Infrastructure Division

Estate Planning

Estate Risk Assessment Guidance for Base Development Plans (BDP) Corporate Services & Infrastructure Request (CSIR) Part 2

Technical Authority: DGEP Subject Matter Expert: TBA Approval Date: July 2013 Estate Risk Assessment Guidance

Document Administration Document Location The master copy of this document is held in Objective, reference: AF16276553 Revision History Date Version Description 24 October 2005 1.0 Initial Release of document for Infrastructure Management. 1 November 2012 1.1 Update and inclusion of BDP 21 November 12 2.1 Formatting 1 July 2013 2.2 Update

Approvals Name Title Version Date of Issue AIRCDRE Anker Brodersen Director General Estate Planning 2.1 30 Nov 2012

Instructions This document has been created with the flexibility to be used for a number of applications including Base Development Plans (BDP), Corporate Services and Infrastructure Request Part 2 Development. It is expected that wherever these items are listed, only the relevant purpose will be retained. That is, for a BDP, all references in this document to CSIR Part 2 should be deleted and vice-versa.

Objective ID: AF16276553 2 Updated: July 2013 Estate Risk Assessment Guidance

Estate Risk Assessment 1. The purpose of the risk assessment is to prioritise BDP / CSIR Part 2 in the context of risk, to inform the development of a particular BDP / CSIR Part 2. 2. The model has a number of components to be considered when risk assessing a BDP / CSIR Part 2: a. a set of Risk Dimensions; b. consequences associated with the Risk Dimensions; c. likelihood of consequences occurring; d. risk level and Score using a Risk Assessment Matrix; e. a Risk Band allocation for the BDP / CSIR Part 2; f. a Priority that represents the overall BDP / CSIR Part 2 risk assessment. 3. The risk assessment is to be based on an assessment of the consequences and the likelihood of not delivering the project for a CSIR Part 2. 4. For a BDP, the risk assessment is to be based on an assessment of the consequences and the likelihood of the current Base Elements and Risks identified in the BDP. 5. The consequences and likelihood ratings are mapped to determine the Risk Level for each Risk Dimension. The project is then allocated a Risk Band determined as the highest of the Risk Levels across the seven risk dimensions. A score is then allocated based on the consequence and likelihood ratings. The total of these scores is the Risk Priority. Risk Dimensions 6. The Dimensions for the risk assessment of BDP / CSIR Part 2 are defined below

Risk Dimension Description Capability Capacity of the facility to support the user unit in delivery of its primary outputs.

Impact on the ability of the ADF to protect Australia and fulfil its national security obligations.

Impact on the ADF’s ability to train and equip for war and for the conduct of peacetime operations.

Impact on the ability of Defence to develop its capability as detailed in the Defence White Paper.

Impact on Civil (non defence) Capability as a consideration for shared facilities.

Objective ID: AF16276553 3 Updated: July 2013 Estate Risk Assessment Guidance

Workplace Health and Impact on the physical and psychological well being of military Safety and Defence employees, contractors, communities in Defence (Staff and Public) regions and the public in general. Legislative Compliance Compliance with regulatory requirements and the impact of failing to comply. Including but not limited to Federal, State, Territory, Local, foreign treaty, indigenous land use agreements, Defence Instructions or contracts.

The impact or potential impact of doing or failing to perform some obligation is where the importance of compliance arises. Matters for consideration include:  whether the estate is currently breaching one or more laws, agreements etc;  whether the estate, in the absence of some remedial work will shortly be contravening a legislative or other obligation; or  whether the estate needs work to be completed within or by some specified time to ensure that it remains compliant with all obligations. Environment and Impact on the environment, including contamination, damage to Heritage flora and fauna, fire, noise, soil damage and erosion, green house gas emission, bio-diversity, feral animals and water quality. Environmental management in the strategic context of Defence business. Impact on Heritage includes impacts on sites listed on the National Heritage List, Commonwealth Heritage List, Register of the National Estate and sites that are thought to have heritage significance but have not been formally assessed. Sites can have Historic, Indigenous and Natural heritage values. Further guidance is provided at Attachment B.

Objective ID: AF16276553 4 Updated: July 2013 Estate Risk Assessment Guidance

Financial Efficiency  Financial impact on an asset – ie. shortened asset life requiring early replacement etc.

 An assessment for the potential for increased project costs caused by additional deterioration and cost escalation that would be incurred if the if the project is delayed. This includes costs directly related to the project itself and any flow on costs that may result if the works are not performed.

 Short-term cost of prevention vs. long-term cost of recovery. This would also cover reductions in costs and return on investment. ie shorter payback period if work performed now, costs now for long term savings.

 Loss of the opportunity to generate savings.

 Cost estimates should be inclusive of GST. Personnel Impact on Military and Defence employees, in the context of staff morale, staff retention and productivity. Reputation Impact on Defence’s reputation in managing the estate, political and media attention to defence estate matters, community concerns or actions over activities.

Impact on compliance with Government commitments as opposed to specific government policy/legislation.

Objective ID: AF16276553 5 Updated: July 2013 Estate Risk Assessment Guidance

Risk Dimension Consequence Guidance 7. The following table contains details of consequence guidance for assessing the risks associated with a project if it is not implemented in the timeframe for which it is being bid. A short statement justifying the consequence rating is to be provided in the BDP / CSIR Part 2 8. In defining this model, consideration has been given to the comparability of ratings between the dimensions, i.e. a Severe Capability is comparable with a Severe Reputation. This has been done because of the Risk Level banding concept used (see below) to perform project prioritisation. Guidance has been prepared in such way to facilitate the comparison of consequence ratings at the same level.

Consequence: If the project is not delivered/implemented Rating Severe Major Moderate Minor Negligible y t

i All activities cease AND Some activities curtailed AND Some activities curtailed AND Minimal activities curtailed Minimal activities curtailed l i

b unable to conduct missions or Missions or training activities missions, training or Cadet AND missions, training or AND missions, training or a

p training activities OR all activities can be conducted Cadet activities can be Cadet activities can be

a can be conducted however in a

C activities cease AND major significantly degraded state. however one or more of the conducted with minor conducted with minor unacceptable delays in delivery significant requirements of the degradation to several mission degradation to one mission or of capability. mission or training would not or training requirements. training requirement. be met. OR AND Minor delays or minor Negligible performance impact. performance degradation. y

t One or more fatalities or life One or more major injuries or One or more injuries or illness One or more injuries or illness Minor injury or ailment e f

a threatening injuries or illness. illness requiring major surgery requiring treatment by a requiring treatment by a that does NOT require S or resulting in permanent physician or hospitalisation. qualified first aid person. medical treatment by a d OR n

a disablement. physician or a qualified OR OR

h Public or staff exposed to a

t first aid person. l OR a severe, adverse long-term Public or staff exposed to a Exposure of public and e

H health impact or life- hazard that could cause injuries staff to a hazard that could

Public or staff exposed to a

k threatening hazard. or moderate adverse health cause minor injuries or r hazard that results in major o surgery or permanent effects. minor adverse health W disablement. effects e e c Potential exposure to Potential exposure to large Some legal constraints imposed Minor technical legal Minor technical breach but v n i t a i

a significant damages involving damages or awards AND/OR with up to half of maximum challenge OR legal breach no damages AND/OR no l l s p i one or more persons, AND/OR prosecution with 50% to fine imposed. AND/OR minor damages monetary penalty. g m e o prosecution with maximum maximum penalty imposed. or monetary penalty.

L OR C penalty imposed. Non Compliance with Department Policy

Objective ID: AF16276553 6 Updated: November 2012 Estate Risk Assessment Guidance

Consequence: If the project is not delivered/implemented Rating Severe Major Moderate Minor Negligible d

n Heritage Listed Assets or Heritage Assets or Areas (not Moderate damage to the Minor damage to the Negligible damage that is a

t e Areas: Irreversible and listed): Irreversible and environment or a heritage listed environment or heritage asset contained on-site. g n e a extensive damage is caused to a extensive damage is caused to a asset or area, which is or area that is immediately t

i AND m r

n World Heritage Listed Area, a non Heritage listed area or asset repairable. The resource or contained on-site. It will take e

o The damage is fully recoverable H r

Commonwealth Heritage but that has heritage values. asset will take up to 10 years to less than 2 years for the i

v with no permanent effect on the n Listed Site, a National Heritage OR recover. resource or asset to fully E Listed Site, a Register of the recover or it will only require environment or the asset, It will National Estate Site or a Environmental Assets or minor repair. take less then 6 months for the Areas: Irreversible and resource to fully recover. Defence Heritage Listed area or OR asset extensive damage is caused to a non environmentally significant Disturbance to OR (as per the EPBC Act) area or scarce or sensitive Significant Environmental asset environmental or Assets: Irreversible and OR heritage resources. extensive damage is caused to a Matter of National Heritage Listed Assets or Environmental Significance Areas: Significant damage is under the EPBC Act (eg. caused to a Heritage Listed area endangered species, ramsar or asset that involves either wetland, marine environment). extensive remediation or will take more than 10 years to recover. OR Significant Environmental Assets or Areas: Significant damage is caused to an environmentally significant (as per the EPBC Act) area or asset from which it will take more than 10 years to recover.

Objective ID: AF16276553 7 Updated: November 2012 Estate Risk Assessment Guidance

Consequence: If the project is not delivered/implemented Rating Severe Major Moderate Minor Negligible

Further guidance on the assessment of Environment and Heritage Risk is provided at Attachment B: Environment & Heritage Risk Assessment – Further Guidance )

s Critical financial impact to life Serious financial impact to life Moderate financial impact to Noticeable financial impact to Less than 20% increase in t y s c

o of Capability – shortened of Capability - shortened life of Capability - shortened life of Capability - shortened project cost in the following n e C

i

l expected life of capability by expected life of capability by expected life of capability by expected life of capability by year. c i a f g

f more the 75% 35%-75% 15% - 35% 5% - 15% OR e E

L l

For cost savings, s a i e OR OR OR OR there is little or no c d n u l a Flow on costs could increase Flow on costs could increase by Flow on costs could increase by Flow on costs that are less than payback realised. c n i x by 200% (or greater) > 100% of the project cost. > 60%-100% of the project 60% of the cost of the project. F E ( cost. OR OR OR OR No or minimal flow on Potential for 200% increase in Potential for 100% increase in OR Potential for 20% - 60% costs. project cost caused by project cost caused by Potential for 60% - 100% increase in project cost caused additional deterioration and additional deterioration and increase in project cost caused by additional deterioration and cost escalation if delivery is cost escalation if delivery is by additional deterioration and cost escalation if delivery is delayed - it could cost more delayed - it could cost double cost escalation if delivery is delayed - it could cost 1 to ½ than 3 times as much when the cost when actually delayed - it could cost 1½ to 2 times as much when actually actually delivered delivered times as much when actually delivered delivered OR OR OR Potential savings with a Potential savings with a OR Potential savings with a payback period of 1 year is not payback period of 2 years is not Potential savings with a payback period of 10 years is realised. realised. payback period of 5 years is not not realised. realised.

Objective ID: AF16276553 8 Updated: November 2012 Estate Risk Assessment Guidance

Consequence: If the project is not delivered/implemented Rating Severe Major Moderate Minor Negligible l

e Serious negative affect on staff Major negative affect on staff Moderate negative affect on Minimal affect on staff morale, Little or no impact on n

n morale effecting all staff morale, affecting more than staff morale, affecting less than affecting a small number Personnel in any area. o s

r associated with the structure, half the staff associated with half the staff associated with (<25%) of staff associated with e

P with significant loss of the structure with major loss of the structure, with some loss of the structure with possible productivity, > 5 days lost productivity, > 1 day lost. productivity, < 1 day lost. minor productivity loss OR OR OR OR A high number (> 80%) of the Over 50% of affected Staff are Some (up to 50%) of staff Staff are unlikely to be re- affected staff are highly likely likely to be re-considering their impacted may be re- considering their continued to be re-considering their continued service or considering their continued service or employment continued service or employment within defence service or employment within within defence. employment within defence OR defence OR Threat of Industrial Action. OR Industrial action is about to Employee representative be taken. involvement. n

o Detrimental international media Sustained detrimental national Limited detrimental national or High profile detrimental local Low profile detrimental local i t

a reports or state media reports. state media reports media reports media reports t u

p OR OR OR OR OR e

R Subject of international Subject of a number of Subject of a parliamentary Subject of local government Trivial substantiated complaints government attention. parliamentary questions and question or ministerial. action from the community. OR ministerials. OR OR Non realisation of a OR Organised community concerns Random substantiated government commitment Sustained community outrage and complaints. complaints from the community.

9. If there are no Consequences for a particular Risk Dimension the “Negligible” Consequence rating should be selected with the “Rare” Likelihood rating. 10. If an assessment cannot be made of the consequences “Not Assessed” will be a valid value, it will be allocated the same score (see below) as Negligible.

Objective ID: AF16276553 9 Updated: November 2012 Estate Risk Assessment Guidance

Likelihood of Risk Guidance 11. The risk assessment must include an assessment of the likelihood of an event occurring that would result in the consequences identified. This assessment is to be made on all 7 risk dimensions. A justification of the likelihood rating is to be provided in the BDP / CSIR Part 2 process. 12. Guidance for determining likelihood ratings is provided below:

Likelihood of the consequences occurring in the requested funding period. Rating Description Almost Certain Very high probability of the consequences occurring. AND Has a > 90% chance of occurring in the identified period if the risk is not mitigated Likely High probability of the consequences occurring. AND Has a 60-90% chance of occurring in the identified period if the risk is not mitigated. Possible Even probability of consequences occurring. AND Has a 40-60% chance of occurring in the identified period if the risk is not mitigated. Unlikely Low probability of occurrence but not negligible. AND Has a 10-40% chance of occurring in the future if the risk is not mitigated. Rare Very low probability of the consequences occurrence but not impossible. AND May occur in exceptional circumstances, i.e. less than 10% chance of occurring if the risk is not mitigated.

13. If there are no Consequences for a particular Risk Dimension the “Negligible” Consequence rating should be selected with the “Rare” Likelihood rating. 14. If an assessment cannot be made of the likelihood “Not Assessed” will be a valid value, it will be allocated the same score (see below) as Rare. Risk Level and Risk Score 15. This Estate Risk Assessment model has been determined in accordance with guidance from the Defence Enterprise Risk Management Guidelines and Australian Standard AS/NZS 4360. 16. The Risk Level for each Risk Dimension is determined by mapping the consequence and likelihood rating in accordance with the following risk assessment matrix.

Objective ID: AF16276553 10 Updated: November 2012 Estate Risk Assessment Guidance

17. The Risk Score for each Risk Dimension is determined by adding the Consequence and Likelihood rating numerical value in accordance with the following risk assessment matrix. The lower the value the higher the priority.

Risk Assessment Matrix Consequence Rating Likelihood Severe Major Moderate Minor Negligible Rating 1 6 11 16 21 Almost Certain Very High Very High High Medium Low 1 2 7 12 17 22 Likely Very High High Medium Medium Low 3 4 9 14 19 24 Possible High High Medium Medium Low 5 6 11 16 21 26 Unlikely High Medium Medium Low Low 7 8 13 18 23 28 Rare High Medium Low Low Low 9 10 15 20 25 30

18. For example: a. A risk assessed as “Major” Consequence with a “Possible” likelihood is allocated a Risk Level of HIGH and a Score of 11. b. A “Severe” Consequence with an “Unlikely” likelihood is also a Risk level of HIGH but has a Score of 8. Risk Banding 19. The Risk Band for a project will be determined from the highest Risk Level of the Risk Levels of the Risk Dimensions. If a project has 1 Very High level and 6 Low levels it is still included in the Very High band. BDP / CSIR Part 2 is categorised into these Risk Bands. Risk Priority 20. The Risk Priority is determined by totalling the risk scores for each risk dimension. The Risk Priority is used to prioritise BDP / CSIR Part 2 development within a Risk Band.

Objective ID: AF16276553 11 Updated: November 2012 Estate Risk Assessment Guidance

Attachment A – Definition of Contribution Factor Guidance The following definitions are provided as guidance.

No. Category Description and Examples 1 Major Major Assets provide a very high level contribution towards operational capability and are the most critical structures of a military platform, national security objective or Group objective. The loss or compromise of a Major Asset would be a major concern to Australia’s national security, with repercussions such as:  Very High impact on the overall capability of the ADO; or  Very high danger too many members of the public or the ADO. A Major Asset should be located in a security area, protected by an approved security alarm system. Examples include:  Critical command, control, intelligence and communications assets; and  Roads, water, electricity and backup electricity for Major Assets. 2 Important Important Assets provide a direct and high level contribution towards the capability of a military platform, national security objective or Group objective. The loss or compromise of an Important Asset would be a high concern to Australia’s national security, with repercussions such as:  High impact on the overall capability of the ADO;  High danger to many members of the public or the ADO;  Lengthy lead times to restore extant capabilities;  High embarrassment to the ADO; or  Very high asset replacement costs. An Important Asset should be located in a security area, protected by an approved security alarm system. Examples include:  Essential military working accommodation and healthcare buildings;  Storage facilities for weapons, ammunition, combustible materials and medications; and  Roads, water and electricity for Important Assets.

Objective ID: AF16276553 12 Updated: November 2012 Estate Risk Assessment Guidance

No. Category Description and Examples 3 Support Support Assets perform a capability support function to enable the efficient and effective functioning of Major and Important Assets. The loss or compromise of a Support Asset would be a moderate concern to Australia’s national security, with repercussions such as:  Short-term impairment of an Important Asset’s functions;  Danger to many members of the public or the ADO;  Lengthy lead times to restore capability support; or  Moderate embarrassment to the ADO. Examples include:  Capability support working accommodation;  Essential training and educational assets;  Military vehicle storage;  High-use live-in accommodation; and  Roads, water and electricity for Support Assets and backup electricity for Important Assets. 4 General General Purpose Assets perform day-to-day base functions and do Purpose not generally require high security protection. The loss or compromise of a General Purpose Asset could cause the temporary impairment of a Support Asset’s functions or a moderate impact to a single capability element (eg base unit). General Purpose Assets are typically:  Low in replacement value;  Require regular maintenance;  Require normal fire protection; and  Require normal security protection. Examples include:  Office, retail and assembly buildings;  General live-in accommodation and detached houses; and  General purpose utilities and engineering structures. 5 Low Low Importance Assets are typically: Importance  Low in replacement value;  Require occasional maintenance;  Require reduced fire protection; and  Require reduced security protection. Examples include recreation facilities, monuments, car parks, general storage, and unused buildings.

Objective ID: AF16276553 13 Updated: November 2012 Estate Risk Assessment Guidance

Attachment B: Environment and Heritage Risk Assessment – Further Guidance The following table contains further details of consequence guidance for assessing the risks associated with a project if it is not implemented. Category Sub- Guidance Example categor y Environme Impact Defence must comply with the EPBC Act. If a Please give example using the ‘environment’ rather nt Assessm project does not go ahead and this inactivity has, will than a matter of NES. ent have, or is likely to have a significant impact on the environment (including matters of National Environmental significance) the consequence must be detailed. The environment includes ecosystems and their constituent parts, including people and communities, natural and physical resources, and the qualities and characteristics of locations, places and areas, heritage values of places and the social economic and cultural aspects. Contami Defence complies with the National Environment If bunding around an above ground fuel storage tank nation Protection (Assessment of Site Contamination) is cracked what are the risk to Defence of not Measure 1999. Under this protection measure repairing the infrastructure? There is the risk of a fuel contamination levels are assessed using Ecological spill resulting in free product being introduced into Investigation Levels and Health Investigation Levels. the groundwater. The risk would increase in direct If contamination exceed these levels the consequence proportion to the size of the tank and the operational can be moderate to severe (acute toxicity to receptors usage. What receptors are present and what effects – Severe, observable impacts on receptors – Major, would increase levels of contamination have on these contamination levels exceed HIL/EILs – Moderated). receptors. A receptor can be either human or ecological. Heritage Historic Defence manages its heritage estate in accordance  Works to a heritage listed building/structure that is with the requirements of the Environment Protection not undertaken in accordance to a heritage and Biodiversity Conservation Act 1999. Any project management plan.

Objective ID: AF16276553 14 Updated: November 2012 Estate Risk Assessment Guidance

that potentially impacts either directly or indirectly on a heritage value must undergo risk assessment to detail the consequence of taking the action on that particular value. Indigeno Defence manages its heritage estate in accordance  Disturbance of an Indigenous site due to us with the requirements of the Environment Protection inappropriate controls and Biodiversity Conservation Act 1999. Any project that potentially impacts either directly or indirectly  Clearing a listed area of Indigenous heritage value to on a heritage value must undergo risk assessment to allow for redevelopment. detail the consequence of taking the action on that  The construction of a road through a listed particular value. Indigenous heritage area

Natural Defence manages its heritage estate in accordance  Disturbance of a natural heritage area due to with the requirements of the Environment Protection inappropriate controls and Biodiversity Conservation Act 1999. Any project  Clearing a listed area of natural heritage value to that potentially impacts either directly or indirectly on a heritage value must undergo risk assessment to allow for redevelopment. detail the consequence of taking the action on that  The construction of a road through a listed natural particular value. heritage area.

Objective ID: AF16276553 15 Updated: November 2012