Lacking resiliency focus
Too often ports wait for a disaster to put in place proper resilience planning. Alex Hughes reports
In 2013, a storm surge on the UK’s east coast put many port installations temporarily out of commission and while many had emergency plans in place, not all had thought through how they were going to maintain business continuity during the subsequent clean up.
John Robinson, managing director of consultant Inoni, says that, while most ports have Emergency Response Plans (ERP) in place, too many rely solely on these, believing them to be the same as Business Continuity Plans (BCP) and/or crisis plans. However, this is not the case.
“They serve significantly different purposes: ERPs typically deal with short-term containable effects while BCPs are about the longer term. BCPs aim to keep the business solvent and active, focusing heavily on customer retention, restoration and cash flow over much longer periods, lasting months and sometimes years, where unique plant is damaged or destroyed,” he says.
As for Crisis Management Plans (CMP), these deal with extreme conditions posing an immediate threat to brand, reputation and belief in port capability, and focus strongly on communications with stakeholders. “An adequate BCP provides sufficient high-grade information and practical guidance to offer reasonable certainty of an acceptable outcome from all the (operational) risks faced. It dovetails seamlessly with the ERP and CMP and shares many of the same structures and information,” says Mr Robinson.
Horses for courses
Kamal Achuthan of University College London (UCL) also worries about the type of emergency planning many major ports have in place. “I’m not sure if all of these could be classified as resilience plans, which are a bit broader and should include wider port stakeholders,” he says.
He points to the 2013 tidal surge in the UK as the major incident that really brought this confusion to light in the country. Before that time only a few major ports had BCPs, or even the awareness of the need to put in place such measures."They had ERPs and safety management systems - anything that was needed as part of regulatory measures - but not continuity or resilience plans,” says Mr Achuthan. “In fact, some ports still believe that they are aware of all risks and are covered in every sense. What we have done is to inform them that there are unknown unknowns and that this is often due to the interdependencies between port stakeholders, there being a lack of visibility between them on exposure to risk and their risk management plans.”
Although he cautions against making sweeping generalisations, it does seem to be that only after major events have struck and business lost that many ports seriously consider continuity and resilience planning. It is also around this time that emergency plans gets revisited and revised.
There are emerging threats, too, such as climate change – which include more frequent storm surge warnings as well as cyber security as two relatively new elements that are also driving awareness for the need to have BCPs in place. An appropriate BCP could bring about joint measures being taken against risk and disruptions, which could save costs and also improve stakeholder relationships, further improving the efficiency of port operations, he says.
Rupert Johnston, director of consultant Risk and Resilience, believes that something approaching a BCP is in place at most ports, perhaps to meet legislation, even if that specific terminology isn't used to describe it. Most will have carefully considered the implications of disruption to their ongoing operations. While they may not describe it as BCP, they may have arrangements in place by dint of other sensible arrangements and the effective management of risk, he says.
More mature and resilient ports, he suggests, will deliberately develop a clear understanding of what constitutes ‘adequate’ to comply both with legislation as well as their own risk appetite and tolerances. “There may therefore be some ports where a narrow or localised vision of ‘adequacy’ falls short and so could be found inadequate in times of significant disruption,” he says.
Mr Robinson believes that port company directors do have some idea of their governance obligations, but many are simply too busy to pursue this aspect of the business, especially when they have a document in place that appears to tick all the right boxes. Indeed, he even speculates that many are prepared to take the losses following emergencies and carry on regardless, due to the mindset that suggests they could never have planned for the emergency anyway.
While Mr Robinson is the first to concede that it is difficult to plan with great certainty for so-called Black Swan events, it is still possible to plan and reduce the impact - or even gain advantage from - such occurrences. In fact, the total number of 'strategies' – which he defines as the 'big picture response to a class of disruption' - is typically not more than ten and not less than three, depending on circumstance, making them not beyond the wit of man to implement. Under consideration have to be the loss of a terminal or, indeed, the whole port, as occurred at Tianjin; loss of road access to the port for several months; sustained IT failure; widespread loss of staff; and so on. “The fact is, a port can and should plan for any class of disruption whose associated risk has not been formally assessed and accepted on behalf of stakeholders. To do otherwise is a failure of governance,” he says.
Mr Johnston holds a similar opinion: “Nobody can precisely predict the future; however, the impacts of disruption and the manifestation of risks can be modelled, mapped and assessed up to a point – and that point will be determined by risk maturity, resourcing and risk appetite. Any casual decision to avoid planning for what you cannot forecast because it feels too difficult is perhaps the biggest risk of all,” he says.
Any continuity, resilience or disaster plan worth its salt will therefore focus on the impact to critical areas, activities or resources, the loss of which would be intolerable after a certain point. International best practice and practical experience demonstrates that there is limited value solely focusing on the causes of disruption; assessing and mitigating impacts to within tolerance should be the primary driver, he insists. .
“Any organisation wishing to increase its resilience should strive to develop and always improve the connectivity and coherence between all protective disciplines, including risk management, emergency planning, incident response, safety, crisis management, IT disaster recovery, contingency planning, and business continuity – the list could go on,” says Mr Johnston.
DEVELOPING RESILIENCE PLANNING TOOLS
In recent years, the UK’s Department for Transport (DfT) has helped raise awareness in ports for the need to adopt BCPs. This has included running port resilience workshops; setting up of port resilience forums across the vulnerable eastern coastal region; and supporting academic teams to raise awareness and develop tools for resilience planning.
As part of this initiative, University College London (UCL) and the University of Nottingham have developed various methods and tools to improve the resilience of the port system as whole. MARS (Methodology for Improving Resilience of Seaports), for example, includes a port operations decision support simulation model to measure and understand consequences of a threat scenario - both to the individual stakeholders (and their dependencies) and to the system as a whole.
“As academics, our aim is to address the gaps in this area by developing methods and tools that will be knowledge transferred to the wider industry. We hope the industry will pick up these methods/tools and use them to address their specific needs, either by themselves or in collaboration with the consultancy industry,” says UCL’s Kamal Achuthan.
Furthermore, he argues that, “Investment in resilience planning should be seen as an asset. If seen from a financial perspective, return on investment happens only when disruption is prevented (or damage reduced) by the system. Hence, it’s always a tricky argument from a pure economics perspective.”
He notes that tools like MARS, which measure consequences/impacts of disruption, can better help in quantifying return on investment for a specific plan, even if the event doesn’t happen.
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