Unprecedented Is Irrelevant

This latest article in the Financial Times reiterates the excuse given by Arkema that the flood at its Crosby plant, which started a stream of events that ultimately led to evacuations of both plant personnel and nearby residents and businesses (mile and a half radius), deflagration of certain organic peroxides stored at the site, intense fires and pollutants being expelled into the air (and possibly ground and groundwater), and damage to the environment, was unprecedented.

This is a mistake people often make when managing risks: they assume the worst that can happen has already happened.

They assume the next flood can’t be worse than the worst one already experienced. That the next financial crisis can’t be worse than the Great Depression. That the next war can’t be as bad as WWII. That the next epidemic can’t be as bad as the Black Plague. Etc. Etc.

It’s illogical. It’s inconsistent with what we know and what’s been written about risks, probabilities and tail risks. Frankly, it’s absurd. But it’s a mistake humans commonly make.

Consequently, we fail to avert avoidable disasters, like terrorists flying planes into buildings, damage caused by floods worse than experienced in recorded history (which, of course, is a very short time relative to actual history) and uncontrolled explosions, fires and releases of harmful substances into the environment.

The fact that something has never happened before tells us nothing. And people who manage large risks (like operating a chemical plant or other industrial facility that uses or produces toxic, hazardous or explosive substances) should know that.

When they plan for only that which has precedent, they fail in their responsibilities to their communities and society.

Government regulators fail, too, when they allow major risks to go unmitigated. Sadly, regulators often lack the legal authority, expertise, resources or gumption to protect their constituencies as they should. But at least things are a lot better than they used to be.

In any case, Vera, my hope is that you’ll be smart and savvy and won’t fall for some of the self-delusional myths that typically capture our species.

Whether precedent exists is often entirely irrelevant.

Plan accordingly.

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