Systemic risk

In the context of infrastructure, systemic risk is a cumulative risk to a system as an outcome of physical, biological, social, environmental, or technological shocks and stresses. These may be internal or external to the system. Impact on individual components of the system (assets, networks, and subsystems) becomes systemic due to interdependence and interactions between them.

Notes:

1. Systemic risk can be seen as a feature of systems at all possible scales – global, national, regional, and local – with varying system boundaries depending on the context.

2. Interactions within a system can either aggravate or contain the overall effect of the constituent parts, creating the potential for cascading impacts on system elements far from the first impact. See also "Feedback loops".

3. A key attribute of systemic risk is that it can transgress spatial and sectoral boundaries in relation to other systems, sectors, and geographical regions, thus leading to cascading effects. See also “Cascading hazards”.

4. Systemic risk management requires a holistic understanding of the interconnected, complex, and non-linear cause-effect relationships between the system’s elements to identify appropriate responses. See also “Organizational learning” and “Infrastructure linkages”.

Reference:

Adapted from Sillmann, J., Christensen, I., Hochrainer-Stigler, S., Huang-Lachmann, J., Juhola, S.,Kornhuber, K., Mahecha, M., Mechler, R., Reichstein, M., Ruane, A.C., Schweizer, P.-J. and Williams, S. 2022. ISC-UNDRR-RISK KAN Briefing note on systemic risk, Paris, France, International Science Council, DOI: 10.24948/2022.01

URL: UNDRR

Disasters in the readymade garment industry, Dhaka, 2013

An eight-storey commercial building, Rana Plaza on the outskirts of Dhaka collapsed on 24 April 2013. Around 1,100 people lost their lives and many more were left with life-long injuries. The building owners had refused to shut down the building inspite of being warned about cracks appearing in the building the day before. Garment workers had been ordered to return to work on the following day, and the building subsequently collapsed during the morning rush hour. The collapse was due to:

  • The building was built on a filled-in pond, compromising structural integrity.
  • The building had been converted from commercial use to industrial use, and heavy industrial machinery was installed which caused vibrations.
  • Four floors had been added above the original permit.
  • Substandard construction materials had been used.

 

Sources:

  • Government of United Kingdom. (2014, April 10). The Rana Plaza disaster. Foreign & Commonwealth Office. Department for International Development. Retrieved December 14, 2022.
  • The Rana Plaza Accident and its aftermath. International Labour Organization. (2017, December 21). Retrieved December 14, 2022.
  • Manik, Julfikar Ali; Yardley, Jim (24 April 2013). "Building Collapse in Bangladesh Leaves Scores Dead". The New York Times. Retrieved 25 April 2013.
  • Blair, David; Bergman, David (3 May 2013). "Bangladesh: Rana Plaza architect says building was never meant for factories". The Telegraph. London. Retrieved 8 May 2013.
  • "Power generators linked to Dhaka building collapse". BBC News. 3 May 2013. Retrieved 16 April 2017.

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