Assessing and Managing Risk of Natural Disasters for a Workplace

Transcription

1 Session No. 629 Assessing and Managing Risk of Natural Disasters for a Workplace William Piispanen, CIH, CSP, CEA, CMIOSH Senior Director Safety URS Corporation Boise, ID Susie Vader, STS Regulatory and Environmental Manager URS Corporation Boise, ID Introduction Natural disasters happen, sometimes with advance knowledge, but often without warning. Regardless, the continuity of business operations, the protection of property, and the minimization of personnel injuries and trauma require advanced planning. Information rather than fear, early warning rather than surprise is the United Nations concept to initiate a planning process for protecting local communities on a global level from natural disasters, where the physical and social structures are self-sustained after the termination of the event. As a result, the next storm or the next flood do not become disasters, but remain as they should be manageable natural events. The extent and impact of a natural disaster can be highly variable and only marginally predictable. According to Annual Global Climate and Catastrophe Report (Aon Benfield 2014) the year 2013 reported economic losses of US$192 billion, which was 4 percent below the tenyear average of US $200 billion. The losses represented 296 separate events worldwide, which was actually higher than the 10-year average, but also set a new record of 41 weather disasters with over US$1 billion in losses. Included in this summary is super typhoon Haiyan that killed approximately 8,000 people with damage estimates of US$13 billion. This event alone left the world with an image of massive destruction that Secretary of State John Kerry described as, You can see an unmistakable example of what an extreme weather event looks like, and the reminder of our responsibility to act to protect the future (Bradsher 2013). On November 1, 2013, U.S. President Barack Obama signed an Executive Order titled Preparing the United States for the Impacts of Climate Change with the intent to pursue new strategies to improve the Nation s preparedness and resilience (The White House 2013). This followed a series of natural disasters that struck the U.S. in 2012 as shown in Table 1.

2 Table 1. The most costly natural disasters insurance losses (in USD million) in Adapted from Natural Catastrophes and Man-made Disasters in 2012 Sigma Report No. 2/2013, Swiss Re, 2013, Table 4, p. 19. Insured Loss Fatalities Event Country 35, Hurricane Sandy U.S. et al. 11, Drought in the Corn Belt U.S. 2, Severe storms, tornadoes U.S. 2,500 1 Thunderstorms, tornadoes U.S. 2, Derecho storm, tornadoes, hail U.S. 1,700 - Thunderstorms, hail, tornadoes U.S. 1, Earthquakes Italy 1, Hurricane Isaac U.S. et al. 1,000 - Thunderstorms, tornadoes U.S Thunderstorms, tornadoes U.S Thunderstorms, tornadoes U.S Storms/high winds Japan Floods caused by heavy rains U.K Floods caused by heavy rains U.K Thunderstorms, tornadoes U.S Hailstorm Canada Waldo Canyon Fire U.S Windstorm Andrea Germany Understanding the Risks Just as planning to improve the nation s preparedness and resilience are important, so too are the survivability and recovery of infrastructure, commercial enterprises, and personal property and livelihood critical. The core of a Natural Disaster Risk Management Plan should be to understand the risk of natural disasters and how the disaster risk reduction approach can mitigate the outcome. Risk in this context is defined as the interaction between a natural event and the vulnerability of the exposed element. In a workplace the exposed element could be a physical structure, property (such as equipment, people, raw materials and products), and electronic and physical data and information. In the United Nations model for community vulnerability, four components are identified for both global and local levels: (1) exposure within the natural hazard sphere, (2) susceptibility or the likelihood of suffering harm or damage, (3) coping or the capacity to reduce negative consequences, and (4) adaptation or long-term strategies to protect assets and people in the future. The first questions to ask are: What are my natural hazard risks? and What are the potential exposures? In the International Disaster Database (CRES-EM-DAT) the four natural disasters of floods, storms, earthquakes and drought were responsible for 88 percent of all deaths globally reported from 1970 to 2005 (USAID 2013). In the United States in 2012, 11 natural disasters resulted in losses in excess of $1 billion with aggregate costs in excess of $60 billion and at least 349 deaths. These data indicate that floods, storms, earthquakes, and drought are the major concerns from a global life and property loss perspective.

3 Considering risks requires understanding that natural disasters can be of two different types: sudden onset events such as storms, floods and earthquakes, or slow-occurring processes such as drought and sea level rise. From a workplace risk perspective, the sudden onset events are primarily the focus of risk management, although in some cases slow-occurring events may have impacts on long-term sustainability of operations. In some regional and local situations, other sudden onset conditions such as volcanic eruptions, landslides, ground sinkholes, avalanches, wildfires, and extreme heat or cold spells should be considered based on historical occurrences and local conditions and geography. The first step is to identify the natural hazard sphere of the operation(s), including both historical occurrences and projected future likelihood of occurrences. For flooding this may include tsunamis, seismic seiches, river overflows, flash floods, ice dams and impoundment failures. Violent storm events may include hurricanes, cyclones, tropical storms, tornadoes, hail and ice storms, sandstorms, heavy snowfall, and thunderstorms with associated lightning hazards. In the U.S. lightning causes an average of fatalities and 400 injuries each year in addition to causing wildfires. Earthquakes are usually localized and vary in severity but also may include secondary effects including aftershocks, landslides, tsunamis, fires, and large ground faults. Contrary to public perception, earthquakes are not limited to very active seismic areas (like Alaska or California) but can occur in other geographic areas as shown in Figure 1. Figure 1. US Earthquakes Causing Damage: (USGS Seismicity of the United States, )

4 The second step is to assess susceptibility to damage of the operations. In many cases, this is a physical assessment of the facility to identify potential defense weaknesses and vulnerabilities. This requires that information obtained in analyzing the natural hazard sphere of impact be used in identifying vulnerabilities. Most operations will have some sort of defense systems and emergency planning, but this assessment should determine if it is appropriate, adequate, and usable in the situation. Each operation is unique and variable over time so this assessment should be revised as conditions change. The third step is to evaluate coping strategies for an event. Dr. William Haddon Jr. described the three phases of an event as pre-event, during event, and post-event (Haddon 1980). Strategies for managing operations should consider each of these phases with regard to emergency planning and response actions during a natural disaster. The final fourth step is the adaptation of the system to the event. In this case the company s Crisis Management Plan should be able to collect and critique the actions and outcomes of the executed response to the event. There should be no Black Swans as the noted essayist and scholar Nassim Taleb describes where the event is rationalized in hindsight as though the event could have been expected but it was not addressed by the risk mitigation methods. Recovery operations are critical but this analysis requires defining goals and strategies to minimize potential future losses. Preparing a Plan of Action In a 1993 survey of 200 companies with average revenues of US$2.5 billion, 41 percent had no disaster plans. By 1997 the number rose to 51 percent, and by 2005, the number of companies who added disaster plans had tripled (Travelers Insurance, 2008). There is definitely a growing awareness of the need for disaster planning as companies realize the often quoted 1954 maxim of the noted management author Peter Drucker, The first duty of business is to survive. The guiding principle of business economics is not the maximization of profit; it is the avoidance of loss. Considering current times and natural disaster awareness and planning, companies such as Coca-Cola and Nike are focusing business continuity on the global impact of natural disasters such as water shortages due to drought or the impact of serious weather disrupting the cotton fiber supply chain (Davenport 2014). Large companies now have executive level positions with responsibilities for assessing risks of natural disaster events and the impact on resources, property, supply chains and financial stability. For smaller companies and communities the amount of information for identifying the risks of natural disasters and preparing response plans is extensive on the Internet as well as through the property and casualty insurance industry. With sophisticated monitoring and data analysis, predicting some types of natural disasters is adequate as long as quality data are available. Sudden onset disasters are harder to predict, but by using historical data and trends, planning can be designed to address potential events and design appropriate response actions. The three critical steps of preparing a plan of action are as follows:

5 1. Conduct a general exposure assessment considering the likelihood of natural hazards to which the facility could be exposed. Review historical data and current assessments plus evaluate the local conditions considering both sudden unexpected events as well as long-term changing conditions. 2. Establish a strategy to prepare the facility to respond to potential natural disasters with the objectives of limiting damage and injury prior to the event; limiting interaction of forces during the event; and planning for recovery and continuity of operations after the event. 3. Evaluate the facility and operations to determine the adequacy and usability of the protective systems in place with the plan designed to continually monitor and improve protective systems as risk information is collected and updated. The plan must have clearly defined roles and responsibilities. Many companies fail to adequately plan because their risk perception is biased because either the event has not happened, or if it did, a severe loss was avoided because it struck a different location. Companies also assume employees will know what to do in an emergency situation or that the insurance will take care of the problems. This demonstrates the critical misunderstanding of the difference between disaster recovery and business continuity. Insurance data show that many companies do not survive natural disasters due to extended downtimes, market disruptions, and hard-to-insure exposures. Resources There are extensive informational resources for both identifying natural hazard risks as well as preparing response and business continuity plans. One of the first places to start is the local or state Hazard Mitigation Plans. The U.S. Federal Emergency Management Agency (FEMA) provides extensive resources for communities, states, and businesses to develop long-term strategies designed to reduce disaster losses and to break the cycle of damage reconstruction and repeat damage. There are many Internet resources for natural hazard risk management and mitigation planning, some of which are included in the following appendix. Other resources include insurance companies and brokers who publish regular annual reviews and status updates that can provide timely information and predictions. Appendix of Natural Hazard Risk Management Resources General FEMA: NOAA, NWS: OSHA: Emergency Action Plan Checklist - CDC: USGS:

6 Mobile Application: FEMA Earthquakes How to Guides to Protect Your Property or Business from Earthquakes: USGS: Earthquake Hazards Program: Mobile applications: QuakeFeed, USGSSeismic, Red Cross Earthquake, Earthquake Maps and Alerts, Earthquake Lite Floods USGS WaterAlert: National Flood Insurance Program: Mobile applications: Flood Watch Lightning National Weather Service; NOAA: National Lightning Safety Institute: National Fire Protection Association (NFPA) 780: Standard for Installation of Lightning Protection Systems Underwriters Laboratories: UL-96: Requirements for Lightning Mobile applications: Lightning Finder Severe Storms Storm Prediction Center (real time): Severe Weather website: Mobile Applications: NOAANow, eweather, WindChill, Accuweather Tornadoes FEMA: Mobile applications: American Red Cross Tornado; NOAA Weather Alert Plus Wildfire NFPA: USGS: CDC: Fighting Wildfires: Mobile applications: US Fires, WildfireInfo Current wildfire information: Winter Weather CDC: Winter Storms The Deceptive Killers: Extreme Cold: A Prevention Guide to Promote Your Personal Health and Safety:

7 Bibliography Aon Benefield Annual Global Climate and Catastrophe Report. Chicago, IL: Impact Forecasting. Bradsher, K Kerry Calls Typhoon a Warning of Climate Change. The New York Times. December 19, 2013 (accessed December 23, 2013) ( Davenport, C Industry Awakens to Threat of Climate Change. The New York Times. January 23, 2014 (retrieved February 25, 2014) ( Haddon, Jr. W The Basic Strategies for Reducing Damage of All Kinds. Hazard Prevention. 16(1). Swiss Re Natural Catastrophes and Man-made Disasters in 2012: A Year of Extreme Weather Events in the US. Zurich, Switzerland. Sigma Report No. 2/2013. Travelers Insurance Risk Control: Strategy Guide for Business Continuity Planning. Hartford, CT: Travelers Insurance. U.S. Agency for International Development (USAID) CRED Crunch: Disaster Data: A Balanced Approach. Brussels, Belgium: CRED, Issue No. 33. U.S. Geological Survey (USGS). U.S.Earthquakes Causing Damage: (retrieved February 6, 2014) ( The White House, Office of the Press Secretary Preparing the United States for the Impact of Climate Change. Washington DC: White House.