HSEC Risk Management

SEVERITY RATING
Choose a description of the realistic potential consequences that could occur that best fit the degree of gain, harm, injury or loss, taking into account
the existing controls that are already in place and their potential effectiveness. Where there is more than one impact type possible, look across the
table and choose the highest level and corresponding Severity Factor. See EWRM Guideline No 1.2 for more details on selecting the Severity Factor
in situations where BHP Billiton does not hold 100% of the equity interest in an asset.
HSEC Impact Types
Severity Severity Severity
Level Level Change in Change in project Health and Natural Community Relations and Government / Factor
ESVA return (-NPV) safety environment Cultural Heritage Reputation / Media Legal
>US$1B >US$5B > 500 fatalities or very Very significant impact Irreparable damage to highly Prolonged international Potential jail terms for 1000
7 a serious irreversible on highly value species, valued items of great cultural condemnation. executives and or very high
injury to 5000 persons habitat or eco system. significance or complete fines for company. Prolonged,
breakdown of social order. multiple litigation.
US$100M – US$500M – US$5B >50 fatalities, or very Significant impact on Irreparable damage to highly International multi-NGO and Very significant fines and 300
6 b US$1B serious irreversible highly valued species, valued items of cultural media condemnation. prosecutions. Multiple
injury to >500 persons. habitat, or ecosystem. significance or breakdown of litigation.
social order.
US$10M – US$50M – Multiple fatalities, or Very serious, long-term Very serious widespread social Serious public or media Significant prosecution and 100
5 c US$100M US$500M significant irreversible environmental impacts. Irreparable damage to outcry (international fines. Very serious litigation,
effects to >50 persons. impairment of ecosystem highly valued items. coverage). including class actions.
function.
US$1M – 10M US$5M – 50M Single fatality and/or Serious medium term On-going serious social issues. Significant adverse national Major breach of regulation. 30
4 d severe irreversible environmental effects. Significant damage to media/ public/ NGO Major litigation.
disability (>30%) to structures/ items of cultural attention.
one or more persons. significance.
US$100,000 – US$500,000 – 5M Moderate irreversible Moderate, short-term Ongoing social issues. Attention from media and/or Serious breach of regulation 10
3 e 1M disability or impairment effects but not affecting Permanent damage to items of heightened concern by local with investigation or report to
(<30%) to one or more ecosystem function. cultural significance. community. Criticism by authority with prosecution
persons. NGOs. and/or moderate fine possible.
US$10,000 – US$50,000 – Objective but Minor effects on Minor medium-term social Minor, adverse local public Minor legal issues, non- 3
2 f 100,000 500,000 reversible disability biological or physical impacts on local population. or media attention and compliances and breaches of
requiring environment. Mostly repairable. complaints. regulation.
hospitalisation.
<US$10,000 <US$50,000 No medical treatment Limited damage to Low-level repairable damage Public concern restricted to Low-level legal issue. 1
1 g required. minimal area of low to commonplace structures. local complaints.
significance.
EWRM – Risk Rating Tables © BHP Billiton, 2004 Group Risk Management
Version 5, August 2004

HSEC Guideline No G19 CONTROLLED DOCUMENT Revision No 2.1

Printed copies of this document are not controlled.
14 February 2005 To verify this copy is current, check on the intranet at http://hsec.bhpbilliton.net Page 10 of 22
HSEC Risk Management
EXPOSURE FACTOR
Choose a description that best fits the frequency of the “window of opportunity” during which
impacts of the selected type and level of severity could be incurred (experienced) by BHP Billiton
or its stakeholders.
Frequency of the “window of opportunity” Exposure Factor
At least once a week 10
Once a month or so 3
Once or twice a year 1
Once or twice every 10 years 0.3
Once or twice in a 100 years 0.1
PROBABILITY FACTOR
Choose a description that best fits the chance of BHP Billiton or its stakeholders actually incurring
(experiencing) impacts of the selected type and level of severity during a “window of opportunity”.
Chances of the impact actually being incurred (experienced) during Probability Factor
a “window of opportunity”
Happens often. 10
Could easily happen. 3
Could happen and has occurred here or elsewhere. 1
Hasn’t happened yet but could. 0.3
Conceivable, but only in extreme circumstances 0.1
PRIORITY GUIDE
Once a residual risk rating has been calculated, the following scheme should be used to assign
priority of action. It should be noted that if action is not taken within the time specified, then the
continued toleration of the residual ‘downside’ risk should be explicitly authorised. The suggested
level of seniority for authorisation is as shown below
Authority for continued
Priority Risk Rating Suggested action Suggested timing toleration of residual risk
1 Greater than Cessation until the residual risk is Immediate BHP Billiton CEO and Board
300 reduced to 300 or below - unless
exposure is authorised as indicated.
2 91 – 300 Take action to reduce residual risk to Short term. Normally President CSG
90 or below. within 1 month.
3 31 – 90 Plan to deal with in keeping with Medium term. Normally President’s direct reports
business plan. within 3 months.
4 11 – 30 Plan in keeping with all other priorities. Normally within 1 year. Manager
5 Below 10 Lower priority. Will still require Ongoing control as part of Manager’s direct reports
attention. a management system.
TOLERATION OF RISK
The decision to tolerate a ‘downside’ risk should be based on a consideration of:
x Whether the risk is being controlled to a level that is reasonably achievable;
x Whether it would be cost-effective to further control risk;
x The tolerability of the organisation (risk appetite) for risks of that type.
For HSEC risks, the principles outlined in HSEC Toolkit T07: Risk Criteria / ALARP Principle (and
summarised in Section 3.5) should be followed involving the application of the ALARP criterion.
HSEC Guideline No G19 CONTROLLED DOCUMENT Revision No 2.1
Printed copies of this document are not controlled.
14 February 2005 To verify this copy is current, check on the intranet at http://hsec.bhpbilliton.net Page 11 of 22