Economic impacts caused by the failure of a maritime global critical infrastructure---a case study of chemical facility explosion in the Straits of Malacca and Singapore

Abstract

Globally shared and intensively used maritime infrastructures such as ports and straits have the potential to cause trans-boundary and multi-sector impacts on our society in case of disruption. This type of infrastructure can be called a “maritime global critical infrastructure (MGCI)”; its disruption can be caused by various types of hazards. IRGC (2011) was first to focus on this issue, identifying critical deficits of risk governance in an MGCI and making recommendations for improvement. However, a detailed impact assessment of a major disruption to an MGCI has not been fully conducted due to various factors including the complex interrelations and mechanisms of MGCI activities and processes and their cascading impacts, the limited availability and difficulty of access to the necessary data sets at regional and global scales, the need to combine modeling approaches from various fields. In an effort to overcome some of the above challenges, this paper presents the results of a prototype economic impact assessment of an MGCI disruption scenario. The Straits of Malacca and Singapore have been selected as a representative MGCI, and an oil refinery fire and explosion in the Singapore Strait as an initiating disruption event. The impact assessment and associated sensitivity study presented here, including the scheme of price changes as a result of the increase of transportation costs, reveal the value of the Straits and ports and the requirements of a relatively fair governance scheme.