Abstract
ABSTRACT The International Maritime Organization rule-making process utilizes a set of guidelines for the so-called Formal Safety Assessment (FSA). This process is based on a risk assessment and its purpose is to ensure that the risk to human health and life and to marine environment is tolerable. A central instrument in the FSA methodology is known as ALARP (As Low As Reasonably Practicable) principle which ensures that the risk is controlled in a rational and cost-effective manner. The FSA Guidelines recommend the use of monetary thresholds for performing the cost evaluation and provide an example of indices for measuring the cost efficiency. For risks involving fatalities, these measures require the use of a monetary threshold derived from the concept of Cost of Averting a Fatality (CAF). Due to the linkage to economic parameters, this threshold needs to be updated regularly to allow for correct cost-benefit assessment in the FSA context.
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