Magazine article Risk Management

The Loss That Didn't Occur

Magazine article Risk Management

The Loss That Didn't Occur

Article excerpt

This is one in a series of columns on risk management success stores that illustrate how, as the result of a risk management program or philosophy being implemented, the company was spared losses prevented or mitigated...to the risk management job that is saved...to anecdotes about risk management solutions. Because the benefits of some programs are not always visible, here's the chance to publicize those that are. Tell us about the risks in your company that could have--but did not--occur. Contact: Con Kyle, assistant director of public affairs, RIMS, 205 East 42nd Street, New York, NY 10017; (212) 286-9292; Fax (212) 986-9716.

HANDS-ON PAYS OFF

THE PROBLEM: Young Brothers Ltd. is a common carrier by water that has six outport facilities plus a central terminal operation. There were five underground storage tanks located among four of the port facilities. The usts had once been used as fuel storage tanks for the hi-lifts that the company operates. All of the usts were over 25 years old. None was in active use as the deadline approached for the ust regulations to take effect. Accepting good risk management advice, operations management ordered the removal of all the tanks.

Four of the tanks were removed without a problem. When the fifth tank was excavated, there were several holes in it and the ground smelled of fuel. Having had an incident involving a PCB spill a few years earlier, large dollar signs pervaded all thoughts of this cleanup.

THE PROGRAM: Risk management at Young Brothers has always meant working hands-on with the experts in these crisis situations. The philosophy is to understand the technical points of the problem, provide consultants with whatever authority is needed and monitor the process closely to be sure of what is going on and to be part of all decision making. First, Young Brothers immediately put together a project specification and solicited bids from the experts in the area. The company had a working relationship with one and received a recommendation about several others. In the fax age, time can be cut drastically, so initial responses came very quickly.

With one exception, each consultant came back with an initial evaluation cost in five figures and projections of cleanup in six figures. It was not difficult to tell that these people were working with a boilerplate approach to the problem. The last consultant took a different approach. …

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