Transcript Risk-Issue-Managemen..

Strategic Risk Management
A New Approach to Risk
Controversies for Organizations
Block Course (January 4, 2000)
William Leiss
• NSERC/SSHRC/Industry Research Chair in
Risk Communication and Public Policy
• Faculty of Management, University of
Calgary
• President, Royal Society of Canada
• www.ucalgary.ca/~wleiss
• [email protected]
The Main Points
• Risk Management [RM] is different from
“Risk Issue Management” [RIM]
• RM deals with a risk domain where risk
assessment governs decision-making
• RIM deals with a risk controversy where the
outcome results from strategic advantage
The Main Points (continued)
• “Failing” in risk controversies can be very
expensive!
• Solutions (reducing exposure) include:
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Understanding the difference;
Anticipating emergent issues;
Becoming fully engaged;
Being proactive;
Staying in for the long haul.
Cases and Illustrations
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Dioxins (MCMM Chap 3)
PCBs (MCMM Chap 8)
Silicone breast implants (MCMM Chap 5)
Alar and apples (R&R Chap 6)
BSE & CJD (MCMM Chap 1)
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MCMM = “Mad Cows and Mother’s Milk,” by Powell and Leiss (1997)
R & R = “Risk and Responsibility,” by Leiss and Chociolko (1994)
Recent and Current Cases
• MMT (website)
“MMT, A Risk Management Masquerade” (September 1999)
• Fisheries Management, esp. coasts
“Between Expertise and Bureaucracy” (January 1999)
• Climate Change (website)
“The Climate Change Policy Mess” (April 1999)
• “GM foods”
Work in progress (November 1999)
Risk Domain / Risk Controversy
• Dioxin risk assessment • Dioxin remains high
prompts action against
on issue agenda, run
occupational exposure
by Greenpeace, for
and environmental
chemical and plastics
buildup 1965-1990, no
industries down to the
significant human
present, with major
health, environmental
investments to reduce
risks thereafter
to non-detect levels
Risk Domain / Risk Controversy
• PCBs: early action to
discontinue use; deal
with persistence in
environment, update
the risk assessment,
find safe ways to
incinerate or otherwise
dispose of stored
material
• Misunderstandings,
poor communication
on acute exposure risk
makes disposal moves
difficult or impossible
to implement easily;
incremental risk from
unsafe storage
Risk Domain / Risk Controversy
• Silicone breast implant • Multi-billion dollar
risk assessment, based
legal settlements
on epidemiology, for
against manufacturers
“systemic” health
based on jury awards
risks, shows no
in U. S. for systemic
significant risk (nonrisks
systemic risks
validated)
Risk Domain / Risk Controversy
• ALAR and apples:
risk assessments, e.g.
by Health Canada, do
not show clearly any
significant excess risk
(childhood cancer)
• Controversy builds
over the 1980s until
CBS “60 Minutes”
program, masterful
publicity campaign by
U. S. NRDC, product
withdrawn from
market by Uniroyal
Risk Domain / Risk Controversy
• BSE & CJD: scientific
risk assessment foiled
by incomplete dose /
response and exposure
characterization; poor
regulatory oversight;
massive uncertainties
and mystery about the
toxic agent
• “Mad cow disease”
concern fueled by UK
government statements
that “British beef is
perfectly safe”; costs
of over £10 billion;
spillover to GM foods
issue due to lack of
trust in government
Risk Domain / Risk Controversy
• MMT, replaced lead in • Federal politicians
gasoline; five separate
played the “risk card”
and credible Canadian
(a game of bluff) and
risk assessments 1970s
lost; the $20m paid to
to present, have shown
Ethyl is less important
no significant risk to
than the mismanagehealth or environment
ment of the issue and
from manganese
the undermining of
emissions
good risk assessment
Risk Domain / Risk Controversy
• Fisheries management: • “Interference” with the
large uncertainties in
science within governthe scientific models
ment, responding to
for dynamics of wild
pressures from the
fish populations, for
competing stakeholder
setting the annual
interests wishing to
allowable catch,
exploit the fishery;
especially for the
very serious economic
coastal fisheries
losses on both coasts
Risk Domain / Risk Controversy
• Climate Change, high- • Impoverished public
consequence risk with
understanding, due to
massive uncertainties,
failure of governments
very high costs for any
to explain complexity,
meaningful actions;
uncertainty, possible
severe test for decision
costs of both action
making, public policy,
and inaction: it will
and the precautionary
get much worse yet!
principle
Risk Domain / Risk Controversy
• GM Foods: complex
new technology with
many “dread risk”
elements (cloning,
irreversible alteration,
“playing God”); food
an especially sensitive
consumer domain;
rapid pace of progress
• Monsanto and others
have run roughshod
over public concerns,
but now momentum
reversed in Europe;
billions of dollars of
share value erased in
the past year, very
uncertain future
What went wrong here? (1)
• First, risk assessment was supposed to give
the right numbers for risks, and this would
settle things, when we lined up the list of
relative risks and decided what to worry
about and what not to;
• It didn’t work because folks didn’t trust the
numbers, those who calculated them, or
those who put the “spin” on them
What went wrong here? (2)
• Second, risk perception research was to
help by explaining why and how ordinary
folks think about risks in completely
different ways from “experts”;
• It didn’t help, because the explanations did
not lead to ways of closing the gap between
risk assessment and perceived risk.
What went wrong here? (3)
• Third, risk communication was supposed to
help, by showing experts how to “package”
their risk messages more effectively and
persuasively;
• It didn’t help, because very few listened to
these clever messages or changed their
opinions about how to manage risks.
What is the lesson from all this?
• Where a risk domain engenders a risk
controversy, the institutions likely to be
held responsible (government and industry)
have two distinct and different tasks: (1) to
manage the risks responsibly, and (2) to
manage responsibly their involvement in the
issue. Both challenges must be addressed;
each demands its own type of response.
Towards Solutions
• First and foremost, appreciate what Risk
Issue Management is not: It is not the latest
in “spin doctoring” which will extricate you
from a sticky situation. In fact, it is exactly
the opposite: It tells you to jump into the
controversy, in a responsible way, rather
than hunkering down and hoping it will all
blow over.
R I M: Solutions (1)
• Understand the difference [RM / RIM]:
• When a risk controversy erupts, and it looks
like you will be involved, call your risk
issue manager first, not your toxicologist.
Understand why it is, or is likely to be, an
issue (i.e., a public concern) as well as a
risk domain that requires also good risk
management.
R I M: Solutions (2)
• Risk Issue Forecasting: Better still, don’t
wait for it to hit you in the face. Anticipate
possible events, by (a) understanding the
common features of risk controversies, from
past events, and (b) analyzing your own
business to identify potential areas of public
concern. This is equally relevant both to
industry and to governments.
R I M: Solutions (3)
• Become fully engaged: Don’t hide in the
hope that it will “blow over” or that others
will have to deal with it. This is the most
difficult lesson of all, because “instinct”
says, don’t call attention to yourself. (“Let
sleeping dogs lie” is the golden rule to
date.) But it is much harder to deal with it
after public opinion is already polarized.
R I M: Solutions (3.1)
• Example: Monsanto and GM foods.
• Monsanto has now (too late perhaps)
offered an olive branch to opponents. My
guess is that the industry will have to retreat
first, slowing the pace of development, and
taking concrete actions, in order to build a
sufficient basis of trust for conducting a
“free and open dialogue.”
R I M: Solutions (4)
• Be proactive in risk communication: Take
the time and resources to design a
responsible strategy for full engagement,
which includes deliberately calling attention
to risk factors, uncertainties, etc.; in other
words, do the “worst case scenario” work
yourself, and tell the public about it, rather
than waiting until others do it for you.
R I M: Solutions (5)
• Stay in for the long haul: Dioxins is a 30year risk issue. Greenpeace - and no one
else - have been involved without pause for
half of this time. (Also in forestry.) Without
the long view, one cannot understand the
constantly-shifting dynamic of the
controversy, and respond effectively to each
phase as it emerges.
R I M: Solutions (5.1)
• Radio-frequency fields, GM foods, human
genetic engineering, forestry practices,
climate change and fossil fuel use,
endocrine-disrupting chemicals also will
have similar lives. Even if you are not in
this business, you will be affected as a
citizen and taxpayer. Make your voice
heard so that we do things better.
R I M: Solutions (5.2)
• Governments are in the most trouble of all:
• Both ENGOs and industry are capable of
long-term issue involvement, governments
however are not (their “issue-attention”
cycle is too short). As citizens, we all need
to help and encourage our governments to
develop the capacity to be effective risk
issue managers.
Thank you.
• Please take my card with you. You can
contact me directly, and you can also visit
my website to get information on how to
obtain the publications referred to earlier.