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It is obvious that risk and uncertainty analyses can and will always be challenged by opposing stakeholders not satisfied with probability assessments, based on their subjective, modeled or even „pseudo statistical“ approaches. Under the excuse of limited or poor available knowledge of the problem at stake some stakeholder may invoke the „unrepresentative“ character of expert analyses, “mistrust„ in the results (as they feel their gut feeling is necessarily better than a science based approach) to avoid making a sensible decision.
The advantage of using ORE is that it allows transparent discussions including ranges estimates, variability of parameters and uncertainties with stakeholders not satisfied with probability assessments, thus leading to healthier debate, and possibly, in our experience, finding consensus.
During the implementation of decisions it is common for decision-makers to seek for further protection by adding conservatism and using traditional engineering frameworks of “defense-in-depth.” This is typical of deterministic approaches to hazard and risk management, where layers of protection are added, without explicitly evaluating their effectiveness, to bound known uncertainties to, for example, “credible thresholds”. However, these approaches have limited effect in reducing the “unknown unknowns”, i.e. reducing the completeness uncertainty.
In particular, these approaches may lead to censored results such as:
As a matter of fact, accidents in all sorts of industries have shown that the „credible“ scenario established in this way oftentimes represent a strong censure of the possible and actually credible ones; codes are generally not covering the full breath of situations that should be covered; mitigations result severely under estimated.
The underlying principle has been that if a system is designed to withstand all the individual worst-case credible accidents, then it is “by definition” protected against any credible accident. That does not cover for uncertainties, inter-dependencies and common cause failures which unfortunately do characterize accidents in our world.
ORE Risk-Informed Decision-Making (RIDM) is a deliberative process that uses a set of performance measures (we call them success criteria), together with other considerations, to “inform” decision-making. The ORE RIDM process acknowledges that human judgment has a relevant role in decisions, and that technical information cannot be the unique basis for decision-making.
ORE RIDM is applicable for decisions that typically have one or more of the following characteristics, independently from the financial stakes significance:
ORE has been used together with its companion methodology CDA/ESM (a Risk Adjusted cradle to grave project evaluation tool which replaces the NPV to support risk based/risk informed decision making in a number of industries).
Here are some examples:
We highlight below some aspects of Risk Informed Decision Making (RIDM), as recently discussed by NASA and USNRC, and compare them to ORE features to show how ORE deployment is feasible and beneficial.
Modern RIDM requires to acknowledge uncertainties, multiple hazards, multiple stakeholders and compliance needs, integrating stakeholders’ concerns and perceptions.
This leads to greater stakeholder participation in decision-making, in which technocratic decision processes, driven purely by rational technical considerations, are modified to integrate the concerns and the perceptions of stakeholders.
Thus the match between ORE and modern RIDM requirements is perfect.
Modern RIDM requires the classic engineering/technical approach to risk assessment which includes:
and stochastic analyses based analyses such as:
to be integrated in the decision making process while recognizing that all the aspects of a given system under consideration may not be known or ready for analysis simultaneously at different stages of a project/operation development/life..
ORE builds a hazard and risk register that will accompany the project/operation thought its existence. The register is:
All the argumentation behind the analysis itself, including the assumptions, hypotheses, parameters and their uncertainties can be transparently laid out for disclosure points (however ORE register structure and numerical techniques remain proprietary).
Thus ORE is again fulfilling RIDM requirements and provides decision-makers with a clearly informed picture of the problem upon which they can confidently reason and deliberate.
There are many more considerations that could be made, but this is a blogpost, neither a book nor a course, so we will be delighted to answer your questions if you send them through the contact form or as a comment.
Building trust with Stakeholders not satisfied with probability assessments is possible by deploying ORE within a Risk Informed Decision Making (RIDM) process. The approach helps achieving success by:
When applied to projects ORE RIDM helps avoiding: