Tag: Governance

Geplaatst op

Risk Management: It’s Not Rocket Science – It’s Much More Complicated

John Adams | May 2007

In popular imagination, rocket science is the totemic example of scientific complexity. As Britain’s leading academic expert on risk, I will argue here that risk management is in fact much more complex. To put it another way, the scientist studying turbulence “the clouds do not react to what the weatherman or physicist says about them”. The risk manager must, however, deal not only with risk perceived through science, but also with virtual risk – risks where the science is inconclusive and people are thus “liberated to argue from, and act upon, pre-established beliefs, convictions, prejudices and superstitions.”

Professor John Adams

The affluent world is drowning in risk assessments. Almost everyone now has a “duty of care” to identify formally all possible risks to themselves, or that they might impose on others, and to demonstrate that they have taken all reasonable steps to “control” them. It is not clear that those imposing this duty of care appreciate the magnitude and difficulty of the task they have set.

In 2004 I participated in a conference on terrorism, World Federation of Scientists’ International Seminar on Terrorism, Erice, Sicily. Most of the other participants were eminent scientists, and I found myself in a workshop entitled Cross-disciplinary challenges to the quantification of risk. Lord Kelvin famously said:

“Anything that exists, exists in some quantity and can therefore be measured.”

This dictum sits challengingly alongside that of another famous scientist, Peter Medewar who observed:

“If politics is the art of the possible, research is the art of the soluble. Both are immensely practical minded affairs. Good scientists study the most important problems they think they can solve [my emphasis]. It is, after all, their professional business to solve problems, not merely to grapple with them.”

Terrorism undoubtedly exists, and some of its consequences can be quantified. One can count the numbers killed and injured. With the help of insurance companies one can have a stab at the monetary value of property destroyed and, for those with business continuity insurance, the value of business lost. But what units of measurement might be invoked to calculate the impact of the terror that pervades and distorts the daily life of someone living in Chechnya, or Palestine, or Darfur or …. ? Or the loss of civil liberties resulting from the anti-terrorism measures now being imposed around the world.

The problem becomes more difficult when one moves on to the challenge of quantifying the risk of terrorism. Risk is a word that refers to the future. It has no objective existence. The future exists only in the imagination. There are some risks for which science can provide useful guidance to the imagination. The risk that the sun will not rise tomorrow can be assigned a very low probability by science. And actuarial science can estimate with a high degree of confidence that the number of people killed in road accidents in Britain next year will be 3500, plus or minus a hundred or so. But these are predictions, not facts. Such predictions rest on assumptions; that tomorrow will be like yesterday; that next year will be like last year; that future events can be foretold by reading the runes of the past. Sadly, the history of prediction contains many failures – from those of stock market tipsters to those of vulcanologists seeking to predict eruptions, earthquakes and tsunamis.

Type “risk” into an Internet search engine and you will get over 100 million hits. You need sample only a small fraction to discover many unnecessary, and often acrimonious, arguments. Risk is a word that means different things to different people. It is a word that engenders a sense of urgency because it alludes to the probability of adverse, sometimes catastrophic, outcomes. Much of the acrimonious urgency, or the urgent acrimony, that one uncovers searching for “risk” on Google, stems from a lack of agreement about the meaning of the word. People are using the same word, to refer to different things, and shouting past each other.

Figure 1 is proffered in the hope of clearing away some unnecessary arguments.

Figure 1. 

Directly perceived risk (much operational risks) are dealt with using judgement – a combination of instinct intuition and experience. One does not undertake a formal, probabilistic, risk assessment before crossing the road. Crossing the road in the presence of traffic involves prediction based on judgement. One must judge vehicle speeds, the gaps in traffic, one’s walking speed, and hope one gets it right, as most of us do most of the time.

Most of the published literature on risk management falls into the category of risk perceived through science. Here one finds not only biological scientists in lab coats peering through microscopes, but physicists, chemists, engineers, doctors, statisticians, actuaries, epidemiologists and numerous other categories of scientist who have helped us to see risks that are invisible to the naked eye. Collectively they have improved enormously our ability to manage risk – as evidenced by the huge increase in average life spans that has coincided with the rise of science and technology.

But where the science is inconclusive we are thrown back on judgement. We are in the realm of virtual risk. These risks are culturally constructed – when the science is inconclusive people are liberated to argue from, and act upon, pre-established beliefs, convictions, prejudices and superstitions. Such risks may or may not be real but they have real consequences. In the presence of virtual risk what we believe depends on whom we believe, and whom we believe depends on whom we trust.

A participant at the conference on terrorism was one of the world’s foremost experts on turbulence, notoriously the most intractable problem in science. In the mythology of physics Werner Heisenberg is reported as saying:

“When I meet God, I am going to ask him two questions: Why relativity? And why turbulence? I really believe he will have an answer for the first.”

I would trust the physicist I met at the conference to tell me the truth about turbulence, so far as he knew it. But the problems he is studying are simple compared to those of the risk manager, because the clouds do not react to what the weatherman or physicist says about them.

We are all risk managers. Whether buying a house, crossing the road, or considering whether or not to have our child vaccinated, our decisions will be influenced by our judgement about the behaviour of others, and theirs by their judgements about what we might do. The world of the risk manager is infinitely reflexive. In seeking to manage the risks in our lives we are confronted by a form of turbulence unknown to natural science, in which every particle is trying to second guess the behaviour of every other. Will the vendor accept less in a falling market? Will the approaching car yield the right of way? Will enough other parents opt for vaccination so that my child can enjoy the benefits of herd immunity while avoiding the risks of vaccination? And, increasingly, if things go wrong, who might sue me? Or whom can I sue? The risk manager is dealing with particles with attitude.

Another participant at the conference, alert to the strict limits of natural science in the face of such turbulence, warned that we were in danger of becoming the drunk looking for his keys, not in the dark where he dropped them, but under the lamp post where there was light by which to see.

This caution prompted the re-drawing of Figure 1. Figure 2 is an attempt to highlight the strict limits to the ability of science to foretell the future.

Fig. 2. Three types of risk (re-draw). An attempt to highlight the strict limits to the ability of science to foretell the future.

In the area lit by the lamp of science one finds risk management problems that are potentially soluble by science. Such problems are capable of clear definition relating cause to effect and characterized by identifiable statistical regularities. On the margins of this area one finds problems framed as hypotheses and methods of reasoning, such as Bayesian statistics, which guide the collection and analysis of further evidence. As the light grows dimmer the ratio of speculation to evidence increases. In the outer darkness lurk unknown unknowns. Here lie problems with which, to use Medawar’s word, we are destined to “grapple”.

As the light of science has burned brighter most of the world has become healthier and wealthier and two significant changes have occurred in the way in which we grapple with risk. We have become increasingly worried about more trivial risks, and the legal and regulatory environments in which we all must operate as individual risk managers have become more turbulent. As the likelihood of physical harm has decreased the fear, and sometimes the likelihood, of being sued has increased.

As the light of science has burned brighter most of the world has become healthier and wealthier and two significant changes have occurred in the way in which we grapple with risk. We have become increasingly worried about more trivial risks, and the legal and regulatory environments in which we all must operate as individual risk managers have become more turbulent.

Perhaps the clearest demonstration of this can be found in the increase in the premiums that doctors must pay for insurance, and the way this varies according to the type of medicine practiced. The Medical Protection Society of Ireland has four categories of risk: low, medium, high and obstetricians. Between 1991 and 2000 the premium charged to those in the low category increased by 360 percent to €9854, and that charged to obstetricians increased by 560 percent to € 54567.

Measured in terms of its impact on peri-natal mortality rates, obstetrics and gynecology can claim a major share of the credit for the huge increases in average life expectancy over the last 150 years. This most successful medical discipline is now the most sued – so successful that almost every unsuccessful outcome now becomes a litigious opportunity. I don’t know of any risk assessment that predicted that.

There is a distinction, frequently insisted upon in the literature on risk management, between “hazard” and “risk”. A hazard is defined as something that could lead to harm, and a risk as the product of the probability of that harm and its magnitude; risk in this literature is hazard with numbers attached. So, relating this terminology to Figures 1 and 2, it can be seen that risk can be placed in the circle “perceived through science” while the other two circles represent different types of hazard.

Typing “hazard management” into Google at the time of writing yielded 70,000 hits; “risk management” 12 million. The number of potential harms in life to which useful numbers can be attached is tiny compared to the number through which we must navigate using unquantified judgement. The Kelvinist, rocket-science approach to virtual risks, with its emphasis on the quantitatively soluble, threatens to divert attention from larger, more complicated, more urgent problems with which we ought to be grappling.

Bibliography

Adams, J. (2007). Risk Management: It’s Not Rocket Science – It’s Much More Complicated, Public Risk Forum, Edition May 2007, pp. 9-11.

Some references

For inspiration and information, please visit Risk in a Hypermobile World, the blog of John Adams.

Making God laugh: a risk management tutorial

7/7: What Kills You Matters – Not Numbers, Times Higher, 29 July 2005

Risk – available from Amazon.

Update-to date preface: Deus e Brasileiro

Geplaatst op

Agenda 21

United Nations | 1992

Agenda 21 is a voluntary action plan developed by the United Nations and national governments at the “Earth Summit” in Rio de Janeiro, Brazil 1992. At the Summit, governmental leaders worldwide agreed on the need to become more sustainable—to meet today’s needs without sacrificing our future.

Agenda 21 presents a vision for how all levels of government—especially in the developing world—can take voluntary action to combat poverty and pollution, conserve natural resources and develop in a sustainable manner. One-hundred-seventy-eight nations, including the United States under the Bush Administration, adopted the agenda.

Preamble

“1.1 Humanity stands at a defining moment in history. We are confronted with a perpetuation of disparities between and within nations, a worsening of poverty, hunger, ill health and illiteracy, and the continuing deterioration of the ecosystems on which we depend for our well-being. However, integration of environment and development concerns and greater attention to them will lead to the fulfilment of basic needs, improved living standards for all, better protected and managed ecosystems and a safer, more prosperous future. No nation can achieve this on its own; but together we can – in a global partnership for sustainable development.”

Agenda 21 is not a treaty or legally binding document and does not infringe upon the sovereignty of any nation, state, or local government. Agenda 21 does not advocate for abolishing private property or have any bearing on U.S. local and state land-use decisions. In other words, it isn’t being forced on anybody, anywhere, by any organisation.

A chapter within Agenda 21 introduces the concept of a “Local Agenda 21” and offers a vision for how local governments can develop their own sustainability initiatives.

28.1. Because so many of the problems and solutions being addressed by Agenda 21 have their roots in local activities, the participation and cooperation of local authorities will be a determining factor in fulfilling its objectives. Local authorities construct, operate and maintain economic, social and environmental infrastructure, oversee planning processes, establish local environmental policies and regulations, and assist in implementing national and subnational environmental policies. As the level of governance closest to the people, they play a vital role in educating, mobilizing and responding to the public to promote sustainable development.

A key theme with Agenda 21 was local self-determination and community engagement: “Each local authority should enter into a dialogue with its citizens, local organisations and private enterprises. Through consultation and consensus-building, local authorities would learn from citizens and local, civic, community, business and industrial organisations and acquire the information needed for formulating the best strategies. The process of consultation would increase household awareness of sustainable development issues.”

Download Framework.

Geplaatst op

INTERFUTURES: Facing the future

The Organisation for Economic Co-operation and Development (OECD) | 1979

Following an initiative by the Government of Japan in May 1975, a major new research project was established within the framework of the OECD on 1st January, 1976, to study “the future development of advanced industrial societies in harmony with that of developing countries”. The project, now referred to as INTERFUTURES ran for a period of three years to 31st December 1978.

Mastering the Probable and Managing the Unpredictable.

The primary purpose of the project, as laid down at the outset by the OECD Council, was: “to provide de OEDC Member Governments an assessment of alternative patterns of longer-term world economic development in order to clarify there implications for the strategic policy choices open to them in the management of their own economies, in relationships among them, and in their relationships with developing countries”.

p. 10: “The publication in 1972 of the Report of the Club of Rome on The Limits of Growth stimulated a decades-old debate, one which is essential for mankind and can be summed up in a single question:

Will the growth in population and in the world economy be helped in the relatively near future by the constraints resulting from the limited availability of the earth’s natural resources or the absorptive capacities of the ecosystem?

If this were to be the case, then efforts would have to be made at once to find ways of achieving another kind of growth which would be more economical in non-renewable resources and less harmful to the physical environment.”

Final chapter p. 423

“A starting point

If the many challenges which the advanced industrial societies will have to meet in the next half-century are to be progressively mastered, nothing is more vital than the establishment in the foremost societies of a solid political leadership capable of taking into account both the long-term issues and the interdependence between the various areas.

Yet the fact has to be faced that in today’s democracies the plans which pay quick dividends have more chance of being carried out than other, more important ones whose benefits are long-term. In election campaigns the long-term issues are often pushed into the background or not mentioned at all, since politicians are convinced, perhaps rightly, that voters look no further than their own private interests and their immediate environment. Things will probably continue this way until the political leaders succeed in producing a vision of long-term objectives that will win the deep conviction of the majority of citizens, but conversely, those same political leaders will need an essential minimum of support from the population in order to embark on this course.

The possible futures described in this report show not only the importance of political dialogue in the democracies of the developed countries, but also the value of informing the public very extensively about trends in the world as a whole.

Scientific circles, the education system and the media should help in this priority task.

    • Where the scientists are concerned, it is not a question of their setting up as specialists in fields other than their own, but of helping as objectively as possible to inform the public of the contribution which the physical, biological or social sciences can make to an understanding of world issues.
    • The education system is a key element of modern democratic societies. In a world of growing interdependence, a knowledge of foreign countries, different cultures and other languages is as crucial for the continental nations like the United States as for the small OECD countries. Furthermore, in societies where the challenges of the future are liable to be political, economic and social, it is probably necessary to think again about how to combine the sound and precise technical training that international competition demands with the outward orientation necessary for a citizen of a democratic country.
    • Finally, the mass media have a responsibility in regard to dissemination of information, critical assessment of policies and introduction of constructive proposals. Often they have simply picked on the sensational aspects of the issues of the future, be it to announce the end of the world or to reassure the uneasy, but they need to do more than disseminate futurological trivia. They must contribute to a realisation by the citizens of developed countries of the tasks that await them and the problems they will have to resolve.

The democratic systems of industrial societies have deep and secure roots. Despite their inadequacies, they should show themselves to be able to face up to the possibilities the future holds. They can ensure that no ageing, sclerosis or withdrawal process threatens those societies in their coexistence with the young societies of the Third World and the socialist world of East Europe.

This report will have achieved its aim if it succeeds in convincing the main active forces in the developed countries to undertake extensive efforts to spread the word about the challenges of the future. Not to develop a resignation to the inevitable but to generate creative responses. Even if many questions remain unanswered or if some of the points of view expressed are debatable, the work of INTERFUTURES should be the starting point for increased allowance for the long term in the policies of governments. For this, which things are necessary:

    • Based on this report, each country looks searchingly into the specific long-term issues with which it will be confronted and then undertakes the necessary additional studies.
    • That the OECD countries then consult one another on the policy conclusions they have drawn from this vast investigation of the long term.”

Report: INTERFUTURES: Facing the future

Geplaatst op

Thinking, Fast and Slow

Daniel Kahneman | 2013

In this fascinating treatise by a giant in the field of decision research, the mind is a hilariously muddled compromise between incompatible modes of thought.

Psychologist Kahneman positions a brain governed by two clashing decision-making processes. The largely unconscious System 1, he contends, makes intuitive snap judgments based on emotion, memory, and hard-wired rules of thumb and the painfully conscious System 2 laboriously checks the facts and does the math but is so “lazy” and distractible that it usually defers to System 1.

Kahneman uses this scheme to frame a scintillating discussion of his findings in cognitive psychology and behavioural economics and of the ingenious experiments that tease out the irrational, self-contradictory logics that underlie our choices.

All the factors described play a direct and indirect role in public governance. All public leaders and managers should be aware of the thoroughly described systems of our brains and behaviour. They make things clear and understandable. The book is an epiphany.

Bibliography

Kahneman, D. (2013) Thinking, Fast and Slow. New York: Farrar, Straus and Giroux

Geplaatst op

Brundtland Report

United Nations | April 1987

The first explicit common reference to sustainable development was in the 1987 Brundtland Report Our Common Future of the United Nations Commission on Environment and Development.

In this report, sustainable development was defined as: “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”. In 1987 the need for cooperating on this was high.

Lees verder “Brundtland Report”

Geplaatst op

Millennium Development Goals

United Nations | 2000

One way to improve global governance of society and nature’s public domain is to work on governance codes. Another is to pursue goals on global public policy issues. The United Nations set the Millennium Development Goals (MDGs) in 2000.

In September 2000, building upon a decade of major United Nations conferences and summits, world leaders came together at United Nations Headquarters in New York to adopt the United Nations Millennium Declaration.

They committed their nations to a new global partnership to reduce extreme poverty and set out a series of time-bound targets – with a deadline of 2015. They were the first attempt to formulate global targets and are the predecessors of the Sustainable Development Goals SDGs. 

Download Millennium Declaration.

Geplaatst op

Fukushima report

The National Diet of Japan | 2012

The evaluation of the Fukushima Daiichi nuclear disaster in 2011, which was caused by an earthquake followed by a tsunami, is a good example of zooming out from a disaster and learning the lessons. It is a true example of self-reflection because it digs deep into the public ecosystem where government, business, and civic society meet. It is a form of network analysis. The disaster had a major impact on the natural environment and ecosystems. The disaster shocked the entire world.

The National Diet of Japan

The conclusions of the Fukushima Nuclear Accident Independent Investigation Commission were thorough and blistering. They shed light on how attitudes, stakes, and rules and their interdependencies, and the lack of cooperation in peacetime (read: before the earthquake and the tsunami) between organisations related to the public domain, had increased the disaster.

The major conclusions [quote]:

    • In order to prevent future disasters, fundamental reforms must take place. These reforms must cover both the structure of the electric power industry and the structure of the related government and regulatory agencies as well as the operation processes. They must cover both normal and emergency situations. 
    • The TEPCO Fukushima Nuclear Power Plant accident was the result of collusion between the government, the regulators and TEPCO, and the lack of governance by said parties. They effectively betrayed the nation’s right to be safe from nuclear accidents. Therefore, we conclude that the accident was clearly “manmade”. We believe that the root causes were the organisational and regulatory systems that supported faulty rationales for decisions and actions, rather than issues relating to the competency of any specific individual. 
    • We conclude that TEPCO was too quick to cite the tsunami as the cause of the nuclear accident and deny that the earthquake caused any damage.
    • The Commission concludes that there were organisational problems within TEPCO. Had there been a higher level of knowledge, training, and equipment inspection related to severe accidents, and had there been specific instructions given to the on-site workers concerning the state of emergency within the necessary time frame, a more effective accident response would have been possible. 
    • The Commission concludes that the situation continued to deteriorate because the crisis management system of the Kantei, the regulators and other responsible agencies did not function correctly. The boundaries defining the roles and responsibilities of the parties involved were problematic, due to their ambiguity. 
    • The Commission concludes that the residents’ confusion over the evacuation stemmed from the regulators’ negligence and failure over the years to implement adequate measures against a nuclear disaster, as well as a lack of action by previous governments and regulators focused on crisis management. The crisis management system that existed for the Kantei and the regulators should protect the health and safety of the public, but it failed in this function. 
    • The Commission recognizes that the residents in the affected area are still struggling from the effects of the accident. They continue to face grave concerns, including the health effects of radiation exposure, displacement, the dissolution of families, disruption of their lives and lifestyles and the contamination of vast areas of the environment. There is no foreseeable end to the decontamination and restoration activities that are essential for rebuilding communities. 
    • The Commission concludes that the government and the regulators are not fully committed to protecting public health and safety; that they have not acted to protect the health of the residents and to restore their welfare. 
    • The Commission has concluded that the safety of nuclear energy in Japan and the public cannot be assured unless the regulators go through an essential transformation process. The entire organisation needs to be transformed, not as a formality but in a substantial way. Japan’s regulators need to shed the insular attitude of ignoring international safety standards and transform themselves into a globally trusted entity. 
    • TEPCO did not fulfil its responsibilities as a private corporation, instead obeying and relying upon the government bureaucracy of METI, the government agency driving nuclear policy. At the same time, through the auspices of the FEPC, it manipulated the cozy relationship with the regulators to take the teeth out of regulations. 
    • The Commission concludes that it is necessary to realign existing laws and regulations concerning nuclear energy. Mechanisms must be established to ensure that the latest technological findings from international sources are reflected in all existing laws and regulations.
    • Replacing people or changing the names of institutions will not solve the problems. Unless these root causes are resolved, preventive measures against future similar accidents will never be complete.” [unquote] 

The chairman of the research commission of the National Diet report Kiyoshi Kurokawa summarised the conclusions [quote]:

    • The disaster cannot be regarded as a natural disaster. It was a profoundly manmade disaster – that could and should have been foreseen and prevented. And its effects could have been mitigated by a more effective human response.
    • Our report catalogues a multitude of errors and wilful negligence that left the Fukushima plant unprepared for the events of March 11. And it examines serious deficiencies in the response to the accident by TEPCO, regulators and the government. 
    • What must be admitted – very painfully – is that this was a disaster “Made in Japan.” Its fundamental causes are to be found in the ingrained conventions of Japanese culture: our reflexive obedience; our reluctance to question authority; our devotion to ‘sticking with the program’; our groupism; and our insularity.  Had other Japanese been in the shoes of those who bear responsibility for this accident, the result may well have been the same. 
    • Following the 1970s “oil shocks,” Japan accelerated the development of nuclear power in an effort to achieve national energy security. As such, it was embraced as a policy goal by government and business alike, and pursued with the same single-minded determination that drove Japan’s postwar economic miracle. 
    • With such a powerful mandate, nuclear power became an unstoppable force, immune to scrutiny by civil society. Its regulation was entrusted to the same government bureaucracy responsible for its promotion. At a time when Japan’s self-confidence was soaring, a tightly knit elite with enormous financial resources had diminishing regard for anything ‘not invented here.’ 
    • This conceit was reinforced by the collective mindset of Japanese bureaucracy, by which the first duty of any individual bureaucrat is to defend the interests of his organisation. Carried to an extreme, this led bureaucrats to put organisational interests ahead of their paramount duty to protect public safety. 
    • Only by grasping this mindset can one understand how Japan’s nuclear industry managed to avoid absorbing the critical lessons learned from Three Mile Island and Chernobyl; and how it became accepted practice to resist regulatory pressure and cover up small-scale accidents. It was this mindset that led to the disaster at the Fukushima Daiichi Nuclear Plant. 
    • This report singles out numerous individuals and organisations for harsh criticism, but the goal is not—and should not be—to lay blame. The goal must be to learn from this disaster, and reflect deeply on its fundamental causes, in order to ensure that it is never repeated. 
    • Many of the lessons relate to policies and procedures, but the most important is one upon which each and every Japanese citizen should reflect very deeply. 
    • The consequences of negligence at Fukushima stand out as catastrophic, but the mindset that supported it can be found across Japan. In recognizing that fact, each of us should reflect on our responsibility as individuals in a democratic society. 
    • As the first investigative commission to be empowered by the legislature and independent of the bureaucracy, we hope this initiative can contribute to the development of Japan’s civil society. Above all, we have endeavoured to produce a report that meets the highest standard of transparency. The people of Fukushima, the people of Japan and the global community deserve nothing less. [unquote]

Bibliography

The National Diet of Japan (2012) The Fukushima Nuclear Accident Independent Investigation Commission. The National Diet of Japan https://warp.da.ndl.go.jp/info:ndljp/pid/3856371/naiic.go.jp/en/report/