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Threat from and threat to concepts

In our courses we always introduce the Threat from and threat to concepts because they apply to risk assessment and risk management. Oftentimes engineers and technical people have a “facility-centric” approach. This means they see the facility they are studying as a potential source of hazard exposures. In mining, this means looking for example at the pit or tailings as the sources of hazards to “the environment”. Thus, oftentimes the analysts see the facility as generating threats to the population,…

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Cyber attacks leave physical consequences

We are pleased to see that FM Global recognize the fact that Cyber attacks leave physical consequences. Some context on physical consequences Last year in 2019 we wrote about an aluminum maker forced to shut down  operations because of a ransomware attack. Successful hacking on industrial systems seemed to remain “isolated exploits” for a long time. For example, in 2014 hackers struck a steel mill in Germany. They did so by manipulating and disrupting the industrial control systems (ICS) to such a…

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Germs, Shipping and Force Majeure

A discussion on Germs, Shipping and Force Majeure seems appropriate given the corona virus epidemic evolution and our experience. Indeed clients have asked us to perform risk assessments and business interruption quantifications of harbors, wharves, and ships loader-unloader in many occasions. If we are looking to quantify business interruption of a shipping facility, we have to break the informational silo. Looking at categories of hazards one by one would limit the resulting understanding of the risk landscape. Indeed, cyber hazards,…

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Why climate risk and consequence overcost have common similarities

Today we look at why climate risk and consequence overcost have common similarities. Have you ever been involved in a project whose final budget exploded due to consequence of apparently small, negligible schedule or material risks? Similarly, even thus we record small change in weather averages, big impacts are being noticed. Let’s find out why this happens. Probability of overcost vs. Likelihood of event Lets suppose the consequences of a risk scenario vary between 0 and 20M$ with an average…

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Insurance denial amid climate change

We explore today how insurance denial amid climate change will impact assets and other aspects of business. In particular, we think at fires like the Australian bushfires and Fort McMurray (Canada) fire in addition to increasing rains leading to flooding. These will undeniably be a ‘big drag’ on growth and have already generated invaluable losses to biodiversity. Furthermore, insurance denial will become a  problem as we discussed back in 2016 and even as far as 2009. Insurance denial amid climate change…

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Probabilities of climate change events

Probabilities of climate change events is the natural extension of our prior blogpost on the ICMM climate change report. Will climate change generate new hazards? Because of the complexity of the issue, let’s start with a few statements. We will discuss climate change effects, but not climate change causes. In addition, let’s note that climate change may generate some “new” hazards, for instance, large scale, generalized: methane releases in permafrost areas (domes, pingos), ocean acidification, frost-free seasons allowing parasite to…

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Probability Impact Graphs do not fly

Probability Impact Graphs do not fly. For short PIGs do not fly was part of the title of a risk management course we gave at TMW 2012. In that course we explained why Probability Impact Graphs (PIGs) and “heat maps” are obsolete, misleading and should be abandoned. We recently read a paper by D. Vose who is finally “kinda coming to our side”. We are delighted by his paper. Indeed, at Riskope we started over ten years ago to point out…

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Climate adaptation and risk assessment

Climate adaptation and risk assessment are the main themes of a recent ICMM report we read during the holidays. Our take-away from the Climate adaptation and risk assessment report The ICMM report notes that physical climate-change risks and opportunities can impact mining companies in a multitude of ways. Examples are: operations, production, financial, social and finally environmental. Thus, the risk landscape of companies can change quite significantly due to shifts in probabilities of occurrence and consequences of climate-related events. The report…

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