Causes of the Explosion
The Tianjin China Explosion occurred on the 12th August of 2015.It involved a series of explosions that killed 173 people and many more were injured in the warehouse at the shipping port (Huang & Zhang, 2015). The explosion occurred in a range of 30 seconds. The second blast had more impact and involved the discharge of 800 tons of ammonium nitrate. The first fires caused added explosions over the weekend till 15th (Fu et al, 2016).
This warehouse had containers with very dangerous chemicals that were flammable which included ammonium nitrate, sodium nitrate, calcium carbide and sodium cyanide.
Firefighters sprayed water on certain chemicals when trying to control the blaze which led to increased blasts (Jing, 2015).
Calcium carbide is a chemical that was in the warehouse reacted with the sprayed water resulting to acetylene which is highly reactive. This said acetylene ignited other chemicals to blast (Aitao & Lingpang, 2017).
The disaster in question destroyed many goods in the port located at Binhai New District. Many large shipping containers were thrown into the air where they were crumpled by the detonations. Due to this the port remained partially closed since only one side of the port was destroyed. This still affected the north as a whole because the port is used as a gateway for most imported and exported goods to Northern China. The restricted movement and strict checking slowed down activities affecting some industries that relied on the port.
Many cars in the ports` logistics park were destroyed by the fireball.1500 of Renault’s cars and the 4000 of Hyundai cars were on site hence destroyed altogether.
The waves of the blasts moved even to residential areas shattering windows and even tearing apart door hinges. Residents of the area neighboring the port had to flee their homes into local schools for refuge. More than 720 people were hospitalized as a result of being critically injured.
The blasts could have been avoided if there were transparency and a time information. Information about the dangerous chemical should have been conveyed to the respective people so as to protect human rights or even create awareness about them. Conveying the information would have mitigated the risk and prevented the disaster as well.
Most people that gave the lessons included the insurers, those involved in loss adjusting and also reinsurers.
- There should be a change in the thinking of accumulation of risk. Many insurers and reinsurers got exposed to many claims at a go. Claims from policyholders and many business lines. This is because the blast affected people, property, vehicles, marine and also infrastructure. Too much risk was accumulated.
Due to this, the need to collect data for how long a ship should remain at a port which would help a carrier determine its market share at a certain time and place was highlighted. This would help avoid potential arising from accumulated risk.
- The disaster proved that not only losses from natural calamities have a great impact.
- People also learned that it is good to have various supply chains so that a calamity occurring at one chain does not paralyze economic activities of a given market.
- Strict measures of storage were to be upheld. This was mainly to prevent storage of harmful products. This also included the government`s idea to zone chemical manufacturers. These measures made warehouses owner reluctant to house harmful goods.
- The need for education was highlighted. If the firefighters had information on how to deal with the blaze from the chemicals, they wouldn`t have lost their lives.
Impacts of the Disaster
This involves identifying and evaluation of risks and how to avoid, prevent or minimize their impact.
Risks involved and their analysis
These are risks resulting from investments, business operations or even assets.
Operational risk – This risk under finance came about when activities at the port were halted due to the occurrence of the blast. The property was damaged and activities were not as usual. The zone of the blast being a port, a lot of importation, exportation, loading, offloading and storage takes place there. For any business that needed goods from there had to halt its operations. All the burnt property led to the loss of assets which is loss of capital hence occurrence of the financial risk (Chung & Kim,2015).
Regulatory risk- The Chinese government had come up with a safety measure that there should be a 1000-meter gap between the public buildings and the stores with the dangerous chemicals. The safety measure was not applied in the Tianjin zone. As a result, the explosion affected even the residential areas bordering the port (Zhao,2016).
This is a potential threat to animals, plants, and environment by emissions and wastes.
After the explosion, the Chinese people got exposed to contaminated water. The animals, plants and entire ecosystem were exposed to the risk. Toxics were spilled into the waters and fumes filled the air. The sodium cyanide from the warehouse, being toxic, causes respiratory poisoning to both humans and animals. Sodium cyanide would have contaminated the air if it was converted to hydrogen cyanide gas hence a toxic to the humans. For animals living in water, the cyanide would have been dangerous because it persists in groundwater for long (Tummala & Schoenherr, 2011).
These are costs that are incurred when a bad thing happens to people.
Loss of life and injury- From the explosion, more than 100 people died and others were seriously injured.
Abuse- The firefighters who came to help stop the fire didn’t have abundant information about the harmful chemicals in the warehouse. Technically, important information was not conveyed to them and that’s why the water they sprayed didn’t stop the fire, instead, it became more (Das & Teng, 1998).
Plan for measuring and monitoring the performance of risk management plan
Due to the explosion that occurred at the warehouse for shipping containers in the port, it is good to for the engineers to come up with a good risk management plan that would prevent or help get out of the impact of the risk that has already occurred. The following are the steps;
Risk Analysis
Identification of the risk that could have an impact on the warehouse.
The warehouse is used for storage of containers with both imported goods and those that are to be exported. It is good to know both the layout of the warehouse and what goods exactly are being stored there. This will help figure out what risks are to be prevented from occurring. For example, in this, if the gases in the warehouse are flammable then mechanisms to prevent the sodium cyanide from exploding should have been in place (Hallikas et al,2004)
The risks should be assessed to reveal their impact.
Each risk that had a possibility of occurring should be noted and what their impact is. For example, in such a warehouse, theft, explosion, deterioration of goods can occur. These are risks whose impact on the owners of containers and the port should have in mind (Cervone,2006)
Evaluation of all stated risks in order for the management to prioritize them
This involves looking at what risks one by one and being able to prioritize by the number of resources you are willing to invest in the risk. This is either to prevent or deal with a risk that has already occurred.
Minimize the impact of risks by treating them.
This involves dealing with risks that can be avoided. This for example at the warehouse in this would include not storing hazardous chemical components.
- Come up and review the risk management plan.
This plan contains details of how to deal with the risks projected. The plan entails those identified risks, the impact of risks, the strategies for dealing with risks, time to implement it, those responsible and the required resources (Saunders & Cornett, 2003)
The process used to analyze strategic issues
- Vision clarification.
This is where short and long-term goals are defined as well as the process to achieve the goals. Each employee is assigned a task according to their skills in order to contribute towards the achievement of the goals. Each stakeholder or employee should be aware of the objective.
- Gathering and gauging of the information.
It involves collecting data that will aid in the achievement of the goals. The strengths and weaknesses of the company should be analyzed as well as the external factors.
- Formulate good a strategy
This will involves first identifying both internal and external resources that will help achieve the given goals. Challenges that may hinder success should also be identified then once done, a strategy is formulated.
- Strategy implementation.
If the structure in use does not favor the formulated strategy, then a new structure should be formulated before the plan kicks off. All employees should know their tasks and roles they play. Adequate funding should be secured then the plan is executed.
- Evaluation of control
Risk Management Plan
This involves measuring performance, reviewing both internal and external issues for any corrective measures to be taken. Before a strategy is put in place, parameters should which performance should be measured against should be put in place (Settele et al,2005)
Autonomy is how a person governs their own actions while accountability is being answerable. These both define how a person does tasks better willingly and are accountable for the same. This is by motivating himself or herself. The highest level of a person`s desire, moves them to act on certain things. The desire is a motivating factor. Also, a person` s desire to act is also determined by their level plans and what actions are worth performing. Caring also motivates one to act and be accountable. The power of her motivation is dependent on her level of authority.
Autonomous people are motivated by desires they cannot resist. For example, drug addicts cannot stop taking drugs because they have the urge to take the drugs. Being accountable is attributed from one`s ability to appreciate their reasons for why they do what they do.
Executive summary/Conclusion
The explosion had a great impact on Northern China. It paralyzed activities at the port and even led to the loss of lives and property as well. Poor risk management in the warehouse caused the overall blasting of the stored chemicals. This, however, could have been prevented if proper information was conveyed and if the government had stringed laws governing the storage of the chemicals in question. The necessary risk management plan should be outlaid to prevent loss from risk impact.
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.
Cervone, H. F. (2006). Project risk management. OCLC Systems & Services: International digital library perspectives, 22(4), 256-262.
Chung, Y. S., & Kim, H. S. (2015). On August 12, 2015, the occurrence of explosions and fires in Tianjin, China, and the atmospheric impact observed in central Korea. Air Quality, Atmosphere & Health, 8(6), 521-532.
Das, T. K., & Teng, B. S. (1998). Resource and risk management in the strategic alliance making process. Journal of management, 24(1), 21-42.
Fu, G., Wang, J., & Yan, M. (2016). Anatomy of Tianjin Port fire and explosion: Process and causes. Process Safety Progress, 35(3)216-220.
Hallikas, J., Karvonen, I., Pulkkinen, U., Virolainen, V. M., & Tuominen, M. (2004). Risk management processes in supplier networks. International Journal of Production Economics, 90(1), 47-58.
Huang, P.,& Zhang, J. (2015).Facts related to August 12,2015 explosion accident in Tianjin ,China. Process Safety Progress,34(4), 313-314.
Jing, Zhao. “Framing the 2015 Tianjin Explosions Crisis: A Content Analysis of People`s Daily WeChat Official Account.
Saunders, A., & Cornett, M. M. (2003). Financial institutions management: A risk management approach. Irwin/McGraw-Hill.
Settele, J., Hammen, V., Hulme, P., Karlson, U., Klotz, S., Kotarac, M., … & Peterson, K. (2005). ALARM: Assessing LArge-scale environmental Risks for biodiversity with tested Methods. Gaia-Ecological Perspectives for Science and Society, 14(1), 69-72.
Tummala, R., & Schoenherr, T. (2011). Assessing and managing risks using the supply chain risk management process (SCRMP). Supply Chain Management: An International Journal, 16(6), 474-483.
Zhao, B. (2016). Facts and lessons related to the explosion accident in Tianjin Port, China. Natural Hazards, 84(1), 707-713.
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