The role of Risk Assessment in Environmental Assessments American Chamber of Commerce Meeting

Basic concepts of risk analysis Potential hazard identification  Are we endangered and by what hazards Assessment of potential effects  What adverse effects can occur Quantification of existing risk  Probability calculation for adverse effects occurrence

Risk – probability for adverse effects occurrence  Related to incomplete or uncertain information  Works on incomplete data/measurement series  Rarely represented by a simple yes/no answer – a range of different outcomes with different likelihoods is the result  Does not work in case of a complete lack of information  The degree of uncertainty translates directly into the calculated risk (the higher uncertainty, the higher calculated risk)

Risk Assessment binds together  Assessment of the hazards’ magnitude (severity)  Assessment of the uncertainty related to -Sources of hazards -Physical laws and conditions governing the process at risk -The endangered subjects

Specialists involved in Risk Analysis  Auditors – hazard identification  Toxicologists – dose-effect assessment  Risk analysts – uncertainty quantification  Risk analysts with other specialists – formulation of the process model  Risk analysts – computations and outcome interpretation  Management – establishing of acceptable risk level, decision taking

Type and quality of input data  Data may have different levels of uncertainty  The degree of input uncertainty determines the methodology of risk calculation  It is crucial to understand that the greater the input uncertainty, the greater the outcome risk  Hence, though RA can manage even very uncertain input data, the calculated risk will be very large

Example – underground carcinogenic contamination of and industrial site

Questions which have to be answered based on RA outcomes  What is the probability (risk) of increased number of cancer cases  What level of risk is acceptable  What sort of one-event testing would be sufficient or should a long term monitoring be applied, what will be the costs  What should be the design of an remediation installation and how much will it cost  In the sight of the abovementioned facts is the purchase of the facility in question economically justified

RA would be performed in the following way:  Investigation of the effects of the contamination on human health  Data gathering for preliminary uncertainty assessment  Preliminary uncertainty assessment: -Low risk -Significant risk – minimization (planning and performing of a measurement campaign)  Enhanced uncertainty assessment: -Low risk -Significant risk: -minimization (design and implementation of remediation) -Cancellation of the acquisition

RA algorithm - summary  RA means additional costs, but it may protect from even greater costs  RA results are the basis of a reasonable decision making process  There will NOT be a no-risk case. EVER.  The decision makers have to establish an acceptable risk level for the decision making.

Additional business risk factors  Environmental Liability Directive  Polish land contamination law (decree of 9/9/02)  Planned EU groundwater directive  International Accounting Standards including environmental liabilities

Examples 1.LUCENT TECHNOLOGIES 2.Commercial sites – shopping centers