PlanB Consulting

You Can’t Win!

Highlighted in the news, was an article about BP asking David Cameron to raise the issue of the compensation that they were having to pay to companies for the Deep-Water Horizon disaster with the US government.
BP are claiming that the compensation package is being abused, and that they may have to put aside more than the £5.2bn agreed in 2012. Whatever the merits of this case, the issue of compensation after an incident is very difficult.

Last week I was teaching the BCI Good Practice Guidelines 5 day training course. BCT was the first company to teach this new course based on the recently published Good Practice Guidelines (GPG) 2013.

A brand new section within the GPG covered the following area:

The needs of interested parties: there may be many individuals and groups affected by an incident. For example, in a major fire there may be contractors injured, local residents evacuated from their homes and local businesses having to close for safety reasons or suffering reduced trade. The organisation’s level of responsibility (both legal and moral) for these groups should be clearly understood.”

The section also talks about if you don’t take into account the needs of interested parties they may “impede the subsequent recovery effort. For example, local residents could press the local authorities to refuse permission to rebuild on a damaged site”.

This information is telling us that we need to take into account the needs of those affected by the incident, beyond our own organisation. If the organisation is a chemical factory which could explode or pollute the environment, or an oil risk that could spill oil, I think the impact on the local area is obvious, and most companies have plans in place for these events. A situation which is more difficult after these types of events is the moral responsibility .

I noticed that a number of clothing companies whose suppliers lost staff in the Bangladesh building collapse, were setting up funds to help compensate the employees’ families. They had no legal requirements to compensate the families, but they felt they had a moral responsibility.

Do we, as business continuity people have to think through, if we have a fire in our office and it affects the local population, do we then have a moral obligation to pay compensation or make some recompense to the local population, even if we don’t have a legal requirement?

The issues I think we should be thinking about are: –

  1. Who could be affected by an incident at one of our facilities? Do we understand the different groups of people who could be affected, and what will their requirements be after an incident.
  2. Do we understand what are the worst, and most likely cases, if we had an incident and what form could this incident take?
  3. If an incident occurs have we thought through the process of what are our legal requirements, and what could our moral requirements be?
  4. Do we know how to contact the local population affected by our incident, and who their community leaders or spokes persons might be? Would it be appropriate to contact the local community directly, or would we want to do it through third parties, such as the emergency services, local authorities or voluntary agencies? Do we have in place the appropriate mechanisms for contacting people, such as social media, letters, radio broadcasts or face-to-face visits?
  5. Do our plans have the flexibility to allow us to provide immediate help, which could mitigate much anger, or is our response going to be curtailed by company lawyers who would stop any help, as they fear this is the organisation admitting liability.

As seen in the BP case this is not an easy thing to get right. Offering too much compensation or to lose a criteria for compensation, could open you to flimsy or even fraudulent claims. Too little or no compensation can turn the local community against you, be detrimental to your reputation, and may lead to later legal action against you. I suggest that these issues are discussed internally or even exercised, so that the organisation can think through where they are vulnerable, and how they should respond before an event occurs.

About Charlie Maclean-Bristol

Charlie Maclean-Bristol is one of the Founders and Directors of PlanB Consulting. He is also the Training Director of Business Continuity Training Ltd., a UK-based training provider accredited by the Business Continuity Institute. Charlie is a former Business Continuity Institute board member and one of the very few Fellows of both the Emergency Planning Society and the Business Continuity Institute.

A former Infantry Captain in the British Army, Charlie held several emergency planning, business continuity and crisis management positions within the energy and utility industry before founding PlanB Consulting in 2007. Over the past twelve years, Charlie has delivered business continuity consultancy in 6 of the worlds 7 continents, frequently providing full business continuity roll-outs to organisations of all sizes and in all sectors.

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