Qualitative Risk Assessment

1. Institute for Water Resources 2010 Qualitative Risk Assessment Charles Yoe, PhD cyoe1@verizon.net

2. The Need • Manage risk intentionally • Do better than has been done • Qualitative risk assessment can be a viable option • Partial assessments sometimes helpful (not all steps)

3. Use Qualitative Assessment • When consistency and transparency in handling risk are desired • When theory, data, time or expertise are limited • When dealing with broadly defined problems where quantitative risk assessment is impractical • E.g., national levee safety ranking

4. Qualitative Risk Assessment • The process of compiling, combining and presenting evidence to support a statement about risk • Descriptive or categorical treatment of information • Is formal, organized, reproducible method based on science, sound evidence and four steps • Flexible and consistent • Easy to explain to others • Supports risk management decision making

5. Qualitative Methods Toolbox • Increase or Decrease Risk • Risk Narratives • Evidence Mapping • Screening • Ratings • Rankings • Enhanced Criteria Ranking • Operational Risk Management (Risk Matrix) • Develop a Generic Process • Qualitative Assessment Models • Multi-Criteria Decision Analysis

6. For Any Method • Necessary preparation! • Identify the problem • Identify the goals • Identify the questions to be answered

7. Increase or Decrease Risk • For some problems it may be enough to know if things are getting better or worse • Identify the direction of change in a risk and the specific reasons for it • Storm damage has weakened structure • Funding uncertainty clouds future • Clarifies thinking and rationale • Not good for netting changes

8. Risk Narratives • What can go wrong? • How can it happen? • How likely is it? • What are the consequences? • Use simple narratives that answer these questions honestly • Tell story of existing risk • Tell story of mitigation effectiveness (risk reduction) • Tell story of residual, transferred or transformed risk

9. Evidence Maps • A risk evaluation technique that identifies and communicates how experts evaluate current scientific evidence on chosen topics. • The evidence basis-the number and quality of relevant scientific studies • The pro- and con-arguments-with supporting and attenuating arguments • The conclusions-about the existence of a hazard with remaining uncertainties identified. Source: Risk evaluation of the health effects of mobile phone communication (10/2005) by Peter Wiedermann, Holger Schütz, and Albena Spangenberg

10. Core Elements • Evidence base or data • Pro and con arguments • Includes supporting or attenuating arguments • Conclusions with remaining uncertainties

12. Ordering Techniques • Screening • Rating • Ranking • Identify hazards, pathways, mitigation measures, potential risks and the like that are of interest to decision makers

13. Screening • Process of separating elements into categories of interest and no interest through systematic elimination • Requires • Items to be screened • Carefully defined categories (yes/no) • Criteria for screening • Evidence for the criteria • An algorithm for using the criteria to separate the items into the desired categories

14. Screening Algorithms • Domination procedures (better/worse on all criteria) • Conjunctive procedures (meets all criteria thresholds) • Disjunctive procedures (meets a least one criterion threshold) • Elimination by aspects (set cut-off value for most important criterion and eliminate, then next most important criterion, etc.) • Weighting rules (rank against all criteria then rank alternatives)

15. Rating • Systematic process of separating elements into multiple categories of varying degrees of interest • Individuals are rated • High, medium, low, no risk • Requires • Items to be rated • Carefully defined categories (non-ordinal is okay) • Criteria for rating • Evidence for the categories • An algorithm for using the criteria to separate the items into the desired categories

16. Ranking • Systematic process used to put items in an ordinal sequence • Rated items are ranked • Rank categories or each individual item • Simple when objective measures of a risk or other characteristic of interest are available • Requires • Items to be ranked (alternatives) • Carefully defined science-based criteria for ranking • Evidence of each item’s measurement or rating for each criterion • Differential weights for criteria when appropriate • A synthesis algorithm

17. Enhanced Criteria Based Ranking • Criteria • Ratings • All Possible Combinations of Ratings • Ranking • Evaluate Reasonableness of Ranking • Add Criteria • New Combinations of Ratings • New Ranking

18. Question? • Which lock gates in division present the greatest potential risk to health and safety and therefore should be repaired first?

19. Step One: Criteria • Assume criteria equally important (or not). • Reflect most important aspects of evaluating risk. • Define H, M, L scenarios for each criterion. • Use three or four evidence-based criteria.

20. Step Two: Rating • Use expert judgment to critically evaluate the available information • Develop estimates for each “hazard” against criteria • Use letters or numbers but numbers do not represent an absolute measurement of risk only a relative means for comparison

21. Greatest Risk HHH HHM,HMH,MHH HHL,HLH,LHH,HMM,MMH,MHM HLM,MHL,HML,LMH,MLH,MMM,LHM HLL,LHL,LLH,MML,LMM,MLM MLL,LML,LLMLeast Risk LLL Step Three: All Possible Combinations This is for equally weighted criteria. Unequal weights yield different listings.

22. Step Four: Rank Subjectively • Establish rank according to descending relative risk • Identify subjective clusters.

23. Step Five: Add Criteria? • Look at rankings, do they make sense? • Have you thought properly about this issue? • If they do not, perhaps you did not consider all the most relevant criteria • A new criteria may be added to more accurately reflect the assessors rationale for ranking

24. Step Five: Add Criteria? (cont) • Suppose the following was added to our example • Criterion 4: Cost of emergency repair • H = Major disruptions to navigation or power, much higher costs to repair • M = Much higher costs to repair • L = Same as scheduled repair

25. Step Six: New Ratings

26. Step Seven: New Ranking

27. You are working a on a beneficial uses of dredged materials study that is using good quality navigation maintenance dredging material to create wetlands in a wildlife refuge. Over the last several decades 7000 acres of coastal wetlands have been lost. You have limited budgets and no money for engineering studies. The risk of greatest concern is that the wetlands will not be established. Your task is to decide where you will place the material to establish wetlands. You will use hay bales to establish a containment structure adjacent to the shoreline, then you will pump materials behind the bales, the emergent land will then be planted. You will be ranking 20 different sites and you want to identify those sites with the greatest risk of failure or, alternatively, with the greatest chance of success. Using the methodology of the enhanced criteria hazard ranking method develop three criteria that will help you to identify the most hazardous locations for these wetlands. Then define a high, medium and low scenario for each of these criteria

28. Operational Risk Management (ORM)

29. Steps • Determine purpose and use of matrix • Identify the question to be answered • Define consequences of interest • Identify consequence ranges and definitions • Identify likelihood ranges and definitions • Identify levels of risk in the cells of the matrix

30. Your DE Has Seen This • “Mishap Risk” • DOD "Standard Practice For System Safety” • MIL-STD-882D 10 February 2000

31. Consequence Severities

32. Probability Levels

33. Risk Assessment Values • Each risk you assess is placed in a cell and managed accordingly

34. Risk Levels

35. Another Example Source: Assessing Environmental Risk, A Lecture to the Irish Environmental Law Association By: L. M. Ó Cléirigh 29 June 2004

36. Risk Matrix

37. Three Axioms • Weak consistency • Betweenness • Consistent coloring • 3x3 and 4x4 should look like this to minimize problems Source: What’s wrong with risk Matrices? By Louis Anthony Cox, Risk Analysis Vol. 28 No.2, 2008

38. The Risk Management Point ofMatrix

39. Recently, Congress passed the National Levee Safety Act, which for the first time directed the Corps to inventory all private levees. In this case we have a programmatic level risk assessment and management problem and we will never have detailed data and analysis for a full blown risk assessment at every location. Given that the levee assessment program is in its infancy, and given the reality of limited data over time, use the ORM approach to devise probability and consequence categories that could be used for an initial qualitative risk assessment of these levees once they are identified.

40. Probability of Adverse Impact Consequence of Adverse Impact Risk = X Age x Condition x Usage x Event Economic Environmental Perceived Damage Damage Damage Potential Potential + + Generic Process

41. Qualitative Assessment Models • Probability hazard exists-rank as H,M,L • Probability adverse consequence occurs if exposed-rank as H,M,L • Probability exposure occurs-rank as H,M,L • Overall risk estimate, integrate hazard, consequence, exposure- rank as H,M,L

42. MCDM/MCDA • MCDA helps people choose among a set of pre-specified alternatives • Decision making relies on information about these alternatives • Quality of information can be scientifically-derived hard data to subjective interpretations • Outcomes of decisions may be certain (deterministic information) or uncertain represented by probabilities and fuzzy numbers • MCDA can assist in information processing and may lead to better decisions

48. Take Away Points • Not all risk assessment needs to be quantitative • Develop a few consistent techniques for your usage

49. Questions? Charles Yoe, Ph.D. cyoe1@verizon.net