Silva Fennica

Table 1. Keywords used in the risk identification process.
Theme	Keywords
Business	profitability, solvency, cost calculation, pricing, investment planning, invoicing
Contracts	own contractual obligations and rights, attractiveness as contract partner, partners, lack of contracts
Services/ products	machine manufacturers, maintenance services, insurance, financing, accounting
Production	work on site, planning, interruptions, waste management, theft and vandalism, logistics, transfers
Machines/ premises	forest machines, transfer trucks, machine halls, storage, storage of dangerous materials
Culture	new operational environment, attitudes of local people, adaptation to the local business environment, differences in organisational culture and behaviour
Entrepreneur	key person risk, own knowledge and management, work motivation, economic conditions, family, use of time
Personnel	preconditions for working, professional skills, traffic, work safety, welfare at work, local labour, communication, work culture, health care
Markets	demand, business cycle, dependency on clients, competition, clients’ solvency, payment schedules, clients’ demands
Policy and authorities	political stability, legislation, customs clearance, taxation, working permissions, other permissions, supervision, regional practices
Infrastructure	road network, phone network, IT network, sites, accommodation
Natural conditions	storms, frost, rainy seasons, frost heave, animals, quality of forest resources

Table 2. Probability of risk.
Rate	Probability	Interpretation
1	Remote	Happens once in 50 years or less frequently
2	Unlikely	At most once in 10 years
3	Possible	At most once in 5 years
4	Likely	Once in a year
5	Very likely	More than once in a year

Table 3. Consequences of risk.
Rate	Economic loss	Interruption of work	Personal injury
0	No loss	No interruption	No injuries
1	< €5 000	< 2 days	Mild injury of one person
2	€5 000–€9 999	< 1 week	Mild injury of several people
3	€10 000–€49 999	< 1 month	Serious injury of one person (permanent injury)
4	€50 000–€99 999	< 3 months	Serious injury of several people (permanent injury)
5	€100 000–€300 000	< 5 months	Death of one person
6	> €300 000	> 6 months	Death of several people

Table 4. Consequence/probability matrix for producing risk level.
Probability		Consequence
Probability		1	2	3	4	5	6
5	Very likely	II	III	IV	V	V	V
4	Likely	II	III	III	IV	V	V
3	Possible	I	II	III	IV	IV	V
2	Unlikely	I	II	III	III	IV	V
1	Remote	I	I	II	III	IV	IV

Table 5. Action plan for risk treatment (Koneyrityksen riskienhallinta 2007).
Risk severity	Action
1. Trivial	Risk is so small that no action is needed
2. Minor	Action is not necessarily needed Situation has to be followed to be able to control it
3. Moderate	Action is needed to check or clarify the situation Action is possibly needed
4. Serious	Necessary to reduce risk, but taking into account social, economic, and other aspects Action is needed
5. Extreme	Removing or reducing risk is necessary regardless of costs If reducing risk is not possible, work should be forbidden permanently

Table 6. Possible risks for Finnish wood harvesting contractors in Russia.
Theme	Risk
Business	Breaches of contract by client
	Dependency on client, limited number of potential clients
	Low profitability of business
Machines, premises, and production	Availability and professionalism of service
	Changing production volumes make planning difficult and decrease profitability
	Problems in operational planning caused by interruptions in work between harvesting sites
	Availability of spare parts
	Theft of equipment and supplies
	Machinery and hall fires
Personnel and culture	Inadequate know-how of the entrepreneur regarding Russian conditions
	Workers’ inadequate professional skills and ability to work independently
	Difficulties in supervision of work due to different mindset (ideas about right and wrong, agreeing, respecting others’ property)
	Misunderstandings caused by interpretation of foreign language
	Neglecting one’s own and others’ safety
	Use of alcohol during work hours
Markets	Sensitivity to general economic fluctuations
	Lack of financing
	Underpricing competitors
Policy and authorities	Non-transparent procedures of the authorities, unpredictability of the authorities (interpretation of legislation, waiting for inspections)
	Quick and unexpected changes of laws and regulations
	Inflexible practice of receiving permissions
	Forest fires not extinguished, danger for people and machinery
Infrastructure and natural conditions	Long frost heave period causing downtime
	Roads are not ploughed in winter, no access to harvesting site
	Unpredictable time consumption and productivity due to the changing structure of forests
	Help is not available quickly in cases of sickness and injury