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Reclamation Risks – how to manage them and protect your project

From an insurance and risk management perspective, reclamation risks are a growing concern for companies that engage in industrial activities. These risks can include environmental liabilities, regulatory compliance, and financial losses resulting from unforeseen events, such as accidents, natural disasters, or changes in market conditions. As such, it is critical for businesses to understand the potential risks associated with reclamation and to develop strategies to manage those risks effectively.

What is Reclamation?

Reclamation is the process of restoring land or property to its original state after it has been used for industrial or commercial purposes, it is a critical issue in today’s world. With the increasing demand for natural resources and the expansion of industrial activities, there is a growing need for reclamation to restore contaminated land, water, and air. However, the process of reclamation can be risky and costly, with potential environmental and financial consequences for businesses and organizations involved.

In this article, we will explore the various risks associated with reclamation from an insurance and risk management perspective. We will examine the types of reclamation risks that companies face, the potential consequences of those risks, and the strategies that businesses can implement to manage and mitigate those risks. Ultimately, this article aims to provide a comprehensive overview of reclamation risks to help businesses make informed decisions and protect themselves from potential financial and environmental liabilities.

What are the construction methods availability for reclamation project?

There are several construction methods available for reclamation projects, and the choice of method will depend on various factors, including the size and scope of the project, the environmental conditions, and the intended use of the reclaimed land. Some of the common construction methods for reclamation projects include:

1. Hydraulic fill: This method involves dredging material from nearby bodies of water and using it to fill the reclamation area. The dredged material is usually transported via pipelines or barges, and the hydraulic fill process can be used to create new land or extend existing land into the water.

2. Sand fill: Sand fill is a similar process to hydraulic fill, but it involves transporting sand from elsewhere and using it to fill the reclamation area. Sand fill is often used when the dredging material is not suitable for filling, or when a higher degree of compaction is required.

3.      Geotextile tubes: Geotextile tubes are large fabric tubes that are filled with dredged material to create a containment barrier. This method is often used for shoreline protection, as the geotextile tubes can provide a stable base for other construction activities.

4.      Poldering: Poldering involves creating a low-lying area within the reclaimed land that is protected by dikes or other barriers. The polder area is then drained, creating usable land that is protected from flooding.

5.      Caisson construction: Caisson construction involves sinking large precast concrete or steel structures into the sea floor and filling them with sand or other materials to create a stable foundation for the construction of buildings or other structures.

6.      Ground improvement: Ground improvement methods such as vibro compaction, dynamic compaction, and deep soil mixing can be used to improve the stability and load-bearing capacity of reclaimed land. These methods can help reduce settlement, mitigate liquefaction risk, and improve the overall stability of the soil.

Overall, the choice of construction method for a reclamation project will depend on a range of factors, including the nature of the site, the intended use of the reclaimed land, and the environmental and social considerations of the project. The selection of the appropriate construction method is a critical part of the planning and design process for any reclamation project.

reclamation risks for airport project

What are the risks of reclamation project in general?

Reclamation projects involve the conversion of land from its natural state, such as wetlands or coastal areas, into usable land for various purposes like urban development, agriculture, or industrial use. While these projects can provide numerous benefits, they also carry some potential risks, including:

1.      Environmental Impact: Reclamation projects can have significant impacts on the environment, including the destruction of wildlife habitats, loss of biodiversity, and changes to natural ecosystems. It can also lead to soil erosion and other environmental degradation.

2.      Flooding: Reclaimed land is often at risk of flooding, as it is located in low-lying areas close to water bodies. This can lead to significant damage to property and infrastructure.

3.      Soil Subsidence: When land is reclaimed, it can cause the underlying soil to settle, leading to subsidence. This can result in damage to buildings, roads, and other structures, and can also affect the stability of the land.

4.      Water Quality: Reclamation projects can have a significant impact on water quality, particularly if they involve the creation of artificial water bodies or the modification of existing waterways. Changes to water quality can harm aquatic ecosystems and impact drinking water supplies.

5.      Social Disruption: Reclamation projects can cause significant social disruption, particularly if they involve the displacement of communities or the loss of traditional land uses. This can lead to social unrest, protests, and other forms of resistance.

6.      Economic Costs: Reclamation projects can be costly, particularly if they require extensive infrastructure development or environmental remediation. If the benefits of the project do not outweigh the costs, it can lead to financial losses for the stakeholders involved.

Overall, the risks associated with reclamation projects can vary depending on the scale and nature of the project, as well as the specific environmental and social conditions in the area. Therefore, it is essential to conduct a thorough risk assessment and engage in extensive stakeholder consultation before embarking on any reclamation project.

What are the specific construction risks of reclamation project?

Construction risk is another potential risk associated with reclamation projects, as the process of building on reclaimed land can be challenging and complex. Some of the construction risks associated with reclamation projects include:

1.      Stability of the Reclaimed Land: Reclaimed land may not be as stable as natural land due to the alteration of soil composition and the potential for subsidence. This can make it challenging to construct stable foundations for buildings and other structures.

2.      Soil Contamination: Reclaimed land may be contaminated with hazardous materials, which can pose a risk to construction workers and impact the structural integrity of buildings.

3.      Extreme Weather Events: Reclaimed land is often located in coastal areas, which are prone to extreme weather events such as typhoons, hurricanes, and storm surges. These events can cause significant damage to buildings and other infrastructure.

4.      Availability of Building Materials: Reclaimed land may be located in remote areas that are far from suppliers of construction materials, making it challenging to obtain the necessary materials for construction.

5.      High Cost of Construction: Reclamation projects often involve significant infrastructure development, which can be costly. The high cost of construction can make it difficult to complete the project within budget.

6.      Project Delays: Construction on reclaimed land can be delayed due to unforeseen challenges such as changes in weather conditions, soil subsidence, or unexpected soil conditions.

Overall, construction risk is an important consideration when embarking on a reclamation project, and it is essential to engage experienced contractors who are familiar with the unique challenges of building on reclaimed land. Careful planning and risk assessment can help mitigate these risks and ensure a successful project outcome.

Will reclaimed land affected by earthquake?

Reclaimed land can be affected by earthquakes, just like any other land. However, the degree of impact will depend on several factors, including the location, geology, and soil conditions of the reclaimed land.

For more information about the NatCat risks in Asia, please refer to another article: Natural Disaster Risks in Asia: A Country-by-Country Overview

One of the main risks associated with reclaimed land during earthquakes is liquefaction. Liquefaction occurs when soil, typically sandy or silty soils, loses strength and stiffness due to earthquake shaking. During an earthquake, the soil may temporarily behave like a liquid, causing buildings and other structures to sink or tilt.

Reclaimed land is also more susceptible to soil liquefaction compared to natural land, as the soil may have been compacted or otherwise altered during the reclamation process, making it less stable.

Other factors that can impact the susceptibility of reclaimed land to earthquakes include the proximity to active faults and the depth and frequency of earthquakes in the area.

Therefore, it is crucial to conduct a thorough risk assessment and engage in appropriate mitigation measures when planning a reclamation project in earthquake-prone areas. These measures may include improving soil stability, using specialized foundation systems, and designing structures to withstand seismic forces.

Land settlement – A Case Study in Japan

Land settlement is an essential component of the reclamation process, which involves the stabilization of the newly created land to ensure it can support the intended use. This process typically involves a series of activities, such as soil improvement, compaction, and drainage, to provide a stable foundation for buildings, infrastructure, and other structures.

One notable example of reclamation and land settlement is the construction of Kansai International Airport (KIX) in Japan. KIX was built on an artificial island in Osaka Bay, which required a massive reclamation project to create the necessary land area. The reclamation project began in 1987 and involved placing 21 million cubic meters of sand and earth into the bay to create a 4 km by 2.5 km island.

After the reclamation process was completed, the land settlement phase began. The process involved a series of measures to ensure the stability and safety of the newly created land. One of the critical activities was soil improvement, which involved mixing in cement and other materials to strengthen the soil and increase its load-bearing capacity.

Another important aspect of the land settlement process was the installation of a comprehensive drainage system to manage the water and prevent subsidence. The system included a network of underground pipes and storage tanks to collect rainwater and prevent it from infiltrating the soil, which could cause erosion and instability.

Overall, the land settlement process for Kansai International Airport was a massive undertaking that required careful planning and execution to ensure the stability and safety of the newly created land. The successful completion of the project demonstrates the importance of effective reclamation and land settlement in creating sustainable infrastructure and supporting economic development.

How to protect reclamation risks?

Protecting a reclamation project from loss or damage requires a comprehensive risk management strategy that includes a range of measures to prevent, mitigate, and transfer risks. Here are some key steps that can help protect a reclamation project:

  1. Conduct a thorough risk assessment: Before starting a reclamation project, it’s essential to conduct a comprehensive risk assessment to identify potential risks and their potential consequences. This assessment should consider environmental, financial, and operational risks, as well as regulatory and legal compliance requirements.
  2. Implement risk mitigation measures: Once the risks have been identified, it’s crucial to implement measures to reduce or eliminate them. This can include measures such as developing contingency plans, implementing safety protocols, and ensuring regulatory compliance.
  3. Purchase insurance coverage: Insurance coverage can provide financial protection in the event of loss or damage to the reclamation project. It’s essential to work with an experienced insurance broker to identify the right coverage options, such as property insurance, environmental liability insurance, or construction all-risk insurance.
  4. Engage with stakeholders: Engaging with stakeholders, such as local communities, regulatory agencies, and contractors, can help ensure that everyone is aware of the project’s goals and potential risks. This can help prevent misunderstandings or conflicts that could lead to loss or damage.
  5. Monitor and manage risks: It’s essential to monitor and manage risks throughout the reclamation project to ensure that any potential issues are identified and addressed promptly. This can include regular inspections, audits, and reporting to stakeholders.

By implementing a comprehensive risk management strategy that includes these steps, it’s possible to protect a reclamation project from loss or damage and ensure its success.

How to protect the project owner and lenders cashflow from physical loss or damage?

Insurance is one of the soluations to tranfer your reclamation risks to insurance market, however, the coverage and placment structure will directly affect your budget, we therefore recommend you to seek for professional advice. If you need a premium indication or professional advice, please reach out us by email: