Keynote Speech

The 1996 Annual Meeting of the Society for Risk Analysis-Europe

The Future Role of Risk Assessment and Risk Management in Environmental Regulation. Dr. David Slater, Director of Pollution Prevention and Control, Environment Agency, Rivers House, Waterside Drive, Aztec West, Almondsbury, Bristol BS 12 4UD

Introduction

The possible future role of risk assessment and risk management in environmental regulation is discussed in this paper, from the perspective of the UK Environment Agency. Much work has already been done on this area, and there are many risk-based environmental assessment techniques in use throughout the world. The Environment Agency has inherited a portfolio of risk assessment tools from its constituent organisations (Her Majesty's Inspectorate of Pollution, National Rivers Authority and the Waste Regulatory Authorities). It is likely that new challenges in environmental protection will raise the profile of risk assessment as a major tool in the assessment and regulation of environmental matters.

The formation of the Environment Agency presents a major opportunity to improve the effectiveness and efficiency of environmental regulation, both in the UK and Europe as a whole. The Agency is considering the role risk assessment and risk management will play in this process. A national centre of expertise on risk assessment, CEERA (Centre for Integrated Environmental Risk Assessment), created by HMIP, will continue to support the Agency's work on risk-related matters.

A brief overview is given on the following issues:

• The Need for Risk Assessment and Risk Management In Environmental Regulation
• Understanding Harm to the Environment
• Environmental Protection Standards
• Integration of Risk Assessment, Risk Management and Regulation
• Public Disclosure and Risk Communication
• The Role of the Environment Agency
  

The use of risk assessment in the Environment Agency will be illustrated using the following examples: OPRA (Operator and Pollution Risk Appraisal) system, a risk-based screening technique recently developed for planning inspections of major industrial processes; the BPEO (Best Practicable Environmental Option) assessment principles developed to fulfill the requirements of Integrated Pollution Control (IPC); and the Probabilistic System Assessment (PSA) approach used to assess long-term risks from underground radioactive waste disposal sites.

The Need for Risk Assessment and Risk Management In Environmental Regulation

Why do we need risk assessment and risk management in environmental regulation?

• Our understanding of the environment and the effects of human activities on it is neither complete nor accurate; substantial uncertainties remain. Risk assessment is an important part of the process of decision-making under conditions of uncertainty.
• The "traditional" approach to regulation, based on uniform standards, may result in under- or over-regulation of hazards, whereas risk-based regulation enables a targeted and more effective approach.
• Fixed limit value criteria, as part of a "go or no-go" system of regulation, do not adequately reflect the complexity of the environment. Harm may not actually occur above some limit values; equally, harm may still occur below limit values. In reality there is often a range of harm, characterised by both a magnitude and probability, i.e. risk, due to variations in exposure and response of individual receptors. The significance of this risk needs to be judged in order to control it appropriately in relation to other risks. Regulations based on such considerations should be less rigid and more likely to succeed.
• Society wishes to protect the environment while enjoying the benefits of industrial activity; this requires a regulatory approach which uses limited resources efficiently, targets those resources towards the major risks and ensures that the level of control reflects the risks and benefits of activities - i.e. a "Sustainable Development" approach.
• The identification of priorities may require a systematic and consistent basis for measuring and comparing the diverse forms of environmental harm, e.g. from acute toxic effects on a surface water body to regional air quality problems like photochemical smog. Risk assessment is beginning to provide the tools for doing this.
• The public in general have a growing awareness of health, safety and environmental risks and a desire for greater explanation and higher standards of protection against these. Risk assessment can provide greater transparency and objectivity to the regulatory process.
• Risk-based techniques can assist with efficient and effective regulatory effort. The regulator must be able to analyse the risks associated with policy and project alternatives, in order to deliver regulations which work in practice and do not expose the public, environment, industry and regulator itself to unacceptable risks.

Understanding Harm to the Environment

Environmental legislation in the UK contains broad definitions of the environment and what may constitute harm, e.g. the Environmental Protection Act (1990), see Box 1. Regulators have faced the difficult problem of turning these into practical definitions of harm, and developing criteria for assessing the significance of this harm. Most of the current approaches to evaluation of harm are based on environmental concentrations which are known to cause a certain effect in certain receptors, e.g. LC50 data for fish. There are substantial gaps and uncertainties in our understanding of actual effects. Can risk assessment help to improve this understanding?

Some of the areas which may provide input to the further development of assessment and regulation of environmental harm are as follows:

• evaluation of uncertainty in pollutant sources, e.g. non-routine releases
• evaluation of variability in the environmental conditions and receptors
• evaluation of long-term fate and transformation of pollutants
• cumulative and synergistic effects of pollutant loadings
• population and ecosystem response to pollutant loadings - recovery times, reversibility, etc.

Risk assessment provides the logical framework for combining this information, by systematically considering pollutant sources, exposure pathways in the environment, and impacts on receptors.

A balanced approach to risk assessment is needed, which includes both detailed methodologies and screening methods. The cost and complexity of detailed risk assessments generally prohibits their use on a regular basis. Where the acceptability of a risk can be readily judged, or a rough comparative assessment is needed, screening techniques may provide sufficient accuracy for decision-making purposes. Greater accuracy, i.e. reduced uncertainty, is only needed if the decision outcome could be affected by the possible change in risk estimates.

OPRA is a good example of a screening technique designed to provide approximate risk information without substantial resource requirements. OPRA has been developed to provide an environmental risk rating for all IPC processes. This information will initially be used to help the Environment Agency plan its overall inspection and monitoring activities and target effort towards specific processes and operators according to their risk levels. This approach will improve the efficiency of the Agency and provide incentives for operators to improve their pollution risk management, by linking regulatory effort directly to environmental risk.

The challenge with OPRA was to develop a system which can provide meaningful indicators of environmental risk, in a consistent manner, across the several thousand highly varied IPC processes in England and Wales, without adding significantly to the cost to inspectors and operators involved with the system. The solution was to develop a set of indicators of environmental risk, based on the "input" factors which determine environmental risk from a process (e.g. management systems, substances handled, pollution control systems, location, etc.), rather than attempt to assess directly the actual risk to the environment. The indicators can be rated fairly quickly and then aggregated to provide an overall measure of the inherent environmental risk of the process and the performance of the operator in managing that risk. The balance between these can be used to determine the level of regulatory effort needed. The OPRA system is shown in Box 2.

The PSA approach, for assessment of long-term risks from underground radioactive waste disposal sites, is an example of a detailed and sophisticated methodology. This capability was developed by the Radioactive Waste Disposal Assessment Centre (RAWDAC) in HMIP, to enable the regulator to perform independent assessments of proposals from Nirex (the UK nuclear industry radioactive waste management executive), to dispose of radioactive waste, and to demonstrate what sort of risk assessment would be expected in support of such proposals. PSA is a system model-based methodology which uses Monte Carlo simulation to account for the uncertainties in predicting long-term behavior of a radioactive waste disposal site. HMIP have used PSA in the review of preliminary safety documentation from Nirex, and also in assessing the Drigg shallow disposal facility and the Dounreay shaft. PSA will be required as part of the planning application for the Sellafield deep repository in the late 1990's.

The PSA model and typical results are illustrated in Boxes 3 and 4 respectively. The model requires a large amount of site-specific data, e.g. relating to hydrogeology, and predicts system behavior over timescales of up to 10⁶ years, taking into account possible changes in human behavior, global climate, topography, etc. The model estimates the long-term radiological risk to humans from exposure to radionuclides; this is compared with a target of 10^-6/year individual risk.

The PSA capability, in combination with scientific and technical expert panel reviews, enables the Environment Agency to independently assess safety case information from the radioactive waste industry, and gives it the credibility required to fulfill its role in authorising sites and giving evidence at public inquiries. A programme of work in this area continues, including issues such as public perception, economic factors, partial assessments and "Best Practical Means."

Environmental Protection Standards

A particular area where risk assessment may help to improve regulation is in the definition of standards for environmental protection. Standards should relate closely to a sound understanding of acceptable harm to the environment, particularly if the Agency is to meet the objectives of transparency, consistency and regard for costs and benefits. There are several types of environmental protection "standards" in the UK: criteria relating to individual pollutants and media, e.g. environmental quality standards, environmental assessment levels and pollutant release limits, and composite criteria, in particular BATNEEC (Best Available Technique Not Entailing Excessive Cost) and BPEO.

Criteria values are typically in the form of single limit values, which are either statutory (e.g. S02 concentrations in air), or represent target or indicator values for what may be considered an acceptable level. It my be desirable to extend the approach to setting environmental standards, from simple single value criteria, to risk-based standards which reflect the distribution of harm that may occur. Appropriate criteria could reflect both the cost of controlling to that level and the corresponding benefit in terms of reduced harm. The consistency between different standards may also be improved by ensuring the underlying risk levels are consistent. The Agency is currently reviewing its use of environmental standards and considering how to improve their consistency and transparency.

BATNEEC and BPEO are essential to the IPC approach because they are used to determine the balance between protection of the environment and practical, economically acceptable pollution control requirements. BATNEEC and BPEO contain tolerability criteria for setting "upper limits" to environmental harm, e.g. Environmental Quality Standards. Once these are satisfied, BATNEEC and BPEO further require that environmental harm is minimised subject to other constraints such as costs, before a proposal may be considered acceptable (see Box 5). There are also lower limits below which the level of harm is considered negligible and no further action is required. This criterion system is analogous to that for assessing risks to humans, where criteria are set for tolerable and negligible risk levels, and between these criteria the risk is acceptable subject to ALARP considerations. It may be possible to develop a criterion system based on risk of harm to the environment and humans, which applies to both routine releases and major accidents, and can therefore address simultaneously the needs of BPEO and ALARP. The ongoing work of the DOE in conjunction with the Agency, on defining criteria for major accidents to the environment in relation to the Seveso Directive, will contribute towards this process.

The principles of BPEO are shown in Box 6, and an example of the results of a BPEO assessment applied to an IEPC process is given in Box 7. The BPEO assessment approach is not fully risk-based, as it does not explicitly require uncertainty to be considered; however it follows the "source-pathway-impact" framework inherent to many other risk assessment methodologies. The Environment Agency is investigating how BPEO assessment may be further developed in the future.

Reaching a consensus on the principles, methodologies and criteria for evaluating BATNEEC and BPEO, has proved to be a challenging task. The Agency is however confident, not just of the value of the general principles and resulting methods, but also of the benefit to industry and government arising from collaboration on their development. Such approaches can help to reach a consensus on how environmental concerns may be assessed and thus improve the robustness of decision-making, whether the issue is the authorisation of an IPC process or the disposal of an offshore installation.

Integration of Risk Assessment, Risk Management and Regulation

There are now several distinct types of risk which may typically be assessed and controlled as part of decision-making over policies and projects, for example:

• public health and safety
• environmental protection
• depletion of natural resources
• occupational health and safety
• economic risks
• political and organisational risks

Each area may have many further subdivisions, e.g. long and short term risks, local and regional, etc. Each area may also have its own form of assessment, management and regulation. While a fully integrated approach is far from established, and no single regulator has responsibility across all areas, there may be benefit to be gained from considering how a more integrated approach can be taken. This could reduce the cost of assessment, make risk management more effective, and ensure consistent and appropriate levels of regulation. A robust decision is more likely to be made if all risks are considered in a balanced manner, as the Brent Spar issue has demonstrated.

As an example, can risks from accidental and planned releases be assessed in an integrated fashion to enable proper comparison and optimum risk management between the two? Can local, regional and global environmental effects be evaluated on a common basis? Should a process site focus on reducing routine discharges to air, or non-routine releases to water? Should a waste stream be discharged to the marine environment or incinerated? The BPEO concept addresses such questions over integrated effects, trade-offs between disparate effects and balancing costs and benefits. BPEO assessment may be the model for future development of integrated approaches.

There are a large number of regulations relating to environmental protection, human safety and management of risks from processes and substances. The Department of Trade and Industry and Treasury have both stressed the importance of simplified or streamlined regulations which avoid unnecessary restrictions (the "de-regulation" initiatives), and risk assessment has been identified as a tool to support such a regime. The UK government has stated that new regulatory proposals should be subject to risk assessment and cost-benefit analysis if they are likely to affect businesses, an approach which is similar to recent developments in US legislation. The Environment Agency may wish to perform risk assessments of its regulatory options, to help ensure the appropriate balance between regulations and other forms of risk management, such as market mechanisms, voluntary schemes, industry-government agreements and insurance.

Public Disclosure and Risk Communication

While it is generally accepted that openness and debate in public about societal risk issues is important, there are substantial reservations among many in industry about agreeing common and transparent methods for assessment, and disclosure of information to the public. This is often based on concerns about commercial confidentiality, misinterpretation of information, adverse publicity, or the possibility that decision-making will be constrained. For example, a majority of IPC operators were strongly opposed to publication of OPRA results, and we have for the time being shelved a proposal to publicise OPRA scores. In the development of the BPEO assessment procedure for IPC processes, reaching consensus with industry has taken substantial effort because of a perception that the approach was prescriptive and could constrain the process options available to operators.

Recent examples of environmental and health concerns raised in public (such as Brent Spar and BSE) have highlighted the need to be aware of public perceptions in the scientific, economic and political decision-making process, and to ensure that the public can trust this process.

If the Environment Agency is to meet its objectives regarding consistency, openness, quantifiable performance and balanced decision-making, the concerns of both industry and the public will have to be addressed. Thus, the needs of environmental protection raise several challenges for risk assessment:

• Can risk assessment methods be developed which are based on sound science, can be communicated effectively to potential users, and do not impose an excessive assessment burden?
• How can public perception be incorporated into the process of identification, assessment and decision-making over environmental concerns?
• Can the results of assessments and the basis for decisions be communicated in a way which addresses the concerns of industry and gains public acceptability?

The Role of the Environment Agency

The Environment Agency will have overall responsibility for protection of the environment of England and Wales. The Agency's overall objectives, as specified in the Environment Act (1995), are outlined in Box 8.

The "holistic" approach at the heart of IPC will be reinforced in the Environment Agency, which will have responsibility for a wide range of aspects of environmental protection, for example water resource management, flood defense, regulation of domestic and industrial wastes and the control of industrial pollution. Risk in the context of Environment Agency therefore covers a wide range of issues. Agency regulatory strategy will be towards coordinated assessment and management of these diverse risks at strategic (i.e. national and international), regional and site-specific levels. A key part of the regulatory strategy will be to use risk assessment and cost-benefit analysis techniques, where appropriate, to inform the decision-making process over setting priorities, formulating policies, defining standards and evaluating specific projects or activities.

As an example of the use of risk assessment in Agency decision-making, Box 9 shows the overall structure of a draft strategic risk assessment methodology to assist in setting Agency priorities. The methodology enables the main attributes (e.g. level of harm, public perception, costs and benefits of control, uncertainty and response of the environment) of different types of risk to be evaluated within a common framework.

How can industry, regulators and the public ensure that society is able to meet its objectives of protecting the environment, creating public confidence and maintaining industrial competitiveness? This question of course relates directly to the objective of Sustainable Development. The principal aim of the Environment Agency is to contribute towards this objective; risk assessment and risk management may have a key role in assisting in this process. Some of the main challenges for the Agency and other "stakeholders" in this process are summarised in Box 10 below.