Magazine article Risk Management

Safety and Security Now a Major Issue in Latin America

Magazine article Risk Management

Safety and Security Now a Major Issue in Latin America

Article excerpt

Workplace safety and security has become a major issue in Latin American countries, particularly because historically it has not been emphasized. Security measures must be widely accepted for risk management to progress, however, and this topic was addressed by several speakers at the ALARYS conference.

Rodolfo Leza, from IES (Escrina y Asociados S.A.) in Buenos Aires, Argentina, said that most Latin American companies lack the corporate culture needed to initiate improvements in loss prevention, particularly since senior managers often do not regard safety as a budgetary priority. There is also a "technological delay," in regard to companies instituting safety and prevention programs. Given the cost of modern technology, and the fact that many Latin American companies lack the facilities and devices to make safety improvements, Latin America is behind other countries in workplace safety.

According to Francisco Martinez, from MAPFRE in Spain, security should be an integral part of a company's operating plan, and should address several social, economic and legal points of view. "Integral security is not technical in the traditional sense, but it will cover every element and every point of view. It must be permanently applied to the processes of a company, including its design, construction and operation," he said.

Integral security consists of a line or continuum of risk so that when an accident occurs "it alters the function of the company," said Mr. Martinez. Integral security considers corporate image, consumers and the environment, all of which are possible risks and should be incorporated into the safety program.

The costs for security measures can represent approximately 8 percent to 10 percent of a company's bottom-line. However, once the investment in safety has been made, it becomes forever part of the company's patrimony. There is also the benefit of reaping savings from insurance rebates, where the company gets discounts from premium, fiscal or tax deductions. In addition, workers who see their company taking steps to improve safety are likely to develop higher morale. And safety investments continue to pay off through the years, as opposed to other types of new expenditures.

In the days when the Latin American insurance markets were state-controlled, insurers had to underwrite a company's risks, regardless of how poor its loss control record was. However, in today's deregulated market, insurers are beginning to tie safety improvements to premium rates, so they can now reject a corporation's risks without evidence of these improvements. Still, problems exist. …

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