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GRC Professional : GRC Autumn 2012
13 advisory and Eurasia Group in a paper on the topic of how energ y com pa nies can i mprove global performance by better managing risk. “Matching energ y demand and supply is, at its ver y core, a high-stakes geopolitical business endeavour. this is truer today than at any time in the past. “the signs of this abound. national oil companies (noCs) are expanding at an unprecedented rate. Geopolitical uncertainty, across both producer and consumer countries, is on the rise. at the same time, the industry is coping with a surge in published and unpublished incident s involvi ng busine ss setbacks, such a s contract renegotiations or cancellation by host countries, increases in taxation driven in part by political agendas, or impromptu exits from countries after significant investment.” Recent changes on a national level, constant changes in regulations keep risk and compliance experts on their toes. on 1 january this year, a new nationwide set of workplace health and safety regulations was releasedby safe Work australia for adoption by the states and territories. according to Mark amos, director Energy infrastructure Policy at the Energy networks association, states have previously developed their own reg ulations but will now be required to transition to the new policies – some have already done so while others will come on board at different times. “a national approach will be good for networks and simplify the management of risk in the workplace,” amos says. “But the change and turmoil as we move towards this will add cost s and pressures.” “the industry employs many highly skilled people who often work at great height, in confined spaces, or around high voltage, so workplace health and safety has always been an ongoing focus for us. But change is constantly occurring around us,” amos says. “Challenges are as variable as the weather. Cyclones, storms and floods can cause enormous issues a nd people wa nt thei r power back on immediately when they do – but we need to wait until it’s safe for our guys to go in and do the work. “the devastating bushfires in Victoria and cyclones in Queensland a re still causing problems in terms of the work that has had to be done to rectify the damage and address the risk of future events. in Victoria, many senior management experts f rom network businesses have spent a large part of the last two years collaborating with the royal Commission and the Powerlines Bushfi re safety taskforces established to investigate and address the causes of bushfires. “Work will continue in designing and implementing solutions developed through a X 4 tips for improving political risk management A systematic approach to managing political risk starts with a comprehensive assessment. Here’s how to make such an assessment effective: 1 Map the politics Createanexternal political risk profile; one that provides you with a cross-country portfolio view of your risk and allows you to begin managing your global investments from a portfolio perspective. 2 Evaluate the risks Next, use this information to identify specific, prioritised, business-relevant risks to your operational performance. 3 Assess controls and plans Now focus on the adequacy of your assessment controls and procedures – particularly with respect to whether these controls are exercised through corporate oversight or local capabilities. 4 Determine the acceptability of residual risk Finally, integrate political risk management into your strategic decision- making and ongoing monitoring activities. Source: PwC Advisory and EurasiaGroup
GRC Summer 2012
GRC Winter 2012