Tracking Progress in the Governance of Critical Risks

7. Conclusions

Abstract

This chapter presents overall conclusions about progress made by Adherents to the OECD Recommendation on the Governance of Critical Risks since 2018. Overall, Adherents have implemented a majority of the provisions of the Recommendation. Important gaps remain, however and some areas are identified as having receded in their implementation when compared to the number of countries that had fulfilled them previously. The chapter also notes how countries have been using the Recommendation as guidance in development of national policy and institutional design.

The governance of critical risks continues to serve as a tool for governments to address complex, interconnected, and politically contested thorny problems. The COVID-19 pandemic in particular required decisions under conditions of uncertainty while balancing competing public health, social and economic objectives. Governments had to coordinate across multiple agencies, levels of government, private actors, and citizens, each with different interests, incentives, risk perceptions, and tolerances. The challenges were compounded by limited information, rapidly changing circumstances, and the need to remain accountable and transparent, even when effective risk management required precautionary actions that were unpopular or costly in the short term.

The pandemic illustrated a fundamental understanding upon which the Recommendation rests, namely Adherents do not have the capacities required to manage critical risks on their own. They rely on a mix of skills, knowledge and material means possessed by non-government stakeholders who need to be integrated into established frameworks for risk governance. National policy frameworks should clarify responsibilities for disaster risk assessment, disaster risk reduction and crisis management, facilitate co-ordination and synergies across government and clarify goals and define priority risk management measures. The scale of the COVID-19 pandemic underscored at national level, a lesson that many disasters had already revealed at regional level over the past 20 years, i.e. effective response requires a co-ordinated effort of capabilities across the whole of society.

The economic crisis within the public health crisis was multi-faceted, including simultaneous supply and demand side shocks. This lived experience revealed previously underestimated vulnerabilities, e.g. in certain global supply chains, and demonstrates the value of risk governance is not only in assessing and managing risks associated with technological development or extreme climate events. It is a fundamentally political process of negotiating trade-offs, allocating responsibilities, and maintaining public trust in the face of uncertainty.

Overall, most Respondents have continued to progress in implementing most provisions amongst the five key principles of the Recommendation. The prevalence of implementation of several provisions, however, has slightly regressed when compared to 2016. For example, Respondents reported:

• Fewer lead government agencies with responsibility related to management of critical risks consult with a variety of stakeholders in the policy- formulation process.

• Lower rate of usage of local risk assessments as a tool for risk anticipation.

• A decrease in support for public research on specific emerging risks as a means of risk anticipation, despite a specific call to pay more attention to emerging risks, in the 2017 Report.

• A decrease in research and modelling on interlinkages between different types of critical risks, again despite a specific call to pay more attention to this challenge.

• Slightly lower use of the public education system to promote risk awareness. 

• Lower prevalence of the use of two-way communication before and during crisis.

• Fewer post-disaster reviews of risk management policies, despite the fact more disasters occurred on average between 2017-2022 than in 2014-2016.

• Lower prevalence of making post-disaster reviews available to the public.

The Recommendation has influenced many Adherents to adopt leading concepts and practices including the all-hazards, transboundary approach to risk governance (Principle II of the Recommendation), the use of national risk assessments (Principle III), setting up co-operative mechanisms for critical infrastructure resilience (Principle IV), develop anticipatory and flexible capacities in crisis management systems (Principle V), and integration of good governance throughout the critical risk management cycle (Principle VI). The findings of the present report indicate that these provisions of the Recommendation continue to be relevant and are used to inspire many Adherents in conceiving new national strategies and revising policies.

When asked how the Recommendation has been used, Respondents indicated it contributes to design of new strategic policy initiatives (e.g. the development of the National Resilience Strategy in France, the National Resilience Framework in the United Kingdom and the requirement of producing a National Risk Assessment to be eligible for regional funds of the European Union). Nearly all Respondents reported its provisions inspired their efforts to develop or revise national strategies on governance of critical risks in some respect. For example, Germany cites the Recommendation in its recent “German Strategy for Strengthening Resilience to Disasters” (Die Bundesregierung, 2022[1]). Several Respondents did specify provisions that they have used in policies to manage critical risks. For example, Ireland specifically cites the OECD guidance related to critical infrastructure several times in its strategic emergency management policy guidance for critical infrastructure (Department of Defence, 2021[2]). Several Respondents have made use of the Recommendation to assess national policies, review legislation on manging critical risks or reorganise institutions responsible for its implementation (e.g. Colombia, Kazakhstan, Luxembourg, and Morocco).

Box 7.1. Overall assessment of implementation

Principle 1: Country risk governance as the foundation for national resilience and responsiveness

Overall, a high number of Adherents have developed national strategies on governance of critical risks, and most have updated them since 2016. The national strategies often entail an all-hazards and transboundary approach to risk governance. The national strategies set forth objectives concerning most phases of the disaster risk management cycle, though recovery and reconstruction are frequently missing. Although most national strategies adopt an all-hazards approach, most Adherents have not set out and developed core capabilities commonly required to manage the harmful impacts of major disasters. All Adherents have established mechanisms to engage a variety of government authorities at national and sub-national levels, and co-ordinate a range of stakeholder input in at least some phases of disaster risk and crisis management decisions.

Reinforced efforts are needed, however, to foster a whole-of society approach to building resilience. Lessons drawn from the COVID-19 pandemic in this respect underscore the importance of regulatory flexibility, emergency authorities with appropriate time limits and oversight, security of supply of essential goods and services, and incentives for the private and third sectors to strengthen capacities needed to respond to a massive scale crisis.

Principle 2: Enhancing anticipatory capacity for complex and wide-ranging impacts to build preparedness

The number of Adherents that have developed a National Risk Assessment since 2016 has increased significantly and most have been updated at least once. These tools provide policymakers a comparative overview of critical risks facing the nation, but use of their results to inform priority setting for investments in disaster risk reduction and preparedness capabilities should be reinforced. The COVID-19 pandemic revealed a key challenge consists in translating existing assessments of critical risks into decisions that require significant public investments (such as stockpiles, diversification of sources and maintenance of reserve or excess capacity to produce essential goods). The opportunity to leverage anticipation into improved preparedness manifest itself again in the context of gas and fuel shortages driven by Russia’s war against Ukraine.

The most prevalent tools used for critical risk anticipation focus on the best-known risks. There is opportunity for Adherents to strengthen their understanding of critical emerging risks through foresight tools and horizon scanning methods to reinforce resilience planning, including for critical infrastructure and essential goods. In particular there is a need to strengthen understanding of supply chain disruptions and critical climate risks, and to use this knowledge to inform gaps in authorities to take preventive actions and decisions on mitigation strategies.

Principle 3: Raising awareness of critical risks and encouraging business and households to reduce and mitigate critical risks

Respondents still find two-way risk communication and participation a significant challenge. They tend to focus their risk communication efforts on natural hazards, with less than half of Respondents sharing information about risks of malicious attacks on critical national infrastructure with owners and operators. Adherents have begun to adapt their risk and crisis communication practices to contend with disinformation campaigns that exacerbate public scepticism of government communications.

Few Respondents, however indicated they use cost/benefit and cost-effectiveness analysis to maximise the public investments that reduce exposure of infrastructure and communities to critical risks. Many Respondents have developed national strategies that foster partnerships for the protection of critical infrastructure and establish an enabling environment for cross sectoral co-operation. These have been key to foster cross-sectoral dialogue, help identify functional interdependencies across sectors, and develop investments for targeted resilience measures to reduce risks of cascade effects.

Principle 4: Developing adaptive capacity in crisis management

Although international co-operation is an essential pillar for crisis management, it remains one of the least developed and least exercised elements of crisis management arrangements. Efforts to boost whole of society crisis readiness, including reinforcing civil-military co-operation, is important in a risk landscape marked by more complex crises, and hybrid risks.

Adherents have improved capability to collect vast amounts of data, though further improvements to analytical and visualisation capabilities would support better understanding of the scale of crises and to model future developments. Efforts have begun to map the vulnerabilities and understand resilience of supply chains for essential goods and services. Adherents show significant progress in mobilising scientific advice in emergency plans and procedures, but robust scientific advice mechanisms are not yet present in all countries. Capability to acknowledge and communicate uncertainties and plot ways to deal with them in their crisis management system also remains a challenge.

Principle 5: Demonstrating transparency and accountability in risk-related decisions and continuously learning from experience and science

Overall, Adherents do notify the public about exposures to natural hazards, however more progress is needed in making publicly available the underlying data used in models that inform risk management decisions. Respondents share risk related information about critical risks across government, but sharing information with private sector and third sector organisations requires stronger efforts, given their important role in a whole of society approach to governance of critical risks.

Institutional arrangements for accountability related to disaster risk and crisis management are not yet broadly developed. Most Respondents do not have a public body charged with ensuring accountability for management of critical risks. Where in place, such bodies are administered by some form of government oversight body, whereas the use of independent bodies or civil society is relatively limited. The powers attributed to accountability organisations are generally advisories or warnings, rather than sanctions that create negative incentives for failure to act or dereliction of duty.

Most Adherents do not have in place an institutionalised process for systematic learning from past crises or disasters. Adherents could achieve informed and meaningful changes across the critical risk management cycle by implementing a structured process on lessons learned, and consistent support for research that helps understand in-depth how gaps and breakdowns of responsibility occurred that impeded effective preparedness and response.

References

[2] Department of Defence (2021), Strategic Emergency Management Guideline 3 - Critical Infrastructure Resilience, https://www.gov.ie/pdf/?file=https://assets.gov.ie/90683/7d83eda8-4ff1-4a42-9c22-2d614c8a2d28.pdf#page=null (accessed on 6 April 2023).

[1] Die Bundesregierung (2022), “Deutsche Strategie zur Stärkung der Resilienz gegenüber Katastrophen”, https://www.bbk.bund.de/SharedDocs/Downloads/DE/Mediathek/Publikationen/Sendai-Katrima/deutsche-strategie-resilienz-lang_download.pdf?__blob=publicationFile&v=6 (accessed on 6 October 2023).