Risk Management Plan for Fortescue Metal Group

This document presents a comprehensive risk management plan tailored for Fortescue Metal Group, an Australian iron ore mining company. It includes an introduction to the company and its operations, definitions of key risk management terms, identification of stakeholders, and a detailed risk assessment process. The plan utilizes consequence and likelihood matrices to evaluate risks, and it provides a risk register and treatment schedule. The document also outlines risk action plans and includes templates for risk registers and treatment schedules. The plan is based on AS/NZS 4360 standards and aims to mitigate various risks associated with mining operations.

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RISK MANAGEMENT PLAN
(insert name of Business )
This plan is based upon AS/NZS 4360
– Risk Management.
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Contents Page
Table of Contents
1.0 Introduction and Context...................................................................................................3
Busindess Name and Description...............................................................................................3
1.1 Background Scope.............................................................................................................3
Background................................................................................................................................3
Detail Activities of the Business.................................................................................................4
1.2 Organisational Details ( Company , Management Structure and Staffing......................5
2.0 Definitions..........................................................................................................................6
Risk.............................................................................................................................................6
Risk Assessment.........................................................................................................................6
Risk Management......................................................................................................................7
Risk Reduction...........................................................................................................................7
Risk Treatment...........................................................................................................................7
Risk Transfer..............................................................................................................................7
Risk Acceptance.........................................................................................................................7
3.0 Stakeholders in Risk Management Plan.............................................................................8
RISKS..............................................................................................................................................8
4.0 Risk Identification...............................................................................................................8
5.0 Assessing Potential Risk...................................................................................................10
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Table 1: Consequence Matrix...........................................................................................10
Table 2: Likelihood Matrix........................................................................................................11
Table 3: Level of Risk................................................................................................................12
Table 4 : Risk Register................................................................................................................9
References:..................................................................................................................................16
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1.0 Introduction and Context
Busindess Name and Description
Fortescue Metal Groups Limited is one of Australia’s iron mining companies. The company is listed on the
Australian Securities Exchange and is financially very powerful(Fmgl.com.au. (2017).
The context is developed to run a risk mnagament programme in a real life situation with Fotescue as its
background.
(As an example…the context within which this plan has been developed is to develop
and run a successful ( Buisnbess ) , ensuring at the same time the patrons, the
property and environment are protected from damage and the business provides a
positive contribution to the community.
1.1 Background Scope
(An overview of the business should be provided here…which creates an image in
the readers mind and sets the scene for the rest of the document. The following
headings should be used as a guide to describe your event)
Background
Risk is an inherent part of mining activities carried out by the mining companies like
Fortescue. Fortescue is an Australian iron ore company, which has its headquarters in East
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Perth with its main mining projects at Chichester Hub, Cloudbreak, Christmas Creek, Solomon
Creek and BC Iron. Fortesue while carrying on mining activities comes under the influence of
several external factors like weather changes and landslides. The company often comes under
the government authorities due to accidents in its mines, which are responsible for injuries
and deaths(Li et al. 2014).
Detail Activities of the Business
Fortescue is a mining company which engages in large scale iron mining in five
locations Christmas Creek, Solomon Creek, Chichester Hub, Cloudbreak and BC Iron. The
compnay is one of the largest iron mining companies in Australia and the world.
Environment: What are the location/ and the layout of the ptremises?
Fortescue carries out mining in Christmas Creek, which is located in Western Australia in the
Chichester Range. The Cloud Break Mine is also situated in the same region. The two iron
mines have facilities of onsite processing of iron ore once mined. The area is also provided
with railway services owned by Forterscue, which allow the metallic commodities loaded
upon ships. As far as the social environment is concerned, the creeks are holy places to the
local people. The political environment of the area is disturbed by struggle over Land rights.
Solomon Creek is the third mining facility owned by Fortescue at the mouth of the
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Susquehanna River and the terrain is experiencing formation of rocks. The mining activities of
Fortescue in these creeks are impacted by acid drainage from the acid mines. The other
minerals present in the creek are manganese and aluminum.
Activities requiring permits? (ABLIS Web Site at https://ablis.business.gov.au/pages/home.aspx
Fortescue is involved in mining activities which require usage of explosives, blasting rocks and
other hazardous methods. Mining of iron ore results in use of surface water and pollution.
Thus, mining activities require permits from government bodies like the Australian Business
License and Information Services(Ablis.business.gov.au. 2017). The Environment Protection
and Biodiversity Conservation Act 1999 also requires all the activities like mining to obtain
approval from the ministry of environment, Government of Australia(Business.gov.au. 2017).
Not acquiring permits for works can attract legal and financial actions against companies
from the government’s side.
1.2 Organisational Details ( Company , Management Structure and Staffing
Fortescue Metal Group Limited is a public limited company listed on the Australian Securities
Exchange. The organisational chart of the company shows that it is led by the chief Executive
Officer, chairman of the board, lead director and the other directors. the operations
department, sales and marketing department, external relationship, corporate services and
law, business development, finance and secretary, corporate affairs and secretary and the
CFO, all report to the CEO.
As far staffing is concerned Fortescue employs both on role and outsource employees.
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Fortescue employs around twenty five thousand employees of various capacities like
mechanics, engineers, labourers and miners.
2.0 Definitions
Risk
Risk refers to future uncertain or unexpected situation which may result in loss of capital, human resource or
material. Risks are usually caused by external environment factors and the companies normally have very little
or no control over the risk causing factors. Fortescue is involved in iron ore mining and requires using of
hazardous methods like blasting to get iron ore. This exposes the people at the sites around the mine to
various risks, which have resulted in accidents, deaths and loss of productivity(Pandey, Agrawal and Singh
2016).
Risk Assessment
Risk assessment refers to identification of hazards, analysis and evaluation of risks involved and determine
appropriate ways of eliminating the hazards. If the hazardous factors cannot be eliminated, the companies like
Fortescue try to reduce them(Garcia et al. 2017).
Risk Management
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Risk management refers to the cultures, processes and structures, which companies undertake to reduce the
risk factors and take advantages of a market situation. The iron ore mining companies try to increase their
production of iron ore using more advancement technology and reducing the possibilities of accidents( Zhang
et al. 2016).
Risk Reduction
Risk reduction or loss control refers to reduction in the frequency or severity of losses, accidents and damage.
Risk reduction techniques may involve initiatives like use of engineering, fire protection apparatus and safety
management. Companies involved in hazardous activities invest huge amount of money in technology and
training staff members to reduce loss due to accidents(Verdejo et al. 2016).
Risk Treatment
The selection, development and implementation of risk treatment strategies and controls are called risk
treatment. Risk treatment requires participation at all the three levels namely upper, middle and lower levels
in the organisations.
Risk Transfer
Risk transfer refers to contractual shifting of business risks to one party to distribute the resultant losses. For
example, the organisations insure their fixed assets like expensive machinery to transfer the risks to insurance
companies.
Risk Acceptance
Risk acceptance refers to acknowledging the presence of risks in certain areas like mining. The companies who
are involved in carrying out mining activities also arrange to minimise these risks totally.
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3.0 Stakeholders in Risk Management Plan
(Detail all agencies, organisations and businesses who are involved in preparing and
providing input into the Risk Management Plan. Indicate who was involved in the
consultation process)
The stakeholders involved in preparing risks management function of Fortescue Metal Group are the apex
management, the middle level employees and the lower level employees. The external stakeholders to
Fortescue’s risk analysis management included the shareholders’ shareholders, clients and labourers. The
labour contractors and the suppliers of raw materials are important organisational stakeholders of the
Fortescue. The business organisations like security consultant firms are the other important stakeholders. The
government and the environmental bodies are the important key stakeholders who impact the functions of
Fortescue.
The security consultant firms, the sub contractors and the employees were involved in the consultation
process.
RISKS
4.0 Risk Identification
The areas identified in the Risk Management framework have been identified under the following
categories:
(It is expected that the following risks will be assessed as part of the process,
however this list should not be considered a complete list…there will be some which
are specific to your event such as drowning if your event is held on a reserve which
has a lake).
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Health /injury /diseases.
Epidemics
Accidents
Criminal activities
Terrorist activities
Protests
Government crackdown
Theft of machinery by illegal identities
Death due to machine breakdown
Environmental risks
Landslides
Floods
Snow
Strong winds
Cloud burst
Fire
Forest fire
Famine
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legal/ contractual
Operational
Lavck of modern machinery
Reputational promotional
Losing of clients.
Loss of key personnel
Inadequate function
Attack from wild animals and human beings.
5.0 Assessing Potential Risk
Once risks are identified, they are evaluated on a 2 dimensional matrix using
a qualitative rating of the likelihood of the event occurring and the scale of the
possible consequences. When risks have been identified, they are analysed
by combining the consequences and likelihood to produce a level of risk. This
form of evaluation provides a good graphical representation of how serious the
risk is or where it lies within a group of risks. The risk analysis provides
information critical to determining what risks need to be treated and what risks
are accepted.
The following matrices have been utilsed for the assessment
process;
Table 1: Consequence Matrix
Level Descriptor More Detail Injuries Financial
Impact
Operational Impact
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1 Insignificant Low Impact, low profile None <$1000 Little impact <1 hour
2 Minor Public embarrassment,
low impact and low news
First Aid <$1-10,000 Inconvenient delays
1hr-1day
3 Moderate Public embarrassment,
Moderate news item
Medical
Assistance
<$10-
$50,000
Significant delays
1day – 1week
4 Major Loss of production capabilities,
public embarrassment, 3 rd
party action, high news impact
Extensive
Treatment
<$50-
$150,000
Non achievement
certain aspects 1 wk-1
mth
5 Catastrophic Public embarrassment, 3 rd
party action, high news and
impact
Deaths +$150,000 Non achievement of
objectives +1 month
Table 2: Likelihood Matrix
Level Descriptor More Detail As a guide…
A Almost certain Is expected to occur in most circumstances Once in a year
B Likely The event will probably occur at least once Once in 3 years
C Possible The event might occur at some time Once in 10 years
D Unlikely The event is not expected to occur Once in 30 years
E Rare The event may occur only in exceptional
circumstances
Once in 100 years
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