Risk like Money, is a Human Contruct
One of the stranger beliefs that emerged in the risk 'business' in the last decades of the 20th century was the idea that risk assessments could be wholly scientifically objective.That is, a belief that risk is purely a physical property of the natural material time-space universe that can be independently and objectively measured.
Australian parliaments collectively seemed to have adopted this scientific risk view as demonstrated by the insistence under OHS legislation that all 'hazards' should be risk assessed on all occasions. Not complying is usually an offence in itself, irrespective of the precautions adopted to address the 'risk'. The concept seems to be that similar risks in different places would be similarly assessed and judged by different people enabling similar appropriate precautions to be implemented. Human cultural and cognitive differences ought not to be significant.
Amongst other things, if all this were true, two independent experts assessing the identical threat scenario would arrive at similar risk characterisations. in practice, this simply does not happen, to the frustration of regulators, senior decision makers and the community generally. And, it is not a position which the courts have ever necessarily agreed.
The review by Maxwell QC of the Victorian OHS Act in 2004 culminating in the adoption of the new OH&S guidelines in July 2007 appears to confirm this. (Chris Maxwell is now a Victorian Supreme Court Judge and President of the Court of Appeal).
The Regulatory Impact Statement, Occupational Health and Safety Regulations 2007, Equipment (Public Safety) Regulations 2007 indicates that:
'Further, mandating risk assessments may be a barrier to the implementation of risk controls. For example, where hazards and risks are well known and there are universally accepted control measures, a duty holder may identify the hazard and implement the appropriate control without doing a risk assessment. In there cases, a risk assessment would yield no new knowledge and would be likely to delay the implementation of controls.'
He is less interested in risk and more interested in precautions. This has been the common view of judges. For example, High Court Chief Justice Sir Harry Gibbs in 1982 noted:
'Where it is possible to guard against a foreseeable risk, which, though perhaps not great, nevertheless cannot be called reomote or fanciful, by adopting a means, which involves little difficulty or expense, the failure to adopt such means will in general be negligent.' Turner v. The State of South Australia (1982) (High Court of Australia before Gibbs CJ, Murphy, Brennan, Deane and Dawson JJ).
Negligence does not seem to arise because some (objective) risk target wasn't met. It arises because the precautions in place were not commensurate with the risk. Organisations are therefore required to demonstrate due diligence. The diagram above attempts to show the usual paths by which such legal due diligence is demonstrated. Unless called up by statute, risk targets in this context are a step on one of the possible due diligence journeys and not ends in themselves.
Project Risk Now a Second Currency
Money isn't real, it does not exist in a state of nature. It is an intellectual device mankind has adopted to help make sense of complex decisions. For the most part it seems to work well enough.
It seems that risk now falls into the same category. Risk has become a second currency at least for projects. If a new project is mooted for example, the first hurdle is how much will it cost (meaning what community resources are required) and the second question is, has there been a risk sign-off? Risk sign-of includes compliance with statute and common law provisions in addition to probity and other issues. These days, both money and the risk hurdles must be met for the project to proceed. |
