23-Jul-10 11:45 AM EDT

Firestorm Newsletter 23-Jul-10

July 23, 2010

Disaster Due Diligence July 23, 2010

Is your business ready?

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Disaster preparedness

HEADLINE: Lessons from Exxon Valdez Went Unheeded

SUMMARY: Veterans of the 1989 Exxon Valdez oil spill response and review say many of the same mistakes have been repeated in the BP disaster. In the immediate aftermath of the Alaska spill, as in the gulf, there was confusion over who was in charge -- oil companies or government officials. Federal authorities eventually asserted themselves but lacked the equipment and personnel to stem the damage. Storms slowed the response and spread contamination. Cleanup technology was old and ineffective. "It's almost as though we had never written the report," said Walt Parker, chairman of the Alaska Oil Spill Commission, which made dozens of recommendations for preventing a recurrence.

STORY LINK: http://www.cbsnews.com/stories/2010/07/14/politics/washingtonpost/main6678173.shtml

ANALYSIS: Disaster denial. History repeats itself. We fail to learn from earlier events. The lessons learned from the Valdez are lost. The scope of the BP spill is even greater. However, we have repeated the lack of preparedness, and confusion in response, communications, authority and decision making.

Why? Most organizations are driven by the expedient: short-term goals, metrics and financial drivers. Combine these with disaster denial and false beliefs by senior management in their ability to “weather’’ any storm and you see the results.

Whether the threats are tornados, fires, floods, earthquakes, workplace violence, pandemics, or hurricanes, we are not more prepared today to learn from our and others’ past mistakes. What lessons has your company learned from BP? Can you name one? What changes have you made? What is the equivalent crisis, disruption or disaster that could impact your company? According to the American Red Cross there are over 70,000 disasters annually. One in five businesses will experience a disruption each year. Are you ready?

Today, we are no better prepared for a bioterrorism attack or a weapon of mass destruction on U.S. soil than we were on 9/11. Yet, reports before Congress indicate a 50 percent likelihood of a WMD attack by 2012.

There are new requirements from DHS for your business to develop business continuity plans. There are specific standards for best practices. Have you tested your plans? Have your employees been trained? Are your plans up to date and in line with best practices? How do you know?

If we learn about your company’s experience in a crisis or a disaster on the evening news, will it be a positive story or the beginning of another failure? Are you sure you won’t be a scapegoat? Have you dealt with the new lessons learned by others? How do you know that you are current?

Everyone has the ability to set an example. Your firm will either be a good example or a bad example. It is up to you. When the disaster occurs, it generally is too late. Are you ready?

--Jim Satterfield, Firestorm President/COO

Workplace safety/compliance

HEADLINE: OSHA Increasing Its Penalties for Workplace Safety Violations

SUMMARY: The Occupational Safety and Health Administration (OSHA) announced it is increasing penalties against employers who commit workplace safety violations. The Severe Violators Enforcement Program provides for enhanced fines and penalties for “willful, repeated, or failure-to-abate’’ violations, raising the stakes for employers who may face OSHA inspections. The directive includes more frequent inspections of a workplace found in violation and other worksites of the same company where similar hazards or deficiencies may be present. Also in the statute is a provision under which an OSHA Regional Office may issue a news release detailing SVEP cases.

STORY LINK: http://www.dcemploymentlawupdate.com/2010/06/articles/workplace-safety/oshas-severe-violators-enforcement-program-now-in-effect/

ANALYSIS: OSHA’s new SVEP puts businesses on notice that if a severe violation is found, and it is likely the violation also exists elsewhere, notice to one location (i.e. plant, hotel, branch office) will be notice to all and will likely lead to inspections of other similar facilities within the organization. This is extremely problematic to a corporation or business that does not have an enterprise-wide communications plan or safety plan.

The statute also provides that OSHA may issue news releases about SVEP cases. This could lead to reputation and brand injury for a business.

The guidance issued to CSHOs (OSHA Compliance Safety and Health Officers) includes important language about what OSHA inspectors will be looking for when they question the plant manager, safety and health personnel and line employees, and businesses should be prepared for questions including:

· Are violative conditions a result of a company decision or interpretation concerning a standard or hazardous condition? Have corporate safety personnel addressed the standard or condition?

· Who made the decision concerning the violative operation, local management or company headquarters? Was the decision meant to apply to other facilities of the employer as well? If the decision was from company headquarters, what is their explanation?

· Is there a written company-wide safety program? If so, does it address this issue? If so, how is the issue addressed?

· Do personnel from company headquarters visit facilities/worksites? Are visits on a regular or irregular basis? What subjects are covered during visits? Are there audits of safety and health conditions? Were the types of violative conditions being cited discussed during corporate visits?

· Are there insurance company or contractor safety and health audit reports that have been ignored? Are headquarters safety and health personnel aware of the reports and the inaction?

· Does the company provide appropriate safety and health training to its employees?

--Suzanne Loughlin, Firestorm Chief Administrative Officer

Economic crisis

HEADLINE: SBA lending shrinks after government guarantee expires

SUMMARY: Since the Small Business Administration ran out of stimulus money for breaks that made loans less risky for lenders and more affordable for borrowers, credit has dried up for businesses in need of capital. This drop in SBA lending has occurred even as President Obama calls for reviving and extending the higher loan guarantee and fee waivers through the end of the year. The proposal has bipartisan support, but is still working its way through Congress.

STORY LINK:

http://philadelphia.bizjournals.com/philadelphia/stories/2010/07/19/story13.html?b=1279512000^3654161&ana=e_vert

ANALYSIS: The challenges for policy makers in the current business environment are partly of their own making, and partly due to economic factors. Providing incentives not based on underlying fundamentals -- such as tax rebates for first-time home buyers or above normal guarantees for SBA loans -- may prop up activity and demand temporarily. The problem comes when the incentives expire and the parties involved have to return to a more normal transaction level. Thus we still have unsold homes and struggling small businesses that find it extremely hard to borrow.

But inasmuch as policy decisions contributed to these problems, and lawmakers cannot be seen to be doing nothing, at least temporarily they must act to try and salvage the situation.

Everyone agrees small business is one of the key generators of job growth. Everyone acknowledges the positive effect of the Small Business Administration in providing guarantees for loans that banks make to small businesses. But banks have been forced to tighten standards for credit extension, so SBA activities become even more critical to small business success.

My bet is that Congress will pass some new programs to restart SBA guaranteed lending, but it will, unfortunately, do it on its own schedule.

--Ted Hansen, Director, Firestorm Expert Council

Health matters

HEADLINE: Reports of sick travelers climb

SUMMARY: Travelers were found to have more than 3,000 cases of potentially infectious diseases in the past year, including airline passengers with tuberculosis, whooping cough, measles, mumps and typhoid fever, according to CDC data. Only 36 percent of travelers flying to Latin America, Asia and other destinations sought health advice before their trips, and only 46 percent headed to areas with malaria carried pills to prevent the disease, said Bradley Connor, head of the New York Center for Travel and Tropical Medicine. "People going to high-risk areas were grossly under-vaccinated, and most weren't even aware to seek travel health advice," he said.

STORY LINK: http://www.usatoday.com/travel/2010-07-21-sicktravelers21_ST_N.htm

ANALYSIS: As anyone who has suffered from traveler's diarrhea knows, foreign travel can result in memorable health consequences. Fortunately, that particular condition (sometimes referred to vernacularly as “Montezuma's revenge”), while uncomfortable, is typically benign. The same cannot be said for other exposures that may be faced while traveling. Malaria, yellow fever, and meningococcal meningitis are among the serious diseases that can be acquired if proper preventive measures are not taken prior to and during travel.

The CDC and World Health Organization monitor disease prevalence and issue travel medicine guidelines. Similarly, the military tracks health threats for personnel traveling overseas and immunizes or provides prophylaxis through internal resources or travel medicine companies such as Passport Health (www.passporthealthusa.com) , a Charter Sponsor of the Preaction Emergency Response Alliance.

Understanding the potential dangers and taking preventive measures is a best practice. As the adage says, “forewarned or forearmed.” Like a warm coat for the winter or sunblock for the beach, simple measures can be lifesavers – literally.

HEADLINE: Two-step vaccine may offer "universal" flu jab

SUMMARY: Using DNA to "prime" the immune system and following with a traditional seasonal influenza vaccine may be able to protect against all strains of the virus -- providing a long-sought "universal" flu vaccine, U.S. researchers said. A team at the National Institute of Allergy and Infectious Diseases is testing the new vaccine in people with hopes the industry may finally be able to dump the cumbersome process of making fresh flu vaccines every year.

STORY LINK: http://www.reuters.com/article/idUSTRE66E7BM20100715