Aon 2019 Risk Maps – Australian Perspectives
Aon’s 2019 Risk Maps, is an in-depth annual survey of the world’s political risk, terrorism and political violence, and helps businesses identify macro-economic and political developments that could affect their business risk in the coming year.
In 2019, key findings from the report point to a rise in populism, and the consequences of that on trade. The report also speak of increasing far-right terrorism and trade tension. We examine what this means for Australia, and how recent events are an indication of increasing volatility in a traditionally low-risk region.
Australia’s key trading partners on high alert
While Australia is fortunate to not experience the level of political violence that is common in some countries, Australian businesses can still be exposed to these issues domestically and in the Asia-Pacific region.
The frequency of jihadist attacks across Southeast Asia rose by around 30 percent last year. The threat is highest in the southern Philippines, but also extends to Indonesia, and to a lesser degree, to Malaysia and Singapore.
Some of Australia’s key trading partners in the APAC region retain medium to high risks for events like terrorism, riots, strikes, civil commotions and sabotage. Countries like Thailand, Indonesia and the Philippines all maintain high risk ratings. Other countries like China, Papua New Guinea and Malaysia all maintain medium ratings, but this is mostly due to issues surrounding civil commotions and protests, rather than terrorism.
Evolving nature of terror
In Australia, most businesses think of political violence as terrorist attacks but forget that the political violence sphere is much broader. Civil unrest includes strikes, protests, malicious damage, civil commotions and riots, and affects three in five countries, which is only a small decrease from last year.
60% of countries are exposed to civil unrest risk
The increase in instances of riots, strikes and civil commotions in China should be of concern to Australian businesses with close ties to China. As the full report highlight, clients in the manufacturing and constructions sectors may be vulnerable. The protests in China in relation to environmental issues combined with these other economic and political factors points to heightened risk for businesses. We recommend closely monitoring these risks and examining the impact through business interruptions or people safety risks is recommended.
Domestic unrest and impact on travellers
Protest activity in Australia has been getting more media coverage in recent times. More recently over animal rights and environmental issues. If causes are more highly publicised then this could increase likelihood these protests becoming violent civil commotions.
We have seen some issues with far-right protests and these have often been coupled with left-wing groups protesting simultaneously. Police have utilised capsicum spray and rubber pellets at times to deal with these protests.
For Australian travellers and expats protests and civil commotions can be intimidating and pose a threat to their safety. It is important that travellers and expats are properly briefed and understand where protests are scheduled and take steps to avoid crowds or demonstrations. It is important to be aware of security forces at times of increased tensions.
New Zealand attacks
The 2019 Risk Maps have also closely tracked issues of right-wing terrorism and political violence and conclude that issues of right-wing terrorism are on the increase in Europe and the US. The report also finds that most of the right-wing attackers have a lack of allegiance to a known or identifiable group. This makes it extremely challenging for authorities that attempt to track and stop these plots and incidents.
Unfortunately, we will see a continuation of this in 2019. New Zealand has historically been a country that has been considered to have a negligible risk of political violence. The risk maps have consistently rated New Zealand as low risk since 2011 and yet the tragic Christchurch attacks highlight that the impact from domestic unrest and right-wing movements can be just as devastating as terrorist attacks and are often harder to prepare for.
How can business prepare?
Having a mature crisis management plans that are well tested is vital. Ensuring that safety and security procedures are in place to mitigate and respond to terrorism and violence is essential for business in the current environment. Political Violence can no longer be viewed solely through the lens of property damage or business interruption. Instead careful thought must be given to the human and operational elements of responding to such an event. In particular, when considering the human element of these events, thought must be given to management of impacted families and ensuring that appropriate support is given during what will be an exceptionally distressing and emotional time for them.
Well tested crisis management and business continuity plans are essential. At times it is best to utilise external consultants to test the business in mock incidents. This will give an objective overview of a business’ handling of the mock incident and can provide important feedback on areas for improvement. Such consultants should be selected carefully as pricing and experience can vary greatly.
While businesses will generally ensure that their security teams are well versed in the handling of these events, it is also worth ensuring that Risk teams and HR teams trained in handling critical