Continuity Forum &

Business Continuity Institute

Meeting

10 September 2013

Adjunct Professor Jim

McGowan AMSchool of Government and International Relations

“Disaster Management: An Emerging

Public Policy Imperative”

Why Disaster Management is an emerging policy

priority?

For most countries, coping with natural

disasters has emerged as a policy priority.

Our Governments need to consider ways to

mitigate and manage disasters, while also

enhancing individual and community resilience.

We need to build our policy capacity in

emergency and disaster management

WHY?

According to research from the Centre for

Research on the Epidemiology of Disasters

(CRED), there was a 233% increase in the

number of natural disasters in the period 2000-

2009 compared to 1980-89 and 67% when

compared to 1998-99.

Impact and Costs of Disasters

More striking is the increase in the impact and costs of

these events as a consequence of population growth,

economic development and climate change. According

to Munich Ra, the world’s largest re-insurer, global

costs have risen from about $US 80 billion in 2011

dollars in 1980 to just under $400 billion in 2011.

The frequency of climate related disasters (tropical

cyclones, typhoons and hurricanes) has increased

tenfold since data was first collected in 1950.

We are neighbours in the Asia Pacific Region where

there have been a large number of significant disaster

events related mainly to climate and seismic activity.

Climate change will make weather patterns less

predictable and more extreme.

Resilience: COAG’s “National Strategy for

Disaster Resilience”

Involves effective, practical steps to limit the impact of disasters on people, the environment (incl the built environment) and the economy.

Involves a move from the traditional approach focused on the response (our emergency services), to one of resilience where it is the shared responsibility of all sectors of the community including all levels of government to help prevent and mitigate disasters

Involves an “all hazards”, “all agencies” approach to risk across prevention, preparedness, response and recovery phases

Involves effective relationships to ensure community resilience activities are informed by local knowledge, can be undertaken safely, and complement the work of all with “skin in the game”.

The Policy Imperative: “Resilience”

“Resilience is the ability to prepare and plan for, absorb,

recover from and more successfully adapt to adverse events.

Enhanced resilience allows better anticipation of disasters

and better planning to reduce disaster losses—rather than

waiting for an event to occur and paying for it afterward.”

“The alternative, the status quo, in which the nation’s

approaches to increasing disaster resilience remain

unchanged, is a future in which disasters will continue to be

very costly in terms of injury, loss of lives, homes and jobs,

business interruption, and other damages.”

(Disaster Resilience: A National Imperative; National

Academy of Sciences, Washington. 2012)

If the policy imperatives are

“Resilience” and improving

individual and community

understanding of risk, reframing

the policy and funding frameworks

for Disaster Management is the

priority.

A Holistic Approach to PPRR

Building resilience requires the integration of

all the Prevention, Preparedness, Response

and Recovery (PPRR) phases.

Each of the four phases should provide

feedback loops to improve performance,

policy development and resourcing priorities

with the broader objective of building

resilience.

Currently these feedback loops are poorly

developed, as evidenced by the

disproportionate funding allocations

between the response and recovery phases

and the prevention and preparation phases.

Further within these phases, the

relationships and interdependencies are not

well understood.

Risk and Response

PlanningThe traditional orthodoxy is no longer

enough!

“Good preparation is based

on the realisation that each

crisis and disaster is unique

and may take on unknown

(and unknowable)

proportions.” (Boin and ‘t

Hart)

The experiences from hurricanes Sandy and Katrina and

in Haiti, earthquakes and/or the resultant tsunamis in

Japan, Aceh, Sumatra, Samoa and Christchurch and the

oil spill in the Gulf of Mexico, floods and cyclones in Aust

are evidence that our planning assumptions have been

too narrow.

Japan is recognised as being among the nations best

prepared for earthquakes with widely acknowledged

community education programs and strong building

codes.

And yet the impact in 2011 was devastating!!

New Models of Leadership

Ret Admiral Thad Allen has articulated the type of leadership needed when confronted

with a fast moving and complex crisis. He believes that the “chain of command” model

is inadequate.

“In what I would call a ‘whole of government response’-to a hurricane, an

oil spill, no matter it is- the chain of command doesn’t exist. You have to

aggregate everybody’s capabilities to achieve a single purpose, taking into

account that they have distinct authorities and responsibilities. That’s

creating unity of effort rather than unity of command, and it’s a much more

complex management challenge.” (“You Have to Lead from Everywhere”; An

interview by Scott Berinato with Ret. Admiral Thad Allen; Harvard Business

Review 2010)

The first priority during and in the aftermath of an event is having clarity in relation to

the operational leadership. The designation of the accountable person is critical to

establishing the authority of the person.

A prompt and public appointment minimises the potential for confusion among the

response agencies, reassures the public that the authorities are in control and reduces

the capacity to “blame shift” in the event that deficiencies in the response are identified.

Communication and Public Information

Accurate, authoritative and up-to-date public information is now recognised as critical a

function for the preparedness and response phases as is the deployment of emergency

services personnel.

Retired US Admiral, Thad Allen, the National Incident Commander for the “Deepwater

Horizon” oil spill in 2010.

“There are two things one can always expect

in a national crisis; media and politics…We live

in a world right now where we will never have a

major event that doesn’t have public

participation. Failure to anticipate, include and

respond to criticism.. will only impact on the

credibility of the response.” (Thad Allen;

Massachusetts Institute of Technology News, 27

May 2011).

Relationships: The Critical Success Factor

The best legislation,

operational procedures

and structural models

won’t deliver a satisfactory

response if relationships

are fractured and

communications are

confused.

Relationships need to be

developed during “peace

time” so that roles and

responsibilities of all

agencies and response

personnel are clear.

“Effective crisis management includes

the forging of relationships among

response agencies, as well as media

representatives, external

stakeholders, and a variety of

experts. Once a crisis has occurred,

there is usually no time to look to the

right people and interact with them on

a basis of trust. Effective crisis

response relies strongly on pre-

existing cooperative networks built

and maintained painstakingly during

the preceding years” (Boin and ‘t

Hart)

Issue: Prevention is a Policy Gap

A serious gap in disaster management policy in

Australia is the need for integrated policy and

funding frameworks focused on ‘all hazards’ and

building resilience.

This lack of integration creates a significant policy

gap in disaster management;- prevention

(adaptation and mitigation)

The consequence is a distortion in resource

allocations between the PPRR phases-the focus is

on response and recovery.

“Building our nation’s resilience to natural disasters.”(paper by Deloitte Access Economics for Australian Business Roundtable for

Disaster Resilience and Safer Communities, June 2013)

“In 2012 alone, the total economic cost of

natural disasters in Australia is estimated to

have exceeded $6 billion. Further, these costs

are expected to double by 2030 and to rise to

an average of $23 billion per year by 2050,

even without any consideration of the potential

impact of climate.

Each year an estimated $560 million is spent on

post disaster relief and recovery by the

Australian Government compared with an

estimated consistent annual expenditure of $50

million on pre-disaster resilience: a ratio of

more than $10 post-disaster for every $1 spent

pre-disaster.”

The Australian Business Roundtable for

Disaster Resilience and Safer Communities

was formed in Dec 2012 by the CEOs of:

Australian Red Cross,Insurance Australia

Group, Investa Property Group, Munich Re,

Optus and Westpac Group.

Counter Terrorism v Emergency Management

Policy

The focus for counter

terrorism is on Prevention

and Preparation.

Threat Risk Impact Investment

Priority through

Policy

Terrorism Low (Medium?) Localised to

Widespread/

Extensive

Minor to

Catastrophic

Mainly in

Prevention and

Preparedness

Natural

Disasters

High

(Inevitable)

Localised to

Widespread/

Extensive

Minor to

Catastrophic

Overwhelmingly in

Response and

Recovery

Prevention (mitigation and adaptation); the policy

and funding gap

The policy imbalance is staggering when one

considers that in the year in which $15 billion was

the estimated of the flooding and cyclonic events,

Queensland’s allocation of funds for disaster

mitigation was about $9 million.

NDMP: $44M over 5 years, with equal contributions

from the Qld and Australian governments.

Progress: The Newman Government has increased

funding for Flood mitigation with $40M over 4 years

and a further $40M over 3 years to support local

governments implement the Floods Commission

recommendations

“The evidence in support of change in

Government policy with significantly

greater injection of funds into mitigation

and adaptation initiatives is

overwhelming”. (McGowan: AJPA Sep 2012)

Total NDRRA Expenditure

-

200,000,000

400,000,000

600,000,000

800,000,000

1,000,000,000

1,200,000,000

1,400,000,000

1,600,000,000

1,800,000,000

2,000,000,000

2003/04 2004/05 2005/06 2006/07* 2007/08^ 2008/09^^ 2009/2010# 2010/2011**

Total NDRRA Expenditure

Reframing “Recovery”

Recovery has been too

narrowly defined.

Experiences in Australia

and internationally often

treat the recovery phase as

having too short a time

horizon, focusing

predominantly on relief and

reconstruction.

Reinforced by the

“reconstruction and

recovery authorities” which

are established with a 2-3

year timeframe.

FROM DISASTER TO RENEWAL:

THE CENTRALITY OF BUSINESS

RECOVERY TO COMMUNITY

RESILIENCE

RAI Report, Aug 2013

“FROM DISASTER TO RENEWAL”: A

CONCEPTUAL MODEL

“Adaptation to the new normal”: The missing

element.

(RAI: “From Disaster to Renewal)

“The concept of resilience, originating

from both physics and ecology,

incorporates the idea of ‘equilibrium’. On

a day to day basis, ‘equilibrium’ could be

considered the status quo of a

community. The pre-disaster and post-

disaster equilibria are likely to be

qualitatively different, because the impact

of the disaster will inescapably alter the

lives of those experiencing it. In this

context, recovery is the process of a

community adapting to the disaster shock

and establishing a ‘new normal’;

resilience comprises the personal,

community and economic attributes that

enable this process.” (RAI: “From Disaster to

Renewal)

The overarching objective of recovery should be

to assist communities to adapt to their new social

and economic environments post-disaster.

Inside the Recovery Phase

Reconstruction must be integrated into to the

economic recovery strategy

The reconstruction stage of recovery is critically important but :

generally drives a significant influx of construction workers to

the affected region.

can distort measures of a region’s economic performance and

obscure the long-term challenges faced in achieving sustained

economic recovery.

can also have the unintended consequence of furthering

population displacement. In Marysville and Cardwell, the

reconstruction boom drove a demand in a housing market with

reduced stock causing rental spikes and serving to push out

local residents in marginal financial circumstances and key

workers such as teachers and nurses.

Business Recovery is a Pre-condition for

Community Recovery

“Well there is a decrease in houses.

Leads to a decrease in population and a

decrease in jobs….leads to a decrease

in population…Just everything

decreases, a total decrease in the town.”

Cardwell resident

The lack of funding for small business

recovery reflects a lack of appreciation of

the critical interdependencies between

business recovery and community

recovery, particularly in rural settings

where the majority of businesses are

owned and operated by local residents.

This situation not unique to Australia.

(RAI: “From Disaster to Renewal.)

‘Thing’ Theory

Economic development is

presumed to flow from building

“things”.

“Things” are seen to demonstrate

commitment and action.

Governments have a difficult

balance to strike between taking

action to break the negative

adaptation cycle caused by

population displacement and

investing in ‘things’ that

exacerbate the reconstruction

boom yet fail to support long-term

business recovery.

An excessive focus on building

‘things’ can result in over-

expenditure on infrastructure that

does not serve the long term

needs of the community if it is not

integrated with business recovery

strategies

Betterment is value for

money

In 2011 Griffith University was engaged by the

Qld’s Dept of Community Safety to develop a

framework to enable applications under the

‘betterment’ provision of the NDRRA program.

Despite multi-billion dollar recovery bills and

the inclusion of betterment provisions within

the NDRRA program since 2007, these

provisions have not been widely accessed.

Government infrastructure and assets are still

being rebuilt “like for like”; missing the

opportunity to fundamentally rethink the

vulnerability of key infrastructure

The question of betterment is particularly salient in light of the Commonwealth’s

requirement to provide value-for-money in the reconstruction phase. In this

context value-for-money is not simply a cheaper reconstruction option or an

effectively delivered reconstruction project; the lifecycle of the asset needs to be

considered, including its likely exposure to future hazards and the costs of future

reconstruction.

Community Led Recovery Requires Commitment

Community led recovery is essential for

local ownership of the outcomes and

building community resilience.

Driving the recovery process requires a

degree of institutional capability to

coordinate, communicate and facilitate

engagement with government and the

broader community

The absence of well-documented

disaster recovery tends to generate a

leadership vacuum which may then be

filled by a variety of competing groups

Local authorities which do not effectively

engage with and involve the local

community and community

organisations not only risk their

alienation from the process but also the

loss of local knowledge and ownership.

The Challenge:

How do communities harness the

institutional leadership and

capacity of local/state authorities

whilst encouraging community-

led initiatives and local leadership

which contribute to individual and

community resilience?

Marysville Feb 2009

Infrastructure Restoration is Business Support

The restoration of critical infrastructure such as power,

telecommunications and rail and road networks is critical to business

recovery

Road and rail closures have disproportionate impact by limiting the

supply of stock and materials and access to external markets.

Telecommunications (internet access, electronic banking and

EFTPOS) are critical to business.

The speedy re-establishment of the physical

and virtual networks is fundamental to

business recovery and support a higher

priority on prevention (ie mitigation programs

including betterment).

Hardship Grants as a Business Recover Strategy

Governments rightly focus on the

impact on individuals. “Hardship

grants” are a priority and in contrast to

small business assistance are provided

with minimum bureaucracy.

In our field work many raised concerns

that hardship grants were creating an

‘entitlement mindset’, where people

expected and relied upon ‘the

government’ to come to their

assistance.

Hardship grants have the potential to

undermine the community resilience

objective of the NSDR.

A more holistic approach

would also see targeted

and structured

emergency assistance

(“hardship”) grants as an

integral component of a

strategy to assist the

economic recovery of

local businesses.

$840 million was provided in $1000

payments to people affected by the

2010-11 floods and Cyclone Yasi. Just

10 percent of that $840M would have

resulted in a tenfold increase in the

funds for disaster mitigation programs

in Qld!

The QFCOI – a Missed OpportunityThe QFCOI ( and VBRC) opted for a very prescriptive set of

recommendations and greater regulation. It focussed on

operational issues: “ finding fault/blame”

“…the oft-observed importance of ‘hardware’ (formal

structures; technical equipment; legal frameworks) is

overrated. It distracts attention from the often more salient

and cost-effective, yet symbolically powerful ‘software’

factors (leadership, training, network building,

organisational culture)……” (Boin and ‘t Hart (2010)).

There are no recommendations on the major policy issues

(resilience, shared responsibility, risk communications) or

national funding arrangements“The missed opportunity of

QFCOI to contribute to these

important policy debates is

lamentable.” (McGowan AJPA,Sep

2012)

Why aren’t these significant issues influencing

the policy debate? Political interest is in response and early recovery

Commissions of Inquiry have had a narrow, non

policy focus

Pre-occupation with NDRRA

Budget/government processes

Uneven regional impact:- estimated costs through

NDRRA for past disasters – between 12-13 to 15-

16, the cost is $6.2B of which Qld’s share is $5.4B

(or 87%) (Budget papers 2013-14).

Little academic interest in disaster management

policy or policy implications; most recent cost

benefit analysis on mitigation 2002; little work on

recovery policy/practice

Limited engagement with the private sector- at

least until the Australian Business Roundtable for

Disaster Resilience and Safer Communities; call

for a commitment “to long term annual

consolidated funding for pre-disaster resilience”.

“The trouble is that politicians at all

levels tend to focus (and want to seen)

after a disaster occurs because that’s

when it has most media attention ...

[and] there is a lot of money that goes

into post- disaster compensation

payments ...” (McClelland 2012)

“Part of the problem is your pre-

disaster expenditure is a budget line

item. In circumstances where spending

that money upfront is going to save

money downstream but at a time when

the Government is, understandably,

trying to achieve a balanced budget,

they don’t want budget line items that

involve, you know, not insubstantial

expense”. (McClelland 2012)

Where to from here?

Policy Debate-what are the implications of a Resilience

agenda?

Review of the NDRRA funding frameworks; through

COAG to Productivity Commission

More interest by academics and “think tanks” on DM and

Resilience

Need contemporary academic research on the economic

benefits of mitigation strategies and projects.

Partnerships with the Private Sector

Collaborative research into the experiences in the Asia-

Pacific, where the majority of disasters occur.

Build situational awareness and intelligence gathering

capacity

“Inherent in building the

culture of resilience is the

ability to incorporate scientific

information, data, and

observing systems to ensure

the availability of reliable

information, decision support

tools, and data sources to

decision makers”. (Disaster

Resilience: A National

Imperative; National Academy of

Sciences 2012)

Questions

Jim McGowan AM

School of Government & International Relations

Griffith University