Asia's top business leaders establish key disaster reduction partnership
MANILA, 25 September 2012 - Some of Asia's most influential business leaders today agreed to adopt Business Continuity Management (BCM) as a first step towards safeguarding their businesses against disasters.
Some 30 CEOs and top managers based in the Philippines and Asia who gathered today in Manila in the Philippines also established the first regional Asian Private Sector Partnership on Risk Reduction.
The experience of the AXA insurance group, PricewaterhouseCoopers and many other corporations in the region set the tone for discussions and decisions today as did the reality that businesses are at increasing risk of disasters in Asia. Last year floods, typhoons and earthquakes caused more than 274 billion US$ of economic losses in Asia alone.
"As we grow in business we should not lose focus on earning respect from our communities. We can do it by strengthening disaster resilience. Your role may not be immediately recognized by communities but you can be sure of their gratitude and appreciation when disasters strike" said Hans Sy, President of SM Prime Holdings who convened the Top leader forum together with the UN office for Disaster Risk Reduction (UNISDR).
Disasters are having tremendous economic and human impacts on corporations, private or public and even more on small businesses. In 2011, in Thailand alone, floods shut down 1,000 factories and forced more than 700,000 people out of work. In Japan more than 337 companies went bankrupt after the Great East Japan earthquake and tsunami in March 2011.
"BCM is a great way for businesses to demonstrate that they are robust as well as safe and to reassure their shareholders and partners", said James Crask, a senior manager at Pricewaterhouse Coopers, who made a full simulation to the SM staff in the afternoon.
"But BCM needs to be of good quality, understood by staff, supported by board management, financially sustained and delivered as part of the organization general approach to risk," Crask stressed.
While most of the companies present at the forum said they had a business continuity plan in place, many also recognized that more needed to be done to increase the collaboration between companies to maintain the global supply chains in the event of a disaster.
"It's obvious that today any supply chain depends on another one and collaboration between corporations at national, regional and global levels is key to minimizing disaster losses. You don't have to be close to a hazard to be affected by a disaster," said Jerry Velasquez, UNISDR regional coordinator for the UNISDR Asia Pacific Office. "This is why it's important to build alliances and partnerships to considerably reduce global disaster losses as they continue to rise," he added.
According to a recent World Bank Report, Advancing Risk Financing and Insurance in ASEAN Member States: Framework and Options for Implementation, the Philippines stands to lose US$1.6 Billion of dollars due to disasters per year. This represents 0.8 per cent of the country's GDP.
"But more than BCM," said Sy, "we should really be more active on the disaster risk reduction side. One of the examples I am very proud of is the building we are in today. Contrary to many buildings that were affected by the recent floods in Manila, such as the U.S. Embassy and Hotel Sofitel, this was not affected because we took many mitigation measures to secure its safety.
"We went beyond what was required by law to build it. When the law required us to build 1.5 metres above the sea level, we decided to put three metres more. These measures have been essential to protect the building", said Sy who was officially invited by Sandra Wu, a member of the UNISDR Private sector Advisory board to join the board and champion the new Asian partnership.
The New Asian private sector partnership is composed of more than 30 CEOs from business sectors such as telecommunications, insurance, banking, food supply chains, and construction. They have agreed to work together and to adhere to the five essentials of the UNISDR Private Sector Advisory Board. They also agreed to provide concrete recommendations to the first Private sector annex that will be further discussed at the Fifth Asian Ministerial Conference on Disaster Risk Reduction to be held in Indonesia from 22-25 October.
The following companies participated in today's meeting: the 2Go Group Inc., Accenture, Ayala Corporation, AYC Holdings Limited, BA Securities, Bank of the Philippine Islands, Basic Energy Corp, Basic Diversified Industrial Holdings, BDO Unibank, Inc., BPI Family Savings Bank, Inc., DHL Supply Chain, DuPont Far East, Executive Baclounge, Federation of Filipino Chinese Chambers of Commerce and Industry, Financial Executives of the Philippines, First Gen Corporation, First Philippine Holdings Corporation Globe Telecom, Jollibee Corporation, Kokusai Kogyo Holdings Co., Ltd., Manila Electric Company, Manulife Philippines, Philippine Business Bank, Philippine Chamber of Commerce and Industry, Philippine Daily Inquirer, Philippine Investment-Management Inc, Philippine Long Distance Telephone Company, Philippine Retailers Association, Philippine Satellite Corporation, Philippine Stock Exchange, Smart Communications Inc. and Teleperformance.