Disaster Management and Private Sectors

The importance of private sector involvement in disaster risk reduction (DRR) has been recognized for several years at the international level. The data shows that disasters could affect businesses directly and very severely. The primary incentives for the private sector in disaster management participation are ensuring business continuity during and after disasters and preparing for a wide range of disruptions before they happen. In addition, the private sector can contribute further through the development of their core business models and by exploring business opportunities. Five ways of private sector engagement were identified: Direct assistance to communities, Disaster preparedness for own business, Developing innovative products based on business, technology, and expertise, Joint project with NGOs, governments, and international organizations as implementer, and Establishment of private foundations, NGOs, and trusts. Especially, the third and fourth models require strong collaboration with stakeholders, as well as their support, therefore, to strengthen private sector involvement, other stakeholders must make efforts to invite the private sector into their projects and provide information and guidance, if necessary. The multi-stakeholder collaboration is a key for stimulating private sector engagement.

This book collects case studies and articles from all over the world based on practices of private sector involvement. It consists of two parts: Overview and regional cases (international perspectives as well as experiences of APEC, Asia, Europe, Africa and Central America), and Country cases (India, Japan, USA, Vietnam, Thailand, Bangladesh, Malaysia, Indonesia and Nepal).

The effects of climate change, globalization and urbanization are contributing to an increase in risk from natural and manmade disasters. Historically, disasters have been a public sector concern mainly focused on preparation and recovery. Over recent years however, a broader and more inclusive perspective has developed which promotes higher levels of risk-sensitivity, alongside the need for strong collaborations between public and private sectors to mitigate and reduce these risks.

These collaborations are not common today. Yet, with 70–85 % of investment dollars coming from the private sector in the next decades, they are essential. For these to succeed, the public and private sectors must strive for greater levels of understanding, trust, and alignment of their agendas. Where the private sector must move more aggressively to integrate disaster risk into its normal decision-making processes right alongside other business risks, the public sector will benefit from incentivizing the actions that will reduce risk at the systemic levels. Ultimately, both must become more risk and resilience sensitive.

This chapter discusses how the private sector perceives risk in general and how they address disaster risk and the related challenges of climate change, globalization, and urbanization. It provides an overview of business continuity management and supply chain resilience – two issues that hold the potential for mainstreaming disaster risk within an enterprise’s awareness and planning processes; and discusses early adopters, good practices, and collaboration.

Disaster risk reduction (DRR) could be implemented through different approaches. At national level, DRR is closely related to national safety, environmental sustainability and people’s livelihoods. Under APEC, an economy-oriented international organization, DRR could directly make contributions to securing safety of trade environment and business operation. Therefore, since 2011, APEC starts promoting business resilience by introducing business continuity plan (BCP), which receives warm welcomes and helps small and medium enterprises (SMEs) to better enhance capacity and capability when a disaster occurs. And APEC also encourages introducing innovative science and technology for better utilizing big data and sharing value-added information that will increase capacity building of disaster resilience at SMEs and Global Value Chains by raising digital preparedness. This chapter describes how APEC influences business sector to foster safer and smarter regional investment in consideration of frequent natural disasters.

Asia has a large diversity on disaster risks, and role of different stakeholders are different based on the country context. The regional organization (ASEAN, SAARC, APEC) in Asia plays an important role in disaster response and risk reduction by bringing cooperation between private sector and national governments. This chapter provides an overview of regional organizations and private sector involvement, its potentials and challenge in disaster management in the context of developing Asian nations. The case studies of Indian Ocean Tsunami 2004 and Cyclone Nargis 2008 are considered to understand and analyze the role of regional organizations and private sector in various phases of disaster management. The findings from the case studies and various regional legislations lead to specific recommendations, which are; (1) Increase collaboration and cooperation among international, regional, and national level organizations for humanitarian business response. (2) Specific guidelines for private sector involvement. (3) Support information and knowledge sharing. (4) Increase accountability and transparency. (5) Awareness generation.

This chapter reviews the viability of private-sector led involvement for DRR in Europe. In particular, the insurance sector is advocated as a crucial player to provide insurance premiums tailored to the local risk patterns related to natural hazards. Thus, protecting the built environment and the agricultural sector through insurance premiums is how insurance companies can provide solutions. As presented in this chapter, the type of insurance system from pure private (e.g. Great Britain, Germany, Netherlands) to entirely state-controlled (Switzerland) shows varying results in terms of insurance coverage. Overall, the idea to transfer risk through an insurance system where the government provides a mandatory requirement for buying insurance premiums, is regarded as beneficial and efficient for private-sector led DRR against natural hazards.

This chapter reviews the African experiences of disaster risk reduction and involvement of private sector from a variety of perspectives. The private sector has the ability to create risks, reduce risks, but also transfers risk through various mechanisms. On a continent where the private sector is moreover a development partner, this chapter explores the contributions by the private sector to the African risk profile (positive and negative). It considers a number of case studies/examples on how the private sector in Africa has been involved in disaster risk reduction measures from a development perspective. The chapter provides a set of recommendations for future involvement of private sectors in risk reduction.

Private sector plays an important role in disaster risk reduction (DRR) in Central America. The countries have already incorporated private sector DRR promotion in their respective national policy instruments. Despite this promotion by the national policy framework, progress in the private sector’s DRR engagement has seen limited success in the region. The aim of this article is to discuss the elements that may enhance private sector DRR engagement. Interviews were conducted in Costa Rica, focused on two important private sectors of the country: agriculture and tourism. The study found that private entities in Costa Rica have recently started implementing some DRR related activities. Analyzing the reason for these recent activities in the country, this study finally found that the majority of the interviewees were more concerned about the impacts of climate change rather than disaster risk. Finally, this study found three elements that may enhance the private sector’s engagement in DRR.

This chapter focuses on the strategies to involve micro enterprises in the recovery processes assisted by other entities of the private sector. The recurring nature of disasters does not allow the communities, involved in smaller businesses, to recover, countermining their resilience. The micro enterprises engage a large segment of the low income population and they can serve as a vehicle for disaster recovery. This would allow the upliftment of the lower income segments of societies without any requirement of focused strategies for recovery. The chapter also takes up case study from India to understand the key challenges and role of micro enterprises in disaster recovery. These challenges range from lack of skills and formal education amongst the proprietors of the enterprises, climate variability, aligning corporate sector’s interests with micro enterprises’, providing micro finance, technology transfer, and combining Disaster Risk Reduction with micro enterprises policies. Both poverty reduction and gender issues are important aspects to be considered for disaster risk reduction. Additionally, urban-rural dependency can also be utilized to share the onus of disaster recovery on urban and rural micro enterprises. Overall, micro enterprises have the potential to act as socio-economic safety nets.

The roles of stakeholders in civil society are dependent on each other and closely intertwined with economic development. Private sectors have played a major role in supporting of the local economy in normal and disaster time and thus Japanese government have promoted Business Continuity Planning as a part of their policy framework. And after the Great East Japan Earthquake and Thailand Flood, the Japanese Private sectors found their efforts were incomplete. This chapter will focus on Japanese Government policy, embedding situation and challenges on private sector resilience.

When district continuity after large-scale disasters is discussed, it is necessary to consider the business continuity of local organizations such as administrative groups and companies at first. However, only 53.6 % of large companies and 25.3 % of middle-sized companies have their own Business Continuity Plan (BCP). The revival of the local community and economy significantly depends on the early recovery of local infrastructures, such as electricity, gas, roads and railways. Immediately after a disaster occurs, the construction industry, which is familiar with the local conditions, can play a significant and highly expected role. Therefore, it can be said that a BCP for construction companies can contribute to achieving district continuity. This study suggests countermeasures to intensify district continuity acquired through the developing support system to formulate BCP for construction companies.

Historically, emergency management has been a collaborative effort in the United States. Disasters were mostly handled locally by community organizations in the early years of twentieth century, however the picture began to change as the damage inflicted by disasters escalated. Focusing events triggered action in federal government, which ended up with numerous policy initiatives and creation of well-known organizations such as FEMA and DHS. Nevertheless, importance of nongovernmental actors has not declined. Today, about 85 % of critical infrastructure is owned and operated by the private sector. Also, FEMA embraces the ‘whole community’ approach in managing disasters. In this approach government agencies, individuals, families, households, businesses, nongovernmental organizations, academia and experts, and neighborhoods are integral parts of the community; and all of them have their own roles and responsibilities to a certain extend. Having so many stakeholders, building partnerships, and working together in a horizontal (nonhierarchical) setting is called collaborative emergency management. In collaborative emergency management all these stakeholders have certain responsibilities in managing emergencies. Emergency management organizations identify these roles and responsibilities and assign them to various partners. Resources, knowledge, and expertise of the partnering organizations are invaluable for emergency managers. For example, emergency management agencies rely on retail companies for timely distribution of certain resources to disaster stricken areas. The logistic capacity and speedy of delivery of such firms are unimaginable for the public sector. As the communities in the U.S. get more complex and threats such as climate change become more visible, emergency management system will likely to rely on collaborative ties with nongovernmental actors in the future.

The role of public and private sector in disaster risk reduction is emerging as an important area of attention in the post 2015 Hyogo Framework for Action agenda across the globe. In a rapidly urbanizing India, the public and private sectors have been the driving force behind socio-economic development. The present trend of sporadic engagement of the private and public sectors in post disaster relief and response highlights a need for a proactive approach among these entities to make the gains sustainable and build close partnership with the government in preparing and mitigating disaster risk. This chapter tries to look at Public Private Partnership (PPP) as a possible solution to better the disaster infrastructure in India. To develop a better understanding of the role of private sector, their engagement in the past disasters and initiatives are studied. Further, the chapter looks into the post disaster initiatives taken at various levels to make the society disaster resilient. The findings from the analysis of existing legislations and case studies help in evolving a set of recommendations to create a road map for engaging the private sector through PPP for disaster resilience in future.

The increase in frequency and severity of natural disasters due to climate change is leading to huge economic loss across the globe. Considering that the private sector contributes 75–80 % of the total investment in infrastructure projects in Asia, involving them in Disaster management would be essential for economic resilience. Vietnam with its high rate of urbanization is exposed to the risk of various natural hazards. Danang city, in Vietnam has been a center of this urbanization with the national and local government supporting investment in geographically challenged regions from other countries in Medium and Small-scale Enterprises. The Japanese enterprises form a major chunk of these foreign investments in Danang. Considering various legislation and structured interviews with Japanese private sector in Danang, this study concludes that the Japanese Small and Medium Scale Enterprises need further work on the following areas; (1) Legislation for the private sector involvement in disaster risk reduction. (2) Training of private sector employees. (3) Capacity building of private sector.

The unprecedented flooding in Thailand during May–Oct 2011 had a major impact on the private sector in general, and small and medium enterprises (SMEs) in particular with almost 90 % of the total damage and losses estimated for this mega disaster. Although the country has been hit by floods in the past, this time the damages is much more severe causing direct damage to the industrial sector than before, as many of the industrial estates in the central region were hit hard, with factories forced to halt operation for than a month. The floods not only had a major effect on local automotive production and supply chain disturbances but also caused short-term effect on regional and global supply of automotive parts and vehicle exports. The severe effect on auto parts makers caused a serious disruption in the supply chain structure. This situation had a cascading effect on automotive assembly and production in Thailand. No body will wish any further natural disaster affect Thailand as it did in year 2011. However, there is a likelihood of increase risks due to changing climate-affecting Thailand.

Not only in Bangladesh, but also in many countries, disasters have ever caused tremendous damage and impacts on various aspects. To tackle these challenges, full commitment and involvement of all actors including the private sector is strongly required. Private sector involvement can be also seen in Bangladesh, but its extent in DRR is extremely limited.

A rainwater harvesting project implemented by Concern Worldwide and Gazi Tank Company in Bangladesh is a successful DRR business model that can contribute to strengthening community resilience to natural disasters and to business investment. This project worked effectively to develop disaster resilience in rural communities by providing a cyclone-resistant house, safe and clean water as well as livelihood through vegetable cultivation. Precisely, these results and achievements contributed to the capacity development in the fields of DRR (cyclone risk reduction), health (reducing risks of diarrhea by clean water), safety and security (avoiding for women to go for a long walk for getting drawing water), food security (harvesting vegetable) and sustainable livelihood (obtaining cash income by selling vegetable). At the same time, the investment made by GTC can be returned in 3 years based on the cash income generated from vegetable cultivation. From this model, three key messages can be highlighted: (1) the collaboration with NGOs, governments and the private sector can develop an innovative project to contribute to community resilience as well as business investment, (2) it is possible for a DRR project to be able to make returns for both NGOs in creating community resilience and the private sector in increasing their branding and market, (3) the involvement of local offices of the private sector is crucial to identify actual problems and challenges on the ground level and to suggest effective model and tools for development. In addition, a disaster can be a window of opportunity for the private sector to expand their business opportunity and market.

Although Malaysia is a country that is not prone towards major disasters as compared to other Southeast-Asian countries, its national government and NGOs in Malaysia have been making efforts, with its declarations, mitigation efforts, short-term community based programme etc. In addition, the private sector has been also involved in DRR activities working together with NGOs. This chapter aims to review two case studies of private sector involvement in DRR in Malaysia – Animasia studio SDN BHD (Animasia) and PricewaterhouseCoopers (PwC) and to discuss the benefits, challenges and opportunities for both the private sector and NGOs. Through this partnership, both the private sector and a NGO gain benefits including reaching out wider target beneficiaries, awareness raising of their own employees, branding as well as fundraising. To increase the DRR awareness among the private sector and make the collaboration sustainable and long-term are future tasks. It is required to establish a platform for information, knowledge and experience sharing among various stakeholders.

Ever since the Indian Ocean tsunami in December 2004, not just the global community learns something regarding better disaster management, but moreover the people and government of Indonesia are awaken of the needs to be resilient in the challenge of natural disasters. The new law of Disaster Management in Indonesia, Law 24/2007, has stated clearly that partnership as one of the main principles in doing disaster management. This means that the three pillars of Indonesia’s disaster management actors; Government, Civil Society and Private Sectors; have to create a mechanism of collaborating in this matter. Responding to the same challenge of disaster threats, the World Economic Forum, initiated the Disaster Resource Partnership as a means of privates sectors to be involved in humanitarian works, mainly but not exclusively, among the Construction and engineering company. After the initiation in two countries, India and Mexico, the President of Indonesia himself, Susilo Bambang Yudhoyon, invited the Forum to start this public private partnership model in 2011. As the process developed, the partnership network was launched in 2011, activated in 2012, and has been a model of multi-stakeholder partnership in disaster management in Indonesia, where it is not just public and private, but also people partnership. And since Indonesia realized as stated in the Law, that disaster management spirit is risk reduction, then the partnership has also been involved in the disaster risk reduction effort with other actors. The partnership provides a model of tri-sector collaboration where close coordination and sharing resources are needed to build resilient in a country like Indonesia which is in the stage of moving from a supermarket of disasters” to a “laboratory of disasters”.

The Kathmandu Valley (KV) stands top as the most seismically vulnerable cities in the world (Geo-hazard International, Global Earthquake Safety Initiative, USA, 2001). Recent studies indicated that more than 60 % of the houses will be severely damaged if earthquake of 8 and more magnitude occurs. As a result, 40,000 people will die due to building collapse while more than half million people will be displaced. Quality of buildings (both structural and non-structural) is one of the key reasons behind this damage assessment. In-spite of this situation the Metropolitan City offices and municipalities in KV are grossly ignorant till recently and hence have very limited progress in effective implementation of Nepal National Building Code (NBC) which is in place since 1994. Among many other reasons; limited trained human resources, poor governance, weak monitoring and evaluation in place, no testing facilities, etc. are the factors behind this failure. In the other hand, risk and vulnerability in Kathmandu valley is growing everyday with new building permit being issued. In order to improve the situation on the ground, an effective public private partnership (PPP) mechanism can be an effective tool to implement NBC based on the principles of Risk, Reward and Responsibility (3 Rs). In this regard, with the technical and financial support from United Nations Development Programme (UNDP) Nepal initiated couple of innovative activities such as risk sensitive land use planning, e-building permit system, involvement of central bank and commercial financial institutions to effectively implement the NBC, etc. This paper describes some of the above mentioned initiatives involving private sectors to implement the NBC and make buildings safer from future earthquake shocks.

This article presents the literature concerning the Public-Private Partnership (PPP) in Malaysia especially in Disaster Risk Reduction (DRR) areas. Since Malaysia is on the fast-track developing modern country, its economy is being led by the private sectors through many initiatives particularly through the PPP concept. Currently, there are about 611 successful PPPs in Malaysia that had been carried out from 1983 till 2014 mainly on infrastructures projects throughout the years. Being the matured leader in Asian for the PPP projects, Malaysia shares its PPP experiences and guidance via the annual Asian Ministerial Conference in Disaster Risk Reduction (AMCDRR). However, the PPP in Malaysia are still lacking in DRR fields areas and have not been extensively covered by both the public and the private sector. Even though Malaysia does not experience any natural disasters, the rare occasion of tsunami or man-made disasters proves to be disastrous. Therefore, this paper provides in depths on the PPPs as well as the DRR-related partnerships in Malaysia.

Private sectors, depending on the size and nature of business are differentially involved in the disaster management issues. There are different roles of private sector in response, recovery and preparedness. While Business Continuity Plan [BCP] becomes the key during response phase, innovations in risk reduction becomes important in recovery phase, and development investment is the key to the preparedness activities. To enhance private sector participation, a balanced approach of legislation, incentive mechanism and engagement process are required. Corporate Social Responsibility [CSR], BCP [Business Continuity Plan], and PPP [Public Private Partnership] become important for legislation issues, while business development becomes the key incentive mechanism, and roles of other stakeholders [like civil society, academia, media] becomes important in the engagement process. As the approaches, private sector as a major group can play an important advocacy role in the international level for framework development; can influence policy and legislation development at the national level through participating in the national platform, and can influence in the local decision making through urban related work [on business continuity or safety standards] and rural development businesses.