Basic principles of risk assessment and management

This paper examines the principles underlying the assessment of risks associated with environmental issues as they relate to the challenges faced by offshore industries. The approach described here is founded upon experience from managing risk to marine mammals from a range of offshore activities, and the delivery of scientific advice to the UK Government and to industry about the management of marine mammals. It is also founded upon the experience that many people across both government and industry think they understand the nature of risk when in fact they only have a poor grasp of what the assessment of risk really involves. In particular, there is a generally poor understanding about what is meant by the uncertainty attached to risk. In other words, there is a common misunderstanding that an assessment of risk can be expressed as an absolute value when, in fact, it is a statistical distribution often with very low levels of confidence. The dangers of misunderstanding the uncertainties around risk are well illustrated by the financial crisis that developed in 2008, which was rooted in exactly this type of misunderstanding.