Tianjin China Explosion Incident Analysis – Risk Management Principles And Techniques

Risk Management

Discuss About The Tianjin China Explosion Incident Analysis.

Risk can be defined as uncertain processing of incidents that are harmful for the being and has the potentiality to cause harm to individuals who are facing the risk. Risk can also be termed as danger that arises during completion of tasks. Mitigation of risk during completion of projects has been a major concern for organizations who are undergoing projects. This leads to the fact that risk management theories have been proposed to manage unseen and undue risks that might arise during processing of the project.

Risk management principles are undertaken by organizations who want to protect their organization from major losses that are incurred during performing project schedule. Risk management is one of the most important step that is taken by organizations to maintain efficiency of their performance. Few risk management techniques used by

Legal issues: According to Chinese legislation, storing of chemicals requires proper permission from government. Chemicals which are flammable in nature, will require special permission from government and huge amounts cannot be stored in a same place without proper authentication from government. Despite all this bounds, 800 tons of Ammonium Nitrate was stored in same place without much safety measures. This illegal method of storing hazardous and flammable chemicals have been a major reason for spreading of fire. As government was unaware of this illegal storage of chemicals, mitigation steps that were taken by fire fighters were not up to the mark and lead to worsening of conditions that were caused due to hazardous and flammable chemicals.  Risk in an uncertain phenomenon, this leads to the fact that a proper risk management strategy must define uncertainties that might arise during completion of projects. In case of Tianjin explosion, dynamicity of risk management was limited which resulted in the fatal explosion. Tianjin was highly affected by this unauthenticated storage of chemicals. Dry nitrogen was also stored in Tianjin port.    

Human Resources: Human Risk management technique must consider risk that might arise due to human factors during completion of project. Flaws that might be committed by human and this factor must be taken into consideration before initiating risk plan. In case of Tianjin port, they did not consider that mistakes can be committed by their employees while storing Ammonium Nitrate (Lo, 2016). Human resource management committee must be hired who will take care of functioning of employees. This ensures that employees stays in efficient way. This is the main reason that processing of data management of employees must be done for better job management. This increases the efficiency of the project that is under progress and project gets completed with higher accuracy. Transparency must be maintained in organizational framework and employees must be aware of issues that might happen due to lack of efficiency in completion of the project. Human resource management committee must portray issues to the employees that might occur in case accuracy is not maintained in completion of the task.  

Legal Issues

Environment: Environment was highly affected due to the fact that pollution was all over China and marine life cycle was highly affected by this explosion. This is acid rain was one of the major reason for damaging the environment. Water pollution was at its peak, leading to depletion in health of people who were consuming polluted water. People vacated Tianjin for many days, epidemic disease being the major reason. Generation born after decades of this explosion were still affected, leading to the fact that they had deformities in their DNA.

Finance: $9 billion was wasted during the course of this explosion. With an addition $50 million spent on destruction of car factory that were situated near Tianjin port. Centralised computer centre was also affected adversely. This is due to the fact that it was located near Tianjin port and this massive explosion affected the organization directly, leading to devastation namely damaging of ceilings, shattering of windows. Overall wastage of money in treating patients who were affected in this explosion was very high.

Risk management is performed with the help of identification, classification and prioritizing of risks that might approach Tianjin port.

Identification: Risks involved in Tianjin port is identified initially before processing the project.

Planning: After identification of risks that are present in Tianjin project, planning regarding mitigation of risks is performed.

Derive safeguards: After planning strategies of risk mitigation, safeguard deriving acts as a process of implementing steps that were planned in the previous terminology.

Monitoring: After implementation of the steps that were decided in planning section, monitoring of completion of the steps is done. This step takes into consideration the fact that efficiency of risk mitigation is maintained.

This incident marked a total of 173 deaths that was measured after a month of happening of the incident. This is the highest number of deaths that is marked in industrial explosions. There was a fatal combination of chemicals and water acted as catalyst that increases intensity of fire. First earthquake measured the intensity level of 2.3. This incident shook seismic plates with an energy level that is equal to that of 2.9 tons of TNT. The second earthquake was much more severe in nature. It marked the magnitude of 2.9. The intensity level of this earthquake was so high that seismic plates shook with an intensity of that of 21.9 tons (Jiu-zhou & Plant, 2015). There was a series of 8 explosions that resulted from the fire that contributed to spread, resulting in huge loss of lives and fatal injuries. Damages caused due to this explosion was immense in nature. Over 8000 cars were destroyed in this explosion. Cars parked in Tianjin port got destroyed in this explosion. Over 300 buildings were damaged due to this explosion and over 12000 cars were physically damaged during the explosion. A hefty amount of $9 billion was wasted in this explosion. Dhongai road station was affected due to this explosion. National supercomputing center of Tianjin was also adversely affected as windows and ceilings of National supercomputing center of Tianjin was blown away.

Human Resources

2 consecutive explosions took place that harmed employees who were working during the time of explosion. Both the explosions occurred in time span of 30 seconds. Second explosion was larger in nature in compared to the 1^st explosion. 2^nd explosion marked detonation of 800 tons of Ammonium Nitrate. In beginning there was a fire at the warehouse of Binhai (Aitao & Lingpeng, 2017). The fire was uncontrollable in nature. Fire fighters were on spot, fighting the fire and trying to prevent it from overflowing. Fire fighters were not aware of the fact that the fire that has struck is due to explosion of hazardous chemical substances. Applying water to fire increased intensity of the fire. This in return increased the intensity of explosion (Irshad, 2015).

Techniques to mitigate the risks: –

Avoiding risk: Risk avoidance is one of the easiest way to mitigate risk. Avoiding risk by proper planning of risk management and deploying the same might act beneficial in mitigating risk (Li, Zhu & Shi, 2016, December). Avoiding risk management is very obvious as it acts as preventive measures in the processing of risk mitigation. Avoiding risk incurs nearly $28 million to maintain safety related issues  

Minimizing risk: Risk minimization helps in mitigating risks. Minimization of risk is possible by proper acknowledgement of risks that are present in the processing of Tianjin project. Minimizing risk can be performed by proper planning an implementation of the plans that are used for reducing risks. Proper planning is required to perform minimization of risk. This implementation of plans that will be made by project managers will be very expensive in nature, a total of $ 77 million will be spent in minimizing risk.

Retention of Risk: Retention of risk is a managerial decision making process, higher authorities of Tianjin port must be taking into consideration the fact that level of interpolation must be maintained and in order to maintain the level of certainty, decisions regarding risk retention is taken. Retention of risk will earn revenues from insurance companies as proper insurance policies are already present for Tianjin port. Insurance making for such huge estate will cost around $ 4 billion.

Cost/Benefit Analysis for Tianjin China explosion
			Year of Project
	year 0	year1	year 2	year 3	year 4	year 5	TOTALS
Net economic benefit		$36,000.00	$36,000.00	$36,000.00	$36,000.00	$36,000.00
		0.3400	0.1200	0.7600	0.1200	0.4600
PV Of Benefits	$0.00	$12,240.00	$4,320.00	$27,360.00	$4,320.00	$16,560.00
NPV of all BENEFITS	$0.00	$12,240.00	$16,560.00	$43,920.00	$48,240.00	$64,800.00	$64,800.00
One Time Costs	$9,000,000,000.00
Recurring Costs	$0.00	($14,400.00)	($14,400.00)	($14,400.00)	($14,400.00)	($14,400.00)
Discount Rate 8%	1.0000	0.9434	0.8900	0.8396	0.7921	0.7473
PV Of Recurring Costs	$0.00	($13,584.91)	($12,815.95)	($12,090.52)	($11,406.15)	($10,760.52)
NPV Of All Costs	($60,000.00)	($73,584.91)	($86,400.85)	($98,491.37)	($109,897.52)	($120,658.04)	($120,658.04)
ROI							$0.34

 

Risk Description	Impact	Reason	Crucial factors	Triggers	Risk Response Strategy	Contingency Plan
Tianjin China explosion was one of the most tragic incident that has ever taken place due to mismanagement in industrial level. This incident took place on 12th August in the year 2015. This incident took place at port of Tianjin. This lead to a loss of several lives and non-fatal injuries were caused to many employees who were performing their duties in Tianjin port.	This incident marked a total of 173 deaths that was measured after a month of happening of the incident. This is the highest number of deaths that is marked in industrial explosions. Over 8000 cars were destroyed in this explosion. Cars parked in Tianjin port got destroyed in this explosion. Over 300 buildings were damaged due to this explosion and over 12000 cars were physically damaged during the explosion. A hefty amount of $9 billion was wasted in this explosion.	2nd explosion marked detonation of 800 tons of Ammonium Nitrate. In beginning there was a fire at the warehouse of Binhai. The fire was uncontrollable in nature. Fire fighters were on spot, fighting the fire and trying to prevent it from overflowing. Fire fighters were not aware of the fact that the fire that has struck is due to explosion of hazardous chemical substances. Applying water to fire increased intensity of the fire. This in return increased the intensity of explosion.	Improper packaging of products as well as incomplete knowledge regarding inflammable and exploding elements that were present in the port (Zhao, 2016).	Preventing fire with application of water was not very helpful as chemical infrastructure got triggered in a negative way (Xu & Webb, 2015).	Risk mitigation strategies that must be implemented to reduce the risk related to Tianjin port is by monitoring the risks that are approaching Tianjin. Another risk mitigation technique is that planning risk mitigation techniques during project initiation must be done.	Contingency plan will ensure that similar incidents do not occur again. These kind of incidents can be stopped by implementing plans like usage of air bags in ammonium nitrate storage places. Analysing situations also helps in understanding problem and planning can be made accordingly.

 

Conclusion

From the above discussion it can be concluded that Tianjin china explosion was one of the biggest explosion that has ever occurred due to industrial mismanagement. Loss of lives has been one of the major highlight of this explosion. Physical damaging of frameworks has been another highlight of this explosion. More than $9 billion was wasted in this explosion. Risk mitigation analysis is done in a proper way in this report. The mitigation strategies that are stated in this report will decrease risk in case of future risk approach. In case of following the risk mitigation processing that is stated in this report will reduce the approaching of risk in industries.    

Reference

Zhao, B. (2016). Facts and lessons related to the explosion accident in Tianjin Port, China. Natural Hazards, 84(1), 707-713.

Xu, F., & Webb, J. P. (2015). Tianjin chemical clean-up after explosion.

Chung, Y. S., & Kim, H. S. (2015). On the August 12, 2015 occurrence of explosions and fires in Tianjin, China, and the atmospheric impact observed in central Korea. Air Quality, Atmosphere & Health, 8(6), 521-532.

Aitao, Z., & Lingpeng, F. (2017). A new insight into the accident investigation: A case study of Tianjin Port fire and explosion in China. Business Process Safety Progress, 36(4), 362-367.

Li, X., Zhu, Y., & Shi, Y. (2016, December). Conflict analysis in redevelopment of brownfield caused by contingency: Tianjin port “8· 12” explosion Hazard, in China. In Industrial Engineering and Engineering Management (IEEM), 2016 IEEE International Conference on (pp. 1106-1110). IEEE.

Jiu-zhou, G. U. A. N., & Plant, S. O. P. (2015). Analysis and Control of Oil and Gas Explosion During Air Injection for Heavy Crude Oil Development. Contemporary Chemical Industry, 6, 098.

Lo, S. S. H. (2016). Policing Crises in Mainland China: The Shenzhen Landslide, Tianjin Explosion and Shanghai Stampede. In The Politics of Policing in Greater China (pp. 223-242). Palgrave Macmillan, New York.

Wang, L. (2018). Features of the microblog and its role in the formation of a green public sphere in China: The case of 2015 Tianjin Explosions. Catalan Journal of Communication & Cultural Studies, 10(1), 133-142.

Sen, X. U., Wehrstedt, L. D. K. D., & Krebs, H. (2016). 2015 Tianjin explosions.

Yao, W., & Qin, S. (2014). A Three-State Faulty Bayesian Network for Solving Combinational Explosion Problem. Journal of Northwestern Polytechnical University, 32(6), 857-864.

Irshad, M. S. (2015). One belt and one road: dose China-Pakistan economic corridor benefit for Pakistan’s econom