Insuring and Managing Hazardous Risks: From Seveso to Bhopal and Beyond

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Insuring and Managing Hazardous Risks: From

Seveso to Bhopal and Beyond

An executive report* on an international conference at IlASA and an overview of the conference proceedings EXECUTIVE REPORT 11 April 1986

Conference Sponsors:

T h e Center for Risk and Decision Processes, University of Pennsyl- vania, Philadelphia, Pennsylvania, USA

The Geneva Association, Geneva, Switzerland

International Institute for Applied Systems Analysis, Laxenburg, Austria

The Center for Organizational Innovation and the Reginald Jones Center, University of Pennsylvania, Philadelphia, Pennsylvania, USA

T h e Monsanto Corporation. S t . Louis, Missouri, USA

T h e Rohin and Haas Corporation, Philadelphia, Pennsylvania, USA The US Environmental Protection Agency, Washington, DC, USA T h e Canadian Committee for IIASA

Conference Proceedings

Edited by Paul Kleindorfer and Howard Kunreuther, t o be published by Springer-Verlag.

*This executive report was prepared with t h e assistance of Marshall Ledger.

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E x e c u t t v e R e p o r t s b r i n g t o g e t h e r t h e f i n d i n g s of r e s e a r c h d o n e a t IIASA a n d e l s e w h e r e a n d summarize them f o r a wide r e a d e r - ship. T h i s o v e r v i e w d o e s n o t n e c e s s a r i l y r e p r e s e n t t h e views of t h e s p o n s o r i n g o r g a n i z a t i o n s or of individual w o r k s h o p p a r t i c i - p a n t s . Copies of t h i s E x e a u t i v e R e p o r t c a n b e o b t a i n e d from t h e Publioations D e p a r t m e n t , I n t e r n a t i o n a l I n s t i t u t e f o r Applied Sys- t e m s Analysis, S c h l o s s p l a t z 1 , A-2361 L a x e n b u r g , Austria.

S e c t i o n s of t h i s p u b l l a a t i o n may b e r e p r o d u c e d i n magazlnes a n d n e w s p a p e r s w i t h acknowledgment to t h e I n t e r n a t i o n a l Insti- t u t e f o r Applied S y s t e m s Analysis. P l e a s e s e n d t w o tear s h e e t s of a n y p r i n t e d r e f e r e n a e t o t h i s r e p o r t t o t h e P u b l i c a t i o n s Department, IIASA, A-2361 Laxenburg, A u s t r i a .

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PREFACE

This e x e c u t i v e review d e s c r i b e s in brief t h e I n t e r n a - tional C o n f e r e n c e on T r a n s p o r t a t i o n , S t o r a g e , a n d Disposal of Hazardous Materials, h e l d a t t h e I n t e r n a - tional I n s t i t u t e f o r Applied S y s tems Analysis (EEASA), a n d t h e ensuing Proceedings, I n s u r i n g a n d M a n a g i n g H a z a r d o u s R i s k s . The C o n f e r e n c e b r o u g h t t o g e t h e r r e p r e s e n t a t i v e s of academia, business, a n d government from E a s t a n d West t o discuss t h e n a t u r e of c u r r e n t problems in t h e a r e a of hazardous materials. An impor- t a n t objective of t h e Conference was t o suggest steps t h a t could b e u n d e r t a k e n b y industrial firms, t h e i n s u r a n c e i n d u s t r y , a n d government agencies t o improve t h e s a f e t y a n d efficiency with which hazardous materials are p r o d u c e d a n d controlled in industrialized societies.

C o n f e r e n c e s p o n s o r s w e r e t h e I n t e r n a t i o n a l Insti- t u t e f o r Applied Systems Analysis (EIASA), T h e Geneva Association, a n d t h e C e n t e r f o r Risk a n d Decision P r o c e s s e s of t h e University of Pennsylvania. Additional financial s u p p o r t was r e c e i v e d from t h e US Environ- mental P r o t e c t i o n Agency, t h e Monsan t o Corporation, t h e Rohn a n d Haas Corporation, t h e C e n t e r f o r Organi- zational Innovation a n d t h e Reginald Jones C e n t e r a t t h e University of Pennsylvania, a n d t h e Canadian

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Committee f o r IIASA. We a r e grateful t o all of t h e s e institutions for t h e i r generous support of t h e Confer- ence.

Within IIASA, a long history of r e s e a r c h in risk activities is evident. This owes much t o t h e vision of IIASA's founding Director, Howard Raiffa, and t o Pro- gram Leaders who have promoted risk r e s e a r c h a t IIASA. The Conference continued this tradition with t h e strong support of IIASA's Director Thomas H. Lee and Deputy Director Vitali Kaf tanov.

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INTRODUCTION

Despite having advanced three decades into the age of nuclear power, we still face the problem of the disposal of hazardous wastes. Hazardous materials are used to produce goods and services that people desire, so there is no question of doing without them.

But using them has led to industrial accidents, sometimes spectacular disasters: leakage of methyl iso- cyanate from a Union Carbide plant in Bhopal, India, killed 2500 people, caused eye injuries to 34000 others, and caused 200000 people to leave the area when the plant was recommissioned. Natural gas explosions at a Pemex plant in Mexico killed 452 people, left 31000 homeless, and forced the evacuation of 300 000 others.

In Mississauga, Canada, 220000 people were evacuated when a trainload of chlorine was derailed. An estimated 15 000 people died when the Marvi-Macchu dam, in India, gave way. The cost of decontaminating a hazardous- waste dump in Colorado has exceeded $500 million, and another dump in Times Beach, MO, has cost $235 million.

A t Seveso, Italy, 250 000 m3 of contaminated soil had to be buried, rendering many acres of land unusable and forcing people from their homes. One lesson we have learned from these disasters is that we cannot antici- pate what form the next catastrophe will take in terms of death, dislocation, and financial equity.

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W e have witnessed t h e r i s e of environmental con- c e r n s during t h e p a s t 15 y e a r s . So t h e public, under- s t a n d a b l y , insists on protection of i t s h e a l t h and s a f e t y a n d wants t o b e handsomely compensated in c a s e of a c c i d e n t s . In many c a s e s t h e c o u r t s have a g r e e d , with t h e word accident often being redefined

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from a sud- d e n calamity with a specific origin t o a n emergent problem t h e c a u s e of which cannot b e located in time o r a t t r i b u t e d t o o n e source.

For i n s u r e r s , t h e r e s u l t is massive u n c e r t a i n t y : What a r e t h e y liable f o r ? How have t h e y assumed r i s k s t h a t may not have b e e n conceived when t h e underwriting o c c u r r e d ? How c a n t h e y determine t h e i r premiums f o r t h e f u t u r e if r i s k levels c a n b e established only inferentially from limited historical samples? How c a n t h e y calculate t h e i r e x p o s u r e if p a s t e x p e r i e n c e is no longer a reliable guide a n d if t h e legal rules a r e changed in t h e middle of t h e game? How c a n t h e y k e e p losses from attaining staggering sums?

Manufacturers have t h e i r problems a s well. If insurance is too expensive, t h e y may b e f o r c e d t o r i s k o p e r a t i n g with liniltsd o r no coverage, in which c a s e victims of a c c i d e n t s may receive only limited compensation f o r injuries and losses. Some firms might b e forced out of business f o r environmental reasons, b u t actually b e e s s e n t i a l f o r economic, social, o r o t h e r reasons.

Firms may have incentives t o invest in s a f e t y a n d t h e r e b y r e d u c e t h e i r liability - b u t how c a n t h e y d e t e r m i n e t h e optimal level of p r o t e c t i o n ?

Despite t h e s e problems, which a r i s e from many p e r s p e c t i v e s , t h e r e a r e risk-management tools

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insurance, compensation, and regulation - t h a t t o g e t h e r may h e l p us deal with hazardous wastes a n d t h e i r consequences. These tools must b e used not a s

"quick fixes", however, b u t a s elements in a system, including t h e production p r o c e s s w h e r e waste is gen- e r a t e d , t h e means by which i t is t r a n s p o r t e d , a n d t h e means b y which i t is disposed of o r s t o r e d . The i n t e r e s t e d p a r t i e s

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manufacturers, i n s u r e r s , government agencies, t h e general public, a s well a s potential victims of a c c i d e n t s

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a r e not isolated from e a c h o t h e r .

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The concern of this Conference focused on t h e role of t h e risk-management tools of i n s u r a n c e , compensation, and regulation in t h o s e p a r t s of t h e p r o c e s s where t h e y c a n b e used imaginatively t o marlage hazardous materials from c r a d l e t o grave. The following synopsis s e r v e s a s a n introduction t o t h e Conference Proceedings, I n s u r i n g a n d M a n a g i n g H a z a r d o u s R i s k s .

PURCHASING THE PROCEEDINGS

The book I n s u r i n g a n d M a n a g i n g H a z a r d o u s R i s k s : From S e v e s o t o B h o p a l a n d B e y o n d will b e published b y Springer-Verlag in t h e e a r l y fall of 1986. Copies of t h e book will b e available through your local bookseller*

o r d i r e c t l y from Spr-inger-Verlag, T i e r g a r t e n s t r a s s e 1 7 , D-6900 Heidelberg 1, FRG o r Spr.inger-Verlag, N e w York, Inc., 175 Fifth Avenue, N e w York, NY 10010, U S A .

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- T H E I N S U R A N C E DILEMMA

WHY INSURANCE?

Although insurance can n e v e r s u b s t i t u t e f o r preventive measures t o p r o t e c t people a n d t h e environment, i t can soften t h e economic impact of random harmful events.

Whatever measures are t a k e n , r i s k is always p r e s e n t . Risk is defined in t e r m s of a n e v e n t whose o c c u r r e n c e is of definite duration a n d beyond t h e control of a n y p a r t y

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a n "accident". I t applies t o a known number of victims

.

The point of obtaining insurance is t o transform u n s u r e financial b u r d e n s from unforeseen e v e n t s into well-defined a n d limited c o s t s within a known period of time, s o t h a t t h e insured p a r t i e s c a n eliminate o r r e d u c e t h e imponderables on t h e i r books. I n s u r e r s d e s i r e t o r e d u c e t h e i r imponderables as well, s o t h e y must b e a b l e t o a s s e s s f u t u r e losses a n d s p r e a d t h e r i s k s a s widely as possible. The language of t h e policies must b e e x a c t , t h e t e r m s p r e c i s e .

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UNCERTAINTIES INTRODUCED BY HAZARDOUS MATERIALS

Hazardous materials have changed t h e notion of

"accident

".

Claims a r e c u r r e n t l y made on policies writ- t e n a s long a s 50 years ago and a r e filled b y people who may have been located f a r from t h e a r e a of t h e incident. Insurers can no longer always define t h e event t h a t triggers t h e claims o r easily t r a c e t h e course from t h e polluter t o t h e injury. Losses can r e a c h catastrophic proportions and a r e often not lim- i t e d t o actual damage. They may apply t o a wide range of consequences, from t h e loss of use of contaminated plants t o environmental impacts, such a s foul odors.

New technology may produce previously unsuspected toxic effects; materials t h a t a r e s a f e individually may b e toxic when t a k e n in combination. Sometimes risks a r e revealed t h a t could not have been conceived when t h e underwriting occurred.

T h e r e a r e o t h e r uncertainties a s well: high puni- tive damages and cleanup expenses (which insurers formerly covered in o r d e r t o prevent o r minimize liabil- i t y claims). All in all, insurers a r e attempting t o make sound calculations of premiums in unaccustomed, uncer- tain circumstances

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LIABILITIES OF THE LIABILITY SYSTEM

Legal decisions have changed t h e rules t h a t determine who is liable t o whom under what circumstances, s o t h a t new legal rules favor injured claimants. (The US, where reliance on liability insurance is g r e a t e r , has been a f f e c t e d more than Europe, where t h e r e is comprehen- sive national health insurance.) The rules have changed because of previous widespread dissatisfaction with t h e liability system, a system t h a t is not fully t o blame since i t was not designed t o deal with all of t h e issues raised b y hazardous materials.

Legislators may determine t h e limits, if any, of liability, but insurers cannot provide unlimited coverage f o r high-exposure risks. They must b e able t o calculate

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t h e i r exposure before t h e fact. For instance, t h e r e a r e no reserves to cover t h e extensive costs of cleaning-up sites, since this was not a risk considered when many of t h e earlier policies were written; present policyholders will have t o make up t h e loss.

Liability insurance will not become obsolete: it will merely be relegated t o areas where causation and blarne can be conventionally fixed. Even though insurers presumably could p r o t e c t themselves by increasing premiums and limiting coverage, t h e y have taken s t e p s t o reverse t h e t r e n d s toward expanded liability. They a r e concerned t h a t t h e courts will expand coverage retroactively. Injured people still have t h e right t o sue under t o r t law, a procedure t h a t is encouraged since compensation through special funds is limited.

In response, American insurers have changed t o

"claims-made" coverage, under which claims can be brought only as long as t h e coverage is in force.

Claims-made policies a r e necessary until losses can be reliably projected. To b e an effective solution, t h e y depend on a common understanding between insurers and insured parties, both of whom must honor each o t h e r ' s interests. Such policies can also be abused:

insurers may cancel policies arbitrarily and insured parties may t r y t o precipitate claims (and t h e courts will tend t o favor them). Licensing and o t h e r regula- t o r y controls become, in e f f e c t , nonenforceable if policies must be renewed for many years a f t e r t h e industrial activity t h e y cover has ended.

CONTRIBUTORY I S S U E S

Insurers cannot easily mobilize t h e i r capacity for coverage because t h e y a r e a diverse, independent group.

This t r a i t fosters competition among them

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indeed, t h e insurance market swings b e t ween periods of plentiful and inexpensive coverage t o periods of restrictive policies with high premiums. Competition also makes insur- e r s more than reluctant t o pool t h e i r resources o r adopt a uniform approach t o underwriting. Yet t h e y have joined into pools t o provide coverage for nuclear

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power, since governments have required insurance for nuclear liability and have provided limited backup guarantees. These lessons might b e applied t o environmental risks.

THE NEED FOR FLEXIBILITY

If t h e insurance industry does not respond t o a need for coverage, then mutual insurance organizations may spring up, o r t h e government may have t o intervene.

Insurers must define t h e i r terms with clarity, especially regarding what is and is not covered

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instance, explicitly canceling coverage if t h e insured violates applicable laws o r regulations designed t o pro- tect t h e environment. Even in cases of clearly written clauses, however, t h e courts have tended t o favor t h e insured; Congress has indicated t h a t i t will help insur- e r s establish rules governing t h e interpretation of words o r clauses.

Insurers must be able t o revise t h e i r premiums in response t o new developments in technology, science, medicine, economy, o r law. Underwriters must strive for a point of "determinateness"

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when t h e y can close t h e i r books and reevaluate t h e i r policies and c o r r e c t , if necessary, t h e i r underwriting practices. Insurers will also have t o reexamine t h e "polluter pays" principle and t h e "cradle-to-grave" rules of liability.

To increase t h e scope of available coverage, t h e principles of all-ris k , firs t - p a r t y insurance must pre- vail. The costs of pollution could b e allocated according t o t h e evidence of causation

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t h a t is, collectively and not individually. All injured parties would b e compen- s a t e d fully and t h e cost of t h e benefits would b e assigned t o t h e polluters a s a group. This plan might avoid t h e problems of unclear o r multiple causation.

THE OUTLOOK

Insurance coverage for hazardous materials will have its price, but i t will not provide long-term security.

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R a t h e r , t h e insured amounts will b e fairly modest, com- p a r e d with t h e potential of some catastrophes. Insur- e r s will provide coverage only f o r claims made within a specified period and will not cover t h e cost of cleanup of t h e insured's own premises. Policies will exclude specific substances by name (for instance, asbestos) o r specific types of damage (for example, genetic). Insur- e r s will b e selective and avoid high-risk facilities.

For long-term risk, coverage should utilize techniques borrowed from life insurance. I t s continuity must b e assured, perhaps with such sweeteners as sav- ings on premiums when claims a r e lower t h a n e x p e c t e d . Political factors may also inhibit new directions, s o alternative systems of insurance may b e difficult t o develop. The role of private insurers depends on t h e i r willingness t o meet t h e demand and cooperate with government in developing a satisfactory system.

THE DEVELOPMENT OF ENVIRONMENTAL- IMPAIRMENT LIABILITY (EIL)

Despite billion-dollar claims f o r environmental catas- t r o p h e s , aggregate losses from t h e s e disasters a r e low, even negligible, compared to, say, losses from all fires.

Why, t h e n , do insurers make a fuss about EIL?

Several reasons account f o r t h e i r concern. Only a f e w policies a r e issued, s o t h a t t h e premiums collected a r e small relative t o t h e possible catastrophic losses.

In addition, familiar events, such a s f i r e s , a r e not viewed by t h e public as threatening t o i t s health, but t h e smallest pollution case is viewed with high emotions, which quickly can t u r n t h e problem into a political issue. O t h e r p a r t i e s , from lawyers t o cleanup contrac- t o r s , see t h e EIL insurer a s a "deep pocket" t h a t can b e picked endlessly.

EIL, which began in 1974, today issues claims-made policies. Although insurance r a t e s normally depend on t h e size and frequency of claims, too little is known about t h e conditions covered by EIL f o r this insurance t o rely on p a s t history. A more subjective approach is thus used. Processes and substances a r e listed

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according t o t h e i r chance of causing harm (without con- sidering whether a claim might a r i s e o r t h e e x t e n t of such a claim). Among: o t h e r elements considered a r e t h e country involved, its history and degree of technical development, t h e claims-consciousness of its people, t h e legal system, and t h e stability of t h e prospective client's company.

The client's premises a r e inspected t o assess t h e possibility of actionable claims. Hazards a r e identified and t h e n quantified according t o several models (for instance, emission of toxic substances o r h e a t radiation o r vapor-cloud explosion). Plant managers a r e urged t o eliminate o r reduce as many risks as possible. Despite t h e s e preventive actions, corporations arc? concerned t h a t t h e i r insurance is adequate t o cover a catastrophic loss. Today, EIL has practically dried up in t h e US and t h e premiums have skyrocketed for t h e limited coverage t h a t a firm may possibly b e able t o purchase.

Several participants a t t h e conference pointed out t h a t EIL coverage available worldwide has been drastically reduced since 1983; c u r r e n t l y , individual coverage limits for a single firm a r e of t h e o r d e r of

$10-20 million

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hardly adequate for t h e risks involved.

The US has been particularly hard-hit because of a lack of reinsurance, a reflection b y reinsurers of t h e i r view of t h e American courts and t h e extraordinarily large settlements in r e c e n t years.

The EIL system would benefit from b e t t e r organi- zation. Reinsurers a r e too f a r removed t o be directly involved in t h e investigation and settlement of losses.

Underwriters, loss adjusters, and risk engineers must work together more than t h e y have in t h e past.

National and international reinsurance pools need t o b e formed and techniques f o r handling claims and losses must improve in o r d e r t o both satisfy t h e victims and keep losses within acceptable proportions.

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REEXAMINING COMPENSA TION

A NEW LOOK AT STATISTICS

Today, t h e cost of environmental damage appears to be prohibitively high to insure. In fact, the total financial burden of this damage is not a large proportion of the burden of all environmental accidents.

Interesting figures appear when we look at disas- t e r s that involve deaths, large-scale evacuation, or expensive cleanup (for instance, oil spills, tanker accidents, decontamination of hazardous-was t e dumps, dam accidents, contamination of soil or water, air pollution, noise, and radioactivity. With few exceptions, they have never caused third-party damage greater than that which has occurred in airline crashes, industrial fires, o r explosions. Other forms of losses may well exceed this amount, so the premium for third-party liability coverage can be expected to be only a modest proportion of the total premium.

A statistical "law" seems to be operative: the frequency of accidents diminishes in proportion to their severity, and the financial weight of technological disasters in different categories of severity stays roughly constant. (The law does not seem to apply to

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catastrophic natural disasters.) In particular, accidents causing losses g r e a t e r than $20 million give rise t o aggregate losses t h a t amount t o less than those of 25% of all accidents. Accordingly, insurance and compensation for such accidents is not, p r i m a f a c i e , constrained by aggregate economic losses, nor do such accidents lie outside t h e normal domain of insurability.

The problems noted earlier with EIL insurance a r e even more striking when contrasted with t h e s e statistics. To d a t e , t h e total cost has been a small fraction of t h e cost of preventive measures. Finally, t h e total cost of pollution disasters is much smaller than t h a t of natural disasters, a t least in industrialized countries.

Some form of compensation t o potential victims of pollution damage, t h e r e f o r e , is not an unreasonable aim.

HOW COMPENSATION CAN BE STRUCTURED

In o r d e r t o make s u r e t h a t victims of serious pollution accidents a r e compensated, insurance has been required for firms t h a t produce hazardous waste a s by- products, compensat ion funds have been established.

and p a r e n t companies have been made liable for t h e i r subsidiaries. These s t r i c t u r e s have c r e a t e d problems for firms t h a t a r e too small t o self-insure and have found liability insurance too costly o r impossible t o purchase. Since no insurance system can cover t h e very r a r e s t and most costly events, compensation ceilings will b e necessary, although t h e y will b e higher when t h e risk is more widely s p r e a d .

Some disasters

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radioactivity, oil slicks, discharges of dangerous waste, a i r pollution, and noise, f o r example

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can cause catastrophic losses, s o some governments have established special compensation systems t o p r o t e c t industries from going under and victims from being poorly compensated. These a r e designed t o pay larger sums rapidly without attributing fault t o any particular p a r t y . The governments normally levy a tax on firms to c r e a t e t h e s e special funds and may have t o utilize revenue from o t h e r sources t o cover losses above t h e existing compensation ceilings.

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ASSESSING RISK A S S E S S M EN 7'

THE LIMITATIONS

Practitioners do not ful.ly understand scientific risk assessment and e x p e r t s disagree over both t h e termi- nology and t h e techniques used. The differences a r e less in t h e models than in t h e assumptions behind them and t h e judgments made from them. For instance, a r e mice good subjects from which t o draw inferences about human risk t o toxic substances? Even if t h e answer is no, a r e t h e data derived from animal t e s t s valid enough t o help t h e public make decisions? Uncertainty and subjectivity, however, need not imply chaos. W e can always t r y t o bias results upward, s o t h a t t h e "true"

risk is unlikely t o exceed t h e estimate w e r e a c h .

People have difficulty assessing risk, partly because of difficulties in understanding past events and partly from fantasizing t h e future. They tend t o overestimate risks from sensational causes of death and underestimate those from nondramatic ones (partly because t h e news media have t h e same bias). Even accu- r a t e information can raise worries. Anxious people also tend t o deny t h e uncertainty

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thus making t h e risk s o small t h a t i t can b e safely ignored o r so large t h a t i t should clearly b e avoided.

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People want f a c t s , not probabilities. They do not want t o face gambles, a form of denial t h a t accounts for t h e polarized attitudes toward such hazards as nuclear power o r pesticides. Polarized a t t i t u d e s a r e h a r d e r t o change, even with new disproving evidence; y e t those without strong opinions can easily b e swayed b y t h e way information is presented. The potential f o r mani- pulation raises i t s own ethical questions.

THE PROSPECTS

People can, nonetheless, b e educated about risks

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^if

t h e y and t h e e x p e r t s s h a r e an atmosphere of t r u s t . Risks described quantitatively can b e shaped b y t h e way t h e hazard category is defined, what consequences a r e measured o r r e p o r t e d , and t h e unit of observation. No statistical display can guarantee t h a t a risk will b e understood, but comparisons between two figures have been shown t o b e more meaningful than absolute numbers o r probabilities. Comparisons can also a c t a s guides t o decision making, although t h e public needs o t h e r information as well, such a s t h e costs and benefits of t h e available options and t h e degree of uncertainty in t h e assessments.

Communication problems e x t e n d beyond numbers.

"Risk" may not mean t h e same thing t o t h e public as i t does t o t h e e x p e r t s , even when i t is quantifiable and predictable. Lay people worry more about hazards, t h e adverse effects of which a r e uncontrollable, dreaded, catastrophic, o r fatal r a t h e r t h a n about risks t h a t a r e injurious, not offset by compensating benefits, and latent (i.e., f u t u r e generations must b e a r them). They a r e more concerned over a small accident in an unfa- miliar system (e.g., in a nuclear r e a c t o r o r a recombinant-DNA laboratory) than a large one in a familiar system (e.g., a train wreck).

Consequently, t h e s e a t t r i b u t e s must b e considered along with probabilities and potential losses. Risk assessors must remember t h a t t h e broader concerns reflected by t h e public a r e legitimate. In a sense, each hazard is unique, but in an attempt t o understand t h e

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collective lay mind, multiattitude indices a r e being com- piled and studied.

Future r e s e a r c h in risk assessment a p p e a r s most promising. One aspect is informed consent, which per- mits people t o make decisions in t h e i r best i n t e r e s t . Current procedures of informed consent convey t h e probabilities of risk b e t t e r than t h e consequences: How can a d e e p e r perspective about t h e l a t t e r b e con- veyed? Perhaps victims of a problem (a disease, for instance) should inform t h e public about i t s physical and emotional impact. W e know virtually nothing about how strong a tendency t h e r e is t o deny t h e relevance of a r i s k o r about t h e nature of t h e process of assimi- lating a message.

Another a r e a of r e s e a r c h is developing creative indices and analogies. W e might study t h e way people understand commonly used measures for distance, time, and speed, o r how t h e y r e a c t t o specific figures on a scale such as t h e Richter scale, designed t o measure earthquakes. Perceptions a r e malleable, s o w e must learn how people organize t h e data. Does, f o r example, presenting information in more than one way help o r confuse t h e listener? Since information cannot b e p r e s e n t e d neutrally, w e must b e aware of ethical and political implications of different modes of displaying data. W e must remember t o t e s t all messages, recognizing t h a t t h e y may b e informative in different ways.

Other r e s e a r c h is required on how individuals characterize risk and how t h e y differ in representing i t . W e also need t o know whether people can absorb information a s index summaries and whether t h e y will make o r a c c e p t decisions based on these.

HELPING OUT THE MEDIA

The media have been criticized for misleading t h e public, not only by t h e content of stories, but also by t h e massive attention bestowed upon some issues; quantity both shapes and defines issues. Stories rarely include

"enabling information" t h a t tells r e a d e r s o r listeners where t o obtain help o r f u r t h e r details.

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In defense of t h e media, risk stories a r e inherently complex and journalists must depend on e x p e r t s in many fields. Scientists can help them by discussing t h e i r findings with them, providing as complete and unbiased information as possible, and developing clearinghouses for scientific news.

Research should study t h e t h e o r y of media

-

why, for instance, is disorder prime news (one reason is t h a t it t h r e a t e n s values)

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o r issues t h a t serious journalists may find useful

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for instance, systematic biases o r inadequacies in stories where t h e e x p e r t s disagree.

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T H E DYNAMICS OF CRISES

WHEN STRUCTURES FALL APART

A crisis can be likened to an unfurling wave because it is not an ordered series of decomposable difficulties, but a complete breakdown

-

technical, organizational, and psychological. Existing policies and programs no longer work because they are designed to cope with normal situations rather than unexpected ones.

Organizationally, a crisis turns sequences into rapid chain reactions. Underlying antagonisms surface when a number of contradictory requirements must be met at once. People look for t h e technical miracle

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or undertake witch hunts in search of scapegoats. This disorder feeds on itself, so corrective mechanisms cease to work. Potential sources of help retreat, view- ing t h e crisis as a threat to themselves. Teams disin- tegrate, leaving individuals to face problems on their own: communication falters, trust evaporates. A crisis exposes vulnerable points in the overall sociopolitical fabric.

RIGHTING THE WORLD

One can, however, cope with a crisis. Much of the response is tactical: speed is essential. Basic

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arrangements must converge

-

trained teams of special- is t s knowledgeable about t h e hazards of industrial products, communications and advice c e n t e r s (for instance, t h e chemical industry's CHEMTREC), on-site emergency plans (established in advance), off-site emergency plans, and intraindustry systems of mutual aid. Emergency plans of firms must b e coordinated with those of local authorities. Employees in firms and t h e general public must b e kept informed of new programs and policies designed t o deal with a crisis.

Organizations, whose morale and stability a r e based on t h e premise t h a t t h e exceptional will not occur, must not, in a crisis, withdraw from t h e many public demands placed on them. They will b e inclined t o say t h a t "everything is under control," but t h e public will believe just t h e opposite.

Community leaders should have already studied o t h e r major crises in o r d e r t o understand how t o cope with t h e reality of t h e c u r r e n t situation. They must efficiently manage information and mobilize analysts , decision makers, and o t h e r individuals who may not have worked together before. They must also provide c o r r e c t , consistent, and up-to-date information t o t h e media; silence may imply guilt, justifiably o r not.

Top management will b e sucked into t h e crisis as well. I t must b e prepared t o g a t h e r information con- tinuously and i n t e r p r e t and r e i n t e r p r e t i t , but t h e r e is little margin for e r r o r , especially as regards t h e media.

Top management must maintain internal coherence and capability, even though t h e destructive tendency of crises pulls t h e o t h e r way, creating doubts about t h e mission, weakening allegiances, fomenting separateness in teams.

The crucial element f o r management is safety.

Hazards and points of vulnerability must b e anticipated

-

for instance, those involving new products, new tech- nologies, new organizational forms, and new business strategies. Many institutional arrangements and policies will have t o b e reexamined in light of t h e c u r r e n t crisis

-

compensation for victims, t h e possibility of failure of networks, such a s t h e telephone service, o r proposed economic solutions t h a t might shortchange

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safety a t a time when t h e public is demanding g r e a t e r safety. I t has been unusual for management t o have implemented prevention programs o r t o have made safety goals public prior to t h e crisis, efforts t h a t would gain it credibility and legitimacy. During a crisis, safety concerns must not be overshadowed by technical, economic, o r administrative considerat ions.

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"&

4%

- T H E PROBLEM OF EQUITY IN CHOOSING S I T E S

THECOSTSOFCARELESSNESS

Programs f o r t h e disposal of hazardous waste a r e behind schedule and in disarray today. Plans for winning public acceptance of selected s i t e s have generally failed and have sometimes been t u r n e d down in volatile anger. Regional compacts have led t o balkanization.

One problem is t h a t plans f o r siting a waste- disposal facility typically a r e undertaken in isolation r a t h e r than as p a r t of t h e overall "cradle-to-grave"

concept, which begins when t h e waste is generated and t h e n t r a n s p o r t e d t o t h e place where i t is s t o r e d o r otherwise disposed of. Another problem is uncertainty about t h e likelihood of massive human contamination, a concern t h a t can push t h e public close t o hysteria.

The public also remembers past disasters, such as Love Canal, and is unlikely t o be soothed merely by more complete and a c c u r a t e information on t h e new technology t h a n has been presented previously. Controversies mix factual disagreements and value disputes.

Much of t h e opposition t o waste facilities comes from local residents who perceive an injustice, feeling t h a t industry and t h e public a t large may benefit while t h e y b e a r all t h e risks. Studies of equity a r e few; both t h e o r y and experience a r e lacking. I t may be possible

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t o s h a r e t h e benefits of a disposal facility by t h e same t y p e of arrangement t h a t t a x e s t h e winners and pro- vides compensation t o t h e chosen s i t e . I t may be possible t o reduce risks by enforcing specific standards and regulations regarding health and safety. Ethical questions also arise: When and f o r what ends may risks be placed upon o t h e r s ? Who should make such decisions?

What rights do risk b e a r e r s have?

The problem of dealing with t h e s e siting issues is compounded because t h e public d i s t r u s t s institutions, including governments, p a r t l y because toxic wastes have been badly mismanaged f o r decades and p r o p e r disposal has been neglected. Even good intentions sometimes go awry. The public can be shown a "fault tree" t h a t is designed t o demonstrate how small t h e risks a r e , yet this leaves t h e opposite impression by revealing how many things could go wrong.

Finally, t h e responsibilities f o r selecting sites differ depending on t h e t y p e of waste involved. In t h e US, s t a t e s have t h e responsibility for choosing t h e many s i t e s needed f o r toxic but nonradioactive waste;

regions f o r low-level radioactive waste; and t h e Federal Government f o r high-level waste. T h e r e is no coordina- tion between efforts a t different governmental levels, although t h e problems a r e t h e same in each group. The result is t h a t f e w sites f o r disposal of toxic waste have been selected and developed.

SEEKING CREATIVE IDEAS

T h e r e a r e several models t o establish a s i t e :

(1) In a market-based model, risks a r e frequently borne by poor communities who a r e least able t o pay large sums t o avoid having t h e facility in t h e i r backyard.

( 2 ) The model in which a c e n t r a l authority imposes a s i t e a p p e a r s t o be oriented toward protecting health and safety. Such authorities, however, command little t r u s t and confidence and do not

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serve t o quiet t h e fears of t h e public. In f a c t , opposition t o t h e i r decisions usually escalates.

(3) In t h e "bartered consent" model, residents near t h e chosen s i t e receive compensation as p a r t of a negotiated agreement

.

This approach presumably converts local opposition into neutral if not posi- tive feelings, helps r e s t o r e equity, and promotes shared values with respect t,o t h e facility. It is t h e h e a r t of t h e U S Nuclear Waste Policy Act of 1982

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a series of c a r r o t s coupled with t h e Presidential stick of forced selection if a volun- t a r y agreement is not forthcoming. It assumes t h a t , in choosing between s i t e s , benefits can be weighed against risks, t h a t compensation can be determined by specifying t h e long-term impact of t h e facility, and t h a t t h e developer and t h e regulatory agency can gain social t r u s t . Today, these assumptions a r e questionable.

(4) The "fairness-centered'' model may include mechanisms for conflict resolution. For instance, it might allow for a "siting jury" t h a t always con- sists of different interested parties, including residents of t h e areas under consideration. Alter- natively, i t might select an ad hoc commission t o determine t h e location of t h e facility from a list of certified sites. O r a lottery might be utilized.

Such approaches have not been widely discussed t o d a t e , but given t h e failures of existing institutions, t h e s e new approaches may be worth trying.

In addition t o conceptualizing t h e siting problem as a systems-level task, a new paradigm must have an ethical basis. It must recognize t h a t some individuals will have t o bear risks for others, but t h e imposition on these should be voluntary if possible; t h a t risks should b e avoided, wherever cost-effective; and t h a t unavoidable risks must be compensated through sharing t h e winners' gains with t h e potential losers.

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IMPLEMENTING T H E RISK- MANAGEMENT TOOLS OF INSURANCE, COMPENSATION, AND REGULA TION

THE PROBLEM

Balancing t h e benefits and costs associated with hazardous materials is difficult. A mix of regulatory and market forces ought t o assure a viable and safe infra- s t r u c t u r e for t h e transport and use of t h e s e materials.

However, w e need t o know how different interested parties weigh and evaluate t h e various consequences of regulatory and policy options. Can insurance and compensation sufficiently r e d r e s s t h e balance with r e s p e c t t o risks, costs, and benefits in t h e management of hazardous waste?

A MODEL FOR SITING

The quest ion bears initially on t h e economic, environmental, and health effects of t h e transportation, t r e a t - ment, and disposal of hazardous waste. Insurance, liability, and safety measures a r e joint, r a t h e r than s e p a r a t e , issues. A generator o r a t r a n s p o r t e r of waste a c c e p t s risks according t o t h e anticipated liability and compensation arrangements. For example, if t h e private cost t o a profit-oriented firm is lower than t h e social cost of an accident, t h e implication i s t h a t t h e

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level of c a r e taken by t h e firm will b e insufficient. The incentive t o make investments in s a f e t y is g r e a t e r if a firm can t h e r e b y reduce i t s liability. On t h e o t h e r hand, if firms perceive t h a t t h e i r reputations a r e a t s t a k e if t h e i r activities adversely a f f e c t human health and s a f e t y , t h e y may spend more on waste reduction than is socially optimal.

T h e r e a r e f u r t h e r complexities in designing optimal strategies f o r managing hazardous materials. A firm faces trade-offs between enhancing i t s output and taking protective measures, since i t s own resources a r e finite. Furthermore, not all damages can b e e x p r e s s e d in monetary t e r m s , particularly environmental and health effects f o r which t h e r e a r e often no easily assignable causal agents. In f a c t , t h e uncertainties associated with non-sudden "accidents" make i t virtually impossible t o assemble a predictive d a t a base f o r assessing risks. Under t h e "polluter pays" principle, many victims would not b e compensated by firms t h a t have only limited assets. On t h e o t h e r hand, under t h e

"public pays" principle, firms have limited incentive t o u n d e r t a k e protective measures. An a p p r o p r i a t e decision regarding an acceptable level of risk requires a balance between enforcement costs, incentives, and t h e inequity of leaving some victims uncompensated.

Compensation and insurance can help choose a feasible and a p p r o p r i a t e s i t e , but who is t o participate in t h e negotiations process? Several p a r t i e s can b e identified as integral:

The firms t h a t generate t h e waste (they want t o continue producing t h e i r goods; t h e y a r e also par- tially liable, according t o US law, f o r t h e costs of accidents).

The facility developers, who have a financial incentive t o compensate t h e host community, p e r h a p s through t a x e s (they should also b e p r e p a r e d f o r liability claims).

The host community, t o whom t h e gains a r e limited and t h e costs possibly large.

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(4) The insurance companies, which face t h e uncer- taint ies inherent in accidents a t hazardous-was t e facilities and in court settlements.

(5) Other residents outside t h e a r e a of t h e facility who benefit from t h e goods and services produced by t h e firm t h a t generates t h e hazardous waste.

SUBSEQUENT STAGES

In building t h e facility, t h e developer will probably have t o offer t h e community e i t h e r monetary compensation o r payment in kind. If compensation is i n t e r p r e t e d a s a bribe, then t h e t e r m "benefit sharing" may b e more palatable. In living with t h e facility, residents will worry about p r o p e r t y values and economic development. Developers might not know what t o offer because fair market values a r e difficult t o determine in t h e absence of a facility. If premiums a r e based on risk, insurance might encourage firms t o invest in b e t t e r plant design and o t h e r protective measures; arrangements can also b e made t o monitor and control plants.

Accidents involving hazardous wastes must b e anticipated. A long latency period before health consequences reveal themselves make traditional insurance arrangements inadequate. Private and public s e c t o r s may have t o combine t o form insurance programs, making use of claims-made policies, t r u s t funds, and an industry-wide self-insurance fund. (The l a t t e r s o r t of fund may have one major administrative problem

-

moni- toring, t o make s u r e t h a t participants, s e c u r e in t h e knowledge t h a t t h e y a r e insured, do not exhibit care- lessness .)

Not all of t h e stakeholders have an equal i n t e r e s t a t each stage of development. The public has been shown t o b e disturbed most b y t h e dread and unknow- ability of hazardous-waste risks. Compensation, o r benefit sharing, will likely have t o be relatively high when both of t h e s e factors characterize t h e risk of a proposed technology. There may b e justifiable differences of opinion: t h e industry and t h e developer may know t h e technology well and feel t h a t i t c a r r i e s a

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minimal risk, while t h e public, not knowing this, may feel otherwise.

The probability of accidents will b e difficult t o assess. Some accidents, in f a c t , a r e s o unlikely t h a t t h e r e will b e no practical basis for statistically estimating t h e i r chances of occurring. Insurers will not b e interested in selling coverage because of t h e uncertainty. On t h e o t h e r hand, t h e potential host community may imagine t h e losses graphically

-

and consequently overestimate t h e potential losses r a t h e r than focus on t h e i r relatively low probability of occurrence.

The t r u e willingness of an individual o r community t o a c c e p t a facility t h a t might harm them but benefit o t h e r s is not easily measured. Considerations of equity and fairness complicate t h e matter, a s do institutional arrangements for designing appropriate mechanisms for compensation. In general, insurance policies and compensation cannot stand by themselves; t h e y m u s t b e integrated into a broader framework. A f t e r sites have been selected f o r t h e i r economic and environmental suitability, t h e values of each interested p a r t y m u s t b e determined. A "value t r e e " analysis might b e helpful in this process. I t often reveals conflicts among t h e stakeholders and lay out possible benefit- and risk- sharing options. The government's role as a monitor can also b e spelled out.

Four c r i t e r i a a r e useful for siting a hazardous materials facility:

(1) The siting process should b e open, allowing public participation in t h e final decision.

(2) Deadlines a r e necessary t o prevent foot-dragging.

(3) Siting arrangements must b e specified and t h e expected gains and losses clearly delineated.

(4) Insurance, compensation, and regulatory mechanisms should b e considered, recognizing t h a t t h e y will have different uses under alternative mea- s u r e s of societal welfare.

Overlapping jurisdictions c r e a t e f u r t h e r complica- tions

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for instance, classification of wastes, document- ing and r e p o r t ing flows across borders, agreement on

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financial responsibility a n d liability, development of t h e i n f r a s t r u c t u r e , a n d a s s u r a n c e t h a t t h e facility has sufficient demand.

Much remains t o b e learned: How d o firms respond t o t h e policy tools of insurance, compensation through negotiation, and regulation? How c a n t h e stigma of compensation b e overcome? W e lack empirical validation of t h e o r i e s of bargaining a n d collective-choice procedures with r e s p e c t t o managing hazardous materials. I n s u r e r s n e e d c r e a t i v e policies t o grapple with t h e uncertainties associated with t h e probability of a c c i d e n t s a n d t h e ensuing consequences. If p r i v a t e i n s u r e r s cannot provide coverage, industry-wide self-insurance programs should b e considered. Finally, t h e c o u r t s a n d t h e government must learn t o a p p r e c i a t e t h e i r r e s p e ~ t i v e roles in t h e process of managing hazardous materials.

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T H E CONFERENCE' PROCEEDINGS

The Conference Proceedings will be published in book form under the title I n s u r i n g a n d M a n a g i n g Hazard- o u s R i s k s : From S e v e s o t o Bhopal a n d B e y o n d , edited by Paul Kleindorfer and Howard Kunreuther.

The book is divided into four parts. Part One pro- vides perspectives on the nature and magnitude of accidents and losses from previous technological disas- t e r s , notably Seveso and Bhopal. Aspects considered a r e t h e reactions of organizations and public authorities t,o crisis situations, errors in technical design and/or management, problems of public health and evacuation, and the extent of environmental damage and its insurability.

Part Two deals with t h e relationships between production, transportation, handling, storing, and disposal of hazardous materials and t h e policy ins t ru- ments of insurance, compensation, regulation, and negotiation. In particular, it examines t h e use of insurance and compensation to share regional benefits from a hazardous-waste facility with those a t risk from t h e facility: t h e importance and difficulties of negotiations

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t o s p r e a d risks and benefits, and t o gain informed con- sensus; and t h e problems of winning and maintaining public t r u s t in t h e resolution of t h e s e conflicts.

P a r t Three discusses t h e traditional problems of hazard identification, risk estimation, risk evaluation, and related perception and communication problems. In particular, i t explores in detail t h e complex relationships b e t ween chemical risk analysis and management ;

t h e practical use and promise, as well a s pitfalls, of risk analysis for insurers and industry; t h e problems of communicating efficiently with t h e public and understanding t h e i r anxieties; and t h e use of value tree analysis t o assess t h e stakes held b y various parties in policies t h a t affect t h e risks associated with hazardous materials.

Part Four focuses on appropriate policy instruments f o r mitigating risks, reducing o r eliminating risks, spreading risks, and absorbing t h e financial and o t h e r loss potential of risks in socially and financially acceptable ways. In particular, c h a p t e r s compare regulatory styles f o r hazardous waste management in various countries; t h e legal background of liability insurance and i t s effectiveness in preventing risk o r satisfying t h e public; and t h e prospects of environmental impairment liability (EIL), in terms of land-based incidents and transportation of hazardous wastes by s e a , and institutional reasons f o r t h e decline of EIL.

The book also contains commentaries on some of t h e c h a p t e r s t o reflect t h e often very active exchanges between Conference participants on various topics. Finally, since a major objective of t h e Confer- e n c e was t o plan a r e s e a r c h agenda f o r t h e n e x t decade, w e summarize in t h e Epilogue t h e recommenda- tions produced a t t h e concluding plenary session.

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C O N T E N T S

OF THE

B O O K

Preface

Editors' Introduction

Part

One: Historical Background

1 From Seveso t o Mexico and Bhopal: Learning t o Cope with Crises

Patrick Lagadec

2 Engineering Aspects of Severe Accidents, with Reference t o t h e Seveso, Mexico City, and Bhopal Cases

G i o v a n n i Naschi

3 The Seveso Accident and I t s Aftermath

F.

Pocchiari, T/: Silano, a n d G. Zapponi

4 Compensation f o r Exceptional Environmental Dam- age Caused b y Industrial Activities

Henri Smets, with a discussion b y Jacques Depri- moz

Part

Two: Problem Context

5 Insurance and Compensation as Policy Instruments f o r Hazardous Waste Management

Paul Kteindorfer a n d Howard K u n r e u t h e r , with a discussion by Joanne Nichols

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6 Bargaining a n d Negotiation in Hazardous Material Management

Michael O'Hare, with discussions b y C l a r e n c e D a v i e s a n d F r i e d e m a n n D i n g l i n g e r

7 R e t h i n k i n g t h e Siting of Hazardous Waste Facili- t i e s

Roger K a s p e r s o n

Part Three: Risk Analysis

8 T h e I n e x a c t S c i e n c e of Chemical Hazard Risk Assessment: A Description a n d Critical Evaluation of Available Methods

V i n c e n t CovsLLo a n d Miley Merkhofer

9 Methods of Risk Analysis

Niels L i n d , with discussions b y H a n s B o h n e n - b l u s t a n d James Hawksley

10 Informing a n d Educating t h e Public a b o u t Risk P a u l kSLovic, with discussions b y T e r e n c e Lee and O r t w i n R e n n

11 Value T r e e Analysis: An I n t r o d u c t i o n a n d a n Appli- cation t o Offshore Oil Drilling

Detlof v o n W i n t e r f e l d t , with discussions b y H a r r y O t w a y a n d I s a d o r e RosenthaL

Part Four: Risk Management and Insurance

1 2 Regulating Environmental R i s k s : A Comparative P e r s p e c t i v e

T i m o t h y O ' R i o r d a n a n d B r i a n W y n n e , with a discussion b y J e f f r e y J o n e s a n d S t e v e n S w a n s o n

13 Chemical I n d u s t r y Hazards: Liability, I n s u r a n c e , a n d t h e Role of Risk Analysis

Michael B a r a m , with a discussion b y A d r i a n C o h e n

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1 4 P r a c t i c a l A s p e c t s of Environmental-Impairment Liability

A l f r e d K l a u s

15 R e c e n t Developments Concerning t h e Legal Regime a n d I n s u r a n c e Problems a b o u t t h e T r a n s p o r t a t i o n of Hazardous Materials b y Sea

E n r i c o O r l a n d o

16 Insuring Environmental Liabilities Malcolm A i c k i n

17 T h e Role of I n s u r a n c e in Risk S p r e a d i n g a n d Risk Bearing

W e r n e r P f e n n i g s t o r f , with discussions b y J o h n Cowell a n d J u r g S p u h l e r

Epilogue: From Seveso to Bhopal and Beyond

List of P a r t i c i p a n t s

I n d e x

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A B O U 7' T H E E D I T O R S

Paul m e i n d o r f e r is Professor of Economics and Deci- sion Sciences, Director of t h e Center for Organizational Innovation, University of Pennsylvania, Philadelphia, PA 19104, USA.

Howard K u n r e u t h e r is Professor of Decision Sciences and Public Management, Director of t h e Center for Risk and Decision Processes, University of Pennsylvania, Philadelphia, PA 19104, USA.

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O T H E R IIASA PUBLICATIONS O N R l S K A N D H A Z A R D O U S WASTE MANAGEMENT

Books a r e not available from IIASA but may b e obtained from your local bookseller o r directly from t h e pub- lisher. Other IIASA publications may b e obtained from t h e Publications Department, IIASA, A-2363. Laxenburg, Austria, a t t h e prices shown.

ROOKS

P l a n n i n g for Rare E v e n t s : Nuclear Accident P r e p a r e d n e s s a n d Management. P r o c e e d i n g s of an I n t e r n a t i o n a l Workshop, J a n u a r y 28-30, 1980. J.W.

Lathrop, Editor. (IIASA Proceedings Series, Vol. 14.

Available from Pergamon Press.) ISBN 0 08 028703 4.

The Risk A n a l y s i s C o n t r o v e r y

-

An . I n s t i t u t i o n a l P e r s p e c t i v e . H.C. Kunreuther, E.V. Ley, Editors. Pub- lished b y Springer-Verlag, Berlin, Heidelberg, New York. ISBN 3-540-12012-2.

Managing Technological Accidents: Two Blowouts in t h e North Sea. D.W. Fischer, Editor. (IIASA Proceed- ings Series, Vol. 16. Available from Pergamon Press.) ISBN 0 08 029346 8.

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R i s i k o a n a l y s e u n d pol

i t

i s c h e E n t s c h e i d u n g s - p r o z e s s e . S t a n d o r t b e s t i m m u n g v o n F l u e s s i g g a s a n - l a g e n in v i e r L a e n d e r n . H.C. K u n r e u t h e r , J . Lin- neroot h , e t al. Published b y Springer-Verlag, Berlin, Heidelberg, New York. Tokyo. ISBN 3-540-12550-7.

R i s k A n a l y s i s a n d Decision Processes. The S i t i n g of L i q u e f i e d E n e r g y Gas F a c i l i t i e s in F o u r C o u n t r i e s .

H.C. K u n r e u t h e r , J . Linnerooth, e t a l . Published b y Springer-Verlag, Berlin, Heidelberg, New York, Tokyo.

ISBN 3-540-12804-2.

R e g u l a t i n g I n d u s t r i a l R i s k s

-

S c i e n c e , Hazards a n d P u b l i c Protection. H.J. Otway, M. Peltu, Editors. Pub- lished b y Butterworth & Co. (Publishers) Ltd., London.

ISBN 0 408 00740 0 .

R i s k Management a n d H a z a r d o u s Waste

-

^Compara-

t i v e I n s t i t u t i o n a l P e r s p e c t i v e s . B. Wynne, Editor. To b e published b y Springer-Verlag, Berlin, Heidelberg, New York, Tokyo. (Forthcoming).

IIASA RESEARCH REPORTS

RR-75-14. A v o i d a n c e R e s p o n s e t o t h e R i s k E n v i r o n - ment: A C r o s s - C u l t u r a l C o m p a r i s o n . H.J. Otway, R.

M a d e r t h a n e r , G. Guttmann. J u n e 1975. 2 9 p p . (Micro- f i c h e only.) $4.00.

RR-80-15. A C o m p a r a t i v e S t u d y of P u b l i c B e l i e f s a b o u t Five E n e r g y S y s t e m s . K . Thomas, D . Maurer, M.

Fishbein, H.J. Otway, R. Hinkle, D. Simpson. April 1980.

33 p p . $5.00.

RR-80-18. Nuclear E n e r g y : The A c c u r a c y of Policy Makers' P e r c e p t i o n s of P u b l i c Beliefs. K. Thomas, E.

Swaton, M. Fishbein, H.J. Otway. April 1980. 44 p p .

$6.00.

RR-80-25. The V a l u e of H u m a n Life: A Review of t h e Models. J . Linnerooth. J u n e 1980. 26 p p . R e p r i n t e d

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from Economic I n q u i r y , Vol. 17, 1980. Available for a handling charge of $3.00.

RR-81-3. Witches, Floods, a n d Wonder Drugs: Histori- cal P e r s p e c t i v e s o n Risk Management. W.C. Clark.

March 1981. 30 pp. Reprinted from Societal Risk Assessment: How S a f e i s S a f e E n o u g h ? Plenum Press,

New York, 1980. Available for a handling charge of

$3 .OO.

RR-81-15. G u i d e l i n e s for C o p i n g w i t h N a t u r a l D i s a s t e r s a n d Climatic Change. H.C. Kunreuther, P.

Kleindorfer. July 1981. 19 pp. Reprinted from Zeitschrigt fkr Umweltpolitik, Vol. 3 (1980). Available for a handling charge of $3.00.

RR-82-36. S i t i n g H a z a r d o u s Facilities: L e s s o n s jYom LNG. H.C. Kunreuther, J. W. Lathrop. November 1982. 1 7 pp. Reprinted from R i s k A n a l y s i s , Vol. l(4) (1981).

Available for a handling charge of $3.00.

RR-82-39. A D e s c r i p t i v e Model of Choice for S i t i n g Facilities. H.C. Kunreuther, J.W. Lathrop, J. Lin- nerooth. November 1982. 20 pp. Reprinted from B e h a v i o r a l S c i e h c e , Vol. 27 (3) (1982). Available for a handling charge of $3.00.

RR-83-34. Liquefied E n e r g y Gas T e r m i n a l Risk: A C o m p a r i s o n a n d E v a l u a t i o n . J. W. Lathrop, C. Mandl.

December 1983. 58 pp. $7.00.

IIASA EXECUTTVE REPORTS

ER-81-6 L e s s o n s jYom Major A c c i d e n t s

-

A Com- p a r i s o n of t h e Three Mile I s l a n d Nuclear Core O v e r h e a t a n d t h e North S e a Platform B r a v o Blowout.

D. W. Fischer. November 1981. 40 pp. Single copies available free of charge.

ER-85-8 R e g u l a t i n g I n d u s t r i a l R i s k s . A n E x e c u t i v e S u m m a r y of a Workshop. J.S. Maini, M. Peltu, H.J.

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Otway. December 1.985. 1.8 pp. Single c:opies available free of charge.

IIASA COLLABORATIVE PAPERS

CP-82-32. RISE A Seminar Series. H.C. Kunreuther, Editor. April 1982. 600 pp. $1.9.00.

CP-02-S6. Liquefied Energy Gas Facility Siting:

International Comparisons. H.C. Kunreut her, J . Lin- nerooth, R . Starnes, Editors. June 1982. 500 pp.

$19.00.

Insuring and Managing Hazardous Risks: From Seveso to Bhopal and Beyond