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.

 

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³  See Annex C for a brief explanation of other, ongoing work.

 

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