Incidents of kidnap for ransom, hostage taking, and other extortion tactics targeted at business are becoming more frequent and in more locations globally, according to an expert in the field.
Jean McDermott-Lucey, a vice president at insurer ACE USA, told the recent Risk and Insurance Management Society conference in Hawaii that as more companies become active in risky and unstable locations, risks have increased. However, the low risk/high reward for kidnappers is also driving the trend.
Extortion threats are also on the rise, McDerrmott added. The risks of corporate extortion were brought into sharp focus last year when Australia’s largest construction company, Multiplex, received an anonymous letter threatening to use snipers to shoot crane drivers on the company’s worksites unless the firm handed over $50 million.
Confectionary firm Mars was also the target of an extortion attempt last year in Australia.
But despite the regularity of extortion attempts, McDermott said many companies ignore it as a risk. “Regardless of size or revenue, any organisation can be compromised anywhere, at any time, and organisations that ignore the reality of global security risks do so at considerable cost to their human, physical and financial assets,”she said.
She added that kidnap and extortion risks particularly are particularly volatile and require deep understanding.
“Risk does not occur in a vacuum. Event-driven, it evolves at the speed of change, and is affected by human error, insurgency, political shifts, civil war, local customs and regulations, the goals of special-interest groups, miscommunication, and countless other variables,”McDermott-Lucey said. “Understanding global security risk requires awareness of the trends and events that impact risk levels, on home soil and overseas. When long-observed conventions change, risk levels change with them.”
She added that recent evidence showed that some professions previously thought to be relatively immune from kidnap and extortion are no longer as safe.
Additionally, status in business is also no longer an accurate way to assess risk. “For example, in America, the CEO of a US-based company may be a more likely target for extortion than a lower-level employee,” McDermott-Lucey said “When that same lower-level employee travels to Colombia, however, his kidnapping risk escalates, and rises higher still when he ventures outside recognised safety zones. In Iraq, an American sub-contractor trucking supplies to front line troops is likely to experience significantly greater risk than a Pakistani engineer working in a relatively safe section of Baghdad.”