In 2011, catastrophes, both natural and manmade, caused an estimated $108.000 million in insured losses. This figure is twice that of 2010 and represents the second largest year in history for the amount of insured losses. It is only slightly lower than the figure for 2005 when the insured losses were $123.000 million, which were primarily the result of three hurricanes: Rita, Katrina, and Wilma.
2011 was a difficult year with a record number of disasters, widespread social unrest, and a volatile global economy. The interconnectedness of risks and internal challenges in the management of uncertainty was made evident. For example, the double earthquake and tsunami that struck Japan on March 11, 2011 caused serious disruptions in the supply chain of companies around the world. It caused a disruption of operations for the automotive industry, which was vulnerable because of its just-in-time inventory strategy.
These events, as well as the increasing threat of global warming, have raised awareness among individuals and businesses alike of the need for better and more adequate disaster preparedness and enterprise risk management with a comprehensive, holistic vision. Today, several professional associations have organized to support businesses to prepare for disasters, both as individual companies and collectively. One example is the Caribbean Business Coordination Council in Mexico, which, along with the InterAmerican Development Bank and the World Bank, has developed different support mechanisms for its members in case of disaster.
Whether through the creation of legal obligations or in reaction to a specific disaster, the governments of many Latin American countries have supported the creation of governmental institutions at the national, regional, or local level, allowing them to react effectively and efficiently to safeguard the health and lives of the people, to continue government operations and to reduce the potential for economic losses. Government are increasingly aware that corporations are profit- oriented enterprises, but that they also have a socials responsibility to provided financial support and employment. If a company fails in a crisis, its impact is not only economic but also social. It is an important reason for governmental interest in helping organizations to develop resiliency during disasters.
This is certainly the case in Mexico, which is a country affected by hurricanes, storms and flooding on both coasts: Atlantic and Pacific. Through the years, the army has developed excellent emergency response plans for disasters, such as the “Plan DN3” of the Ministry of National Defense and the “Plan Marina” of the Navy’s Ministry, enabling them to assist the people and respond to different types of disasters. These plans are continuously improved through testing and they could serve as a benchmark for other nations, as to how to create effective and efficient governmental plans to protect the people in case of disasters.
Continuity of operations (COOP) is another area of development. There are government initiatives to establish regulations and COOP standards of best practice in BCM. The goal is to establish a standard for both public and private organizations to improve preparedness in the event of an incident. DRI Mexico/Risk Mexico is participating in these initiatives by providing technical expertise and best practices in the field.
Authorities of the General Coordination of Civil Protection in Mexico have been working on initiatives to establish best practices for prevention, preparedness, response, reconstruction and recovery operations with a global approach. In 2012, the National Civil Protection System will seek to anticipate and prevent risks, disasters, and inherent crises, through a holistic approach that contributes to sustainable human development:
• Ensuring protection of physical integrity and property
of people at disasters risks.
• Mitigating its vulnerability toward them.
• Undertaking environmental protection.
• Promoting equality.
• Promoting a social policy that shields the poor from
the risk of being poorer because of disasters, and
• Ascending the policies of an integral risk management
to a constitutional level.
Despite the numerous efforts for preparedness in Latin American countries, the region is limited in its capacity since it is comprised of developing nations. Universities and other national institutions have limited budgets to promote the development of knowledge and research in the related fields of Business Continuity and Risk Management. There are still several highly-specialized fields that are in early stages of development, including Business Continuity Management (BCM) and Enterprise Risk Management (ERM). To help address this lack of capacity, DRI Mexico has a clear mission to promote a common knowledge base for the industry of business continuity and disaster recovery through solid education, a mission that is shared by DRI International and other BCM and ERM professionals in Latin America.
Based on our experience in Mexico and other Latin American countries, we anticipate that the 2011-2020 decade will witness an improved culture of Disaster Preparedness in both the public and private sectors. We expect increased regulatory emphasis on business / operations continuity management. Business continuity professionals will be challenged to prepare for multiple disaster scenarios in a constantly changing world.
As BCM and ERM professionals, you can expect a commitment from DRI International and DRI Mexico to professional development in the Spanish language, by offering courses and educational events that will help you prepare and lead the business continuity and risk management industry.
BIO: Jorge Escalera (MBA, CBCP, CRM) is a Master Consultant in Business Continuity Management, Risk Management, and Insurance and Surety Bonds. He is Chemical Administrator Engineer from Tecnologico de Monterrey, has a MBA from EGADE Monterrey and is CBCP from DRI, and CRM from The National Alliance. He has more than 25 years of experience focused in Risk Management and Business Continuity Management. Jorge Escalera is one of the Spanish- speaking certified instructors of DRI and CRM. He participates regularly as a speaker in local and international events and is a practitioner of the best BCM practices, including the development of BCP for Pandemics.