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  • 1. The Impact onBusiness Continuityof Buncefield andEyjafjallajökull David Alexander Global Risk Forum - Davos (CH)
  • 2. RedundancyThe ingredientsof resilience Adaptability Attitude Participation ...and communication
  • 3. CRISIS OPERATIONSREPUTATION (ACHIEVEMENTS) Perception Concrete developments • positive Communication • negative
  • 4. Crisis management as a combination of management of events and management of reputation ACHIEVEMENTS failed unknown, hidden succeeded known, publicised positive perceived negative not perceived REPUTATIONInside influences Outside influencesResilience of organisation Resilience of systemCrisis management capability External factors: "force majeure"
  • 5. Civil contingencies Business Civil Civilcontinuity protection defence management Resilience The risk environment
  • 6. Buncefield
  • 7. The fire burned for three and a half daysExplosion and fire at an oil storage depot,Buncefield, Hertfordshire, United Kingdom Sunday 11 December 2005, 0602 hrs
  • 8. Oil storage depot Business park (22 tanks) Entrance to site MotorwaysResidential area
  • 9. The effects of the explosion extended 3 kmwith damage to 1000 houses and 300 companies.
  • 10. Interruption of traffic circulation, of commercial activities for 300 firms, and to the lives of 3,500 people.
  • 11. Effects on the nearby commercial area.
  • 12. According to a study by the London Chamber of Commerce, started in 2003 and updated ever since:-• 80% of commercial companies that do not have a well-structured emergency plan risk bankruptcy within one year of suffering a major incident or disaster• 90% or companies that suffer major losses go into liquidation within two years
  • 13. • 43% of companies that suffer the effects of disaster never recover their market position• In the United Kingdom, half of commercial companies have no contingency plan (data unchanged from 2003 to 2006)• in the United Kingdom one company in 500 per year suffers a disaster.
  • 14. More than 85% of the largest companies depend totally or largely on information technology. On average, a company will lose one quarter of its daily earnings by the sixth day in which it cannot accessits IT system. The figure rises to 40% for banks, financial service firms and public service companies.
  • 15. At Buncefield threemultinational companiessuffered serious effects,but 8000 jobs weresaved by havingbusiness continuity plans
  • 16. Northgate Ltdadministeredthe paymentof salariesfor 209clients....and it wasalmostChristmas....
  • 17. Northgate started work again the nextday from other sites, including employees working from home by Internet.
  • 18. The local municipality, Dacorum, had abusiness continuity plan, which it used in parallel with its emergency plan.
  • 19. Permanent emergency plan AftermathMonitoring Strategic,prediction tactical & operational& warning planning Business continuity plan Recovery and reconstruction planning Disaster
  • 20. Eyjafjallajökull
  • 21. Volcanic Ash Aviation Hazard• from 1935 to 2003 102 aircraft encountered significant concentrations of volcanic ash• ash is not detectable by weather radar as it is dry• ash can reach cruise altitudes in five minutes• stratospheric ash concentrations may remain at circa 20,000 metres.
  • 22. Eyjafjallajökull eruption of Apr-May 2010:• started 20 Mar 2010, ended 22 May• volcanic explosivity index VEI 2-3• Vulcanian eruption style• maximum plume height 13 km• ash had 58% silica concentration.Eyjafjallajökull eruption of 1821-3:• started 19 Dec. 1821, ended Jan. 1823• central vent, subglacial explosive eruption• volcanic explosivity index VEI=2• 4 million m3 of tephra emitted
  • 23. Impacts of Eyjafjallajökull on business• US$1.7 billion losses for civil aviation• air delivery of perishables and medical supplies knocked out• business travel down, meetings cancelled• passengers left stranded everywhere• imbalance created in tourism and business travel.
  • 24. Implications of Eyjafjallajökull for business• potential civil aviation mass bankruptcy• need for regulation and integrated planning for transportation in general• liability issues for transportation (EU regulations)• alternatives to travel, meeting and delivery need to be studied (create redundancy).
  • 25. Conclusions• two big unanticipated (but not improbable) events• longer or worse disaster of similar kind would equal threshold crossed to much more profound implications• use scenarios to explore implications and identify needs• in crisis radical changes needed in ways of doing business• organisational learning.
  • 26. Environmental context Latent organisational Active Active context context organisational (members tools) context Practical Knowledge experience After: Argote and Spektor (2011)
  • 27. d.alexander@alice.itwww.emergency-planning.blogspot.com