Cim2013 oboni oboni_zabolotoniuk

(c)Oboni Riskope Associates Inc.(c)Oboni Riskope Associates Inc. www.riskope.comwww.riskope.com foboni(a)riskope.com Pagefoboni(a)riskope.com Page 11 of 22 2013/04/XXof 22 2013/04/XX
Can We Stop Misrepresenting RealityCan We Stop Misrepresenting Reality
to the Public?to the Public?
By Franco Oboni,By Franco Oboni,
Cesar Oboni, Oboni Riskope Associates Inc.,Cesar Oboni, Oboni Riskope Associates Inc.,
www.riskope.comwww.riskope.com
Susan ZabolotniukSusan Zabolotniuk szabolotniuk@gmail.comszabolotniuk@gmail.com

Let's start with a point we probablyLet's start with a point we probably
all agree upon:all agree upon:
There has been approximately half aThere has been approximately half a
century ofcentury of
PUBLIC DISTRUSTPUBLIC DISTRUST

There was a time Public consideredThere was a time Public considered
Scientists trustworthy experts.Scientists trustworthy experts.

Meanwhile governments wouldMeanwhile governments would
oftentimes neglect risk assessments,oftentimes neglect risk assessments,
leading, forleading, for
example, toexample, to
disastrousdisastrous
residential zoningresidential zoning
decisions,decisions,
generating vivid,generating vivid,
media-friendymedia-friendy
consequences .consequences .

This simplified ISOThis simplified ISO
31000 scheme31000 scheme
shows theshows the
consideration givenconsideration given
to communicationto communication
and consultation atand consultation at
every stage of Riskevery stage of Risk
Assessment.Assessment.
Communication
andconsultation
RiskAssessment
Monitoringand
review
Documented
risk assessment
Communication and consultation wereCommunication and consultation were
considered, but rarely truly fosteredconsidered, but rarely truly fostered

Standard practice CommunicationStandard practice Communication
evolution through Projects and Operationsevolution through Projects and Operations

During the same period many IndustriesDuring the same period many Industries
became satisfied with Risk Assessmentsbecame satisfied with Risk Assessments
performed following “Common Practices”performed following “Common Practices”
based on "PIGs"based on "PIGs"

PIGs add confusion and mislead becausePIGs add confusion and mislead because
they are arbitrary. Just ask one question:they are arbitrary. Just ask one question:
How is the prioritization criteria defined?How is the prioritization criteria defined?

If we look at historic and recent sets of tolerabilityIf we look at historic and recent sets of tolerability
criteria and real probability-consequences data...criteria and real probability-consequences data...

Cases will beCases will be
challengedchallenged
in Courtsin Courts
of Law againstof Law against
companiescompanies
using PIGs forusing PIGs for
theirtheir
riskrisk
assessmentsassessments
and theand the
resultingresulting
decisions.decisions.
...and plot the PIG on top, “hazardous”...and plot the PIG on top, “hazardous”
discrepancies become evident!discrepancies become evident!
?

Using “frequency” instead of “probability”Using “frequency” instead of “probability”
creates confusion. They are not synonyms.creates confusion. They are not synonyms.
Frequency is not equal to probability in theFrequency is not equal to probability in the
high range; and in the low range it ishigh range; and in the low range it is
misleading!misleading!

PIGs also lead to the so called “overwhelmingPIGs also lead to the so called “overwhelming
syndrome” as they lack of definition, they aresyndrome” as they lack of definition, they are
“binning exercises”.“binning exercises”.
PIGs can often result in too many “High” andPIGs can often result in too many “High” and
“Medium” risks.“Medium” risks.
Tackling, prioritizing and allotting resources to aTackling, prioritizing and allotting resources to a
large insufficiently differentiated portfolio of riskslarge insufficiently differentiated portfolio of risks
generally ends with:generally ends with:
- rejection of the results and- rejection of the results and
- no remedial action!- no remedial action!

InformationInformation
ConfusionConfusion
Common Practices and sometimes codesCommon Practices and sometimes codes
have been adding to the brewinghave been adding to the brewing
confidence crisis by delivering misleadingconfidence crisis by delivering misleading
and fuzzy information.and fuzzy information.
Optimum level
of information

Many of these problems can be solved by:Many of these problems can be solved by:
- Developing a transparent tolerability- Developing a transparent tolerability
thresholdthreshold
- Analyzing in a comprehensive way- Analyzing in a comprehensive way
potential consequences including socialpotential consequences including social
ripple effectsripple effects
- Using sensible quantitative analyses and- Using sensible quantitative analyses and
accepting the inevitable uncertainties.accepting the inevitable uncertainties.

It is possible to do way better then theIt is possible to do way better then the
obsolete Standard Practicesobsolete Standard Practices
and the next slide shows one exampleand the next slide shows one example
from a real life holistic risk assessment.from a real life holistic risk assessment.
The results you will see INCLUDE ofThe results you will see INCLUDE of
course a specifically developedcourse a specifically developed
client's tolerability threshold.client's tolerability threshold.

Acme Inc.
4 Divisions:
A,B,C,D;
Diversified
3 countries;
International
Exports.
Sources of ThreatsSources of Threats
Media VulnerabilityMedia Vulnerability
Potential Losses per ProductPotential Losses per Product
Hazardous SectorsHazardous SectorsLogistic RisksLogistic Risks

Two general additional considerations:Two general additional considerations:
Designers performing Risk Assessments on theirDesigners performing Risk Assessments on their
own projects/designs oftentimes constitute a conflictown projects/designs oftentimes constitute a conflict
of interest that has been “picked-up” by publicof interest that has been “picked-up” by public
opinion.opinion.
Without a third party perspective Risk AssessmentsWithout a third party perspective Risk Assessments
most likely miss big picture items.most likely miss big picture items.
The process should be consultative, but too manyThe process should be consultative, but too many
times projects' developers “forget” that aspecttimes projects' developers “forget” that aspect
because of the “overwhelming syndrome” we willbecause of the “overwhelming syndrome” we will
discussed earlier.discussed earlier.

Risk Communication cannot beRisk Communication cannot be
paternalistic... but a partnershippaternalistic... but a partnership

Partnering with the public requiresPartnering with the public requires
communication, consultation andcommunication, consultation and
participation.participation.

Communication has to be understandableCommunication has to be understandable
by all partners.by all partners.

Trust andTrust and
Credibility mustCredibility must
be earned bybe earned by
using modern,using modern,
transparent andtransparent and
understandableunderstandable
methodologiesmethodologies
which includewhich include
and fosterand foster
communication.communication.

Misrepresentation has to be avoided:Misrepresentation has to be avoided:
Unbiased “big picture”Unbiased “big picture”
view of risks,view of risks,
in depth consequencein depth consequence
andand
tolerability analysestolerability analyses
are necessary.are necessary.

Long term is critical. If we do not evaluate itLong term is critical. If we do not evaluate it
right, our children will have to bear it.right, our children will have to bear it.

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