Cedric Stephens | Technocrats far behind on risk-management homework

Managing risks, according to the United Kingdom’s Association of Insurance and Risk Managers in Industry and Commerce, AIRMIC, has become “an increasingly strategic issue and recognised as an onerous responsibility” for boards, senior executives of companies, and others that “ needing new tools and techniques to forecast and assess the effects of uncertainty – and talent with the right knowledge and skills to use them”

.AIRMIC promotes the interests of corporate risk professionals and encourages the adoption of risk management best practices.

Political and other leaders, including the heads of entities like The International Monetary Fund and The World Bank, and the folks who meet each year in Davos, Switzerland, agree that the creation and execution of plans to manage risks is an important management function.

Minister of Local Government & Community Development Desmond McKenzie appears to be part of the select group given the nature of his portfolio. He spoke recently at the Office of Disaster Preparedness & Emergency Management’s month-long Earthquake Awareness press launch.

“Earthquake awareness and preparedness should be a year-round activity,” he said.

So far, so good. The gravity of the island’s earthquake risk demands more than 30 days’ public attention. The direction he gave to ODPEM’s leadership, however, seems corny and wrong: “Ensure that every month, there are simple messages that can be played.”

Simple messages about social distancing, the wearing of masks, the need for vaccinations and lockdowns during the COVID-19 pandemic were ignored. The number of vaccination doses administered locally per 100 persons was 54 on October 27, 2023, according to Trading Economics.

“There cannot be too much information out there in the public domain when it comes on to taking necessary precautions around disasters,” Mr McKenzie said

I agree. However, other things also need to be done.

Last Sunday Gleaner’s editorial, ‘Beyond Charlemont’, discussed topics that are relevant to earthquake awareness month. It raised serious questions about the ‘eye-popping deviations from approved building permits’ at a former building site on Charlemont by inspectors of the Kingston & St Andrew Municipal Corporation. KSAMC is one of the municipal agencies under the local government ministry.

Were the deviations at that location limited to obvious violations like building height and the number of multifamily dwellings on less than half an acre of land? Were there other violations of rules and standards that are germane to how buildings should behave during earth tremors and that cannot be easily spotted by the average person in the street? We do not know.

The editorial cited other cases of irregularities. In one, two senior members of the corporation’s building department were “interdicted” – a fancy word for banned from carrying their job functions – “and sent on leave by the Local Government Services Commission for unspecified concerns relating to construction oversight”. It also noted that in other ‘instances where permit violations have been uncovered, it has mostly been because of court actions or persistent advocacy by citizen groups or individual neighbours, rather than oversight by regulators.”

The editorial did not discuss the impacts that a dysfunctional inspection regime, deviations from world-class building codes, and corruption had on earthquake-prone Turkey. Experts said, according to the BBC, that last year, “more than 160,000 buildings collapsed or were severely damaged after the quakes, raising questions about whether the natural disaster’s impact was made worse by human failings”. The confirmed death toll in Turkey and Syria exceeded 50,000.

Have the minister, the ODPEM, and the municipal corporations learned any lessons from the Turkish/Syrian earthquakes that can help the island to manage its vulnerabilities more effectively? None of the official reports that I read about earthquake awareness month provide answers to this question.

Risk management does not exist in a vacuum. Lloyd Waller and Edmund Bartlett made the connection in a recent book about the regional tourism industry. “The increasing frequency and intensity of natural disasters in recent years, coupled with the devastating effects of the pandemic and the containment measures adopted by governments, has made crystal clear the importance of addressing the sustainability of Caribbean tourism,” they wrote.

The Insurance Development Forum, a public-private partnership, led by the insurance industry, and supported by international organisations, argues that insurance and its related risk-management capabilities can be used “to build greater resilience and protection for people, communities, businesses, and public institutions that are vulnerable to disaster and their associated economic shocks”.

Technocrats at the Ministry of Local Government, the ODPEM, and municipal corporations and the insurance companies appear to be far behind in their homework. As a result, they are unable to see the big picture – like their counterparts in the Ministry of Finance and Public Service.

Under the United Nations Agenda 2030, insurance – and, by my inference, risk management – “is explicitly recognised as a key vehicle to enable risk sharing and transfer solutions required for greater global resilience.”

Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, write to: aegis@flowja.com or business@gleanerjm.com