The following report is prepared on risk assessment and management plan in the context of Fukushima Daiichi’s accident case happen in 2011 in Japan. The accident that takes place in Japan was basically an energy accident which was initiated by Tsunami and then followed by Tohoku earthquake. In this part information related to project was discussed along with its objectives, scope and risk management policies.
In the accident 4 buildings of the company was damaged and during investigation it was identified that there were many reasons for that accident. The problems include structural problem of building, earthquake and tsunami (Aoki and Rothwell, 2013). It should be noted that it is one of the disastrous nuclear plant damage. It is opined by (Chew and Jahari, 2014), that power cut take place in the factory due to tsunami and due to those power cut pumps cool down the nuclear reactors which consequently led to hydrogen explosion and released radioactive material also.
It is considered that nuclear energies are powerful way to protect country from various aspects (Hindmarsh, 2013). Through this project the selected factory can apply retrospective risk management strategies which can thus help the owners of company to keep the factory still thriving.
According to research conducted on the Fukushima Daiichi Nuclear Power Plant it has been identified that there was lack of communication among the internal management system which leads to disastrous effect of accident. As suggested by Galliers and Leidner(2014), communication and consultation activities with stakeholders of company can reduce the aggressiveness of risk to large extent and can also provides alternative ways to restart the factory. From the reports of respective company it has been analyzed that along with tsunami and tohoku, internal mismanagement is also responsible for destruction of the company (Fukushima Daiichi Nuclear Power Plant, 2017).
Communication helps in flow of information within the organization and thus can help management to take active decision in critical situation. It has been pointed out by Yoshida & Takahashi (2012), that unit 4 and 1 of factory was totally damaged but others were safe, this is happened due to lack of effective communication and consultation process. According to the risk management and framework policies of Australia proper communication system and regular consulting with higher level authorities can identify risk from prior and thus can help in mitigation of identified risk (Hu et al 2013).
In order to mitigate the risk properly it is necessary to implement risk management strategies properly. Hence some of the major objectives of this project are as follows-
|
Region of power of interest |
Method of communication |
|
Monitoring |
It is important for company to keep local resident informed about their operating activities. It has been evaluated that Fukushima Daiichi does not provided any information to the local resident and thus the accident also affect the life of local resident (Hasegawa et al. 2015). Hence it is necessary to monitor the activities performed by members of company to evaluate if they are delegating their responsibilities properly or not. |
|
Keeping updated with recent information |
It is necessary to keep the stakeholders of company informed about the activities to be performed to take appropriate decisions (García-Herrero et al. 2013). The selected company properly follows these rules. |
|
Managing communication system closely |
In order to manage the communication system closely the company sends e-mails to stakeholders. In addition to these the company also organizes quarterly meetings to ensure proper flow of information (Cavallo and Ireland, 2014). |
|
Keep satisfied |
It is necessary to provide right information to the shareholders of company to keep them satisfied by ensuring that company is maintain transparency in their operational activities. |
Table 1: Stakeholder analysis
(Source: Fukushima Daiichi Nuclear Power Plant, 2017)
Hence from above information it can be said the relation between Fukushima Daichii and its stakeholders was quite satisfactory but it fails to keep satisfied local environment authority through the communication strategy it’s adopted. It is suggested by Yasumuraet al (2012), that if Fukushima can maintain good relationship with its local authority and social workers the amount of effects suffered due to accident will be less.
It is important for establishment of internal and external context with accordance to AS/NZ ISO 31000:2009 for risk management policies after outlining the risk criteria and roles and responsibilities of stakeholders.
There are several internal elements which can affect positively and negatively the project undertaken by company. However, majority of internal elements involved financial reports prepared by company and record of activities performed by the respective company (Managing the Fukushima Challenge, 2017). In case of Fukushima it is necessary to make every member of company ware about the project undertaken by them along with its business strategies and marketing strategies because it is an investment project and company needs to consult with every member involved with it.
As commented byEdwards et al.(2014), management of risk should also consider the point of view of investors because it can control the strategy of investors and sources of investment also.Figueroa (2013), claims that it is not the sole responsibilities of management team of Fukushima for the damage happen to the respective factory. On the other hand,Chew and Jahari (2014) argued that Japan is earthquake prone country thus it is the responsibility of risk management team to take necessary actions at the time of natural disastrous incident. Thus, it can be said that natural elements of project are basically responsible for the accident happen to Fukushima Daichii Nuclear Power Plant.
In case of external factors suppliers, customers, competitive firms are considered as major elements which have affected the project of Fukushima Daichii. Government agents and several big companies are agent or customer of the selected company which deals in nuclear energy product (Mismanaging Risk and the Fukushima Nuclear Crisis, 2017). But the internal elements of project could not harm the company like internal elements. As the selected company was one of the oldest nuclear plant of Japan it was well reputed and it also give tough competition to its competitors in market (Funabashi and Kitazawa, 2012). Thus, it can be said that level of risk was higher in case of internal factor as compared to external factors.
The main goal of risk management plan is to reduce the extent of risk which has already occurred or to avoid the risk which can be occurring in future. The Risk Assessment Process as discussed below stressed upon identification of risk and mitigation of those risk through proper process. The case of Fukushima Daiichi revolves around safety and public health issues after the nuclear plant accident (Mismanaging Risk and the Fukushima Nuclear Crisis, 2017). As mentioned by Gaillard and Mercer(2013), many people were injured during the accident including the employees of organization. In case of this nuclear plant it was the responsibility of government of country and higher authority of factory to allow no local resident people within 10 Km to 20 Km of the re4spective plant.
The selected organization has already suffered from risk associated with the natural calamities due to mismanagement within organization; their entire business was shut down after the incident. As opined by Hirose (2012), in order to ensure that no such type of issues occur in future due to risk the organization needs to analyze risk properly by applying risk management strategies. It is observed that Fukushima Daiichi fails to apply the risk assessment process and consequently suffered from damages (Hagmann, 2012).
It is important to identify external and internal stakeholders before preparation of risk management plan. Stakeholders of Fukushima Daiichi has been identified below which can help the company in conducting project.
|
External stakeholders of Fukushima Daiichi |
Internal stakeholders of Fukushima Daiichi |
|
Nuclear Energy Source and Association Department |
Board of Directors |
|
Land Owner of the respective factory |
Management level |
|
Local communities |
Staff of organization |
|
Suppliers of company |
Other partners |
|
Environmental agencies |
Table 2: Stakeholders of Fukushima Daiichi
(Source: Fukushima Daiichi Nuclear Power Plant, 2017)
|
Position of the stakeholders |
Responsibility and roles |
|
Internal audit |
The responsibility of this team is to verify the internal reports prepared by accounts department of company and implement risk management plan (Hirose, 2012). In case of Fukushima the internal audit team does not delegate their responsibilities properly. |
|
Board directors |
Review of plan before approval of any project is main responsibilities of this group (Risk Management: Procedures, Methods And Experiences, 2017). However, in case of Fukushima Daiichi the team should also assist risk management team to reduce the aggressiveness of risk. |
|
Risk manager |
Identification of risk associated with project and implementation of proper treatment strategy. In addition to this monitoring of risk assessment plan. |
|
Financial manager |
The responsibility of financial manager of Fukushima was to verify risk management reports to determine the actual cost implemented for management of risk (Miller and Ager, 2013). |
|
Staff of organization |
The staff of organization was responsible to follow the risk management plans implement4ed by company to avoid harmful effects of risk. |
Table 3: Roles and Responsibilities of the Stakeholders of Fukushima Daiichi
(Source: Fukushima Daiichi Nuclear Power Plant, 2017)
The selected company has complied with Tokyo’s Energy policies, Regulatory outcome policies, Energy free and Low carbon emission policy. As investigation conducted by ICANPS or Investigation Committee on the Accident at the Fukushima Nuclear Power Stations reveals that the company did not follow policies which can ensure health and safety of people residing at that area (Othman and Beydoun, 2013).In this section, different process to be followed by company for assessment of risk which are associated with future project activities are discussed below.
If Fukushima Daiichi Nuclear Power Plant can identify the risk associated with natural calamities then they can have beneficial effect on nuclear project undertaken. As opined by Owen and Kemp (2013), it is necessary to identify the risk along with their effects on the project to overcome it.
There are several methods for identification or risk which can be adopted by Fukushima Daiichi. The respective company can adopt two risk identification methods such as brainstorming and checklist to determine risk associated with nuclear project (Park et al. 2013). As at that time the company has no past experience regarding nuclear project it would be beneficial if they choose checklist method to identify risk at every stage of project. On other hand brainstorming can help the company to evaluate risk which can occur from future events. It is suggested by Srinivasan and Rethinaraj(2013), that if the company can select in any risk identification method which are associated with natural calamities then the risk of Fukushima Daiichi can be easily mitigated.
The research conducted on Fukushima Daiichi reveals that the company does not followed any standard method for preparing risk management strategies. Many loopholes were identified such as lack of compliances with health and safety policies, environmental policies and appropriate framework for local people. Generally, lack of application of environmental policies can be the major reason for the accident (Tsumuneet al. 2012). As observed the accident affect the quality of life and food due to the radiation affect on environment.
Risk register of company is used to fill information about identified risk along with their mitigation process (Principles and Practices of Events Management – Planning and Operations, 2017). Moreover,in order to ensure credibility of mitigation process the records of risk register should be reviewed by management team of the respective company.
In this section, several methods are discussed which can be utilized by the selected company to identify the probabilities of risk and thus can controlled the effect of accident. In this method rating criteria of risk has been used to evaluate the severity of risk and thus can mitigate risk according to its severity.
Risk assessment matrix has been drawn to identify risk according to their probability of occurrence and its effect on company. For the Fukushima Daiichi case simple qualitative risk assessment matrix can be used which have five point rating scale. The risk register of company should be updated after analyzing likelihood and consequence of risk associated with project (Risk Management: Procedures, Methods and Experiences, 2017).
|
Likelihood or Probability |
Consequences or Effect |
||||
|
(5) Catastrophic |
(4) Major |
(3) Moderate |
(2) Minor |
(1) Insignificant |
|
|
(1) Rare |
M |
M |
M |
L |
L |
|
(2) Unlikely |
H |
M |
M |
M |
L |
|
(3)Possible |
E |
H |
M |
M |
L |
|
(4)Likely |
E |
H |
H |
M |
M |
|
(5)Certain |
E |
E |
H |
H |
M |
Table 4: (Qualitative) Risk assessment matrix
(Source: Created by researcher)
Describing symbols of Risk assessment matrix
|
Probability or Likelihood |
Description |
|
Green (L) |
Indicator of low risk |
|
Yellow (M) |
Indicator of medium risk |
|
Orange (H) |
Indicator of higher risk |
|
Red (E) |
Indicator of extreme risk |
|
(5)Certain |
Highest possibility of occurrence |
|
(4)Likely |
High possibility |
|
(3)Possible |
Chance of occurrence |
|
(2)Unlikely |
Low chances of occurrence |
|
(1)Rare |
Rare chances of occurrence |
|
(5Catastrophic |
Effects can leads to disaster |
|
(4)Major |
Needs management level of effort to control risk |
|
(3)Moderate |
Requires efforts of considerable level |
|
(2)Minor |
Low level of effort will be efficient |
|
(1)Insignificant |
Requires normal process for mitigation |
Table 5: Description of symbols
(Source: created by researcher)
The external risk control method in case of Fukushima Daiichi can be implementation of regulations and rules delegated by TEPCO or Tokyo Electric Power Company (Managing the Fukushima Challenge, 2017). At that time, the company tries to mitigate the risk by nationalizing the nuclear allergy under Japanese government. In addition to these the company has also applied emergency procedures and communication strategy but cannot implement it properly.
The accident occurred in Fukushima Daiichi effects the environment and life of people by large extent thus according to the risk should be accepted in which the effect on life and environment will be minimum (Visschers and Siegrist, 2013).Hence from the above figure it has been showed that the impact of risk needs to be 1 or close to 2 in case of environment and human health to accept it for further mitigation process.
After risk identification and analysis, risk evaluation is conducted to give priorities to that risk which has higher probability of occurrence. In case of Fukushima priorities should be given to those risks which have higher chances according risk assessment matrix (Wachingeret al. 2013). ALARP or As Low as Reasonably Practicable has been followed here to evaluate the risk properly.
According to the principle of ALARP identified risk will be classified as per its effect on environment and society. This principle will classify risk in three majors are such as tolerable region, unacceptable region and acceptable region (Cavallo and Ireland, 2014). Through this principle the respective company can take proper step of mitigating risk after identifying with its aggressiveness.
From the above diagram, it can be said that the risk which has less effect will be shown in bottom. The risk which can be tolerated by company is shown in middle and the risk which has higher impact is shown in upper region. As mentioned earlier that the company has two major areas which requires risk treatment such as environmental health and impact on life. In these two major areas, some elements are included like, effect on food, radiation effect, quality of air and effect on economy. These elements will affect both the life of people and environmental health (Hindmarsh, 2013).
In this part, proper treatment method for identified risk has been proposed which can be implemented by Fukushima Daiichi to avoid the impact of incident that occurred in 2011. The risk treatment procedures arealigned with the principle of ALARP as discussed above. Through this plan the disastrous effect of risk can be mitigate to large extent if properly implemented by management level of company (Aoki and Rothwell, 2013).
Fukushima Daiichi Nuclear Power Plant can deploy the risk treatment plan as mentioned below to reduce the impact of accident like 2011 if further happens (Edwards et al. 2013). Through this plan the company can reduce the effect of risk which has higher probability of occurrence by implementing appropriate process.
Preparation of contingency plan:In case of nuclear project there is higher probability of explosive actions. It is important for the company to prepare contingency plan to deal with such situations if arises in future.
Implementation of technical measures: From the reports of Fukushima it has been evaluated that unwanted cooling of machinery and equipments lead to generate radiation explosion (Figueroa, 2013). Thus, if the company can implement technical measures which can control the machinery and equipment or can indicate the alarming situation then the accident can be stop easily.
Providing training to staff:The selected company has undertaken the nuclear project, explosion of which can be very sensitive to society and environment. Therefore, in such case it is necessary to train employee properly to handle critical situation. The employee of Fukushima was not well-trained which create hindrances for them to deal with emergency situation (Managing the Fukushima Challenge, 2017). Apart from that technical; training to employee is also necessary to deal with challenging situations.
Implementation of rules and regulation: From the case of Fukushima Daiichi it has been observed that the company risk management strategy has been failed severely because of its poor monitoring strategy (Hirose, 2012). Hence the company should apply rules and regulation implemented by TEPCO to reduce the effect of risk.
Risk transfer:If the company can predict risk associated with project then can transfer the risk easily. The warnings from anti-nuclear activist were not seriously taken by the Fukushima(Miller and Ager, 2013). If these warnings are seriously taken then there were chances of survival after the accident.
|
Risk (Health of public and environment) |
Option for treatment |
Preferred option |
Cost analysis of treatment plan |
Probability chances of risk |
Responsible person |
|
Air quality |
· Maintaining condition of machines used by company · Testing quality of air affected by the operational activities of company |
Both |
Cost benefit analysis is required |
4 |
Research and development department of company |
|
Effect of radiation |
· The suggestion of anti-nuclear activist should be taken seriously · Determining the level of radioactive isotopes present in surrounding area of company |
Both |
Cost benefit analysis is required |
5 |
Board of directors |
|
Economic effects |
· Implementation of rules and regulation prepared by government for nuclear power plants · Testifying effect of operational activities on economy of country |
Both |
Cost benefit analysis is required |
3 |
Management department of company |
|
Effects on quality of food product |
· Examination of pollution level in surrounding area of company · Safe induction |
Both |
Cost benefit analysis is required |
3 |
Management department of company |
Table 6: Risk Treatment Plan
(Source: created by researcher)
Several treatment options are available for identified risk but it would not be accurate to mention any one treatment as the best for the incident cases like Fukushima Daiichi. Basically, the treatment options which will be feasible and cost-effective for the company should be selected (Othman and Beydoun, 2013). However, some time company needs to invest more funds for management of risk properly. From the past experience of Fukushima Daiichi it is advisable to maintain risk register and implement proper risk treatment method to reduce the effect of risk. In order to select proper treatment strategy, the respective company can follow the below mentioned procedures-
It is important for Fukushima to follow risk monitoring and reviewing framework to manage the identified risk. If the company can be utilised this framework from prior then it can easily evaluate the factors which leads to destruction. Through this framework the management department of company can keep close eyes on the activities performed by the employee of company (Galliers and Leidner, 2014). The company can opt the below mentioned steps to monitor and review risk-
Through this framework the companies easily identify the emerging risk along with its probability of occurrence and its effects on organizational activities. In addition to these the management department of company can also locate any loopholes if present in risk management strategy deployed by company (Tsumuneet al. 2012).
In order to follow the risk monitoring process properly it is important to follow the rules and regulation set by company. Through these standards the company reviews the strategies which require changes because risk changes according to time and due to dynamic business environment (Visschers and Siegrist, 2013).Therefore, it is important to implement monitoring programs on frequent basis. The selected company can follow the below mentioned monitoring plan-
|
Activity |
Frequency level |
|
Preparing checklist |
In business days |
|
Conducting internal inspection |
In business days |
|
Maintenance of risk register |
Weekly |
|
Conducting monthly meeting with management department of company |
Once in month |
|
Conduction of Internal audit |
Quarterly basis |
|
Conduction of External audit |
Monthly basis |
Table 7: Periodic Monitoring activities
(Source: created by researcher)
The above-mentioned activities can be done by different departments of company to obtain more accurate information. Fukushima Daiichi can implement these activities to reduce the effect of accident happen because it will increase their risk handling capacity (García-Herrero et al. 2013).
Risk closure refers to the process of closing risk treatment if the criteria for the risk are properly met. In order to close the risk, the criteria are mentioned below-
It is necessary to mentioned that closure of risk without meeting these criteria could be harmful for the organization (Hong et al.2013). The statement of risk closure should be assessed by higher level authorities before closing the risk finally.
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