How not to manage infrastructure crisis risk

The best crisis management is taking planned steps to prevent a crisis from happening in the first place. But that important principle sometimes seems to take a back seat when it comes to a crisis risk involving costly, vulnerable infrastructure.

Take the entirely predictable and avoidable crisis which struck New Zealand’s largest city. A ruptured pipeline carrying fuel to Auckland airport led to almost two weeks of cancelled and disrupted flights and questions about the vulnerability of the country’s main international gateway.

The crisis began late last year when a major break shut down the 170 km pipeline conveying fuel from the Marsden Point Refinery, the sole fixed supply to Auckland City and its busy airport. With limited local storage available, the impact was sudden and dramatic, with scores of flights cancelled or delayed.

Some incoming long-haul flights were diverted to Australia or Fiji to load fuel before arriving, and Qantas even sent two “fuel mule” jets to top up their smaller aircraft on domestic routes in New Zealand. By the time the crisis finally eased almost two weeks later, 150 flights out of Auckland airport had been cancelled, disrupting tens of thousands of domestic and international passengers. Plus of course damaging New Zealand’s air freight exports and its reputation as a tourist destination.

While the crisis itself was relatively short-lived, the implications for the security of critical national infrastructure were wide-reaching, especially with the revelation that the Government had been warned at least 12 years earlier.

A Government report in 2005 identified the impact of a major outage, and a second alarming report, in 2012, raised the possibility of duplicating the pipeline or building extra storage capacity. Yet politicians decided not to proceed with either option, perhaps encouraged by the report saying the probability of a short-term disruption to the pipeline was only 0.5 to one per cent per year, or once every 100-200 years. Extraordinarily, just as the pipeline was failing, Government officials were “taking a fresh look” at the issue, and yet another draft report was out for review.

As a communication strategy, Refining New Zealand, owner of the refinery and the pipeline, tried to position itself as a victim of the crisis. Within days, CEO Sjoerd Post said there was “clear evidence” the pipeline had been struck, with digger marks visible near the breach. Remarkably though, this damage appeared to have occurred up to three years earlier.

For its part, the Ministry of Business, Innovation and Employment unhelpfully concluded: “Given the costs of additional infrastructure that would very rarely be used, operational responses, such as managing airline refuelling at other airports and trucking in petrol and diesel, remain the best way to minimise any disruption.”

It was a classic bureaucratic response and no comfort to the thousands of individuals and businesses affected. Nor was the optimistic declaration by then-Deputy Prime Minister Paula Bennett: “I think people will see this as a very rare occurrence. It hasn’t happened for 30 years and we don’t expect it to happen again.”

Potential crises demand acknowledgement and effective preventive action rather than denial. And don’t be misled by a calculated risk of once in a hundred years. For any given crisis risk, that once just might be this year.

Footnote: Just weeks after the crisis the NZ Government lost an election, and last month the Refinery CEO resigned.  Adapted from Crisis Response Journal

 

 

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About managingoutcomes

Issue and crisis management expert
This entry was posted in Crisis management, Crisis Prevention, Reputation risk and tagged , , , , , . Bookmark the permalink.

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