Preparing for high impact, low probability events
This new report from the think tank, Chatham House, received in depth coverage in the Guardian, and highlights how lean, just in time approaches to public services and business put the UK at risk when disaster strikes. Fuel shortages, low stocks of emergency food, and inadequate water storage networks are among the difficulties that can lead to social breakdown and chaotic infrastructure.
As Permaculturists begin to look beyond their veg patches and wake to the bigger picture, this report makes important reading:
Preparing for HILP events
A summary of the Chatham House report January 2012:
The frequency of ‘high-impact, low-probability’ (HILP)
Events in the last decade signal the emergence of a new ‘normal’. But lower-profile, persistent events such as flooding, droughts and cyclones have been shown to have equally serious impacts, raising new questions about the way in which we perceive risk and prepare for disruptive events.
Events can manifest themselves as ‘impossible’ to predict– and as known hazards such as floods, hurricanes or earthquakes, which, owing to the low likelihood of occurrence or the high cost of mitigating action, remain un- or under-prepared for. There are also crises such as pandemics which typically unfold over weeks, months or years, for which the scope or timing remains unknown even with preparations.
The 2011 drought and subsequent food crisis in East Africa have also raised questions about how the international community responds to ‘slow-motion’ disasters which build up over time.
Globalization of production and optimization of
supply chains have increased systemic efficiencies in the global economy but have exacerbated the speed and scope of contagion in the event of shocks. They pose particular threats to key industries and to the just-in-time model. The consequences of HILP events spread rapidly across sectors and borders, often with second- or third-order impacts that are hard or impossible to predict. In an increasingly connected global economy and society more people are) affected by shocks, irrespective of whether ‘high-impact events’ are actually becoming more frequent or not.
Despite efforts to improve understanding and reform risk management, governments and businesses remain insufficiently prepared to confront HILP crises and effectively manage their economic, social, political and humanitarian consequences. Current contingency planning often assumes the return of the status quo after a crisis. But this approach may be inadequate in a world of complex economic and social risks, especially when combined with slow-motion crises like climate change and water scarcity which build over many years, but are likely to result in a higher frequency and greater severity of shocks. Often there are several steps between an event ‘trigger’ and the social consequences that result.
Recent shocks highlight the need to plan also for worst-case scenarios given the nature of our increasingly globalized and interconnected world.
The impacts of future crises are unlikely to remain local – regardless of their origins – and will likely affect more than one country or region. The vulnerabilities of globalized supply chains and particularly the just-in-time model are likely to be exposed by any disruption lasting more than a few days.
One week seems to be the maximum tolerance of the ‘just-in-time’ global economy.
How to balance the cost of resilience and the impact of worst-case scenarios.
Difficulty of articulating risks to the public.
Whether over climate change, bird flu or terrorism threat levels, the public would benefit from increased and quality coverage of scientific opinion by the media, but acting rapidly without a clear strategy will affect credibility. Communications strategies across all forms of traditional and social media should be built into scenario planning and exercises. Organizations that engage with the public and key stakeholders in normal times, (building their presence, reputation and networks), enjoy a significant advantage when disaster strikes. This is especially true of social networks. Stakeholders also need a contingency plan in case systems are compromised; recent crises have shown that modern communications networks can be fragile.
Improving information and coordination
Governments must also ensure that science and uncertainties are translated into a set of recommended actions. Identifying ‘no-regret’ options in such strategies makes sense whether or not a specific threat actually materializes in the future. For example, existing social safety net programmes can build contingency arrangements so that the delivery of cash transfers or execution of public works same capacity can be used to cope with ‘man-made’ crises such as food, fuel and financial shocks. Early warnings, which are by their nature uncertain, must be quickly followed by recommended steps, making it easier for decision-makers to take timely action.
Navigating conflicting interests amid uncertainty:
The existence of competing and mutually exclusive claims to certainty is often unavoidable during any crisis situation. As the 2010 ash cloud over Europe demonstrated, pre-existing rules and guidelines will come under severe pressure during a crisis particularly if worst-case scenarios have not been explored and in the absence of flexible but credible decision- making structures. Policy-makers have some freedom to take emergency measures in response to a short-term crisis, but uncertainties and conflicts of interests will inevitably surface during a longer-term event, complicating the response process as political and economic pressures grow.
Creating a robust process for resilience:
To get the right balance between planning for specific ‘known’ events and creating generic responses for events that are rare, governments must strengthen planning processes to anticipate and manage shock events: from clarity in the chains of command (especially where multi-jurisdictions are involved) to activating and connecting independent knowledge networks with policy-makers, to building common approaches in the management of complex risks.
There are common activities and actions that are relevant in the majority of disruptions. For example, evacuation processes will remain largely the same whether for hurricanes, earthquakes or a terrorist attack. However, governments and stakeholders can identify robust – but not necessarily ‘threat-specific’ – processes to mitigate disruption.
Stress-testing risk mechanisms
A multi-sector voluntary agreement on participation in planning, exercises and crisis response should be established
Enable rapid financial and practical support where national organizations are unable to cope or where the consequences are cross-border.
Sharing best practice and, where relevant, capacity,
Build a robust website (for example, a ‘dark site’ prepared in advance but only made available to the public when a crisis hits).
National science institutions should work together to develop, strengthen and promote effective guidelines for the communication of scientific and risk-related information for media and science institutions during a crisis, reflecting the new opportunities and challenges presented by social media.
There should, for example, be a one-stop centre to aggregate information and advice from official sources with information provided by individuals via social media networks. This would become known in advance as the go-to place in a crisis for stakeholders, with enhanced capacity to meet huge increases in traffic during a crisis.
Businesses should undertake cost-benefit analysis of options such as shifting to regional hubs and storage centres for non-perishable goods to avoid urgent intercontinental transportation. While transport risks will be more difficult to overcome for perishable goods, in some instances different packaging and storage methods may permit delivery by land and sea instead of air. Indicators of business resilience should be developed that can actually be audited or reported on and passed on to stakeholders or the stock market, to bolster incentives for investing in resilience.