Press Conference on Launch of Disaster Risk Reduction Report 2013

 

The investment decisions “we make as individuals, households, communities and, in particular, as businesses” have far-reaching consequences on disaster risk reduction and recovery, United Nations officials and private-sector experts said today upon the launch at Headquarters of the biannual Global Assessment Report on Disaster Risk Reduction.

Subtitled “From Shared Risk to Shared Value:  The Business Case for Disaster Risk Reduction”, the publication focuses on the role of the private sector in managing disaster risks, said Andrew Maskrey, lead author and Head of the Risk Knowledge Section, United Nations Office for Disaster Risk Reduction (UNISDR).

Speaking at a press conference, just days ahead of the fourth session of the Global Platform for Disaster Reduction, to be held from 19 to 23 May in Geneva, he said the new report “represents a subtle shift in approach from protecting us from unexpected extreme events, such as earthquakes, tsunamis and cyclones, to taking responsibility for the risks which we advertently or inadvertently generate through our investment decisions”.

The report looked at various impacts of a disaster on businesses, the most obvious of which were flooded offices, he said.  But it could also interrupt production and cause wider effects.  The case in point was Port of Kobe in Japan.  It had been the sixth most important port in the world before the 1995 earthquake hit.  Japan had spared no effort to rebuild the facility as quickly as it could, spending an enormous amount of money.  The port was up and running again two to three years later, but by that time, businesses had left to Busan and elsewhere in Asia.  “You can’t insure against loss of business and loss of reputation,” he said.

Decisions made by businesses that overlooked disaster risk issues created risks for communities as well, he said.  For example, investment decisions in small island developing States, where the tourism sector represents 60 to 80 per cent of the total value of exports, carried a high risk of affecting not only the tourism industry but whole communities when disaster struck.

The report also tackled the question of how shared risks could be transformed into shared values, he noted.  Resilient businesses would obviously contribute to resilient cities and economies.  Similarly, Governments that invested in making infrastructure resilient were the most successful in attracting future private-sector investments.  “This works like a boomerang,” he said.

Joining Mr. Maskrey were Margareta Wahlström, Special Representative of the United Nations Secretary-General for Disaster Risk Reduction; Oz Ozturk, Strategy and Operations Partner, Global Initiative Leader with UNISDR, PricewaterhouseCoopers (PwC); Mark Cooper, Senior Director, Emergency Management, Walmart; and Jay Collins, Vice Chairman of Corporate and Investment Banking at Citi.

Ms. Wahlström, taking the floor briefly before other speakers, pointed out that trillions of dollars that were being invested in marginal and high-risk areas in the fastest-developing parts of the world should be invested in a more resilient manner. 

Mr. Ozturk said that the economic cost of a disaster was rising dramatically, predominantly as a result of interconnectedness among businesses, such as through supply chains, and due also to global exposure to the “butterfly effect”.  For example, an incident in Bangkok impacted the supply of particular goods and services on the other side of the Earth.  There were some unique assets in the private sector that could be shared with the public sector, he said, noting that “the opportunity now is for the Hyogo Framework to leverage that foundation”.

Mr. Cooper of Walmart, one of the 14 leading multinational companies which had taken part in some of the research for the 2013 report, said that with more than 10,000 stores in 27 countries, “chances are pretty good when a disaster strikes, it is going to impact our company”.  Stressing the importance of businesses in community resilience, he said, “The sooner we can bring our stores back online, the sooner the community can return to some level of normalcy”.

He recalled that during the 2011 earthquake and tsunami in Japan, a Walmart store manager there had travelled by bicycle for several hours to get to his store and get it open.  Among the customers lined up to buy supplies and necessities were Government officials and first responders.  The manager was actually helping the Government to bring a sense of normalcy to the communities.  Walmart had also worked closely with local authorities in the aftermath of Hurricane Sandy in the United States.

He said that the United Nations could play a major role in three areas of disaster relief:  promoting information sharing, facilitating problem solving and strategically managing donations.

Mr. Collins noted that the concentration of risks was with small and medium-sized enterprises, which suffered disproportionate impacts, particularly in small island developing States.  Those were repeatedly hit hard, year in and year out.  Urbanization was another area of vulnerability, with a large majority of 450 urban centres home to more than 1 million people exposed to disaster risks.  The United Nations could facilitate the establishment of new disaster-prevention principles for managing the infrastructure, particularly in mega cities.

Asked about the connection between poverty eradication and disaster risk reduction, Mr. Maskrey drew attention to the 2009 assessment report, which focused on that linkage.  “More people die in poorer countries,” he acknowledged, “because they live in hazardous areas, out of necessity.”  The 2013 report pointed out that as countries developed, people there were more likely to be able to evacuate and get medical supplies during disasters, he added.  In that connection, Mr. Ozturk said that making right investment decisions was one way to reduce poverty.

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For information media • not an official record