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Professor Satoru Nishikawa joined the Global Forum for disaster risk prevention and shared his 22 years of experience on disaster management.

Professor Satoru Nishikawa joined the Global Forum for disaster risk prevention and shared his 22 years of experience on disaster management.

Japan is located in a volcanic zone on the Pacific Ring of Fire. Earthquakes and tsunamis occur frequently with colossal damages like Fukushima. In addition, typhoons strike often the Japanese archipelago. Therefore, authorities of world’s third economy have a long history of disaster risk planning and management.

In 1991, Dr. Satoru Nishikawa was responsible on editing the government annual report on disaster risk reduction. In that report he indicated that private corporation had a significant role to play in reducing risks and disasters as well as preventing economic losses. The expert stated three main reasons to integrated private sector into risk planning at the national level.

-Firstly, business interruption comes with economic losses and can threaten the life of citizens. For example, if pharmaceutical industries are not able to produce medicines in time of disaster, population are facing health risk.
-Secondly, corporate citizens have a role to play in their corporation towards their region.
-Thirdly, companies are responsible for their premises as well as the safety of their employees and customers.

These reasons explain why businesses must be more actively involved in Disaster Risk Reduction (DRR).

Since 1991, there has been witnessing of incidents and disasters which contributed to raise awareness and interest on DRR. Companies that were reluctant on changing their practices changed their mind-set and saw the benefits of better DRR management. The Kobe earthquake, torrential rains hitting the car industry and 9/11 attacks raised concerns about Business Continuity Planning (BCP). Following these events, a guideline on BCP was issued.

Before the 7.2 magnitude Kobe earthquake, it was strongly believed that DRR had to be handled by the government. The worst earthquake that Japan suffered acted as a wake-up call reflected by a switch from a government only approach to a multistakeholder approach in DRR. The last decades saw the development of a nation-wide movement for DRR including citizens, corporations and authorities.

In 2004, the prefecture of Niigata suffered a 6.8 magnitude earthquake which highlighted the importance of BCP in time resumption. A factory was seriously destroyed but was able to restart business after one week. Customers were able to purchase goods in an acceptable timeframe and bankers were able to lend money for recovery thanks to BCP. Basically, BCP allows effective and quick recovery for the companies.

BCP must be elaborated according to BCP need and BCP investment. Thus,the important point is to assess the acceptable interruption time for the company depending on the nature, the products and services provided. Interconnected modern enterprises are highly dependent on supply chain. The current procurement system is based on the assumption that the supply chain is continual, so any interruption has negative effects. That is why supply chain factors must be taken into consideration when elaborating a BCP.

There are models to quantify the risks. For example, if Tokyo is to be hit by a violent earthquake, Japan will lose 80% GDP. So, the government has set various strategic measures to tackle DRR issues. There were two ways to do so, one was adopting a regulatory approach and another was to follow an encouraging approach. Japanese officials opted for an encouraging approach:
- publishing a checklist and a guidelines for large scale companies and SMEs
- encouraging large scale companies and SMEs to implement BCPs
- annual BCAO awards to highlight good practices (which were underlined in WEF reports)
- BCAO guidelines for SMEs
- policy incentives (for example BoJ offers low-interest loans for companies willing to implement BCP)
- create a sense of common practice among companies to have BCP

BCP can also add-value to companies by making them more reliable. Local banks are also interested in BCP, because they do not want to lose their customers, the local companies. Japan authorities and banks started to promote BCPs. In 2011, 72% of big companies had BCP when there were only 35.3% in 2005. In 2011, 35.7% of SMEs had BCP when there were 15.8% in 2005.

Now, Dr. Satoru Nishikawa identified a fourth reason for companies to have BCP. Implementing BCP will enable corporation to apply latest technologies for DRR. For example, real-time earthquake system can stop conclude, if Private-sector can understand DRR and regard DRR spending as investment, it will add-value to the company and investors will gain confidence. Not only companies will benefit, but all employees and communities around them. A responsible and reliable corporation will attract more investors and customers.

The insight provided by Dr. Satoru Nishikawa was very interesting. We can note that actions or measures are unfortunately always taken after disasters or big crisis and effort must be pursued. Complete protection against disaster is not possible not matter how, but risk management reduces economic and human losses. Japan is a good model for other countries facing same issues, even though the Land of the rising sun has the means and budget to implement it.

Reported by Vanessa Esteves