In what ways are risk managers preparing for a possible disruption to normal business practices, Nathan Skinner finds out
The discovery of Avian Influenza in three dead wild mute swans in Dorset’s Chesil Beach area is the latest in a series of reports from the Department for Environment Food and Rural Affairs (DEFRA) noting cases of the highly pathogenic strain of H5N1.
In November the culling of birds infected with Avian Influenza began on a Suffolk farm and a week later the disease was detected in a second premises. Last year the agricultural industry was also unfortunate enough to be hit by disruption stemming from outbreaks of bluetongue and foot and mouth disease.
In the latest incident, DEFRA said there will be no culling of wild birds because such action could disperse them further and would not aid control. Acting Chief Veterinary Officer Fred Landeg commented: “While this is obviously unwelcome news, we have always said that Britain is at a constant low level of risk of introduction of Avian Influenza.”
The 1918 Spanish flu is often used as a basis for projecting the possible impact of a severe pandemic, but a report published in December found that today’s populations are far better equipped to deal with life-threatening diseases.
The Chief Risk Officer (CRO) Forum’s Emerging Risks Initiative concluded that advances in medical technology and global health monitoring should be taken into account and that in projecting excess mortality of a flu pandemic in today’s world, 1918 figures should be substantially reduced.
Nonetheless, the impact of a pandemic could still be profound, particularly considering the density of populations in urban areas, advances in human mobility and globalization. A human pandemic could escalate quickly, last for many months, and infect 25% or more of the world’s population, according to public health experts.
Humans can catch Avian Flu, but only after coming into close proximity and handling infected birds. As such, currently H5N1 is not itself a business threat except for the poultry industry—Aon predicted that an outbreak could cost UK poultry farmers as much as £30m—but risk managers are advised to consider the knock on effects of a possible outbreak.
Firms may want to review their business continuity planning, suggests Paul Hopkin, technical director AIRMIC: ‘I think the most important concern for risk managers is the underlying desire to have business continuity plans (BCP) in place to deal with the consequences of an avian flu outbreak.’
In a recent StrategicRISK survey, the threat posed by a pandemic was cited as the biggest fear for most European risk managers. In the survey, the BCP methodology surfaced as a popular approach for dealing with a pandemic crisis—73% of the risk managers who said pandemics were a serious concern had also prepared a BCP.
‘Absence from work is the most immediate problem that could follow an outbreak of Avian Flu,’ confirmed Hopkin.
In the worst case scenario, a pandemic flu, arising from a mutation allowing the virus to be transmitted from human to human, could lead to 50% absence from work at the peak, according to Marsh’s risk consultancy.
Non-attendance could be the result of the illness itself or a desire for people not to gather in large numbers. Such an event could mean having fewer people, losing certain critical people, or having staff work from home or other remote locations.
Furthermore, a human to human form of the disease is likely to lead to immediate extensive restrictions on travel, and possibly the passage of some goods. A typical comment from risk managers in the StrategicRISK survey was: ‘Our main concern is the ability to continue offering key services with potentially depleted resources.’
Businesses would do well to assess how a pandemic might affect services from suppliers and vendors—particularly in areas where incidence of the disease may be concentrated—said Marsh in advice issued at the time of the Suffolk bird flu outbreak.
'This is a real threat and businesses should take precautions,’ added Marsh.
‘The focus that risk managers tend to look at is the threat of communications and peripheral services being disrupted,’ added Hopkin.
The publication of BCP standards combined with recent crises like the significant disruption caused by the summer floods, have raised the awareness of risk managers to the possible impact of disruption to normal practices.
‘Risk managers are increasingly concerned about these disruptions within an existing framework of BCP,’ concluded Hopkin.
The Chief Risk Officer (CRO) Forum's Emerging Risks InitiativePDF, Size 0.19 mb
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