When ‘Low Risk’ Doesn’t Mean ‘No Risk’. Practical Lessons for the Nuclear Sector.
Being of a more mature stature, otherwise known as a Grumpy Old Bu**er, here I am in the middle of the road, just waiting to be hit by the Number 22 Bus. Does it happen? “No!” Every time a bus turns up and I step in front, the driver swerves, swears, shakes a fist, and drives on. How on earth can this be? According to all technical analysis, at my tender age, I should have been struck down at least once.
The answer being:
“Lies, Damned Lies and Statistics.”
The issue isn’t the analysis but the interpretation – particularly as my ‘Crystal Ball’ is a little cloudy these days. There’s no way to determine exactly “IF” or “WHEN” an event might occur, and this same uncertainty has troubled the nuclear industry since its inception.
Take, for example, the advice for communities near nuclear sites to keep stable iodine tablets on hand. The body can block harmful isotopes by saturating the thyroid with non-radioactive iodine, preventing damage. But with iodine’s multiple isotopes, one of which has a half-life of 1.7 x 107 years, does this mean a perpetual iodine intake is in order? Of course not – the actual risk is far more complex than any single statistic can convey. Whilst the potential for harm is real, the quantity of this isotope is very small, the population density is massive, and therefore, the risk of harm to any individual is incredibly small.
In business, this serves as a reminder not to accept statistical risk at face value. Yes, the data is real and likely accurate, but interpretation is essential. Determining the business impact of risk remains subjective – not a scientific assessment.
Business leaders must weigh risks not just by numbers but by their actual, probable impact over time. The question remains: “Is a 1-in-1,000-year event something to consider, AND what is the probability of it occurring during business life?” For example, how does the nuclear sector even begin to factor in an isotope like tellurium-128, whose half-life is a mind-boggling 160 trillion times longer than the age of the universe?
While a major nuclear incident may statistically be a ‘once-in-a-lifetime’ event, stakeholders know that even this low probability requires stringent safety planning.
What Can Businesses Do?
To mitigate such challenges, businesses in the nuclear sector should develop a culture of proactive risk management. This involves conducting thorough risk assessments and crafting contingency plans that account for both low-probability and high-impact events. Businesses can build trust and ensure everyone is prepared for any eventuality by fostering open communication with all stakeholders.
Oh good, here comes another bus! As I step into the road, I notice “a Small Group of Men in White Coats” approaching. Maybe I should retreat to the pavement, blending in and leaving the experts to manage statistical probabilities.
At Prospect Law, our Energy and Nuclear team of international consultants help clients tackle these complex questions, offering insight and support in navigating high-stakes risk management in the energy sector.
The personal ramblings and observations of John Ireland, Senior Consultant
About the Author
John Ireland is an internationally experienced energy specialist and senior business executive skilled in the development, negotiation, and management of businesses and technically complex contracts within both the Government and private sectors. John has grown complex businesses in Asia and the Middle East, and assisted international organisations to develop business in and from the UK through joint ventures and partnerships.
