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OBSERVATIONS AND NEXT STEPS
The development of the public risk management decision-making framework makes two key
contributions:
- draws together issues of common interest across government and thereby provides a
platform for further discussion aimed at developing a corporate, or government-wide
perspective on risk management; and,
- provides a context for ongoing work and the opportunity to establish critical
linkages between sectors (e.g. science and policy).
In developing this framework, two facts about the current environment were immediately
evident:
- there is a wide range of familiarity with and expertise in managing risk in the
government; and,
- there is an abundance of work underway to explore risk-related issues, from a variety of
perspectives.3
These are indications that recognizing and dealing with uncertainty is a growing
concern for public policy decision-makers.
One consistent finding of the literature on risk management is that support and
endorsement from senior management is a prerequisite for development of an effective
risk management approach. Accordingly, the longer-term integration of public risk
management into decision-making practices requires continued leadership now.
- Deputies have expressed significant interest in the issue by establishing a working
group of assistant deputy ministers. This report builds on that interest and focuses
attention on issues requiring further, horizontal policy attention.
Next Steps
The proposed next steps relate to broad, horizontal issues concerning public risk
management. As noted, there is a great deal of work already underway in government and it
will be important to build on some of that work and where possible, draw linkages between
various exercises.
In order for further government-wide work to be successful, all departments and
agencies must be involved. Nevertheless, key departments and central agencies have
been identified to provide horizontal leadership and coordination in each priority area.
The priority areas identified for further work on risk management include:
4.1 A Government-Wide Framework for Risk Management
The Treasury Board Secretariat (TBS) has initiated work to identify how
various departments deal with risk in their areas of responsibility and has
researched best practices domestically and internationally. Informed by the
studies and in consultation with an interdepartmental Advisory Group on Risk
Management, TBS is developing a risk management framework for
government-wide use. As this work continues, the development and
implementation of effective processes for managing risk within departments
should provide opportunities to benefit from best practices and develop
implementation guidelines and tools with the appropriate flexibility.
- This work is consistent with Treasury Board Ministers endorsement of the Panel Report on
Modernizing Comptrollership, which mandated the Treasury Board Secretariat (TBS) to create
a more systematic and integrated approach to risk management across government.
One of the ADM Working Group’s most important findings from its
examination of best practices from across government, is that effective risk
management relies more on the existence of a flexible process than on a
rigid set of rules.
While there will always be pressure for a rules-based system for managing risk, the
very nature of risk and uncertainty make such a system inappropriate in many
circumstances. Even in the case of known conditions, changes or discoveries in science can
render existing rules obsolete.
Without the processes in place to identify changes and revisit decisions on an ongoing
basis, systems for risk management can become unreliable. What seems to work best are
processes that are flexible enough to accommodate rules and also provide for regular
revisiting and challenging of the issue analysis (e.g. science) and procedures
currently relied upon by departments and agencies.
4.2 The Legal Context
The Department of Justice is working with Treasury Board
Secretariat to identify ways of managing legal risk and civil litigation more
strategically across the federal government. Building on work already underway, the
objective is to find ways, where possible, to avoid or minimize litigation, and to handle
any litigation that does occur more efficiently and strategically. Key outcomes expected
within the next few months include:
- developing a clearer understanding of the basic drivers of the growth of litigation;
- devising an effective government-wide scanning process to identify and prioritize legal
risks early; and,
- elaborating an "instrument packaging" policy and supporting tools (including
preventive dispute resolution) that reduce the risk of unnecessary, unintended Crown
litigation. The project will also identify appropriate procedures, tools and resources to
better manage so-called "mega cases", and cases raising significant horizontal
issues for government.
In recent years, the volume and complexity of civil litigation have
increased dramatically, putting great pressure both on available resources
and the government’s ability to manage this litigation effectively. There
is general acceptance that this has become a serious problem for all
departments, and calls for a government-wide response. The risks pose
program integrity issues for most, if not all, departments. The Legal Risk
Management Project will address these challenges.
4.3 The Precautionary Approach and the International Context
The application of the precautionary approach by Departments and
Agencies is a central aspect of risk management. The Deputy Ministers’
Challenge Team on Law-Making and Governance is an important avenue for
developing federal
consensus on the precautionary approach and building up linkages
between potentially divergent interests.
The precautionary principle/approach is becoming a key issue in international
relations, in terms of trade, health protection and environmental issues. International
negotiations, disputes, and agreements relating to risk management, in particular to the
application of a precautionary approach, have implications for numerous line departments
as well as for the Department of Foreign Affairs and International Trade and for virtually
all sectors of Canadian society. In this respect, there is a need to integrate domestic
and international obligations into the application of the precautionary principle and into
the broader risk management process.
Recent developments in the area of bio-diversity and trade protocols highlight the need
to come to terms with the precautionary approach in Canadian public policy. While the
actual implementation of a precautionary approach may vary sector-by-sector, to ensure
coherence in its use, the guiding principles by which it is to be applied need to be
reviewed in a comprehensive manner.
4.4 Risk Communications and Consultations
The Privy Council Office should work with the Treasury Board
Secretariat to ensure that risk communications and consultation practices are integrated
into the Government of Canada Communications Policy as part of the current Communications
policy renewal exercise. This should reinforce the importance of incorporating
communications advice and planning into the early stages and full spectrum of risk
management exercises.
Risk communication is a significant area for further work. The recommendations above
are aimed at enhancing the public context component of assessment, and the overall role of
communications and consultations in managing risk. They therefore require significant
focus on risk communications by central agencies.
Risk communications also needs to be a focus of capacity-building and training. The
appropriate mechanisms for integrating risk communications into policy-making is just one
aspect; the other is the capacity of the people involved to ably communicate risk concepts
to the appropriate audiences.
It is anticipated that additional opportunities for developing risk communications
capacity and integrating it into the public risk management process will arise through
discussion of this report.
4.5 Risk Management Training
The Canadian Centre for Management Development should
develop the capacity to deliver appropriate training in the various stages of the risk
management process. Ultimately, this capacity building should ensure that management
at all levels, including Deputy Ministers, are as well equipped to ask the right questions
about science and risk, as they are, for example, on questions of policy objectives
and sound economics.
The Canadian Centre for Management Development, in its
roundtable on risk management, may be able to develop proposals aimed at enhancing risk
management capacity in government.
The government’s ability to manage risk rests on the skills of its
people. The issue of risk management capacity is therefore broader than the
related concern for science capacity. Beyond the need for scientists to
conduct good science, effective risk management in a public policy context
also requires a capacity for asking the right questions about science, risk,
public perceptions and policy options, and how each of these may be related.
For example, choosing the most effective means of achieving a given policy objective
(referred to as instrument choice) is clearly important aspect. Often, however, only the
most traditional or obvious options are considered (legislation) when other, less onerous
options could be equally, or perhaps more, effective, as they are better-targeted, or have
the support of stakeholders and are more enforceable. Knowing how and when to pursue use
of different policy tools is a simple, yet important, component of public risk management
training and capacity needs.
3 See Annex C for a brief explanation of other, ongoing work.
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