Ujwal Ritwik: Global financial crisis biggest threat to environmental and process safety and risk management

This is the observation of reputed international expert in the field Ujwal Ritwik.

When companies cut on budget and resources safety, environment and training are the most affected disciplines. In order to show a quick win the management find it easy to cut on strategic investments without realizing how deeply the organization is wounded by such reckless decision. It takes years and decades to build the right culture but shortsighted approaches can spoil the process in weeks and months. Ritwik appreciated while many top management are conscious of this fact, there is no dearth of quick win seekers. Small and medium enterprises and even some multinationals and government owned bodies are vulnerable.

Ritwik is the President of the 5th International HSE Conference to be held in Kuwait from 17th to 19th March 2009. Talking about the conference he said " We encourage all industrial, institutional and governmental sector professionals to attend this conference to know first hand what are the priorities. This is not a commercial event, we are really seeking to reach out to the leaders of the hour."

Strong growth of safety system market will not continue any more

Safety in the process industries has improved greatly over the last 20 to 30 years through improvements in hardware and the implementation of Safety Management systems. Whilst further improvements in these fields will continue, the rate of improvement is likely to be slower than in the past. The booming economy of China and India, and the high price of crude oil that led to significant investments in the Middle-East region in grass-root facilities are now history.

Leadership should raise their sights

Economic difficulties need not mean that we lower our standards for leadership. If anything, we should raise our sights. Ujwal Ritwik whose initiatives and ideas have shaped health, safety and environment (HSE) advancement in the Middle East during the past twenty years says there is still a place for what has been termed uncompromising leadership. This also leads to answers to the question of how to manage in tough times in a way that avoids liquidation of human and cultural assets.

Management should ask and answer questions such as: What outcomes must such an organization achieve in order to sustain commitment and performance? What are principled choices its leaders must make if they are serious about building such a firm? "CEOs of visionary companies think very differently about the issues on environment and safety of employees and public. They see them as long-term investment. As a result they manage downturns differently from the norm, too."

As companies batten down the hatches, we need leaders who do not compromise on standards and values that are essential in flush times. Fortunately, such leaders do exist. Their insights can help other organizations weather the current crisis. In addition to open and honest communication and continued investment in HSE management practices, corporations need to develop an a priori set of policies in advance of the crisis that will minimize damage from restructuring and downsizing and maintain employee dignity and commitment.

The factors contributing to the growth of HSE market in the Middle East include:

- Greater awareness and compliance to international safety standards
- Pace of investments started in the previous years
- Obsolescence of older systems
- Increased high profile incidents in USA, and in UK
- Global environmental awareness and regulations

The factors retarding the growth of this market include:

- Dearth of qualified people
- Perception of some users that they are protected by the grandfather clause
- Cost
- Slow growth in mature economies and recession in global economy
- Higher level of complexity in risk estimation and its mitigation

Strategic risk management

In order for a supplier to take advantage of the many opportunities that await in this growing market, it is crucial to determine the appropriate strategic business plan.

The following are some of the key strategic issues for success of the suppliers who deal with safety and critical control systems:

- Offer unified asset monitoring for process equipment, control, and safety systems
- Develop packaged solution for safety lifecycle management
- Deliver simulation packages for hazard analysis and operator training
- Provide safety training to alleviate the shortage of trained personnel
- Emergence of new competition in the market

Companies are ignoring strategic risk management at their peril despite the credit crunch - a key strategic risk - having become a painful operational reality for most, according to the annual Ernst & Young 2009 Business Risk Survey.

Ritwik referred to a recent top-ten ranking study, that surveyed more than 100 leading global sector analysts on their views on the major long term issues threatening businesses in 2009. This year the credit crunch displaced regulation and compliance from last year's top spot.

"Not surprisingly, many businesses are currently focusing all their resources on managing short-term operational risks in an attempt to survive. But, this approach exposes them to major gaps in how they foresee and manage strategic risk, particularly with regards to contingency planning for unthinkable events. Ultimately, it's those that have planned who will be in a stronger position when the economic crisis dissipates."