Accident And Design

Contemporary Debates On Risk Management

C. Hood, D. K. C. Jones

• Publisher: Routledge
• Year: 2003
• Print ISBN:
  9781857285970
• eBook ISBN:
  9781135362614
• Topic: Business
• Subtopic: Public Policy
• Index: Business

An examination of different theoretical, methodological and practical approaches towards the management of risk. Seven dimensions of the debate are identified, and the case for each position is put forward, the whole discussion being set in context and perspective. This volume attempts to identify and juxtapose the contested doctrines and underlying assumptions in the field of risk management.

CHAPTER ONE
Introduction

David Jones & Christopher Hood

Since the mid–1980s, there has been an upsurge of academic and popular interest in the subject of risk and its management. Indeed, it has been claimed that risk is emerging as a key organizing principle in social science (Beck 1992, Douglas 1992, Giddens1990,1991) and become “one of the most powerful concepts in modern society” (Leiss&Chociolko1994:3). Controversies as to how risk should be managed are now claimed to rank as “among the most bitter disagreements in contemporary society” (ibid.: xiii).

The reasons for this growth in attention are complex and debated. For some, rising risk-consciousness reflects increased expectations of health, safety and security within advanced technologically based societies, notions that have been given added status because of contemporary aspirations to sustainable development. Others emphasize the increasing numbers of people who believe they cannot control their exposure to the chance of unfair or uncompensated loss caused by the activities or decisions of others. Since the mid–1980s, large-scale high-technology developments, such as nuclear power and biotechnology, have come under continuing attack, and there have been widespread fears of adverse consequences created by unforeseen and invisible threats (such as AIDS, the BSE-CJDlink, radon, electricity transmission and certain kinds of environmental pollution). Other foci of attention, blame and apprehension have been the possible adverse outcomes of human-induced global environmental change and the apparently remorseless escalation in costs of so-called “natural disasters” (reflected in the United Nations declaration of the 1990sas the International Decade for Natural Disaster Reduction). And we can add a diverse range of longer-standing concerns on issues such as resource availability, the safe operation of industrial plant, transport safety, pesticides, drugs, and the viability of certain financial institutions. Even these issues turn out to be merely the most prominent landmarks in an extensive and varied landscape, “for risk is ubiquitous and no human activity can be considered risk free” (Hood et al. 1992:135).

Public interest and attention has stimulated the production of many books and papers on the subject of risk. But despite—or perhaps because of—this burgeoning literature, there is little sign of closure of this debate and three fundamental problems remain unresolved. First, there is no clear and commonly agreed definition of what the term “risk” actually means. Secondly, research on risk remains highly compartmentalized, fragmenting the subject into many relatively isolated subfieldsand specialisms(a feature referred to as “the risk archipelago” by Hood et al. 1992). Thirdly, there is continuing controversy over what-to-do issues—the “practical philosophies”, principles or doctrines concerning how the different major components within the “risk environment” are best managed.

This book is intended to provide some insights into this third issue— debates over doctrines of risk management-by exploring further the competing approaches that were outlined by Hood et al. (1992) in the Royal Society Report, Risk: analysis, perception and management. However, before embarking on this exploration, we need briefly to examine the other two major “hot spots” in the risk literature to which we referred earlier.

The meanings of “risk” and “hazard”

It is notable that, instead of converging on agreed definitions of basic terms, the contemporary literature abounds with contradictory statements about what the words “hazard” and “risk” mean. Some authors appear to use the terms interchangeably whereas others put “hazard” at the centre of the stage, limiting risk to its original technical sense to connote likelihood or probability of occurrence (see Cutter 1993:2). It remains to be investigated systematically how far these differences of usage can be explained by rhetorical analysis, cultural bias, the academic pedigree of the author or the nature of the problem being studied. But it can be observed that natural scientists involved with extreme events, such as floods, hurricanes and earthquakes, tend to favour “hazard”, whereas social scientists and mathematicians employ “risk”. This diversity of vocabulary makes the language of the subject tricky to master.

The term “hazard” generally denotes a phenomenon or circumstance perceived to be capable of causing harm or costs to human society. The anthropology of taboo testifies to the rich variety of beliefs about agents, situations or circumstances held to have the potential to cause loss, should they affect persons, property or resources by threatening life, health, emotional security, material welfare or societal institutions. Hazard is, therefore, concerned with the cause of perceived adverse consequence.

“Risk”, by contrast, is a broader and more diffuse concept. In the usage of “normal science”, it connotes the assessment of consequence or “exposure to the chance of loss” (Leiss&Chociolko1994:6). Reflecting that usage, Warner (1992:4) argues that the term should not be restricted to the mere likelihood (probability) of an adverse impact but rather to “a combination of the probability, or frequency, of occurrence of a defined hazard and the magnitude of the consequences of the occurrence”. Defined in this way, hazard becomes a component within risk, making hazard management a subset of risk management.

Such a wide range of possible hazards exist—associated with day-to-day human life, both within the natural environment and the technological, commercial, legal and sociopolitical systems—that the selection of which risks and hazards are to occupy a central place on the political agenda is a complex and much-disputed social process (Douglas 1992). There is a close analogy with the range of beliefs and interpretations of cause-effect relationships affecting the “environment” and differing views of how ecosystems work (that is, how organisms relate to one another and what the relationship is between organisms and their abioticenvironment). Building on that analogy, “risk” can be said to comprise perceptions about the loss potential associated with the interrelationship among humans and between humans and their natural (physical), biological, technological, behavioural and financial environments—a complex that may conveniently be termed the “risk environment”.

The risk archipelago

In view of the extremely diverse character of risk, it is no surprise that risk analysis and management is not a tightly unified and consensual field but instead consists of many distinct subdisciplinesand specialisms, rather like the islands of an archipelago.

Traditionally, the field has been divided by specialists according to the type of hazard under examination: natural, technological or social (Fig. 1.1). A specialist field of natural hazard research has tended to employ human ecological perspectives to examine the “goodness of fit” betweenhumansocieties and non-human physical processes (see White 1974,Burton et al. 1978, 1993, Kates1978, Kates&Burton 1986, Bryant 1991,Smith 1992, Alexander 1993). But the term “environmental hazards” isincreasinglycoming to replace “natural hazards”, reflecting a growingappreciationof the extent to which “natural” environmental systems areinfluencedby human activity to create or exacerbate hazardous conditions, for instance in desertification, floods and acidification. Technological hazards, such as explosions, collisions or systems failure, emanatefromthe design and management of technological systems (see Turner1978,Perrow1984, Lewis 1990), whereas social hazards emanate fromhumanbehaviour alone, such as fraud, burglary, arson or terrorism(Rosenthal et al. 1989).

The apparently particular nature of each of these three different groups of hazards has led to the evolution of separate and distinct fields of study, each of which has generated its own particular literature, methodology and terminology. Further specialization has led to division into subfieldsconsisting of groups of relatively insular hazard-specific experts. Although such conventional distinctions are understandable and may be useful, up to a point, in developing specialization, they may be becoming more of a problem than a solution to the effective analysis of some crucial aspects of risk management. The conventional distinction between “natural” hazards on the one hand, and “technological” and “social” hazards on the other (see Fig. 1.1) is precarious, because what is seen as the product of extraneous natural forces as opposed to human behaviour is culturally variable (it has to be remembered that our very notion of hazard involves impact on human wellbeing).Also, the three categories are not even analytically distinct, but, as Figure 1.1 shows, they overlap and merge to produce hybrid hazards, otherwise known as quasi-natural hazards and “na-tech” hazards. Hence, similar hazard impacts and management problems can be produced by events/accidents/incidents caused by very different trigger mechanisms, and the conventional tripartite division based on causation can obscure rather than illuminate the social processes at work, because the impact characteristics of a hazard tend to be of greater significance to those involved than its causes.

An alternative division focuses on the different levels of scale and frequency in risk management. The approach of one “island” focuses on the special problems associated with managing conspicuous high-magnitude low-probability (low frequency) events, usually termed “disasters” or “catastrophes” (see Quarantelliet al. 1986). Disaster research, which first emerged as a recognizable subfieldof the social sciences in the late 1950s,has mainly focused on the response phase of disasters, but is coming to give more attention to recovery and mitigation processes (see Drabek1986, Comfort 1988). Other work is more concerned with incidents of lower magnitude and higher probability (such as road accidents or accidents in the home), which may, nevertheless, have a larger absolute fatality rate. Some attempts have been made to link the two islands, by constructing absolute scales for disaster using objective measurement (e.g. the Bradford Disaster Scale; see Keller et al. 1990), but such scales have been the subject of much criticism and are not widely accepted, partly because there are no simple relationships between social impact and objectively measurable aspects of scale such as death rates.

Figure 1.1 The hazard spectrum (Jones 1993).

Thus, a picture emerges of an exceptionally broad, diverse and yet compartmentalized field of study. Although certain disciplines, such as quantitative risk analysis, economics and the study of government regulation, have tended to address risk management in a generic way, these approaches continue to be in a minority. Mitchell (1990) bemoans the lack of a single comprehensive integrated body of study created by the existence of three quite distinct coherent subfields:natural hazards research, disaster research and risk analysis. But the divisions by no means end there. The Royal Society’s (1992) attempt to produce a multiscienceapproach to risk revealed a major conflict of cultures, ostensibly between social scientists stressing social construal of risk and rivalry among competing risk-managementdoctrines and natural scientists with a more objective view of risk and a more uniform vision of good practice. But the “four chapters good, two chapters bad” interpretation of the problem (see Preface) obscures major differences within the social and natural sciences, among practitioners and even between cultures. According to Turner (1994:148) “we are now in a situation where no single view of risk can claim authority or is wholly acceptable”, whereas Beck (1992:29) goes one step further by claiming “There is no expert on risk”.

This book is an attempt to go beyond the over-simple “four chapters good, two chapters bad” view of the risk management world and to build some further bridges between the islands of the risk archipelago. In the following chapters, hazards of different type, scale and frequency are discussed and most of the major disciplinary “voices” in risk management are included, with contributions to the debate from perspectives based in law, engineering, economics, psychology, sociology, political science and geography. To some extent, this approach represents a search for a more generic approach to risk (an issue that is discussed further in Ch.9). But it also reflects a view that much is to be learned about risk from an approach that does not divide the world too neatly into separate specialisms, and to avoid a situation in which the inhabitants of each island reinvent the wheel for themselves. A wide-ranging approach to risk seems appropriate to an attempt to bring out the major voices in the debate and identify the areas of discordance and harmony.

So, what is risk management?

What does it mean to “manage” risk, given the variety and dimensionality of the phenomenon? It is certainly easier to say what risk management is supposed to do—at least in an abstract and formal way—than what it ought to be for. Like any other form of management, risk management can be understood as a process involving the three basic elements of any control system (cf. Dunsire1978:59–60) namely:

• goal-setting (whether explicit or implicit)
• information gathering and interpretation
• action to influence human behaviour, modify physical structures or both

Each of these three elements is linked to fundamental questions about risk management that are easier to ask than answer (cf. Shrader-Frechette1991). Who is to bear what level of risk, who is to benefit from risk-taking, who is to decide, and who is to pay? Where is the line to be drawn between risks to be managed by the state, and those to be managed by individuals, social groups or corporations? What information is needed for “rational” risk management and how should it be analyzed using what “justice model”? What actions make what difference to risk outcomes? Who evaluates success or failure in risk management and how? Who decides on what should be the desired trade-off between different risks? There is no general consensus on such questions, yet life-or-death risk management does—and must—go on in all societies through some sort of institutional process (Douglas 1987).

The term “risk management” means different things to different people, depending partly on which of the islands in the archipelago they inhabit. Some adopt a rather restricted technocentricview, building on the technological hazards literature and putting the emphasis on the safe operation of hazardous processes, technological systems and engineered structures. In a business context, the term means financial provision for risks. In politics, it is sometimes used to refer to the handling of issues that may threaten a government’s electoral fortunes (see New Zealand State Services Commission 1991:53–60). In public policy, “risk management” has been commonly used to refer to an analytical technique for quantifying the estimated risks of a course of action and evaluating those risks against likely benefits. In this book, we have decided to adopt the broadest view in an attempt to encompass all of the major senses of risk management, sometimes at the expense of precision. Accordingly, for these purposes, risk management means all regulatory measures (in both public policy and corporate practice) intended to shape the development of and response to risks. Risk management in this sense means a range of related activities for coping with risk, including how risks are identified and assessed and how social interventions to deal with risk are monitored and evaluated. Figure 1.2 depicts a set of risk management processes. Formal doctrines of risk management are usually based on two presuppositions: that risk is acceptable only if it is outweighed by demonstrably greater aggregate benefits and (as with total quality management doctrines) that there has to be a continuous striving to reduce the level of risk to a point where it is held to be “tolerable”, “as low as reasonably achievable”, or to meet some other criterion of social acceptability. But doctrines of that type rarely refer explicitly to distributional questionalquestions (as opposed to aggregated social costs and benefits) or to whose view of ...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Preface
• List of Contributors
• Chapter One: Introduction
• Chapter Two: Anticipation in risk management: a stitch in time?
• Anticipating The Risks Posed By Natural Perils
• Hazard Engineering
• Resilience, Flexibility, and Diversity In Managing The Risks of Technologies
• Chapter Three: Liability and blame: pointing the finger or nobody’s fault
• Criminal Law, Blame and Risk: Corporate Manslaughter
• The Problem of Blame Tom Horlick-Jones41
• Blame, Punishment and Risk Management
• Chapter Four: Quantitative risk assessment and risk management: risk policy by numbers
• Quantitative Risk Assessment and Decisions About Risk An essential input into the decision process
• Limits To The Mathematical Modelling of Disasters
• Chapter Five: Designing institutions: a house of cards?
• Risk and Disaster The role of communications breakdown in plane crashes and business failure
• Criteria For The Design of Hazard Mitigation Institutions
• Chapter Six: Counting the cost
• Is Safety A By-Product of Quality Management?
• Risk Management: An Economist’s Approach
• Chapter Seven: Participation in risk management decisions
• Technocracy, Democracy, Secrecy and Error
• Risk Management, Post-Normal Science, and Extended Peer Communities
• Exploring The Role of Civic Science In Risk Management
• Chapter Eight: The regulatory target: products and structures— or people and organizations
• Risk and Emerging Technology: The Case of Process-Based Regulation of Biotechnology In Europe
• Chapter Nine: Conclusion: learning from your desk lamp
• Where Extremes Meet: “Sprat” Versus “Shark” In Public Risk Management
• Bibliography