Introduction to risk management

1. Introduction to risk management Mikko Pohjola, Jouni Tuomisto THL

2. Conventional perspectives to risk management

3. RA by Red book

4. Million euro cycle • Lessons from the centre of excellence of environmental health risk analysis

5. Orange book • Role and importance of deliberation

6. IRGC • Interface of assessment, management, and government

7. Open risk management

8. Definition of risk 1 • Covello and Merkhofer

9. Definition of risk 2 • Jouni Tuomisto

10. Definition of risk 3 • In this course, we use the word risk in a loose/broad sense. • Risk = impact (good, bad) • The probability of risk may be low, high, or even 1. • Why? Because you treat favourable and harmful, likely and unlikely impacts all in the same way.

11. Questions in risk management • What is the problem? • Who is responsible for the problem? • What are the possible decisions/actions? • What are the objectives? • What are the outcomes to be monitored? • Who are influenced by the problem? • Who are influenced by the actions?

12. Risk management of bus traffic in Kuopio • What are the problems? • What are potential actions? • What are outcomes of interest? • Who decides? Who acts?

13. 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

14. Q R A Open risk management: overview

15. Risk management • Also, we could use the term ”impact management” instead of ”risk management”. • This is just a matter of tradition. • (But if we had called this course Open assessment and impact management, the professors hadn’t been interested in including the course in ToxEn MSc studies.)

16. Open risk management: context • All risks emerge in a society (or group). • The society observes the risks, valuates them, is afraid of them, suffers from them, manages them, and adapts to them.

17. Definition of open risk management • How can scientific information and value judgements be organised for improving societal situations by identifying potential decisions and relevant outcomes in a situation where open participation is allowed? • Emphasis: The decision situation should be clarified.

18. Machine for risk management within a society • Identify a problem. • Formulate it as a (decision) question. • Perform argumentation about it. • Create hypotheses. • Attack and remove poor hypotheses. • Make conclusions. • Act based on the conclusions.

19. Definition of open assessment • How can scientific information and value judgements be organised for improving societal decision-making in a situation where open participation is allowed? • Emphasis: The decision situation is clear, focus on choosing good options.

20. Difference between OA and ORM • There is no clear separation between open assessment and open risk management. • If your decision options are clear (for the moment), you are more on OA side. • However, be prepared for surprises and revisiting your original questions (RM).

21. 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.

22. Assessment, management, and communication • A traditional view separates • Risk assessment (by scientists) • Risk management (by decision-makers) • Risk communication (by all, but especially to stakeholders) • However, in trialogue there is no need for separation.

23. There is no science-policy interface • The most important tools for making science and making policy are the same. • Making artificial separations only confuse and slow down efficient actions. • This is not obvious, though. Why?

24. What are science and policy? • ”Science is what a scientist does.” • ”Policy is what a politician does.” • We know how is a scientist and who is a politician. We can answer the question by observation. • This is a reasonable assumption, if the current way is the best way to make science and policy. Is it?

25. What is the best way to make science and policy? • You cannot answer by observing. • However, you can find problems by observing and then try to understand why they exist. • You can start from the ultimate objective and then try to find efficient methods to reach it.

26. 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

27. Independence of assessors? • How to ensure that science is objective? • What if assessments are only made to justify existing decisions? • Can political pressures be overcome if scientists step out of the ivory tower? • (Should this topic be discussed in more detail eg. In a decision analysis lecture?)

28. 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

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