Stakeholder Involvement in Risk Governance ORTWIN RENN

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1 Stakeholder Involvement in Risk Governance ORTWIN RENN PUBLISHED BY

2 Stakeholder Involvement in Risk Governance is published by Ark Group UK/EUROPE/ASIA OFFICE Ark Group Ltd 6-14 Underwood Street London N1 7JQ United Kingdom Tel +44 (0) Fax +44 (0) NORTH AMERICA OFFICE Ark Group USA 4408 N. Rockwood Drive Suite 150 Peoria IL United States Tel Fax Australia/NZ OFFICE Ark Group Australia Pty Ltd Main Level 83 Walker Street North Sydney NSW 2060 Australia Tel Fax Head of Content Strategy Fiona Tucker Commissioning Editor Helen Roche Assistant Editor Laura Slater UK/Europe/Asia enquiries Ken Fitzgerald US enquiries Daniel Smallwood Australia/NZ enquiries Steve Oesterreich Online bookshop ISBN: (hard copy) (PDF) Copyright The copyright of all material appearing within this publication is reserved by the authors and Ark Conferences It may not be reproduced, duplicated or copied by any means without the prior written consent of the publisher.

3 Chapter 1: Key terms in stakeholder involvement MAKING A decision on the location of hazardous facilities, setting standards for chemicals, regulating food and drugs, as well as designing and enforcing safety limits, all have one element in common: these activities are collective endeavours to understand, assess, and handle risks to human health and the environment. These attempts are based on two requirements. On one hand, risk managers need sufficient knowledge about the potential impacts of the risk sources under investigation and the likely consequences of the different decision options to control these risks. On the other hand, they need criteria to judge the desirability (or undesirability) of these consequences for the people affected. Criteria on desirability are reflections of social values such as good health, equity, environmental quality, or efficient use of scarce resources. Both components knowledge and values are necessary for any decision-making process. Anticipating the consequences of human actions or events (i.e. knowledge) and evaluating the desirability and moral quality of these consequences (i.e. values) pose particular problems if the consequences are complex and uncertain and the values are contested and controversial. Dealing with complex, uncertain, and socially-contested outcomes often leads to the emergence of social conflict. Although everyone may agree on the overall goal of safety and environmental quality, precisely what that goal entails and precisely how that goal will be obtained may evoke substantial disagreement. Typical questions in this context are: What are the most suitable criteria for judging risks? What role should the assessment of uncertainty and ignorance play in dealing with risks? How should one balance a variety of options with different compositions of magnitude and probability of impacts, but identical expected values? 1

4 Chapter 1: Key terms in stakeholder involvement How should society regulate risks that benefit one party at the expense of potential harm to another? These crucial questions on how to deal with complex, uncertain, and controversial risks demand a level of decision-making that goes beyond conventional risk management routines. Most public and private organisations are in urgent need of revising their institutional routines and need to design procedures that enable them to integrate professional assessments (systematic knowledge), adequate institutional process (political legitimacy), responsible handling of public resources (efficiency), and public knowledge and perceptions (reflections on public values and preferences). These various inputs require the involvement of several actors in the risk assessment and risk management process. The structures that evolve from the co-operation of various actors in all phases of the risk handling process are subsumed under the term risk governance. In Risk in Social Science, Bridget Hutter characterises the move from governmental regulation to governance as a move from the public ownership and centralised control to privatised institutions and the encouragement of market competition. It also involves a move to a state reliance on new forms of fragmented regulation, involving the existing specialist regulatory agencies of state but increasingly self-regulating organisations, regimes of enforced self-regulation and American-style independent regulatory agencies. 1 Two previously accepted forms of decision-making are the technocratic (where a dictator tried to act in the best interest of the common good) and the decisionistic (in which elected representatives make decisions). A third mode was coined by the philosopher Jürgen Habermas the pragmatic based on the assumption that the plural actors of society should be an integral part of the decision-making process. This participatory mode of decision-making is nowadays referred to as inclusive governance. Inclusive governance Inclusive governance considers the question of what and whom to include in the governance process not only in the decision-making, 2

5 Stakeholder Involvement in Risk Governance but in the whole process from framing the problem, generating options, and evaluating each of these options and, in the end, arriving at a joint conclusion. This goal presupposes that attempts have been made to meet the following conditions: Representatives of all relevant stakeholders have been involved (if appropriate); All representatives of the various stakeholder groups or directly affected populations have been empowered to participate actively and constructively in the discourse; The framing of the risk (or the issue) has been co-designed in a dialogue with the different groups; A common understanding of the magnitude of the risk and the potential risk management options has been generated and a plurality of options that represent the different interests and values of all involved parties have been included; Major efforts have been made to conduct a forum for decision-making that provides equal and fair opportunities for all parties to voice their opinion and to express their preferences; and There exists a clear connection between the participatory bodies of decision-making and the corporate or political implementation level. While these objectives can be accomplished in most cases where risks are able to be governed on a local level, and where the different parties are familiar with each other and with the risk issue in question, it is much more difficult to reach these objectives for risks that concern actors on a national or global level, and where the risk is characterised by high complexity or where the effects are, for example, not directly visible or are not easily referred to the corresponding risk agent. Sometimes, one party may even have an advantage from attempts to sabotage the process because their interests profit from having the existing (or no) risk management strategies in place. Consequently, inclusive governance processes need to be thoroughly monitored and evaluated in order to prevent such strategic deconstructions of the process. 3

6 Chapter 1: Key terms in stakeholder involvement Closure Closure, on the other hand, is needed to restrict the selection of management options, and to guarantee an efficient use of resources (be it financial or the use of the time and effort of the participants in the governance process). Closure relates to the process of generating and selecting risk management options more specifically, which options are selected for further consideration, and which options are rejected. Closure therefore concerns the product of the deliberation process. It describes the rules of when and how to close a debate, and what level of agreement is to be reached. The quality of the closure process has to meet the following requirements: Have all arguments been properly treated? Have all truth claims been fairly and accurately tested against commonly agreed standards of validation? Has all the relevant evidence been collected and processed? Was systematic, experimental, and practical knowledge and expertise adequately included and processed? Were all interests and values considered, and was there a major effort to come up with fair and balanced solutions? Were all judgements made explicit and thoroughly explained? Were normative statements derived from accepted ethical principles or legally-prescribed norms? Were all efforts undertaken to preserve plurality of lifestyle and individual freedom and to restrict the realm of binding decisions to those areas in which binding rules and norms are essential and necessary to produce the desired outcome? If these requirements are met, there is at least a chance of being able to achieve consensus and a better acceptance of the outcomes of the required risk assessment options. The success of the stakeholder involvement strongly depends on the quality of the process. Consequently, this process has to be specifically designed for the context and characteristics of the corresponding risk. The balance of inclusion and closure is one of the crucial tasks of risk governance. 4

7 Stakeholder Involvement in Risk Governance This report provides conceptual and operational guidelines for making stakeholder involvement successful with respect to resolving complex risk problems and generating solutions that are both scientifically sound and ethically acceptable. The guidelines are based on the belief that the integration of knowledge and values can best be accomplished by involving those actors in the decision making process that are able to contribute all the respective knowledge as well as the variability of values necessary to make effective, efficient, fair, and morally acceptable decisions about risk. Reference 1. Hutter, B.M., Risk, Regulation, and Management, in P. Taylor-Gooby and J. Zinn (eds), Risk in Social Science, Oxford: Oxford University Press, 2006, pp