Inherent Risk and Residual Risk

 

Inherent Risk

In the context of the Philippine government, inherent risk refers to the level of risk that naturally exists in a process or activity before any controls or mitigation measures are applied. This risk is intrinsic to the task or environment and cannot be avoided. It measures the natural susceptibility to harm, loss, or failure, independent of any intervention. For example, an inherent risk for government field inspectors might be exposure to hazardous environments or physical injuries during site inspections.

Residual Risk

Residual risk refers to the remaining level of risk after control measures have been implemented. Despite the best efforts to mitigate inherent risks through processes, training, and safety measures, some level of risk remains. Residual risk is essentially the "leftover" risk that persists even after safeguards are in place. In the government context, after implementing safety protocols for workers in a hazardous environment, residual risk might involve manageable but still-present risks, such as minor injuries or unforeseen incidents.

 Simplified Explanation of Inherent Risk and Residual Risk

Inherent Risk refers to the level of risk present before any control measures are implemented. It reflects the potential for harm or loss under existing conditions without interventions.

Residual Risk is the level of risk that remains after implementing controls. It accounts for the effectiveness of the measures in mitigating the inherent risk but acknowledges that some risk may still persist.

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Example 1: Manual Handling (Lifting Heavy Objects)

• Inherent Risk: High likelihood of injury such as back strain due to improper lifting techniques or heavy loads.
• Control Implemented: Training on proper lifting techniques, use of mechanical aids (e.g., trolleys).
• Residual Risk: Low likelihood of injury if proper techniques are used and mechanical aids are available.

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Example 2: Fire Hazards in a Kitchen

• Inherent Risk: High potential for injury or damage due to open flames and flammable materials.
• Control Implemented: Installation of fire extinguishers, regular fire drills, and fire suppression systems.
• Residual Risk: Low likelihood of severe fire incidents, but minor risk remains in case of human error or delayed response.

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Example 3: Psychological Hazards (Work-Related Stress)

• Inherent Risk: Moderate likelihood of stress due to excessive workload or poor interpersonal relationships.
• Control Implemented: Employee Assistance Programs, flexible work schedules, regular performance reviews.
• Residual Risk: Low likelihood of severe stress, though minor cases may persist in high-pressure situations.

These examples demonstrate how controls help reduce the likelihood and severity of risks but may not entirely eliminate them.