Puerto Rico is an example of how local, state and regional governmental leaders, private industry and infrastructure experts must work together after a natural disaster to examine the enterprise risk management strategies that had been in place, where those plans worked and where they failed. This examination should include everything from small municipalities to an entire region. Furthermore, these groups must work in tandem to thoughtfully rebuild infrastructure so that when the next event occurs, the affected areas are more resilient and better able to serve their citizens during the recovery phase.
Cascading effects of infrastructure failure
In Puerto Rico, we have been witness to the cascading effects of the failure of multiple parts of a community’s infrastructure. Electricity, water, roads, dams, hospitals, and cell towers: No structure was immune to the devastating effect of a storm that has been described as a 70-mile-wide tornado crossing an entire country. The island has suffered extensive damage to its infrastructure that cannot be addressed by standard reconstruction efforts and strategy.
In most events when a municipality is impacted by a natural disaster, infrastructure rebuilding and recovery is mostly “patchwork”-simultaneous efforts toward retaining the original infrastructure through different types of repair activities. However, like many other locales, Puerto Rico’s infrastructure (prior to Hurricane Maria) included outdated bridges, water resources, communications, and power grid systems. The almost total damage to critical infrastructure puts Puerto Rico in the unique position of focusing its efforts not only on rebuilding its infrastructure in a manner that incorporates the latest developments in utility distribution, building techniques and emergency response framework, but also on acting as a testing ground for the type of risk planning that can aid communities worldwide.
To be clear, the unprecedented nature of Hurricane Maria’s destruction across Puerto Rico would have resulted in significant damage to infrastructure even if it had been modernized. However, the resiliency required to bring critical systems back online quickly would certainly have been enhanced by state-of-the-art technology and building methods.
Meanwhile, a group of coders, computer scientists and Silicon Valley entrepreneurs believe that relief efforts after Hurricane Maria need to be approached from another perspective. Calling themselves the Maria Tech Brigade, members want to see developing technologies for people connected to Puerto Rico.
Due to the extent of the initial damage and its immediate and continuing effects on citizens, the destruction of the government-owned electrical grid is an obvious area for examination. Consider the risk implications of concentration of values and lack of supply chain diversity. Ninety-eight percent of Puerto Rico’s electrical generation is dependent on petroleum, coal and natural gas. All must be imported, and the generation plants are large and non-distributed. Only 2 percent of their electricity is renewable, coming from wind and solar generation; that includes only two wind farms, and 60 percent of the utility-scale solar is non-distributed.
Dealing with the probable while planning for the possible
As part of a comprehensive risk management plan, communities with finite budgets must focus prevention and mitigation efforts on those risks that have the highest probability of occurrence. Communities then have to find the balance between the types of losses that occur most frequently and those that can cause the most damage.
In the example of electricity distribution, officials must consider diversifying both the means of generation and the dispersion of the generating facilities. Hurricane Maria was primarily a wind event with maximum sustained winds of 155 miles per hour. Hurricane Harvey by contrast, was primarily a flood event resulting from rainfall amounts up to 50 inches. In coastal east Texas, distributed electrical generation systems were not the issue. Rather, it is zoning regulation in flood-prone areas and drainage infrastructure that merit risk review. That’s because 40 percent of building damage in the Houston area came from buildings located outside of FEMA-designated flood zones. There is growing concern that flood maps are no longer accurate due to a variety of factors, including changes in drainage caused by construction of impermeable surfaces like roads and parking lots.
In Mexico City, after the 8.0 magnitude earthquake in 1985, building codes were modernized. However, an unintended consequence was that soil shifted and resettled under older buildings as new buildings were constructed nearby with deeper foundations. Old buildings, grandfathered out of retrofitting to new construction methods, have shallower foundations and thin panel walls – they are the first to fall.
Alerting residents when disaster strikes
Much of the catastrophic extent of the wildfires in California is the result of uncontrollable natural events, including an increase in vegetation during winter months that then becomes fuel in the dry, windy summer. A controllable risk failure may emanate from a lack of a coordinated emergency warning system using WEA – wireless emergency alerts – such as Amber alerts and other warning systems. The local governments in the area have emergency plans that may differ from neighboring communities in the mode and platform for communicating with their citizens in an emergency. Social media, reverse 911, and “opt-in” mobile alerts are some of the methods, but they are not consistent or coordinated over jurisdictional lines.
When dealing with catastrophic events, you can have an excellent risk management plan. Your emergency response and all the components may work cohesively as planned, but it is impossible to eliminate the impact of 50 inches of rain, an 8.0 magnitude earthquake, 150 mph winds or 281 square miles of wildfire.
Thoughtful city planning, investment in critical infrastructure, modern building codes, practical zoning in flood-prone areas and linked emergency communication systems are critical to reducing property loss and saving lives, the immediate concerns of local officials in areas affected by natural disasters. Long-range planning must look beyond avoidance or elimination of risk and also work toward mitigation and resiliency, which allow local governments to continue their mission of serving and protecting citizens.
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The insurance policies, not this descriptive article, form the contract between the insured and the insurance company. The policies contain limits, exclusions and conditions that are not listed in this article. All coverages are subject to individual underwriting judgments and to state legal and regulatory requirements. This article is provided for informational purposes only and does not constitute legal advice. Policies for this program are issued by one or more insurance companies of Argo Group International Holdings Ltd. Trident is a registered service mark of Argo Group International Holdings Ltd.