Risk Management Case Study

Here is the case study:
Background:
You have been hired by ABC Warehousing Systems Inc. (hereinafter “ABC”). They provide
warehousing services in a number of markets, including the Toronto, Ontario “Pearson Facility”).
The Pearson Facility was built in 1982 in accordance with all applicable building standards in
effect at that time. While some modifications to the building had been made to address
developing needs for storage, the building remained structurally as originally built. One of the
additions to the building was an automatic fire alarm system. Unfortunately, there has recently
been a serious incident at the Pearson Facility when a fire broke out in the facility.
The warehouse was storing various materials including oxidizing materials, solvents and various
other chemicals in drums. The fire alarm system operated successfully and an alarm was
transmitted to the local fire service. By the time the fire service arrived, flames were shooting
through holes in the roof. An explosion then occurred which broke the glass on the site gatehouse.
15 minutes into the incident another explosion occurred in a store holding oxidizing materials.
This blew out a roller shutter door, which hit the wall of a building about 10m away. This was
now a serious fire engulfing both the oxidizing materials store and an acid pen area. Drums of
solvents were beginning to explode in the intense heat. Some of these exploding drums were
propelled several hundred feet into the air.
The fire also spread to the roof of a nearby building on the boundary of the site and after 30
minutes from the alarm being raised another offsite building 30m away was beginning to be
endangered. Several explosions then occurred engulfing the front of this second building. A
flying, burning solvent drum also crashed through the roof in the main store area, immediately
starting another fire. The off-site emergency plan was progressively implemented during the
course of the incident.
The Fire Brigade was advised of the broad generic basis of the materials involved in the fire, and
a print out of stored materials was obtained. This list was too detailed for the needs of the
emergency services. The resulting smoke from the fire contained a cocktail of eleven different
chemicals including hydrogen chloride. Approximately 3,000 residents were evacuated from
their homes.
Ultimately, the fire was contained although the Pearson Facility was totally destroyed and there
was significant property damage to neighboring properties which have resulted in a large
number of lawsuits being filed against the company. Investigation after the fire determined that
lack of chemical segregation in the storage of a vast range of chemicals led to the extremely rapid
and violent spread of the fire. Although the specific root cause of the fire has not been identified
with a degree of certainty, a number of chemical routes to ignition in the event of spillage or
exothermic reaction was present in the oxidizing materials store where the fire started. The
probable cause was leakage of a corrosive substance onto organic materials.

Assignment:
In light of the foregoing facts, you have been asked by your manager to provide a report of no
more than 4- 5 pages suggesting risk management strategies that ABC could have implemented
to avoid the incident in the first place and that could be used to avoid other incidents in the
future.