Engineering firms could be exposing themselves to greater peril, both legal and actual, than they realize by adopting the wrong risk approach when conducting due diligence.
It has become increasingly common for engineers to confound two disparate approaches towards risk minimization when performing due diligence with regards to safety – those of risk minimization so far as is reasonably practicable (SFAIRP) and risk minimization as low as is reasonably practicable (ALARP).
While both approaches share the same objectives with respect to the demonstration of safety, they are characterized by certain differences in their concrete processes, as well as the legal and practical implications of their adoption.
ALARP is a process for assessing whether further precautions should be adopted with respect to a hazard, stating clearly that a risk is only acceptable when further mitigation is not practicable. SFAIRP focuses more on available and practicable precautions before assessing which are reasonable based on the comparison required by common law of the significance of the risk versus the effort its reduction entails.
The diagram above depicts the differences between the two approaches. The ALARP approach is characterized by a number of core flaws, including the inherently unrepeatable nature of hazard analysis and risk calculation, and the subjective nature of the risk criteria selected.
Most importantly from a legal perspective, some ALARP guidance suggests that no further action is required once a hazard is deemed to be beneath an acceptable or tolerable risk threshold.
Australian common law deems, however, that even if a risk is only slight, the failure to adopt available precautionary measures which entail modest difficulty or expense is considered negligent in the event of contingency. The courts of Australia instead favour the SFAIRP approach, and its emphasis on the assessment of the level of precaution as opposed to the level of risk.
It is for these reasons that the attitude frequently encountered amongst engineers that ALARP and SFAIRP are equivalent in practice, or even worse, the misconception that ALARP is a target risk approach, should be a source of deep concern.
Not only does misunderstanding or misapplication of ALARP fail to safeguard firms from a legal perspective, it also fails to account for the safety and well-being of others by omitting precautionary measures for black swan events which, though rare, often appear to be just short of inevitable in the real world.