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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?