Risk Services of Arkansas - September 2019

From the Panama Canal to Yucca Mountain

THE WORST RISK MANAGEMENT MISTAKES IN HISTORY

in 1907. In 1914, the Cristobal would become the first ship to maneuver through the Panama Canal. Had de Lesseps practiced any sort of risk management, we might be calling the Panama Canal “La Grande Tranchée” (The Great Trench) today. Yucca Mountain In 1987, the United States government decided Nevada’s Yucca Mountain was the perfect site for a nuclear waste depository. Neither the politicians nor the citizens of Nevada were consulted before Congress approved the project. For the next two decades, the project was plagued with opposition and protests. These protests grew even more intense when it was discovered that the research falsified data about the repository’s safe- keeping of nuclear waste. The project was finally scrapped in 2009, after wasting $13 billion of taxpayers’ money. Had Congress assessed the risk of opposition and safety, the whole embarrassing mess could have been avoided.

Risk management isn’t some buzzword to be checked off a project to-do list. This strategy of assessment and preparing for risk can make or break projects of any scale. Not convinced? Take a look at these historical projects that ended in disaster thanks to poor risk management. Panama Canal Before President Theodore Roosevelt set his sights on connecting the Atlantic and Pacific Oceans, the ambitious project in Panama was the vision of French businessman Ferdinand de Lesseps. Since the French had already successfully constructed the Suez Canal, de Lesseps began work in 1880, without any blueprints or risk management plan to speak of. By 1883, barely a tenth of the excavation was completed, with constant landslides regularly setting the work back. In 1884, an outbreak of deadly yellow fever halted efforts again. A lack of funds put an end to de Lesseps’ project in 1889, after accidents, tropical diseases, and poor planning claimed the lives of 22,000 workers. In 1901, President Roosevelt took an interest in completing the canal. While the term “risk management” wasn’t in use yet, this was the first step in the American project. The deadly mosquitoes that spread yellow fever were eradicated, and infrastructure was built before excavation started again. Army Colonel George W. Goethals was put in charge of the project Let’s face it, what might make sense to the people in California or New York doesn’t necessarily work here in Arkansas or Texas, and vice versa. We look at the world differently and we have different beliefs and priorities. But at the end of the day, we are all Americans. What the framers created during the Constitutional Convention was genius, and I believe we need to get back to that. We need to get back to a smaller centralized government and more power to the states. The states are closer to the people and can more effectively address their problems and wants. This system has helped create some of the greatest success the world has ever seen. It’s crazy that some people want to blow it up because its “outdated,” which simply means it doesn’t support their immediate political goals. Forget “Out with the old, in with the new.” Our ingenious system of self-governing literally allowed us to become the envy of the world in less than 200 years … while generally protecting our individual liberty and freedom in the process! ... continued from Cover

Whether you’re training delivery drivers or building a canal to connect oceans, it’s clear that a little risk management can go a long way.

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–Brad Johnson

President, Risk Services of AR

Specialized Insurance Programs for Specialized Industries. • www.insurica.com • 3

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