When It's Really Not Business as Usual; Professor Alyson Warhurst, of Warwick Business School, Ponders the Business Response to World Disasters

The Birmingham Post (England), October 28, 2006 | Go to article overview

When It's Really Not Business as Usual; Professor Alyson Warhurst, of Warwick Business School, Ponders the Business Response to World Disasters


Byline: Professor Alyson Warhurst

A year ago this month an earthquake in Pakistan killed more than 73,000 people, injured more than 128,000 and left more than three million homeless.

It was the culmination of a series of disasters that shook the world within a year, starting with the December 2004 tsunami that affected 14 countries and continuing with the hurricanes that pounded the Gulf of Mexico and New Orleans.

Along with the deaths, injuries, damage and displacement, disasters cost the global economy almost $350 billion (pounds 187 billion) in 2004 and 2005.

In each of these disasters, businesses reacted admirably to the scenes of devastation, donating large amounts of cash, goods and in some cases assets and expertise.

But the key word there is reacted - after the fact, action can only mop up the damage. While you never know exactly where disaster will strike, it is clear that certain areas are more susceptible than others to particular events.

Moreover, evidence is starting to suggest that climate change will increase the frequency and intensity of storms, floods and droughts.

It is also apparent that the poor suffer most in natural disasters.

The World Bank estimates that 97 per cent of disaster-related deaths occur in developing countries. In 2003, an earthquake destroyed the city of Bam in Iran, killing 27,000.

At the same time, a similar-strength quake struck in California and just two people died. With planning and preparation, the effects of natural hazards could be greatly reduced.

One only needs to look at the impact of Hurricane Katrina to see what happens when you don't prepare - the breaching of the city's inadequate levees - or plan...thousands of people were left stranded in the Super Dome.

There is a case, therefore, for disaster prevention - not only disaster relief - in vulnerable areas.

However, this is not a role for which humanitarian organisations are currently well-positioned - their mandate is to aid people after the event and donors want to see their money helping the people they see suffering on their television screens. The World Food Programme is a case in point. A few years ago, around 90 per cent of their assistance went to address chronic hunger and related development needs. Now, almost 90 per cent of their work comprises emergency relief.

But there is a real opportunity for business to step in and take a role in improving lives.

Companies have a number of advantages when it comes to supporting a preventative approach to natural disasters.

First, they are good at mobilising communities. They have well-organised workers, cash, influence, creativity, expertise and the ability to learn fast. Globalisation means multinational corporations have a presence in many at-risk areas, either as employers or customers.

After a disaster a company can find it has lost its premises, its supply chain, the local infrastructure it needs to keep trading, its staff and its customers' so, it is very much in its interest to ensure the impact on affected communities is as small as possible. In addition, it is simply "the right thing to do", and it can have a powerful effect on staff morale to see their employer acting in this way, which makes it easier to retain and attract workers.

Companies can greatly cut disaster risk by helping to reduce poverty, and therefore vulnerability, in regions in which they operate. They can do this by the very act of doing business - providing decent jobs, paying suppliers on time and paying taxes, but also by going beyond legal requirements, for example building codes, and investing in areas such as education, aimed at preparing communities for the possibility of natural disasters. …

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