Future Energy

Pragmatic Regulation: Sparrow and the Control of Harms

“Pick Important Problems and Solve Them”

Malcolm Sparrow, a Harvard professor in the Kennedy School of Government and ex-British cop, has spent a decade or more popularizing this phrase and the approach to regulation that it summarizes.  In his most recent book, The Character of Harms: Operational Challenges in Control, he looks closely at the difficulties of picking and solving regulatory harms or risks and has this to say:

“However simple that sounds, it turns out that organizing around carefully selected and important pieces of risk - rather than around traditional programmatic or functional tasks, or around core-high-volume operational processes – is extraordinarily difficult for agencies or institutions to do.”

Harms or risks, as defined by Sparrow can include international terrorism, hunger, war, child mortality, loss of environmental resources, crime of all kinds, etc., etc., etc.  In Sparrow’s words, “much of the unfinished business for the human race consists of harms, threats, or risks of one kind or another, insufficiently controlled”.

Solving harms is a different kind of work from the routines practiced by most regulators and others in the risk management business.  It even gets its own acronym, ROPE (Recognize, Organize, Perform, Explain) to distinguish it from the functional and process-based approaches normally practiced by regulators.  Introducing the characteristics of his approach to solving harms, Sparrow describes it as “spot the knots, study them and unpick them one-by-one”.  More prosaically, he describes the four important properties of the approach:

• Addresses specific, tightly defined concentrations of harm;
• Involves a prolonged period of analysis resulting the development of hypotheses about what the specific problem really is;
• Results in interventions that are qualitatively new, not merely a mix of existing functions and methods; and
• Projects involve multiple agencies and organizations working in collaboration because the problems frequently straddle jurisdictional and pragmatic boundaries.

Sparrow advocates a pragmatic, practical approach to regulation, urging regulators (and readers) to understand the problems facing them before worrying about which tools, tactics or times to intervene and to avoid ideological preferences.  He goes further, suggesting that practitioners ....

“respect the natural shape and size of the harm itself.  Fashion your response around its structure, rather than forcing the harm into your structure.  Use a control structure which mirrors the structure of the harm itself.”

And in his opinion the people chosen to carry out this type of work matter (they always matter, but it’s nice to read an author that understands that).   

“The analysis and planning stages favour creative, analytic-types; not champions of particular functions with entrenched views; not necessarily senior staff or authority figures; rather those who work well in lateral teams, far away from their normal supervisor, the only one-of-their-kind in a diverse group; people not wed to any one particular set of tactics but willing to engage in brain-storming, working and re-working strange new ideas until they eventually morph into something feasible, legal, publicly acceptable and (hopefully) brilliantly effective.”

In short, pragmatic, practical people.

It would take a book to adequately describe his approach and that is what Sparrow very ably provides.  And it's divided into two sections: the first half provides the how-to, with sections such as “A different type of work”, “Defining the problems: setting the scale”, and “Puzzles of measurement”.

The second half of the book tackles special categories of risk such as invisible harms, catastrophic harms and conscious opponents.  In each case providing insight into what’s different and how responses must be tempered to address the specifics of the particular type of harm.

Perhaps most importantly, is that the approach is not just for regulators.  It can be applied equally well to the management of risk by other organizations, corporations, NGO's ..... wherever individuals are struggling to manage risks associated with the potential harms of our day.

It’s a very good read if you are interested in effective regulation and the art of risk management.

Enjoy.

Australia is Recognizing Aboriginals in its Constitution ... I Think

Source: Thriving in the Desert blog

With repatriation of our Constitution in 1982, Canada took the step of ensuring recognition of Aboriginal rights.  With Section 35 of the Constitution Act, the country provided constitutional protection to the existing aboriginal and treaty rights. 

35. (1) The existing aboriginal and treaty rights of the aboriginal peoples of Canada are hereby recognized and affirmed.

(2) In this Act, "Aboriginal Peoples of Canada" includes the Indian, Inuit and Métis peoples of Canada.

(3) For greater certainty, in subsection (1) "treaty rights" includes rights that now exist by way of land claims agreements or may be so acquired.

(4) Notwithstanding any other provision of this Act, the aboriginal and treaty rights referred to in subsection (1) are guaranteed equally to male and female persons.

From an energy development point of view, Aboriginal recognition was and is significant because of the string of court cases that followed, establishing an Aboriginal role in the development of natural resources.  In particular, a series of landmark court cases have established the responsibility of the Crown to "consult" with Aboriginal peoples and, where appropriate, accommodate Aboriginal rights or interests when considering development proposals. (A position paper by Weyerhaeuser does a particularly good job of articulating the issues and ways of addressing.)

In practical terms, the Crown's responsibility is frequently effectively handed-off to industry and others proposing to develop resources and rarely does it seem to be done well.  Evolving understandings of what constitutes consultation and how to consult have been huge factors in the complication of regulatory processes for approving projects.

Now Australia seems to be stumbling towards similar accommodation of aboriginal peoples rights and interests (See Coalition to put Aboriginal Recognition to Referendum, August 10^th). 

I say stumbling because, in 2007 John Howard's government committed to holding a referendum on whether the preamble to the Australian Constitution should be changed to explicitly recognize aboriginals.   The promise was then reiterated by Kevin Rudd in 2008. 

Now as a national election approaches, the current Labour government under Julia Gillard has suggested that it would form an expert panel to build support for the constitutional recognition of indigenous people.  And, needless to say, the conservative Coalition thinks it has a better idea.

As indigenous people across remote Australia began casting their votes in mobile polling booths for the federal election on August 21, the Coalition's indigenous affairs spokesman, Nigel Scullion, said there was no need for another committee and he would guarantee a timeline for constitutional recognition to be delivered to Australia's first people.

"We are not only committed to it, we certainly aren't going to flick this very important matter to an expert panel," he said.

"There's been a lot of conversation with the wider community about it. I haven't met anybody who doesn't think it should be reflected in our Constitution and it is down to words and there's not a great deal of angst in the community about the words."

Its hard to see the difference between the two positions beyond a knee-jerk bias against "committees".  Both say they are going to referendum, with Labour suggesting a need to build support among voters, presumably to ensure the issue doesn't blow up in their faces (i.e. get rejected by Australians). 

I wish them luck as they proceed down this path.  Australia has done a lot of interesting work developing innovative regulation and reducing regulatory barriers to development.  I would hope to see some lessons for Canada to come out of this.

Controlling Risk with Malcolm Sparrow

Last week while trying to get some information on a recent book by Malcolm Sparrow, I came across an interview with the man himself.  I was trying to make up my mind about ordering his book, The Character of Harms, and had hoped to find enough information to make a decision.  However, the interview was interesting in its own right and seemed worthy of a quick post.

I first came across Sparrow, a researcher at Harvard and ex-British cop, in an earlier book entitled The Regulatory Craft.  As a consultant that focuses on regulatory management, I am always looking for good writing on the subject and Sparrow's book was one of the best I've come across in recent years.  (Very quickly, his thesis in The Regulatory Craft was that regulators should "pick important problems and solve them" as part of a focus of focusing on the delivery of obligations.  It strikes a counterpoint to the many prescriptions for regulatory reform that focus, in his view wrongly, on customer service, process improvement, etc.)

In his interview, (and I suspect in his most recent book) Sparrow again focuses on the careful identification and solving of regulatory and other risk related problems, extending the direction advocated in The Regulatory Craft.  In discussing this approach, he hits on three key themes, including:

• Catastrophic risks, much in the news these days, lack the frequent, low-level events that would normally provide a basis for training, practice and prevention.  Put another way, there are too few events to support a a feedback loop.  To successfully manage catastrophic risks then, regulators and others must shift their focus to near-misses and precursor events.

• Regulators should focus on spotting emerging problems and suppressing them quickly before they can do much harm - "that doesn't mean waiting for three years for new legislation, but using available tools and enlisting relevant partners and getting into it quickly, devising a solution ..."

• This approach is not just for regulators, it applies equally well to corporate risk management and in fact any forum in which managers are struggling to manage risks relating to potential harms.

I am a strong advocate of designing and building proactive management systems to address the risks that affect companies and regulators.  However, I do believe that the practical, evidence-based approach advocated by Sparrow makes sense for addressing those problems that inevitably squeeze through even the best management systems.  So I recommend reading the interview for yourself - its short and won't take you long.  I recommend Sparrow's books even more.

Incidentally, I did buy The Character of Harms and with 30 minutes invested in reading thus far, it looks like it will be good.