Page 57: of Maritime Logistics Professional Magazine (Q1 2011)

Maritime Risk

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www.maritimeprofessional.com Maritime Professional 57

L

Legal

Risk Management in the

Era of Cognitive Dissonance

LEGAL ANALYSIS

O ne might believe that, as important as the maritime sec- tor is to the economy of the

United States, the US would treat it as least as well as other transportation and commercial sectors and would encour- age the adoption of risk management as an integral part of the maritime business model. It appears that the United States is engaging in a pattern of cognitive dis- sonance – acknowledging the impor- tance of the maritime sector while at the same time discouraging that sector from investing the time and monies required to improve its performance, particularly with regard to environmental compli- ance. Cognitive dissonance is the uncomfortable feeling one gets by simultaneously holding conflicting beliefs. The discomfort is often reduced, not by changing one’s beliefs, but by justifying, blaming, and/or deny- ing. An example is found in the fable of the fox and the grapes. The fox sees some high-hanging grapes. Unable to secure the grapes after much effort, he walks away, surmising that they were undoubtedly sour anyway. People are similarly biased to think of their choic- es as rational, despite evidence to the contrary. This bias is explained in dis- sonance theory, shedding light on other- wise puzzling irrational and destructive behavior. Nevertheless: • It is vital to our economic well- being that we have a vigorous interna- tional trade, particularly a strong mar- itime trade. • It is necessary, to protect our envi- ronment, that we criminally punish acts that result in pollution.

Both of the above propositions are valid and reasonable – unless taken to their extremes. Few would suggest that those engaged in international trade are entitled thereby to ignore applicable domestic laws, such as customs, immi- gration, and environmental protection.

Likewise, few would suggest that every act that might degrade or pollute the environment should be prosecuted criminally.

For the most part, criminal prosecu- tion is limited to intentional or reckless acts. Thus, in the environmental arena, so-called “midnight dumpers” are pros- ecuted with the full approval of the pub- lic. On the other hand, if a driver is involved in an automobile accident through no fault of their own and gaso- line from their car is spilled on the ground, no prosecutor in their right mind would attempt to charge the driv- er with criminal pollution.

RISK MANAGEMENT

Society expects everyone to behave reasonably. If you are engaged in an activity that might damage others or the environment, you are expected to have taken reasonable steps to minimize that risk. If you like to drive cars at speeds of over 100 miles per hour, you are expected to confine such behavior to places such as race tracks, rather than city streets. If you have an accident at high speed on a race track, there are no criminal consequences. If you have an accident at high speed on a city street, you can expect to be prosecuted and probably spend some time in a confined space.

The difference in treatment of these events relates to risk management. Both events involved driving at high speed.

Such driving is not unreasonable on a race track. Persons involved in this activity have analyzed the risks and taken steps to manage those risks. Most persons involved in driving on city streets have also undertaken an informal risk analysis and operate are speeds that are reasonable for the conditions pre- sented (i.e., have stayed below or near the speed limit).

Persons and entities that engage in adequate risk analysis and who act on that analysis expect that, if something goes wrong despite those efforts, they may have to pay civil damages but they will not face criminal prosecution.

Otherwise, there would be little reason to take all the time, effort, and expense involved in risk management. Why engage in risk management if the con- sequences of an incident are the same, whether it was intentional or a true acci- dent?

The maritime industry has developed a sophisticated risk management scheme – the International Management

Code for the Safe Operation of Ships and for Pollution Prevention, common- ly referred to as the ISM. The ISM

Code has been incorporated into title 46 of the US Code. That said; risk analy- sis and risk management, no matter how well undertaken, will not prevent all accidents. Things go wrong; equipment breaks down; humans err.

The United States Sentencing

Guidelines (USSG) provides for reduc- tion in the potential sentence of an enti- ty convicted of a criminal offense if that entity had an effective compliance and ethics program in place when the offense occurred. The compliance and ethics program must have been reason- ably designed, implemented, and

As the Red Queen said in Lewis Carroll’s “Through the Looking Glass”: Sometimes I’ve believed as many as six impossible things before breakfast. by Dennis Bryant

Maritime Logistics Professional

Maritime Logistics Professional magazine is published six times annually.