Risk
March 17, 2014

The business case for resilience

When it comes to catastrophic manmade or weather-related events, it might be time to retire the old expressions “once in a lifetime” and “one in one hundred years.” As those in Calgary can attest as they continue to clean up from the second major flood in five years, severe weather events are more frequent, more damaging and more costly. The question is no longer if a disastrous flood, earthquake or storm will strike, but when.

If we can can’t prevent such events, how can we mitigate their effects? How do we build resilience into our systems and critical infrastructure? How do we become resilient?

Those are questions Nick Martyn has been considering for much of his career. A retired Lieutenant Colonel in the Canadian Armed Forces, he has worked with large organizations and governments to understand the risks and the linkages between disparate infrastructure systems, and how cascading effects can turn many of our assumptions on their head when those systems fail.

“We design for convenience, for maximum efficiency; we don’t design for resilience,” he explains. “The assumptions on which we have designed much of our critical infrastructure and how we have built it and placed it, are no longer true.”

By way of example, he points to the 2011 earthquake that rattled Japan and the flooding caused by Hurricane Katrina in 2005. Although the threat of rising water was recognized in both locations, protective barriers were thought to be sufficient. In the case of the Fukushima Daiichi nuclear plant, backup power generation and control systems to shut off the reactors were placed below ground with the intent of providing them maximum typhoon protection. “It wasn’t that they didn’t have systems to shut it off – every nuclear power plant does – but they were put in a place of supposed security based on a set of assumptions that turned out to be wrong,” he said.

“In New Orleans, critical care floors in hospitals were on the ground floors and backup power was in the basements. The assumption was that the levees would not fail. Again, a poor assumption with tragic consequences.”

The Canadian population is expected to almost double over the next 50 years, according to Statistics Canada, placing tremendous strain on municipal and provincial infrastructure. Many of those systems are owned or operated by private industry, but government is ultimately held responsible when they fail, Martyn notes, and the cost politically and financially can be crippling: Calgary has already spent over $6 billion on clean up and that does not begin to factor in business interruption and economic loss.

While current risk management methodologies such as ISO 31000, probabilistic analysis and constructive simulations provide a solid foundation, he believes they do not go far enough to help governments and industry understand what should and should not be protected, and where best to invest resources.

In 2010, Martyn founded RiskLogik, a software and consultancy company that has developed solutions using directed path graphs to map risk exposure and the drivers behind risk. The company’s efforts to date cut across federal, provincial and municipal lines: a project with Emergency Management Ontario to monitor the effects of 1,300 different provincial infrastructure elements; a project with the government of New Brunswick to understand the effects of supply chain interdiction on Atlantic Canada; a project with Public Safety Canada to understand the effects of national infrastructure collapse, helping officials understand how systems are connected and what could also fail if one critical element does; and a project in development with the National Capital Region to understand how the infrastructure of five different jurisdictions are linked.

“In each case they intuitively know their systems are all connected, but they don’t know how,” he says. “We’re in the business of bringing all of the stakeholders to the table and helping them understand those dependency relationships, the vulnerabilities they imply and what effective mitigations can be implemented. At the moment critical infrastructure risks are mitigated largely on intuition.”

Martyn acknowledges that building resilience into our critical infrastructure will be generational, but he says we may be past the point of preventing climate change even if we did not cause it, so we can either ignore the mounting evidence of that change or take measures now to adapt by becoming more resilient.

“There is also a compelling business reason for investing in resilience,” he adds. “Businesses locate where they can rely on the critical infrastructure that supports their operations. Canadian communities that become resilient will increasingly attract businesses because CEOs can rely on the services and workforce availability despite disruptive events. So investing in resilience makes good sense from both a public safety and a business perspective.”

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