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Topic 40: Does the value placed on human life have an effect on safety

Elvis.E.Osung's picture

Discuss the relationship between safety and human life, with respect to the effect of the financial value placed on human life and how an increase or a reduction in  the value placed on human life will affect the general concept of safety management.

Comments

Menelaos Michelakis's picture

(Answer to Elvis. E.Osung)

 

Safety engineering is greatly affected be the value of human life. In developed, as well as in developed countries human life is important, because each death (because of an accident) does not only cost to the society but in our case it also costs to the industry. In 1960's about 1000 people were killed annualy (industry) on average, whereas in 2000's this number was reduced to 300. These numbers prove that human life costs and industry tries to protect it. As a result improvements have been made not only to the legislation but also to safety equipment.

In general, the value of human life is greatly varying depending on the occassion. How many are homeless, how many people die in wars, how many people live in horrible conditions ? Unfortunately, uncounted. In the army we had a joke : '' How much you think your life costs '' ? Ans: Only 2.53 euros - the cost of a bullet!

To conclude, safety engineering, is greatly affected by the value of human life. Human life is important because each loss costs to the industry in many ways (money, reputation etc.). Unfortunately, in general human life value varies depending on the occassion (e.g if someone is very poor, if he is an infantry soldier etc.) and many examples can be found.

Thomas Ighodalo's picture

"Everything we hear is an opinion not a fact"

Firstly, Safety is defined as "a relative freedom from danger, or threat of harm, injury, or loss to personnel and/or property,
whether caused deliberately or by accident.  [1] as such the concept of safety and human life can not be treated in isolation.

Secondly, what is the financial value of a single human life? the onus is not on the figure because in reality the value of a human life can not be calculated as such safety management concept is basically to avoid the loss of Life and reduce the instances of incidents occurring, placing a vague value on human life implies that there will be some actions that may be allowed to occur because the potential financial loss is within an acceptable criteria e.g the need to stop work on a drilling rig in the advent that an unforeseen condition could potentially lead to the loss of life vs the loss of revenue if the rig is shutdown to effect the necessary repair.

 

References

1. lecture note 2: BASIC CONCEPTS IN SAFETY ENGINEERING AND RISK MANAGEMENT EG50S1 &EG501D Fundamental  safety engineering and risks management concepts

amir masoud bayat's picture

The concept of "human life value" was first defined by Dr. Solomon S.Huebner in the 1920's. Although it seems impasssive to put a price fot the life of a person, it is necessary in safety analysis to evaluate a maximum cost of a person's life. For example, imagine the value of life is quantified for X pounds. If safety measures taken in a company cost more than X pounds for saving a person from death, then it will be expensive and it will not be worth it. If you think it is unfair and life is priceless and any measures should be taken to save one's life,then you should think on what John Muller, a political scientist at Ohio university said. He said that if the government of the US reduces the limit of speed to 13 miles/hour, the number of annual car accident fatalities will reduce from 30,000 to near Zero (www.lifeslittlemysteries.com). Does it worth? Do you want it to happen? your answer is probably NO.

nina yari's picture

I share Amir's idea about the necessity of giving a quantity to "human life value". Actually the most critical decisions made in terms of safety are the ones which have relations with fatal accidents. As you know, we should reduce the risks until it is as low as reasonably practicable. As a result "human life value" was defined. The costs of preventing a fatality should not be more than "life value". Otherwise, it is not cost-effective. I want to elaborate on this issue by giving an example I have read in an articleby Natalie Wolchower on life's little mysteries website. Imagine there is a parl on the gulf coast. We want to build hurricane shelters for this park. For analysing it moneywise, we should first calculate the number of people nearby and the frequency of the hurricane and also the cost of building shelters. If the saved value( for saving people's lives) is more than the money we spend, we should build shelters. That is why we cannot build shelters everywhere.

Deinyefa S. Ebikeme's picture

Human life is priceless and no amount of financial value can quantify/replace it. The concept of financial value placed on Human life was to buttress the importance of safe practises in industrial activities and this was critically explained by the US Environmental Protection Agency (EPA) with its calculated based on "what people are willing to pay to avoid certain risk and on what employers pay workers to assume extra risks". it was also clearly stated by EPA that, "it should be viewed as defining a person's actual worth".

Therefore looking at it from a more philosophical, and humanistic, stance that the value of life is priceless and can’t be estimated, perhaps the question to ask is, how much are we willing to pay, to keep ourselves alive?

References:

http://www.care2.com/causes/epa-puts-the-value-of-human-life-at-9-1-million-fda-says-7-9-million.html

Deinyefa Stephen Ebikeme IBIYF

Angelos Hadjiantoni's picture

I believe that the value placed on human life will affect the safety measures taken.
If the estimated value of a life is low it might not worth taking enough measures to protect it.
This also applies to the government. If a life does not worth enough to justify new regulations then no new safety regulations will be made.
This of course is in favour of the companies since they will save money. Economists calculate the human life’s value. But what happens if the decisions made are affected by external factors?
Who guarantees that the final result is not tailored to fit companies in order to avoid new tougher legislations?

Life value in the US has been declining according to the following graph:


My opinion is that human life should not have a price. The purpose of companies and regulations must be to protect it without any excuses.

Best regards,
Angelos Hadjiantonis
MSc Renewable Energy

Source: http://www.msnbc.msn.com/id/25626294/ns/us_news-environment/t/how-value-life-epa-devalues-its-estimate/#.UKQ7Iob8HIV

Toby Stephen's picture

I think that by and large everyone would agree with Angelos's statement that "human life should not have a price" as nobody wants to feel as if the value of their life can be quantified by any financial model or estimates, which personally I couldn't agree more with.

From a practical perspective, however, this view is very limiting because it infers that no projects should go ahead as nothing is completely devoid of danger. Or that nobody should buy a can of coke as vending machines kill 13 people per year (1). The bottom line is that estimates on the value of human life are performed out of economic necessity, not as a way of suggesting that a human life can be replaced for X dollars. 

(1) http://www.oddee.com/item_98002.aspx 

--

Toby Stephen
MSc Oil & Gas Engineering

Etienne Gunter's picture

Toby,
I could not agree with you more. The whole subject of the value of human life is totally subjective. Just to illustrate, the different values that are coupled to human life by various countries [1]:
•    $50 000 per year of quality life (international standard most private and government-run health insurance plans worldwide use to determine whether to cover a new medical procedure)
•    $129 000 per year of quality life (Time)
•    $6.9 million (Environmental Protection Agency)
•    $7.9 million (Food and Drug Administration)
•    $6 million (Transportation Department)
•    $7 million (median value for prime aged workers)
When you compare this to the $500 000 that is paid to the family of US soldier that died in Afghanistan [2], this is very excessive. Furthermore, I would like to know what the average value is that an individual is willing to insure his/her life against death. I know it is not entirely the same, but I still believe that it is very subjective.

As you stated, the basis of the argument should not be to replace a life in monetary value, but merely to make a realistic cost comparison of the investment in safety improvement.

[1] http://en.wikipedia.org/wiki/Value_of_life
[2] http://www.time.com/time/health/article/0,8599,1808049,00.html

Mark Haley's picture

Depending on which industry or sector you are coming from, the value of a human life will vary greatly and will depend on how it is calculated.

A good example is road safety and the calculations used to determine whether to implement certain safety measures. In the last decade over 30,000 people have been killed and more than 300,000 seriously injured on UK roads. Britons are 4 times more likely to die on the road than any other daily activity and it remains the single highest cause of death in young adults.
The calculations for whether t implement a particular road safety measure are based on ‘willingness to pay' methodology, covering both human and direct economic costs. The Department of Transport looks at pain, grief, suffering as well as lost output and medical costs associated with road crashes, and then compares this cost with what a sample of the population would be willing to pay to save lives.
i.e. If a particular road junction causes 7 deaths in every 100,000 and measures to improve it will save 3 lives in every 100,000. If the willingness to pay is £30 per person then:
100,000 X £30 = £3,000,000 which equates to a cost of £1,000,000 per life.

The actual figures given by the Department of Transport for a fatality put the cost of a human life at £1.1million (2008 prices) and for a serious injury at about £150,000.

This is based on the willingness to pay model and represents what we as a society value our lives at on the road!

http://www.roadsafetyfoundation.org/media/11070/saving%20lives_saving%20...

Mark Haley

Tony Morgan's picture

Use the calculator below ....

Recomended is probably around 20 times your salary !

Does anyone actually pay that ? You make decisions based upon risk and ususally most people opt for the reduced costs of covering the mortgage as a priority and providing for kids or dependants is a risk that maybe doesnt always get the upront value put in that it should.

It is no different in business that risk based decisions shall be made but that there are no hard and fast values or break points and that considered review of all of the circumstances is what shall dictate the final decision on investment ( the use of group and democratic practices assist in getting a worldly view of the risk rather than an isolated one in the hope that the best decision is taken).
Certain decisions shall need reviewed over time i.e. if someone was single their life worth may be different or attitude to risk may be different than someone who has a family or dependants to support and so the cost they would be happy to pay may be different too.
Again it is exactly the same for companies, scale, location, history and circumstances all need to be taken into account and this is natural across industries also.

I am amazed at the decline in value shown above and my thoughts were that the developed world would place a higher value than necessary but i do feel that this is certainly motivated by political pressure where governments are trying to control spending and close off criticism.

http://www.aviva.co.uk/life/quick-guides/lifestyle-maintenance-calculator.html

regards
tony morgan

p.s. I like your use of Value rather than Cost and think that is an important but subtle reference to re-iterate.

Oluwasegun Onasanya's picture

The cost of a human life, cannot be quantified with a monetary value, just like what others who have posted on this blog have said.
So also, the human factor of an injury can be devastating to each individual, company or employee group. Workers health and safety
 continues to be a focus that has helped reduce losses and costs for many companies and workers. The effort i beleive, is continuous
and must remain a core value in conducting business.

When there is no effective or less effective safety programme in place within an organisation, it shows that the lifes of their workers
is not so much valued.
When there is no continuous safety training for workers, the organisation is not valuing the lives.
When there is no system in place within an organisation, to capture near misses, at risk behaviours, which should serve as lead indicators
and pointers to the fact that things can go wrong, it shows that there is no value of lives within such organisation.

Incidents, after lives are lost, should not be the driving force that should be propelling organisations to sit up and buckle their safety
programmes and should not also be the reasons why safety policy and legistlations are given birth to. The question "what can go wrong?"
should always be asked, as this will likely prevent the lost of a life.

Another factor is compliance, as it begins with a commitment and a safety program that is tailored to fit the organisation and help employers
maintain a system that continually addresses workplace injuries.
Every effective program should include management commitment and leadership, employee involvement, workplace analysis, hazard prevention and
control, safety training, performance goals and measurement.

REFERENCE:

www.plantservices com

Soseleye F. Ideriah's picture

Given that risk is relatively subjective, it is important to define the value of human life because this helps us clearly define ALARP scenarios. Consider the example of a trailer park located at sea level on the gulf coast. Safety engineers will have to analyse the economics in building hurricane shelters for the park. To do this, they figure out how many hurricanes would have to hit the park to justify the cost of building the shelter. They also consider the frequency of hurricanes that hit, the number of people who live nearby (bearing in mind the cost of each human life), and the cost of building and maintaining the shelter for the period of time from one hurricane to the next. If the money (people) saved is greater than the money spent, it is economical to build the shelter [1].

The value placed on human life is one of many parameters that safety engineers use to decide whether it “makes sense” to continue to reduce risk further. An increase in the value placed on human life means more options can be explored to reduce the risk further. On the other hand, if the value placed on human life is too low, then very few risk mitigating strategies would be put in place, resulting in a system more susceptible to accidents and failures. Safety engineers have to strike the balance in the definition of this parameter, to ensure that all risks are reduced as much as possible.

1 http://www.lifeslittlemysteries.com/1731-dollar-value-human-life.html

Uko Bassey's picture

Generally, the price tag of any product determines the worth and value of such product and a human lives are not excluded. Truly, there is no suitable amount that can be allocated to human live because it lacks justifiable basis of computations. Organisations should see their employees and customers as their most important asset but this is far fetch, empty words than a reality I will say. If not mere words, is there any organisation that will save the life of 10 employees and risk a sinking vessel of about £100m? I have my doubts. When it comes to safety, I believe it starts with oneself before extending it to others. Most people/employees do not value their lives too. It is disheartening how some people will risk their lives for intangible rewards. The value placed on lives varies significantly in different organisations. They tend to use their wages and income to determine the value placed on each human life.

Toby Stephen's picture

To relate back to the original question, I think it's a very contextual but for this discussion I'll assume we're talking credible, engineering firms. Would an increase or reduction in the value of human life affect safety? Personally I don't think so. Companies have so much more to lose than just the compensation for accidents/deaths. Even if they did indeed have to pay out the 'value' of a human life (I think I saw somewhere it was estimated around US 5million), this value would be well and truly overshadowed by the loss due to reputational damage, which would far exceed any individual payout.

I think Menelaos makes an interesting point however in saying that industrial accidents have decreased from around 1000 to 300 in the past 50 (approx.) years. Does this show that companies are in fact doing more to protect their workers or that due to technological improvement jobs are nowhere near as dangerous as they once were? Or some combination of both? There is clearly a much higher emphasis placed on safety in this day and age than ever seen previously, but is this due to genuine concern on behalf of companies or because of external pressure and the reputational damage that accidents can inflict? Either way, according to those figures, we're over three times less likely to killed due to a workplace accident than we were 50 years ago.  

--

Toby Stephen
MSc Oil & Gas Engineering

Kareem Saheed Remi's picture

Kareem R. Saheed

Kareem Saheed Remi's picture

 

 

As of 2011, the Environmental Protection Agency set the value of a human life at $9.1 million. Meanwhile, the Food and Drug Administration put it at $7.9 million — and the Department of Transportation figure was around $6 million. Are any of these the right answer?

The truth is that none of these figures is right, and fields of study around this evaluation is majorly based on individual opinions. From safety perspective, the concept of cost of human life is just to estimate how much importance should be given to mitigating factors designed to prevent the realise of known hazards and to minimise such effects if eventually they do occur. 

As it has been generally said, no amount of dollar can replace human life.

 

Reference: www.theglobalist.com/storyid/9692

 

Kareem R. Saheed

mohamed.elkiki's picture

i just get caught by your comment and i don't understand something. you mean if someone killed they pay 9.1 million or 6 or 7.9? and is this as i see an agency so it must be something in law also because if a case made about company that causes death to many people they will pay for each life lost this price. i dont think this is true because it never happened that anyone pay this price for life loss and as you said life cannot be valued by money but it just a way to penalize the company for doing the accident. However, in most cases the big company pay some money in order to protect its reputation and not as a value for people who died so we cant even get value from this cases. humans are not machines or substances that can be paid or sell but if an accident happened the best way of penalizing if by stopping those who were responsible for the accident from doing it again but whatever life lost it can not be compensated.

Kareem Saheed Remi's picture

Kareem R. Saheed

Kareem Saheed Remi's picture

Kareem R. Saheed

Ambrose Ssentongo's picture

Mohamed, the idea of putting a monetary figure on the life an individual is so that if the measures a company is planning to put in place to reduce the risks identified with a certain activity cost more than the total value of lives saved by implementing these measures, then the measures are not worth implementing. The monetary value of human life is therefore not to enable cash be paid out to those concerned in the case that a life is lost. This human life monetising technique is quite important in risk analysis to enable say companies justify which measures they put in place to achieve ALARP. Different jurisdictions will have different value on human life. Media reports for example last year 2011, USA had a statistical value of about $5million on life.

Ambrose Ssentongo

Andrew Strachan's picture

I think the value of human life will have an effect on safety management decisions for very low occurrence, high consequence events that require substantial investment to fully eliminate. The effect on day-to-day operations would be minimal.

With reference to the HSE's website "Something is reasonably practicable unless its costs are grossly disproportionate to the benefits."

This is expressed as COST/BENEFIT > 1xDF

Where DF is the disproportion factor e.g. for a major explosion causing multiple fatalities DF is given as 10.

Benefit = cost of fatality x Number of fatalities x yearly incident rate x years of operation

So the minimum reasonably practicable amount to spend eliminating a risk is:

Cost = cost of fatality x Number of fatalities x yearly incident rate x years of operation x DF

It can be seen that cost and cost of fatality are directly proportional, so on the face of it you might conclude that reduction in the cost of fatality will have a detrimental effect on safety management in that a lower valuation on a fatality will provide a lower cost limit to satisfy the HSE's reasonably practicable policy.

However there are three major points within the HSE policy which significantly diminish the effect the fatality cost will have on safety management:

1) A cost benefit analysis should not be used as justification for not applying relevant good practice.

2) Any theoretical non-safety related financial gains made by implementing the safety measures must be applied in the analysis and used to offset some of the costs of implementation.

3) If the risk is excessively high then the activity should be stopped immediately.

Reference
http://www.hse.gov.uk/risk/theory/alarpcheck.htm

Ahmed_Abdelkhalek's picture

I have to agree with anyone who believes that “Human life is priceless”, but the fact is“Risk free activities do not exist” and thus the concept of putting a value on human life to justify investments is acceptable.



I also want to differentiate between two terms “Cost of Human Life” and “Value of Human Life”, as I believe; according to my understanding of course; that they are mistakenly thought of as interchangeable.



‘Cost’ tends to be interpreted as a ‘Penalty’ i.e.: death compensations. ‘Cost of human life’ is more like a law trade term and one cannot readily accept it.



The term ‘Value of human life’; in the context of health and safety; refers to the financial benefits from changing the likelihood of death [1]. Please refer to
Andrew Strachan’s comment above, according to the HSE, “Something is reasonably practicable unless itscosts are grossly disproportionate to the benefits”.



It is therefore clear why; and this exactly what
mohamed.elkikisaid; the values set by the HSE or the EPA cannot be related to what victims or their beneficiaries receive as compensations.



Organizations like the EPA estimate the value of the human life based on studies of howpeople are willing to take risks in exchange of financial remunerations. This can be deduced from the wages that people with a certain occupation in a certain industry ask for to accept it risk [1].



[1] Value of life, Wikipedia, available at:
http://en.wikipedia.org/wiki/Value_of_life [Accessed 19 November 2012]


Hanifah N. Lubega's picture

Interesting posts and Ahmed has crowned it all by mentioning the key things I had in mind. But again, let’s look at it this way. You get hired as an Engineer for a job and you are given a certain amount of money at the end of the month. Does it mean this is equivalent to your value to the company? Guess not but at least some money has to be paid to you in appreciation of your contribution and time. Increasing your salary motivates you to even work better right? So taking it back to safety terms, having a value to human life (not necessarily your life’s worth) is some sort of motivation to organisations to reduce fatalities so as to improve financial benefit (as Ahmed has noted on the definition of ‘value of human life), by reducing associated compensation costs among other factors otherwise people will die and no one will notice if there’s no value or sense of accountability. I think ‘The Corporate Manslaughter and Corporate Homicide Act 2007’ is good one to encourage safety improvement. So YES, the value of human life has an effect on safety. Besides safety in my opinion is centred around three things, benefit, human life and Environmental protection. That’s why as we talk of system reliability we look at probability of the system to actually meet its design objectives (benefit) and probability to cause fatalities and/or environmental damage. So if costs are put on maintenance of the system and a fee for environmental damage and clean up, why wouldn’t there be a value to human life yet life cannot be reversed! Actuall in my opinion the key aspect that drives safety is the value of human life, that why Safety is relative freedom from danger, or threat of harm, injury, or loss to personnel and/or property, whether caused deliberately or by accident [as defined by Dr. Tan in our notes].

Elle Allswell David's picture

“The care of human life and happiness,
and not their destruction, is the first and only object of good government”
Thomas Jefferson.

It is the duty of every government and
organization to care for its citizens and workers. The Safety of every worker
should be considered paramount in a company’s duty to its employees.

The financial value placed on human life
will definitely have an impact on every company’s attitude towards safety. The
higher the financial value on human life the more an organization will pay
attention to safety.  This is because if
higher amount of money is spent on compensation than that required for safety
it will be economical to mitigate a risk which means the money used in reducing
the risk is still within the ALARP region.

Though the damage done to the image of an
organisation is more than the financial value of human life but in the under
developed world that is not the case. I will therefore suggest higher value be
placed on human life as this will certainly affect an organization safety
attitude.

OKECHUKWU CHUKELU's picture

For safety analysts it is necessary to put
a price tag on human lives this allows them to judge whether a certain safety
regulation will be cost effective. Comparing how much it will cost to implement
by how many lives would be saved does this.  Companies often perform cost-benefit analysis on the cost of
safety features. The questions that will be asked while doing this is “will the
cost of fixing this problem be more or less expensive than the costs of not
fixing it at all?” Even we as individuals usually make these sorts of
decisions, like I would prefer to buy an SUV because I know they are safer and
my chances of surviving an accident are much better than a smaller car that is
more fuel-efficient. But that doesn’t work for a motorcycle rider because to
them the associated benefits outweigh the costs.

 

Okechukwu Chukelu (51231798)

JOHN BOSCO ALIGANYIRA's picture

Discuss the relationship between safety and human life, with respect to the effect of the financial value placed on human life and how an increase or a reduction in  the value placed on human life will affect the general concept of safety management. 
This is an interesting topic for discussion. Like Stephen and other colleagues have already pointed it out. Human life cannot be quantified however there is a very big relationship between human life and safety. Depending on how different companies value the life of personnel, this will directly impact on how effective they are in terms of safety management. Companies that attach more value to the life of their employees tend to be more effective in terms of safety management as opposed to companies which are driven by the level of production/profitability irrespective of Safety procedures in place but of course the current legislation in place focuses on environmental health and safety as well as minimising human injuries and fatalities. Therefore the higher the financial value placed on human life by an organisation/company, the higher it will be in terms of effectiveness of safety management and vice versa. This is because such companies will invest more in risk/safety management at workplace and will always devise means of reducing risks by applying the ALARP concept at all times. Of course any company can claim to have minimized the risks to as low as is reasonably practicable but all in all different companies will achieve different levels of safety depending on what value they are willing to invest in safety management and that is where the financial value attached to human life comes in and this will definitely vary from one organisation to another. One company  may regard the cost reduction of a certain risk as being  grossly disproportional to the benefits gained whereas to another company,it may not be the case depending on  financial value placed on human life by each of the companies and as per the UK Health and Safety at Work Act 1974,both companies will claim to have followed the ALARP concept.
In conclusion,underestimating the value of  human life is one of the reasons responsible for frequent accidents at workplace. Therefore assessing the value of human life remains of  great significance as far as analysis of production safety management is concerned and unless a very high value is placed for compensation of employees concerning work related accidents and fatalities resulting from the employers’ failure to put proper health and safety measures in place,managers may never give safety management priority.

Regards,

John Bosco  Aliganyira

Msc.Oil and Gas Engineering

Ambrose Ssentongo's picture

You're right John. It is an important step in risk management to make a monetary valuation of human life. Some people here indeed consider it unethical to put a price on human life but in my opinion it shouldn’t be seen as putting value to human life, it is attaching a figure that tries to equate to what would be lost monetarily in the case that a life is lost, not that it calculates out someone’s life’s worth. In fact, not considering the economic value of human life when making risk assessments will result into much lower economic damage and underestimate the extent of consequence of a given mishappening thus giving even more unrealistic conclusions on a system’s safety. In the article titled "An overview of quantitative risk measures for loss of life and economic damage," the authors S.N. Jonkman, P.H.A.J.M. van Gelder, J.K. Vrijling suggest four approaches to determining economic value of life, these are.; Macro economic valuation, Comparative approach, Utility based approach and Contingent valuation. These can be studied further in their article.

Ambrose Ssentongo

Ryan Grekowicz's picture

My experience from Industry, and I believe that most companies agree, is that a monetary value will not be placed on a human life.  In addition, we don't place a value on environmental impacts either.  When we do formal risk assessments, we have two separate risk registers, one is for HSE risks, and one is for Financial and License to Operate risks.  We are not allowed to put the two types of risks on the same register.

To give you an example of my experience with addressing risks that are life threatening; if the post mitigation impact is 1 or 2 fatalities, and the probability is 10^-4 to 10^-3 (which equates to, a similar event has happened somewhere in the organization) then we have to present our vice president with a thorough mitigation plan and he/she has to approve the activity. If the probability was the same, but the potential impact was 10 or more deaths, then we would have to go to Executive management with our mitigation plan and receive their approval.  

I have never heard of an activiity being approved if the post mitigated assessment is that there's a 1%-.1% chance of a fatality. 

Richard Sedafor's picture

RS

Most human activity have some kind of risk to life and health involved in them. For most activities especially in the oil and gas industry, reducing the risk to zero or absolute safety is either difficult to achieve or very expensive. There should always be a healthy balance between investment on safety and the business objective. Risks can only be reduced to a value "As low as reasonably practicable" ALARP.

Attempts made by some authors and individuals to derive a definate value for a human life for me is useless and will not bring public acceptance for safety standards. This might even cause public outrage. Multibillion companies may even take the human life for granted if a value is placed on it.The only valid quote of value that in my opinion should be allowed is the amount of expenditure on Safety to which human life is at risk. 

Currently, Japan places more value or infact the highest value on a human life. The country spends an estimate of USD 11,728,000 to save a single life through improvements in public safety. This value only reflects expenditures that are spent to reduce risks to human life to a value "As low as Reasonably Practicable" ALARP. Infact risks may even be reduced to a much lower rate but that would be very expensive.

Regards,

Richard Sedafor

Msc Oil and Gas Engineering

 References

[1] http://www.iaea.org/Publications/Magazines/Bulletin/Bull221/22102084050.pdf

[2]http://complianceandsafety.com/blog/infographic-the-monetary-value-of-a-...

Neil Fraser James Carr's picture

I would like to throw something into the domain. I feel more and more that safety and the value of human life vary from country to country, culture to culture. I put it to you that it is people themselves that are disproportionately unwilling or unable to pay for their own safety and the amount that they value a life at compared to the risk is proportionate to the income they receive. As when you look into the larger corporate companies they tend to employ a duty of care to anyone that is directly linked to them that is very similar around the world where as contractors are often left to their own pursuits. An example I would like to give is dry docks around the world where vessels or rigs go for their maintenance are often a very risky place to be with quite a large number of injuries and incidents occurring. As the maintenance is undertaken by crew that aren’t affiliated with the vessel then the permits are usually under the dry docks jurisdiction and so the vessel or rig will tend to not intervene with how they work and protect themselves. This is also evident in the construction industry in the UK with workers paid as they perform ( Piece Work) being enticed into cutting corners unsupervised allowing themselves a larger return for the risk with injury rate being  twice that of a normal worker.  Reference http://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=3494&context=lcp http://www.etui.org/Topics/Health-Safety/News/Piece-work-increases-the-work-injury-rate

I totally disagree with the fact of nominating a value for human's life. Also, I don't see the point of having the exact amount in any safety and reliability calculations. I will try to present an example in order to describe my point of view.

Let's assume that human life’s value here in UK is 5 million pounds and when the fatal event occurs, while working for international company, the family of the employee will receive this amount as compensation. Now let's assume that at the same time, in the same company, but in a different country, for instance in a less developed, in case of fatal event the life will be considered less valuable. This means that we are estimating human life’s cost according to the economic status of the country. Thus all oil and gas, nuclear, coal employees and engineers would prefer to work in a developed country where the safety measures are higher and the compensation more reasonable. In my opinion this is discrimination and generally this thought of different human life’s value in accordance with the
location is just unacceptable.

Moreover, our lecturer of Project Management said that most of the projects including the part of the associated risks are estimated +/- 10% so there is no requirement of estimating the precise human's life value. Even though, most of companies operating in a dangerous environments despite the fact of making an effort to reduce the risks, they have encountered fatalities so when engineers have to estimate investments or compensations they can refer to this information.

Finally, I think that safety should be applied in every country according to the best measures established so far. In addition, this should be mandatory for every operating company no matter the location or the kind of industry they represent. Otherwise, in my opinion safety will be affected seriously.

YAKUBU ABUBAKAR 51126107's picture

In response to Sergio’s point, I can understand your
prostration that a value in monetary terms is attached to human life, which is presumed
to be priceless. Yes you’re right but for the purpose of economic analysis i.e.
value of statistical life a figure of around $ 129,000 or less is assign to
human life and gets reviewed each year.

But sergios one thing you can understand is that since
accident can not be prevented 100% there must be a basis of human compensation,
as human life is priceless in that way the family can have some to hold on and
also to punish the company for their negelences to safety.

Even though some would argue that the companies are big and amount
means nothing to them, yes but they would have bad public reputations if they
convicted of man slaughter.

So I don’t totally believe that by assigning value of money
for human life as compensation would compromise safety of individuals at work,
rather it would make the companies pay for their negligence’s to safety.

YAKUBU ABUBAKAR

OIL AND GAS ENGR.

REF: http://www.time.com/time/health/article/0,8599,1808049,00.html

RossWinter's picture

It is a ruthless world that we live in if we are putting a value on a person's life. unfortunately that is what some companies do in their applications of safety processes. The phrase ALARP (As Low As Reasonably Practical) has already been discussed in this process but it fits well with this topic. A company will implement a safety measure if they can get a good correspondence between cost and benefit, which makes sense from their economic outlook. However if it costs too much to make a practice safe, then maybe a change of technique in achieving the goal may be a better option rather than just putting new safety rules onto the original process.

Ross Winter Msc Renewable Energy

c.ejimuda's picture

The value placed on a human life from an economist’s point of view is called ‘Value of Statistical Life’ (VSL) (Brannon, I. 2005).  VSL can be estimated using ‘Revealed Preference method’(RPM) (Brannon, I. 2005) though, other methods exist.  RPM quantifies the value of human life as the amount an individual accepts to do a certain risky job. 

Many companies associate the cost of a human life to the nature of risk likely to be encountered in a job.  To expatiate, the higher the risk associated with a job, the higher the value of life or premium an individual receives. If an individual accepts a job, it means that this person accepts the risks associated with the job and the extra amount added to the basic salary (premium). 

Some of the challenges in this method of assessing the worth of a human life is that wage premium is calculated based on perceived risk, not the actual risk and both of them are totally different. Proper assessment of the risk associated with the job is not usually carried out by the company before assigning the job. Even if the risk increases, the premium does not necessarily increase (Brannon, I. 2005). 

In my opinion, no matter how countries, companies, or individuals assess the worth of a life or the amount attached to a life in terms of health and safety, I do not believe it is enough to quantify what a human life is worth. 

 

Reference:

Brannon, I (2005) ‘What Is a Life Worth?’, Regulation winter, 2004 – 2005. [Online]. Available at: http://www.cato.org/pubs/regulation/regv27n4/v27n4-8.pdf [Accessed 21 November 2012]

 

Chukwumaijem M Ejimuda

MSC Safety and Reliability Engineering.

Foivos Theofilopoulos's picture

I agree with all those who state that human life should not have a value. It is not a commodity to be valued, sold or bought. However, I also understand that in order to prioritize risks, there should be a way to equalize the consequences of different hazards using a constant denominator. Unfortunately, monetary value is a very constant system, it is a global language, although as Sergios mentioned in his post, the price is not the same worldwide. Also, if you set the bar too high for ethical reasons (implying that, say, a human life is worth one billion pounds), then you end up with going financially overboard with your ALARP. I cannot think of an example where a company pays 200 million pounds to eliminate the risk of a single casualty. What is happening in Japan now is maybe a (positive) exaggeration.


Another issue with the pricing of human life, at least in my opinion, is that you might end up with “shady” industrial sites of any kind (from factories to construction sites to production facilities) where you can hear the something along the lines of  “we can afford X fatalities”. This is unacceptable. But still, from all the statistics (as Menelaos mentioned in the 1st comment), we see that fatalities are decreasing worldwide.

 

Ike Precious C.'s picture

I would say, as others have rightly commented, human life is very priceless; there is no amount that can truly quantify how much life of a person is worth.
But I believe that value attached to human life has more to do with the culture of a nation or community. A community that places great value on human life will always be driven to new innovations on how to keep them safe, irrespective of the cost. Like Andrew pointed out, in as much as the HSE has advised that one can go as low as reasonable practicable, that doesn't give them the licence to proceed when the risk is too high - This is a function of the culture of the people involved.
On the other hand, a country that places less value on human life, may proceed some of these activities to go on as long as it generates profit - this has been the cause of major disputes in certain oil-producing areas in Western Africa.
I believe that as much as there is no Oil and Gas activity void of risks, Regulators and Operators in their bid to improve safety procedures and legislations, must place human life value on the forefront before other factors can come into the picture.

Thank you.

Siwei Kang's picture

I totally agree with the point that human is priceless. The loss of life is related to not only the money, but also to a lot of things, like reputation of company, qualificated employee and so on. But here is one thing I am still confused. In the tutorial one, question 3 (f), it mentioned that company A is considering investing money to reduce the fatality number. We need to calculate whether benefit got from declining fatalities is more than the investment or not. And the answer we finally got is that the investment is not worth.

If it is true, it demonstrated that human could be valued by money. On the other hand, if it is not true, any investment we spend on reducing the fatalities should be carried on. 

From my point of view, human is the most important thing for company or society. Therefore, strict regulation should be set up and conducted all the time. However, for company, the fact sometimes is opposite to what we imaged. 

Andrew Strachan's picture

The question you would have to ask yourself is when do you stop spending money on mitigating a risk? Is it right that a company should be required to spend 1billion dollars on removing a hazard that has a 1/1billion probability of causing a fatality?

I am not sure about the outcome of question (3f) in tutorial 3, the HSE require the costs to be GROSSLY disproportionate to the benefits to justify not implementing a risk reduction measure. I would have said £4.25M versus £5M is not grossly disproportionate and so the investment should go ahead.

http://imechanica.org/node/13662#comment-21795 

Kyle McFarlane's picture

I think looking at the question, "should a monetary value be placed on a human life" the mass public would agree that it should not. However it is important that as engineers we look into this in respect to our industry and the fact is that is makes clear and logical sense to do so. I feel no measure of disrespect to have my life valued to estabilsh parameters for my safety, at the end of the day most of us are going to be working in high hazard, high risk areas and therefore why shouldnt there be a value used to estabilsh what is acceptable in regard to safety.

 I feel it is important to remember that the only true means of making, for example oil production 100% safe is to not perform oil production as told to us in a lecture. 

 It seems alot of my collegues are focusing entirely on the value of a persons life without considering the value of preventing the loss of human life, a company with a high safety reccord is held in much higher esteem than that with a low, the value attached to this is not fixed but it is a clear indicator of just how much each worker is "worth". 

 The sum in question is used to estabilsh safety procedures and rules not as a payout to the deceased family. 

 

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The high
value placed on human life has been a positive effect on safety, as it has
continued to set the pace on legislation on safety and reliability management
across various industries. For example, the drive to reduce human losses in
operations in the oil and gas industry has led to the enactment of far reaching
legislation that has been able to shape the industry for the best. The high
price placed on human value has ensured companies are more safety conscious in
their daily operations as these activities are carried out by humans.

 

 

Uhunoma Osaigbovo

Subsea Engineering D/L

Leziga Bakor's picture

I think the value we place on human life has a huge effect on safety. For example, if we don't value human life, we will not be will to spend money to put in safety measures to ensure that fatalities and serious injuries of people are reduced. We will rather just send people to work even in places where there life will be at serious risk and if there is an event of death or serious accident we simply replace them.  Now because we value the life of people, we have to go the extra mile to ensure the safety of the people that work in a given environment. 

The value place on human life can be high or low. Whichever one it is will determine how seriously we take the safety issues. I will say the relationship between the value place on human life and safety is one of direct proportionality

Yaw Akyampon Boakye-Ansah's picture

 

As
an earlier argument presented, human life is valued that is why safety
mechanisms are put in place. In the event of trying to reduce risks exposed to
workers, the owner is also safeguarding his investment.

It was explained during the
Legislative aspect of this course, Fundamentals of Safety and Risk Management
Concepts that there is an estimated value placed on human life in a work
environment. Any company that caused the death of any of its workers would have
a huge fiscal liability charged against it if it were especially found out that
it did not provide the factors necessary to reduce the risk factor and
probability.

Most companies try not to lose
their best workers and those workers they have spent time and money to train.
In that sense, they find it valuable to retrain these workers to work safely,
and maximise their efficiency. A machine is as efficient as the worker
operating it.

No employee would find it
charming to work with a company that does not value the life of its employees.
Thus, a company with a high FAR or LTI is less likely to attract the best
employees to its fold. It will rest on such companies who have high goals to be
market leaders, whether locally or internationally, to spend considerable money
to improve the safety of its workers.

All in all, safety of workers
has had and will continue to have an impact on the lives of workers and it
will influence expenses safety-wise.

Yaw A. Boakye-Ansah

MSc Oil and Gas Engineering

 

Hello,

 

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Hello,

Just so n one gets the wrong impression I believe that a
life is priceless and that i couldn't put a price on my enemies head never mind
someone I care about.

In saying this I think that most companies put a price on a
human life cover/insurance for death at work is a pretty direct way of putting
a price on a life.

I realise that this is not really the issue being raised.

 any thougths??

 

Thanks

Liam Slaven

 

I think you only have to look countries such as India and
China to see indication that there is a value placed on human lives which does
not justify safety costs. Disasters such as Banqiao Dam, China, 1975 ,
26,000 immediate deaths and  Machhu II, India, 1979 where a dam failure
left , 2,500 dead. Both these were caused from safety measure not being carried
out correctly, both with knowledge of possible consequences.

These example are two extreme cases of little value to human
life effecting the safety.

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Businesses try to quantify there decisions
they make in financial terms. A value to life is good method of bringing a
logical approach into safety management. A financial value can allow businesses
to apply a cost benefit analysis to safety measures and will ensure value for
money in safety. Applying cost benefit  analysis
can help ensure that money is spent on prevention measures that will see relevant
improvement  in safety performance
instead of applying a disproportionate amount of money to an event that has
large implications but low possibility of occurring. After all organisations
have to abide to legalisations to ensure health and safety at work.


James Parry
MSc Subsea Engineering


the value of human life
is a determine factor while considering the cost of safety and how much
protection should be put in place and in effect what is considered to be ALARP. so yesin practice it has an effect on safety.


Mohamed H. Metwally's picture

 

I
like the posts discussing the principle of placing value on human life, and I
tend to believe that no harm in that so long as it is regarded as "blood
money"

Not only that, but also the more
human life value is the more we see commitments of saving employees lives and
health on the top management level.

Ultimately, no one can rule out
the occurrence fatality during work; and since the human life value is a
considerable amount of money, it has to be accounted for from a financial
perspective....why not?

 

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