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Home World Cup 2010 Duty of care: Corporate responsibility
Duty of care: Corporate responsibility PDF Print E-mail
Monday, 07 June 2010 09:44
With the countdown to the 2010 FIFA World Cup having reached the three-day mark, most companies appear to have finalised their risk management plans for the tournament. It is however surprising that a number of companies still appear undecided or uncertain about the types of risks that they could be exposed to and the mitigation measures that should be implemented.

Part of the reason for this uncertainty is that the World Cup risk environment remains ambiguous at best, and contradictory at worst. FIFA and the South African authorities have continued to downplay potential risks relating to terrorism, security, logistics and disruptions to essential services. On the other hand, risk experts – including the Pasco team responsible for managing World Cup security and protective intelligence – have if anything grown less optimistic about the level of risk relative to the capacity of authorities to prevent significant risks from materialising into confirmed threats. Three weeks ago, Pasco raised its terrorism threat assessment from 'low' to 'moderate', and in the past week the global insurance firm Aon similarly raised its threat assessment level for South Africa owing to the risks associated with the World Cup. As we prepare this article for publication, the Pasco team is monitoring the possibility of industrial action by workers at Eskom, the country's national electricity supplier. As we have stated in previous assessments of this risk, the World Cup stadiums and other venues will have alternative power supplies, but there is little doubt that persistent disruptions to the national grid will have a significant impact on the tournament and could jeopardize crime prevention activities across the country.

A second reason that some companies appear uncertain about precisely what measures to implement is that the statutory requirements in South Africa are currently in a state of transition. The Safety at Sports and Recreational Events Act was passed through parliament earlier this year and places stringent risk management requirements on all sporting and recreational events, including hospitality functions. The fact that the Act specifically excludes the World Cup may be an indication that local operators and companies are poorly positioned to meet the new requirements. On the other hand, there can be no escaping the fact that the Act sets out a set of best practice standards that corporates and venue managers should seek to comply with, irrespective of whether those requirements have been passed into law or not. For many corporates, therein lies the rub.

The dilemma raised above can be illustrated by way of a simple but plausible scenario. A large enterprise operating in South Africa has several employees that will be attending matches around the country. Assuming those employees are attending in an official capacity, in other words representing the company, it seems obvious that there are both legal and moral requirements on the part of the company to ensure that its employees are protected and safe. But what does this mean in practice, and what if those employees are attending matches in a private capacity?

To answer the first question, it is evident that companies have a requirement to appraise employees of potential safety, security and health risks, and to take reasonable measures to mitigate those risks. Depending upon the actual scenario, this may range from awareness briefings and training in responding to emergencies, to providing close protection and crisis response services. For companies that are hosting clients or other important associates, these requirements assume an even greater significance.

But what of cases in which employees are attending matches in a private capacity? On one hand, South African law holds no specific requirements for the employer to take measures to protect employees on 'off-time'. It is also reasonable for local employers to assume that South African employees are cognizant of the problem with crime and other threats in the country. On the other hand, if there were to be a serious incident, public opinion will inevitably judge companies that may have been aware of a heightened risk environment and failed to take one or other measure to at the very least make employees more aware of possible risks.

Pasco is advising several multinational companies on these issues, and on the whole we have been impressed with the openness of large entities to respond to duty of care requirements relating to the safety and security of employees, clients and other guests during the World Cup. If there is a general deficiency that we could point to, it probably lies in a lack of emphasis on crisis management and contingency planning. In this regard, it must be borne in mind that in event of any significant incident (for example, a Mumbai-style terrorist attack targeting multiple venues) the immediate response by authorities would most likely include shutting down of mobile communications, major roads and airports. Crisis response plans need to cater for these possibilities. Critically, employees and other stakeholders also need to be trained to know precisely how to respond in event of a significant security incident. In a best practice model, one would want a dedicated crisis management center that is able to coordinate appropriate interventions, including facilitating communications and emergency response measures.

Considered statistically, the probability of a catastrophic or significant incident remains low to moderate. On the other hand, the statistical probability of both towers of the World Trade Center being destroyed simultaneously was reasoned as too remote to warrant insurance against such an eventuality. And in event of any serious incident, companies whose employees are exposed to harm will inevitably be confronted with the question: Who knew what when? There is a compelling case for companies to take reasonable measures to cater for all World Cup scenarios, no matter how remote they may seem.

Pasco recommends the following minimum standards relating to World Cup events:

Keep employees informed of all risks and threats through regular briefings;
Train employees who are directly involved in events to manage and respond to on-scene incidents, including basic principles of evacuation and disaster management;
Ensure that high-profile employees and guests have adequate physical protection;
For large groups, a dedicated crisis management center is advisable.