Published works

This desktop review presents a summary of risk ownership allocation for the strategic management of natural hazard risks in Australia. It forms part of the project Mapping and understanding bushfire and natural hazard vulnerability and risks at the institutional scale undertaken for the Bushfire and Natural Hazards CRC.

Risk ownership here is restricted to strategic pre- and post-events for natural hazard disaster management. Other aspects of ownership, such as the undertaking of emergency response, where Australia has a significant and well-recognised capacity, are not addressed.

Risk ownership is explored through three questions:

• Who pays for the risk?
• Who manages (is responsible for) the risk?
• Who is accountable for the risk?

These questions take in the two main definitions of risk ownership that cover the asset owner and the risk manager: the person or entity with the accountability or responsibility of managing a risk.

The key findings are described according to the strategic aspects of managing the risk of natural hazards:

• Building and maintaining resilience
• Mitigation
• Plan and prepare
• Early response and recovery
• Medium response and recovery
• Long-term response and recovery

Ownership was examined within a matrix of broad institutions (federal, state/territory and local government, business and industry, and civil society) and values (built, social and environment assets, and infrastructure). Risk ownership across this matrix was found to be allocated according to individual hazards, ownership of assets, tasks associated with the risk management process and policy/legislative instruments.

Risk ownership is highly dynamic. The systemic nature of natural hazard disasters is characterised by their potential to cross domains and move from one risk owner to another, affecting a wide range of ownership. Risk ownership is also changing as new operational structures and processes are emerging, and growing within and across institutions. Also found was variable interpretation of risk, risk ownership and lack of clarity of appropriate governance, particularly across areas of multiple ownership.

Review of pre- and post-event policies and strategies revealed ownership strengths in the following areas:

• Built infrastructure and assets have the most complete coverage of risk ownership, which is supported by a wide range of policies and regulation.
• Well-developed early and medium-term response plans for impacts on built assets and infrastructure and to a lesser extent on social assets and infrastructure. The majority of recovery funds are currently spent on roads and other transport infrastructure due to high levels of damage and lack of insurance in this area in most states.
• Growing allocation of ownership in risk planning and preparation at the state and local level, for civil society, and business and industry in designated high-risk areas for specific hazards such as flood and fire.
• Broad ownership by civil society of overall hazard risk in terms of insurance coverage, although growing exposure increases the risk of under-insurance.

Ownership gaps were observed in the following areas:

• Mitigation of risk to environmental assets and infrastructure has limited ownership, and there are important gaps in coverage for both environmental and social assets and infrastructure.
• Despite a degree of existing resilience, resilience is in all areas of the risk management process and its application is not well defined. Accountabilities also extend beyond emergency management into broader social, economic and environmental areas such as climate change adaptation and business development.
• Lack of clarity between investment in and relative effectiveness of active (e.g., emergency management plans, targeted mitigation) and passive resilience measures (e.g., building to regulation).
• Recovery plans for social and environmental assets and infrastructure. There was no defined funding mechanism for environmental recovery or for social recovery over the long term.

Areas of interest regarding ownership that will be explored further in the next phase of this project include:

• The need to provide positive incentives and fit-for-purpose funding to support change from current institutional and organisational practices that have had limited effect or provide perverse incentives. For example, betterment funding for local government and NDRRA payments for small business have had limited uptake.
• Possible unacknowledged risk ownership in existing areas of social vulnerability, such as health and unemployment, where risks may be exacerbated by the flow-on effects of disaster events.
• The inability of some institutions to fulfil the obligations of ownership due to lack of resources or capacity. As a result, the accountabilities and responsibilities of some organisations and groups may not be met, particularly in regional and outer urban municipalities.
• The issue of how strategic risk management is to be sustained over the long term in order to avoid mounting payments to fund recovery; who should be accountable for ensuring this and how should they be accountable?
• How different levels of incentive and enforceability of risk ownership instruments affect ownership uptake.

This review has highlighted some of the challenges for ascertaining the allocation of risk ownership for natural hazards and disasters. It has also revealed areas where ownership is less well allocated and potential pathways for this to be developed.  The breadth and complexity of integration and coordination across institutions to enable effective management of natural hazard risk effectively needs the comprehensive allocation of risk ownership to evolve over time. This will require new structures and adaptive ways of thinking that can incorporate new knowledge as it emerges. It will also require institutions to think systemically, not only within and across their own domains, but also across the broad system of values that are the foundation of our economy.