AGCI Session I: Natural Hazards and Global Change
Session Chairs: Louis Walter and E. L. Quarantelli
- July 10 to 20, 1996
3. Private Sector
The Challenge
Private sector
organizations are at once victims and resources when disasters
strike.
The private sector is comprised of thousands of organizations, large and small, which provide goods and services to the American public through commercial or non-profit channels. They range in size from family businesses and neighborhood social service providers to multi -national corporations, international religious denominations and disaster relief organizations.
Examples of private sector organizations include:
They are inextricably intertwined with the public sector in creating and protecting regional assets such as:
Because of this integration, the impact of natural disasters, technological accidents, or acts of terrorism is felt by all sectors. The resulting breakdown in community systems is manifested as:
Private sector organizations are at once victims and resources when disasters strike. There are laudable cases of independent action among businesses and non-profit organizations in which the impact of natural disasters is being mitigated through corporate or even industry-wide preparedness, employee training, or response planning. However, the disaster management community has traditionally underestimated both the dysfunction that can result when the private sector is among the victims, and the benefit that could result if private sector resources and capabilities were better integrated with public sector efforts. In turn, the private sector has traditionally underutilized the valuable findings of disaster researchers, the disaster mitigating or hazard monitoring technologies of physical scientists, and opportunities to minimize their losses and liabilities by changing operational practices, materials or training.
We have
traditionally underestimated both the dysfunction that can result
when the private sector is among the victims, and the benefit that
could result if private sector resources and capabilities were better
integrated with public sector efforts.
These disconnects and dysfunctions may be attributed to any of several reasons. Some of the constraints include:
· Private sector decision makers are often unaware of hazards and vulnerabilities they face.
· They are unaware of the short or long term implications of those risks.
· They are unfamiliar with alternative procedures or options.
· They are familiar with options, but have not yet seen a valid business case for change.
· Natural disaster reduction (NDR) principles have lacked a champion or cohesive leadership to set a new standard.
· Government has misconceptions about the role of businesses in emergencies.
· Legal constraints have blocked efforts of businesses, labor and non-profits to fulfill their potential role in disaster mitigation, preparedness, response, and recovery.
· Technologies have been insufficiently integrated into systems and applications to seem relevant or cost-effective in the minds of decision makers.
The Opportunity
Recent events have brought the issues and costs of unmitigated natural and technological disaster to the attention of private sector managements. These include: the publicity about catastrophic financial losses incurred in recent disasters; the manifestation of these losses in the insurance market; incidents of terrorism in the U. S. and abroad; and the operational impact of distant events such as the Kobe earthquake.
In addition, some disaster-mitigating systems and technologies have successfully entered the market and have begun to prove their effectiveness. These include weather reporting systems, GIS and GPS systems, disaster-resilient building materials and practices, and non -structural household mitigation systems in seismic environments.
In response to the challenges of major urban environments, where lifeline industries and complex technological systems are jeopardized by major dysfunction from natural or technological disasters, local business alliances are now emerging and applying inter-corporate planning processes to reduce the ripple effect of system failure.
Finally, the publication of the National Mitigation Strategy in December 1995 provides a cohesive statement of goals and organizational frameworks for building successful public/private partnerships on behalf of safer communities. This document has provided several of the integrating principles upon which some of the following recommendations are based.
Local business
alliances are now emerging and applying inter -corporate planning
processes to reduce the ripple effect of system failure.
Recommendations
Land Use
1. Advocate development of a national policy to identify, define and allocate responsibility associated with any natural hazard risk inherent in the ownership of property. Form a Presidential commission to evaluate and prioritize the options for achieving this goal.
2. A prerequisite to mitigation is the land owner's knowledge of hazards and mitigation opportunities. Land owners should seek, and state and local governments must assure the availability of the most current data on natural hazards. To this end, state and local governments should promote exchange of information from all available public and private sources regarding relevant hazards.
In all real
estate transactions as well as in construction and rehabilitation of
structures, local governments should adopt a formal process for the
identification and disclosure of hazards.
3. Every participant in the land purchase transaction has a responsibility to effectively make known in a timely fashion all natural hazards that exist with regard to a property to enable buyers to make informed decisions and take all necessary steps to reduce risks. Therefore, in all real estate transactions as well as in construction and rehabilitation of structures, local governments should adopt a formal process for the identification and disclosure of hazards analogous to the National Environmental Protection Act (NEPA) process. The federal government should provide an incentive for adoption of such a process through its Federal Disaster Assistance Program. This process should include:
· real estate agents disclosure of all known hazards in offering documents;
· mortgage lenders inclusion of all known hazards in loan documents;
· insurance companies inclusion of all known hazards in policy documents; and
· appropriate local authorities' requirement that the best available hazard information be attached to all property deeds.
FEMA photo.
We underscore
the importance of public awareness, training and education as
described in the National Mitigation Strategy and suggest it also
include preparedness, response and recovery.
Education
4. We underscore the importance of public awareness, training and education as described in the National Mitigation Strategy and suggest it also include preparedness, response and recovery. Appropriate related messages should be developed and specifically tailored to decision makers and "influencers" in the private sector including but not limited to:
· executives and decision makers with the ability to decide on and fund activities which promote NDR goals;
· students of the physical, social, business, and technical sciences so that they are able to incorporate NDR goals into their future professional decision making;
· "influencers" with capability to network, including the media, chambers of commerce, labor unions, and trade associations;
· multi-nationals with potential to carry NDR practices/values abroad.
Since mitigation involves preparedness, response and recovery activities, the mission of the National Multi-Hazard Mitigation Council should be expanded to include the development of education and information programs to meet the needs of the categories of decision makers described above.
Utility Role
5. Private sector "lifeline" organizations that are common to all communities, notably utilities that provide energy, water and communications, should take the leadership role in communicating hazard risks and responsibilities and organize members of the private sector for a collective educational, mitigation and recovery planning effort. National level organizations that represent lifeline industries, such as the Electric Power Research Institute (EPRI), should take the leadership in establishing local/regional coalitions to advance the National Mitigation Strategy and recovery aspects of the federal response plan, with a goal of establishing a demonstration organization within each FEMA region.
"Lifeline"
utilities should take the leadership role in communicating hazard
risks and responsibilities and organize members of the private sector
for a collective educational, mitigation and recovery planning
effort.
Operational practices
6. There are many ways in which individual organizations and coalitions can advance NDR goals. These practices should include:
· Mitigating risks within the internal operations of companies;
· Ceasing, minimizing or mitigating activities that pose or aggravate risks to others;
· Taking part in and supporting regional and national coalitions fostering inter-organizational disaster mitigation programs;
· Responding to market needs to provide goods and services that foster disaster mitigation and preparation.
Regional organizations should identify and acknowledge best practices. Best practices should be submitted to the National Multi -Hazard Mitigation Council for consideration for national awards and then disseminated through the educational programs recommended above.
7. Professional associations comprise an important resource to further natural disaster reduction. Such associations include American Society of Civil Engineers, Earthquakes Engineering Research Institute (EERI), the Seismological Society of America, and the Research Committee on Disaster of the International Seismological Association. EERI should take the lead in forming a national coalition to develop coordinated programs for hazards research, hazards reduction practice, and hazards policy.
See Side Bar: Roger A. Pielke, Jr.: On assessing societal exposure to hurricanes
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