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Risk Governance : Defining a Better Process for Risk Communication and Stakeholder Participation : Ortwin Renn IRGC Stuttgart University and DIALOGIK gGmbH.

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Presentation on theme: "Risk Governance : Defining a Better Process for Risk Communication and Stakeholder Participation : Ortwin Renn IRGC Stuttgart University and DIALOGIK gGmbH."— Presentation transcript:

1 Risk Governance : Defining a Better Process for Risk Communication and Stakeholder Participation : Ortwin Renn IRGC Stuttgart University and DIALOGIK gGmbH

2 The Basic Fabrics of Risk Governance The Five Components of Risk Governance

3 Requirements for Integrated Risk Concepts Concepts that link risk assessment with risk perception and socio-cultural processing of risk Avoiding relativist view of knowledge but including social constructions of risks Link between risk assessment, management and communication Concepts that link physical risk analysis with financial, economic and social risk; Explore social amplification pathways Consider trans-sectoral and trans-boundary ramifications Concepts that link risk theory with organizational capacity building and management competency Systematic use of management sciences and decision aiding Emphasis on risk communication between and among agencies and professionals

4 Oct 2007Introducing the IRGCs Risk Governance Framework 4 Emergence of systemic risks that are: transboundary socially amplified via perception and social mobilisation subject to expert dissent regarding risks and benefits unmanageable by single organisations difficult to communicate New Challenge: Systemic Emerging Risks

5 August 2007Introducing the IRGCs Risk Governance Framework 5 There is a need for improved RISK GOVERNANCE Governance refers to the actions, processes, laws, traditions and institutions by which authority is exercised and decisions are taken and implemented. Risk is an uncertain (positive or negative) consequence of an event or an activity with respect to something that humans value Risk governance refers to the actions, processes, laws, traditions and institutions by which decisions about risk handling are prepared, taken and implemented Best practice in risk governance integrates the principles of good governance within the processes of risk identification, assessment, management and communication and includes criteria such as effectiveness, accountability, efficiency, fairness and social and ethical acceptability

6 Oct 2007Introducing the IRGCs Risk Governance Framework 6 COMMON DEFICITS IN RISK GOVERNANCE Framing – different stakeholders have conflicting views of the issue Scope – a risk perceived as only local may have global consequences (and vice versa) There is a scarcity of data about the risk or peoples perceptions of it or, if data does exist, there is a failure to accept it Transparency – trade-offs are not made explicit and hidden agendas seem to determine the outcome Inequity – decisions allot the risk and benefits unfairly Accountability – decision makers are isolated from the impact of their decision Alienation – people or organisations are ignored (can lead to social mobilisation) (also Authority knows best) Lack of trust in the process or the communication channel Paralysis by analysis – overly inclusive process leads to inertia

7 Oct 2007Introducing the IRGCs Risk Governance Framework 7 Deciding Management Communication Appraisal CONVENTIONAL RISK HANDLING Most risk handling processes do not go beyond these steps Who needs to do what, when? Who needs to know what, when? The knowledge needed for judgements and decisions

8 August 2007Introducing the IRGCs Risk Governance Framework 8 DecidingUnderstanding Pre-assessment ManagementCommunication Characterisation and evaluation Appraisal IRGCs RISK GOVERNANCE FRAMEWORK Who needs to do what, when? Who needs to know what, when? Is the risk tolerable, acceptable or unacceptable? Getting a broad picture of the risk The knowledge needed for judgements and decisions

9 Oct 2007Introducing the IRGCs Risk Governance Framework 9 INNOVATIONS IN THE IRGCS FRAMEWORK 1.The pre-assessment phase extending problem definition 2.Including concern assessment as part of risk appraisal 3.Categorising the knowledge about the risk as: linear complex uncertain ambiguous 4.The characterisation and evaluation phase is the risk acceptable, tolerable or unacceptable?

10 Oct 2007Introducing the IRGCs Risk Governance Framework 10 HOW CATEGORISING THE KNOWLEDGE CAN HELP Linear risk problems can be managed using a routine-based strategy, such as introducing a law or regulation Complex risks may be best addressed by accessing and acting on the best available scientific expertise, aiming for a risk-informed and robustness-focussed strategy Uncertain risks are better managed using precaution-based and resilience-focussed strategies, to ensure the reversibility of critical decisions and to increase a systems capacity to cope with surprises Ambiguous risk problems require a dialogue-based strategy aiming to create tolerance and mutual understanding of conflicting views and values with a view to eventually reconciling them

11 11 34 ESSENTIAL DISTINCTIONS WITHIN THE CORE PROCESS Assessment Sphere: Generation of Knowledge Management Sphere: Decision on & Implementation of Actions Risk Characterisation Risk Profile Judgement of the Seriousness of Risk Conclusions & Risk Reduction Options Risk Evaluation Judging the Tolera- bility & Acceptabiliy Need for Risk Reduction Measures Tolerability & Acceptability Judgement Pre-Assessment: Problem Framing Early Warning Screening Determination of Scientific Conventions Pre-Assessment Risk Appraisal: Risk Assessment Hazard Identification & Estimation Exposure & Vulnerability Assessment Risk Estimation Concern Assessment Risk Perceptions Social Concerns Socio-Economic Impacts Risk Appraisal Risk Management Implementation Option Realisation Monitoring & Control Feedback from Risk Mgmt. Practice Decision Making Option Identification & Generation Option Assessment Option Evaluation & Selection Risk Management Communication 1 Knowledge Challenge: Complexity Uncertainty Ambiguity 2 Risk judged: acceptable tolerable intolerable 3 Risk Management Strategy: routine-based risk-informed/robustness- focussed precaution-based/resilience- focussed discourse-based

12 August 2007Introducing the IRGCs Risk Governance Framework 12 RISK GOVERNANCE INCLUDES AND IS SENSITIVE TO CONTEXT Core Risk Governance Process pre-assessment risk appraisal -- risk assessment -- concern assessment evaluation: tolerability / acceptability judgement risk management communication Organisational Capacity assets skills capabilities Most risk management processes are done in this context only

13 August 2007Introducing the IRGCs Risk Governance Framework 13 RISK GOVERNANCE GOES MUCH FURTHER Core Risk Governance Process pre-assessment risk appraisal -- risk assessment -- concern assessment evaluation: tolerability / acceptability judgement risk management communication Organisational Capacity assets skills capabilities Actor Network politicians regulators industry/business NGOs media public at large Social Climate trust in regulatory institutions perceived authority of science degree of civil society involvement Political & Regulatory Culture different regulatory styles

14 Details of each phase Integrating Disciplines and Perspectives in Risk Governance The interplay between the five components

15 Phase 1 PREASSESSMENT

16 16 34 COMPONENTS OF PRE-ASSESSMENT Pre-Assessment Components DefinitionIndicators 1Problem framingDifferent perspectives of how to conceptualize the issue dissent/consent on goals of selection rule dissent/consent on relevance of evidence choice of frame (risk, opportunity, fate) 2Early warningSystematic search for new hazards unusual events or phenomena systematic comparison between modeled and observed phenomena novel activities or events 3Screening (risk assessment and concern assessment policy) Establishing a procedure for screening hazards and risks and determining assessment and management route screening in place? criteria for screening: hazard potential, persistence, ubiquity, etc. criteria for selecting risk assessment procedures for: known risks, emergencies, etc. criteria for identifying and measuring social concerns 4Scientific conventions for risk assessment & concern assessment Establishing a procedure for screening hazards and risks and determining assessment and management route definition of NOAEL validity of methods and techniques for risk assessments methodological rules for assessing concerns

17 IMPORTANCE OF FRAMING Frames represent social, economic and cultural perspectives –Challenge or problem –Opportunity or risk –Innovation or intervention Frames determine boundaries of what is included and excluded –Time and duration (future generations, sustainability) –Location and space (the universe, all nation, the Netherlands, Le Hague) –Social class and stratus (vulnerable groups, poor, immigrants) –Types of adverse effects (physical, mental, social, cultural) –Primary or secondary impacts (ripple effects) –Criteria taken into account (risk reduction, cost, benefit, equity, environmental justice, value violations…)

18 Oct 2007Introducing the IRGCs Risk Governance Framework 18 NOVELTY AND PRECAUTION: THE IMPACT OF FRAMING ON THE RISK-HANDLING OF GMOs Copyright: Freakingnews.com Taken from Risk governance of genetically modified crops – European and American perspectives, Joyce Tait, for publication by Springer in 2007 in the book Global Risk Governance: Concept and Practise Using the IRGC Framework Some of the differences between EU and US approaches to the regulation of GM crops can be traced to a very early difference in the framing of the technology for regulatory purposes. In the EU, GM crops were framed as a radical departure from any previous products and were seen as requiring path-breaking regulatory approaches. The US, in line with the OECD approach, framed them as inherently similar to existing products developed through conventional plant breeding programmes and therefore not requiring any additional scrutiny beyond existing regulatory systems, for example for pesticides, food for human consumption or animal feeds (i.e. they were seen as requiring path-dependent and evolutionary regulation).

19 Phase 2 APPRAISAL

20 20 34 RISK APPRAISAL Risk Assessment Hazard identification and estimation Exposure assessment Risk estimation Concern Assessment Socio-economic impacts Economic benefits Public concerns (stakeholders and individuals)

21 August 2007Introducing the IRGCs Risk Governance Framework 21 CONCERN ASSESSMENT How do values and emotions impact on how the risk is perceived? What are the publics concerns and perceptions? What is the social response to the risk? Is there the possibility of political mobilisation or potential conflict? What role are existing institutions, governance structures and the media playing in defining public concerns? Are risk managers likely to face important controversies (ambiguities) arising from differences in stakeholder objectives and values, or from inequities in the distribution of benefits and risks?

22 Oct 2007Introducing the IRGCs Risk Governance Framework 22 BRENT SPAR – UNDERESTIMATING STAKEHOLDER CONCERN © Greenpeace / David Sims Greenpeaces campaign included occupation of the platform but did not include calling for a consumer boycott. Nonetheless, Shell is estimated to have lost between £ million, mostly from lost sales across northern Europe; petrol stations were fire-bombed in Germany.

23 Phase 3 Tolerability and Acceptability Judgment

24 Oct 2007Introducing the IRGCs Risk Governance Framework 24 EVALUATION – IS THE RISK ACCEPTABLE, TOLERABLE OR INTOLERABLE / NOT-ACCEPTABLE (TRAFFIC LIGHT MODEL) Based on both the evidence from the risk appraisal and evaluation of broader value-based choices and the trade-offs involved, decide whether or not to take on the risk. Acceptance Reduction Prohibition or Substitution No formal intervention necessary Benefit is worth the risk, but risk reduction measures are necessary Risk so much greater than benefit that it cannot be taken on

25 August 2007Introducing the IRGCs Risk Governance Framework 25 CHARACTERISATION AND EVALUATION What are the broader, value-based questions to consider? Characterization: What are the societal and economic benefits and risks? Are there impacts on individual or social quality of life? Are there ethical issues to consider? Is there a possibility of substitution? Evaluation: What are possible options for risk compensation or reduction? How can we assign trade-offs between different risk categories and between risks and benefits (or opportunities)? What are the societal values and norms for making judgements about tolerability and acceptability? Do any stakeholders have commitments or other reasons for desiring a particular outcome of the risk governance process?

26 Phase 4 RISK MANAGEMENT

27 27 34 COMPONENTS OF RISK MANAGEMENT Assessment Components DefinitionIndicators 1Option generation Identification of potential risk handling options, in particular risk reduction, i.e. prevention, adaptation and mitigation, as well as risk avoidance, transfer and retention standards, voluntary agreements performance rules restrictions on exposure or vulnerability economic incentives compensation insurance and liability labels, information/education 2Option assessment Investigations of impacts of each option (economic, technical, social, political, cultural) effectiveness and efficiency minimization of side effects sustainability fairness legal and political implementability ethical acceptability public acceptance 3Option evaluation and selection Evaluation of options (multi-criteria analysis) assignment of trade-offs incorporation of stakeholders & the public 4Option implementation Realization of the most preferred option accountability consistency effectiveness 5Monitoring and feedback Observation of effects of imple- mentation (link to early warning) Ex-post evaluation intended impacts non-intended impacts policy impacts

28 28 34 NEED FOR DIFFERENT RISK MANAGEMENT STRATEGIES dealing with routine, mundane risks dealing with complex and sophisticated risks (high degree of modeling necessary) dealing with highly uncertain risks (high degree of second order uncertainty) dealing with highly ambiguous risks (high degree of controversy) dealing with imminent dangers or crisis (need for fast responses)

29 29 34 RISK CHARACTERISTICS AND THEIR IMPLICATIONS FOR RISK MANAGEMENT (I/II) Knowledge Characterisation Management Strategy Appropriate InstrumentsStakeholder Participation 1Simple risk problems Routine-based: (tolerability / acceptability judgement) Applying traditional decision-making Risk-benefit analysis Risk-risk trade-offs Instrumental discourse (risk reduction) Trial and error Technical standards Economic incentives Education, labelling, information Voluntary agreements 2Complexity- induced risk problems Risk-informed: (risk agent and causal chain) Characterising available evidence Expert consensus seeking tools, such as Delphi or consensus conferencing, meta analysis, scenario construction Results fed into routine operation Epistemological discourse Robustness- focussed: (risk absorbing system) Improving buffer capacity of risk target via: Additional safety factors Redundancy and diversity in designing safety devices Improving coping capacity Establishing high reliability organisations

30 30 34 RISK CHARACTERISTICS AND THEIR IMPLICATIONS FOR RISK MANAGEMENT (II/II) Knowledge Characterisation Management Strategy Appropriate InstrumentsStakeholder Participation 3Uncertainty- induced risk problems Precaution- based: (risk agent) Using hazard characteristics such as persistence, ubiquity etc. as proxies for risk estimates Tools include: Containment, ALARA, BACT Reflective discourse Resilience- focussed: (risk absorbing system) Improving capability to cope with surprises Diversity of means to accomplish desired benefits Avoiding high vulnerability Allowing for flexible responses Preparedness for adaptation 4Ambiguity- induced risk problems Discourse- based: Application of conflict resolution methods for reaching consensus or tolerance for risk evaluation results and management option selection Integration of stakeholder involvement in reaching closure Emphasis on communication and social discourse Participative discourse

31 Complementary Phase Risk Communication

32 August 2007Introducing the IRGCs Risk Governance Framework 32 RISK COMMUNICATION – POTENTIAL GOVERNANCE DEFICITS The most important governance gaps are: One-way information instead of two-way communication prevents building a dialogue Certain concerns are treated as irrational and, as a result, those holding them are alienated from the risk handling process (which may cause social mobilisation against the institution) The communication is not adapted to the category of risks and the stakeholders involved Low level of confidence or trust in the information given and in the decision-making process weakens the whole process

33 PREASSSSMENT Internal Informing other agencies and getting feedback from them (who is affected and how does it relate to their mandate?) External Media briefing about process to start Inviting stakeholders to provide feedback and framing suggestions (if risk appears to load high on uncertainty and ambiguity) Risk Communication at Different Stages (1)

34 APPRAISAL Internal Informing the appropriate scientific departments in other agencies and, if necessary, organize workshops External Media briefing and announcement to stakeholders that assessment process is on its way (low complexity) Depending on degree of knowledge, press conferences or press releases on results (high complexity) Conducting hearings, Delphi, or other information gathering techniques with appropriate knowledge carriers (high complexity and uncertainty) Risk Communication at Different Stages (2)

35 EVALUATION Internal Involving all affected agencies if risk characterisation is either uncertain or evaluation controversial External Press conferences with assessors and managers on evaluation results and protective measures (low uncertainty and ambiguity) Information of stakeholders and invitation for written review (high uncertainty and low ambiguity) Deliberation with stakeholders about values/perspectives and assigning trade-offs (high ambiguity) Risk Communication at Different Stages (3)

36 Management Internal Involving all affected regulatory or government bodies if risk management measures have impacts on their mandate External Press conferences on selection of management measures (low uncertainty and ambiguity) Information of stakeholders about regulatory impact review and, if needed, organisation of hearings (high uncertainty and low ambiguity) Engaging in formal deliberations with stakeholders and representatives of the public (high ambiguity) Risk Communication at Different Stages (4)

37 Beyond communication Stakeholder and Public Involvement

38 Crucial Questions for Involvement Inclusion Who: stakeholders, scientists, public(s) What: options, policies, scenarios, frames, preferences Scope: multi-level governance (vertical and horizontal) Scale: space, time period, future generations Closure What counts: acceptable evidence What is more convincing: competition of arguments What option is selected: decision making rule (consensus, compromise, voting)

39 PREASSSSMENT Shaping the process (consensus on frames) Design Discourse APPRAISAL Gathering information and knowledge Epistemic Discourse EVALUATION Deliberating around values/perspectives and assigning trade-offs Reflective Discourse MANAGEMENT Weighing pros and cons of management measures Pragmatic Discourse (for low ambiguity) Participative Discourse (for high ambiguity) Stakeholder Involvement at Different Stages

40 August 2007Introducing the IRGCs Risk Governance Framework 40 Complexity Epistemic Use experts to find valid, reliable and relevant knowledge about the risk Uncertainty Reflective Involve all affected stakeholders to collectively decide best way forward Ambiguity Participative Include all actors so as to expose, accept, discuss and resolve differences Simple Instrumental Find the most cost-effective way to make the risk acceptable or tolerable Agency Staff Dominant risk characteristic Type of participation Actors STAKEHOLDER INVOLVEMENT Agency Staff Scientists/ Researchers Affected stakeholders « Civil society » Scientists/ Researchers Affected stakeholders As the level of knowledge changes, so also will the type of participation need to change

41 The wider context Organizational Capacity

42 August 2007Introducing the IRGCs Risk Governance Framework 42 ORGANISATIONAL CAPACITY (1) Risk governance relies upon equipping all actors with adequate: Assets Laws and regulations that establish rights and obligations Resources – financial and physical – to gather information and act Knowledge – the experience and expertise to best use the resources Integration – with which to access and deploy the other assets Skills Flexibility – adapting to change in a dynamic situation Vision – preparedness to think outside the box Directivity – being an agent for external change when necessary

43 August 2007Introducing the IRGCs Risk Governance Framework 43 ORGANISATIONAL CAPACITY (2) Capabilities Relations – links between the actors to create the basis for collaborative learning and decision making Networks – enhanced links between key actors Regimes – the structures that create and oversee the overall process and how all the actors interact

44 August 2007Introducing the IRGCs Risk Governance Framework 44 Criteria for Evaluating Governance Performance Effectiveness (Were the goals of risk management accomplished or are they likely to be accomplished?) Efficiency (Are the management measures cost/effective?) Legality (Are the risk measurement measures compatible with legal prescriptions and national/international laws?) Legitimacy (Are the management measures based on due process and publicly accepted procedures) Accountability (Are all responsibilities for risk management and liability clear and unambiguous?) Fairness (Is the risk/benefit distribution considered fair and just?) Acceptance (Are the measures approved by the main stakeholders and the public at large?) Acceptability (Are the measures compatible with ethical and moral standards?) Sustainability ( Are the measures in line with the goals of sustainable development?)

45 Oct 2007Introducing the IRGCs Risk Governance Framework 45 ONE RESULT OF A DEFICIT IN ORGANISATIONAL CAPACITY (AP Photo/Phil Coale) The Gulf Coast States have attempted to coordinate contraflow plans with neighboring States that may be affected, but exercises, traffic simulations, and other analyses to evaluate evacuation options for catastrophic incidents on the scale of Hurricane Katrina have not been conducted. Catastrophic Hurricane Evacuation Plan Evaluation, A Report to Congress; US Dept of Transportation and Dept of Homeland Security, June 2006

46 46 34 CONCLUSIONS I Problems in handling risks: Plural values and knowledge claims Expert dissent on risk and benefits Transboundary nature of risks Social amplification and attenuation via perception and social mobilization Pressure from globalized economy Lack of organizational capacity in many countries Lack of effective governance structures Emergence of systemic risk that cross national and sectoral boundaries (ripple effects) Need for integration of risk analysis and perception Part V: Conclusions

47 Oct 2007Introducing the IRGCs Risk Governance Framework 47 CONCLUSIONS II Good risk governance integrates traditional risk analysis with the thorough understanding of how different stakeholders perceive the risk (framing and concern assessment) Understanding and acting on how different stakeholders frame the risk is a key factor in the overall success of the process Categorising the knowledge about the risk as simple, complex, uncertain or ambiguous can help: select a risk management strategy design the process for stakeholder involvement Using the results of both risk assessment and concern assessment can support a tolerability/acceptability judgement that accounts for both scientific facts and peoples perceptions

48 48 34 QUOTE What man desires is not knowledge but certainty. Bertrand Russell Policy makers cannot produce certainty but can help people to develop coping mechanisms to deal prudently with the necessary uncertainty that is required for societies to progress

49 49 34 EXTRA SLIDES

50 Transition towards Governance Evolution of Risk Research Four stages of development

51 Stage 1: Engineered Safety Characteristics Deterministic Safety Analysis Risk = What happens if? Probability exposure over losses (at best) Clear focus on human lives and health Problems Mechanical conception of risks and accidents Uncertainties are ignored Risk communication only among experts and between experts and politicians

52 Stage 2: The New Monarch: PRA Characteristics Probabilistic Safety Analysis Risk = Function of probability times damage Probability assessment over events and exposure Clear focus on human lives, health, capital assets and environmental damage Problems Probability distribution often intelligent guesses Uncertainties are confined to statistical confidence intervals Risk communication is designed to bridge the gap between risk assessments and (biased) perceptions

53 Stage 2: Probability Theory in Risk Analysis Actuarial Approach: Statistical extrapolation Causal Modeling: Determining the pathways from emission to effects using models of dispersion and transport, dose- response-relationships, exposure assessment, consequence analysis Probabilistic Risk Assessments: Synthesizing failure rates through fault and event trees

54 Stage 3: The Rise of Cultural Relativism Characteristics Probability theory is one instrument among others Risk = social construction of the human mind All knowledge is created equal Focus on everything that human value Problems Danger of solipsism due to constructivist concepts Uncertainties are confined to beliefs of individuals and groups (for example subcultures) Risk communication is designed to give voice to those who have alternative views on risk

55 Stage 4: Towards Systemic Integration Characteristics Acknowledgement of prospects and limitations of probability theory Risk = integration of technical and social concepts Coping with uncertainty by applying precaution Explicit system boundaries of what is covered Problems Incompatibility between technical and social approaches to risk Uncertainties are subdivided in aleatory, epistemic, and indeterminate Risk communication is designed to combine rational policies with social perceptions and concerns

56 Requirements for Integrated Risk Concepts Concepts that link risk assessment with risk perception and socio-cultural processing of risk Avoiding relativist view of knowledge but including social constructions of risks Link between risk assessment, management and communication Concepts that link physical risk analysis with financial, economic and social risk; Explore social amplification pathways Consider trans-sectoral and trans-boundary ramifications Concepts that link risk theory with organizational capacity building and management competency Systematic use of management sciences and decision aiding Emphasis on risk communication between and among agencies and professionals

57 RISK GOVERNANCE - TOWARDS AN INTEGRATIVE APPROACH RISK MANAGEMENT STRATEGIES (I): COPING WITH ROUTINE AND COMPLEXITY Routine Risk Management Sufficient knowledge of key parameters Little complexity, clear causal knowledge Standard Assessment sufficient Risk-benefit analysis and risk-risk comparisons as basic tool for evaluation Risk-Informed Management High complexity of causal risk models Little uncertainty and ambiguity Expanded risk assessment / need for knowledge management Emphasis on robust risk management strategies, i.e. risk standards including safety factors Emphasis on close monitoring of outcomes Annex: Back-up Slides

58 RISK GOVERNANCE - TOWARDS AN INTEGRATIVE APPROACH RISK MANAGEMENT STRATEGIES (II): COPING WITH UNCERTAINTY AND AMBIGUITY Precaution-Based Management High uncertainty or ignorance Adverse effects plausible but quantification not reliable Appraisal of uncertainty by statistical means Goal of risk management: avoidance of irreversible effects Instruments: –Negotiation between too little and too much precaution –classic: ALARA etc. –new: containment, diversification, monitoring; substitution Discourse-Based Management High ambiguity Goal of risk management : to find consensus or tolerance Instruments: –stakeholder involvement –public debate –risk communication Annex: Back-up Slides


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