Environmental Insurance Model in the Shipyard Industry
Keywords:, risk management, environmental risk, environmental insurance modeling
AbstractThe shipyard industry is a capital- and labour-intensive industry, which also supports Indonesiaâ€™s industrial development. In carrying out its activities, which include shipbuilding and ship repair works, the shipyard industry is challenged by a number of risks, one of the crucial ones being the risk of deterioration of the shipyard environmental quality due to the great number of ships repaired in the docks. Risk management practice in the Shipyard Industry involves transferring risks to manage potential environmental risk threats through the use of Environmental Insurance. Environmental risk transfer analysis is determined by risk analysis factors (risk values), risk estimates (risk characteristics), and environmental insurance modeling (preventive cost & risk-based margin) using SAST (Strategic Assumption Surfacing and Testing) and PPA (Participatory Perspectives Analysis) methods. The results demonstrate that the biggest risk factor â€“ also a driving factor â€“ is the risk of shipyard contamination due to the sandblasting process in a series of activities in ship repair, followed by leverage factors, which are paint wastes, rust, barnacles, and others. The most suitable progressive environmental insurance model for environmental risk transfer within the scope of ship repair suggests the installation of environmentally friendly docks, namely Graving Docks. Water blasting, the use of environmentally friendly anti-fouling paints, or charging preventive costs to stakeholders may be calculated based on the Environmental Insurance premium calculation formula and are charged to ships repaired on such docks.
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