Risk management
Discuss About The Human And Organizational Factors In Chinese.
In 2015, 12th of August various explosions took place in China. These explosions caused 173 deaths and injured many people. This incident took place specifically at the Port of Tianjin. Two explosions occurred at an interval of 30 seconds. Fires resulted by the first explosion kept burning for several days (Zhao, 2016). This uncontrollable fire caused eight explosions in addition. These explosions took place on 15th of August. The explosions caused various risks and the risks are to be managed in a proper manner. The risks that were faced due to the explosions are mentioned below in the discussion part. It further discusses some risk management strategies.
Risk management is a process of identifying risks, accessing them and controlling the threats. Threats can be of various types’ financial, legal, environmental, human resource and many more. The risks after the Tianjin explosion in China are mentioned below.
The explosion occurred in China has caused various risk on the financial condition of government as well as people. This was recorded to be the worst disaster caused until date. Overall, financial loss caused was approximately $3.25 billion (Bao, Qu and Zeng et al., 2017). It was reported to be the costliest manmade disaster that has been recorded in the history. The biggest victims of financial loss are the insurance providers. It was estimated that the insurance premium caused due to the blast might go up to $1 billion-$1.5 billion. If it hits a higher number, it would be approximately 88% of total premiums. Tianjin’s port is responsible for about 40% of foreign vehicles that come to China. The international automobile manufacturers have lost around $312.5 million because of the blast. The brands were Volkswagen, Toyota and Renault. According to reports 1,500 cars of Renault has been damaged in the blast.
Some legal risks faced due to the blast are reported as very serious. Along with illegal construction as well as issues regarding operations there were many problems regarding control failures and the violation of industry and national standards such as storing ammonium nitrate illegally at the harbor, illegal transportation, packing, unpacking, loading and unloading and some other operations (Lu and Xue, 2016). They also failed in filing and registering the hazardous sources that are majorly harmful.
According to the environmental rules, factories should be built far away from the public buildings, other enterprises and main traffic. The factories and industries that indulge in using or manufacturing hazardous resources that can be harmful to people as well as environment should not be anywhere around residency (Xu and Webb, 2015). The Ruihai warehouse that had been exploded contained around thousand ton of harmful materials like sodium cyanide, which is a very toxic chemical resource. This was situated about 600 meters far from the nearest residence. One company did not agree in making safe assessment report for the factory because of its short distance from the residence. This might not help the project in getting approval. According to some sources, it was found that the Ruihai Warehouse provided inappropriate information regarding its distance from the resident and the quantity of dangerous goods stored in it (Xu and Webb, 2015). Every company needs to go through onsite investigations, so it is never possible that they were unknown regarding this matter. This might be the case that the company wrote a false assessment report regarding this information. After the assessment report is made, it gets crosschecked in very rare cases. As a result false report would not get caught very easily.
Financial risks
The human risks faced by companies after the blast is that people denied from working in these companies that consist hazardous resources (Zhou and Fu, 2017). Especially the companies that were said to have no legal permission for the presence of hazardous materials.
The higher authority of the factories or industries should identify the risks faced by the industries. The risks faced should be categorized according to their types like human resource risk, financial risks, legal risks and many more (Aitao and Lingpeng, 2017). This identification of risks is the vital part of managing risks.
Planning is the most important part of risk management. The mitigation of risks is to be planned. The mitigations are planned according to the risks (Wang, Gao and Dong et al., 2017). Different types of risks need different mitigations to be planned.
The planned mitigation of various risks needs to be implemented in a systematic manner. The areas with legal risks should have its respective mitigations (Fu, Wang and Yan, 2016). Every risk is dependent on other so their mitigations are to be carried out properly. Any mistake in the implementation of mitigations can result in affecting the other mitigations.
The implementation of the risks should be monitored with the help of supervisors. The supervision or monitoring the implementation is very important. This is done in order to prevent the factors that affect the implementation of the mitigations (Zhang, Duan and Zuo et al., 2017). Monitoring also helps in smooth functioning of risk management.
The explosion had various impacts on the companies as well as the nation. The blast had a force of 21 tons, which killed people more than 100. It also ripped apart various warehouses, cargo and numerous cars (Huang and Zhang, 2015). Businesses have faced their worst nightmare. The insurers faced a claim of around $3 billion. The overall damage went up to $6 billion. This made the explosion the most dangerous one ever recorder in history. This disaster not only affected the city where it occurred but also the ones that bought resources from the city. This explosion destroyed a huge number of cars which included 10,000 Toyota, Range Rovers and Hyundai. It also stopped the shipments of other cars from their nearby factories (Li and Ma, 2018). The explosion affected companies starting from John Deere to the drug companies. This explosion has affected their supply chains hugely. This had also risked the shipping industries even more than they expected.
Legal risks
Some important techniques that should be followed in risk management are as follows
The industries faced various risks after the blast. Most of them were major risks that cannot be avoided, but some minor risks can be avoided. It should be noted that the risks that are being avoided should not be major (Lam, Lun and Bell, 2018). In case a major risk is avoided, it would affect the other risks and their mitigations. As a result, it would have a negative impact on the industry.
The risks should be minimized by taking proper steps. The steps need to be planned well. The mitigations required in reducing the risks should be according to the risks (Huang, Wu and Wan, 2018). The minimization of risks has positive impact on the industry. It is quite time taking so it should be carried out carefully.
The present risks should be noted down along with their mitigations. This helps in reducing the risk of further risks. Suppose after the blast the industries faced financial, legal and many more risks (Huang, Wu and Wan, 2018). These risks are overcome with the help of their respective mitigations. These risks along with their mitigations should be noted so that they can be used further in order to prevent risks in the same fields. These steps would help in reducing the chances of further risks.
|
Risk description |
Impact |
Reason for explosion |
Measures taken to control the explosion |
Strategy to mitigate the risks |
Prevention plan |
|
The explosion that took place in Tianjin China was one of the most disastrous explosions until now (Zhang, Teixeira and Guedes et al., 2016). It was recorded that the explosion took place due to mismanagement in the industries. It took place at the port of Tianjin. It took many lives and injured more. Due to the explosion the country, people and the government had faced many risks such as legal risks, financial risks and many more. |
The explosion had many negative impacts on the people and country. The impacts were even worse than expected. The environment was affected in a very negative way. The explosion caused a huge loss to the companies that relied on the supplies and products that were exported from the city (Zhang, Teixeira and Guedes et al., 2016). The people working at the port were affected hugely. |
The blast had killed nearly 165 people. The explosion was said to be the result of an action of mismanagement at one of the chemical warehouse (Zhang, Teixeira and Guedes et al., 2016). The disaster was recorded to be an incident of manmade events. |
The explosion was caused due to the mishap caused by various chemicals. As a result water did not help much in controlling the disaster (Zhang, Teixeira and Guedes et al., 2016). Rather it triggered the explosion even more. |
The strategies in order to mitigate the risks are as follows (Zhang, Teixeira and Guedes et al., 2016). The assessment of the storage of hazardous substances should be done. Update the protection, emergency responses and mitigation accordingly. |
A prevention plan has to be made in order to make sure that the risks are no more dangerous for the port as well as the government. The prevention plan include noting down the mitigations taken for the risks so that the risks do not take place any more. |
Conclusion
From above report, it can be concluded that the Tianjin China explosion was caused due to various factors. The explosion had negative effects on the ports as well as the government. The cities that were dependent on the products imported from the ports were hugely affected. The city had faced many risks due to the explosion. These risks and their mitigations have been discussed in the discussion part.
References
Aitao, Z., & Lingpeng, F. (2017). A new insight into the accident investigation: A case study of Tianjin Port fire and explosion in China. Process Safety Progress, 36(4), 362-367.
Bao, C., Qu, J., Zeng, W., Bi, J., Guo, Q., Ma, Z., … & Zhang, W. (2017). China’s development and environmental risk management. In Risk conundrums (pp. 112-126). Routledge.
Fu, G., Wang, J., & Yan, M. (2016). Anatomy of Tianjin Port fire and explosion: Process and causes. Process Safety Progress, 35(3), 216-220.
Huang, L., Wu, C., Wang, B., & Ouyang, Q. (2018). A new paradigm for accident investigation and analysis in the era of big data. Process Safety Progress, 37(1), 42-48.
Huang, P., & Zhang, J. (2015). Facts related to August 12, 2015 explosion accident in T ianjin, C hina. Process Safety Progress, 34(4), 313-314.
Lam, J. S. L., Lun, Y. V., & Bell, M. G. (2018). Risk management in port and maritime logistics.
Li, J., & Ma, D. (2018). The studies for building failure characteristics of the extraordinarily fire explosion accident in Tianjin Port. KSCE Journal of Civil Engineering, 22(2), 718-724.
Lu, X., & Xue, L. A. N. (2016). Managing the Unexpected: Sense?Making in the Chinese Emergency Management System. Public Administration, 94(2), 414-429.
Wang, F., Gao, Y., Dong, W., Li, Z., Jia, X., & Tan, R. R. (2017). Segmented pinch analysis for environmental risk management. Resources, Conservation and Recycling, 122, 353-361.
Xu, F., & Webb, J. P. (2015). Tianjin chemical clean-up after explosion.
Zhang, H., Duan, H., Zuo, J., Song, M., Zhang, Y., Yang, B., & Niu, Y. (2017). Characterization of post-disaster environmental management for Hazardous Materials Incidents: Lessons learnt from the Tianjin warehouse explosion, China. Journal of environmental management, 199, 21-30.
Zhang, J., Teixeira, Â. P., Guedes Soares, C., Yan, X., & Liu, K. (2016). Maritime transportation risk assessment of Tianjin Port with Bayesian belief networks. Risk analysis, 36(6), 1171-1187.
Zhao, B. (2016). Facts and lessons related to the explosion accident in Tianjin Port, China. Natural Hazards, 84(1), 707-713.
Zhou, L., Fu, G., & Xue, Y. (2017). Human and organizational factors in Chinese hazardous chemical accidents: a case study of the ‘8.12’Tianjin Port fire and explosion using the HFACS-HC. International journal of occupational safety and ergonomics, 1-12.
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