Unrest and uncertainty: Understanding the consequences of Brexit for businesses

Red phone booth on London street with Big Ben and other buildings in the background

With a wide range of Brexit outcomes still in play, organizations face enduring uncertainty as the UK attempts an orderly exit. And the current lack of clarity could extend beyond the exit date — whenever that might be.

For businesses concerned with the repercussions of change and uncertainty, there are three primary areas to focus on:

1. Security consequences

One of the primary concerns for law enforcement and security agencies will be the continuing ability to share information and coordinate their activities. Currently, there are an average of 600 security-information exchanges every day between the UK and EU. A disorderly and acrimonious exit could see the UK lose access to law enforcement agencies such as EUROPOL (and vice versa) as well as the breakdown of the existing international arrest warrant system across the new EU/UK border. Inter-agency coordination is an important part of intelligence-led policing and can reduce the threat of cyber-attacks and organized crime in particular.

A number of law enforcement and security agencies have attempted to provide public assurances that these fears will not be realized. The heads of the German, French and British overseas intelligence agencies recently issued a joint statement affirming “…close cooperation and cross-border information sharing must be taken forward on themes such as international terrorism, illegal migration, proliferation and cyber-attacks.”1

Regardless of the Brexit outcome, officials and security agencies will be vigilant to make sure criminals attempting to exploit the uncertainty are not able to use bureaucratic loopholes or diplomatic uncertainties to their advantage. It is possible that there will be short-term disruption at borders as law enforcement and customs officials seek to establish new transit and transfer processes.

A 2018 paper by the UK’s National Audit Office2 estimated that there could be a five-fold increase in customs declarations to be processed if the UK leaves the EU with a “no deal” outcome from UK and EU negotiations. This can increase the risk of opportunist thefts if goods are left in storage facilities for longer while new transit and transfer processes are implemented.

Border disruption could also come from protestors attempting to cause disorder, such as the French “Gilet Jaunes” which continues to be successful at disrupting auto route toll booths and Eurostar trains News media reports indicate that the UK government is considering its powers available under legislation known as the Civil Contingency Act 2004 in the event of protests in GB.

Any civil unrest related to Brexit is likely to focus on symbols of the State such as government buildings, police stations or iconic tourist locations. But companies thought to be benefiting from an unpopular outcome should be aware of the risk of activist action directed at them too.

2. Risk Management

Organizations should consider undertaking formal risk analyses to fully understand their security and operational vulnerabilities. As far as possible there should be a picture of what might impact business-as-usual. In addition to ensuring supply chain risks are mitigated, organizations need to study the impact a disruption could have on their own staff, premises and operations.

In particular, enterprises close to potential protest targets should:

  • Review their crisis management plans.
  • Create robust and well-practiced lockdown / invacuation processes should access to the premises become threatened or impaired.
  • If at all possible, staff should be prepared and supported to work from home.

3. Risk Transfer

Risk managers should be reviewing their general property insurance programs and ensure they include cover for strikes, riots and civil commotion. If enhanced cover is required, advice can be sought to consider specific stand-alone policies that can include support from crisis response specialists, including security staff, crisis communicators and staff counseling.

While criminals will always look to exploit social unrest and change, the imminent departure deadline and ongoing uncertainty are creating an uncertain environment, where even civil unrest is becoming a concern. Any company that has operations in the UK and has cause to worry about its risk exposure will need to start putting plans in place now should the worst come to pass.


Endnotes

  1. https://www.reuters.com/article/uk-germany-security-britain-intelligence/brexit-wont-deter-european-security-cooperation-intelligence-chiefs-idUSKCN1Q41RW
  2. https://www.nao.org.uk/report/the-uk-border-preparedness-for-eu-exit/

About Wendy Peters

Wendy is the Global Head of Terrorism within Financial Solutions. Based in Radnor, Pennsylvania, she has 21 years o…
Categories: Claim & Risk Control, Europe, Featured Post, Insurance and Risk Management, Risk Culture | Tags: , , , , ,

Leave a Reply

Your email address will not be published. Required fields are marked *