Saturday, March 07, 2020

The Collapse of the 'Quarantine Hotel': Thoughts on Business, Legal, Political, and Societal Risk for State and Enterprise COVID-19 Strategies





One of the structures designated by the Chinese state authoritative as a place of containment for COVID-19 coronavirus infected individuals. As reported for the South China Morning Post by Mimi Lau: 
More than two dozen people have been rescued from the rubble of a multi-storey building reportedly converted into a coronavirus quarantine centre, after it collapsed in the southeastern Chinese province of Fujian on Saturday. The Xinjia Express Hotel in Quanzhou collapsed just after 7pm, according to Mnw.cn, an online news site operated by the official Fujian Daily. Authorities in Licheng district said about 70 people were in the building when it collapsed. The Quanzhou municipal government said 34 people had been rescued by about 10pm. The Beijing News quoted several local government officials as confirming the hotel had been turned into a quarantine centre and was one of two in the district. The exact number of people in the building at the time was unknown. People’s Daily reported that the hotel had been converted by the Licheng district government into a medical surveillance facility for people with close contact with coronavirus patients. (Mimi Lau, ‘Coronavirus quarantine hotel’ collapses in southeast China, South China Morning Post (7 March 2020))
Deutsche Welle reported that "The reason for the collapse has not yet been made public. Federal authorities have sent an emergency working team to the site" (China: 'Coronavirus quarantine' hotel collapses, trapping dozens). The collapse has become an important political , as well as a humanitarian event. High level officials from the State and CCP apparatus are involved.  "Huang Ming, the ministry’s Communist Party secretary, is overseeing the rescue mission from Beijing. Senior State Council officials are also on their way to Quanzhou" (Mimi Lau, ‘Coronavirus quarantine hotel’ collapses in southeast China). Indeed, state authorities have been quick to be transparent about their response to the collapse. "A video stream posted by the government-backed Beijing News site showed rescue workers in orange overalls clambering over rubble and twisted steelwork carrying people towards ambulances." (Rescuers race to save 30 people still trapped in collapsed five-star hotel in China being used to quarantine coronavirus victims).

But the damage, and its mitigation, now extends beyond the physical and emotional injuries of those within the collapsed building. People now are burdened with an additional worry--not just the state of their health, but also the conditions around which the state has a responsibility to protect their safety. "I'm under quarantine too [at another hotel] and I'm very worried, I don't know what to do. They were healthy, they took their temperatures every day, and the tests showed that everything was normal." (BBC News).
There will be much to learn after authorities and volunteers respond to the humanitarian needs of those trapped. Much of it, of course, will involve second guessing the authorities along a line of decisions and policies leading all the way back to the construction of the building itself and thereafter the determination to place people in it.




 The collapse, however, serves as a reminder about the nexus of business, political, legal, and societal risks that converge around governmental (and private) decisions with respect to their responses to the (additional) risks posed by an epidemic of infectious diseases with more than a trivial mortality rates.  Like so many other areas, COVID-19 may well serve as the space within which the conventional premises around which the allocation of risk and responsibility, and the legal obligations with respect to both, may be transformed. Brief thoughts respecting potentially important vectors for change follow.  

 While the issues are complex, I start with seven potentially transformative areas.  While most of these will manifest in different ways as a function of context--liberal democracy versus Marxist Leninist systems; developed versus developing states: common law versus civil law; etc.--it is likely that all actors will experience transformation pressure in these areas.  

1.  Sovereign immunity. There is a tension between the appetite of government, and their political and administrative leaders, to appropriate authority to act (indeed to compel action), and their willingness to subject the state apparatus they manage, direct or use to liability for the damage that may be caused by their actions, decisions, or policies, where these may cause harm to the people subject to their authority. The usual refrain is to invoke ancient notions built into the feudal structures of state long rejected by liberal democratic and Marxist-Leninist systems  more than eager to bury the core premises of those systems when they each arose triumphant over the corpse of the ancient systems they decapitated (each in their own ways). And yet both remain eager, it seems to retain the one characteristic of the ancien regime that itself might be understood as the source of the poison that eventually made it possible to overthrow these ancient systems.  It remain unclear how sovereign immunity fits compatibly within the ideologies of liberal democracy or of New Era Marxist-Leninism in the era of data driven governance in which the state undertakes an increasingly large responsibility for directly or indirectly managing behavior and making decisions that affect the everyday lives of its citizens.  And again, invocation of the past rings hollow here, however piously invoked. The Quarantine hotel makes it clear that sovereign immunity ought to be "on the table" for transformation, especially in context like these where the state assumes a parens patriae power over its citizens. And it ought to apply as much to decisions to keep passengers on cruise ships where some of them test positive (here), as it does for the consequences of decisions to impair the movement of people. Misdiagnosis, faulty state ordered tests, inability to supply people in quarantine with food, water and other services, and the economic consequences of a general lockdown may all be fit candidates for waivers of sovereign immunity.

2. Accountability. If sovereign immunity issues goes to accountability by the state to the citizens it has harmed, the accountability goes to the responsibility of officials for their own conduct that causes harm--to the state or others.Power and responsibility must be coupled both with the duty to prevent. mitigate and remediate harm, as well as the duty to ensure that the administering apparatus has in place systems of monitoring, quality control, and assessment, so that it can effectively minimize harm and discipline abuses of authority. Here there is a strong case for the extension of Social Credit systems in China to officials. And it is a pity that the authorities appear to have left the public social rating of its own officials for last. At the same time, accountability ought to extend far beyond the state.  In the case of the hotel collapse, accountability (along with liability) ought to extend back to those responsibility for the (maintenance of the building; (2) its inspection; (3) its construction; and (4) its approval.  That responsibility may extend to architects, government officials, lenders (whose failures of due diligence ought to be punished), construction companies, and perhaps those responsible for other conditions that might have contributed to the collapse.  This circle of accountability ought to be constrained by principles of causation; but causation itself might be due for a reconstitution.

3. Transparency.  What has become relatively clear in the context of responses to COVID-19 is the close connection between policies of containment and transparency. Yet neither states, nor other authority wielding institutions have appeared to learn tat lesson well.  Instead, transparency continued to be viewed from a mid-20th century perspective as an exercise of the propaganda (public) or marketing (private) function.  There is likely only the  minimal connection between operational ministries (or private units) and the propaganda/marketing units that tend to control public (and sometimes) private communication. But transparency as propaganda/marketing does little to control panic, especially of the sources of communication are viewed with suspicion.  A tighter connection between transparency and the operational units may be necessary.  That, in turn, will require a reworking of the rules of standard operation of control core groups and their organizations in times of crisis. In this case, that may mean that the welfare of the state and the collective may need to be put ahead of the personal or non-crisis agendas of leadership cores.

4. Private actor liability. Public liability and risk is only the tip of the iceberg now.  As states have increasingly devolved governance authority to private actors, it is worth considering whether the protections of state immunity ought to flow down to those entities acting in the place of the state, or whether the traditional principles of private liability ought to travel upward to the highest reaches of the state organism. We are not even capable of understanding the context within which this conversation must be undertaken, mostly because individuals and institutions continue to cling to the delusion that it is 1985 and that the presumptions that made the operations of states and others possible then continue to apply.  But they do not.  At some point change will come--and usually anarchically as a consequences of crisis or disaster--whatever the delusional desires of those who seek to pretend that nothing has changed. 

5. Beyond legal liability. Neither government nor private organizations (NGOs and enterprises) operate solely or primarily on the basis of legal risk (much to the chagrin of the lawyer). Rather much of the operational decision making of most actors is undertaken within the broad parameters of legal risk but is driven by business and societal risk (and political risk to public actors). Yet there is little attention paid to the constitution and consequences of either business or societal risk.  The Quarantine Hotel Collapse provides a good case study of business and societal risk. Societal risk here includes a loss of confidence in the ability of the state to deliver on its responsibilities, which may make it harder to require citizens to make large sacrifices without push back in the future.  The credibility of the state or other organizations will substantially affect teir ability to shape the narrative within which their operations are conducted.  The latter touches on business risk as well as societal risk. A considered review of the hotel collapse measured against business, political, and societal risks might be useful to all actors. 

6. The chain of responsibility.The core principle of all economic and political systems tend to posit that those onto whom authority to direct and manage are also burdened with the responsibility of exercising that authority in the best interests of those subject to that power. Neither capitalist nor Marxist-Leninist systems recognize a power of selfishness in their leadership cores.  Indeed both insist on structures (a cage of regulation, fiduciary duty, etc.) to ensure that action is premised on advancing the interests of the collective rather than the ruling group. That chain of responsibility now appears to acquire a deeper meaning in the context of re-considering the character of accountability and the reach of sovereign immunity.  And yet, it seems unlikely that this chain of responsibility will be reconsidered against the realities of events like the COVID-19 epidemic or the specific instances of quarantine connected building collapses. And here the fundamental issue: responsible to whom and in what way? The Quarantine building collapse provides a view of the way that these are or will be shifting.

7.  The role of insurance. Ultimately, what the building collapse exposes is the very tenuous relationship between action and insurance--that is protection against the consequences ordered by people with the power to enforce their will. At the end of the day, individuals and enterprises are responsible to themselves.  It does not matter how splendidly articulated are assurances of good intentions, of duty, of preparation, and the like. Individuals have worn the scars of good intentions and splendid assurances since the first governments were established over them.  But then so have the institutions of government (public, private, religious, societal) themselves.Everyone it seems, in this new era, will likely be faced with the real issue of insurance--of ensuring that everyone within a system of interlocking dependencies can be depended on to fulfill their duty--and of providing contingencies for the inevitable failures of those duties.  But the question of insurance is stuck in the 20th century and with 20th century notions of insurance as a risk dissipation mechanism that can be reduced to a product bought on the market.  But if one must now consider rsk in a different way with the advent of an era of increasingly more challenging collective inhibiting events (like epidemics), then the nature of insurance must be challenges as well.  Individuals, institutions, and the state itself must undertake a difficult analysis of insurance and the modalities for mitigating risk. That starts, as the Quarantine Hotel collapse suggests, with the issue of identifying the events against which one must insure.  If one can't see risk coming, then one can't insure against t.  That is the ultimate lesson of risk and responsibility here.

And with that one  ought to better mourn those who have been buried under the rubble of good intentions.

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