Recognizing Risky Relationships

Smoke from the Stevenson Ranch wildfire obscures the sun while water and power worker checks the power lines after a Santa Ana wind driven wildfire raced through the area in Valencia, Calif., north of Los Angeles, Monday, October 22, 2007. (Photograph by Kevork Djansezian, Associated Press)

Risk calculation often considers three broad types of threat: natural, accidental, and intentional. Understanding how these different threat-types interact with vulnerability is one way to focus risk management decisions. Should a fourth type - relational - be added to our mental toolbox?

When the levees failed following Katrina was it an accident? If California wildfires are ignited by badly maintained utility lines is that an accident? Osama bin-Laden said he did not expect the World Trade Center towers to collapse. Does absence of specific intention or expectation have a meaningful impact on how we practice risk management?

There can be relationships - unexpected and, perhaps, unforeseeable - between natural and/or accidental threats and human choice (quite separate from human intention).

In a report (pdf) released in early September the California Public Utilities Commission found that three San Diego County wildfires were caused by badly maintained overhead lines.

According to this report, "On October 22, 2007, a Cox Communications (Cox) lashing wire made contact with a San Diego Gas and Electric Company (SDG&E) 12 kV overhead conductor between SDG&E poles P196387 and P196394 in San Pasqual Valley. The July 9, 2008 California Department of Forestry and Fire Protection’s (CalFire) report on the fires (CalFire Report) states that the Guejito Fire started when these energized power lines and this Cox lashing wire came in contact with each other. This fire has been variously referred to as: the Pasqual Fire, the San Pasqual Fire, and the Guejito Fire. This fire will hereinafter be referred to as the Guejito Fire. The Consumer Protection and Safety Division (CPSD) of the California Public Utilities Commission (CPUC) investigated this incident. Based upon all the evidence made available to it, it is CPSD’s opinion that Cox was in violation of CPUC General Order (GO) 95, Rules 31.1 and 31.2 at the time of the incident. GO 95, Rule 31.1 requires a utility’s facilities to be designed, constructed, and maintained, in order to enable safe, proper and adequate service, and Rule 31.2 requires a utility to inspect facilities frequently and thoroughly in order to ensure that they are in good condition."

The two regulated companies have vigorously disagreed with the report's findings. Cox Communications specifically argues, "“The evidence indicates that our line was fully intact prior to the extreme Santa Ana winds, which caused S.D.G. & E.’s lines and our lines to come into contact." Which raises a question as to the foreseeability of the Santa Ana winds.

Legal principles distinguish between outcomes that are intentional, unintentional, and the result of negligence. Under the law an accident is an unintentional mishap, the result of chance (accident is derived from the Latin for chance) and beyond foreseeing. Negligence is usually established by making a case that an unintended injury was reasonably foreseeable.

In Anglo-American law the issue is often determined by defining the scope for a "duty of care." Those accused in the Southern California wildfires argue that but for fierce winds, there would have been no contact of their lines and they cannot be held responsible for unforeseeably fierce winds. But it might be asked, given seasonal recurrence of the Santa Ana winds was such an outcome outside reasonable anticipation? Even if the probability of such winds or such harm was low, was it incumbent on some party to give serious consideration to such possibilities.

In discussing his decision in United States v Carroll Towing Company (1947) Judge Learned Hand offered the following rule for establishing duty of care:

Since there are occasions when every vessel will break from her moorings, and since, if she does, she becomes a menace to those about her; the owner’s duty, as in other similar situations, to provide against resulting injuries is a function of three variables: (1) The probability that she will break away; (2) the gravity of the resulting injury, if she does; (3) the burden of adequate precautions. Possibly it serves to bring this notion into relief to state it in algebraic terms: if the probability be called P; the injury, L; and the burden, B; liability depends upon whether B is less than L multiplied by P: i.e., whether B <>

The risk manager - especially if he or she is engaged in protecting the public-at-large - must be less concerned with the burden and more concerned with the potential injury. It is in the self-interest of many to underestimate both injury and probability.

The risk manager - as public servant - must be willing and able to consider catastrophic potential. Such catastrophic potential will often have lesser probabilities. But a lesser probability cannot be simply dismissed. The risk manager must inquire into the possible relationship between human choice and chance events. Has human choice - without intention - substantially increased potental injury or probability.

In other words is the chance of catastrophic injury - even if "reasonably" improbable - sufficient to undertake a precautionary burden?

The 9/11 Commission argued that a major contribution to the attackers' success was a "failure of imagination" by those charged to consider the injury and probability of the foreseen attack. The same critique can often be applied to probability and injury resulting from natural and accidental threats.

(Recent developments in financial risk management emphasize the importance of recognizing often obscured relational threats. See the New York Times.)