CWS 3.0: August 27, 2014

Print

Operating in politically sensitive environments? Know how to deal with the risks.

Multinational corporations operating in politically sensitive environments need greater awareness of the risks to the safety and security of their employees, assets and supply chains. This is not only a moral and business concern but a legal one.

In January 2013, terrorists took more than 800 people hostage at a gas facility in Algeria, killing 39 foreign hostages. In November 2010, gunmen in Nigeria attacked an oil rig and seized seven international workers.

But it’s not just attacks from terrorists that pose a threat to employees and contractors. In light of recent upheaval in Eastern Europe and the Middle East, U.K. law firm Osborne Clarke issued guidance for companies with workers based in unstable regions and geographies.

The law imposes duties on an employer to safeguard the health and safety of its employees and to provide them with a safe place to work. Failure to do either can lead to civil and/or criminal penalties and the associated legal processes in both the foreign jurisdiction and in the U.K., which are likely to be labor intensive, costly, and drawn out.

This may include risks not only to the business but also to company directors and managers personally, and the risk of legal proceedings against those individuals abroad.

While the risks associated with political instability, war and terrorism cannot be removed, there are a number of practical steps businesses can take to protect employees and assets and limit the potential effects on their operations in high risk areas.

It is crucial that businesses identify and assess health, safety and security risks associated with working abroad and have a plan in place.

Some of the steps Osborne Clarke has advised its clients to consider are:

  • Staffing companies that supply contract workers into hot spots — and the firms that use the workers — must be very clear (with the contract workers/insurers/payroll partners/subcontractors/employment intermediaries) who has relevant control (from which legal duties of care stem, creating a legal obligation to manage risk) and who has contractual responsibility for the management of risk and who has responsibility for carrying insurance for key risks (and checking that insurance is in fact in place).
    • In practice, Osborne Clarke does not advocate relying on local payroll partners/subcontractors/employment intermediaries; companies should have their own plans and insurance in place.
  • Appoint a dedicated crisis team and liaison officer to assume control of any emergency and ensure disruption to other areas of the business is minimized.
  • Where possible, put in place transport, access to funds, legal assistance, and medical help for any affected employees.
  • Work with other employers in the region to assess the viability of a cooperative action plan for emergencies.
  • Provide employees with satellite phones or other technologies that can be used in the event of cell phone network disruptions or power outages/failures.
  • Communicate regularly with employees to gain advice or provide information about changes to their situation.
  • Maintain up-to-date contact, next-of-kin details, locations and travel plans for all employees. This will enable the business to quickly account for employees and help local embassies, consulates and foreign governments communicate with employees if it becomes necessary to evacuate.
  • Monitor the situation regularly and be alert to changing circumstances or any escalation that might necessitate increased security or evacuation.

It is nevertheless important for businesses to ensure they have the appropriate level of insurance in place when operating in high risk areas and for them to regularly review such policies in light of any changes in circumstances that might affect or necessitate a change in the level or scope of any cover.