Risk-based Oversight

Definitions

Risk-based Oversight (RBO): A way of performing oversight, where:

  • planning is driven by the combination of risk profile and safety performance; and
  • execution focuses on the management of risk, in addition to ensuring compliance.

Risk Profile: The elements of risk that are inherent to the nature and the operations of the regulated entity, this includes:

  • the specific nature of the organization/operator;
  • the complexity of its activities;

the risks stemming from the activities carried out.

Safety Performance: The demonstration of how effectively can a regulated entity (e.g. operator) mitigate its risks, substantiated through the proven ability to:

  • comply with the applicable requirements;
  • implement and maintain effective safety management;
  • identify and manage safety risks;
  • achieve and maintain safe operations;

the results of past certification and/or oversight also need to be taken into account.

Performance-based Oversight

EASA explains the relationship between Performance-based Oversight (PBO) and Risk-based Oversight (RBO) as:

The concept of "performance" conveys the idea of tangibly measuring the health of the system under scrutiny and ultimately assessing its overall performance. Performance indicators, as a means to measure, may specifically help to either identify risks within that system or measure safety risks or monitoring actions mitigating these risks. This means that a PBO can also support the identification of areas of greater risk and serve the risk assessment and mitigation exercise. This is where PBO meets RBO. [1]

Discussion

The implementation of Safety Management Systems signals a shift from reactive and compliance based oversight to a new model that includes proactive and performance-based tools and methods.

Recognising that compliance alone cannot assure safe operations, and that effective and affordable regulatory oversight needs to be targeted, most regulators have altered the relationship between the operators and the Competent Authorities to ensure that greater oversight is applied to those that need it. To achieve this, Inspectors need to be able to assess safety performance and the key factors that influence it. If an Operator's Compliance Monitoring Function demonstrates that regulatory and procedural compliance is being monitored effectively internally then it will attract less external oversight.

A risk-based approach to oversight entails the assessment of the performance influencing factors, organisational changes and other safety performance indicators that make up an operator's risk profile. An operator's risk profile will inevitably be dynamic. The regulator must have a process that acquires and analyses different sources of intelligence that provide insight into the changing risks in an operation such as:

  • reported occurrences;
  • reorganisation and restructuring (e.g new management and reporting structures, new operating bases, new aircraft types, changing working practices);
  • retirement/departure of a key employee (e.g new accountable managersafety manager, or operations director);
  • financial health of the organisation;

Those operators with a high-performing SMS and clear safety leadership will attract less oversight.

Accidents and Incidents

The following events in the SKYbrary database of Accident and Incident reports feature Ineffective Regulatory Oversight as a contributory factor:

Related Articles

Further Reading

References

<references>

  1. ^ "Practices for risk-based oversight"; Edition 1, published by EASA 22 November 2016
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