Safeguarding Hawaii s Small Businesses from Natural Disasters

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1 Safeguarding Hawaii s Small Businesses from Natural Disasters September 23, 2015 Public/Private Sector Workshop Melissa White Senior Planner, SSFM International 2 1

2 Today s presentation will: Describe the Natural Disaster Economic Recovery Strategy (NDERS) and how it was developed Summarize our findings on strengths and gaps in small business preparedness, response, and recovery Present strategic issues and goals that informed the development of strategies Discuss important follow-on actions and how YOU can take part in implementation and prioritization of strategies 3 The State of Hawai i created a Natural Disaster Economic Recovery Strategy (NDERS) in 2014 to address pre-disaster operations continuity planning and post-disaster recovery actions for both public and private sectors, with a focus on small business. The State Office of Planning received an Economic Development Administration (EDA) Grant for this project and hired SSFM International, Inc. as its consultant. The NDERS is the first state-level economic recovery plan in the United States! It can serve as a model for other states and municipalities. 4 2

3 More than 99% of Hawaii businesses fit the Small Business Administration s definition of small business (<500 employees) More than 85% of Hawaii businesses have less than 20 employees 25% of businesses that close because of a disaster never re-open (Institute of Business and Home Safety) 5 Natural Disaster includes non-manmade disasters specific to Hawai i including hurricanes, high wind events, tropical storms, earthquakes, lava flows, wildfires, floods, and tsunamis. It does not include blackouts, acts of war, terrorism, disease epidemics, or acts of violence. Disaster Preparedness includes equipment, practices, and procedures that support readiness when a natural disaster occurs. Disaster Response begins during the event and continues immediately after the natural disaster occurs. Response includes a damage assessment, salvaging property, protection of undamaged property, and cleanup. Business Continuity is the strategic capability to plan for and respond to business disruptions, and to continue business operations at an acceptable level. 6 3

4 A multi-disciplinary Advisory Group was formed from stakeholders in the public and private sectors including: Federal Emergency Management Agency State Departments of Transportation, Health, Agriculture, and the Energy Office Civil Defense Agencies from four counties and the State of Hawai i as well as FEMA Disaster Experts: Red Cross, Pacific Disaster Center, University of Hawai i Sea Grant Extension Program, RCUH Economic Development: Economic Development Boards in all counties, Enterprise Honolulu Business Interests: Chamber of Commerce, Small Business Administration, Hawai i Business Roundtable Tourism: Starwood, Outrigger, and Sheraton Hotels, Hawai i Hotel and Lodging Assocation Energy: Hawaiian Electric Company, Chevron Oil Refinery Communications: Hawaiian Telcom, Oceanic Time Warner Cable Financing and Insurance: First Insurance, Bank of Hawai i, HMAA Transportation: Young Brothers 7 Provide input on the Natural Disaster Economic Recovery Strategy and its deliverables Identified candidates to participate in Focus Groups Reviewed and helped distribute the small business survey Identified information and resources to include The Advisory Group exemplified the kind of public-private, multidisciplinary efforts that build community capacity and support resilience 8 4

5 Existing materials were reviewed to identify best practices and inform strengths and gaps in natural disaster preparedness, response, and recovery: Plans, policies, and programs by government and private sector Business continuity information resources and programs Stakeholder interviews were conducted with government agencies and business associations within and outside of Hawaii 9 Seven Focus Groups were held within a two-week period during September 2014 on O ahu, Kaua i, Maui, and Hawai i Island to hear directly from small businesses on their perceptions, needs, strengths, and gaps in planning, preparedness, and recovery. Efforts were made to represent a range of business sectors: * Tourism * Defense * Energy * Technology * Science, Environment * Health and Wellness * Insurance * Real Estate * Agriculture and Food Distribution * Retail, Manufacturing, Import/Export * Professional Services * Business Associations * Landowners 10 5

6 What are the biggest risks to your business from a natural disaster? Has your business been impacted by a natural disaster and if so, which type? What were the associated impacts causing greatest harm to your business from the natural disaster? What are your most vulnerable assets in your business from a natural disaster? What do you do to protect your business from natural disasters? 11 Focus group participants taught the project team and their peers a lot about what they are doing to protect their businesses, and some shining examples emerged Best Practices in Preparedness: HC&S Maui HC&S has begun identifying fields and crops that can be planted quickly to provide food in the event of a prolonged emergency. In this way, HC&S as a large landowner is contributing to the resilience of Maui. Best Practices in Continuity Planning: Waterfront Plaza, O ahu As a commercial property, Waterfront Plaza maintains a disaster recovery plan and works with its tenants in rehearsing, carrying out, and improving its standard operating procedures. The goal is to stay fluid when a potential disaster or incident occurs and return to normal operation as quickly as possible. 12 6

7 Best Practices in Response: Wasa Electric, O ahu Wasa Electric coordinates with Hawaiian Electric Company (HECO) to make repairs and restore power during and following natural disasters. Wasa purchased twenty two-way radios for backup communications and use public and emergency radio channels to communicate during disasters. The company has two large generators with transformers at their facility. Best Practices in Recovery: Kīlauea Bakery, Kaua i The bakery has signed up with the local Red Cross to become a commissary in the event of a natural disaster. Through the process the business has acquired a generator and back-up fuel. 13 The focus group input shaped a statewide survey of businesses, conducted during October 2014 by SMS Research. The survey was sent to 3,363 businesses across the state by and in print form. Nearly 300 responses were received, half from O ahu. The survey characterized respondents by qualities such as business size, revenue, and number of employees Questions sought information on: * Impact of natural disasters on businesses * Perceived vulnerabilities * Primary causes of negative impacts on businesses * Business level of knowledge and preparedness * Resources utilized by businesses 14 7

8 Experienced in past decade High wind event 39% Hurricane 36% Tsunami 31% Flood 23% Earthquake 20% None 18% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 15 Business Preparedness Information Do not have enough Information Somewhat aware Need more information Have information, Not well prepared Enough Information and Prepared Larger businesses tend to be better prepared and informed. Smaller companies, especially those with less than 5 employees, are the least informed and the least prepared for a natural disaster. Most of these small businesses feel their business is too small to deal with disaster response 16 planning. 8

9 Vulnerable assets: IT equipment 78% Employees 72% Corporate records 47% Office furniture 43% Vehicles 40% Crops and farm related infrastructure 15% Vulnerable systems: Electrical power 95% Communications systems Landlines 83% Cellular 67% IT equipment 81% 17 Commonly cited sources for information and resources: NOAA Red Cross Nixle FEMA DEM Civil Defense Mobile phone notifications Businesses wanted a more centralized internet site with links for all credible sources of information; Businesses would like access to more up-to-date information on disaster conditions as well as postdisaster response and recovery efforts; Businesses said they would utilize text messaging to phones, other phone apps, internet services like Facebook and Twitter, and other social media sites. 18 9

10 First responders are well prepared, but Businesses are concerned about the State and Counties level of preparedness to restore power, communications, and clear roads. Businesses depend on the utility company for electrical power and have no back-up generators or to supply power independent of the utility. Most small businesses do not have emergency supplies of food and water at the business location for all the employees to last during the time of a natural disaster 19 Because of Hawaii's reliance on imports for food, there is serious concern about food security is an underlying critical issue All food, fuel, and supplies must first be offloaded on O ahu, then sent to the neighbor islands on barges. If O ahu cannot offload cargo, it will be difficult to receive any goods on the neighbor islands

11 Themes that emerged to improve business continuity in Hawai i These provide a framework for the Goals and Objectives, and ultimately the recommendations: Educate: information and awareness Regulate: mandate preparedness and resilience Incentivize: motivate businesses to prepare and plan Engage: forge beneficial partnerships and programs Plan: incorporate preparedness into planning and policy

12 23 Recommended Implementation Strategies Forty-Nine in all, prioritized and grouped by implementing entity: A. Nine strategies call for State or Federal legislative action to change statutes and ordinances, or provide funding B. Eighteen call for Government agency action to change administrative rules, policies, or programs C. Fourteen call for Public-private partnerships D. Eight are Private sector-driven initiatives 24 12

13 The private sector plays a critical role in restoring public confidence immediately after a disaster. The private sector owns and operates much of the nation s critical infrastructure. The Natural Disaster Recovery Framework recommends that local leadership should work with the private sector to develop post-disaster strategies as well as recovery plans. 25 Final strategy approved and posted on OP s website: Business Recovery Center established by Governor Ige in 2015 This conference! Bringing together public and private stakeholders to forge partnerships and identify solutions

14 Join the Breakout Sessions later TODAY at 1:00 and 3:00 pm with David Tarnas of Marine and Coastal Solutions International Participants will review the implementation strategy and work together to rank the recommendations

15 David Tarnas Marine & Coastal Solutions International

16 31 16

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