Risks? What risks?!

Development management professionals looked in wonder at the U.S. Supreme Court case against IFC. In brief, America’s top justices handed down a landmark ruling in favor of a group of Indian villagers looking to sue the International Finance Corp. — the private sector arm of the World Bank — for its support for the coal-fired Tata Mundra Power Plant. The villagers said the project contaminated groundwater, killed marine life, and ejected coal ash into the air. IFC did not contest that the damage occurred, but argued it is immune from liability under U.S. law. Tata Mundra – named “India’s first ultra-mega power project” – gave already in 2015 some indications of headaches to come, if you read The Guardian article at that time. The World Bank projects go through internal assessments of impact and risks. The Guardian’s investigations seem to suggest that the standard assessments of social and environment impacts have been carried out.  Those affected had used the available remedy of applying to the Compliance Ombudsman who also looked into the matter (http://www.cao-ombudsman.org/cases/document-links/documents/IFCresponsetoCAOAudit-CoastalGujaratPowerLimited.pdf). If you are interested, there are further details on the case https://www.devex.com/news/calls-for-stronger-accountability-after-ifc-supreme-court-ruling-94387

This post is not about the legal implications of the ruling on whether it will open or not the floodgates of litigation against International Organisations. Reading the above analysis reminded me of the importance of accountability and the related risk management in project design and implementation.

With due consideration paid to the accountability framework of the organization/client, a project manager works for, the risks assessments are an inherent part of the latter’s job. While project managers are not (always) magicians with abilities to foresee the future, taking time to do a proper risk assessment from smallest internal projects to largest (infrastructure) projects is worth every second of it.

It is not unheard of to tick the boxes and fill in the risk logs (or risk registers) with standard information at the projects design phase. How much time and thought is dedicated to risks assessments and diligently answering to the question “what could go wrong” depends on a number of factors, including the risk threshold of those who design the project and the context of the project. Not taking time to do a proper risks assessment results in project delays or even damages. And no project manager wants to have to recover a troubled project or the client/organization to pay for that.

Risk logs are live documents. They are like growing children: need to constantly keep an eye on them throughout the entire project management lifecycle.

Do:

  • identify risks as early as possible in projects;
  • consult stakeholders on the risk assessment and risk management plan;
  • apply rigor to risks assessments and risk management plans;
  • complement qualitative methodologies with data-driven approaches to risk assessments (see OECD (2019) Analytics for Integrity http://www.oecd.org/gov/ethics/analytics-for-integrity.pdf);
  • avoid ‘blind spots” and biases by means of third party monitoring and evaluation, if/when possible;
  • be mindful of and monitor eventual third party risks, which could impact the project; take legal/administrative steps to reflect them in the agreement with the third party;
  • constantly monitor risks and apply remedies.

There are a variety of project risk management tools available on the internet. I found this risk log of practical use in some projects. Feel free to download it. Template_Risk Management Plan_EN

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