Australian businesses’ continuity plans were put to the ultimate test by the recent Brisbane floods. But some companies have proved that, with the right systems in place, they can stay one step ahead

Recent extreme weather conditions in Australia have greatly tested the resilience of businesses’ continuity planning. But some, like law firm DLA Phillips Fox and car rental company Hertz, passed with flying colours.

DLA Phillips Fox’s corporate services director, Mark Hornsby, describes learning that there was going to be a problem. “Following extreme rain in the Brisbane River catchment area, it was fairly rapidly predicted that the river would break its banks and that large parts of Brisbane, including the central business district and the low-lying suburbs, would be inundated.

“Building management of Waterfront Place, home to our Brisbane office, ordered the evacuation of all tenants just before midday on Tuesday 11 January. At that time, all our Brisbane staff were safely evacuated and a number of our immediate incident responses were implemented.”

Hornsby says that the firm’s business continuity management plans worked well when put to the test. “We were able to quickly assemble and put into action the right components to ensure the safety and wellbeing of our staff was maintained, that business operations continued uninterrupted and that communication to our staff, clients and other stakeholders was timely and informed. It also worked particularly well to have a national team established, with some representatives ‘on the ground’ in Brisbane but also with many of us working remotely from other offices.”

Unlike some other Brisbane businesses, DLA Phillips Fox, one of Australia’s largest law firms, was fortunate in being able to maintain business operations throughout the period via its sophisticated remote access and backed-up IT systems. It meant that the majority of staff could continue to work remotely from home or from the firm’s temporary office until they were able to return to the building.

Hornsby says that there were also some unforeseen challenges. “Power outages in Brisbane’s suburbs created an initial communications challenge for some staff, meaning communicating via SMS – a system we had previously established – proved critical.”

Hertz, meanwhile, has offices throughout the world, so it is almost inevitable that it will be affected wherever disaster strikes. Good business continuity plans in such an organisation are crucial.

As director of risk and claims management for EMEA and Asia-Pacific Patrick Smith says, many organisations have continuity plans in place but have never used them. “In Australia, we had ours tested; they were resilient and they worked. In fact, they were so successful that we are using the Australian experience as an internal case study and to bench test other plans. It reinforced why you need continuity planning.” SR

Addressing costs and future perils

Reports suggest that the Australian floods have killed 32 people and affected around 30,000 properties in Queensland. There has also been significant crop damage.

On 27 January, Australian prime minister Julia Gillard estimated that the flooding would cost A$5.6bn (€4.06bn) and said the government plans a one-off levy on taxpayers to help pay for reconstruction.

The tax will raise around A$1.8bn – with a levy of 0.5% applied on income between A$50,001 and A$100,000, and a 1% rate applied on taxable income above A$100,000.

Secondary perils

The December 2010 and January 2011 rainfalls that severely affected the Australian states of Queensland, New South Wales and Victoria are a prime example of how secondary perils can cause widespread damage to property.

Secondary perils are usually high-frequency, low to medium-severity events and include floods, hailstorms and bushfires, among others. Although they are not usually on the same financial scale as earthquakes, hurricanes or winter storms, they can cause significant damage.

Head of Swiss Re’s flood group Jens Mehlhorn says: “Secondary perils are very often underestimated. Typically, these perils are difficult to model. Hence, there are no adequate risk assessment models available, which contributes to uncertainty when assessing these perils.”