MANAGING RISK STANDARD Mandatory

Risk Assessment Matrix Specification

Risk Assessment Matrix

Purpose
To establish a consistent process for assessing Risks to people, assets, environment and reputation
(including social performance).

Who is this for?

 Managers;
 Staff who are in HSE Critical Positions or who are required to implement Controls;
 Technical Authorities;
 Site Controllers, Area Authorities, Performing Authorities, Isolating Authorities;
 Maintenance Planners;
 Employees.

What situations are covered?

This document applies to all Sakhalin Energy Assets, Facilities, operations, Projects and activities, including
activities undertaken by contractors on behalf of the Company. In particular, this document is applicable in
Managing Risk, classification of Incidents and Audit Findings, and as the Maintenance Prioritization Tool.

Requirements
Managers are Accountable for implementing requirements 1 to 2:
1. Use the Risk Assessment Matrix (RAM), see Figure 1 below, for performing HSE Risk Assessments.
a. In reporting to Lenders, use the RAM specified in the Methodology for Classifying and Remediating
Incidents And Breaches that additionally includes a Social consequences column.
2. Assure the competence of people applying the RAM to HSE management processes.

Figure 1: Sakhalin Energy Risk Assessment Matrix

CONSEQUENCES INCREASING LIKELIHOOD
A B C D E
Environment

Never heard Heard of in Has happened Has happened Has happened

Reputation

of in the the Industry in the at the more than

Severity

Industry Company or Location or once per year

People

Assets

more than more than at the

once per year once per year Location
in the Industry in Company
No injury or No No No
0 health effect damage effect impact
Slight injury or Slight Slight Slight
1 health effect damage effect impact
Minor injury or Minor Minor Minor
2 health effect damage effect impact
Major injury or Moderate Moderate Moderate
3 health effect damage effect impact
PTD1 or up to 3 Major Major Major
4 fatalities damage effect impact
More than 3 Massive Massive Massive
5 fatalities damage effect impact

1
PTD is a Permanent Total Disability.

RESTRICTED Document 0000-S-90-04-O-0006-00-E Appendix 5, Revision 05 Valid from 01.08.2012 to 01.08.2015

Document History Authorisor: A. Galaev, Custodian: S.Lock Printed copy uncontrolled p1 of 2
 MANAGING RISK STANDARD Mandatory

Risk Assessment Matrix Specification

Definitions
Harm to People (P) Asset Damage (A)
Slight injury or health effect – not affecting work Slight damage – no disruption to operation, costs less
performance or Daily Life Activities. than $10,000.
Minor injury or health effect – affecting work performance Minor damage – brief disruption to operation, costs less
(restricted work case, or up to 5 days lost time), or reversible than $100,000.
health effects (e.g. skin irritation, food poisoning). Local damage – partial shutdown, can be restarted but
Major injury or health effect – lost time more than 5 days, costs up to $1,000,000.
or irreversible health damage (e.g. hearing). Major damage – partial shutdown up to 2 weeks, costs
Permanent Total Disability or one to three fatalities – up to $10,000,000.
resulting from injury/ occupational illness. Extensive damage – Substantial or total loss of
More than three fatalities – resulting from injury or operation, costs greater than $10,000,000.
occupational illness.
Environmental (E) Effect Impact on Reputation (R)
Slight effect – slight E damage, contained within the Slight impact – Limited public awareness on local level
premises. but no discernible concern, no media coverage.
Minor effect – minor E damage, no lasting effect, e.g. small Minor impact – Local public concern and media
spill offsite, onsite groundwater contamination, single coverage.
exceedance of limit. Moderate impact – High local public concern, extending
Moderate effect – limited E damage that will persist or to the level of the Sakhalin Region, media coverage on
require cleaning up, e.g. spill that requires removal and regional level.
disposal of a large quantity of soil/sand, or observed fish kill Major impact – Likely to escalate and affect reputation
or damaged vegetation, frequent exceedance of limit with of Company, Shareholders and/or Lenders; National
potential long term effect. attention, extensive media coverage on national level,
Major effect – severe E damage that will require extensive some international.
measures to restore beneficial uses, e.g. spill on beach, Massive impact – Severe impact on reputation of
extensive offsite groundwater contamination. Company, Shareholders and/or Lenders, international
Massive effect – persistent severe E damage that will lead public /media attention, NGO action, high level of
to loss of commercial, recreational use or loss of natural concern amongst governments.
resources over a wide area.
The four colors in the application of the RAM mean the following:
Managing Risk Incidents Audit Maintenance prioritization
Severity Zero: Review requirement
to progress work
Manage for continuous
improvement, although Businesses (A1) 7 Routine Priority, Latest
Low Allowed Finish Date LAFD <=12m
may set lower priority for further Risk
reduction. Low Risk (A2/B1) 6 Routine Priority,
Incident LAFD<=6 months
(A3/B2/C1) 5 Routine Priority,
Manage for continuous improvement LAFD<=8 weeks
through the effective implementation Medium
of the HSSE Management System. (A4/B3/C2/D1) 4 Routine Priority,
LAFD<=4 weeks
Identify and implement Controls and (A5/B4/C3/D2/E1) 3 Routine
Recovery Measures to reduce Risk Medium Risk Priority, LAFD<=2 weeks
High
to As Low As Reasonably Incident (B5/C4/D3/E2) 2 Schedule Breaker
Practicable (ALARP). Priority, LAFD<=1 week
Identify and implement Controls and
Recovery Measures to reduce the
Risk to ALARP and provide a High Risk 1 Emergency Priority.
Serious LAFD: ASAP + Overtime.
Documented Demonstration Of Incident
ALARP by a Bow-Tie or equivalent
methodology.
Actual
Significant
Severity
Incident
4 or 5

RESTRICTED Document 0000-S-90-04-O-0006-00-E Appendix 5, Revision 05 Valid from 01.08.2012 to 01.08.2015

Document History Authorisor: A. Galaev, Custodian: S.Lock Printed copy uncontrolled p2 of 2