Piet Sellke

London, March 11th 2013

Piet Sellke

A closer look at risk perception and risk governance

Dialogik and University of Stuttgart

ICPS5th Annual Regulatory Affairs International Symposium

March 11th, 2013

2 London, March 11th 2013

Outline

• Part I: Introduction

• Part II: Risk Perception and Risk Assessment

• Part III: Risk Governance: An Integrated Concept

• Part IV: Conclusions

PART I: INTRODUCTION

Deficits in Risk Governance

Framing

Scarcity of data

Transparency

Inequity

Accountability

Paralysis by Analysis

Lack of Trust

Policy Dilemma in Risk Management

• Follow perceptions of the public?

• Follow advice of professional experts?

Challenge of Risk Governance

Integration of factual, technical knowledge and socio-cultural knowledge into one framework

• Factual dimension– Physically measurable outcomes– Risk discussed as a combination of consequences

and their probability of occurence

• Socio-cultural dimension– How risks are viewed if values and emotions come

into play

PART II: RISK PERCEPTION AND RISK ASSESSMENT

Risk perception (I/II)

• Human behavior depends on perception, not on facts!

• Qualitative Risk Characteristics:– Risk-related patterns

• Perceived dread• Familiarity with the risk• Sensual perceptibility

– Situation-related patterns• Personal controllability• Voluntariness• Trust in risk management• Fair distribution of gains and losses

Risk perception (II/II)

• Semantic risk patterns– Risks posing an immediate threat (large dams,

nuclear energy)– Risks dealt with as a blow of fate (natural disasters)– Risk as challenge to one‘s own strenght (sports)– Risk as a gamble (lotteries, stock exchange)– Risks as an early indication of insidious danger (food

additives, viruses)

• Stigmatisation of Risk• Social amplification of Risk

Challenges of Risk Assessment

• Quality of explanatory power depends on the accuracy and validity of (real) predictions

• Problems in validating risk assessment results– Prove of correctly assigned probabilities to a specific

outcome difficult– Risks with difficult to discern cause-effect

relationships– Risks with rare effects– Risks with effects difficult to interpret– Variations in both causes and effects obscuring the

results

Integration of Risk Assessment and Risk Perception• Option 1 (only science):

– Only scientific concepts of risk can claim inter-subjective validity and applicability

– (Erroneous) risk perceptions have to be corrected via communication and education

• Option 2 (only people): – No overarching universally applicable quality

criterion available in order to evaluate the appropriatness and validty of risk concepts

– Scientific concepts should compete with concepts of stakeholders and public groups

Loss of Public Support

Loss of Scientific Expertise

Integration of Risk Assessment and Risk Percpetion

• Option 3 (science + people):– In identifying aspects of concern and worry, all

groups of society have the same right to raise them and to bring them to the negotiation table

– Question of the degree to which these concerns / worries are violated by the risk-bearing activity / events should be primarily answered by experts

Integrated Approach

PART II: RISK GOVERNANCE: AN INTEGRATED CONCEPT

CONVENTIONAL RISK MANAGEMENT

UnderstandingDeciding

Management Communication Appraisal

Who needs to do what, when?

Who needs to know what,

The knowledge needed for

judgements and decisions

Most risk management processes do not go beyond these steps

IRGC’s RISK GOVERNANCE FRAMEWORK

Communication

Pre-Assessment

Characterisationand Evaluation

AppraisalManagement

Categorising the

knowledgeabout the

UnderstandingDecidingGetting a broad picture of the

Risk assessment

PLUS Concern

assessment

Is the risk tolerable, acceptable or unacceptable?

Is the risk simple, complex, uncertain

or ambiguous?

Who needs to do what, when? Communication

Who needs to know what, when?

Phase 1

Pre-Assessment

AppraisalManagement Communication

Getting a broad picture

of the risk

Importance of Framing

Looks like a high risk from the outside

But consider this…

Or this…

NOVELTY AND PRECAUTION: THE IMPACT OF FRAMING ON THE RISK-HANDLING OF GMOs

Comparing USA and Europe:

Different framing

Different regulatory approach

IMPORTANCE OF FRAMING

– Frames represent social 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, Norway, Stavanger)• 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…)

Phase 2

Pre-Assessment

Categorising the

knowledgeabout the

Is the risk simple, complex, uncertain

or ambiguous?

Components of Risk Knowledge

• Complexity in assessing causal and temporal relationships

• Uncertainty– variation among individual targets– measurement and inferential errors– genuine stochastic relationships– system boundaries and ignorance

• Ambiguity – Interpretative ambiguity (What does it mean?)– Normative ambiguity (Is it tolerable?)

RISK APPRAISAL

• Risk Assessment– Hazard identification and estimation– Exposure assessment– Risk estimation

• Concern Assessment– Socio-economic impacts– Economic benefits– Public concerns (stakeholders and individuals)

BRENT SPAR – UNDERESTIMATING STAKHOLDER CONCERN

Greenpeace’s campaign included occupation of the platform but did not include calling for a consumer boycott. Nonetheless, Shell is estimated to have lost between £60-100 million, mostly from lost sales across northern Europe; petrol stations were fire-bombed in Germany.

Phase 3

Pre-Assessment

Characterisationand

Evaluation

Appraisal

Management

Communication

Is the risk tolerable, acceptable or unacceptable?

Characterization 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?

Evaluation and Characterisation

The scientific evidence from the risk assessment is “simple” – civil aviation emits significant pollutants into the atmosphere. Grounding the fleet would stop those emissions.Modern values – particularly economic and societal – are such that no decision has been or is likely to be made to ban civil aviation.In this instance, the policy judgement is therefore to give greater weight to the values than the scientific evidence.

Phase 4

Pre-Assessment

Who needs to do what, when?

RISK CHARACTERISTICS AND THEIR IMPLICATIONS FOR RISK MANAGEMENT (I/II)

Knowledge Characterisation

Management Strategy

Appropriate Instruments Stakeholder Participation

1 ‘Simple’ risk problems

Routine-based:(tolerability /acceptabilityjudgement)

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

2 Complexity-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

RISK CHARACTERISTICS AND THEIR IMPLICATIONS FOR RISK MANAGEMENT (II/II)

Knowledge Characterisation

Management Strategy

Appropriate Instruments Stakeholder Participation

3 Uncertainty-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

4 Ambiguity-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

Complementary Phase

Pre-Assessment

Characterisationand

Evaluation

Appraisal

Management

Communication

Who needs to know what, when?

Objectives of Risk- Communication• Enlightenment: Making people able to understand risks

and benefits (and their interactions)

• Behavioral changes: Making people aware of potential risks and benefits help them to make the right choices

• Trust building: Assisting risk management agencies to generate and sustain trust

• Conflict resolution: Assisting risk managers to involve major stakeholders and affected parties to take part in the risk-benefit evaluation

Risk Communication – Essential throughout the process

► Pre-assessment► Informing other agencies and assessing who is affected and who is

mandated to take responsibility► Inviting views of affected stakeholders

► Appraisal► Requesting and receiving appropriate scientific advice on the risk► Requesting and receiving scientific advice on people’s concerns

► Evaluation► Communication of appraisal findings (if they are clear)► Involving all affected agencies and stakeholders if risk appraisal findings are

uncertain or ambiguous► Deliberations concerning values / perspectives and to evaluate trade-offs

► Management► Inclusion of appropriate stakeholders in the decision making process► Communication of the decision / regulation / advice

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 Agency Staff Agency Staff

Scientists/ Researchers

Affected stakeholders

« Civil society »

Scientists/ Researchers

Affected stakeholders

PART V: CONCLUSIONS

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– Emergence of systemic risk that cross national and

sectoral boundaries (ripple effects)

• Need for integration of risk analysis and perception

• Communication must be tailored to the risk class

Part V: Conclusions

CONCLUSIONS II

Four risk management regimes should be used to deal with these new risk challenges:– simple risk management: standard risk assessments– risk-informed management: expanded risk

assessments; seeking expert consensus and epistemological clarification

– precaution-/resilience-based management: negotiated safety level under uncertainty; seeking stakeholder consensus and relying on containment and resilience

– discourse-based management: value-based orientation; seeking more public input and stakeholder involvement for interpretative variability and normative controversy

sellke@dialogik-expert.de

Thank you!

RISK GOVERNANCE GOES MUCH FURTHER

Core Risk Governance Process• pre-assessment• risk appraisal

-- risk assessment-- concern assessment

• evaluation: tolerability / acceptability judgement

• risk management• communicationOrganisational Capacity• assets• skills• capabilitiesActor Network• politicians• regulators• industry/business• NGOs• media• public at largeSocial Climate• trust in regulatory institutions• perceived authority of science• degree of civil society involvementPolitical & Regulatory Culture® different regulatory styles

• Adequate structure of working groups?• Local structures, leading structure?• Who is initiating a process as this?• What partners does one need?

New Challenge: Systemic Risks

• 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 organizations– difficult to communicate

Piet Sellke

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