Comparative Analysis of the Maritime Venture Risk and the Cost of Averting a Fatality in the Republic of Croatia

Abstract

Given the fact that every maritime venture is exposed to continuous risks, it is necessary to create a hierarchic structure of its predictors and to manage them efficiently. In view of that, the International Maritime Organization (IMO) suggests the possibility of risk management through the Formal Safety Assessment (FSA). The key element in the implementation of this method is to determine the optimum point of investment in risk reduction with the purpose of achieving the balance between the costs of protective measures and the profit. Although it may be inappropriate to discuss the price of a human life, it is nevertheless possible to calculate it by formal mathematical procedures through the Cost of Averting a Fatality (CAF) and the Implied Cost of Averting a Fatality (ICAF). This methodology has allowed to produce – and to present in this paper – the above values for the Republic of Croatia for the very first time. In addition, by using the ϰ2 test, it has been possible to examine the relations between the observed actions (foundering, collision / impact, flooding, fire, disabled and adrift, man overboard) and the period (years 2006-2017). The results clearly show a statistically relevant dependence (ϰ2(88)=143,17; p<0,001) among the observed categories, which probably results from various implementation dynamics of the risk reduction measures that are performed in Croatia on a yearly basis. The results obtained by this research can provide important additional guidelines for the optimisation of the risk management model.

Keywords

• risk management
• Formal Safety Assessment
• Cost of Averting a Fatality