1) Introduction Risk refers to the probability, or frequency of a particular hazard and the magnitude of the consequence that of the consequences of the hazard if it were to occur. Risk management is a variety of actions concerned with the mitigation and controlling the particular hazard with improvement of the benefit side and reducing the loss side of provisional risks. The manageability of risk involves decisions down to Subjective perception. Whereas risk assessment refers to the process of risk identification, analysis of relevant risks and finally evaluation of risks (Waring and Glendon 1998). The objective of this report as a member of the crisis contingency of an oil company is to produce a risk and vulnerability assessment report of Brazil by primarily focusing on the business side. The PEST and SMUG risk models will be critically examined and collectively utilized for Brazil in the later stage. 2) Risk Assessment Models i) PEST This risk assessment model determines risk in 4 categories involving: The organisation evaluates and measures the potential impact the categorised determinants identified above may directly have on their operations in the country, including the level of profitability. This model essentially focuses on external factors in terms of understanding the macroeconomic market and the environment. These factors in the current environment must be frequently updated. The process involves discovering and analysing the data into greater depths, this is followed by an analytical response for each category and the final advisement from the firms (Thomas 2007). Benefits PEST encourages development of strategic review internally within the organisation. Provides a system that enables a firm to identify (classify) and take advantage of new opportunities. An evaluation of the implications of surging into new markets/countries. Raise of awareness and perception of the wide-ranging business environment. Can be utilised to see the big picture of the environments and think about the opportunities and threats that lie in it. Helps understand the risks related within the microenvironment –the environment surrounding the company operations and macroeconomic markets, such as the demand for a service in growth or decline. For e.g. the economic viability of offshore oil production in south Brazil and the global oil prices. Therefore this risk models enables an organisation to identify business opportunities within an area and exploit them. Also PEST analysis considers ‘drivers of change’ which can help organisations in adapting to present and upcoming developments taking place within the market environment (Bright-Hub 2012). Limitations To maximise the benefits of this risk model changes must be accommodated. The analysis has to be performed frequently for example quarterly or annually to be effective. Organisations often fail to make this investment of choice due to financial reasons, with PEST analysis applied mainly in the initial phases of a project and rarely whilst the company is operating. Considerable amount uncertainty as such external factors are dynamic and may change at a rapid pace, such as in less than a day’s time range. Rapid change of pace in society may make it raise the difficult to foresee developments that may impact the organisation in the near future. Can create an issue and complication when considering how these factors affect the present or future of an organisation’s operation in the country. Risk model may be insufficient for the objective of strategic planning as it only considers external environmental determinants, while ignoring internal determinants and the competitive scenario. Needs to consider other factors such as the organisation itself, competitors and the industry it is currently operating in (related to the new area) For a functional strategic planning it must be combined with other tools – SMUG etc. The approach encourages subjective analysis – influenced by opinions and personal judgement. The verdict may be highly subjective and may vary from one individual to another (Free-Management Books 2014). Therefore a company may suffer if data is misinterpreted. For e.g. a market analyser may identify the capacity road and railway infrastructures as a benefit, whereas a logistics officer may perceive the inefficiencies due to the high maintenance of these road and rail networks. Also PEST may not cover the environment. ii) SMUG This qualitative hazard priority system allows a direct evaluation of a number of potential hazards through ratings or low, medium and high for four separate standards as indicated below: • Seriousness: The impact of a hazard, covering the figure of people affected and the economical costs (including property service damages and social damages). Therefore a hazard signifying a threat to a majority number of people or related with highest costs the hazard would be a high rating. However if a group is unable to agree