Taleb takes the example first espoused by Bertrand Russell of the chicken that after 1000 days of being fed is reconfirmed in his belief that he will receive food every day by being fed yet another day. However, the farmer, with a different view of the world knows that this natural order is about to change whilst to the chicken, the day of his slaughter comes as quite a shock – a black swan event.
When BP started drilling their well on the Macondo field in the Gulf of Mexico they were not expecting problems only pleasant surprises. They had risk systems in place, safety procedures well rehearsed and yet somehow the well failed, the deepwater horizon rig exploded and one of the greatest environmental disasters in history unfolded with the results still unknown. Every day that BP drilled without accident reassured them that their risk systems were working and yet on 20th April all this changed. This was a Black Swan event for BP.
That one single event can bring down a £200b company is itself a Black Swan and yet how many such possibilities exist in our companies? How good are our own risk systems, procedures? What could bring us down? Most probably for service companies that make up the majority of EARSC members risks are smaller but customers can fail, markets can change dramatically and quickly and we should all ensure that periodically we review what measures we have in place to protect us.
EARSC held its AGM in Brussels on 22nd June and the afternoon was devoted to a workshop on the insurance industry and Geo-spatial information. BP happens to be self-insured so they have their own fund set aside to deal with disasters yet this is rare and Fiona Shaw of Willis Analytics and Dr Haverkamp of MunichRe explained that they have significant needs for geo-spatial information to support their risk assessments for underwriting. This looks to be a market worth exploring further and EARSC will continue to act as a broker and mediator to create opportunities for its members.
The morning was devoted to the agm itself and a workshop looking at GMES. The agm proceeded smoothly; Han Wensink gave an upbeat report on the industry and the activities of the association. Importantly he reported that we are finally near to finding a Secretary General for the Association that will indeed be a major step forward once he or she is in place. The treasurer, Andre Jadot, reported that the finances of the Association remain sound – in no small way aided by the award of the eoVox2 study for which Logica is the prime contractor but which supports directly EARSC in its business.
On GMES, first Norbert Glante Member of the European Parliament and rapporteur of the recent opinion on the Initial services communication. Praised the progress being made by the EC on GMES and welcomed the voice of EARSC as a representative body with which to engage in shaping future legislation.
Then Mauro Facchini, deputy head of the GMES Bureau also welcomed the opportunity to exchange with EARSC and the position paper that we are preparing. This will help greatly in ensuring that the industry role is recognized and reflected in the future actions. He explained that now the initial operations has been approved the focus will turn to governance.
It remains to say that the EARSC board is very positive concerning the future of the industry and the role that EARSC can play to help all its members.