15 april 2006
Business lessons from responding to the tsunami
Local, national and international companies were quick to respond when the consequences of the devastating tsunami became clear. Among the Dutch business responses were water supply companies, restoring the water and sanitation system in Aceh, the chemical company DSM, accelerating its production of water purifiers for tsunami victims, and the insurance company Interpolis, speedily paying compensation to participants in micro-insurance schemes.
Some of the business responses were effective and sustainable, reported the Task Force, consisting of executives of fifteen companies. But in Indonesia 80% of the victims continue to suffer over 50% loss in income and remain substantially unemployed. In Sri Lanka this figure is 60%, in India 40%. "The transition to recovery and reconstruction is proving slow and difficult," the Task Force comments in its report 'Best Intentions, Complex Realities: business and lessons from the Tsunami'.
Of course companies experience the same difficulties as humanitarian and relief organisations, when working in chaotic circumstances: poor coordination, sometimes rivalry, red tape and corruption. "Our hearts were in the right place, but there are a lot of lessons we can learn, and it's urgent - what will we do next time?", comments Alan Hassenfeld, chairman of Hasbro Inc. in the report. The IBLF has some clear answers to his question. Business skills, like logistics, management, communication, employment training, construction or land reclamation, can be vital for relief and reconstruction. But companies will have to think through their positions on how to respond and how to balance sympathy and public and employee expectations with the business relevance. Impulsive actions can have very negative effects on poor local communities. Examples are land speculation, land seizing, or industrialising traditional local business, such as fishing, at the expense of small local producers. The same goes for tourism development, which has the potential to raise income, but can also threaten traditional and poor local communities.
In their strategy companies need to recognise the importance of local responses and the value of local people and organisations. It is better to back their efforts than to implement completely new plans. Likewise, in the transition from relief to recovery, companies should create accountable local partnerships with humanitarian organisations. The most successful efforts have proven to be those that engage with local organisations, local people and local businesses. Many local NGOs are eager to acquire business skills. In fact, business contributions in terms of cash and in-kind support will be much more effective if combined with the contribution of management and employee skills.
The Task Force, that also took into account more recent disasters like the hurricane Katrina and the earthquake in Pakistan, presses businesses and donors to place response planning alongside a contribution to development priorities 'with less drama' in neighbouring regions. Don't neglect the daily suffering on a far greater scale caused by civil conflict, disease, hunger, lack of access to safe water, road accidents or industrial accidents, the report says.
The IBLF has also issued a comprehensive framework for disaster response and examples of business actions, published in 'After the Flood'.
P+ Webtip: International Business Leaders Forum