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Party

28 September 2012 • Ype Wijnia
risk management, policy development

It is virtually impossible to miss for someone following the news. Last week a Facebook party was held in Haren which created job opportunities for the cleaning business. Now, by coincidence I have lived a number of years in Haren in my youth. What I remember of it is that it is a village primarily inhabited by elders. Many of them still drive their cars, and as a cyclist I learned to watch out for the people behind the wheel. If the driver was wearing a hat (not a cap) you could better hide behind a tree. There was a significant probability the driver would refrain of using the indicators, cut corners and neglect right of way rules and signs. Everything motivated by old habits: “For the last 94 years, every day of the week  I have turned left here at this precise time, so learn to live with it”. As you guessed correctly, this is hardly a village to have a party. On the contrary, if you want to party you best stay very far away. We used to go to Groningen, a university city with a very high concentration of pubs and no official closing time.

When the news about the Facebook party in Haren began to spread I had some difficulty suppressing a smile. Partying in Haren is like sunbathing in a cave or fishing in the Sahara: it may seem a good idea when it is brought up in a pub, but there really is no fun in doing it, especially not with 30000 people.  At the same time there was the awareness that bringing together many people that are drunk (or planning to become so) while there is nothing to do can very quickly turn into riots. Uncontrolled masses of people attract the police (it has to, concerning the public order) and what is better at getting rid of boredom than challenging the police. Somehow you expect the self announced partygoers to have a  similar awareness and therefore decide not to go. The experience shows that the large majority of announcers does not show up, only about 10% actually goes. Yet: 10% of 30000 people is still 3000 people, about a third of the population of Haren.  And experience also shows that 3000 adolescents combined with alcohol combined with boredom is more than enough for a riot. Every authority seemed aware about the risk, nevertheless it proved impossible to prevent the riots. Apparently, risk awareness was no prelude for risk control, whereas that is the fundamental assumption of the profession of risk management. What was going on?

To start with the basics, risk awareness is knowing about things that can go wrong and having some idea about the probability and consequences of things that go wrong. To analyse this systematically, it helps to regard risk as a process, starting with cause, entity, reaction and consequence. In a previous column we focused on risk identification and presented a generalized scheme containing the most important risk elements for energy distribution. Below, the scheme for risks in the public domain is sketched.

In this specific case the arrival of the many partiers in Haren can be qualified as deliberate damage. It may not have been everybody’s intentions, but as explained before, participating in an event like this is deliberate creation of risk. That deliberate damage acted upon all assets in the public space. Bricks were lifted from streets to be used as a weapon, police officers, inhabitants and passersby were attacked, property was destroyed, burned or stolen and every public value was infringed. This chain of event is marked by the red circles.

For a risk manager, everything that has to do with deliberate damage is very intangible. If someone really wants to, it is virtually impossible to stop that person. Furthermore, making statistics of what someone really wants is difficult, as that is not an event but a choice. Regarding the party in Haren, the first estimate to be made was that if people really would come, how many that would be, what the probability was on riots and finally what the expected damage would be. The probability of riots and the damage to be expected most likely depends on the number of people. Uncertainty on top of uncertainty. To start with a conservative estimate, suppose there was a 50% probability of no one showing up, if people would show up it would be limited to about 10%, that given 3000 attendees the likelihood for riots would be 25% and that the expected damage at such a riot would be several hundreds of thousands of Euros. Not a very unreasonable estimate is it? The exposure is then 50%*25%*300k = ca 40 k . Given this exposure it is a reasonable measure to have a significant police unit ready, but sealing of the complete village and set up an evening clock seems to be overreacting.

However, if it happens to be the case that about 3000 people come, that it resulted in riots and that the damage was ten times larger than estimated, it may seem that the effort put in controlling the risk was insufficient. In the media there is lot of attention for the risk marked blue, the inadequate response of the police. But that is wisdom with hindsight. And as they say in the neighborhood of Haren: with hindsight you see an ass in its ass. That is no party.

 

Ype Wijnia is partner at  AssetResolutions BV, a company he co-founded with John de Croon. In turn, they give their vision on an aspect of asset management in a weekly column. The columns are published on the website of AssetResolutions, http://www.assetresolutions.nl/en/column

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