ENDORSING PARTNERS

How do we ensure the
assessment of
infrastructure resilience is
www.isngi.org
proportionate to the ris...
How do we ensure the assessment of
infrastructure resilience is proportionate
to the risk?
Matthew Holmes a, Anna Provost ...
Industrial Doctorate - Acknowledgements

Dr. Sean Wilkinson
Prof. Richard Dawson

David Owen
Dr. Matt Hill

Anna Provost
D...
The challenge facing
infrastructure risk managers

4
The Risk Manager’s Challenge:

Development & Infrastructure
More demand
More capital to invest

Development
Infrastructure...
The Risk Manager’s Challenge:

Vulnerability & Resilience
Greater
dependency on
infrastructure

Society is more
vulnerable...
The Risk Manager’s Challenge:

Risk Identification

Risk managers have
to consider an
increasing wide
range of risks

Civi...
The Risk Manager’s Challenge:

Risk Selection

Photo: Kyodo/Reuters
Photo: AP

Managers have to
consider an
increasingly w...
Alternative approaches to
selecting risks
1. Likelihood
vs.
Consequence

2. Subjective
appraisal of
uncertainty

3. Formal...
Likelihood vs. Consequence

10
Approaches to selecting risks:

Likelihood versus Consequence
High consequence
risks facing the
United Kingdom
(after UK C...
Approaches to selecting risks:

L vs. C, with uncertainty
Indicative National
Risks
N.B. Axes reversed
compared to the UK ...
Subjective Appraisal of
Uncertainty

13
Cost of
obtaining
information

Value of
information
obtained

The problem with highly uncertain
appraisals

Uncertainty

C...
Approaches to selecting risks:

Subjective Appraisal of Uncertainty
Risk selection
based upon the
uncertainty of the
proba...
Formal Appraisal of Uncertainty

16
Approaches to selecting risks:

Formalised Appraisal of Uncertainty

Loss of access to
PS1
P(Snow & ice)
Snow & ice

Loss ...
Approaches to selecting risks:

Results

Cold
Weather

Storms &
Gales
• High risk
• Large spread of
results: low
precision...
Approaches to selecting risks:

Comparison with Likelihood vs. Consequence
Likelihood versus Consequence

2.0
Cold
Weather...
Discussion & Conclusion

20
Discussion
1. Omitting uncertainty at the risk screening phase is not
inherently flawed.
2. However, it misses an opportun...
Conclusion
1.

The cost of assessing
marginal risks

We are more reliant on
infrastructure

We are more vulnerable
to fail...
Thank you

References:

Any questions?

Cabinet Office (2013) National risk register of civil
emergencies 2013 edition. Lo...
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SMART International Symposium for Next Generation Infrastructure: How do we ensure the assessment of infrastructure resilience is proportionate to the risk?

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A presentation conducted by Matthew Holmes, Civil Engineering & Geosciences Newcastle University. Presented on Tuesday the 1st of October 2013.

As infrastructure becomes increasing integral to daily lives, society becomes more vulnerable to potential failures.
We mitigate against this by investing some of the increased prosperity afforded by infrastructure to treat the most salient risks and increase the resilience of the system. Therefore we enter a cycle whereour ability to identify and prioritise vulnerabilities is crucial to the future development of infrastructure. It is easy to compose a list of risks occupying the whole spectrum from probable through to fanciful, but, how do infrastructure owners define defensible boundaries between the credible risks they should assess and those that can be set aside? This paper tests the hypothesis that incorporating information on the uncertainty of risk assessments provides risk managers with a more robust process to justify their choice of credible risks.

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SMART International Symposium for Next Generation Infrastructure: How do we ensure the assessment of infrastructure resilience is proportionate to the risk?

  1. 1. ENDORSING PARTNERS How do we ensure the assessment of infrastructure resilience is www.isngi.org proportionate to the risk? The following are confirmed contributors to the business and policy dialogue in Sydney: • Rick Sawers (National Australia Bank) • Nick Greiner (Chairman (Infrastructure NSW) Monday, 30th September 2013: Business & policy Dialogue Tuesday 1 October to Thursday, 3rd October: Academic and Policy Dialogue Presented by: Matthew Holmes, Civil Engineering & Geosciences Newcastle University www.isngi.org
  2. 2. How do we ensure the assessment of infrastructure resilience is proportionate to the risk? Matthew Holmes a, Anna Provost b, Derek Clucas b, Sean Wilkinson a a. Civil Engineering & Geosciences, Newcastle University, Newcastle-upon-Tyne, NE1 7RU b. United Utilities Plc., Lingley Mere Business Park, Warrington, WA5 3LP International Symposium for Next Generation Infrastructure Wollongong, Australia 1st October 2013 2
  3. 3. Industrial Doctorate - Acknowledgements Dr. Sean Wilkinson Prof. Richard Dawson David Owen Dr. Matt Hill Anna Provost Derek Clucas Mark Jones Civil Engineering and Geosciences • Cassie Building • Newcastle University • Newcastle upon Tyne • NE1 7RU • UK • www.ceg.ncl.ac.uk For further information; m.j.holmes@ncl.ac.uk 3
  4. 4. The challenge facing infrastructure risk managers 4
  5. 5. The Risk Manager’s Challenge: Development & Infrastructure More demand More capital to invest Development Infrastructure provision Infrastructure supports development Civil Engineering and Geosciences • Cassie Building • Newcastle University • Newcastle upon Tyne • NE1 7RU • UK • www.ceg.ncl.ac.uk For further information; m.j.holmes@ncl.ac.uk 5
  6. 6. The Risk Manager’s Challenge: Vulnerability & Resilience Greater dependency on infrastructure Society is more vulnerable to failure Development permits investment Development Infrastructure provision More reliable infrastructure Infrastructure needs to be more resilient Investment treats the most salient risks Civil Engineering and Geosciences • Cassie Building • Newcastle University • Newcastle upon Tyne • NE1 7RU • UK • www.ceg.ncl.ac.uk For further information; m.j.holmes@ncl.ac.uk 6
  7. 7. The Risk Manager’s Challenge: Risk Identification Risk managers have to consider an increasing wide range of risks Civil Engineering and Geosciences • Cassie Building • Newcastle University • Newcastle upon Tyne • NE1 7RU • UK • www.ceg.ncl.ac.uk For further information; m.j.holmes@ncl.ac.uk 7
  8. 8. The Risk Manager’s Challenge: Risk Selection Photo: Kyodo/Reuters Photo: AP Managers have to consider an increasingly wide range of risks They cannot assess every risk in detail Their selection process must be robust and accountable Photo: Daily Telegraph Photo: AP Civil Engineering and Geosciences • Cassie Building • Newcastle University • Newcastle upon Tyne • NE1 7RU • UK • www.ceg.ncl.ac.uk For further information; m.j.holmes@ncl.ac.uk 8
  9. 9. Alternative approaches to selecting risks 1. Likelihood vs. Consequence 2. Subjective appraisal of uncertainty 3. Formalised appraisal of uncertainty 9
  10. 10. Likelihood vs. Consequence 10
  11. 11. Approaches to selecting risks: Likelihood versus Consequence High consequence risks facing the United Kingdom (after UK Cabinet Office 2010, red line added) Risks of natural hazards and major accidents (UK Cabinet Office 2012) Civil Engineering and Geosciences • Cassie Building • Newcastle University • Newcastle upon Tyne • NE1 7RU • UK • www.ceg.ncl.ac.uk For further information; m.j.holmes@ncl.ac.uk 11
  12. 12. Approaches to selecting risks: L vs. C, with uncertainty Indicative National Risks N.B. Axes reversed compared to the UK version (IPENZ 2012) Civil Engineering and Geosciences • Cassie Building • Newcastle University • Newcastle upon Tyne • NE1 7RU • UK • www.ceg.ncl.ac.uk For further information; m.j.holmes@ncl.ac.uk 12
  13. 13. Subjective Appraisal of Uncertainty 13
  14. 14. Cost of obtaining information Value of information obtained The problem with highly uncertain appraisals Uncertainty Civil Engineering and Geosciences • Cassie Building • Newcastle University • Newcastle upon Tyne • NE1 7RU • UK • www.ceg.ncl.ac.uk For further information; m.j.holmes@ncl.ac.uk 14
  15. 15. Approaches to selecting risks: Subjective Appraisal of Uncertainty Risk selection based upon the uncertainty of the probability assessment (adapted from the UK Cabinet Office diagram in slide 9) Civil Engineering and Geosciences • Cassie Building • Newcastle University • Newcastle upon Tyne • NE1 7RU • UK • www.ceg.ncl.ac.uk For further information; m.j.holmes@ncl.ac.uk 15
  16. 16. Formal Appraisal of Uncertainty 16
  17. 17. Approaches to selecting risks: Formalised Appraisal of Uncertainty Loss of access to PS1 P(Snow & ice) Snow & ice Loss of access to PS3 Loss of access to WwTW P(Cold weather) Cold weather Loss of power to PS1 Storms & gales Cyber attacks: infrastructure Public disorder Loss of access to PS2 P(Loss of power) Loss of power Loss of power to PS2 Loss of power to PS3 Loss of power to WwTW P(Loss of access to PS1) P(Loss of access to PS2) P(Loss of access to PS3) P(Loss of access to WwTW) P(Loss of power to PS1) P(Loss of power to PS2 P(Loss of power to PS3) P(Loss of power to WwTW) Civil Engineering and Geosciences • Cassie Building • Newcastle University • Newcastle upon Tyne • NE1 7RU • UK • www.ceg.ncl.ac.uk For further information; m.j.holmes@ncl.ac.uk 17
  18. 18. Approaches to selecting risks: Results Cold Weather Storms & Gales • High risk • Large spread of results: low precision • Medium – high risk • Probability restricted to a narrow band Cyber Attacks: Infrastructure Public Disorder • Low risk • Large uncertainty • Very low risk • Low uncertainty (only 1 failure mode) Civil Engineering and Geosciences • Cassie Building • Newcastle University • Newcastle upon Tyne • NE1 7RU • UK • www.ceg.ncl.ac.uk For further information; m.j.holmes@ncl.ac.uk 18
  19. 19. Approaches to selecting risks: Comparison with Likelihood vs. Consequence Likelihood versus Consequence 2.0 Cold Weather 1.5 1.0 Public 0.5 Disorder 0.0 0.00 Cyber Attack: Infrastructure Storms & Gales 2.0 Cold Weather 1.5 1.0 Cyber Attack: Infrastructure 0.5 Public Disorder 0.0 0.02 0.04 0.06 0.08 Mean: Probability of at least one failure • • • 2.5 Storms & Gales Mean: Flooding Volume [ML] Mean: Flooding Volume [ML] 2.5 Uncertainty versus Consequence 0.10 1.0 0.8 0.6 0.4 0.2 0.0 Coefficient of Variation: Probability of at least one failure Does the new information materially affect the selection? Is this extra information worth the extra effort? How reliable is a risk manager’s judgement? Civil Engineering and Geosciences • Cassie Building • Newcastle University • Newcastle upon Tyne • NE1 7RU • UK • www.ceg.ncl.ac.uk For further information; m.j.holmes@ncl.ac.uk 19
  20. 20. Discussion & Conclusion 20
  21. 21. Discussion 1. Omitting uncertainty at the risk screening phase is not inherently flawed. 2. However, it misses an opportunity to justifiably eliminate some risks whose assessment adds little value. 3. Incorporating subjective information on the uncertainty over probability is more perceptive, but subjective and opaque. 4. Formalising this process reduces opacity, but the extra complexity and cost may exceed the value of the new information. Civil Engineering and Geosciences • Cassie Building • Newcastle University • Newcastle upon Tyne • NE1 7RU • UK • www.ceg.ncl.ac.uk For further information; m.j.holmes@ncl.ac.uk 21
  22. 22. Conclusion 1. The cost of assessing marginal risks We are more reliant on infrastructure We are more vulnerable to failure We need to assess increasingly marginal risks We require new methods required to select risks to assess 2. The more formal appraisal of uncertainty is interesting but flawed because: a) It does not eliminate subjectivity, just moves and exposes it. b) The effort required to do it is self-defeating, given we are looking for new ways to screen risks. 3. Therefore, the subjective appraisal looks the most promising approach. Civil Engineering and Geosciences • Cassie Building • Newcastle University • Newcastle upon Tyne • NE1 7RU • UK • www.ceg.ncl.ac.uk For further information; m.j.holmes@ncl.ac.uk 22
  23. 23. Thank you References: Any questions? Cabinet Office (2013) National risk register of civil emergencies 2013 edition. London: Cabinet Office. matthew.holmes@stream-idc.net Cabinet Office (2011) Keeping the country running: natural hazards and infrastructure. London: Cabinet Office. IPNEZ (2012) A safer New Zealand: reducing our exposure to natural hazards. Wellington: IPENZ 23

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