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Russell Watkins/DFID

Chapter 4 Partnerships, governance and stakeholders

Private sector partnerships

Photo: Russell Watkins/DFID

Businesses are heavily involved commercially in DRR, providing engineers, consultants, software designers, insurers, transporters and suppliers of goods and services of many kinds. The role of the private sector in disaster management is sometimes a contested issue, especially with regard to potential clashes between commercial interests and broader social and humanitarian objectives. Disasters can create profit-making opportunities for businesses.+N. Klein, The Shock Doctrine: The Rise of Disaster Capitalism (London: Penguin Books, 2007). Nevertheless, attempts have been made to encourage initiatives to mitigate risks that are both commercially viable and support poor and vulnerable groups, for example through micro-insurance (see Chapter 12). More effort is also going into making businesses aware that they depend on local people, resources and infrastructure, and should take steps to protect these as well as their own premises and goods.

There is much potential for corporate social responsibility (CSR) initiatives in risk reduction. CSR involves businesses recognising their impact on society and the environment, and acknowledging some degree of responsibility for making a more positive contribution to sustainable development. It often involves dialogue and partnerships with other stakeholders in government and society. There are many examples of public–private and CSR-inspired initiatives in DRR, such as hardware stores donating materials or providing them at low cost to encourage homeowners to protect their properties, allowing use of business premises as shelters or distribution centres or providing free technical support. As part of an Indonesian government–private sector initiative to prepare for tsunamis (launched in 2008), members of the Bali Hotel Association agreed to open their hotels in an emergency to local people who could not reach safe evacuation locations; they also supported public education events and putting up evacuation route signs.+UNISDR, Private Sector Activities in DRR: Good Practices and Lessons Learned (Bonn: UNISDR, 2008), http://www.unisdr.org/we/inform/publications/7519, pp. 20–23. In the UK, supermarket chains have agreed to provide disaster response agencies with out-of-hours access to obtain food and essential provisions; a hotel chain has offered its hotels as emergency rest centres and restaurants have agreed to provide food vouchers to displaced people.+K. Williams, Emergency Planning in the UK: The Players, the Partnerships and the Pressures (London: Aon Benfield UCL Hazard Centre, 2009), https://www.ucl.ac.uk/hazardcentre/resources/working_papers/working_papers_folder/wp25. In Project Impact in the United States (see Case Study 4.2: Building and maintaining partnerships), business inputs to local DRR initiatives included home supplies stores giving discounts on products for household preparedness, employees being given time off to take part in projects and supporting public education activities, for example by paying for materials and providing space for displays and airtime for announcements.

Insurers and other firms publish and distribute information on disaster impact and risk reduction measures; insurance and reinsurance companies have sponsored important hazards research, and in some public–private insurance schemes premiums are reduced if households or communities demonstrate that they have taken certain steps to protect their property. Business was active in rehabilitation projects in Gujarat after the earthquake in January 2001, and in the Philippines and the United States businesses have created NGOs to address disaster problems. Private sector involvement in technological innovation, such as electronic cash transfers, telecommunications and remote sensing, also supports DRR and humanitarian efforts.

Although companies of all kinds are often keen to give cash and in-kind support to emergency relief, they appear to be far less involved in longer-term DRR, especially in lower-income countries. The degree of business engagement with DRR issues in a particular country may be related to the general level of awareness of these issues in that country. It also seems that commercial pressures on small businesses everywhere make it hard for them and their employees to find time to take part in local DRR activities. Where there is business activity, it is usually ad hoc and short-term and, significantly, addresses only the immediate symptoms of need or vulnerability, not the root causes – for which businesses may in part be responsible.

In some countries, companies have little confidence in government or the NGO sector, preferring to go it alone. Elsewhere, governments and international organisations have to persuade businesses to take part in collaborative activities. Where businesses take the initiative, this often takes the form of unilateral actions closely linked to their own activities (e.g. provision of materials and information) or interests (e.g. sponsorship of research and training). Business leadership and commitment are most likely to come from sectors most closely linked to issues of risk and safety: insurers, principally, but also engineers, retailers, architects and telecommunications enterprises. Such firms have a large commercial stake in risk reduction and understand the problems associated with it.