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Societal risk – An industry view

My own background:

Chemical industry for 39years; just left SABIC where I had been SHE Director, so…

given the nature of the activities operated by SABIC up on Teesside, I have some experience of dealing with the issues we are seeking to address as part of this project.

SABIC also has large petrochemical operations in Holland where the same issues are being addressed in conjunction with governmental bodies and other stakeholders, so having the opportunity to share experiences with SABIC colleagues in the Netherlands has been useful.

I have got a few points to make as I view this whole issue from an Industry perspective. Firstly let me say that CIA representing UK’s chemical industry is very grateful that it was afforded a chair at the table of the Technical Advisory Group, and I personally have been very pleased to be filling that chair and bringing what experience I can to the Group.

So my first point is to say that UK chemical industry wholeheartedly supports this current initiative to address Societal Risk and is very pleased to have been involved from the outset.

However, other major hazard industries outside the chemicals sector, for example refining, have exactly the same issues, and therefore the points I make here are genuinely from a broad industry perspective and not just my own chemical sector Furthermore, you would not be surprised that in representing the industry view, one of the fundamental points I make is that while industry supports developing societal risk policies, this must be with the caveat of giving due weight to industry’s perspective as a key stakeholder.  Despite the current economic difficulties the chemicals industry alone contributes a huge balance of payments surplus to UK plc (c. £5 billion per year), and UK refineries have a key strategic role to play in ensuring fuel supplies for the lives we all lead. Industry is not simply self-serving in its wish to have a significant say in the development of societal risk policies.

My second point is directly related to this. Now that site trials for the project are beginning, it is worth reminding ourselves that Industry in the form of the companies involved in the trials, have got a lot to offer the project in terms of expertise, experience, and knowledge. I’m sure the project will achieve optimum success when a co-operative and inclusive approach of all stakeholders is adopted. (the contribution which industry can bring to this should not be underestimated).

Use of the word “stakeholders” invites consideration of who are the stakeholders associated with Societal Risk. For me, stakeholders include Local Communities, Developers, Regulators, Politicians. But, since Societal Risk includes on site risks as well as off site risks, the stakeholders include Operators of the major hazard sites affected. So I am pleased that the wide and diverse nature of the stakeholders involved in this project has been well recognised in this discussion today. It will be a challenge at times to harness the diffuse interests of the various stakeholders, but it is essential that this is done if the project is to be truly successful.

That causes me to reflect on the word “Risk” as part of the title of this project…

Understanding of the term “risk” by all of the stakeholders is essential. Some people confuse the terms “hazard” with “risk” and don’t consider likelihood, but even worse, some people would wish to substitute the word “certainty” for “risk”. What I mean by this is that some people in a number of walks of life, want to be totally assured or have certainty that theoretically possible scenarios will just never ever happen in practice. We all know that is why people in this room use the term “risk”. But as part of the project, there will be a need to provide education to ensure that all parties involved, accept that it is risk we are dealing with and we can’t be seeking absolute certainty when considering various scenarios. Mathematically the risk of a scenario manifesting itself can be demonstrated to be extremely low and therefore acceptable to us. We need also to ensure that other stakeholders understand and accept this approach as well, and be prepared to defend it to others.

We have been hearing today that although progress is being made on this project, we would have liked to be further along the track. Nevertheless, we must recognize that there is still no clear agreement on which methodology is to be used for determining societal risk. Therefore it is important to trial a number of options in different situations to determine which methodology (or methodologies) should be used. This will cost time and money but it is essential to do this if the process is to have the necessary credibility with all Parties in the long term.  Industry is not pushing for unrealistic early answers or proposals in the societal risk developments, but we are emphasising the importance of getting the proposals right.

From all this effort, we should have a logical and agreed approach to the determination of Societal Risk. However having done so, I feel it must also be recognized that at times there will be other dimensions which will also have to be considered as part of the whole issue - urban redevelopment and local economic issues such as unemployment and land blight – the complexities of which require significant political decision making, consistent with all of the overarching principles of Sustainable Development. A pragmatic solution to the problem, recognising legitimate economic, social and safety, health, and environmental concerns, will require co-operation between relevant governmental departments and other stakeholders affected by the problem.
I mentioned earlier my links with activities in the chemical industry in the Netherlands on the subject of “Societal Risk” and I am pleased to hear that learning from there both in the technical and the socio – economic issues (you might say the less quantifiable but in some ways the more difficult aspects) are being considered as part of the work now being done in this country to develop an acceptable approach to planning matters.

Although not strictly part of the process currently underway, it would be remiss of me if, on behalf of Industry, I did not refer to the potential financial implications of implementing changes agreed to be done as a result of examining Societal Risk for proposed developments. (This aspect was mentioned in Consultation Document 212 issued in 2006). It is important that apportionment of any costs for stakeholders affected by proposed developments is properly taken into account. There is no easy answer to this issue but , it is important  that UK Chemicals Industry is not put at a competitive disadvantage with other EU Member States - and beyond, now that he chemical industry is seen very much as a global industry. I know it’s easy to say but there must be a level playing field – otherwise we will find companies voting with their feet.

In summary, the Chemical Industry is happy and very keen to be fully involved in this project to develop a means of determining risk to society from industrial activities. However having quantified Societal Risk in a way acceptable to all stakeholders, it’s important to recognise other factors that will impact upon decision making for proposed developments which, if agreed to, must be financed in a way that does not impose unacceptable financial burdens on Industry.

JWG 28/04/09

Updated 2012-08-31