Risk Planning (Part 2)

Force Majeures

How to evaluate?

Let's take a look at the example of the 04/25/2015 Earthquake in Nepal, 8.2 Richter.

Did anyone know that an earthquake could happen? Surprisingly, but yes.

There is a cyclicality - roughly every 85 years, there is a massive earthquake in Nepal. Funny enough, a conference of seismologists was scheduled precisely in these days in Kathmandu.

Soon after, Japan was shaking, Fukushima. It is common to have one significant earthquake to trigger a set of other significant quakes.

I have never heard of any risk analysis or risk planning of the possible consequences of the Nepalese earthquake performed by countries with high seismological risk.

How can we not talk about the current lockdown of almost all countries in the world due to the COVID-19? It all started in Wuhan, and we had at least one month to take into account the risks! Such irresponsible reaction turned out to be disastrous...

Is it possible to avoid risks like force majeure? - No!

Is it possible to reduce losses from the force majeure risk? - Yes!

The simplest and most common example to show how force majeure risks are treated would be Fire Emergency Protocol.

Everyone knows for sure that there is an evacuation plan in case of fire, where the fire exits are,  there are signs in which direction to move, everyone follows the instructions, everyone leaves the building safely.

Everyone is safe in the vast majority of emergent fire situations.

Risk planning is your "Fire Emergency Protocol " to save a project or the company.

#riskplanning #covid19 #forcemajeures #wuhan