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Dealing with Crises

A rise in security challenges such as crime, terrorism, and political instability plagued U.S. businesses, nongovernmental organizations, and academic institutions working overseas in 2006. The trend makes it more important than ever that companies incorporate security plans into their core operations, according to an analysis by the U.S. Department of State’s Overseas Security Advisory Council (OSAC).

“The overall theme that came forward this year was that those organizations that build security within their [operations] are able to handle the everyday challenges along with the catastrophic,” says Doug Allison, author of the OSAC report. Firms that are adequately prepared for upheavals can better exploit opportunities in riskier environments and in the aftermath of major events, says Allison, who is director of OSAC and a special agent in the Department of State’s Bureau of Diplomatic Security.

Allison uses the blow-up of hostilities between Lebanon and Israel last year as an example of a sudden crisis that caught many organizations by surprise. Some companies were very efficient with both their ability to evacuate their personnel, and their readiness to reenter Lebanon rapidly after the crisis was over.

“Security is a major part of those organizations—they bake it into the business from the word go,” Allison says.

Among the best-prepared are the oil and gas and mining sectors, he notes. They often operate in inhospitable locales that are remote and unstable, and constantly face crime and corruption on a broad scale. “They’ve incorporated the culture of resiliency [so they are] able to weather challenges more readily and not get caught flat-footed,” he says.

West Africa’s Niger Delta embodies the hazards faced by oil and gas companies. Westerners have been kidnapped, oil pipelines sabotaged, production severely restricted, and facilities overrun. Throughout Africa, U.S. businesses are challenged by rising corruption at ports, product counterfeiting, theft, and violent crime against employees, the report said.

OSAC analysts singled out kidnapping as the chief global threat, particularly in Latin America, Africa, and Iraq. “In the Americas, kidnapping has now become its own cottage industry, conducted in a much less targeted, haphazard manner, with hostage detentions taking much less time, and smaller ransoms being accepted,” OSAC analysts wrote.

Kidnappers have targeted western oil companies in Africa. In Iraq, local employees are the quarry, and the kidnappers are more violent. Even when ransoms are paid, the abductees have a limited chance of surviving.

In the Persian Gulf, terrorism—not surprisingly—was fingered as a major problem. But security has succeeded in thwarting some attacks, such as those on major oil installations in both Saudi Arabia and Yemen that were rebuffed by tight perimeter security and guard force response. In Latin America, civil unrest was pointed out in places like Bolivia and Mexico City for its ability to cripple major economic areas.

The OSAC analysts saw militant activism as a primary dilemma in Europe, as illustrated by disturbances in France that ended in January 2006 (they were triggered by immigration and employment policies) and by antigovernment protests in Budapest. Europe was also haunted by radicalism, including heightened Islamic extremism and right-wing groups linked to skinheads or neo-Nazis.

Not all of the problems cited by OSAC were man-made. OSAC analysts called natural disasters a chief scourge in Asia. Typhoons, flooding, earthquakes, and tsunamis all hit spots including Japan, the Philippines and India.

Intellectual property piracy and other related rights violations are also widespread in Asia, particularly within its two largest players on the international stage, China and India, said the report.

Last year was the first time OSAC put together the survey. It relied on nine analysts—eight regional specialists and one who covered big events such as the World Trade Organization talks and the Olympics.

A “trend line” spied throughout a mass of collected information prompted the release of the initial report, according to Allison. “We wanted to get out a broad perspective of information on a regional level,” he says.