Problem
Borneo Mining Inc. is a mining company that extracts precious metals from open pit mining operations in many countries. The company has a formalized risk management process and has chosen to use a risk retention approach for environmental risks. What does this mean?
1) The company will refrain from any activities that have environmental risks
2) The company has chosen to shoulder the environmental risks associated with their mining operations and they will pay for any losses that might occur from those risks.
3) The company will purchase insurance to cover the costs associated with environmental claims against the company.
4) The company will implement a great number of improvements to its mining operations to reduce the severity of any losses associated with environmental risks.