Understand your Context to Mitigate Political and Security Risks

Fighting terrorism in North Africa

At a recent Alert:24 Risk Briefing in which I participated, risk professionals reflected on the measures that businesses should take to mitigate a variety of socio-economic, political and security risks, which permeate emerging markets.

Such risk exposures have been highlighted recently by instability in the Sahel and North Africa as well as recent incidents directly targeting corporate personnel and facilities.

Where a state is unable to provide security, raise revenue or meet the expectations of its people with respect to their social and economic needs instability and uncertainty is likely and failure possible. Meanwhile, indeterminate state boundaries may produce serious challenges to supply chains which, like risks, transcend borders, regions and sectors.

Unresolved socio-political tensions founded on ethno-linguistic, religious and ideological fissures can spread across porous borders affecting the stability and operational business environment on both land and sea.

The Sahel, for example, is a region where a toxic mixture of armed ethnic groups with organised criminal gangs and Islamic fundamentalists operate across porous borders taking advantage of the power vacuums, social tensions and security inadequacies compounded by weak governance.

Understand your context

Given such challenging risk environments it is critical to have a comprehensive understanding of the key threat drivers. It is vital to build contextual understanding to appreciate and identify interconnected economic, political and security risks. Locally sourced intelligence, which recognises the motivations, grievances and interests of local players, helps develop a sustainable business plan which recognizes opportunities as well as threats.

It is essential to also understand the profile and impact of an organisation on its host community and the degree to which its resources influence the ‘dividers’ and ‘connectors’ therein, thereby nurturing capacities for stability or exacerbating conflict. The arrival of a business interest or the prospect of local employment can actually act to facilitate communication, cooperation and resolution under the correct circumstances.

Company management on the ground and corporate head offices should confer and collaborate in intelligence analysis and contingency planning to better understand, shape and mitigate these political and security threats. This can be extended to cooperation between business peers who can support each other by providing an invaluable information-sharing network to their common advantage including enhanced duty of care.

Local risk management based on a diverse set of constantly updated contextual sources, best occurs within a larger and integrated Enterprise Risk Management (ERM) framework, which fuses these insights with board-level decision making.
What was strikingly absent from much planning during the Arab Spring and in other evacuations studied is this contextual understanding and a set of sensible triggers based on solid scenario planning. The Arab Spring highlighted the deep inadequacies of many business contingency plans which over relied on both consular and international support and did not anticipate the potential closure of air corridors.

A viable, workable and resilient mitigation strategy should have a nuanced understanding of contextual risks and robust mitigating measures that include comprehensive insurance cover and facilitate timely and focused decision making at the moment of crisis to ensure that a company’s Duty of Care to their employees is met.

While instability, insecurity and uncertainty persist, the threat spectrum in the Middle East and North Africa will continue to evolve and mutate requiring an innovative and proactive risk management strategy from risk managers whose facilities, supply chains, personnel and markets are threatened by an ever diversifying set of risks.

About Tim Holt

Tim is Head of Inform at Alert:24, a new crisis and risk management consultancy from Special Contingency Risks. He …
Categories: Global Risks, Kidnap & Ransom | Tags: , , , , ,

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