ALARP EVALUATION: USING COST EFFECTIVENESS AND DISPROPORTIONALITY TO JUSTIFY RISK REDUCTION

A key principle in achieving Tolerable Risk under ANCOLD (2001) Guidelines is “reducing risks as low as reasonably practicable” (ALARP). The ALARP Principle is founded on the legal obligation of dam owners as duty holders to reduce risks to the point that additional risk reduction would “cost” “disproportionally” more than the risk reduction (benefit) achieved. To make this evaluation, there must be an option for risk reduction that can be identified. The Cost Effectiveness and Disproportionality Ratio approaches, which can be used in ALARP Evaluation, are presented and illustrated in this paper. While the Cost Effectiveness or cost per statistical life saved approach has been used in Australia for almost a decade, the explicit estimation of the degree of disproportionality associated with a potential risk reduction measure, as proposed by the UK HSE, is new to Australian practice. The “Disproportionality Ratio” is a Cost/Benefit ratio that includes both economic and life safety benefits. Example guidelines are offered for using the Disproportionality Ratio in decision