The APS faces risks in a number of definable areas; some of these are strategic in nature and affect the whole agency while others are more operational. The APS also must consider and assess significant reputational risks. Communicating and consulting about risk underpins the successful management of risk. Effective communication requires consultation with employees, relevant stakeholders and the transparent, complete and timely flow of information between decision makers.
The case study on the Australian Antarctic Division (AAD) provides an example of the operational benefits to be gained from an integrated approach to understanding and communicating risk. It also highlights an approach to evaluating risk-management processes to continually improve performance. The case study also highlights the operational value of thorough pre-planning and risk assessment. The AAD approach demonstrates that good risk-management aids decision making when it reflects the agency's risk profile, is integrated, adaptive, evidence based, user friendly (with responsibilities made clear), encourages assurance through external scrutiny, and drives performance improvements.
Australian Antarctic Division: Risk management in the Australian Antarctic program
Australian Antarctic Division (AAD) is a division of the Department of the Environment. It contributes to advancing Australia's strategic, scientific, environmental and economic interests in the Antarctic and sub-Antarctic. One strategy aimed at achieving this objective is through the delivery of the AAD's Australian Antarctic program (AAp).
The AAp engages best practice operational risk management, minimising risks and maximising opportunities, in some of the harshest and most remote locations on earth. The task is enormous, with the AAp annually supplying four permanent stations in the region, supporting marine and field science, recruiting and training hundreds of expeditioners, providing transport and cargo logistics within a complex supply chain in collaboration with international partnerships, while complying with an array of national and international legislative obligations.
AAD aims to deliver a well-planned, integrated and safe Antarctic program. This is supported through robust, integrated and effective risk-management practices; the continual development of a positive AAD risk culture; and ongoing reporting, reviewing and managing operational risks.
Operating in Antarctica demands a risk-management framework that reflects AAD's risk profile and resources. AAp risk management is, by its nature, adaptive, rigorous and evidence-based. It must help the AAD meet obligations and deliver its program safely and effectively.
Through pre-planning and annual season risk assessments, a number of risks are identified and controls and treatments put in place. A key risk of operating in Antarctica is the possibility of a significant work, health and safety (WHS) incident.
During the 2013–14 AAp season, a helicopter incident occurred 150 nautical miles inland from Davis Station, seriously injuring three people. The worst case scenario was nearly realised, but because strong risk control measures were identified and implemented—such as standard operating procedures, training on safety and emergency response procedures, appropriate kitting, field team composition, helicopter flying protocols, Bureau of Meteorology weather forecasts, coordinated aviation logistics and the use of advanced telemedicine support—the injured were successfully retrieved and safely returned to Hobart.
Risk management is directly resourced through a dedicated risk manager and other risk-management roles across WHS, environmental management, security and financial risk. Examples of AAp-funded risk mitigations include engaging dual helicopters (which is often more than is needed for the task alone), wilderness first-aid training, communications equipment and survival equipment.
All areas undertake relevant risk assessments and check that controls are effective and/or implement treatments as part of planning, operation, monitoring and continual improvement processes when delivering the AAp.
The program undergoes an annual two-day debrief at the end of each season, analysing issues, risks and lessons learned. Annual planning includes revising the AAp season's risk assessment, standard operating procedures and manuals. Assurance is through an audit programme, including AAD, departmental and external regulatory audits. A continual improvement programme exists with a WHS Register of Targets and key performance indicators linked to risks and business objectives.
Reviewing and continuously improving risk management
The CRMP formalises the requirement for agencies to review and continuously improve risk management:
Formalising and implementing risk management within an entity is not a ‘one-off event’. The effective management of risk is a process of continuous improvement, requiring regular review and evaluation mechanisms.21
The 2011 ANAO report on the HIP highlighted deficiencies in the risk-management approach. The case study on the Department of Communications outlines the way in which lessons from the HIP were learned and incorporated into the implementation of the Household Assistance Scheme that formed part of the switchover to digital television.
Department of Communications: Household Assistance Scheme
As part of the switchover to digital television,
the Household Assistance Scheme (HAS) was established to provide in-home practical and technical assistance with installation services (including antenna, cabling, set-top boxes and satellite access, where warranted) to eligible Australians receiving the maximum amount of specified government allowances.
The ANAO performance audit of the Home Insulation Program (HIP) provided valuable lessons for the Department of Communications in minimising risk in the development and implementation of the HAS including:
- outsourcing delivery to companies with previous experience in installing television services in homes
- performing extensive checks on installers before installation (safety, reliability, quality of work, experience, price, service and financial position)
- undertaking a programme of quality assurance, testing 5% to 10% of installations
- rolling out progressively, starting with smaller-scale regions, so the programme could be evaluated, adjusted and refined for future regions.
Risk was significantly reduced through the outsourced delivery model involving deeds with experienced service contractors requiring adherence to work, health and safety (WHS) standards designed to protect installers and householders. These standards specified the minimum technical standards for equipment installed in homes. The deeds also required installers to be trained before they began to install.
The formal quality assurance programme was also substantially provided by an outsourced experienced firm. It involved quality assurance of each service contractor's quality management system, performing WHS inspections while installations were being conducted and performing post-installation technical equipment inspections. This programme resulted in approximately 7% of installations being inspected. The programme improved installer safety and quality performance over time, particularly by introducing unannounced on-site inspections.
More than 320,000 installations were completed under the HAS from 2010 to 2013, representing approximately 4% of Australian households. Implementing the HIP learnings resulted in the HAS being completed safely, to a high quality and in the required timeframe. It provided an important safety net for vulnerable Australians in the transition to digital television.
21 Department of Finance 2014, Commonwealth Risk Management Policy, Commonwealth of Australia, Canberra, p. 17, viewed 21 October 2014, http://www.finance.gov.au/comcover/risk-management.