Risk Management Report: Analyzing the Tianjin Port Disaster Impact

This report provides an in-depth analysis of the Tianjin Port disaster, focusing on the identification and analysis of various risks. It explores the financial, legal, environmental, and human resource impacts of the incident, highlighting the devastating consequences of the explosions. The report examines the lack of proper safety standards and the resulting environmental damage and loss of life. It details a plan for measuring and monitoring performance, emphasizing the need for effective communication and strategic risk management techniques. The report also analyzes strategic issues, such as the need for improved supply chain risk management tools and the importance of complying with safety regulations. Furthermore, it discusses the effectiveness and limitations of risk assessment, emphasizing the need for accurate prediction and preparedness. The report concludes by emphasizing the importance of proactive risk management strategies and the implementation of technologies to prevent future disasters.

Running head: RISK MANAGEMENT
Risk management
Name of student
Name of University
Author note

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Table of Contents
Introduction......................................................................................................................................3
Identification and analysis of risks..................................................................................................3
Plan for measuring and monitoring performance............................................................................7
Processes to analyse strategic issues................................................................................................8
Effectiveness and limitations of risk assessment.............................................................................9
Personal autonomy.........................................................................................................................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................12

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Introduction
The report analyses the disaster plan by prioritising the various risk management
principles through the use of various frameworks, literature reviews and models. The risks that
are experienced are associated with the financial, legal, environmental and human resources,
which has created a significant impact on the engineering activities considering the safety and
environmental management systems. Various risk management tools and techniques will be
identified by analysing the actual scenario and create risk management strategies for overcoming
the engineering activity issues with ease and effectiveness. With the help of risk assessment
techniques, it will be easy to manage these kinds of financial, legal and environmental risks and
furthermore ensure that the engineering activities are managed properly (Aven, 2012). The
limitations of assessment of risks along with the risk perception and communication of issues
related to the risks are considered as useful for developing the communication skills and plan
with efficacy.
Identification and analysis of risks
The serious incident occurred at the Tianjin Port where a large container storage station
was present. The explosion was so huge and happened continuously that it detonated more than
800 tonnes of ammonium nitrate, thereby creating huge amounts of fire. By identifying and
analysing the risks, it could be understood that huge amounts of chemicals were stored at the
container storage facility at the Port of Tianjin along with calcium carbide, sodium nitrate and
ammonium nitrate that resulted in the explosions multiple times (Colicchia & Strozzi, 2012).
Financial

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The explosion happened during the night, and the devastation continued till early
morning, taking the lives of hundreds of people and injuring many as well. The financial
condition of the country was hampered due to the destruction of huge numbers of buildings and
cards that were present in the port area. It also destroyed the dormitories of workers who had
shops in the port area. Shockwaves were felt several kilometres away, which even damaged the
roads and many houses nearby, thereby creating a huge loss, which needed investments to regain
the initial condition (Glendon, Clarke & McKenna, 2016).
Figure 1: Destruction of cars
(Source: Glendon, Clarke & McKenna, 2016)

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Legal
After analysing the scenario, it was found that the organisation located there did no
maintain proper packaging standards, due to which safety was hindered. There were more than
15000 containers present, among which nearly 30 of those had been left unchecked based on the
packaging and safety standards, which was a major legal issue as well. The legal issues were
that proper safety standards were not maintained, because of which, the explosion occurred and
destroyed many buildings, roads, plants and trees and even took many lives of people
(Haimes¸2015).
Environmental
The environment lost its ecological balance due to the huge amounts of gases that were
spread from the explosion and engineering activities. The hazardous chemicals including the
ammonium nitrate, which was used for manufacturing fertilisers were destroyed, and while
combating the fire, water was put on the calcium carbide, which released a large amount of
volatile gas named acetylene. These harmful gases not only made people suffocate but also
created pollution by harming the environment. It destroyed many trees, plants nearby and even
the explosions caused damage to the atmosphere, furthermore created environmental issues that
deteriorated the environmental condition too (Kaplan & Mikes, 2012).

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Figure 2: Fire spreading on buildings in the port area
(Source: Kaplan & Mikes, 2012)
Human resources
According to various evidence, the explosion happened in an industrial area, and this
resulted in taking lives of many officials and employees who have been working at the Port of
Tianjin. The workers who died during the explosions were assumed as state officials who were
there to discuss the safety standards that could be maintained at the workplace. The TNT
explosions also caused huge destruction to the warehouse that was run by Tianjin Dongjiang Port
Ruihai International Logistics, and many of the workers there also faced miserable death. Many

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firefighters fought bravely to stop the fire though many of them were found dead as well (Lam,
2014).
Plan for measuring and monitoring performance
From the perspective of SMART, specific objectives are to identify the risks related to
the financial, level, environmental and human resources aspects while the measurable objectives
are to create an effective communication plan. The objective that is needed to be achieved
include monitoring the performances; relevant objective is to determine the impacts of the
incident and develop effective plans to overcome the issues and finally implement an effective
supply chain strategic management technique to overcome the critical situation (Meyer &
Reniers, 2016).
The risk communication plans are developed to identify much more than just the
incidents that occurred but also evaluate the storage of hazardous substances and trade disruption
through the implementation of effective strategies with ease and effectiveness. The measurement
and monitoring of the performance of the strategic risk management techniques are done by
assessing the risks related to the hazardous substances storage and even the regulatory
compliance obligations to manage updating, protection, mitigation of risks and provide an
emergency response by planning for effective training sessions. The training and development
sessions would make the workers well informed about the rules and regulations and perform in
such a manner so that it complies with the rules and regulations of the organisation and
organisational standards are maintained as well (Park et al., 2013). The business impact analysis
or BIA has facilitated the ways of assessing the risks and critical activities and resources that will

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be required for overcoming the issues caused due to the damages from the explosions at Tianjing
port, China.
The communication plan efficiency is improved with the utilisation of data and analytics
through active monitoring and managing supply chain visibility to ensure successful business
continuity and implement effective, resilient strategies. The contingency plans are assessed,
which can create impacts on the supply chains. The perception of risks is managed by reviewing
the obligations regarding contracts made with the suppliers who deliver good quality raw
materials and supplies during the catastrophe for improving the condition of the place after the
Tianjin port explosion (Pritchard & PMP, 2014).
Processes to analyse strategic issues
Risk management tools and strategies
One of the major strategic issues was that the strategies, policies and procedures were not
implemented properly, which resulted in hindering the safety standards during the explosion.
There is need for reinforcing the supply chain risk management tool to ensure that further
catastrophes at Tianjin does not occur and proper health and safety standards are maintained to
prevent any casualties that may be faced during the huge explosions. The third largest port, i.e.,
Tianjin, China was destroyed and it had been quite familiar with the industrial accidents that
happened in the past few years. The supply chain risk management tool is used to ensure proper
implementation of the strategies, manage the daily risks, and even predict the chances of risks
that may be faced shortly (Sodhi, Son & Tang, 2012). The supply chain activities are also
managed by enabling assessment of risks continuously, reduce the vulnerabilities, and

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furthermore ensure continuation of implementing effective strategies for managing the risks with
ease and effectiveness.
The supply chain risk management technique is considered as useful through the
implementation of new technologies and ensures that the catastrophic accidents are mitigated
largely. From the case scenario, it is clear that among the huge numbers of storage containers
that contained chemicals and hazardous substances, only a few of those were checked, which
exploded afterwards and destroyed infrastructures, caused pollution and even took lives of many
people. The explosions have caused severe impacts on the multinational companies’ supply
chains, and thus it is essential to ensure that the Port facilities at Tianjing comply with the
Chinese rules, regulations and legislations to maintain safety standards. Based on the guidelines,
there should be an allowance of storage of maximum 10 tons of chemicals and hazardous
substances, and due to the stored chemicals exceeding the permissible allowance, the explosions
tended to happen (Sun, 2015).
Effectiveness and limitations of risk assessment
Research questions:
What are the various financial, legal, environmental and HR issues faced during the incident?
What can be the tools and strategies to mitigate the strategic issues?
The effects of the explosions were huge and this damaged lots of infrastructures, vehicles
parked there, buildings, shipping containers, etc. This created complicated claims for insurance,
recover the amounts of money that were lost due to damage to infrastructures and other risk
mitigation issues too for the third and first parties. Based on the level of damage produced, the

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risk assessment methods could help in mitigating the impacts on company’s finance and manage
the operations and processes successfully. The risk assessment technique can be used as an
effective decision making tool to review the terms and conditions of the insurance policies and
even identify the coverage that could be applied to the property and lives lost. The local
resources should be listed accordingly through the management of global connections for
ensuring that it could facilitate the customs, policies and procedures, resolve issues related to
property access and take less time to develop new infrastructures within quick time (Willey,
Murphy & Baulch, 2015). The risk assessment can also determine the long and short-term supply
chain impacts and focus on the alternative sourcing, distribution and transportation of goods and
services.
Few limitations of assessing risks include not getting a clear understanding of the
likelihood of issues like here the explosion was not assumed earlier, though proper checking
shall have been done to make sure that the containers do not hold more chemicals and hazardous
substances. In various situations, the knowledge and experiences are limited, which cannot
predict the future negative outcomes that may be generated (Aven, 2012).
Personal autonomy
From the report, it could be analysed that the catastrophic explosions could cause huge
numbers of issues that could not only create adverse effects on the environment, but also to the
environment and human resources. As part of the contingency and risk assessment plan, I think
that the explosion should have been stopped if the containers were monitored and checked so
that the hazardous substances do not exceed the permissible limit. The strategic risk management
technique is managed along with the business impact analysis or BIA to resolve the chances of

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risks. The supply chain risk management could be used because I think with the proper
implementation of technologies, these kinds of incidents would be controlled and predicted at the
earlier stages (Colicchia & Strozzi, 2012).
Conclusion
Various types of risks have been identified while managing the engineering activities and
even during the disaster, there have been numerous risks associated with it, which have created a
negative impact on the safety and environmental management systems. The issues have been
faced during the Tianjin explosions that occurred on 12th August 2015. There were a series of
explosions, which killed more than 170 people, and hundreds of people were injured as well,
thus creating an overcrowded atmosphere at the hospitals and nursing homes as well. The
financial issues were faced due to the destruction of buildings; cars present at the port area
whereas the legal issues had been faced because of not complying with the organisational
standards. The human resources issues were related to the death of many staffs who were
working there. The supply chain risk management strategy helped in fulfilling the supply chain
requirements and communication plan was devised by considering the data and analytics derived
based on the negative impacts caused due to the explosion.

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References
Aven, T. (2012). Foundational issues in risk assessment and risk management. Risk
Analysis, 32(10), 1647-1656.
Colicchia, C., & Strozzi, F. (2012). Supply chain risk management: a new methodology for a
systematic literature review. Supply Chain Management: An International Journal, 17(4),
403-418.
Glendon, A. I., Clarke, S., & McKenna, E. (2016). Human safety and risk management. Crc
Press.
Haimes, Y. Y. (2015). Risk modeling, assessment, and management. John Wiley & Sons.
Kaplan, R. S., & Mikes, A. (2012). Managing risks: a new framework.
Lam, J. (2014). Enterprise risk management: from incentives to controls. John Wiley & Sons.
Meyer, T., & Reniers, G. (2016). Engineering risk management. Walter de Gruyter GmbH & Co
KG.
Park, J., Seager, T. P., Rao, P. S. C., Convertino, M., & Linkov, I. (2013). Integrating risk and
resilience approaches to catastrophe management in engineering systems. Risk
Analysis, 33(3), 356-367.
Pritchard, C. L., & PMP, P. R. (2014). Risk management: concepts and guidance. CRC Press.
Sodhi, M. S., Son, B. G., & Tang, C. S. (2012). Researchers' perspectives on supply chain risk
management. Production and operations management, 21(1), 1-13.
Sun, B. (2015). Tianjin port explosions. Process Safety Progress, 34(4), 315-315.

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Willey, R. J., Murphy, J., & Baulch, A. (2015). The explosion in Tianjin, China, August 12,
2015. Process Safety Progress, 34(4), 312-312.