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A new public-private model to approach community resilience

In recent years, the increase in scale and frequency of disasters has led to an increased involvement of the private sector in responses to emergencies, as they increasingly equate their global presence with a global responsibility. Governments and humanitarian organizations, the traditional first responders, recognize their own limitations in responding to massive disasters such as the 2005 tsunami and the 2010 Haiti earthquake. They increasingly acknowledge the need to tap into additional resources, including the skills and assets of the private sector, and this mutual interest has changed the nature of partnerships. Both sides recognize the need to learn from each other, to share common humanitarian norms and procedures, while working together to build resilience, effective risk management and collaboration.

Recognizing the changing nature of the private sector’s involvement in disasters, the World Economic Forum members established a Global Agenda Council on Disaster Management to gather thought leaders on disaster risk reduction and response. The members of the Council – a panel of recognized experts and leaders from the academic, humanitarian, public and private sectors – held consultative meetings and conducted in-depth research, including external experts whenever needed. Following an initial discussion on the broad trends in disaster management, their findings offered a clear analysis of the rationale for focusing on small- and medium-size enterprises (SMEs). Due to their small size, these SMEs are highly vulnerable to disruptions in supply chains, shrinking local markets or defaulting customers, yet they are also essential to the ultimate recovery, since their role as employers and customers make them an integral part of the local economy. However, despite this important role in making risk reduction effective, the Council demonstrated that SMEs have been considerably underrepresented in global discussions on resilience. The Council members therefore agreed that the Council should aim for a practical implementation of the lessons learned, which translated into a detailed proposal for a pilot project to be implemented with SMEs in Turkey.

Framing the issue: The London consultation

Over the course of 12 months, the Council undertook several scoping exercises, including a consultative meeting hosted by the Overseas Development Institute in London. This consultation brought together a range of private-sector and multilateral stakeholders to gain feedback on the approach to better integrate businesses in community resilience. Outcomes included a list of practical proposals for the engagement of the private sector, to move beyond traditionally broad conceptual frameworks.

Suggestions included:

  • Working with utility providers, for instance those in Indonesia, to understand their planning for natural hazards; their contribution is potentially significant given that utility companies tend to have a national presence and long-term presence of local staff in communities, ready to be called in to help communities during emergencies;
  • Promoting resilience in urban centres, as urban disaster management is still a nascent field and cities have the highest concentrations of both SMEs and international businesses;
  • Mapping the experience of disaster management in an urban centre, focusing on the position of the business sector as a way of identifying shortcomings in responses;
  • Establishing disaster preparedness frameworks that engage business communities in particularly vulnerable countries;
  • Finding a way to address resilience across regional boundaries, for example by working with ASEAN for an emergency planning mechanism;
  • Finding ways to engage representatives from the private sector into coordination mechanisms convened by UN OCHA, including the cluster system at global and national levels;
  • Carrying out a review of existing business sector expertise in disaster management and of its response capacity in relation to the humanitarian system, in order to build businesses into planning;
  • Capitalising on DRP’s work through its national networks;
  • Establishing whether the private-sector response to the East Africa crisis has led to any transfer of experiences or management techniques to West Africa, currently also facing crisis.

The key role of SMEs in risk reduction and recovery

The Council focused much of its attention on the recent trend in the humanitarian community to resort to market mechanisms for humanitarian response and early recovery. This shift from in-kind to cash-based assistance has been tested in the sectors of food, educational materials, housing materials, etc. It typically involves aid material being provided by local businesses, through the distribution by humanitarian organizations of vouchers or money to the affected population. As this practice becomes more common, recovery is led by the resumption of local markets, through the role of SMEs as providers of goods and employers.

There are multiple entry points for the private sector in disaster preparedness and response. Companies are already providing product donations and supporting logistics and transportation, for example. The Council reviewed how such initiatives have functioned within the World Economic Forum, in which companies apply their core competencies and skills in supporting responses to disasters. For instance, the Disaster Resource Partnership (DRP) utilizes engineering and construction companies to support humanitarian shelter programmes, while the Logistics Emergency Teams (LETs) rely on the experience of companies active in the logistics and transport industries. These partnerships are examples of the private sector supporting governments and humanitarian organisations to augment their response capacity.

Having a better understanding of the local business climate, how supply chains function, how vulnerable businesses are to seasonal variations or whether they have insurance, greatly improves the overall picture of a community’s resilience to disasters. Private-sector approaches to business continuity, customer retention and resilience to shocks, particularly at the local level, have direct applications to community resilience overall. Conversely, a decrease in community vulnerability improves the business climate, thereby facilitating investment and growth. The ability of local businesses to withstand shocks and to recover quickly following a disaster is critical, yet consistently overlooked. Discussions among Council panel members highlighted how understanding vulnerability from the perspective of local businesses provides a new and hitherto unexplored avenue for assessing community resilience. Some initial work in this area is currently being carried out by the Business Civil Leadership Centre (BCLC), the philanthropic branch of the American Chamber of Commerce, and humanitarian agencies have developed the Emergency Market Mapping and Analysis Toolkit for example, but more needs to be done to ensure that this work informs local community resilience planning. Strengthening SMEs therefore offers a clear use of core competencies that should be explored as part of private-sector engagement in corporate social responsibility, whether at local, national or international levels.

As a result, private-sector engagement is critical for community-based risk reduction and recovery, even though their contribution does not receive the recognition it deserves. The Council agreed to the need for raising awareness and dialogue on market mechanisms, and how they feed into and complement the work of development and humanitarian actors. In line with public-private discussions in many Global Agenda Councils, a strong case should be made why closer interaction between the private sector, government and humanitarian and development communities, particularly before disasters strike, would improve community resilience.

From theory to practice: small business resilience in Turkey

Based on the London consultation and Council meetings, a pilot project proposal was developed to test business-sector approaches to community resilience. This Disaster Resilience Business Project was presented to the UPS Foundation, which agreed to support it for an implementation phase in eastern Turkey. The project aims to simultaneously engage businesses in vulnerable communities while contributing to the Disaster Resource Partnership initiative through the strengthening of national networks in Turkey.

Eastern Turkey was selected as the first site to pilot this project for a number of reasons. Turkey is generally prone to natural hazards and is particularly at risk of seismic activity due to the number of active fault lines that run through it. Eastern Turkey experienced a large scale earthquake on 23 October 2011, followed by a series of strong aftershocks. Because of the remoteness and relative poverty of the region, the earthquake left 200-550 people dead and resulted in considerable damage to housing and infrastructure. However, with a vibrant local economy and extensive experience in disaster-risk reduction and response led by the Government, Turkey is uniquely placed to play a key leadership role in promoting innovative public-private partnerships for disaster resilience in Europe and the Middle East. In addition, a convergence of elements further strengthened the case for piloting such a project in Turkey, such as the World Economic Forum’s Economic Summit on Europe and the Middle East, held in Istanbul on 4-6 June and seen as an excellent opportunity to engage the Government in this project. A proposal was submitted through the Forum’s Europe team to the Turkish authorities in this regard. In addition, the DRP Steering Board, in its 26 March 2012 meeting, reacted very favourably to the suggestion of launching a public-private DRP network in Turkey, which could support and potentially bring additional resources to the project.

Below is an overview of the draft project proposal Disaster Resiliency Business Project which the council members would like to contribute to throughout the next council term:

Project objective

To develop a pilot strategy for promoting disaster resilience of small- and medium-size businesses while simultaneously enhancing their interactions with risk-reduction actors. The project is based on the premise that by promoting the resilience of local businesses to natural hazards and strengthening their ties to local government and civil society groups, the overall community resilience will be strengthened. Building on the initial work carried out in the USA by the Business Civic Leadership Centre (BCLC) and others on private sector approaches to disaster resilience, the project would pilot such holistic approaches to local businesses and affected community groups.

The project strategy would leverage the existing programmes of BCLC as well as the intellectual capital and available resources of the Council members and the World Economic Forum. The UPS Foundation has accepted to allocate an initial grant to partially cover the financial costs of the DRB project and act as lead underwriter. The project would be directly implemented by a local partner to be identified in Turkey. The vision is to develop a model that could be replicated in other disaster-prone parts of the world.

Preliminary Project Overview

This summary is a basis for initial discussion and will be further refined and developed based on further analysis of the local context in Turkey.

  • The first phase of the project would involve an exploratory phase to select the most appropriate communities in Eastern Turkey and to understand how these communities perceive risks, what sort of government initiatives are already in place and how the community and SMEs function. This phase will include exploration of partnership opportunities with the local business community, government entities and relevant civil society groups. CSR-Turkey (www.csrturkey.org) has been proposed as one possible local partner, while other possible partners include academic institutions in Turkey with extensive research on disaster risk reduction and response, as well as humanitarian/ development organizations such as the United Nations Development Programme, which manages a number of public-private partnerships in Turkey. Once the appropriate local partnerships have been established, a detailed project plan will be developed and validated by relevant stakeholders.
  • Working in close collaboration with local partners from the business community, government and civil society in Turkey as well as with Council members, the DRB project manager would review the relevance of existing tools on pre- and post-disaster market analysis and business sector resilience to natural hazards, such as the toolkit produced by the BCLC and the Emergency Market Mapping and Analysis toolkit developed by a number of humanitarian NGOs. These tools and approaches would be adapted to the local context in Eastern Turkey and piloted through local organizations possibly in a series of workshops in the latter half of 2012.
  • In a third phase, a local project manager from one of the participating organizations would serve as the on-the-ground coordinator for the DRB Project. He or she would be responsible for coordinating activities, workshops, and exercises between, on the one hand, key business and community groups such as the American Chamber of Commerce, local chambers and business associations and other companies with broad business influence, and, on the other hand, local, national and global humanitarian organizations and relevant government agencies responsible for disaster risk reduction and response.

The BCLC in collaboration with the Council would develop key success indicators against which the project would be measured, monitored and evaluated and would support the roll-out of the programme to other vulnerable areas in Turkey and/or the region. The Council would act as an international advisory board providing expert technical expertise to the project as and when needed and drawing upon resources at the global level.

Lessons learned and next steps

Beyond the challenging intellectual debates among Council panel experts and the detailed findings presented above, the Global Agenda Council on Disaster Management also demonstrated a keen ability to take advantage of the different synergies within the World Economic Forum. Its discussions always sought to benefit from the resources and experience of the Disaster Resource Partnership initiative, and it examined how mutually beneficial initiatives – such as the launch of a DRP network in Turkey – could be pursued. It provided innovative ideas to the DRP and committed itself to reducing vulnerability through a specific project on the ground. Furthermore, individual members broadly disseminated the findings from the Council, identified funding for its initiative and committed to continue supporting the project in an advisory function beyond the end of Council’s term.

Regarding the launch of a new national DRP platform in Turkey, a final decision from the Turkish Government is still pending, and would allow for individual Council members to continue promoting the innovative suggestions for SME involvement in risk reduction.

Finally, with the merger of the two Global Agenda Councils on Catastrophic Risk and on Disaster Management, the experience and engagement of Global Agenda Council members bodes well for the achievements this new Council can aspire to.

Disclaimer

The opinions expressed here are those of the individual members of the Council and not of the World Economic Forum or any institutions to which they are affiliated.