Levels of risk/Consent status matrix

In order to take a risk-based approach, the consequences and likelihood need to be quantified to provide a level of risk. To achieve this, a matrix can be used that incorporates the relevant risk level, expressed as a function of consequences multiplied by likelihood (Figure 1). The risk then ranges from 1 (extremely low) to 25 (extremely high).

  Consequences
Likelihood 1 2 3 4 5
5 5 10 15 20 25
4 4 8 12 16 20
3 3 6 9 12 15
2 2 4 6 8 10
1 1 2 3 4 5

Figure 1: Quantifying consequences and likelihood (adapted from Saunders, 2011)

The risk levels then need to be determined. In practice, participation and associated debate would be required within Council and with the community to determine the thresholds for the levels of risk [see Building an Engagement Strategy]. Figure 2 shows conceptually how the risk levels could be determined from Figure 1. Figure 2 does not provide definitive thresholds of risk - these risk levels are an example only.

Risk Level of risk
1-9 Acceptable
10-19 Tolerable
20-25 Intolerable

Figure 2: Qualifying levels of risk from Figure 5 (adapted from Saunders, 2011)

Once levels of risk have been determined, the matrix is then colour coded (Figure 3), based on the levels of risk shown in Figure 2. The use of colours allows a faster assessment of the levels of risk involved. The colours of green (acceptable), blue (tolerable), yellow and orange (tolerable with consent) and red (intolerable) are considered standard colours for this approach (Standards New Zealand, 2004).

Figure 3: Colour coding the matrix based on level of risk (adapted from Saunders, 2011)

This stage uses the colours, based on the levels of risk, to determine the consent status (i.e. treatment) of the activity (Figure 4).

Figure 4: Level of risk and associated consent status (adapted from Saunders, 2011)

In the final stage of the process consequence values 1–5 are relabelled into roman numerals to ensure no confusion between the likelihood scale and consequence scale. Figure 5 provides the final framework where risk equates to consent status applied.

Figure 5: The risk-based planning framework (adapted from Saunders, 2011)

Non-complying and prohibited are merged together, but it is acknowledged that the former allows for development, while the later avoids development. For the purposes of this example, the two are merged to allow for high consequence activities to take place in high risk areas, which may not be able to be avoided e.g. a port.

Not all consent categories may be required. The consent categories that are used need to relate to level of risk associated with the hazard and the desires of the community to address this risk. As such, it maybe that a council only chooses to use the following consent categories when implementing the risk based approach: permitted, discretionary, and non-complying.

References

Saunders, W. S. A. (2012). Innovative land use planning for natural hazard risk reduction in New Zealand. People, Environment and Planning. Palmerston North, Massey. Doctor of Philosophy: 229.

Standards New Zealand (2004). Risk Management Guidelines: companion to AS/NZS 4360:2004, Standards Australia/Standards New Zealand.