<<
5-Waters Volume 1
9 Risk Management
This section outlines the risks and the process of identifying risks that may affect the ongoing delivery of services from infrastructure. It covers these key areas:
- Business risk management processes;
- 5Waters risk management approach;
- Resilience of Infrastructure to Natural Disasters;
- Other considerations, in particular WSPs and regional plans;
- Risk management strategy; and
- Emergency management and Civil Defence.
9.1 Business Risk Management Processes
This section introduces business risk management processes used for the 5Waters Activity. Assessment and management of risk within the 5Waters provides defensible tools for communities and the Council to develop prudent work programmes that support sustainable development.
9.1.1 Risk Policy
The 5Waters all risks management process follows best practice as described in the International Infrastructure Management Manual 2015 and the International Standard on Risk Management ISO 31000 2009 Risk Management - Principles and Guidelines [20], as shown in the diagram below.
The risk assessment process identifies “critical assets" and assesses the implications of service failure on Council's customers, with the objective of optimising the service potential of the assets employed.
Figure 9‑1 Risk Management Process
A corporate Risk Management Policy [21], aligned with AS/NZS ISO 31000 was formally adopted by Council in August 2017, with the following objectives:
- Achieving Council's goals, programs, targets with a commercially and politically acceptable level of risk;
- Ensuring all staff understand and fully accept their risk identification and control responsibilities;
- Ensuring all staff implement appropriate risk management processes naturally as part of their daily work;
- Establishing a best practice model for corporate governance and risk management for local government in New Zealand
The Policy Statement within this document states:
It defines four broad categories of risk, which are also categorised by organizational responsibility as illustrated in the tables below.
Table 9‑1 Categories or risk
Strategic
| Risks associated with high level goals that align to Councils Strategic direction and Long Term Plan |
| Operational | Risks associated with departmental functions and daily operations |
| Project | Risks associated with Project Management; |
| Compliance | Risks associated with regulatory/legislative requirements (H&S). |
This framework is consistent with the methodology used for the 5-Waters activity, and the 5Waters approach meets corporate expectations and requirements.
9.1.2 Risk and Asset Management
Application of a systematic and consistent approach to risk assessment improves Council's ability to manage its assets within resource limitations and to prioritise expenditure and actions that can avoid or mitigate the effects of any event. The negative consequences of risk events can seriously impact public health and safety, incur financial loss or adversely affect public image. The risks identified might be relevant to many activities and be of concern at corporate level, or they might be localised, at an asset specific level.
As urban development increases the value of the built asset, and threshold limits for cultural and environmental impacts tighten, the need for more formal risk management practices increases. Mitigation strategies need to be put in place and reviewed continuously to achieve improvement to levels of service.
9.1.3 Resilience
Communities rely on water services for their daily economic and social wellbeing. The ability of water services infrastructure to function during adverse conditions and quickly recover to acceptable levels of service after an event is fundamental to the wellbeing of communities.
Furthermore, the risks to critical infrastructure from hazards are increasing globally. These hazards can include natural, technological and social/political hazards. Some natural hazards are 'rare events', events which may previously have been considered extremely unlikely, but are instead occurring more frequently than previously expected.
The effects of such hazard scenarios can be exacerbated by the complex interdependencies that exist between modern infrastructure networks, and the existence of many different failure modes – all of which can affect the functioning of infrastructure.
The resilience of infrastructure to such events is therefore a key consideration in asset management planning, and both physical and organisational dimensions are significant.
The National Infrastructure Plan (2011) defined the concept of “resilience":
“The concept of resilience is wider than natural disasters and covers the capacity of public, private and civic sectors to withstand disruption, absorb disturbance, act effectively in a crisis, adapt to changing conditions, including climate change, and grow over time".
The following diagram illustrates the relationship between risk management's traditional 4R's, shock events, and components of resilience.
Figure 9‑2 Resilience and the 4R's
Engineering measures such as asset strengthening can reduce the effects of an event, while readiness is about organisational preparedness.
Following the occurrence of an event or shock, initial short term response is followed by longer term recovery processes.
This diagram also illustrates the importance of pre-event awareness to resilience – firstly understanding the vulnerability of the assets, and secondly “adaptive capacity" a critical organisational capability for readiness.
Following the event, a sudden change in the levels of service being provided occurs, and it typically takes a much longer period for services to return to full normality.
Resilience requires more than good engineering – “technical" and “organisational" dimensions of resilience are both important:
- Technical resilience relates to the ability of a physical system such as an infrastructural network to perform to an acceptable / desired level when subject to a hazard event; and
- Organisational resilience relates to the capacity of an organisation to make decisions and take actions to plan, manage and respond to a hazard event in order to achieve the desired resilient outcomes. In this context, change readiness, relationships, leadership, culture, financial sustainability and insurance arrangements are important aspects.
9.1.4 Asset Insurance
Asset Insurance is covered in Section 11.0 Financial Summary.
9.2 Risk Management Approach
9.2.1 Integrated Approach
For the 5Waters Activity, risk assessment is integrated across the 5 services. Often, similar mitigation measures can be applied to reduce risk in more than one of the 5Waters activities. Furthermore, Council utilises a prioritisation system for capital expenditure and operational improvement projects which is based on evaluation of community benefit and cost and which allows, but does not require, preference for expenditure in one service over another. This approach is fundamental to allow sustainable management of water services.
If the levels of service are achieved, in tandem with legislative compliance, prudent investment and good financial management, then minimisation of the following should occur:
- Exposure to public and general liability; and
- Risks derived from the operation of assets.
Risks arise from many areas of the 5Waters Activity. They can be derived from the use of physical assets (e.g. a pump or a pipe failure) or management of the services provided (e.g. failure to formalise procedures and reporting of incidents).
In addition to the risk evaluation process used to justify improvement projects as mitigation measures there are a number of other processes that Council uses for management of risk within the 5Waters asset portfolio. Often these are driven by legislative requirements. However, they are all integrated with the risk management approach and can be used as sources for identification of risk events.
9.2.2 Strategic Approach
The strategic approach to management of 5Waters risks is to:
- Apply assessment tools to evaluate gross, current and residual risk and derive potential mitigation measures, where considered necessary;
- Document the assessment process and record potential mitigation measures. These measures can be used to signal the need to implement specific improvement projects or change or improve processes and practices;
- Input improvement projects derived from this risk evaluation into the prioritisation process to derive expenditure programmes; and
- Link prioritised projects to specific assets that are affected by the projects within the AMS.
Regular and timely monitoring of these strategies will ensure that changes/modifications to management and operation practices are effective.
9.2.3 Statutory Requirements
Obligations as a Lifeline Utility
The Civil Defence and Emergency Management Act 2002 contains specific requirements in relation to Lifeline Utilities. In the Act the term “lifeline utility" means an entity named or described in Part A of Schedule 1, or that carries on a business described in Part B of Schedule 1".
The Act states the duties of lifeline utilities at Section 60:
60. Duties of lifeline utilities
Every lifeline utility must—
(a) ensure that it is able to function to the fullest possible extent, even though this may be at a reduced level, during and after an emergency:
(b) make available to the Director in writing, on request, its plan for functioning during and after an emergency:
(c) participate in the development of the national civil defence emergency management strategy and civil defence emergency management plans:
(d) provide, free of charge, any technical advice to any Civil Defence Emergency Management Group or the Director that may be reasonably required by that Group or the Director:
(e) ensure that any information that is disclosed to the lifeline utility is used by the lifeline utility, or disclosed to another person, only for the purposes of this Act.
The Council's water supply, wastewater and stormwater networks are defined under the Act as lifelines. Further information is provided in Section 9.3 Resilience of Infrastructure to Natural Disasters.
Water Safety Plans
As discussed in Section 0 the Health (Drinking Water) Amendment Act 2007 required drinking water suppliers to prepare and implement a Water Safety Plan for any water supply serving more than 500 people. Council decided in 2010 that WSPs were to be completed and used as an alternative means of compliance with DWSNZ 2008. The key risks identified in WSPs are summarised in Section 9.4 Water Safety Plans.
9.2.4 Risk Management Objectives
Risk events associated with the 5Waters Activity are often dominated by extreme consequences such as public health and high community cost. The context of these risks is heavily determined by national legislation and standards and by community expectation. Water services are expected by the community and their tolerance for failure of the services is generally low. The treatment of risks is usually undertaken to ensure there is intervention at the appropriate time.
The 5Waters goal is to ensure there are strong links between sustainability principles, community outcomes and levels of service.
The ultimate aim for completing any work is to minimise the risk of failing to deliver the levels of service for the community.
The risk management approach addresses the following objectives:
- Risk events must be distinguished from the projects that will improve levels of service. Projects are
outcomes of risk evaluation. Risk evaluation highlights areas where achieving levels of service may not occur;
- Projects are defined from mitigation measures and then fed into the project prioritisation process;
- Once projects are prioritised and budgets are set, project programmes can be determined according to affordability; and
- Risk evaluation provides a tool to define projects. In its absence, project creation can be adhoc and somewhat dependent on informal discussion and communication.
9.2.5 Risk Management Methodology
Although risk management strategy and risk management processes essentially follow AS/NZS ISO 31000:2009 “Risk Management Principles and Guidelines", the detail within evaluation methods may vary between utilities. The 5Waters process is fully detailed in a spreadsheet based system, adapted to suit an integrated 5Waters approach. Figure 9‑3 summarises the process.
Figure 9‑3 Risk Evaluation Process
More information on the process, including detailed consequence and likelihood rating tables, is provided in the report “5Waters Risk Assessment" dated June 2018.
9.2.6 Consequences
Weighted consequences are evaluated for each risk event and linked to Council's levels of service. This assumes that the direct outcome of a risk event is failure to deliver one or more levels of service as listed below. Previous community consultation work established weightings for levels of service; as detailed in Table 9‑2 below.
Table 9‑2 Levels of Service and Areas of Impact Weightings
| Public Health & Safety, Contamination and Overflows | The community is provided with water services that protect their health and property.
| 0.19
|
Asset Performance
| Service capacity is provided to accommodate growing communities where this growth is sustainable. | 0.15 |
| A continuous water supply service is provided to reticulated properties | |
Environment and Legal Compliance
| Adverse impacts on the environment are minimised. | 0.07 |
| Greenhouse gas emissions from the provision of water services are minimised. | 0.05 |
| Historical or Cultural | Adverse effects of water services on cultural and heritage values are minimised. | 0.03 |
Financial
| Customers are provided and fairly charged for water services that meet their reasonable needs (CAPEX charges) | 0.15 |
Water services are provided in a cost effective manner (Operational costs).
| 0.15 |
| Nuisance effects – odour, noise and aesthetics | Nuisance effects of water services are minimised. | 0.07 |
| Customer Service | Problems with water services are addressed in a timely manner and prioritised according to risk and need. | 0.14 |
Weightings are considered to represent the maximum risk the applicable impact area presents i.e. the greater the weighting value = greater risk. An overall evaluation of consequence for any risk has been calculated as the sum of the impact for each level of service, multiplied by the specific level of service weighting.
9.2.7 Likelihood
The probability of occurrence (likelihood) of an event occurring has been assessed using likelihoods ranging from Almost Certain to Rare:
Table 9‑3 Risk Likelihood
Almost Certain
| 1
| Expected to occur frequently and up to several times a year | 0.9
|
| Likely | 2 | Expected to occur at least once every 2-5 years | 0.4 |
| Possible | 3 | Could occur at least once every 5-10 years | 0.2 |
| Unlikely | 4 | May occur once in 10-20 years | 0.07 |
| Rare | 5 | May occur once in 50+ years | 0.02 |
9.2.8 Risk Assessment Matrix
Consequences and likelihood scores are multiplied together to arrive at a combined risk score and relative level of risk as shown in Table 9‑3.
It is important to note that risk priority ratings shown in Table 9‑4 do not necessarily imply a priority for taking action. Where service failure cannot be allowed to occur even for rare events (e.g. due to the importance of the service to the community, such as a hospital) then a higher priority will need to be accorded. Critical assets are those assets whose failure would impact on such important services. Section 0 describes the approach followed for critical assets.
Table 9‑4 Risk Ratings
|
Negligible
|
Minor
|
Moderate
|
Major
|
Catastrophic
|
Almost Certain
| Moderate
| High | Very High | Extreme | Extreme |
|
Likely | Moderate | Moderate | High
| Very High | Extreme |
|
Possible | Low | Moderate | Moderate | High | Very High |
|
Unlikely | Low | Low | Low | Moderate | High |
Rare
| Low | Low | Low | Low | Moderate |
Table 9‑5 Risk Priorities
|
Risk Score |
Level of Risk |
Risk Response |
>50
| Extreme | Awareness of the event to be reported to Council.
Immediate action required to eliminate / mitigate / manage the risk.
Document risk and action in the AcMP. |
| 35 - 50 | Very High | Awareness of the event to be reported to Council.
Urgent action to eliminate / mitigate / manage the risk.
Document risk and action in the AcMP. |
| 14 - 35 | High | Risk to be eliminated / mitigated / managed as a priority and be actively monitored and reported on |
| 3.5 - 14 | Moderate | Manage risk through routine business procedures |
| <3.5 | Low | Monitor the risk |
Types of Risk
The types of risk event include:
- Operational Failure;
- Asset Failure;
- Natural Disasters;
- Events and Incidents;
- Project Risks;
- Business Risks; and
- Environmental Risks.
9.2.9 Calculation of Risk
Gross risk, current risk and
residual risk have been calculated as a product of likelihood and consequence.
-
Gross risk – the level of risk derived from an event or action if Council did nothing to mitigate.
-
Current risk – takes account of what Council is currently doing to mitigate risk.
-
Residual risk – takes account of additional controls or mitigation actions that could be taken to further reduce the risk.
9.2.10 Prioritised Expenditure Programmes
The risk management process provides Council with a robust approach to derive expenditure programmes that are affordable, undertaken according to a determined priority, and derived from an assessment of the risk of failing to deliver levels of service.
Within these programmes individual projects may relate to:
- Management processes;
- Planning and feasibility;
- Operations and maintenance;
- Asset rehabilitation and renewal; and
- New asset development.
The application of the risk management process within the programme development and prioritisation decision making process is illustrated in Figure 9‑4. As shown, risk events can arise or be identified from a variety of sources – such as analysis of asset information, strategic planning processes, audits or from external hazards and events.
An important part of the AcMP Improvement Plan is to integrate risk assessments within the asset management system (AMS). The current spreadsheet based assessment system will be migrated to AMS.
Figure 9‑4 Application of Risk Management Process to Programme Development
9.3 Resilience of Infrastructure to Natural Disasters
Natural Hazards
Selwyn District is subject to a wide range of natural hazards, including earthquake, flooding, tsunami, meteorological events (snow, wind), mass movement (land slip), and wildfire.
Typical effects on 5Waters infrastructure may include:
- Physical damage such as pipe breaks, plant and equipment damage, subsidence, collapse, destruction;
- Contamination such as wastewater entering water supply or other water systems; and
- Loss of automation capability.
Information about natural hazards is provided by agencies such as GNS and Environment Canterbury.
9.3.1 Lifeline Utilities
For the purposes of this Plan all 5Waters activities are considered as Lifeline Utilities.
9.3.1.1 Infrastructure Resilience
Infrastructure resilience is a significant issue for communities within the District and across the country, given the range of hazards that New Zealand is exposed to. Resilience is concerned not only with physical aspects relating to the assets but also with the organisation's capabilities in terms of aspects such as readiness and adaptability.
In considering the physical infrastructure itself, it is important to understand how resilient it is now compared to how resilient it should be. This addresses dimensions such as physical robustness, redundancy and design, in the context of specific hazard events. A key factor post-event is how quickly the assets can be reinstated, or service replacement can be put into place, to meet the community's immediate and short term needs before recovery gets underway.
To date, the Council has not carried out a comprehensive Lifelines Study or resilience assessment, but has built up a body of knowledge of the impacts of events that have occurred as noted above. Such a study would identify the nature, scale and locality of natural hazard events and carry out a risk assessment of the infrastructure which may be exposed to the hazard events, leading to the identification of mitigation actions for risk “reduction". These actions may range from updating design standards through to asset strengthening or replacement, based on priorities linked to the “resilience gap".
A number of hazard events are assessed in the risk register (refer subsequent sections), however these do not provide a complete “lifelines picture".
A “Lifelines Utilities Response Plan" was prepared in 2017 to provide guidance to asset managers and response personnel when an event occurs. This plan takes an all hazards approach identifying expected consequences and cascade effects. Further work is required to better understand the specific impacts of hazard events and the level of resilience actual vs desired.
9.3.1.2 Interdependencies
An important aspect of the “lifelines approach" is the concept of “interdependencies", which addresses questions such as:
- What other utility services the network depends on – such as power or fuel at particular locations, or physical access by road or bridge; and, what is the level of this interdependency? (e.g. High, Medium, Low)?
- Is that utility fully aware of your need? What mitigation actions should that utility consider? How should their network be modified?
- What other utilities are dependent on your assets (e.g. pipes / cables on a bridge)? Are they aware of the vulnerability (if any) of your asset? If you are considering work on the asset would they reconfigure their assets? Might they be interested in paying to strengthen your asset to provide them with better protection?
Where a confluence of important lifelines occurs, such as multiple services crossing a single bridge, a “hot spot" exists. Such sites warrant particular, inter-utility cooperation to address the risks and reduce the potential impact of a cascade failure affecting multiple services.
Understanding of interdependencies is currently achieved through inter-utility communication and by regular involvement with the Canterbury Lifeline Utilities Group.
A preliminary rating of interdependencies between 5Waters activities, Solid Waste and Roading is included in the Lifelines Utilities Response Plan. This needs to be expanded to include other non-Council utilities, such as power, telecommunications and fuel.
9.4 Water Safety Plans
WSPs have a public health consequence focus and include improvement actions for maintenance and capital budgets. WSPs are important documents that guide and inform priorities for maintaining and improving water supply schemes, and their implementation is reviewed periodically by the Ministry of Health.
In addition to individual WSPs for each water supply scheme, an overarching document supersedes the previous Council document “Selwyn District Council, Public Health Risk Management Plan, Part 1: Overview". This document includes:
- List of water supply schemes;
- Methodology –including a risk assessment which is aligned with the approach described in this AcMP; and
- Contingency Plans – typical actions to address different types of event that could occur.
Individual Scheme WSPs typically include:
- Description and overview of the scheme;
- Critical points for managing hazards – e.g. bore;
- Risk assessment based on the four barriers to contamination
- Description of preventive and corrective actions;
- Improvements and action plans; and
- Contingency plans.
Each WSP includes a risk assessment worksheet which identifies risks at each of the following points in the supply system:
- Catchment and intake
- Treatment
- Storage and distribution
- Other
Significant issues and risks that may be identified in Council's WSPs include:
- Contamination of source water;
- Unsuitablility of raw water – e.g. due to turbidity;
- Lack of treatment or failure of the treatment system;
- Physical failure of the assets;
- Poor performance, for example over or under chlorination;
- Contaminant entry into the distribution system;
- Insufficient water available for abstraction and treatment; and
- Occurrence of natural hazard events.
Issues such as the environment within which well heads are located, the configuration of the scheme, whether or not the appropriate assets exist, and the condition of the assets are all typical examples of sources of risk.
The risks identified in WSPs are considered as part of the development of the 5Waters AcMP and associated programmes. This 5Waters integrated risk management approach ensures that WSP outcomes relating to public health risk are not viewed in isolation of other Council risks.
9.5 Summary of Key Risks
9.5.1 Results of Risk Assessment
The following approach was followed in updating the risk register and determining priorities for the 2018 AcMP:
- Review and update the 2014 Risk Register [22],, adding, deleting and modifying risks as appropriate across each of the 5Waters portfolios, and considering risks arising from natural hazard events.
- Consideration of risk events which affect critical assets, as higher criticality assets should receive a higher priority.
- Identification of risks specific to individual schemes, also for inclusion in WSPs.
- Review the list of risk-derived projects from the 2015 AcMP, rationalising, updating and reprioritising the list to provide appropriate recommendations for the 2018 AcMP.
- A list of risks and the results of the assessment process are tabulated in the report “5Waters Risk A ssessment" dated June 2018.
- The effectiveness of
existing mitigations or controls is assessed by comparing the gross risk rating with the current risk rating, determining the risk reduction ratio.
- The effectiveness of
additional mitigations or controls which are not yet in place is assessed by comparing the current risk rating with the residual risk rating, determining the risk reduction ratio.
- The risk reduction ratios are considered when prioritising actions.
9.5.2 Very High and Extreme Business Risks
Gross risks rated as “very high" or “extreme" are listed in Table 9‑6 below. This table describes the risk consequences and identifies the mitigation strategies or controls that either exist now or are proposed.
Proposed actions are taken forward into the project prioritisation process for future funding consideration.
The priorities of mitigation strategies or controls which are already in place are also considered in terms of scheduling or funding. Priorities are addressed in Section 9.6 Risk Management Strategy.
9.5.3 Very High and Extreme Individual Schemes Risks
A range of “very high" or “extreme" risks have been identified for Water Supply and Wastewater schemes. These typically relate to capacity, growth, asset failure, treatment and contamination of water supplies, particularly where strong population growth is expected.
A full list is provided in the report “5Waters Risk Assessment" dated June 2018.
Table 9‑6 Business Risks Identified
|
1 |
High Level Policies, Procedures and Controls
|
| 1.01 | No clearly defined, documented strategy to guide long term delivery of activity | 5Waters
| | Ad hoc decision making, waste of significant human, material and financial resources. Progress towards sustainable development not achieved as no adopted plan to follow. | High |
| 1.02 | No clear consistent approach to public consultation | 5Waters | | Non-compliant with LGA 2002 consultation requirements | High |
| 1.03 | Policies relevant to asset management are not in place or are incompatible or inconsistent | 5Waters | | Robust asset management input not able to be incorporated leading to significantly sub-optimal asset management decision-making (e.g. due to time constraints) | Medium |
| 1.04 | No clear Council policies or adopted views on sustainability, climate change, energy management. | 5Waters | | Rebuild, relocation (abandonment) of assets, cost on community and inability to provide service. Financial loss (liability for property damage) | Medium |
| 1.05 | Effective Bylaws not in place | 5Waters | | Inappropriate or non-controllable behaviour of customers leading to environmental or health problems, multiple complaints, increased costs to Council | High |
| 1.06 | Highly inaccurate or incomplete data / assumptions adopted by Council in strategic planning processes. | 5Waters | | Inappropriate sustainable development decisions are made by Council. Additional costs incurred in developing and implementing programs of work. | High |
|
2 |
Financial |
| 2.01 | Absence of or poor quality long term financial planning | 5Waters | | Higher borrowing costs, increases intergenerational debt burden | High |
| 2.02 | Appropriate levels of service not aligned with funding and work delivery | 5Waters | | Levels of service not met due to lack of funding, as customers/Council not informed of implications | High |
| 2.03 | Whole of life costs of new asset development are not properly assessed | 5Waters | | Decision making not based on full lifecycle costs. Capital and operational costs do not reflect true costs. | High |
| 2.04 | Substantial unforeseen additional costs | 5Waters | | Reputation of Council considered poor due to significant budget over expenditure.
Growing financial debt burden. | High |
| 2.05 | Valuation does not accurately reflect actual facilities | 5Waters | | Incorrect valuation leading to under or over recovery of depreciation funding. Concerns about robustness of plant and equipment valuation data. | High |
| 2.06 | Inappropriate insurance cover | 5Waters | | Cover does not provide funds for necessary asset replacement following an insurable event | Very High |
|
3 |
Organisation Management |
| 3.01 | Failure to act on identified risks | 5Waters | | Potential legal action against council in the event it identified significant risk but did not act. Threat to public health and safety. Environmental and cultural degradation. | High |
| 3.02 | Lifelines plan not up to date or implemented | 5Waters | | Potential prolonged service outage (wide scale) from reasonably foreseeable naturally occurring events | High |
| 3.03 | Incomplete or inadequate Business Continuity Plan | 5Waters | | Business unable to recover rapidly following extreme event, resulting in significant public health issues | High |
| 3.04 | No internal audit policy and implementation | 5Waters | | Financial and legal action following failure to audit processes, including meeting legislative requirements | High |
| 3.05 | Below standard provision of professional and physical services | 5Waters | | Poor quality delivery or delay in delivery of projects. Possible project rework cascades impact on following projects. | Very High |
| 3.06 | Not meeting legislative requirements | 5Waters | | Legal action taken against council | Very High |
| 3.07 | No township or scheme representation committee in place | 5Waters | | Communication on works and costs not adequate | Medium |
| 3.08 | Poor Council relationships with Iwi and/or local Communities | 5Waters | | Difficulties with resource consents, possibility of increased costs and delays on projects, reputation of Council considered poor | High |
|
4 |
Human Resources |
| 4.01 | Staff accountability to customers and employer not clear | 5Waters | | Poor relationships between staff and customers leading to poor reputation of Council | High |
| 4.02 | Institutional (staff) knowledge not left in form accessible by others and no productive focus on implementing staff succession | 5Waters | | Knowledge lost with staff leaving | High |
5
|
Health and Safety |
| 5.01 | Poor health and safety culture, Health and safety risks not identified and managed | 5Waters | | High accident rate, Council faces legal claims in not meeting obligations | High |
6
|
5Waters Activity - General Risks |
| 6.01 | Deferred renewal and maintenance not recorded | 5Waters | | Unexpected additional costs incurred due to greater impact of asset failure | High |
| 6.02 | Increasing numbers of easements, easements not recorded or obtained; loss of security of access to existing easements and assets on private land | 5Waters | | Unable to gain access to infrastructure to carry out maintenance or urgent repairs, may not be able to access assets without the legal right to cross private property | Medium |
| 6.03 | Wastewater or potable water not treated to acceptable standard | 5Waters | | Legal action and cultural offence, people ill and environment degraded | Extreme |
| 6.04 | Asset security (site) not adequate | 5Waters | | Ongoing or major repairs due to vandalism. Scheme unable to provide service for extended periods, significant costs incurred | High |
| 6.05 | Poor standard of asset construction | 5Waters | | Reduced asset life, additional remedial works required which may have ongoing costs | High |
| 6.06 | Operations Manuals not up to date or non-existent | 5Waters | | Poor operational control results in service failure and adverse health effects or environmental damage | Very High |
| 6.07 | Council operations have negative environmental impact on the districts natural and cultural resources/features | 5Waters | | Poor reputation of Council, public dissatisfaction, resource consent non-compliance, flora and fauna health reduced | High |
| 6.08 | Subdivision approvals process fails to deliver assets of appropriate quality. | 5Waters | | Increased maintenance costs, early renewal, reduced asset lives, higher rates of asset failure. | High |
|
7 |
5Waters Activity Management Plan |
| 7.01 | 5Waters Activity Management Plan does not address the key issues and is not implemented appropriately | 5Waters | | Progress towards Sustainable development is not enabled.
LTP planning cycles, funding and staff work programmes do not deliver projects as planned and a significant backlog and misalignment with objectives occurs. | High |
| 7.02 | Insufficient funding available to implement the recommendations of the AMPs | 5Waters | | Projects deferred, increased lifecycle costs, service levels decline, risk of asset failure increases | High |
| 7.03 | Network modelling and condition assessments not undertaken | 5Waters | | Renewals works not undertaken or completed as expected by criticality rank. Capital work programme not optimised. Future asset works programme not optimised | High |
| 7.04 | As built information incomplete or slow to be provided from external parties eg contractors | 5Waters | | Inability to locate, repair assets within a suitable time. Higher costs due to delayed response from contractors | High |
| 7.05 | Criticality assessment not undertaken and maintained | 5Waters | | Failure of critical assets leads to service failure and adversely affects people and environment | High |
| 7.06 | Asset Risk Register and Risk Plan not implemented | 5Waters | | Failure of service eg wastewater treatment, water pumping as maintenance work not completed on time | Very High |
| 7.07 | Asset Management system not kept up to date with data on the condition, performance or maintenance history of the assets. | 5Waters | | Failure of operational systems where maintenance work programme not kept up to date based on data and instrumentation responses | Very High |
| 7.08 | Asset management decisions based on poor data | 5Waters | | Poor council, community and consent reporting. Decisions may not be accurate or mistimed. Scheme failures, mistimed capital works. | High |
8
|
Resource Consents, Designations and Conservation Orders |
| 8.01 | Appropriateness of land use zoning / designations for community well sites | 5Waters | | Lack of controls in the District Plan for well sites, does not provide barrier from other land use activities leading to contamination of water supply. | High |
| 8.02 | Applications for consents | 5Waters | | Consents not granted or granted with restrictive conditions that force change in use and additional costs | High |
| 8.03 | Resource consents not complied with, failure to monitor consent conditions to the required standard | 5Waters | | Council faces legal action where consents conditions not met or not applied for. Unaware of significant non-compliances which leads to damage to environment and cultural values and subsequent prosecution. Public dissatisfaction. | High |
|
9 |
General Risks – Wastewater |
| 9.01 | Onsite disposal of primary treated septic tank sewage to ground | Wastewater | Darfield, Kirwee | Downgradient contamination of water supplies, inter-generational degradation of groundwater | High |
| 9.02 | Growth projections do not occur and affect project affordability | Wastewater | Rolleston, Lincoln, Prebbleton, West Melton, Springston | Council rates district users for costs where they have no direct benefit | High |
| 9.03 | Location of treatment plants - Encroachment on STP by residential properties (NIMBY) | Wastewater | Lincoln | Complaints and resistance from neighbours alongside the activity, restrictions on STP activity drive up costs | Medium |
| 9.04 | Fat and contaminant buildup | Wastewater | All schemes | Overflow to environment from network, odour, users LoS adversly impacted | Medium |
| 9.05 | Impaired treatment plant operation due to lack of operational staff | Wastewater | All schemes | Disruption to service, Non compliance with DWS, non compliance with resource consents | High |
| 9.06 | All Asbestos Cement pipe schemes - earlier than predicted failure of AC pipe | Wastewater | All schemes | Increased leakage/loss earlier than predicted renewals funding costs | High |
| 9.07 | Reticulation has insufficient capacity during high rainfall periods due to stormwater ingress and infiltration | Wastewater | All schemes | Overflow of reticulation
Detrimental environmental effects
Health hazard | High |
| 9.08 | Treatment plant capacity insufficient during high rainfall periods | Wastewater | All schemes | Non compliance with resource consent conditions; multiple illnesses result | High |
|
10 |
General Risks - Water
|
| 10.01 | Contamination in previously secure public water supply | Water | All schemes | Community sickness, non compliance with Drinking Water Standards, significant remediation costs | High |
| 10.02 | Surrounding activities could contaminate public water supply | Water | All schemes | Community sickness, non compliance with Drinking Water Standards, significant remediation costs | High |
| 10.03 | Deep Well Groundwater levels drop below well intake screen | Water | All schemes | No alternative source or low quality alternative | Very High |
| 10.04 | Lack of bore and reservoir water turnover | Water | All schemes | Loss of residual / Contamination resulting in illnesses | High |
| 10.05 | Imposition of 3rd tier minimum take restrictions | Water | Jowers Road, West Melton, Johnson Road, Edendale | Minimum water use permitted, fire risk and impact on outside flora/fauna | High |
| 10.06 | Small rating base with high operational and renewal costs | Water | Jowers Road, Raven Drive, Te Pirita, Rakaia Huts Upper Selwyn Huts | High cost on property owners, financial stress | High |
| 10.07 | Insufficient quantity of water available for reasonable needs | Water | All schemes | Significant level of customer complaints, stock stress | High |
| 10.08 | Significant overallocation of water supply | Water | All schemes | Pressure drops, insufficient fire flow water, siphoning | Medium |
| 10.09 | Reservoirs have insufficient capacity at peak times | Water | All schemes | Pressure and flows reduce, insufficient fire flow water, siphoning | Very High |
| 10.10 | Treatment plant cannot meet demand eg UV system | Water | Dunsandel, MHRWS (Hartleys and Dalethorpe), SRWS (Glentunnel), Sheffield, Lake Coleridge, Arthurs Pass | Partially or untreated water is delivered to customers | Very High |
| 10.11 | Bore failure resulting in loss of production > 24 hours | Water | All schemes | Community is without sufficient water to meet basic needs | Medium |
| 10.12 | Lack of Backflow prevention | Water | All schemes | Required backflow not installed or fails due to no maintenance resulting in illness or death | High |
| 10.13 | Water testing results are of poor quality or inconsistent | Water | All schemes | Unaware of potential threats to public health, resulting in illnesses. | High |
| 10.14 | Poor management of Council water supply schemes operated by committees | Water | All schemes | Consent non-compliances, higher lifecycle costs, premature asset failure | High |
|
11 |
General Risks - Land Drainage
|
| 11.01 | Poor management of Council land drainage schemes operated by committees | Land Drainage | | Consent non-compliances, higher lifecycle costs, premature asset failure | Medium |
11.02
| CPW may impact ground water levels and function of drains | Land Drainage | | Reduced functionality of land drainage assets | Medium |
| 11.03 | Environmental impact of poor drain maintenance practices | Land Drainage | | Adverse environmental impacts | High |
| 11.04 | Increased cost for monitoring and achieving compliance with consents | Land Drainage | | Increased operating and capital costs | High |
| 11.05 | No process for converting private to classified drains | Land Drainage | | Loss of knowledge of the asset base leading to poor decisions and customer response | Medium |
| 11.06 | Non optimised drain cleaning practices | Land Drainage | | Poor and expensive operations, poor water quality, loss of key committee members may also result in loss of knowledge | High |
| 11.07 | Extreme rainfall and flooding of rivers, causing them to enter the drainage system or overtop existing stopbanks and enter townships | Land Drainage | Hororata, Bealey River, All
| Drainage system in Hororata township having insufficient capability, flooding of farmland for extended period, flooding of State Highway and buildings | Low |
|
12 |
General Risks - Stormwater |
| 12.01 | Public health and safety | Stormwater | | Public injury, drowning. Public perception of dangers of open stormwater systems | Medium |
| 12.02 | Sediment from subdivisions | Stormwater | | Siltation of water bodies | High |
| 12.03 | Flooding resulting from heavy rainfall events | Stormwater | | Flooding occurs without adequate warning to residents | Medium |
| 12.04 | Urban stormwater quality | Stormwater | | Environmental contamination, health risks (eg Urban stormwater containing heavy metal contaminants reaches downgradient water supplies), cultural impacts | Very High |
| 12.05 | Inadequate overland flow paths,
Overland flow paths not maintained | Stormwater | All | Flooding of property
Flooding of sewer system | High |
|
13 |
General Risks - Water Races
|
| 13.01 | Closure of water races | Water Races | | Increasing impacts for closure, impacts water/cost viability. No protocol for closure | Medium |
| 13.02 | Loss of knowledge
| Water Races | | Loss of contractor knowledge leading to poor decisions. | Medium |
| 13.03 | Poor asset data | Water Races | | Poor asset management decisions | Medium |
| 13.04 | Public Health and Safety risks at intakes | Water Races | | Public injury, drowning. | Medium |
|
14 |
Miscellaneous Risks yet to be Assigned |
14.01
| Climate change impacts | | | | Low |
| 14.02 | Leeston high water table impacts | | | | Low |
| 14.03 | Infiltration over ground - lift manholes | | | | Low
|
9.6 Risk Management Strategy
9.6.1 Prioritisation of Expenditure to Manage Risks
The successful management of 5Waters activities is dependent on the coordination of a multitude of activities that generates a work programme for planning, designing, construction, operation, maintenance and monitoring of the assets. The risk evaluation process provides a mechanism to derive projects for potential inclusion in the works programme once they are “filtered" through a prioritisation process.
There are inevitably competing demands placed on 5Waters Operations and Maintenance (O&M) and capital expenditure budgets. Decision making processes must ensure that expenditure is allocated fairly and wisely according to the needs of existing and future generations and in a way that is affordable.
The outcome of the risk assessment process is a list of actions or projects which are identified as mitigation measures or controls for each of the risk events. These projects each have a residual risk score and associated risk priority rating, and are fed into the project prioritisation process for capital and operational expenditure programmes. These actions may fall into one or more categories, such as listed below:
- Management actions;
- Operational actions – e.g. readiness planning;
- Maintenance and renewal planning and decision-making – e.g. changes in prioritisation of work; and
- Capital investment – new assets, strengthening, capacity building, etc.
This risk management approach allows Council to derive a robust expenditure programme that is affordable, undertaken according to a determined priority and derived from an assessment of the risk of failing to deliver levels of service.
9.6.2 Critical Assets Priorities
Lifecycle management considerations relating to critical assets were discussed in Section 7.4 Asset Criticality. Typically, assets are replaced when there is unacceptable risk to levels of service because of:
- Asset condition
- Operability issues
- Vulnerability to external influences (earthquake, flood, fire etc)
When making asset management expenditure decisions priority needs to be given to risks affecting critical assets. Decisions need to be driven from a service perspective – considering the risks of disruption or loss of the ability to deliver the levels of service.
In relation to the risk management strategy, priority is to be established as follows:
- Firstly, prioritisation of the asset base in terms of asset criticality; and
- Secondly, managing and mitigating risk, prioritised according to the level of risk.
9.7 Civil Defence Emergency Management
9.7.1 Civil Defence Emergency Management Act
The Civil Defence Emergency Management (CDEM) Act 2002 requires Local Authorities to coordinate Plans, Programmes and Activities related to CDEM across the areas of Risk Reduction, Readiness, Response and Recovery. It also encourages cooperation and joint action within regional groups. Management systems for civil defence emergencies are detailed in the Council CDEM plan.
The Act also prescribes specific duties expected of lifeline utilities, as described in Section 0.
9.7.2 Lifelines Utilities Response Plan
A Utilities Lifelines Response Plan has been prepared for key Council utility services including the 5Waters, and is to be reviewed and updated. The Plan considers natural hazard events including earthquake, flooding, meteorological (snow/wind) and mass movement (land slip), and also takes account of fire and civil disruption events. The principal objectives of the Plan are to:
- Provide a management tool that identifies natural hazards for individual utilities;
- Identify the consequences of natural hazards;
- Identify immediate remedial actions;
- Define restoration levels, priorities and issues;
- Identify long term risk management issues; and
- Ensure that Emergency Management knowledge is retained within Council.
The Lifelines Response Plan details the hazards, possible cascading effects and the interventions that may be applicable. It does not consider the effect on any individual community as these will change with the extent of the hazard (e.g. the depth and extent of snow) and the extent and makeup of the utility service (e.g. if the water supply has a standby generator).
Following any natural hazard event that affects any utility, an assessment to ascertain the extent of damage, intervention required, priority of reinstatement and the resource requirements should be carried out at an early stage. The Effects and Intervention Lists contained in the Plan can be used to ensure all contingencies are considered. The interconnectivity and interdependence between the 5Waters as well as other utilities both during and after an event is very important and has been identified in the Plan.
9.7.3 Business Continuity
While emergency response describes processes and systems to address the provision of service needs in the community, business continuity has a more internal focus and is aimed at allowing an organisation to continue functioning when a disaster event occurs. The following plans and processes have been established to help ensure business continuity:
-
Pandemic Business Continuity Plan: This Plan provides guidelines and procedures to be followed to ensure Council can maintain its critical infrastructure obligations, as well as its responsibilities under the Civil Defence Emergency Management Act 2002 if a pandemic event has an effect on the district. This plan is updated from time to time.
-
Succession Planning: This is necessary to reduce the risk associated with staff leaving the organisation and also forms part of the business continuity process. Succession planning allows institutional knowledge to be passed on, and assists in ensuring continuity of organisational culture. To this end the 5Waters AcMP is quite detailed to ensure all relevant documents and information required for appropriate decision making are recorded and knowledge transfer can occur even in the absence of key staff. Succession planning is further discussed in Section 0 Succession Planning.
Further arrangements need to be established and documented, including:
- Alternate operational headquarters for 5Waters should the Council office be uninhabitable;
- Arrangements for remote access or manual access to critical information;
- Back-up availability of personnel; and
- Other support resources and equipment to enable the lifeline utility to be able to continue to function.
9.7.4 5Waters and the 4Rs
Table 9‑2 earlier described the 4Rs of risk management. The following table indicates the status of 5Waters in each of these key areas, highlighting the future actions required.
Table 9‑7 Risk Reduction, Readiness, Response and Recovery Status
| Reduction | Identifying hazards, describing risks, and taking actions to reduce the probability or consequences of potential events on the assets and the services they deliver
| Proactive approach. Carry out specific lifelines risk assessments and identify and implement mitigation strategies, asset strengthening and risk management controls. |
| Readiness | Planning and preparation required to enable agencies and communities to respond to and recover from an emergency event
| Proactive approach. Develop, review, and update Emergency Response Plans, Mutual Aid Agreements and Emergency Procedures, including clear definition and allocation of staff and contractor roles and responsibilities. Provide training to staff and contractors in the use of these plans. Understand how the services and assets are likely to be affected and what the priorities for response are likely to be. Develop relationships with other lifeline utilities and an understanding of critical interdependencies. |
| Response | Addressing immediate service problems after an emergency event has occurred | Reactive approach. Provide trained 5Waters resources for response activities. Implement response plans, mutual aid agreements and other plans as appropriate. Participate in CDEM response and Lifelines coordination activities. |
| Recovery | Addressing the long-term recovery to normality needs of the community
| Mix of proactive and reactive approach. Participate in community recovery and Lifelines coordination activities. |
9.8 Monitoring, Review and Improvements
This section describes processes for monitoring achievement of the risk management programme, reviewing the risk register, and identifying improvements in risk management processes, systems and data for inclusion in the overall AcMP Improvement Plan.
9.8.1 Monitoring
Implementation of the risk mitigation actions and controls will be monitored by the Asset Manager Water Services as part of normal business reporting procedures.
Risks and mitigation actions or controls which are determined to be significantly less effective than expected will trigger a re-assessment of the risk and its management strategy.
9.8.2 Review Risk Register
The risk register contained in the report “5Waters Risk Assessment" dated June 2018 will be formally reviewed on an annual basis and any changes recorded. Implications involving changes in budget requirements or lifecycle asset management tactics in the 5Waters AcMP will be recorded by way of update to the AcMP.
At the same time, the risks identified in WSPs will also be reviewed.
New risks or existing risks that are assessed as Extreme or Very High shall be reported to Council and addressed in the timeframes required. All risks shall be managed in accordance with the requirements of Table 9‑3 relating to their relative rating.
Where significant new risks or additional risks are identified between the formal reviews they shall be assessed and recorded in the risk register and dealt with according to their risk rating.
9.8.3 Improvement Planning
Throughout this section a number of specific actions to improve the way in which the Council identifies and manages risk associated with the 5Waters activity. These actions are summarised below in Table 9‑8 below.
Table 9‑8 AM Improvement Items – Risk Management
9.2.6
| Integrate risk assessments within the asset management system | Medium
| 2021/22
|
| 9.3.2 | Carry out an interdependencies assessment between Council utilities and other lifeline utilities, such as power, telecommunications and fuel. | Medium | 2021/22 |
View citations
