Crisis Management – Are You Prepared?

S.Veerasingam, Vice-President of Malaysian Society for Occupational Safety and Health

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‘There cannot be a crisis next week. My

schedule is already full”

Dr. Henry KissingerFormer US Secretary of State

New York, 1969

Objectives

Understand the dynamics of a crisis

Understand the importance of being proactive

Understand the need for a predetermined CM structure

Understand the roles of the “Players”

Understand the need for Business Continuity Planning

Understand the importance of working with the government authorities

Understand the importance of openness when dealing with the media

Understand the importance of cooperation when dealing with NGOs

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Incident ! Emergency ! Crisis ! ……

What is the Difference?

Is There a Difference?

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Definitions

Incident

An event, series of events or set of circumstances that interrupts normal operating procedures and has the potential to precipitate an emergency or crisis.

Emergency

An unforeseen combination of circumstances that disrupt normal operating conditions and poses an actual or a potential threat to human life, health, property or the environment if not controlled, contained, or eliminated immediately.

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An incident or Organization response to an

incident that affects the safety and security

of the Corporation’s employees, the

Corporation’s financial and operational

integrity, the Corporation’s reputation and

relationship with the public and government

agency officials, and/or the interests of the

Corporation’s business partners and

customers.

Definition of a Crisis

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PreventionPrevention

PreparednessPreparedness

ResponseResponse

RecoveryRecovery

Four Pillars of Crisis ManagementFour Pillars of Crisis Management

Definition of a Business Crisis

A potential or an actual crisis situation exists when an incident or response to an incident threatens to affect or affects:

The security, welfare, or morale of employees or their families

The business’ ability to attract/retain qualified employeesThe long-term welfare, health, and/or safety of the publicLong-term ecological processesThe welfare or financial integrity of the business’

customersThe business’ ability to attract/retain customers for the

productsConsumer confidence in the business’ productsThe competitiveness of the business’ productsThe reputation of the businessThe financial integrity of the businessLicense to operateAbility to engage in new, or expand existing, business

ventures

Type of Crisis

Incident Led– Fire / Explosion– Toxic Release– Oil Spill– Civil Unrest– Hostage Taking– Natural Disaster– Terrorist Act– Pandemic

Issue Led– Protests– Boycotts– Financial Scandal– Product Tampering– Corruption Scandal

Two types of crisis events

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Creeping Crisis

Typically a situation that can ‘creep up’ on an organization. It is less obvious than an incident led crisis. It is not necessarily be directly connected to the company’s operations and may take weeks or months to mature. It is therefore more difficult for an organisation to decide when it needs to respond and recognise that it may indeed be facing a crisis.

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Costs & Risks

Incident Iceberg - Hidden Costs of Incidents

Uninsured costsProduct and material damage

Plant and building damageTool and equipment damage

Legal CostsExpenditure on emergency suppliers

Clearing siteOvertime working and temporary labour

Investigation timeSupervisors’ time diverted

Clerical effortFines

Loss of expertise / experience

Insured costsCombined liability

(employers, product and public)

All risks (property and material damage and business interruption)

Motor vehicle (third party only) $1

$36

Priorities

1st PeopleEmployees, contractors, suppliers, customers, and communities

2nd EnvironmentAir, water, land, spillages, and areas of sensitivity

3rd PropertyYours and third-parties

4th Business InterestsSupply chain and reputation

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Actual Risk

Risk = Probability X Consequence

Threat: What is the likelihood of occurrence of a scenario?

Vulnerability: what is the likelihood of implementing the scenario

Consequence: What are the impacts if the scenario occurs?

HazardAwareness

PreventionMitigation

PreparationPlanning Response Recovery

Incident

Public Risk Perception

5 Jan 2000 (WSH/emergency-room.ppt/jt)

RISK = HAZARD + OUTRAGE

(Public definition) ( Death rate by ( Everything that Public Professional consider part of the

risks risk assessment) * voluntary / coerced

* fair / unfair * trustworthy * controlled by

individual / controlled by others

SUCCESSFUL = TECHNICAL + PERCEPTION

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Crisis Management

Organizational Structures

Three-tiered Crisis Management Organization

INCIDENT MANAGEMENT TEAMIncident Command System (ICS) management and organizational principles

Near the incident site

TACTICAL RESPONSE TEAMAt the incident site

Manage Incident Impact

BUSINESS SUPPORT TEAMAt Business Unit Location

Manage Business Impact

CRISIS MANAGEMENT TEAMCorporate Headquarters

Manage Corporate Impact

Role of Incident Management Team

Provide overall Strategic Direction Support Tactical Response Operations Establish / Maintain Unified or Coordinated

Command Manage External Affairs Prepare Incident Action Plans and General

Plan Maintain Situation / Resource Status Provide Logistics Support Services Contract Required Resources Account for Costs

Role Of Business Support Team

Support the Incident Management Team (IMT)

Take proactive measures to avoid a crisis, whenever possible,

and

Proactively manage a crisis by mitigating potential impacts

Work with Crisis Management Team

Work with Joint Venture Partners

Work with relevant external ‘stakeholders’

Ensure Business Continuity

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Role of the Crisis Management Team (CMT)

The CMT forms a corporate response strategy and proactively manage such issues as reputation, license to operate and liabilities / loss potential which could threaten the corporation as a whole. The CMT’s prime responsibilities are to :

Determine the principal impact of the crisis

Ensure that information associated with the incident is promptly considered by the CMT and decisions of escalation and de-escalation are addressed

Review the business response to the incident and be assured the corporate concerns ( eg ext. media, govt and shareholder issues) are considered and appropriately managed

Review adequacy of information received, and respond to the BST accordingly

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Business Continuity Planning

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Business Continuity Planning

Business Continuity Planning: an

ongoing management process that

seeks to periodically assess the risk

to the business associated with

unforeseen or unexpected events, and

put in place appropriate

contingencies to maintain business

continuity.

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Planning Scenarios

Loss of peopleKey members of workforce not availableLarge part of workforce not available

Loss of facilitiesPartial and complete loss of facilityTemporary and permanent loss of facility

Loss of systemsWorking with restricted systems availabilityWorking without systems

Loss of supply chainDisturbance to flow of product, information and cash Disruption to internal and external parties/infrastructure supporting critical processes

Loss of critical recordsRestricted or no access to soft or hard copies of records

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BCP Document Structure

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Working With Government Authorities

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The Government’s Role

The authorities will have overall responsibility and it is essential that the Company works with and supports the response in the most appropriate manner.

Ensure that you work with and support the authorities and other associated organisations involved in a response. This is essential if the response is to be really effective.

Working with the authorities BEFORE an incident occurs will reduce confusion and uncertainty during an incident.

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Working With The Media

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A good crisis manager must recognize that there are at least two sides to any emergency:

Operational side• the tactical response operations undertaken

to address incident objectives

Communication side• the need to quickly provide clear and

understandable information regarding what impact the incident has upon the community and its residents

The Two Sides of the Incident

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Cooperate with the media by communicating in an open, honest, and timely manner.

 They have a job to do, just like you

The public has the right to know about situations that may constitute a hazard to their health, wealth or property, whether that hazard is actual or perceived.

Expect that there may be a significant information gap between the public’s perception of what has happened (and its impact on them) and the reality of the situation. The objective is to close that information gap quickly to help shape the public’s opinion.

Communicating through the media in such instances can go a long way in calming fear, clearing up confusion, defusing rumors, and avoiding public anger and outrage.

The Media…What You Should Know

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The press statement covers the following: 

The name of the asset involvedThe time of the incidentThe location of the incident.Any other facts that are not in dispute.

 Generally, the steps being taken by you or 3rd parties to contain, control, or otherwise mitigate the incident are not in dispute.

Initial Press Statement

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The statement may also include the following information:

The emergency response experts who are on, or are being called to, the scene.

Type of incident: fire, explosion, release, other, etc. How the incident is being controlled. The incident classification (initially, we may not know

the full extent of the incident; explain that they will be advised as we obtain additional factual information).

What control or countermeasures are underway or planned.

Special efforts being taken to protect human life, property and the environment.

Federal/country, state/province, and/or local agencies that are involved in response operations.

Follow-up Press Statements

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Liability for the incident. In all cases, but especially in cases involving a significant incident, be factual. Never speculate. An extended inquiry may be required to determine cause, and liability could be affected by erroneous statements.

Estimates of damage expressed in USD (RM).

Estimate of how long it will take to clean up/recover following an incident.

Estimates of repairs, containment, or cleanup costs.

Restoration of property, ecosystems, or anything else to a pre-incident/normal state.

Appropriateness of government response to the incident.

What You Do Not Include

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Working WithNon-Government

Organizations(NGOs)

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Cooperate with NGOs by communicating in an open, honest, and timely manner.

You may not see them as part of the solution, but they can quickly become part of the problem if not dealt with in a professional manner.

Ongoing dialogue with NGOs is important if you expect cooperation during an incident

Working With NGOs

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THANK YOU!!

QUESTIONS?