Introduction to risk managementJouni Tuomisto, Mikko Pohjola

THL

Contents

• Introduction to (conventional) RM

• Open risk management (ORM)

• RM in the swine flu story

Introduction to (conventional) RM

• Risk management (of what?)

• Conventional paradigms of environment and health RM

• Some related concepts

• Interim conclusions

Risk management (of what?)

• Google RM, what do you find?– Economical risk management

• finance, project, investement, …– World bank social RM– Also a number of environment & health related

• These are of our interest here

Conventional frameworks for environment and health RM• Several views to EH RM (conventional paradigms), e.g.

– EHRM framework– NRC: Red book, Understanding risk, Science and decisions– IRGC risk governance framework– REACH– YVA - regulatory EIA in Finland– water management– LCA?– nuclear safety?

• Considered in terms of e.g.– risk?– management; who, what, how?– interaction/participation?

EHRM

EHRM

• Risk management is the process of identifying, evaluating, selecting, and implementing actions to reduce risk to human health and to ecosystems. The goal of risk management is scientifically sound, cost-effective, integrated actions that reduce or prevent risks while taking into account social, cultural, ethical, political, and legal considerations.

EHRM

• Risk is defined as the probability that a substance or situation will produce harm under specified conditions. Risk is a combination of two factors:

– The probability that an adverse event will occur (such as a specific disease or type of injury).

– The consequences of the adverse event.• Risk encompasses impacts on public health and on

the environment, and arises from exposure and hazard. Risk does not exist if exposure to a harmful substance or situation does not or will not occur. Hazard is determined by whether a particular substance or situation has the potential to cause harmful effects.

NRC: Red book

Extrapolation

Measurements and population characteristics

Hazard identification

Dose-response assessment

Exposure assessment

Risk characterization

Regulatory options

Evaluation of options

Decisions and actions

Risk assessment Risk management

Observations

NRC: Red book

• Regulatory actions are based on two distinct elements, risk assessment, the subject of this study, and risk management.

• Risk assessment is the use of the factual base to define the health effects of exposure of individuals or populations to hazardous materials and situations.

• Risk management is the process of weighing policy alternatives and selecting the most appropriate regulatory action, integrating the results of risk assessment with engineering data and with social, economic, and political concerns to reach a decision.

NRC: Red book

• …the risk of cancer and other adverse health effects associated with exposure of humans to toxic substances.

• Many decisions of federal agencies in regulating chronic health hazards have been bitterly controversial. The roots of the controversy lie in improvements in scientific and technologic capability to detect potentially hazardous chemicals, in changes in public expectations and concerns about health protection, and in the fact that the costs and benefits of regulatory policies fall unequally on different groups within American society.

NRC: Understanding Risk (Orange book)

• Role and importance of deliberation

DecisionProblem formulation

Process design

Selecting options & outcomes

Information gathering

Synthesis

Public officials

Natural and social scientists

Interested and affected parties

ImplementationEvaluation

Learning and feedback

Analysis and deliberation

NRC: Science and decisions (Silver book)

NRC: Science and decisions (Silver book)

• How we deal with risk depends largely on how well we understand it. The process of risk assessment has been used to help us understand and address a wide variety of hazards…

• U.S. Environmental Protection Agency (EPA), other federal and state agencies, industry, the academic community, and others in evaluating public-health and environmental concerns. From protecting air and water to ensuring the safety of food, drugs, and consumer products such as toys, risk assessment is an important public-policy tool for informing regulatory and technologic decisions, setting priorities among research needs, and developing approaches for considering the costs and benefits of regulatory policies.

IRGCAssessment sphere:

Generation of knowledge

Risk managementImplementation▪ Option realization▪ Monitoring & control▪ Feedback from risk management practice

Decision making▪ Option identification & generation▪ Option assessment▪ Option evaluation & selection

Pre assessment▪ Problem framing▪ Early warning▪ Screening▪ Determination of scientific conventions

Communication

Tolerability & acceptability judgement

Risk appraisalRisk assessment ▪ Hazard identification & estimation▪ Exposure & vulnerability assessment▪ Risk estimation

Concern assessment▪ Risk perceptions▪ Social concerns▪ Socio-economic impacts

Risk evaluation▪ Judging tolerability & acceptability▪ Need for risk reduction measures

Risk characterization▪ Risk profile▪ Judgment of the seriousness of risk▪ Conclusions & risk reduction options

Management sphere:Decision & implementation of actions

IRGC

• Risk is an uncertain ( generally adverse ) consequence of an event or activity with respect to something that humans value. Risks are often accompanied by opportunities.

• Systemic risks are embedded in the larger context of societal, financial and economic consequences and are at the intersection between natural events, economic, social and technological developments and policy-driven actions. Such risks are not confined to national borders; they cannot be managed through the actions of a single sector; they require a robust governance approach if they are to be adequately managed. The governance of systemic risks requires cohesion between countries and the inclusion within the process of governments, industry, academia and civil society.

IRGC• Governance refers to the actions, processes, traditions and institutions by

which authority is exercised and decisions are taken and implemented.• Risk governance deals with the identification, assessment, management and

communication of risks in a broad context. It includes the totality of actors, rules, conventions, processes and mechanisms and is concerned with how relevant risk information is collected, analysed and communicated, and how management decisions are taken. It applies the principles of good governance that include transparency, effectiveness and efficiency, accountability, strategic focus, sustainability, equity and fairness, respect for the rule of law and the need for the chosen solution to be politically and legally feasible as well as ethically and publicly acceptable. Risk accompanies change. It is a permanent and important part of life and the willingness and capacity to take and accept risk is crucial for achieving economic development and introducing new technologies. Many risks, and in particular those arising from emerging technologies, are accompanied by potential benefits and opportunities.

• The challenge of better risk governance lies here: to enable societies to benefit from change while minimising the negative consequences of the associated risks.

IRGC

IRGC

REACH

Hazard assessment▪ Hazard identification▪ Classification & labeling▪ Derivation of threshold levels ▪ PBT/vPvB assessment

Exposure assessment▪ Exposure scenarios building▪ Exposure estimation

Risk characterisation

Information: available vs. required/needed▪ Substance intrinsic properties▪ Manufacture, use, tonnage, exposure, risk management

Dangerous or PBT/vPvB

Risk controlled

no yes

noyes

Iteration

Chemical safety report

YVA

Opinions and statements about the program

Statements of the ministry of employment

and economy about the evaluation

Evaluation report

Statements of the ministry of employment

and economy about the

report

Evaluation program

Opinions and statements about the

report

Pa

rticipa

tion

Pa

rtic

ipa

tion

Phase 1 Phase 2

Assessment

YVA

Water resource management (integrated modeling approach)

Million euro cycle

• Lessons from the centre of excellence of environmental health risk analysis

Some related concepts

• RC, RP, RA, RCh– how do they relate to RM?

Interim conclusions

• Similarities and differences?

• Risk -> impact?

• Sufficient?

• DA in RM?

Open risk management (ORM)

• Introduction to the concept(s)

• Operationalization: ”discussion engine”

Six hours which topics

• Risk management traditional views

• Is there a theory for RM? – Context: you must understand this to be able to

operate– Find a decision or decisions that are reasonable and

relevant– Essential parts: context, research question,

decision(s), objectives– RA-RM process

• Introduction to risk management. What is managed, who is responsible, what is included? Traditional paradigm.

• Look from decision-maker's point of view: needs, communication, and assessment all included.

• Openness: RA, RM, RC are not totally separate. • Performance: Context about what we actually aim to achieve. How

do we know if we succeeded? • Developing risk management options. • Development of risk assessment questions. • Science-policy interface. Why it does not exist. • Boundaries of RA and RM

There is no science-policy interface

Different roles in decision-making

• Authority (has the decision-making power)

• Policy-maker (develops policies to be decided)

• NGO

• Industry and other commercially interested parties

• Other stakeholders

• Citizens

• Anyone

What is the point here?

Theory of open risk management

• Incremental improvements

• Everyone involved

• The idea of justice as one basis

• Decision analysis as one basis after we know what the decision is

• Open assessment/trialogue as one basis as the method to reach shared understanding.

Concepts in the theory

• Problem(s) identified (something wrong with the world)

• Decisions (as responses to problems)

• Partners/actors: – Decision maker of a particular decision (may be

several decisions)– Those influenced in any way– Everyone else

• * Risk• ** what risk(s)?• ** how about benefits (costs)?• ** whose risks / whose benefits?• * Management:• ** who manages?• ** manages what?• ** on what basis (→ role of knowledge/learning)?• ** manages how?• * → RM: from needs to knowledge, knowledge to action• ** is ''risk'' the right question?• ** are traditional RA, RM, RC approaches sufficient?• ** a societal knowledge process

• What is managed, who is responsible, what is included? Traditional paradigm.

• *Look from decision-maker's point of view: needs, communication, and assessment all included.

• *Openness: RA, RM, RC are not totally separate.

• *Performance: Context about what we actually aim to achieve. How do we know if we succeeded?

• *Developing risk management options.

• *Development of risk assessment questions.

• *Science-policy interface. Why it does not exist.

• *Boundaries of RA and RM

RM in the swine flu story

• Independent exploration– Beginning of the Pandemic– Prepredness in Finland and elsewhere

• Mini-presentations and discussions

• Summary