For U.S. companies, violent attacks such as this week’s ambush killing of four Americans in Karachi, Pakistan, are the stuff of nightmares.
They also could be an increasingly common cost of doing business in a global marketplace, security experts warned Thursday.
As more small- and medium-size businesses pursue ventures in emerging nations, they’re running risks that most are ill-equipped to handle, the experts said.
Although big multinationals usually devote considerable resources to security planning, smaller players often take only rudimentary steps to train and protect their personnel abroad.
“Exxon is going to be much more prepared than someone from a law firm flying into Karachi for the first time,” said Christopher T. Marquet, a senior managing director at security consultancy Kroll Associates in New York. “Companies jumping into these emerging markets are not assessing the risks.”
That’s especially true in the Midwest, where many smaller companies are just beginning to move abroad, said Chicago-based security consultant Jerry Brandt, former chief of detectives in Evanston. “These boutique companies with six or eight employees don’t have a hint. They’re the ones really at risk.”
The biggest threat isn’t a politically motivated terrorist attack, such as the one in Pakistan. The number of terrorist acts against Americans has been falling, though each incident on average has become bloodier.
Instead, Americans are more likely to be targets of simple street crime in which money is the motive: robberies, carjackings and kidnappings for ransom. Middle managers are victimized at least as much as top brass.
Incidents occur more often as businesses push into poorer markets, where the wealth of Westerners stands out prominently, said Eleni Jakub, a senior consultant at Control Risks Group.
In its two decades of operation, her London-based firm has handled 1,000 cases of kidnapping and extortion–half in the last five years. At the same time, ransom demands have skyrocketed as high as $100 million, as criminals have learned to think big when dealing with the West. “It’s not that the world’s more dangerous– companies are going places they never were,” she explained.
The U.S. companies with the best security planning tend to be those that have gone to obscure places for generations, such as oil, lumber and mining concerns. Even in those cases, the press of business has pushed them even further into the hinterlands.
With U.S. oil-production maturing, Chicago-based Amoco has intensified operations in South America, Trinidad, Egypt, Azerbaijan and Kazakhstan. Chief executive H. Laurance Fuller said in a June interview that measuring political risk has become a key issue.
Amoco hires former government analysts and diplomats to study its risks, maintaining what Fuller described as “an internal secretary of state.”
“We set limits,” he said. “We’re getting more explicit and quantitative about the risks we are willing to take.” An Amoco spokesman declined to comment on security issues Thursday.
The growing emphasis on security at big companies has boosted the business of prominent consultancies such as Kroll and Control Risks. They specialize in providing detailed reports and up-to-the-minute data bases that warn, protect–and, critics say, scare–executives traveling abroad.
In addition to disseminating information, the firms prepare crisis-management plans allowing for a quick response if, say, an employee gets shanghaied in Bogota.
They also specialize in prevention, which usually amounts to training executives to be more aware of their surroundings, rather than selling them armored cars. “It’s a lot more than bodyguards and alarms,” noted Jakub.
One key: Information control. Executives hiring a car to travel from their hotel to a plant site in Karachi, for instance, would be well-advised to reveal little about themselves or their plans. Among other steps, they should order the car under a personal name, rather than a company name, and reveal the destination only after they’re rolling, Jakub suggested.
