RISK MANAGEMENT

Risk management can be defined as a systematic approach to identifying, measuring and controlling risks that can threaten assets and earnings of oneself, business or the organization.

It is a general management function that seeks to assess and address the causes and effects of uncertainty and risk on an organization. The purpose of risk management is to enable an organization to progress towards its goal and objectives(mission) in the most direct, efficient, and effective path

RISK MANAGEMENT OBJECTIVE The objective of having risk management can be looked at from to different perspective, i.e (i)before a loss; and (ii)after a loss

BEFORE LOST Risk management is necessary before a lost actually takes place so that the impact of the lost should it occur can be minimized Risk management is necessary before a loss since it reduce fear and worry. Organization that have disaster recovery plans or a contingency plan are less worried about their future then organization that have none. AFTER LOSS A well-planned risk management programme ensures the survival of the organization even after a loss has taken place. When a loss takes place, the organization must be able to continue its operations. An effective risk management programme will reduce the overall impact of losses towards the organization and the society in general. When a loss occurs not only will the organization suffer but the loss has to be burdened by society as well.

CASE STUDY RELATION

Landslide that happened at Hulu Langat that had hit the orphanage on Saturday afternoon that in conclude in life disaster causing 13 person had been killed in the landslide and still leaving three buried in the landslide. In this situation risk management has occur by showing damages not only to life but also to orphanage property and causing huge liability to the owner that is our own government Malaysia. Identifying the causes of Hulu Langat Landslide: Unusually heavy rain over three days had weakened the soil structure, resulting in the landslide which hit the Hidayah Madrasah Al-Taqwa Orphanage in Hulu Langat, claiming 16 lives last Saturday.Public Works Departments (PWD) Hillslope Engineering senior director Datuk Ir Ashaari Mohamad said that based on the rainfall distribution data over three days, there were 29 millimetres (mm) of rainfall last Thursday, 41 mm on Friday and rising sharply to 80 mm on Saturday (day of landslide incident) in the area. Below is news about Hulu Langat Landslide: The amount of rainfall on that day was extraordinary because the normal level is around 20 mm. With such heavy rain, a lot of water would seep into the soil, causing the structure to be weak and a landslip could occur any time. He said this when briefing the Sultan of Selangor, Sultan Sharafuddin Idris Shah, on the devastating landslide before the Sultan handed over contributions from the Selangor Islamic Religious Council (MUIS), Selangor Zakat Board (SZB) and the state government for the victims and their families. Ashaari said on inspecting the landslide site and hilltop area close by, they (PWD) noticed water channels on the hillslope in the direction of the landslide site, while the cutting of trees in the area had also contributed to the problem during a downpour. There is still some soil movement here and rain can cause another landslide, so weve categorised this area as unsafe.

He said that based on information received, the orphanage was also too close; only about seven metres away from the hillslope of 25 metres to 30 metres high. We estimate about 3,500 cubic metres or 600 lorry loads of soil had slipped and hit the orphanage, leaving a mound of loose soil of about four metres high and 54 metres wide. Ashaari said the hillslope near the orphanage had also been cut, causing further soil instability. Today, we want to closely examine the soil condition in the area and see how we can improve the soil structure. We are also asking the local authority to monitor the housing areas around here as they are also exposed to the same risk, he added. From the contribution of RM217,000 from MUIS and SZB, each family or beneficiary of the 16 landslide victims who died received RM5,000 while the survivors received RM1,000 each, and the orphanage, RM100,000. The Selangor government also gave RM5,000 to each of the beneficiaries.

A simple process Risk analysis is best done in a group with each member of the group having a good understanding of the tasks and objectives of the area being analysed. 1. Identify the Risks: as a group, list the things that might inhibit your ability to meet your objectives. You can even look at the things that would actually enhance your ability to meet those objectives eg. a fund-raising commercial opportunity. These are the risks that you face eg. loss of a key team member; prolonged IT network outage; delayed provision of important information by another work unit/individual; failure to seize a commercial opportunity etc. 2. Identify the Causes: try to identify what might cause these things to occur eg. the key team member might be disillusioned with his/her position, might be head hunted to go elsewhere; the person upon whom you are relying for information might be very busy, going on leave or notoriously slow in supplying such data; the supervisor required to approve the commercial undertaking might be risk averse and need extra convincing before taking the risk etc etc. 3. Identify the Controls: identify all the things (Controls) that you have in place that are aimed at reducing the Likelihood of your risks from happening in the first place and, if they do happen, what you have in place to reduce their impact (Consequence) eg. providing a friendly work environment for your team; multi-skill across the team to reduce the reliance on one person; stress the need for the required information to be supplied in a timely manner; send a reminder before the deadline; provide additional information to the supervisor before he/she asks for it etc. 4. Establish your Likelihood and Consequence Descriptors, remembering that these depend upon the context of your analysis ie. if your analysis relates to your work unit, any financial loss or loss of a key staff member, for example, will have a greater impact on that work unit than it will have on the University as a whole so those descriptors used for the whole-of-University (strategic) context will generally not be appropriate for the Faculty, other work unit or the individual eg. a loss of $300000 might be considered Insignificant to the University, but it could very well be Catastrophic to your work unit.

5. Establish your Risk Rating Descriptors: ie. what is meant by a Low, Moderate, High or Extreme Risk needs to be decided upon ahead of time. Because these are more generic in terminology though, you might find that the University's Strategic Risk Rating Descriptors are applicable. 6. Add other Controls: generally speaking, any risk that is rated as High or Extreme should have additional controls applied to it in order to reduce it to an acceptable level. What the appropriate additional controls might be, whether they can be afforded, what priority might be placed on them etc etc is something for the group to determine in consultation with the Head of the work unit who, ideally, should be a member of the group doing the analysis in the first place. 7. Make a Decision: once the above process is complete, if there are still some risks that are rated as High or Extreme, a decision has to be made as to whether the activity will go ahead. There will be occasions when the risks are higher than preferred but there may be nothing more that can be done to mitigate that risk ie. they are out of the control of the work unit but the activity must still be carried out. In such situations, monitoring the circumstances and regular review is essential. 8. Monitor and Review: the monitoring of all risks and regular review of the unit's risk profile is an essential element for a successful risk management program.

Risk Management Process To Case Study There are five step in risk management process that we can relate with our case which is Hulu Langat landslide. 1 The first step is to identify, determine and anticipate all potential loss exposures. Loss can be classified as those that can result in direct damage, indirect damage, liability and loss of key person. We can conclude that the direct damage is the damage to building cause of landslide. The amount of rainfall on that day was extraordinary because the normal level is around 20 mm. With such heavy rain, a lot of water would seep into the soil, causing the structure to be weak and a landslip could occur any time and the area of that place is categorized as unsafe to prevent more damages. For indirect damage they facing the loss of profit and income causing huge liability to the owner that is our own government Malaysia. Based from liability :is when its interrupt the education for all the orphanage. Last is loss of key person which been reported that 13 person had been killed in the landslide and still leaving three buried in the landslide.

The way to identify the problem is from questionnaires where we ask the orphanage and villages, interviews, flow chart, financial statement and personal inspection which is our observation. I heard a loud noise. Suddenly the earth was chasing me. I had to run to save myself," Hambali, 34, told the Malay-language Berita Harian newspaper.

2 The second step is to determine and estimate the impact of these losses, should they occur? There are two special features which is frequency and severity.

To relate with frequency, this case causing the loss of 13 person had been killed in the landslide and still leaving three buried in the landslide, the tent collapsed and some injured. From severity, orphanage property causing huge liability to the owner that is our own government Malaysia. Apart from that they are facing whether the building need to be close or not which will occur more severity loss.

3 The third step of the risk management process is to examining the methods of handling the loss exposures. There are two risk management techniques which is risk control and risk finance. Risk Control have four way. The first is risk avoidance where we can check the land structure before constructing building. The second is loss control which split in two part start with loss prevention to reducing frequency of landslide and loss reduction that can reduce severity of death. Next is separation where government should ban any constructing at the risk area of landslide so that can prevent the others building from that area facing the same problem which is landslide. Last is contractual transfer which conclude incorporation where the owner of the company transfers the risks to corporation by registering the company, leasing contracts that an agreement where the owner or landlord transfers the risks, hedging an agreement to buy or sell a commodity at a certain price to avoid losses due to price increase or decrease and hold-harmless agreements between a retailer and manufacturer whereby the later agrees to bear losses due to the manufacture of defective products thus relieving the retailer or any liability. There are three risk financing which is retention/assumption, self insurance&captive insurer and insurance. Retention/assumption is the losses are retained by donations from some companies Captive insurer is the organizations sets up a pool of fund to retain its loss exposures Insurance is risk financing methods of transferring the financial consequences of potential accidential losses from an insured firm or family to an insurer

4 Next is to draw up and implement the risk management programme. The selection of a risk management programme may be based on two factors which is financial criteria and non-financial criteria. The financial criteria is whether it will afftect the organisations profitability or rate or return. From this criteria we will see based from the profit whether its worth or not to the Hidayah Madrasah Al-Taqwa Orphanage. Non-financial criteria to see whether it affects the growth of the organization, humanitarian aspects and legal requirements or in other words, other thing than financial. The various loss exposure can be classify according to the frequency and severity.

5 The last step is systematically monitor and control the risk management programme to ensure its effectiveness. Its must be monitored and controlled systematically. Based from the case related, we should check the land structure before constructing any building and if there is anything problem happen, make sure make a report so that the worst thing wont happen.

COMMENTS AND SUGGESTION

The landslide issue been happen many times at Malaysia for example at Highland Tower but this case happen and happen again. Based from the case we noticed that they didnt make report when the small landslide happen before. As result, the big landslide happen and people killed. In our opinion, first of all is that always check the land structure before constructing any building. Government should ban any construction at the area of landslide risk. Last but not least, always make report if anything problem came out.

CONCLUSION

In a conclusion we can conduct that incident that happened in Ulu Langat landslide have make its collateral damage that in result have lost of a lot of lives in that natural disaster. In 5 step of risk management we agree that we can conclude every disaster have its bearer. In this consequences it already show that the owner of Ulu Langat orphanage have bear this natural disaster with the insurance agency. Yes lives cannot be claim but at least it minimize the burden that the Ulu Langat orphanage bare. We can help the orphanage to set up back it noble intentions in helping in growing orphan that needs to be raise up full of care and love. We can said that by the help of insurance agency we implied the fourth step that how to risk management technique applied which is measuring the damage

APPENDIX (1)Accident place:

(2) News

KUALA LUMPUR, Malaysia Police say two landslides that hit a Malaysian orphanage killed 15 boys and one adult but nine other people survived. District police chief Abdul Rashid Wahab says the bodies of 15 boys, aged 8 to 18, and a 34-year-old caretaker have been recovered. He says six boys and three wardens who were critically injured have been hospitalized. He said Sunday that the last victim was pulled out more than 12 hours after tons of earth crashed through the orphanage in central Selangor state on Saturday. Heavy rain had likely caused the landslide that hit the orphanage for ethnic Malay Muslim boys in a rural village in central Selangor state, he said. Rain was still falling in the evening and hampering rescue work by some 200 firefighters, police and others. "They just had lunch at the tent by the side of the house when two landslides apparently occurred at the same time. The tent collapsed, burying 24 people as they did not have time to escape," he told The Associated Press. "Rescuers have to dig using their hands and other equipment because the soil surrounding is very soft due to the rain," he said, adding the search would continue for another nine children and three orphanage staff. A small stream runs nearby the orphanage, a huge three-story house at a foothill in a sleepy village in Selangor. The house wasn't damaged but was partly covered in sludge. Several tall trees fell along with the landslide. Several houses near the orphanage have been told to evacuate amid concerns of further landslides, Abdul Rashid said. Mohamad Hambali Ismail, a warden at the orphanage, told local media that the children were preparing to receive visitors when the earth shook. "I heard a loud noise. Suddenly the earth was chasing me. I had to run to save myself," Hambali, 34, told the Malay-language Berita Harian newspaper.

INS 312

Siti Zaleha Omar

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