Large international corporations are expanding into the developing world to take advantage of new emerging markets and low-cost resources. This is exposing their business and employees to risks from natural hazards.
For decades we have been advocating for the improvement of resilience to natural hazards – without much traction. However, the Christchurch and Japan earthquakes, among others, made a number of organisations and communities realise that they may not have a true understanding of their exposure to the risk from natural hazards.
Recently, we have seen a rise in the number of requests for advice on resilience from the Asia Pacific region and from Europe. With the rapid march of globalisation, large international corporations are expanding into the developing world to take advantage of new emerging markets and low-cost resources. This is exposing their business and employees to risks from natural hazards which may have not required consideration before.
Through our long experience in the management of these risks, we have identified four key aspects to creating a resilient organisation or community. These are:
- understanding the risk
- mitigating the risk
- planning for a disaster
- preparing a disaster plan.
Understanding the risk
Risk is a function of the underlying natural hazard and the vulnerability of the infrastructure/people to it. In most cases, the likelihood of a natural hazard occurring is unchangeable whereas the vulnerability can be addressed. It follows that, without understanding the vulnerability of a building or asset to each hazard, you cannot quantify the risk.
Consider, for example two buildings - a new building near the coast and an older building further inland. Both are exposed to a similar earthquake hazard, but the coastal building is in a tsunami zone. The coastal one therefore has an overall higher exposure to natural hazards. The older building inland, despite having an overall lower hazard exposure, may be at a higher risk than the newer coastal one. This understanding of the combination of hazard and vulnerability is key to making informed business decisions around risk management and mitigation.
Mitigating the risk
Mitigation, where possible, is built on the back of a solid understanding of the risk. Mitigation needs a pragmatic approach in which both life-safety and business-continuity issues are addressed. A cost-benefit analysis at an early stage is often overlooked. However, it can add immense value by helping to determine where sensible investment should be made. Options for an existing building/infrastructure might include strengthening/retrofit, relocation or rebuild. In addition, from a business continuity point of view, it might involve setting up back-up systems and operating facilities for critical infrastructure. All of these options need to be reviewed in conjunction with the wider impacts of the disaster. They must be realistic! For instance, is it worth investing in a low damage design for a new building when the surrounding services infrastructure is unlikely to be able to support its operation?
Planning for disaster
Planning is also key to supporting staff and assisting with the swift recovery of the business or community after a natural disaster. This planning requires a holistic approach - not just around the asset itself, but taking into account elements such as employee safety and protection of critical infrastructure. We often assist in the setting up of disaster-recovery centres in appropriate buildings and planning how to deal with the immediate aftermath (including damage assessment). Getting operational again requires an understanding of the comprehensive risk rather than just the asset risk. An incorrect understanding of the risk leads to poor planning.
Preparing a disaster plan
Initiating the disaster plan and assessment of any damage in the immediate aftermath is also critically important to returning functionality to a business or community. Even moderate seismic events can knock a business offline for over a week. It follows that planning of key tasks, such as engineering inspections and staff communication is critical. This also links back to the first aspect of understanding the risk. The ability to prioritise inspection and post-disaster activities based on increased risk profiles can enable faster recovery and the direction of investment to the most appropriate areas. The emotional aspects of disasters also need consideration and are often overlooked. Even a moderate earthquake can have significant emotional impacts on individuals and the recognition of this, along with taking steps to address any issues, is vital for business recovery.
Overall, it is important that the risk assessment, mitigation and planning consider the wider impacts of the disaster. This requires a holistic view outside of buildings or assets themselves, but also consideration of the full requirements to get the business or asset back up and running.
From a community perspective, the most important part of recovery from a disaster is to get the local economy flowing. Without businesses and shops, there are no jobs, infrastructure or services, and it is impossible to get a community functional. Organisations need to understand that they play a big part in preparing and creating resilient businesses and communities.