How To Help Businesses In Thailand

Transcription

1 Innovative Risk Reduction and Management for Business Continuity The Thailand Case

2 Innovative Risk Reduction and Management for Business Continuity 2 Current Situation and Challenges Most natural disasters in Thailand are linked to water, e.g. floods, droughts or landslides. Large volumes of water flow down to the mouth of the ocean in Bangkok from the mountainous areas in the north with large rivers (i.e. Ping, Wang, Yom, Nan and Chao Phraya). This phenomenon takes place every year during the rainy season, influenced by the monsoon, which arrives annually between mid-june and October. In recent years, the amount of rainfall has increased; and the waters have exceeded the capacities of both rivers and reservoirs. Other factors are manifold, such as environmental degradation, deforestation, filled-in water ways; critical water and dam management. Especially the rapid urbanisation across the Northern provinces of Thailand and the Bangkok Metropolitan Administration (BMA) prevents the natural flow and drainage of the water. As climate change is likely to accelerate, risks and natural disasters will further increase. In fact, in-depth analysis to understand the underlying factors and their linkages is urgently required for sustainable solutions. The 2011 floods have been labelled the worst in five decades, killing over 800 people, affecting 65 provinces across the country (including the recent flood in the Southern provinces). This time the industrial sector was also severely hit. Many of the industrial estates in the central region were badly affected and many factories had to stop their operation for several months. According to the World Bank (December 1, 2011), total economic damage and losses from the floods stands at US $45.7 billion, while recovery and reconstruction requires US$ 25 billion. The most significant damage and losses were in the manufacturing sector, with a total of US$ 32 billion. 930 factories in 32 provinces were affected, including multiple industrial estates flooded in Ayutthaya and Pathum Thani Provinces. The Office of Small and Medium Enterprises Promotion (OSMEP) reported that a total of 240,000 small and medium sized enterprises (SMEs) in 32 provinces were hit by floods. 58,000 of them are in the manufacturing sector, while the most significant damage is in the food and beverage and textile sectors, each with around 15,000 SMEs. A total of 117,000 SMEs in the wholesale and retail sectors were affected, and further 19,000 in the hotel sector. The damage also had a negative impact on the employment of 670,000 workers. The floods resulted in an estimated 1.1 per cent decrease in GDP. The effects of this have been felt worldwide, as Thailand e.g. is the world s second largest producer of hard disks and many other electronic and industrial goods, not to mention the Thai automotive industry-the most important in SEA-where car production has decreased considerably. The Government of Thailand and its departments, civil society, military, industries, media and individuals have fought fiercely against the floods and mobilised funds, equipment and people. The efforts have prevented the impact from being worse. However, the floods have been a wake-up call and all stakeholders are now aware that Thailand s people and economy are highly at risk. There is a common agreement among all stakeholders that urgent and sustainable measures are needed to prevent similar disasters in future and to mitigate their negative impacts. Planned Measures The Thai government approved several plans which concentrate on the recovery and reconstruction process: a) by improving the existing flood prevention system and the coordination of water management, and b) by building awareness, confidence and capacities in flood prevention in communities, agricultural areas, and industry. The Flood Recovery and Prevention Plan, the Master Plan for Rebuilding and Water Resources Management, and the Action Plan for Integrated and Sustainable Mitigation of Floods will require substantial amounts of funds, which will be provided by the Royal Thai Government. With regard to the private sector, efforts will concentrate on industrial estates, where enterprises are concentrated. However, a substantial number of factories/enterprises, especially SMEs, are dispersed all over the country, outside the estates, in tourist destinations and within cities and municipalities. They need special attention, too, as they play a crucial role in supplying raw materials, products and provide services. They contribute to the supply chains or deliver inputs for industrial estates, export, assure transport or serve the tourism sector.

3 Innovative Risk Reduction and Management for Business Continuity 3 How to Support Enterprises Outside Industrial Estates: An Approach by GIZ With regard to natural disasters, GIZ has developed internationally recognised tools and methodologies for future oriented disaster risk reduction, (risk analysis, prevention measures, mitigation and preparedness, early warning, contingency planning) and urgent disaster management. For Thailand, addressing the challenges related to flood effects on Thai industry, Thailand can make use of these tools and methodologies to support the action and master plans of plans of the Royal Thai Government, beneficial to the private sector in general and factories outside the estates in particular. Within the framework of combining disaster risk reduction expertise with private sector promotion objectives, following services can be delivered for different levels and topics in Thailand: National level: Capacity building: to elaborate and implement together with the Ministry of Industry capacity building measures for factories at risk especially outside industrial estates Objective: Make factories/sme more resilient and autonomous with regard to disaster risk reduction and management Corporate risk management: Together with the Office of Small and Medium Enterprises Promotion (OSMEP), the Management System Certification Institute (MASCI), the Federation of Thai Industries (FTI) and other industrial associations to promote disaster risk management as new component of an integrated corporate risk management (e.g. applying ISO 31000:2009). Objective: Improve business continuity of enterprises at risk in and outside industrial estates. Contingency plans and early warning: Together with the Department of Disaster Prevention and Mitigation (DDPM) to elaborate and establish of contingency plans and early warning channels specifically addressed to SME (outside industrial estates and within). A specific emphasis can be laid on environmental issues as floods often trigger environmental disasters. Objective: Link SME inside and outside the estates to national communication and early warning channels and include SME in contingency plans, based on the Disaster Prevention and Mitigation Act B.E. 2550, 2007 and National Disaster Prevention and Mitigation Plan (NDPMP) B.E ( ). Climate change adaptation: Development of a strategy and support of its implementation for adapting SME to climate change and climate sensitive production. Objective: Support the Thai government and the private sector to take full advantage of new Climate related funds (e.g. Green Climate Fund, Adaptation fund) Involvement of science and technology: Together with universities and the Ministry of Science, facilitate scientific exchange between Thai and German universities with regard to applied science in disaster risk management on SME level. Intermediate level: Risk analysis: Support disaster risk analysis measures in existing and prospected industrial zones at high risk, using national science and technology and international expertise in land use planning, remote sensing, environmental impact assessment procedures. Objective: Increase knowledge and awareness of risks of established SME and avoid establishment of SME in high risk area. Streamline and facilitate measure for risk reduction (in and around SME) Capacity building and promotion of chambers / business and industrial associations: Introduction of risk reduction and management issues into the mandates and services (knowledge broker) of chambers and business associations. Micro level: PPP: Facilitation of (international) Public Private Partnerships Objective: Make international supply and production chains more disaster sensitive and resilient, and promote risk transfer / micro insurance schemes. Nationwide extension: Support and strengthen NGO (e.g. ADPC), cooperatives, informal SME groups and media for promoting disaster risk reduction measures especially in remote areas. Objective: Include remote and rural SME in disaster risk reduction measures and capacity building. These measures may be implemented as advisory inputs to programmes on sustainable private sector promotion in general (mainstreaming), as tools and methods for making industries and industrial estates more resilient to floods (corporate risk management), or as stand-alone national disaster risk reduction and mitigation programmes (e.g. on government level, DDPM, City of Bangkok).

4 Innovative Risk Reduction and Management for Business Continuity The Benefits The benefits of investments in risk management are immediate and long-term. Awareness and knowledge of existing risks will be established among the private sector, providing relevant information for business decisions ( living with tolerable risks or investing for reducing critical risks ). Through combined and coordinated measures by the government and the Private Sector, individual factories/ enterprises and industrial estates will be less at risk and more resilient to disasters. Although initial investments will be necessary for appropriate measures to be taken, SMEs will capitalise on those measures-and the national economy will greatly benefit from. As international companies consider other production areas with fewer risks, Thailand will regain a reputation as a country with a competitive and disaster-resilient industry. Examples from the Field All these tools and programmes have been implemented throughout the region (e.g. within Mekong River Commission) and beyond, successfully reducing risks to people, infrastructure and the economy and supporting disaster preventive reconstruction. GIZ on behalf of the German government and in close cooperation with national authorities, has implemented various programs on disaster risk reduction in Asia. For example, in Indonesia, institutional and organizational capacities of executive and implementing agencies and the population have been built up on national, regional and local levels in the fields of preparedness and early warning. Another example, for the Mekong River Commission, watershed management activites helped to improve the sustainable management of water resources at national and regional levels, thus contributing to a balanced water regime. In China, institutional development measures have strengthened the capacities of government authorities and the population for disaster reduction and management. And within the scope of a supra-regional programme, e.g. the needs of SME in Indonesia have been analyzed and solutions been developed in regard to their disaster preventive adaptation to climate change. 4

5 Innovative Risk Reduction and Management for Business Continuity 5 GIZ (German International Cooperation) in Thailand Thai-German Technical Cooperation began in 1956 with the first agreement on economic and technical cooperation. Each period has brought its own different development focus and projects have been implemented in many sectors, e.g. Rural Development, Agriculture, Fisheries and Food, Education, Health and Good Governance. The foci in the 1990s shifted towards the industrialisation process, economic development, state modernisation, energy, environmental and climate protection. In addition, regional projects such as German-ASEAN programmes, e.g. on sustainable port development and clean air, are also being implemented from the GIZ Office Bangkok. Example of Activities in the Fields of SME Promotion, Risk and Disaster Prevention and Management In respect to Thailand s floods, GIZ has already been involved in rehabilitation measures: a) to assess the damages of the industrial electrical system and thermal-energy generating device for flooded factories, and b) to provide recommendations on performance improvement for equipments/devices, which have been damaged by the flooding. In the past, GIZ has been also working very successfully with the Department of Disaster Prevention and Mitigation (DDPM), at the Ministry of Interior, in the area of community-based disaster prevention and mitigation during the post-tsunami supporting measures. With the Asian Disaster Preparedness Center (ADPC), a non-profit regional NGO based in Thailand, GIZ successfully executed various activities in disaster risk reduction (e.g. Mekong River Commission). Within the framework of the Thai-German Climate Policy project, flood management was also on the agenda of specific experience exchange activities with city planners, such as those between the Bavarian administration and the Bangkok Metropolitan Administration (BMA). This issue will be further pursued under the Thai-German bilateral cooperation programmes. In the areas of handling and transportation of hazardous goods and chemicals risk management, GIZ, the Ministry of Industry (DIW, IEAT), Ministry of Transport, SMEs and industrial estates (e.g. in Bang Pu) can also look back to a very successful cooperation during the last decade, especially in bringing Thai procedures and capacities up to international standards and building up competency and emergency response centres. In the field of SME Promotion, GIZ and its Thai partners have been successful in the implementing of many programmes in the last two decades. For example, the Thai-German Programme for Enterprise Competitiveness ( ) has considerably improved economic and environmental performances of agricultural value chains through business and eco-efficiency services. During , GIZ and DIW were also successful in developing best-available technology guidelines and implementing pilots to improve energy-and resource-efficiency and production processes in five energy-intensive sectors, e.g. in the glass, aluminium and canned food industries. For more information: The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) As a federally-owned enterprise, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH supports the German government in achieving its objectives in the field of international cooperation for sustainable development. As a non-profit enterprise in the field of international cooperation for sustainable development, it provides technical, managerial and advisory services to support complex development and reform processes. GIZ implements projects on behalf of the German government and international organisations (such as the European Commission, United Nations organisations, the World Bank, and the Asian Development Bank) as well as national governments and private-sector clients. In 2011, GIZ was operating in over 130 countries worldwide, employing approximately 17,000 staff members, over 60% of whom are local personnel. Its annual turnover in 2011 is approx. EUR 1.9 billion.

6 Contact GIZ Office Bangkok Mr. David Oberhuber (Country Director) E: T: (ext. 12) 193/63 Lake Rajada Office Complex New Ratchadapisek Road, Klongtoey, Bangkok GIZ Technical Experts in Germany Dr. Michael B. Siebert (Adaptation to climate change; Disaster Risk Reduction and Management) E: Birgit Seibel (Vocational Education & Private Sector Development) E: Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH Postfach Eschborn Germany