NAME MATRIX NO

CHUA YI MEI 219663

LIM WAN YI 219871

TAN ZHI JIUN 219893

TAN AN LIY 221520

TAN WEI HSIEN 226643

SINAR JAYA SHELL PETROL

BKAI 3043 (A)

INTRODUCTION• possibility of an event occurring or not occurring that will

adversely affect the business organization in achieving its business objectives and executing its business strategies successfully

• Different company may have different level of tolerance or action in facing certain risk, some only able to endure some risk but some are much riskier than others.

• Malaysian Ringgit has depreciated for approximately 25% against US dollar in the past 12 months

RISK MANAGEMENT TEAM• proactive and an on-going process involving the identification,

assessment, control, monitoring and reporting of risk exposure• enhance and encourage the identification of greater

opportunities for continuous improvement through innovation

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LITERATURE REVIEWFuel has the potential to create fire accident (McCarthy & G.J Chatto, 1998)

Fuel hazard fire assessment is an important input for fire management plan (Gould J & Sullivan, 2004).

From 1993 to 2004 approximately 243 incidents related to fire broke up reported at PFS around the world. Electrostatic charges found to be main root cause for fire generation (Research Paper B2005/0028, 2005).

Risk level of different hazardous activities prioritized by using risk assessment criteria models and it provides viable knowledge to safety professionals to set company goals and objectives (Ivan W. H. Funga, 2010).

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LiteratureReview

Every year in USA alone about 150-200 fires events occurred due to static-electricity-caused ignition of gasoline vapour (Babrauskas, 2005).

Both contractors and client have the activities that can create major and minor injuries during operation. The major cause identified was carelessness (Corporate Environment Report, 2007).

With appropriate approach and scrutinize main causes of accidents, incidents, unsafe acts and unsafe conditions can be improved significantly (M.M. Ahmed, 2010).

Hazard identification and risk assessment is an important tool to prioritize hazardous activities. Rank them according to their severity level and take corrective and control measures. (Babrauskas, 2013).

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Methodology

Qualitative

Face-to-Face Structured Interview

Telephone Interviews and

E-mail

Structured Observation

Quantitative

E-collection of Documentation

METHODOLOGY 219893

COMPANY BACKGROUND

Sinar Jaya (Family Business)

• Responsible to deliver oil product and ensure product quality meets stringent specifications.

• Location: Lebuhraya Bukit Kayu Hitam, Changlun• Owner: Mr. Haji Ariffin• Age: 70• Leasing operation since: 1985 - 2018• Main customers: UUM lecturers, students, local

residents, people who travel to and fro from Thailand

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Petrol station also need to open an account for its station with about RM1,000,000 inside the account.

An agreement had been signed by the owner with the parent company for 30 years under leasing operation starting from the incorporation year 1985-2018.

Owner applied to land office for permission to use that land for construction of Sinar Jaya Shell Petrol Station

Start-up capital for petrol station nowadays is around RM400,000 for deposit

Firstly, the owner placec a request to the parent company for permit to operate.Upon the requisition received, the parent company came to investigate the

location and determine whether the location is strategic for operation.

PROCEDURES ON INCORPORATION OF COMPANY219893

ObjectivesTo win and maintain customers by

developing and providing products and services which offer value in terms of price,

quality, safety and environmental impact

To hit the sales target that is set by the parent company in which the total amount is RM2 million per year in order to achieve the

incentives

MissionTo meet the energy needs of society, in ways that are economically,

socially and environmentally viable, now and in the future

VisionTo reinforce our position as a leader in the local oil and gas industry in order to provide a favourable return while helping to meet local energy demand in a

responsible way

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Name of business : Sinar Jaya (Shell)Address : No. 42, Jalan Lama Changloon, Kedah 06010 Changlun, Malaysia.Contact number : +60 4-924 1398

CORPORATE PROFILE

（ Source: Google Map）

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Sinar Jaya Shell Petrol Station is a single Shell outletIt has the following departments as told by the manager:

DEPARTMENTALIZATION

• Filling petroleum in vehicles. Petroleum

• Filling gas in the vehicles according to their need. Gas

• Changing oil in vehicles. Oil Change

• Providing snacks and other things of basic necessity to customers.Convenience Store

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Hj. Ariffin (Owner)

Shukri

(Finanacial Manager)

Niekmat

(Operation Manager)

Suba

(Senior Cashier)

Ane

(Assistant Clerk)

Syirah WanyLinaZatiEila

Zalikha & Atirah (Clerks)

Cashier

ORGANISATION CHART

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Internal factor

External factors

Risk factors

221520RISK FACTORS

Internal External

Environmental

Industry competition

Hazard risk

Government policy changes

Human errors

Global volatility

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GLOBAL VOLATILITY GOVERNMENT POLICY

CHANGES

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HAZARD RISK INDUSTRY COMPETITION

Health, safety, security and environment (HSSE)

BHP, PETRONAS, Shell, Caltex

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ENVIRONMENTAL HUMAN ERRORS

Primary victims : residents that located at behind of Sinar Jaya Shell Petrol Station

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Techniques used to identify and analysis risk

• brainstorming, risk management framework or Enterprise Risk Management (ERM).

Identification Analysis

brainstorming, industry benchmarking, scenario analysis, risk assessment workshops, incident investigation and auditing and inspection

• business impact analysis,• threat analysis • SWOT (Strengths,

Weaknesses, Opportunities and Threats) analysis.

Brainstorming method SWOT analysis

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Identify Risk

Assessing Risk

Risk Appetite

Addressing Risk

RISK MANAGEMENT PROCESS 226643

Ris

k Id

enti

fica

tion

Checklist analysis• Identify potential risks and evaluating the likelihood risk• Developed risk checklists based on experience from past

projects

Brainstorming • Identify the accidental risk and make a

precaution plan to avoid it

SWOT analysis • Weaknesses of the company – do not launch any promotion• Opportunity – turn weaknesses into opportunity

Questionnaire • Risk questionnaire used• Help a company think through its own risks by providing

a list of questions around certain risks

25 ri

sks i

denti

fied

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Business risk

Risk of theft

Risk of customer

makes cheating

Risk of dishonest

employees

Input-cost risk

Risk of low

business rate

Risk of counterfeit

note

Risk of robbery

Impact

Bu

siness R

isk226643

Financial risk

Risk of fluctuate oil and gas priceSelling price low but the cost high = Loss for the company

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Risk of careless

Risk of customers smoking

Risk of not turning off the

vehicles’ engines

Risk of using mobile phone

Risk of transferring the fuel to storage

tank

Risk of petrol spills

Risk of hazardous

substances

Risk of slips, trips and falls

Risk of leakage of electricity

Risk of motorbikes

Risk of filling portable containers

with flammable liquids

Hazard risk

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Operatio-nal Risk

Risk of accidents of nearby roads

Risk of accidental collision

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Strategic Risks

Risk of competition

Health risk

Risk of compresse

d air system

Environmental risk

Other Risks

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RISK ASSESSMENT

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Level Likelihood Percentages (%) Description

5 Certain 90 – 100 Very frequently occur

4 Probable 50 – 89 Is Frequently occur in most situations

3 Possible 25 – 49 Will probably occur occasionally

2 Unlikely 10 – 24 Might occur, but not rarely

1 Remote 0 – 9 May occur, but probably never will

Level Impact Description

5 Severe Threatens on-going existence

4 Major Difficult to achieve business objectives

3 Medium Makes achieving some business objectives challenging

2 Minor Some undesirable outcomes

1 Negligible No noticeable impact on objectives

Table 1

Table 2

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Risk Risk ID1 Risk of motorbikes 182 Risk of not turning off the vehicles’ engines 123 Risk of using mobile phone 114 Risk of customers smoking within the operation area of the

petrol station9

5 Risk of transferring the fuel to storage tank 136 Risk of filling portable containers with flammable liquids 19

7 Risk of fluctuate oil and gas price 88 Risk of Robbery 79 Risk of competition 2210 Risk of Spill 14

RISK APPETITE• Amount and type of risk that and organization

is willing to accept or tolerate

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Risk without major harm to company

Risk that create harm and affect company operation & performance

RISK TREATMENT

Tolerate Mitigate

Transfer Terminate

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• Accept the risk• After control,

remaining risk is deemed acceptable the risk can be retained

• When cost is higher

• Control the risk• Reduce the risk

to acceptable level

• Share the risk• Transfer the risk to

third party which is more capable in managing it

• Avoid the risk• Choosing an

alternative which is less risky to achieve same outcome

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1 Risk of motorbikes

Accept • Insist the moto rider to switch off the ignition, get off from the bike, put the motorbikes on the side stand or centre stand before pumping the fuel

• put a remainder on the wall to create awareness among the motor rider

2 Risk of not turning off the vehicles’ engines

Accept • Put the safety symbol and remainder notice to warn the customer do not leave their vehicles running when refuelling

• keep their eye out for every customer

No RISK ACTION TREATMENT

3 Risk of using mobile phone

Accept • Place a warning signboard to warn the customers that the gasoline and petrol is high flammable, the electrical devices may create potential source for any fumes

4 Risk of customers smoking within the operation area of the petrol station

Accept • Put the safety symbol to warn the public to remove all ignition sources, and signboard to prohibit smoking in petrol station.

• Offence to smoke may be fined up to RM10, 000 or 2 years of imprisonment.

• Always alert

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No RISK ACTION TREATMENT

5 Risk of transferring the fuel to storage tank

Mitigate • Staff should be trained before they are placed in the petrol station to limit the risk that may arise due to lack of experience

• Retain training records, ensure they are properly trained.

6 Risk of filling portable containers with flammable liquids

Mitigate • All containers used to store and transport petrol must be suitable, leak-proof, and made of metal or other material of adequate strength and construction

• ensure that the container using by the customer is an approved container, and educate the customer how to proper fill the petrol in the container

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No RISK ACTION TREATMENT

7 Risk of fluctuate oil and gas price

Accept • Alert and sensitive to price fluctuation make higher amount of purchase of petrol when the price of petrol is at significant low rate

8 Risk of robbery Transfer • Installed the CCTV and the alarm to monitor the situation in petrol station

• Good relationship with the police and RELA• “window pay” at night• Buying burglary insurance

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No RISK ACTION TREATMENT

9 Risk of competition Mitigate • Competition for petrol station is quite high• Focus on improve the customer loyalty• Reward point , lucky draw box• Improve qualityoffer windscreen wiping

service

10 Risk of Spill Mitigate • Careless customer overfills the tank, fill the petrol from the wrong side, leakage of the pump nozzle

• Any leakage will be repaired as soon as possible

• Instruction board educate the proper way to pump the fuel

• Spillensure that there is no source of ignition present in that spill area, clean-up using sorbent material

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Vision • A leader position• In a responsible way &

should not cause any harm to the social values

Mission

• Satisfy the needs of customers

• Constantly achieving operational excellence & conduct business in a safe manner

Objectives

• To win and maintain customers with offer value in terms of price, quality, safety and environment impact

• Hit sales target set

IMPACT

Top 10

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IMPACT OF TOP 10 SIGNIFICANT RISKS BROUGHT ON OBJECTIVES, MISSION AND VISION

Risk of motorbikes – during refuelling -> fire and explosions -> Blame and question on the operation safety of petrol station -> reputation damaged, loss of customers -> failure in fulfil the society needs and satisfaction

Risk of not turning off the vehicles’ engines – convenience advantage -> ignored warning signboard and underestimate the risk -> flammable liquids cause fires and explosions -> (X) vision of provide services that don’t cause any harm to society & mission of profit requirement

Risk of using mobile phone - impacts are similar to the risks of top 1 and 2 -> explosion accident consequence led to the vision, mission & objectives being adversely affected. -> difficult to meet the main objectives of win and maintain customers.

Risk of customers smoking within the operating area of the petrol station - irresponsible, ignored the safety of other users -> loss of human life -> those targeted vision, mission and objectives become subjective statement -> underperformance -> financial (huge losses incurred )and non-financial (reputation and public stereotype )

Risk of transferring the fuel to the storage tanks - oil spilled over the ground of petrol station -> resources wasted/ fire and explosions -> NO operational excellence in delivery services & unable to hit targeted key performance index (KPI) as the leader position in the industry.

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1

2

3

4

5

Risk of filling portable containers with flammable liquids - flammable liquids such as fuel exposed under the sun or in high temperature environment, it would raised a risk of explosion in anytime and anywhere -> Sinar bear the inherent cost, results a bad public image = risky operation environment -> lose of confidence trust -> vision of leading the industry, mission of excellence operation, objectives of provide valuable products and services are not achievable.

Risk of fluctuate oil and gas price - new policy: managed float system used to determine the oil and gas pricing -> higher degree of risk on pricing as compared with previous -> targeted sales achievable?? uncertainty & unstable -> question marked on vision, mission and objectives.

Risk of robbery – hotspot of robbery crime-> safety issues of employee and customers -> vision of fulfill the society demand in a responsible way and mission of conduct business in a safe manner are violated -> material effect

Risk of competition – huge transactions came from the contract agreement with nearby logistic companies -> a better terms and conditions of agreement are critical in competing -> immense importance for business sustainability -> stress in realise the sales target set

Risk of oil spill - close to risk of transferring fuel -> fires and explosion accidents -> implication on overall vision, mission and objectives -> quality services, safety issue, environmental friendly

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7

6

8

9

10

ENTERPRISE RISK MANAGEMENT FRAMEWORKSupports the achievement of an organization’s objectives by addressing the full spectrum of its risks and managing the combined impact of those risks as an interrelated risk portfolio.

Prioritises and manages organisational exposures as an interrelated risk portfolio.

Evaluates the risk portfolio in the context of all significant internal and external environments, systems, circumstances, and stakeholders.

Provides a structured process for the management of all risks, whether those risks are primarily quantitative or qualitative in nature.

Seeks to embed risk management as a component in all critical decisions throughout the organization.

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ERM framework consists of four objectives and eight components

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CONCLUSION• The level of awareness towards risk has increased as the

economic and political environment surrounding us are less stable

• most of the risk is related with safety of employee or customers and also towards financial management of organization

• pay most of our concern on handling risk for society responsibilities rather than financial responsibilities.

• failure in handling or avoiding all those risk related with society responsibility can be the most damaging to a company in long run and it cost company so much time in recovering

• For example, in June 2015, an explosion happened at a petrol station in Ghana's capital and flooding caused by torrential rains killed around 150 people

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• In conclusion, risk management is an ongoing process, not a single time event.

• increase competitive advantage and reputation of company especially Sinar Jaya Shell Petrol Station.

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