Analyse économique du Risk Management Program (section 112® du « Clean Air Act »)

The Civil Protection Act (Bill 173), passed on December 19, 2001, gives the government the power to adopt a by-law on technological risk management. In the elaboration of this by-law, the Ministry of Civil Protection wanted to obtain information on the American Risk Management Program (RMP) adopted in June 1999. Any project (or by-law), public or private in nature, must be evaluated to determine whether it is positive or negative for each agent, as well as for the society as a whole. In the case of the new Quebec by-law, the CIRANO was contracted to perform an economical evaluation of the RMP, meaning that it had to evaluate the costs associated with requirements of this type of by-law, as well as the benefits that it brought to the corporation. The report that was produced first presents the methodology used for the cost/benefit analysis of compliance with the regulation on industrial risks, as well as an application to the RMP. The report lists the direct and indirect costs, as well as the direct benefits ("negative costs"") and indirect benefits. The direct costs are those directly imputable to compliance with the requirements of the by-law, while indirect costs are those generated by the application of the by-law rather than to compliance itself (decrease of the productivity, delayed investments); indirect benefits might include improvement of the corporate image, reductions in insurance costs and technological innovations.
Secondly, the report also explains the responsibilities of each group, as well as the means supplied to them to assume these responsibilities. It currently appears necessary, to improve the effectiveness of environmental regulation, amongst others, to reinforce the culture and the consciousness of risk, as well as to promote involvement by facilities, local communities and the broader public. In this context, the report examines the Local Emergency Planning Committees (LEPCs), which are pivotal entities in the transfer of information between local communities, facilities and citizens.
Additionally, when a new regulation comes into effect, a program of inspection must be set up to assure that the subjected facilities fulfil the new requirements. Consequently, the report examined one model of incentive audits, as well as the role of insurance companies in the prevention of major industrial accidents.
The conclusion contains a discussion about the economic analysis of the RMP and isolates the main elements that must be accounted for."
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