Why private sector should invest in disaster preparedness

Posted at 07/22/2014 5:27 PM | Updated as of 07/23/2014 4:28 PM
(Third from left) Presidential Communications Operations Office (PCOO) Head Sec. Herminio "Sonny" Coloma, Jr. is presented with a plaque of appreciation by (from left) Prudential Corporation Asia Chairman and Prudence Foundation Trustee Don Kanak, CSR Asia Chairman Richard Welford and (right) Prudence Foundation Executive Director Marc Fancy following his opening speech at the Disaster Preparedness Forum 2014 at the Makati Shangri-La Hotel on July 22, 2014. The Disaster Preparedness Forum brings together thought leaders from across the Asia Pacific to exchange key insights and best practices in strategic sector engagement in disaster preparedness and recovery efforts.

MANILA, Philippines – The private sector is being urged to take on a bigger role in helping government prepare for disasters.

In a country where an average of 20 typhoons hit every year, it has been common practice for private companies to assist in recovery efforts through cash and relief goods.

But according to Corporate Network for Disaster Response (CNDR) president Ramon Isberto, recent calamities that cost government and businesses billions of pesos influenced a shift from response towards preparedness.

Isberto said top conglomerates have been teaming up to boost efforts in preparing for disasters, citing as an example the roles of Ayala chairman and chief executive Jaime Augusto Zobel de Ayala and Philippine Long Distance Telephone Co. (PLDT) chairman Manny Pangilinan in leading the Philippine Disaster Recovery Foundation.

Isberto said the group, composed of other conglomerates and non-government organizations, is in the process of setting up a system to better prepare for disasters.

“The resolution that they came to and are still working on is to put together a permanent secretariat among different business groups, talking and coordinating so that it’s a 24/7 operation and not just after the storm,” Isberto said Tuesday in one of the sessions at the Disaster Preparedness Forum 2014.

Isberto, who is also head of public affairs for PLDT and Smart, stressed the importance of disaster preparedness in saving lives and livelihood in communities.

“If we’re going to be world leaders in disaster exposure, we might as well be world leaders in disaster preparedness,” he said.

Philippine Disaster Recovery Foundation president Butch Meily, meanwhile, suggested a “pre-agreement” between private companies, government, military and NGOs to coordinate efforts in times of calamities, similar to a system used by earthquake-prone Japan.

“If we use that Japanese model, not just here in the Philippines, but regionally so we can come up with a sort of pre-agreement among ourselves, because we know the disasters are coming, it’s just a matter of time. If we set up a formal agreement to cooperate, then we will be much better off in enhancing humanitarian effectiveness,” he said.

Meily also said several corporations from the private sector have expressed interest in funding command centers set up outside Metro Manila to keep businesses running in case communication in the country’s business districts is cut off.

“We are looking at an idea of setting up an alternate hub or command centers, jointly among different companies which are normally business rivals and setting that up in places like Subic or Clark,” he said.

Corporate social responsibility

Meily also raised the need for incentives to encourage companies to invest in disaster preparedness and recovery, saying merely relying on the budget of corporate social responsibility (CSR) programs of private companies will be insufficient.

“I think that if you just rely on the CSR budgets of private companies, they’re very limited, and no matter how much we can spend, it’s always going to be not enough considering the number of disasters. So I really think we need to think about creating economic incentives for the private sector to invest in areas like Tacloban,” said Meily.

He said declaring economic free trade zones in disaster-hit areas will attract not only local companies and foreign companies as well.

“If you do that, then you can really tap the private sector’s economic muscle because let’s face it, their self-interest will be involved, it’s a quick win for the Philippine government, and if it works here, then it may work on other disaster-hit areas,” he said.

The challenge in engaging the private sector to invest in disaster preparedness is the long-term commitment it needs, according to CSR Asia chairman Richard Welford.

"We need to take this out of CSR departments and realize that in the Philippines and a lot of the Asia Pacific region, this really is core business—dealing with disasters, managing risks, dealing with business continuity, but also looking at opportunities in that recover phase should also be part of core business,” Welford said.

“Don’t it treat it as an add-on, treat it as absolutely central in your business going forward,” he added.

The Disaster Preparedness Forum was organized by Prudential Foundation and CSR Asia.

Prudential Foundation, the charitable arm of Pru Like UK, and CSR Asia commissioned an exposure paper titled "Effective and Sustainable Recovery - The Role of the Private Sector."

The paper will be published in September 2014.

"There is a need and opportunity for businesses to look beyond the short-term needs after a disaster and support mid- to long-term recovery efforts in cooperation with the humanitarian and government sectors," said Prudential Corp. Asia chairman Don Kanak.