessment (2nd ed.). New
York: ASME Press.
Bahr, N.J. (1997). System safety engineering and risk assessment: A practical
approach. Washington, DC: Taylor and Francis.
Bakri, A. Mohd. Zin, R. Misnan, M.S. & Mohammed, A. H. (2006) in their paper
presented at Proceedings of the 6th Asia-Pacific Structural Engineering and
Construction Conference (APSEC 2006), 5 6 September 2006, Kuala
Lumpur, Malaysia
TOPIC 1 INTRODUCTION TO OSH RISK MANAGEMENT

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Hughes, P. et al., & Toigo, J. W. (2002). Introduction to health and safety at work.
Butterworth: Heinemann.
Occupational Health and Safety Management Systems Requirements. OHSAS
Project Group 2007.
Occupational Safety and Health Management Systems Part 1: Requirements
(2005). Department of Standards Malaysia.
OHSAS 18001:2007 Occupational Health and Safety Assessment Series.
Management System Standard Requirements.
Ridley, J., & Channing, J. (1999). Risk management. Butterworth: Heinemann
Stranks, J. (1994). Management systems for safety. London: Pitman Publishing.