Turmoil in Latin America

By Robert Elliott

Companies doing business in Latin America have been taking some steps to deal with the security challenges at hand and to head off those that appear to be on the horizon.

Diplomacy. Dogged diplomacy is one tool being put to use. “In these environments, there’s a realization [firms] need to be a lot better at external relations, specifically their liaison with the government,” says SOS’s Cameron.

Companies are putting a lot of effort into regularly meeting with government representatives to forge relationships and understand what their needs are, he says. They are launching community-relations strategies that cast governments in a good light, allowing the state to demonstrate to the local population that they are supporting the growth of the country, Cameron says.

Contingency planning. There has also been a greater focus on contingency planning to brace for worst-case scenarios. One new twist is to map out evacuations of executives to domestic locations, rather than spiriting them out of the country, since “there is no guarantee they will be let back in if they are pulled out,” says Cameron.

Case in point: After political protests roiled Bolivian capital La Paz during the past few years, many firms moved offices eastward to Santa Cruz. Ducking confrontations there and elsewhere has become a common theme.

“We see a lot of attention being focused on avoiding protests by following news and keeping up on the day-to-day situation,” says Andy Case, a Latin America analyst at iJET Intelligent Risk Systems, a travel intelligence firm based in Annapolis, Maryland.

Company security directors monitor roads leading to airports and scrutinize the safety of routes taken between the office and employee homes. They also develop strategies to deal with possible civil wars. Firms have strengthened their ties with local guard force providers and international security companies.

Physical security. Physical security has also been bolstered in some areas.

Quiroga says Bolivian firms are boning up on security measures they had previously ignored. Some are looking into electronic security systems, while others are replacing old access control networks with modern magnetic card systems.

“In Bolivia very few companies paid attention to security or safety. But now with the new government, companies are concerned about their situation, and they are considering security measures,” Quiroga says.

In the eastern Bolivian gas fields, perimeter security has been upgraded around installations following infiltrations by local groups that demanded a greater share of the profits. To try to head off future contention, one company that operates a gas well there removed all of its overseas nationals, and staffed the facility with local managers.

Local recruitment. In some countries with good educational systems, such as Argentina, multinational firms are predominantly hiring locals, right up to senior management. “They know how to take care of themselves and move around,” says Toby Friedl, a Latin American analyst for iJET.

While employee background checks may not always be conducted by the firms, they are careful about whom they choose. Job hunters often have to present transcripts or diplomas to back up their stated educational record, along with documentation proving their history with previous employers. “Many companies also ask for photos as part of the applications to see how you present yourself,” says Case. “In general, much more scrutiny is used across Latin America when hiring local nationals compared to the U.S. or western Europe model.”

Awareness. Companies are also counting on security directors to brief staffers as thoroughly as possible on dangers they may face in any particular country. Security experts in some areas are putting companies on guard about murder, rape, pickpockets, and road cargo theft, for example.

Others hire security firms to update their employees. “We give them the dos and the don’ts,” says Vance’s Fajardo-Guerrero. “It sounds like a cliché, but knowledge is power. If you arm your employees properly, they will be fine.”

An example of a specific recommendation for those traveling to Mexico is to avoid calling the police in times of trouble. “Don’t call the cops, because the corruption there is so rampant and intense you may get into more problems,” says Fajardo-Guerrero.

In dicey places such as Caracas, security companies generally recommend not taking cabs at the airport. Companies that ignore the rule stand a chance of seeing their employees kidnapped.

“A lot of attacks are occurring between 1 and 4 in the morning on travelers who are poorly prepared and don’t have prearranged transport from the airport to their hotels,” says Cameron. “We’ve seen companies have four to five such incidents in the last year.”

Executive protection. Friedl says he has heard of at least two cases where important executives have canceled trips to Venezuela because they have been advised against it.

Those who do venture to Caracas or other Latin American hot spots are relying on more protection. “Executive protection is being used a lot more,” says Friedl. In Argentina, that means armored cars, which have also become more common in Mexico and Brazil.

“Now if you have money in Argentina, you see more bodyguards and tinted windows,” says Friedl. “People are careful about what sort of vehicle they choose. You won’t see that many luxury vehicles in Buenos Aires because of security concerns.” One of iJET’s clients in Buenos Aires actually picks out the types of cars employees are allowed to drive.

Security professionals throughout the continent are also encouraging executives—particularly those in the petroleum industry—to keep a low profile. As in Argentina, they are being advised not to travel in expensive cars, throw lavish parties, or show up in newspaper society pages. “In some cases, they are already lowering their profile; in other cases, they will,” says Quiroga.

In my own experience traveling in Caracas, I recall being advised to avoid loitering in front of boutique windows in the downtown shopping district, as thieves interpret that as a sign of wealth.

Executives in the region are being shielded from crime in other ways as well. At Maiquetía airport in Caracas, kidnappers or thieves have been known to read names on welcome signs held up in the waiting area, then intercept the indicated person and pose as their contracted ride. When the businessperson unwittingly goes along with the wrong party, he or she is robbed.

To prevent such incidents, iJET has instituted a system where clients are greeted with a password, ensuring that the stranger at the airport is the one who is supposed to be picking them up.

Executives are warned against traveling too close to the border of Venezuela and Colombia because of rebel activity, and they are advised to dodge rural areas. Local businesspeople carry their car’s registration in their wallets in case their vehicle is broken into.

There are indications that while kidnappings are down in some places, like Argentina, they are up elsewhere, like Venezuela, where the involvement of local police is suspected.

In addition to prevention and deterrence, companies are preparing for the worst. Kidnap and Ransom insurance is being used for high executives, says Friedl.

Overall, while making decisions about business and travel, companies need to constantly monitor situations on the ground. They can get some information from the State Department and the Overseas Security Advisory Council (OSAC). They can also look to private sector sources, such as iJET and Control Risks, which put out country security ratings that have proven to be a staple element within client portfolios. At the time of this writing, iJET gave Venezuela a 4 on a scale of 1 to 5, with 5 being the most dangerous. The ranking takes into account crime, security services, civil unrest, terrorism, kidnapping, and geopolitical risk. Bolivia was also given a 4.

Despite the shifting political scenario and waves of crime, firms with established operations in Latin America are not likely to give up on those countries. “They are used to the turbulence that comes and goes in a periodic manner throughout the region,” says Simon Strong, managing director of Latin America and the Caribbean regions for Kroll Associates Inc.

Security pundits agree that the main objective for these entrenched firms is to stay on top of regional developments to monitor operations and employee safety, and to provide staffers with security briefings and updates. “Clients are adjusting security schemes to the situation,” says Fajardo-Guerrero. “They are closely watching everything.” They will adapt.



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