As Low As Reasonably Practicable (ALARP)
As Low As Reasonably Practicable, or ALARP, is one of the fundamental principles of risk management. We neither need nor want, to manage risk to the point where we eliminate it because doing so is a waste of valuable resources.
ALARP refers to the notional point where risk is managed to be as low as we can reasonably make it. Often this refers to the point where risk is either negligible or at least at a level where it can be managed by routine procedures. Sometimes, however, ALARP can still be a very high level of risk (soldiers in battle would be one example) but is as low as we can make it given available resources and our competing priorities for those resources.
There is no specific definition for this term but it can be found in legislation and case law in many nations. It comes originally from UK legislation, particularly the Health and Safety at Work etc. Act 1974. The key question in determining whether a risk is ALARP is the definition of 'reasonably practicable'. The term has been enshrined in UK case law since Edwards v National Coal Board in 1949. The ruling was that the risk must be significant in relation to the sacrifice (in terms of money, time or trouble) required to avert it; that is, risks must be averted unless there is a gross disproportion between the costs and benefits of doing so.
Although the term originates in safety management, the concept is an essential one for all forms of risk management.
The majority of risks we face in life are already at an ALARP level and we accept them relatively unconsciously. For most of our everyday lives, the risk of being pick-pocketed, for example, is so low that we don’t feel the need to carry cash in separate pockets or hidden money belts. We similarly manage slightly higher risks, such as crossing the road, by routine procedures that we were taught as children. The risks of global financial crises or climate change, however, are much more complex and require significant analysis to consider if we are really managing them to be as low as reasonably practicable.
Another view of the ALARP principle can be seen in the infographic above where the balance point, or trade-off, between risk mitigations and risk exposures produces a point of equilibrium. ALARP is the level of risk that is tolerable and cannot be reduced further without expenditure of costs disproportionate to the benefit gained or where the solution is impractical to implement. Of course, ALARP only tells half the story. Whenever we manage risk, we also want to optimise the benefits or positive outcomes. It might therefore be time to update ALARP to AHLARP (As High/Low As Reasonably Practicable).
Keep an eye out for future posts where we look at what it means to manage the positive outcomes (benefits) to be HIGH, while minimising the negative outcomes (losses).
What do you think? Is AHLARP the better concept? How do we get to AHLARP? How do we benchmark and measure the benefits of risk management?