Risk Governance: The Integration of Analysis, Perception and Participation

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Risk Governance The Integration of Analysis,
Perception and Participation

• Ortwin Renn
• University of Stuttgart and
• DIALOGIK gGmbH

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Structure of Talk

• Characterization of risk
• The IRGC Risk Governance Model
• Evaluating Risks
• Application to risk managementstrategies and
  policy making
• Lessons for stakeholder participation
• Conclusions

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PART I

• Characterization of risk Trends and
  Challenges

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RECENT TRENDS (I/II)
Part I Characterisation of Risk Challenges and
Trends

• Increase of population density and urbanization
• Increase in uncertainty due to interconnectiveness
  and fast global changes
• Strong links between physical, social and
  economic risks
• Increase of vulnerability with respect to
  technological, social and natural risks
• Increase of catastrophic potential and decrease
  of individual risk

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RECENT TRENDS (II/II)
Part I Characterisation of Risk Challenges and
Trends

• Increased uncertainty about natural hazard
  patterns and frequencies due to global change
• Exponential increase in payments by insurance
  companies for compensating victims of natural
  catastrophes
• Emergence of new social risks (terrorism,
  disenchantment, mobbing, stress, isolation,
  depression)
• Increased importance of symbolic connotations of
  risks
• High potential for social amplification and
  attenuation

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Modern Systemic Risks (OECD)

• Characteristics
• Complex causal relationships
• High degree of uncertainty (non-knowledge)
• Benefits are often contested
• Open system boundaries
• Problems
• Technical risk concept too narrow
• Amplification beyond physical impacts
• High social mobilization

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Concepts of Risk

• Technical concept Function of probability and
  harm. Harm refers to human health, environment
  and capital assets
• Economic concept expected utilities (losses or
  gains)
• Ecological concept Threat to ecosystem stability
  and sustainability
• Psychological concept Subjectively expected
  utilities (based on perception of harm and
  likelihood as well as other qualitative factors)
• Sociological concept Social constructions of
  pending threats to all aspects of what
  individuals and groups value
• Cultural concept Culture-specific rules and
  procedures for framing, analysing, managing and
  handling threats to society

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PART II

• From Risk Analysis to Risk Governance

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Need for integration

• Concept that links risk assessment with risk
  perception and social processing of risk
• Avoiding relativist view of knowledge
• Including social constructions of risks
• Concept that links physical risk analysis with
  financial, economic and social risk
• Explore social amplification pathways
• Look for cross-fertilization
• Concept that links 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

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IRGC RISK GOVERNANCE OVERVIEW
Part II The IRGC Risk Governance Framework

• Core Risk Governance Process
• pre-assessment
• risk appraisal-- risk assessment-- concern
  assessment
• 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

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IRGC Risk Governance Framework Core Model
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Pre-Assessment

• Problem Framing
• Early Warning
• Screening
• Determination of Scientific Conventions

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Importance of Framing

• Looks like a high risk from the outside

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Importance of Framing

• But consider this

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Importance of Framing

• Or this

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Framing in Risk Debates

• Frames represent social, economic and cultural
  perspectives
• Is it a challenge or problem?
• Is it an opportunity or risk?
• Is it a Gods will, natures tempers or are
  humans accountable?
• Frames determine boundaries of what is included
  and excluded
• Time and duration (future generations,
  sustainability)
• Location and space (all nations, Europe,
  Switzerland, Davos-Glaris)
• Social class and stratus (vulnerable groups,
  poor, immigrants)
• Types of adverse effects (physical, mental,
  social, cultural)
• Primary or secondary impacts (ripple effects over
  system boundaries)
• Criteria taken into account (risk reduction,
  cost, benefit, equity, environmental justice,
  value violations)

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Risk Appraisal

• Risk Assessment
• Hazard identification and estimation
• Exposure or vulnerability assessment
• Risk estimation
• Concern Assessment
• Socio-economic impacts
• Benefits to society
• Public perceptions and concerns(stakeholders and
  individuals)

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PART III

• Evaluating Risks

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Tolerability and Acceptability Judgement

• Acceptable no public intervention
  necessary, yet private action
  desirable
• Tolerable Public risk reduction measures
  necessary but benefit is worth the risk
• Not acceptable Risk is not worth taking in
  exchange for the benefit drastic risk
  reduction necessary before reconsidering

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Acceptable, Tolerable and Not-Acceptable Risks
(Traffic Light Model)
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Probability of Occurrence
Prohibition or Substitution
Reduction necessary
Acceptable
0
Extent of Consequences ? ?
0
Intolerable risk
Acceptable risk
Tolerable risk, need of reduction
Not acceptable
Not defined
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Risk EvaluationClassification of the German
Global Change Council

• Factors for evaluating (physical)risks
• Probability
• Potential for harm
• Uncertainty (variability, statistical, genuine,
  ignorance)
• Ubiquity (intra-generational equity)
• Persistence (inter-generational equity)
• Delayed Effects (extra-generational equity)

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Factors for evaluating social risks

• Inequity and injustice associated with the
  distribution of risks and benefits over time,
  space and social status
• Psychological stress and discomfort associated
  with the risk or the risk source
• Potential for social conflict and mobilisation
  degree of political or public pressure on risk
  regulatory agencies
• Spill-over effects onto other fields such as
  financial markets or loss of credibility in
  management institutions
• Risk avoidance behavior likely consequences of
  individuals when informed about the risk or asked
  to avoid risks

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PART IV

• Implications
• For Risk Management

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Risk Management Strategies ICoping with routine
and complexity

• Routine Risk Management
• Sufficient knowledge of key parameters
• Little complexity, clear causal knowledge
• Standard Assessment
• Risk-Benefit Analysis
• Risk-risk-comparisons
• Risk-Informed Management
• High complexity
• Little uncertainty and ambiguity
• Expanded risk assessment/Knowledge management
• Risk-risk tradeoffs
• Risk-benefit comparison

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Risk Management Strategies IICoping with high
uncertainty

• Precaution-Based Management
• High uncertainty or ignorance
• Adverse effects plausible
• Appraisal of uncertainty
• Goal avoidance of irreversible effects
• Instruments
• Negotiation between too little and too much
  precaution
• classic ALARA etc.
• new containment, diversification, monitoring
  substitution

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Risk Management Strategies IIICoping with high
controversy

• Discourse-Based Management
• High degree of controversy
• Goal to find consensus or tolerance
• Instruments
• stakeholder involvement
• public debate
• risk communication

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PART V

• Implications
• For Stakeholder Involvement

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Why Stakeholder Involvement?

• Functional
• inclusion of all relevant knowledge (systematic,
  experiential, anecdotal)
• Broad representation of relevant arguments,
  interests, and values
• Prerequisite for public acceptance
• Prerogative for successful risk information and
  behavioral advice
• Normative
• Part of democratic culture and tradition
• Facilitator for identification with the common
  good and society
• Legal or moral requirement

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The Risk Management Escalator and Stakeholder
Involvement

• Risk Trade-off
• Analysis Delib-
• eration necessary
• Risk Balancing
• Probabilistic Risk Modelling

• Risk Balancing
• Necessary
• Probabilistic Risk Modelling

Remedy
Remedy

• Cognitive
• Evaluative
• Normative

Probabilistic Risk Modelling

• Cognitive
• Evaluative

Conflict
Remedy
Conflict

• Agency Staff
• External Experts
• Stakeholders
• Industry
• Directly affected groups
• General public

Statistical Risk Analysis
Cognitive

• Agency Staff
• External Experts
• Stakeholders
• Industry
• Directly affected groups

Remedy
Conflict
Agency Staff

• Agency Staff
• External Experts

Actors
Actors
Actors
Actors
Participative
Instrumental
Epistemological
Reflective
Type of Discourse
Type of Discourse
Type of Discourse
Type of Discourse
Ambiguity induced
Simple
Complexity induced
Uncertainty induced
Risk Problem
Risk Problem
Risk Problem
Risk Problem
Function Allocation of risks to one or several
of the four routes Type of Discourse Design
discourse
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PART VI

• Conclusions

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Conclusions I

• Problems in handling risks
• Plural values and knowledge claims
• Expert dissent on risk and benefits
• Transboundary and transsectoral 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 und sustainability
  policies

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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

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Quote

• What man desires is not knowledge but certainty
• Bertrand Russel
• 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

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Extra Slides
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Stakeholder Involvement I

• Instrumental discourse
• In-House staff
• Inclusion of necessary external experts
• Epistemological discourse
• All of the above
• Representative range of experts
• Relevant knowledge carriers (independent of where
  they come from)

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Stakeholder Involvement II

• Reflective Discourse
• All of the above
• Representatives of major organized stakeholder
  groups (balance between too much and too little
  precaution)
• Participatory Discourse
• All of the above
• Society wide value-based groups
• Representatives of non-organized public
  (including samples of consumers)

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Input to Decision Making in Civil and Plural
Societies

• Economic System
• Optimizing allocation and distribution
• Pareto principle
• Distributive discourse(bargaining)
• Rational actor decision and game theories

Maximizing Utility

• Social SystemSustaining Relationships
• Mutual understanding
• Therapeutic Discourse
• Social enhancement theories

• Expert System
• Sustaining Meaning
• Methodology and Peer Review
• Cognitive and interpretative Discourse
• Theories of knowledge management and epistemology

Empathy
Evidence
Generalizable values and norms

• Political SystemSustaining Order
• Compatibility withuniversal or
  positiveprinciples
• Normative Discourse
• Theory of communicative action