Latin America: Risk Engineering Past Cultural Barriers GRM006

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2 Latin America: Risk Engineering Past Cultural Barriers GRM006 Speakers: Ken Sun, Latin America Risk Engineering Manager, AES Global Insurance Barry Mitchell, Director, Risk, Security & Loss Control, Teck Resources Limited

3 Learning Objectives At the end of this session, you will recognize the importance of: Speaking the Local Language Appreciating and understanding the local culture is key. Organized and Early Preparation Set meeting dates and participation well in advance. Understanding the Local Capabilities Set clear and realistic expectations.

4 General Overview of Session: Risk Engineering in Latin America is still considered a fairly unknown concept and a new paradigm. Many plant / facility / operations managers will display an eagerness to listen and learn to risk engineering advices and recommendations during a visit and at the exit conference and politely agree. The disappointment sets in when the Risk Engineer returns only to find nothing but the same condition prior to the last visit. 4

5 Common outcomes in Risk Engineering visits: Risk Engineering visits, particularly from Property Insurance carriers are viewed as audits or inspections. Most often, recommendations are simply viewed as suggestions. In most cases if not all, plant managers take the path of least resistance and agree to recommendations so the risk engineer can be dispensed and the visit can be concluded. There is a common practice of not caring. 5

6 Many plant managers do not listen to risk engineering recommendations unless they see technical merits. This is often related to Boiler and Machinery (B&M). Property risk engineering recommendations are neglected 99% of the time since most plant managers lack fire protection / risk mitigation subject matter knowledge. Most plant managers will not make capital investment on risk management unless this is program is top-down driven. Quite often, Plant Managers do not have the decision making authority. 6

7 Objectives: Speaking the local language and understanding the local culture is key. Set meeting dates well in advance and with the appropriate individual(s). Establish a good understanding of the local capabilities and set expectations accordingly. Examples of successes. 7

8 Speaking the local language and understanding the local culture: Most plant / facility managers speak English but for most it s not the easiest struggle to understand and convey key messages. Speaking the local language puts both managers and engineers at ease. Generally the amount and quality of information flows easier. When speaking the local language: Not viewed as a total foreigner. A foreigner who took the time to learn to speak their native language. Easier to break the ice. 8

9 Understanding the local culture is key: Knowing the local culture displays respect to host. Although the host normally understands the cultural differences you should know the do s and don ts. Results in more mutual cooperation. Show empathy in arriving at action plans that will still satisfy your company values if in conflict with local practices. 9

10 Site visit preparation: Crucial to ensure the appropriate individual(s) are available. Establish an amicable date and time period. Send agenda(s) well in advance in both languages. Ensure there is an understanding of the concept of property protection, B&M and BI from a risk engineering perspective. Try to obtain copies of maintenance records or t/p inspection reports in advance of visit date. 10

11 Meeting with the right individuals: Encourage participation from the most significant individual(s) within the organization or facility location. Ensure the necessary support individuals are available. Review agenda items and confirm time and manpower commitments during the visit. 11

12 Setting your Expectations: What standards does your (or their) company or organization currently have in place? Are they clearly defined? Local or Global? Is there a process for alignment? Minimum Standards or Industry Best Practices? To what standard does your insured operate their business(s). 12

13 Recognizing Local Challenges: Availability of listed or approved materials and equipment. Import restrictions; Customs delays; Supply Chain Shipping delays will cause significant interruption to papered project schedules. Availability of experienced designers and contractors; increased demand of oversight. Understanding of broader standards and practices. Authority having Jurisdiction (N.A. vs S.A.) 13

14 Examples of Plant Risk Engineering visits: Ken Sun Brazil Visits Barry Mitchell Chile and Peru 14

15 Managing and / or Quantifying Risks - Fire 15

16 Managing or Quantifying Risks B&M 16

17 Managing/Quan4fying Risks 17

18 Kansas City Power & Light Hawthorne Generating Station February 17, 1999 Boiler Explosion 18

19 Fire walls between the transformers are containing and preventing fire spread. Fire and smoke entering the window or opening, (red arrows), above the transformer - the importance of following recommendations ie: NFPA 850/851 Successful visits will identify hazards such as the window openings and provide recommendations to mitigate. 19

20 Recognizing Local Challenges: Funding to provide sprinkler protection. Availability of water. Non- rated belts. 20

21 Risk Engineering Past Cultural Barriers Community Impact: Economic Moral Familial 21

22 Local Challenges: Significant business interruption. 22

23 When a facility is no longer operational. 23

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25 Successful Visits: Discuss the difference between critical recommendations vs risk improvements: Those that could lead to an immediate loss. Build in accountability to successful completion: e.g. - Impact to bonuses Establish diary dates for follow-up: 30 / 60 / 90 days or project plan. Make use of translators if necessary Joint committees to address o/s recommendations Work into budgeting and 5yr planning 25

26 Work Plan - Business Risks Development and Implementa@on Level of Urgency Requirements Observa@ons Date Responsibility Status High Fire System must be 100% opera4onal Need to develop a work program to monitor and repair as required Immediate Daffy Duck Cri4cal Equipment Maintenance Revise the defini4on for and iden4fy cri4cal Program equipment July Foghorn Leghorn Cri4cal Support enforcement team In accordance to Risk Department and / or Insurer recommenda4ons Foghorn Leghorn Risk Assessment workshop coming July 2013 June Baloo Prepare and update Risk Register Development of Management Procedures Prepare dray risk matrix by area; plant, shop, warehouse, etc. June - July - August All Areas Procedures for Risk Assessment process June Bugs Bunny Audit Procedures June Bugs Bunny Repor4ng procedures and management reviews June Bugs Bunny Annual Internal Audit Program June Bugs Bunny Coordinated ac4vi4es and sent invites for July workshop Medium 26 Development of Opera4onal Procedures Red Tag Impairment Program implementa4on; procedure for repor4ng to Risk Department and / or Insurer June Bugs Bunny Fire system review procedures August Daffy Duck Hot Work Procedures July Daffy Duck Procedures for working at heights July Daffy Duck Procedures for working with Energy July Daffy Duck Emergency services and response training July Daffy Duck Procedures for simula4ons / drills July Daffy Duck Procedures for transporta4on of Cri4cal Equipment July Daffy Duck

27 Significant Challenges Successfully convey the message regarding the need to control and mitigate inherent hazards with a given occupancy. Those [senior management] who are controlling the company assets in Latin American countries must understand the importance of making an effective and permanent change towards accepting risk engineering inputs. 27

28 Muchas Gracias por su 4empo! PREGUNTAS?