Area Business Continuity Management, A New Approach to Sustainable Local Economy
H. Baba*, T. Watanabe**, K. Miyata**, and H. Matsumoto**
*Japan International Cooperation Agency (JICA)
Nibancho Center Building 5-25, Niban-cho, Chiyoda-ku, Tokyo 102-8012, Japan
**Global Environment Department, JICA, Japan
The flooding of the Chao Phraya River in Thailand and the Great East Japan Earthquake and Tsunami, both of which occurred in 2011, reminded us of the risks of business disruption and further impacts on national, regional, and global economies through supply chains when disasters occur anywhere in the world.
Considering the increasing economic losses attributable to disasters, the fourth session of the Global Platform for Disaster Risk Reduction (2013) aimed to promote resilience and foster new opportunities for public-private partnerships as part of an overall approach to improving risk governance. Furthermore, it highlighted that a growing world requires a new approach to development action, emphasizing the private sector’s role in managing disaster risks.
One of the most significant private sector contributions to disaster risk management is the creation of the business continuity plan/planning (BCP) and business continuity management (BCM) systems, which were standardized as ISO22301 and disseminated in many business enterprises around the world.
However, a BCP or BCM system has been neither formulated for nor implemented in most local enterprises in industry agglomerated areas, even though these are located in areas vulnerable to disasters.
Moreover, in the case of large-scale disasters, a business enterprise’s capacity may be too limited to mitigate damages and maintain operations through its own efforts, even if BCPs are prepared. The main reason for this is the disruption of public infrastructure and services.
In order to minimize the negative economic impacts or economic losses, particularly in the case of a large-scale disaster that disrupts the fundamental infrastructure in certain areas, it is important to conduct risk assessment on a proper scale and to prepare scenario-based disaster management plans for area-wide damage mitigation. In addition, it is essential to have integrated resource management and strategic recovery plans to support each enterprise’s BCM actions in coordination with public sector activities.
Considering this backgrounds, the Japan International Cooperation Agency (JICA) and the ASEAN Coordination Center for Humanitarian Assistance on Disaster Management (AHA Center) launched the “Natural Disaster Risk Assessment and Area Business Continuity Plan Formulation for Industrial Agglomerated Areas in the ASEAN Region” project in February 2013.
The project introduced the new concept of the Area BCP, which, based on a risk assessment of the area, designates a framework and direction for coordinated damage mitigation measures and recovery actions by stakeholders, including individual enterprises, industrial area managers, local authorities, and infrastructure administrators, to allow business continuation of the industrial area as a whole. The project also established Area BCM as a cyclic process of risk assessment, sharing risk and impact information, determining a common strategy of risk management, developing the Area BCP, implementing and monitoring the planned actions to continuously improve the Area BCM system, and coordinating among stakeholders, in order to improve the capability for effective business continuity of the area.
This paper aims to evaluate the progress of the project and to explore lessons from the applied process of Area BCM and its benefits.
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