Foundations and Fallacies of Risk Acceptance Criteria - LATTIS

110 Pages·2010·2.31 MB·English

Inger Lise Johansen

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R O S S

Reliability, Safety, and Security Studies
at NTNU

Address: N-7491 Trondheim
Dept. of Production and Quality
Visiting address: S.P. Andersens vei 5
Engineering Telephone: [phone]
Facsimile: [phone]
TITLE

Foundations and Fallacies of Risk Acceptance Criteria
AUTHOR
Inger Lise Johansen
SUMMARY
The objective of this study is to discuss and create a sound basis for formulating
risk acceptance criteria. Risk acceptance criteria are quantitative or qualitative
terms of reference guiding decision making on acceptable risk. Examining
central concepts, metrics and approaches, a comprehensive fundament for the
setting and use of risk acceptance criteria is provided.
First, foundational issues on risk, probability and risk acceptance are presented.
Subsequently, the strengths and fallacies of individual and societal risk metrics
are inquired, followed by a like examination of principal and practical
approaches to setting risk acceptance criteria. The ability of risk acceptance
criteria to offer sound decision support is finally questioned.

REPORT NO.
ROSS (NTNU) 201001
ISBN DATE
978-82-7706-228-1 2010-02-23
SIGNATURE PAGES/APPEND.
Marvin Rausand 105
KEYWORD NORSK KEYWORD ENGLISH
RISIKOVURDERING RISK ACCEPTANCE
AKSEPTKRITERIER ACCEPTANCE CRITERIA
RISIKOMÅL RISK METRICS

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Preface
This report is written Autumn 2009, at the Norwegian University of Science
and Technology (NTNU), Department of Production and Quality Engineering.
For their devoted guidance, special gratitude is directed to Professor Marvin
Rausand and Post doc Mary Ann Lundteigen.
I also wish to thank Vivi Moe for allowing me to use her piece ’Tuppenog
Lillemor’ in fronting this publication
Trondheim, Norway, 18th February 2009
Inger Lise Johansen
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Abstract
The purpose of this study is to discuss and create a sound basis for for-
mulating risk acceptance criteria. Examining the strengths and pitfalls of
central concepts, metrics and approaches, the thesis provides a compre-
hensive fundament for the setting and use of risk acceptance criteria. The
findings are derived from integration and critique of pioneering and state
of the art literature.
Risk acceptance criteria are quantitative or qualitative terms of refer-
ence,usedindecisionsaboutacceptablerisk.Acceptableriskmeansarisk
levelthatis acceptedbyanindividual,enterpriseorsocietyinagivencon-
text.Ourwillingnesstoacceptriskdependsonthebenefitsfromtakingthe
risk, the extentto which the risk can be controlled and the types of conse-
quencesthatmayfollow.Acceptablelevelsofriskarehenceneverabsolute
nor universal, but contingent on trade-offs and contextual premises.
Fatality risk can be expressed by individual or societal risk metrics.
To capture the distribution and totality of risk posed by a particular sys-
tem, both individual and societal risk acceptance criteria are necessary.
Suitability for decision support and communication, unambiguity and in-
dependence are qualities that should be sought. The main expressions of
individualriskare IRPA andLIRA. IRPA expressesthe activity-basedrisk
of a specific orhypotheticalperson,and is particularly suited fordecisions
concerning frequently exposed individuals. While exposure is decisive to
IRPA,LIRAassumesthatapersonispermanentlypresentnearahazardous
site. LIRA isthuslocation-specificandpragmaticallyreservedforlanduse
planning.
Common societal risk metrics are FN-curves, FAR and PLL. FN-
criterion lines uniquely distinguish between multiple and single fatality
events, but are accused for providing illogical recommendations. PLL is a
simpler metric, particularly suited for cost-benefitanalyses. Overall accep-
tance limits are seldom expressed by PLL, since exposure is not reflected.
Incontrast,FARisdefinedbyunitofexposure,enablingrealisticcompari-
sonwith predefinedcriteria.Ifinjuryfrequencysurpassesthatoffatalities,
a metric related to injury or ill health may provide the most proper crite-
rion.Allmetricsarefraughtwithassumptionsanddifficulties,necessitating
awareness amongst practitioners.
Various approaches are developed for setting risk acceptance criteria.
A distinction is drawn between fundamentalprinciples,deductivemethods
and specific approaches. Utility, equity and technology offer principal cri-
teria to be used alone or as building blocks. While utility-based criteria
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concern the overall balance of goods and bads to society, the principle of
equity yields an upper risk limit of which none of its members should
surpass. Technology-based criteria see acceptable risk attained by the use
of state of the art technology, possibly at the expense of considerations
of cost-effectiveness and equity. Amongst deductive methods for solving
acceptable-risk problems are expert judgment, bootstrapping and formal
analysis.Thereare two questionableassumptionsunderlyingbootstrapping
methods; that a successful balance of risks and benefits is achieved in the
past, and that the future should work in the same way. Formal analyses
avoid this bias towards status quo, demanding explicit trade-off analyses
between the risk and benefits of a current problem. The advantages of
formal analysis are openness and soundness, while a pitfall concerns the
difficulty of separating facts and values.
Specific approaches to setting risk acceptance criteria are based on
a combination of fundamental principles and deductive methods. Most
cultivated is the ALARP-approach, capitalizing the advantages of formal
analysis and all principal criteria. Requiring risk to be as low as reason-
ablypracticable,ALARPprovidesconditionalratherthanabsolutecriteria;
uniquely capturing that risk acceptance is a trade-off problem. Problems
are yet addressed, notably in resource intensiveness and the imprecise no-
tionofgrossdisproportionality.Conceptuallyclose,butpracticallyfarfrom
ALARP,isALARA.WhereasuppercriteriarepresentthestartofALARP-
discussions, they serve as the endpoint in ALARA. Arguments of reason-
ablenessareconsideredalreadybuiltintothestrictupperlimitsofALARA.
Strict criteria are provided also by the GAMAB-approach, requiring new
systems to be globally as good as any existing system. GAMAB can be
seen as learning-oriented bootstrapping, but may reject developments on
an erroneous standard of reference. While GAMAB is technology-based,
the MEM-approach uses the minimum IRPA of dying from natural causes
as reference level. Little impetus is given for reducing risk beyond this
static requirement. Different from these risk-based approaches is the pre-
cautionaryprinciple,intendedforsituationswheregreatuncertaintymakes
comparisonwith a predefinedmetric meaningless.The precautionaryprin-
ciple has been attacked from many stands, but is concluded to offer a
valuable guide in the absence of knowledge.
The extent to which risk acceptance criteria offer sound decision sup-
port is finally questioned. The various approaches differ with respect to
consistency, practicality and ethical implications, to the degree risk reduc-
tion is encouraged and risk acceptance reflected. The choice of metrics
implicitly or explicitly affects how these issues are resolved. Interpreting
risk and probability as subjective constructs are not seen to threaten the
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validity of risk acceptance criteria. What may cause a problem, are regu-
lators and practitioners understanding risk acceptance criteria as objective
cut-offlimits. Theoverallconclusionisthatacceptancecriteriaoffersound
decision support,butonly if authors and users understandthe assumptions
and limitations of the applied metrics and approaches. There is a call for
applied research on the role of the industries and the government in for-
mulating and complying with risk acceptance criteria. As environmental
consequences are omitted from the study, the lack of a sound basis for
formulating environmental risk criteria urges further research.