Risk management

Public-Private Partnerships and Emergency Management

PICT213 S8

Dr Layla Branicki – [email protected]

In this session we will examine:

• Critical goods & services supplied by business

• How public-private partnerships contribute to safe & resilient communities

• Role of the private sector in disaster response & recovery

• Responsibilities that businesses have in responding to natural disasters

Public, Private or Non-Governmental?

Sometimes the boundaries can be blurry

Why does business matter to emergency management?

1. Emergency management is often complex, drawn-out and involves many organizations from the public and private sector

2. Businesses provide the facilities, systems, sites and networks necessary for the functioning of the country and the delivery of the essential services which we rely on in every aspect of our daily life

3. Examples of essential services commonly provided by the private sector include energy, food, water, transport, telecommunications, health care, housing and finance

4. Critical National Infrastructure is often privately owned

5. Failure of business services can produce severe economic or social damage and/or large scale loss of life

6. Businesses have different resources and capabilities than governmental organizations

High consequence risks facing the United Kingdom (source National Risk Register, UK)

Non-conventional Attacks

Coastal Flooding

Pandemic Influenza

Inland Flooding

Attacks on Transport

Attacks on Crowded Places

Extreme Weather

Electronic Attacks

Major Transport Accidents

Attacks on Critical Infrastructure

Major Industrial Accidents

Animal Disease

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http://news.bbc.co.uk/1/hi/uk/7548990.stm

The Case of the 2007 UK Floods

• As a result of exceptionally heavy rainfall in July 2007 floods in Gloucestershire and Worcestershire led to the closure of the Mythe water treatment plant on 22 July and about 340,000 people had to endure more than a week without running water.

• Severn Trent's managing director, Tony Wray, said: "This was a completely unprecedented event that has rewritten the records of flooding in the UK. It was on a scale 10 times bigger than anything the industry has dealt with in the past."

• Heavily criticised for their lack of preparedness

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More information: http://www.youtube.com/watch?v=eN2OJjd_fXw

Findings of The Pitt Review 2008 • UK 2007 floods largest emergency since World War II

• Decision making was hampered by insufficient preparation and lack of information

• There must be greater involvement of private sector companies

• We need partnerships between the public and private sector, which enable coordination between multiple sectors, organizations and localities

But it was recognized that this would not be easy…

• Impossible to anticipate all hazards

• Not practical on economic or any other grounds to completely protect all organizations

• Businesses need to be competitive this drives out spare capacity and redundancy

• CNI is a complex system of interlinked networks, if one part fails it is likely to impact another

How do you coordinate across these interfaces?

What is the role of law in regulating these risks? 7

“There are many risks that can affect an organisation’s ability to continue its day to day business and these can affect organisations of all sizes, across all sectors, both directly and indirectly.”

Bruce Mann, Director of Civil Contingencies Secretariat, Cabinet Office

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Systems, Ripples & Interdependencies

Extreme events give organizations a stake in each others preparedness, as a neighbour or suppliers fallibility may have a direct impact upon other businesses or communities

Organizations need to consider the vulnerabilities of the system they are part of, and the risks they create for others

For example, ‘It’s not their problem when the water’s coming in through your theatre. They might be to blame, but it’s not their immediate problem… … Their priorities will be different to ours, so therefore I can’t rely on them …. …What happens if its multiple events and we come down the pecking order?’ (Director, Postcard Target)

An emergency plan that doesn’t consider interdependence is unlikely to be effective in practice

Examples organizational inter-dependence

1. UK fuel crisis which almost became a crisis for farmers, as supply was stopped, jeopardizing livestock and ultimately food security

2. A flood which threatened electricity power supplies, drinking water and sanitation impacting upon both business and residential properties and ultimately the economic productivity of the region

If interdependence is important then partnerships matter

The FEMA Approach FEMA believes that every community benefits from public-private collaboration in emergency management

"There's no way government can solve the challenges of a disaster with a government centric approach. It takes the whole team.” (FEMA Administrator Fugate)

Through public-private partnerships both government and the private sector can: • Enhance situational awareness • Improve decision making • Access more resources • Expand reach and access for communication efforts • Improve coordination with other efforts by segments of the private sector • Increase the effectiveness of emergency management efforts • Maintain strong relationships, built on mutual understanding • Create more resilient communities

Source: https://www.fema.gov/public-private-partnerships

Public-private partnerships are collaborations built on:

1. Needs: Each member of a partnership has resources or support it needs from the partnership

2. Capabilities: Each member of the partnership brings its own unique set of capabilities that can be leveraged

3. Two-way communication: Partners should communicate their needs as well as their capabilities to all members of the partnership

Source: https://emilms.fema.gov/IS660/indexMenu.htm

Bajracharya, B., & Hastings, P. (2015). Public-private

partnership in emergency and disaster management:

Examples from the Queensland floods 2010-

2011. Australian Journal of Emergency Management,

30(4), 30-36.

Sharing Capabilities

“What’s interesting about this for me is the opportunity to engage with other sectors on the issue, whereas traditionally in an integrated approach to managing issues of this nature, it’s usually within one sector, and if it’s going to be done properly we need to take full advantage of the resources and skills that exist elsewhere” (Senior Manager, Manufacturing).

As argued by Cole in a 2010 Royal United Services Institute Report:

“... organizations will be forced to consider whether capabilities can be shared or held centrally, as there may not be sufficient budget for each organization or regional force to hold every resource it needs.”

The Value Chain

Support

Activities

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Firm infrastructure

Human resource mgmt

Technology development

Procurement

Inbound

logistics Operations

Outbound

logistics

Marketing

and

sales

Service

(Porter, 1985)

Barriers to Successful Partnerships

• Lack of clarity about purpose

• “No single locus of control” (Power, 2007:5)

• Clashes between professional cultures (Webb and Vulliamy, 2001: 315)

• “Joined-up crisis preparations do not necessarily lead to joined-up responses” (Drennan & McConnell, 2007:33)

• Expectations misaligned, accountability unclear, legislation unsupportive

• No culture of sharing information

• Who is in charge can arouse great passion and politics (Boin, t’Hart, Stern, and Sundelius, 2005)

There’s also confusion about partnership…

• Terminology (Huxham, 2000: 338) • Partnership purpose • Allocation of costs and rewards • Rhetoric versus reality • Private sector production of

public sector goods

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“The crucial point is that managers of public companies do not own the businesses they run. They are employed by the firms' owners to maximise the long-term value of the owners' assets. Putting those assets to any other use is cheating the owners, and that is unethical.”

The Economist - The ethics of business, Good corporate citizens, and wise governments, should be wary of CSR, Jan. 20th 2005

(Senior Manager, multinational financial services).

“Well, that’s part of the problem isn’t it? There’s a wider debate about, you know, this is a private sector organisation with shareholders and other stakeholders around the place, and it’s got conflicts of interest’”

Businesses Might Not Be Invested

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Q1: Why was Wal-Mart able to effectively respond to Katrina?

Q2: What is the responsibility of companies in responding to natural disasters? Where does this responsibility end?

Tutorial Activity – Wal Mart & Katrina

Part 1 (25 minutes): In your allocated group discuss and answer the questions below.

Part 2 (25 minutes): Be ready to share your answers with the rest of the group, and to discuss the issues raised by this activity.