Risk governance deficits and emerging risks IDRC 2 June 2010 Chemin de Balexert 9, CH – 1219 Châtelaine, Geneva, Switzerland | tel +41 (0)22 795 17 30 fax +41 (0)22 795 17 39 | www.irgc.org
Systemic risks Fisheries management The collapse of stocks of cod in the Canadian Grand Banks, blue-fin tuna in the Mediterranean and herring in the North Sea all illustrate the multiple challenges of dealing with the “Tragedy of the Commons”. Climate Change Climate change is the outcome of decisions made, deliberately or not to increase GHG emissions in favour of economic development. Its consequences on issues such as water cycle, droughts, agriculture, sea level rise, ocean acidification and other issues of concer are largely systemic Hurricane Katrina In August 2005 weather warnings persuaded the Governors of Mississippi and Louisiana to declare states of emergency on Friday 26th, but the mayor of New Orleans did not order evacuation until Sunday 28th. Katrina hit the following day. FEMA did not have sufficient organisational capacity to respond effectively.
A risk’s acceptability is a judgement based on values and how people balance anticipated risks and benefits
People and organisations need to define, inter alia, their risk appetite and level of tolerance for each risk
Many factors influence the acceptability of risk, such as:
Is it incurred voluntarily, or is it imposed?
Is the risk familiar or unfamiliar?
Is it controllable by personal action or only through collective action?
Does it disproportionately impact on the poor, or on children?
Radioactive waste disposal Equity considerations (both intra- and inter-generational) are important when assessing risks relating to the siting of hazardous facilities. Objections by 3 US states to storing all US LLRW led to the Federal Low-Level Radioactive Waste Policy Act (1980) which had the effect of increasing the number of people at risk from LLRW disposal facilities. Failure to consider variables that influence risk acceptance and risk appetite
No-one can reliably anticipate the future; there will always be surprises and unexpected events
Unknowable risks will be subject to deficits in their assessment until it is understood that their existence is NOT predictable, that they cannot be characterised, measured, prevented or transferred
This situation will not be resolved by more sophisticated tools to model risk
Instead, what is needed is lateral thinking, creativity and the capacity to deal with surprises when they occur
9/11 “ We were trapped by our own paradigm… programs to handle the endless sequence of hijackings and hostage takings…a “book” was devised and experts trained…the premise was that the hostage takers wanted something negotiable; this time, all they wanted was our lives.” David T. Jones Failure to overcome cognitive barriers to imagining events outside of accepted paradigms (“black swans”)
For many reasons, risk managers may be unable to act in the face of the unexpected
Skills and resources suited to prior emergencies or well-known risks may be insufficient for dealing with new threats
Managers may delay or fail to change from routine to crisis management
There may be an absence of authority to reallocate resources
An emphasis on efficiency makes it difficult to retain slack resources or build redundancies and resilience into systems
The Millennium Bug Dire consequences were predicted from the possible failure of computers to deal with date-related data between 31 December 1999 and 1 January 2000. Millions were spent checking and upgrading computer systems, but no problems were reported. However, work done to prepare for “Y2K” may have added resilience to systems so as to allow the New York infrastructure to function after 9/11. Insufficient flexibility in the face of unexpected risk situations