Brazil — the land of carnival, samba and beautiful football (soccer) — is not a country generally associated with terrorist activity. But as the country prepares to host the biggest sporting event in the world, there is unfortunately no getting away from the immediate and continuing threat.
As the eyes of the world turn toward Brazil and the start of the Olympics on August 5, both government and businesses have had to contemplate the heightened threat of terrorists targeting the country.
Aside from Brazilian authorities needing to mount a huge security operation to protect those participating in and attending the Games, the event has also raised inevitable questions about how prepared the country’s institutions and corporations are for the wider implications of an attack, either during or after the Olympics.
For a country that is familiar with outbreaks of civil violence, general visibility and discussion of the terrorism threat up to now has been relatively low. Media coverage in the build up to the Olympics, for example, has tended to focus much more heavily on the Zika virus, work running late on venues, police force strikes and the structural problems affecting many sports in Brazil.
Nonetheless, a few months ago ABIN (the Brazilian Intelligence Agency) confirmed the authenticity of a social network profile and a message posted in November last year, shortly after the attacks on the Bataclan Theatre and other sites in Paris, that said: “Brazil, you are our next target.” There has also been growing evidence of Isis/Daesh attracting followers from Brazil.
During the Olympics, the host city Rio de Janeiro, would inevitably be considered as the most likely location of an attack. Transport facilities, stadiums, shopping malls, hotels, hospitals, storage tanks of flammable materials, bridges, tunnels, tourist attractions, water treatment and supply plants, and offices of iconic brands will all be on higher alert.
But terrorist attacks can often have a wide economic impact, meaning that companies don’t have to be a primary target, or even in a high-risk location, to be affected in ways that may not be immediately obvious. A particular risk in today’s increasingly interconnected world is third-party contingent risk – where a key supplier or business partner may be unable to operate for an extended period of time.
Indeed, the global economic impact of terrorism has been rising steadily over a number of years. The Institute for Economics and Peace estimated the direct cost of terrorism to the global economy in 2014 at USD52.9 billion, a tenfold increase since 2000.
Currently, many Brazilian institutions and companies could be exposed to financial loss because insurance against the cost of lost profits, salvage, rescue expenses and property damage arising from a terrorist attack is not yet widespread. Exposures can occur before, during and after the event.
At a time of celebration for Brazil, it’s sad to be talking about the prospect of terrorism, but it has to be taken seriously due to the heavy concentrations of people the events will attract and the mass publicity an attack would generate. Even after the Olympics, the growing threat of terrorism-related losses will remain. Organisations can and should protect themselves with the terrorism covers now available on the market.
Terrorism in Brazil has so far seemed distant and unimaginable, but we can’t wait to be sure.
Alvaro Igrejas is P&C Director at Willis Towers Watson in Brazil.