Titel_SS06

order of 10-5 might be close to a generally accepted value. However, it will be seen in the
following that it is possible to establish a more refined basis for the assessment of this.

Experienced risks in selected commercial activities

In the Farmer diagram illustrated in Figure 13.1, observed frequencies and corresponding
losses have been plotted for failure events in the offshore, maritime, mining, aviation and
hydraulic water energy sectors.

Annual probability of failure Pfother studies

accepted

marginally accepted

merchant shipping

mobile drill rigs

canvey lng

storage

geyers

slope

stability

foundation

fixed drill rigs

canvey refineries

estimated u.s. dams

commercial

aviation

mine

pit

slopes

canv

recomey

men

ded

cost in $

lives lost 1 10 100 1000 10000

1m 10m 100m

Consequence of failure

1

10 -1

1b 10b

10 -2

10 -3

10 -4

10 -5

10 -6

Figure 13.5: Farmer diagram with an indication of risks experienced in connection with various societal
activities in the past (Bea R.G [73]).

By plotting into the diagram typical risk acceptance criteria it is seen that not all risks are
located in the acceptable domain. Also it is observed that there is a substantial variability of
the experienced risks between the different sectors. One example where experienced risks are
very small is the aviation sector. The opposite situation may be found in the merchant
shipping sector. There could be various explanations for this – one of them being that the
observed risks only indicate the losses and not the chances or profits by which the activities in
the different sectors are associated. In merchant shipping as well as in oil and gas exploration
potential profits are very significant, and despite the experienced losses the achieved benefits
might still be substantial. In the commercial aviation sector on the other hand, the income is
made on the basis of the confidence the customers have in the safety provided by the
individual airline companies. It seems that the actual safety provided in different societal
activities might be driven at least partly by the underlying market mechanisms and thus only
partly through a just management.