RISK MANAGEMENT

1. ENVIRONMENTAL RISK ASSESSMENT Session 8 RISK MANAGEMENT ParichartVisuthismajarn, Dr. phil., Asst.Prof. Faculty of Environmental Management Prince of Songkla University

2. Objectives • Risk management definition • Approaches to risk management • Aspects of risk management • Principles & challenges of risk management • Risk Tradeoffs • Impact of perception • Urban air pollution • Remedial action risk management process • Use of risk management in the military • Labeling systems for risk management (DOT, NFPA) • Management systems – ISO 14001 • Environmental audit process • Qualitative risk management systems, several examples

3. Risk management • Risk Management is reducing risks to an acceptable level, which is? • Zero risk? – no risk is acceptable – unrealistic • Acceptable risk? – who defines what is acceptable • De Minimus and De “Manifestis” Risks • de minimus, that is trivial risks • Often considered less than 1 in 1,000,000 risk • de “manifestis” that is obnoxious risk • Controlled without regard to cost; risk greater than 1 in 1000 • Risk Assessment complicates management by exposing • Uncertainty and variability • Differences in stakeholder understanding and perceptions • multiple perspectives make consensus building difficult

4. How Risk Management fits into the process : www.fao.org/WAICENT/faoinfo/economic/ esn/risk/risktext.htm source: www.iupac.org/publications/ ci/2001/march/

5. Environmental management methods

6. Risk = Hazard x Exposure • If this is true, then risk management is a function of reducing or eliminating: • Hazards • Exposure • Consequences (harm) of expsoure • Risk management must be formulated in the context of the culture • Socio-economic • Socio-political

7. Risk Management • Involves decision-making that incorporates: • Prioritizing risks • Determining acceptable level of risk • Determining resources to reduce risks to an acceptable level • Determining the greatest benefit for the resources to be expended • Planning • Implementing • Monitoring and evaluating effectiveness

8. Corporate objectives EHS policies Site specific goals Driving forces Analytical boundaries Risk assessment & management integrated systems framework Define Objectives Identify Resources, Assess Risk Develop risk Reduction & Avoidance Alt. Prioritize Opportunities Implement & Review Results • Worker • Public • Ecological • Consumer • Financial • Likelihood • Magnitude • Eliminate • Reduce • Respond • Communicate • Threshold criteria • Benefit estimation • Cost estimation • Time sensitivity • Benefit to cost ratio • Resource allocation • Schedule milestones • Independent review • Continuous improvement Adapted from Autenrieth

9. Use of Risk Management in the Military • The use of risk assessment methods in the military varies • Quantitative Health Risk Assessment follows generally accepted principles • Qualitative methods are also used for decision-making

10. Six Steps of Risk Management in Military • Step 1 • IDENTIFY HAZARDS DURING MISSION ANALYSIS • CONDITIONS THAT HAVE THE POTENTIAL OF POLLUTING THE AIR, SOIL, WATER, OR DEGRADE NATURAL CULTURAL RESOURCES • Step 2 • ASSESS THE PROBABILITY OF ENVIRONMENTAL DAMAGE AND VIOLATIONS • ENVIRONMENTAL RISK ASSESSMENT MATRICES • Step 3 • MAKE DECISIONS AND DEVELOP MEASURES TO REDUCE HIGH RISKS http://155.217.58.58/cgi-bin/atdl.dll/gta/5-8-2/050802_top.htm

11. Six Steps of Risk Management in Military • Step 4 • BRIEF THE CHAIN OF COMMAND AND APPROPRIATE DECISION MAKERS • PROPOSED PLANS AND RESIDUAL RISKS • Step 5 • IMPLEMENT ENVIRONMENTAL MEASURES • INTEGRATE THEM INTO PLANS, ORDERS, SOPs, TRAINING PERFORMANCE STANDARDS, AND REHEARSALS • Step 6 • SUPERVISE AND ENFORCE ENVIRONMENTAL STANDARDS • TRAIN TO THESE STANDARDS http://155.217.58.58/cgi-bin/atdl.dll/gta/5-8-2/050802_top.htm

12. Management Systems Plan Act Do Check

13. Environmental Management System 4.2 Environmental policy 4.6 Management review 4.3 Planning 4.5 Checking and corrective action 4.4 Implementation and operation

14. Compliance & Management Systems (adding context) High Good Performance But Not Sustainable Sustainable Zone Compliance Status Weak Systems & Poor Performance Ineffective Systems Low Early Mature Management Systems Development

15. Social Risk Management Framework:Basic thrusts: • The poor are typically most exposed to diverse risks • traditional and modern • The poor least equipped to deal with these risks • The poor are most vulnerable • High vulnerability makes them risk averse and thus unable or unwilling to engage in higher risk/high return activities • SRM seeks to account for multiple sources of risk and their characteristics to address vulnerability • Operates with multiple strategies (prevention, mitigation, coping) and arrangements (informal, market-based, public) to deal with risk • Attempts to match the multiple suppliers of risk management instruments (such as households, communities, NGOs, and governments) with key demand groups (formal, informal-urban and informal-rural workers) Adapted from Holzmann, 1998

16. Sources and Forms of Social Risk Micro Meso Macro (idiosyncratic) (co-variant) Natural Rainfall Earthquake Landslide Floods Volcanic eruption Drought Strong winds Health Illness Epidemic Injury Disability Life-cycle Birth Old-age Death Social Crime Terrorism Civil strife Domestic violence Gangs War Economic Unemployment Resettlement Output collapse Harvest failure Financial Business failure or currency crisis Technology Political Ethnic discrimination Riots Default on social prog. Environmental Pollution Deforestation Nuclear disaster Adapted from Holzmann, 1998

17. Risk Management Strategies • Prevention Strategies - to reduce the probability of down-side risk • Mitigation Strategies - to decrease the impact of a future down-side risk • Portfolio diversification • Insurance • Hedging/Risk exchange • Coping Strategies - to relieve the impact once the risk (the event) has occurred Adapted from Holzmann, 1998

18. Risk Management Arrangements • Informal arrangements, e.g. • marriage, real assets, mutual community support • Market-based arrangements, e.g. • cash, bank deposits, bonds and shares, insurance contracts • Publicly provided or mandated arrangements • social insurance, transfers in cash and kind, subsidies and public works Adapted from Holzmann, 1998

19. Matrix of Social Risk Management (examples) Adapted from Holzmann, 1998

20. Framework for studying vulnerable populations Policy Social and Community-oriented Medical care and Level Ethical norms Perspectiveeconomic policy health policy public health policy of analysis and values Community resources People Ties between people Neighborhoods Vulnerable Populations At-risk Community health Needs Physical Psychological Social Community (-) Common Good Reciprocity Interdependence Statistical (aggregate) lives (+) Resource availability (+) Relative risk (+) Health status (+) Community and Individual Well- Being Individual Resources Social status Social capital human capital Vulnerable Individuals Susceptible to: harm or neglect Individual Health Needs Physical Psychological Social Individual (-) Individual Rights Autonomy Independence Individual (identifiable) lives (+) Note: (+) indicates direct relationship (likelihood of outcome increases as predictor increases; (-) indicates inverse relationship (likelihood of outcome decreases as predictor increases) Source: Aday (1994)