THE PROBLEM: SECURITY IN THE GLOBAL ECONOMY
Sooner or later many people either encounter situations in which they have to seriously consider their own personal security or engage in foreign business transactions in which security becomes an issue. It is an oddity of the American psyche that while television and movies have as their principle theme criminal activities and the apprehension of criminals, in daily life most Americans consider such dangers as illusory and business people, in particular, tend to ignore or trivialize potential dangers.
Most of the time that is an accurate viewpoint. The odds of becoming a victim of a violent crime in the United States are minute, particularly if one takes the precaution of avoiding certain neighborhoods at certain times and seeks to engage in business with ethical persons whose background is investigated.
But the increasing globalization of business results in two related events: one ends up doing business in foreign locales in which the various policing forces are either weak or nonexistent; and, secondly, entities operating in those locales engage in business in the United States and export to our nation the modes of doing business and illegalities of such locales.
Crime, itself, has become an international business. Both in terms of available markets, and in avoiding capture, it is common practice for most significant criminal organizations to have locations in numerous nations and criminals, like legitimate business people, see the value of locating their monies and investments in the relatively secure United States economy. Many governments abroad are linked closely to criminal elements or are, themselves, engaged in criminal activities. (North Korea and Nigeria and, occasionally the Ukraine, are examples of the latter.) The internet allows business to easily become international. Both legitimate and illegal businesses have utilized e mail and internet banking skills to engage in activities abroad without leaving home.
This enlargement of the potential criminal sphere is real. Organized crime from Russia and many of the former Soviet Republics is prevalent and operating efficiently in Moscow and St. Petersburg yes…but also in Los Angeles, New York, San Francisco and Boston. Recent bombings in Tel Aviv were related to that same group of Russian criminals. Columbian drug key pins have to launder money and do so by investing heavily in United States businesses not only in Florida but in California and the South West. China, a nation utterly devoid of an effective legal system, is rapidly becoming the major player in United States trade. One reason the various terrorist organizations have been able to utilize our international monetary system so well is precisely because the methods of international finance and investment were perfected by the various organized criminal elements who often do business with them.
Add to this various states which are, in effect, outside the law (North Korea, Cuba, Iran, etc.) and you have an international system of business in which a good percentage stems from illegal and unethical sources used to evading and, at times, breaking the law. The movies invariably show such persons as apprehended. Reality is that they are seldom apprehended and move from nation to nation as the authorities that do exist and seek to capture them move closer.
If you are in business, sooner or later you will almost certainly encounter them. You will probably not know it. If something goes wrong in your deal, you may know it and you may regret it greatly. And if you do not take care of both your assets and your own personal security in such transactions you face significant loss. A client once told the writer that when he was threatened in a small restaurant in Russia he thought his business partner was joking and even when it was made very clear to him that the threat was real, felt the entire exchange was “unreal,” a scene from a Grade B movie. Only when he returned to his hotel room and found it had been ransacked did he at last realize that the odd exchange was “real,” and begin to do more than react passively. Russian clients of our office, when told the story, simply shake their heads and comment that Americans are so naïve that they unwittingly expose themselves constantly to dangerous situations. One Russian client called Americans, “foolish children who think the world is like Los Angeles or New York. If it was like Los Angeles or New York we would not be here! You people go to places I run from, do business with people I fear and are astonished that bad things happen. If it was so easy to do business safely there, why do you think I have come here?”
THE PROBLEM: INTERNATIONAL CRIME IN THE UNITED STATES
The diversity of crime and unethical conduct even within the United States has been demonstrated to be far wider than often admitted. The massive embezzlements seen in all areas of previously respected institutions (from securities dealers to top corporate executives, from mutual funds to saving and loans) denotes an atmosphere in which the cultural restrictions of acceptable business ethics in the United States has clearly deteriorated. It is sobering that in the world wide survey of business ethics conducted by Fortune, the United States is midway down the scale of countries, above Mexico but far below such nations as Denmark, Sweden, Germany, Australia and Canada. The world considers the United States as only average in its ethical practices in business. And this study was conducted prior to the massive scandals of 2003.
Put simply, the staid institutions we once relied upon to be honest…were not. The bubble economy of the 90’s revealed a disreputable side to American business from the top to the bottom and the professionals who were supposed to protect us, from CPAs to lawyers, did not.
What all this means is that criminal and unethical conduct is increasingly a part of the business and personal world of far more people than would at first seem obvious. In the sense of protecting assets, due diligence and healthy cynicism is clearly required for any business person considering a business proposition and the steps we recommend to protect assets are discussed elsewhere in this website. (See our article on Due Diligence). In the more dangerous world of personal security it is often necessary to utilize professional assistance.
THE CONTEXT: MONEY AND BUSINESS AND THE BUSINESS OF TAKING YOUR MONEY:
How do these matters usually arise for a business or typical client who has sufficient assets to attract criminals? In our experience, in the business context it arises when an existing business relationship deteriorates and one seeks legal or contractual relief and discovers, often as a complete shock, that the business partner or the other party in a contract is criminal in nature and potentially dangerous.
Within the last five years this firm litigated over a dozen instances of criminal counterfeiters of product or thefts of intellectual property being “caught” in their activities, refusing to stop, and requiring personnel of our client (and our office) to visit locations both in the United States and abroad to seek to stop their continuing activities. In three of those instances professional body guards were needed for our client on those trips and there was little question that safety was at issue. In one of those cases, once access to documents were obtained, it was discovered that our adversaries were well aware of the itinerary and activities of both our client’s key personnel and attorneys in this office and were sending e mails and memos around keeping track of all such travel and the locations for reasons that we can only surmise.
Individuals, both in business and outside of business, face not only efforts to rob or embezzle sums, but the remarkable growth of a new international business: kidnapping. This has long been an active industry in such nations as Columbia and Brazil, but in the last three years virtually all of Latin America and the former Russian republics have a remarkably vibrant portion of their economy devoted to kidnapping middle class and wealthy people for regular income.
While only in its infancy in the United States, it has recently emerged in such previously exempt nations as Argentina and Mexico as critical problems. It will arrive in the United States in force in the next decade and, of course, is a current worry for those traveling to those locales.
This article shall concentrate on various simple yet effective precautions any individual or business can take to increase security both at home and during travel.
This section of the article deals with business or personal travel abroad. The next section will deal with domestic security precautions.
It assumes no particular itemized threat (which would correspondingly require involvement of either police authorities or private body guards) but simply a legitimate concern on the part of the individual or the employer that they may face danger from unscrupulous business or personal adversaries and a desire to minimize that threat. What can the average person do as common sense and affordable precautions?
1. STEP ONE: THE NATURE OF THE THREAT IN TRAVEL SECURITY- IDENTIFY THE PROBLEM and CREATE THE RECOVERY PLAN.
The most important step is perhaps the first one: to realistically and seriously assess precisely what danger one is considering. The nature of the threat determines appropriate countermeasures. Consider where the threat emanates.
A) First Part: Security and Travel Considerations:
If one adds dubious business connections to the mix as described in the introduction, it can be seen that travel can be a most risky business requiring significant alterations in your own activities. What makes sense?
The more you travel either on pleasure or business to certain locales, the more you must take security seriously.
For example, any moderately wealthy person traveling to Brazil or Columbia should be aware that there are thriving industries there that make a good living kidnapping family members of middle class or wealthy families (any American traveler is middle class or above to them) and these industries engage in thousands of such kidnappings each year. In Brazil it is typical for even moderately wealthy families to take significant precautions and wealthy families usually keep several hundred thousand dollars in ready reserves to pay off kidnappers. One successful and prominent attorney-land owner from Sao Paulo told the writer that he has an average of two kidnapping attempts on him each year, more if he ventures outside of Sao Paolo to his family farm.
In South Africa, on the other hand, the danger is from epidemic levels of violent criminal activities, usually violent robbery, and a corrupt police force overwhelmed by demands. The average middle class family subscribes to a “rapid deployment” security force that arrives with automatic weapons and that family avoids large sections of the cities after sunset. A car offers little security since most deaths from robbery stem from “car jackings.” Your closed window and locked door is of little use if a man with an AK-47 stands in front of your car ready to fire and another holds it to your driver’s window. And they care little if you “surrender” or not. By pulling the trigger they will get as much or more than they will get if you roll down your window. It is not like in the movies: if you accelerate you will almost certainly be killed.
Clearly the preemptive security measures required in the two examples above differ greatly. You must first educate yourself as to the danger you confront.
(1)Learn about the nation you are visiting.
Either by consultation with other people who have traveled to the locale or by consulting with attorneys or consultants experienced in international affairs find out if the rumors are true as to the dangers in the nation. Remember that most tourists have no idea as to the real dangers in a locale since they are taken to safe locations carefully protected by the governments who seek to protect tourism above all. To talk with your Aunt about her visit to the South African tourists’ parks to determine if Johannesburg is safe is useless and can be misleading. A visit to Rio will tell you nothing about doing business in Sao Paulo. Forget the tourist books and do not rely on State Department Travel Advisories. Get first hand knowledge from business people or professionals who actually do business there.
(2)Learn about the locale within the nation you are visiting.
Equally important is to plan your itinerary in advance, including potential changes to your itinerary, so you may plan if certain portions of your travel require additional security precautions. A visit to New York City is a visit to one of the safest business locations in the world. Forty minutes to the West is Newark, one of the most dangerous business locations in the United States with entire neighborhoods out of bounds after sunset. You do not need to know just about the nation but the locales within the nation and, within cities, the neighborhoods you must avoid.
Do not rely on local people you meet to advise you unless you know them well. An amusing and at times fantastic aspect of the Thriller movies beloved by Americans is to have a local friendly “native” take the neophyte American under his or her wing and protect them in their local environment. Such themes are so common in such movies that the “friendly native helper” has become a joke among the writers of screen plays. Unfortunately, in reality this seldom happens since it is the criminals who take the time and trouble to be available at airports and hotels, at restaurants and high end stores to engage in communications with the obvious neophyte traveler. Hotels usually have professional guides and advisors to assist as do local consulates. It may cost you some money to buy advice in this manner. It is usually worth it.
A key aspect is to make sure the employee adheres to your existing plans of visits and activities. In such locales as Nigeria or South Africa travel to a different neighborhood suddenly increases the danger of security issues. The employee must be made to understand that such additional activities require him or her to enlist additional security precautions per your security plan. The employee should have access to such professionals as necessary if the travel becomes required.
(3) Give “Constant Contact” Information and Procedures to Those You Trust.
A major problem confronting travel is that one does not quickly know that one’s family member or employee is in trouble. With time differences and the fact that contact is not often regularized, a person can be in danger for days or even weeks before anyone in the home locale realizes there is a problem. By then, taking corrective action or even locating the employee may be extremely difficult.
Used to America and our system of computerized identifications, most American business people are astonished when they discover that most of the world, outside of their five star hotel, does not use typewriters, much less computers, to keep track of people. If you disappear in most of the world, it is likely you will not be easily located by credit card receipts or telephone calls, the usual method to locate missing persons in the United States. Further, unless you set up a procedure so that people at home can know you are “gone,” no one may discover there is a problem for weeks.
A client of our office once took a job as a personal fitness trainer for a distant member of the royal family in Kuwait, was paid in advance handsomely, but consulted us as to an emergency method of communication should she “disappear” as can happen to women visiting locales in certain areas of the Middle East. We created a procedure in which she was to telephone a contact in the United States each five days at a certain time and agreed that if no contact was made, our office was to immediately take steps to determine her whereabouts and condition. This method was used by her regularly and while no “emergency” was declared, she later stated that she made sure that two men who were friends of her employer’s son who had assigned themselves to “escort” her despite her protests were made aware of this procedure and claimed their attitude towards her changed markedly and they ceased to visit her a few days later. Perhaps they were trying to protect her. She did not think so.
(If you create this check-in method, be sure to note in your calendar the need for calls or you may create a false alarm, an event that caused this office to incur thousands of dollars in costs when a business man, exhausted after a prolonged negotiation, neglected to call in.)
It need not involve checking in with professionals, of course, Carefully planned scheduling of calls can be to family members or the home office so long as they know who to contact if no call is made.
Suggestion: do not have a single missed call activate your “recovery plan,” since, with jet lag and poor telecommunications, it is relatively easy to miss a particular time and place. You should have a backup call, to occur relatively quickly after a missed call, to activate the recovery plan. Thus, if the call is normally to be every three days and one is missed, the plan should be a backup call within twenty four hours or your plan goes into effect.
Assuming travel within a nation or alterations of schedule are a likely part of the trip, then the contact information method must be altered from time to time but such alterations must be done in a manner that assures the home contact that the alteration derives from the person in question. Thus, if e mail is to be used, an easily remembered code must occur before any alteration. (An example we used was the simple note that “The documents have not arrived yet” before each valid alteration of travel plans.)
Equally important is that the home contact must have backups available should a local emergency make it impossible for him or her to be available to receive a check-in call. Our only failure in this entire method occurred when the company’s designated recipient of the check-in call was delayed on his own business trip and unable to be available to receive the message at the standard time…or in this case not receive the message…and our response was delayed by a full day.
We have found it vital to convince normally staid business people that these methods are both easily accomplished AND absolutely vital. It is important that those assigned to the tasks realize that absent their active and continuous cooperation, a call may be missed…in which case immediate and expensive responsive action will take place. Once they see what such action entails, they are likely to take it much more seriously.
(4) Create an Appropriate RECOVERY PLAN.
It is important to know precisely what to do if you receive word of trouble from the traveler or if a contact is missed and the backup contact is also missed. Indeed, the entire recovery plan should be planned in detail ahead of time with the correct contacts made in advance so that it is smoothly implemented without a sense of crisis or confusion.
What is the “recovery plan?” Circumstances vary, of course, but it amounts to a series of steps agreed upon by both parties as to what will be done if the contact is missed or a report of trouble is received. If the employee, him or herself, can explain the problem, then you can direct your efforts to resolving it directly. If the employee misses a contact call and backup, your recovery plan can range from having an agreed upon third party being contacted to commence local efforts to contact the missing person to the home office contacting the consulate and bringing in private security specialists with operatives in the particular locale. It should rapidly increase in scope if success is not achieved. A typical security plan is as follows:
- No contact call: wait until backup contact call. Alert management.
- No backup contact call. Call hotel and local business contacts. Alert management and family of employee. Call hourly for the remainder of the day. If still no contact;
- Call local authorities and US consulate. Alert private security people and have them stand by. If no recovery achieved within five hours;
- Activate local private security firm you already contacted and call consulate hourly.
- If no recovery within two days, send VP of operations to local area to coordinate.
TYPES OF CONTINGENCIES
Remember, the plan should not only relate to providing security for protection from criminals. It can relate to medical problems that might be confronted in certain locales; it can relate to civil insurrection or governmental corruption. It can even relate to the propensity of the employee abroad to engage in questionable activities. One client felt they had to send an engineer to Thailand, a nation famous for various drug and sexually related temptations and the employee had a long history of succumbing to precisely that type of activity. In that particular instance, when that employee was in Bangkok the “recovery” plan was sending another local agent from Japan to locate and bring back the wandering employee before real trouble began. (It still resulted in a later divorce for the employee but at least he was alive.)
On the medical front, it is vital to both determine if insurance is available to cover emergency care, the quality of emergency care that is likely to be provided, and ways to remove the employee to adequate hospitals in the country or outside the country if necessary. Many private organizations provide that type of planning for business travelers.
The important aspect is that the recovery plan be known by both the local employee and the home office, that the elements of the plan, from other local agents to personal security experts, be contacted before hand so that it is confirmed they are available, and that the plan have sufficient backup personnel so that it is workable in any circumstances.
When the call is not made from the employee abroad or a call is received that the employee is in trouble, the person receiving the call should have ready telephone numbers and an action plan already well considered and automatic in implementation. Let us emphasize that: the plan to recover must be created ahead of time so that the person acting to recover need not, at that often stressful time, face having to create plans or locate contact numbers for the professionals who will assist.
(5) Know What Authorities to Contact and When
At some point it may be necessary to call in the United States or other governmental help if private means have not been availing. This is not always as simple as it sounds and it is vital for the home office to not only have contact information for the local consulate or embassy, but to collect contact information for the appropriate local policing authorities and, if possible, engage in some basic information exchange with whatever local multi national is located in that locale to determine how they interact both with the local security forces and the local United States consulate. (In Indonesia, for example, the huge mines have their own security forces in compounds the size of counties and often engage in police work and security work without any involvement of the Indonesian authorities. )
There is no need to give out privileged information to the local authorities if that is important: merely indicating that personnel will be in such and such locale and you wish to know their experience in that area will normally elicit the type of information of use for your own planning.
Quite often local attorneys are also quite useful for obtaining such information and in many countries the Bar is small enough so that any prominent attorney will be well connected to the important persons to know in a locale. It is important to ensure that the local Bar is to be trusted, however. The concept of attorney client privilege and Code of Ethics is unknown in many nations and care must be shown in selection of the counsel.
Any professional security provider in the United States will have developed useful contacts within foreign policing forces or even military intelligence and those contacts can be vital if you wish to involve the local government. Such contacts should be arranged ahead of time with, at least, the local security professional making sure that such foreign contacts are available.
Once you implement private security professionals abroad, the expense can be significant. Nevertheless, such personnel can mean the difference between protecting your employee or family member or relying upon an often corrupt or inefficient policing authority. In some locales, the policing authorities may be acting in concert with the local criminals and to rely upon them is actually counter productive.
(6) Your Plan Should Have Programmed Steps of Escalating Efforts
Since most failures to call will be based on mistake or emergencies unconnected with security, your recovery plan should have staged increased levels of reaction. Typically, one first calls the local hotel or local business connection there and requests them to check up on your employee. Only if there is a failure in that regard do you move to the next step of contacting professional security personnel and/or local authorities. We have found it is useful to have deadlines by which, if no progress is made, one moves to the next stage of escalating efforts. By the final stage, it is common to have local authorities, the United States Consulate, local newspapers and professional security experts all assisting in your efforts as well as sending additional personnel within your own organization to the locale.
2. STEP TWO: EDUCATING THE TRAVELER OR EMPLOYEE AS TO ACTIVITIES ABROAD AND THE NEED FOR SECURITY
(1) Having Your Employee Take the Issue Seriously: the Hardest Challenge.
In our experience, the most difficult problem is that the employee considers all the security problems as “overreaction.” More particularly with male employees, it seems to them to show a lack of trust in their ability to handle their own problems and they resent it or evade the precautions the company has arranged. Provision of body guards or local security personnel is treated as an infringement upon freedom of movement and action.
It is not uncommon for employees to dismiss such personnel or ignore travel restrictions imposed by the home office and even senior executives seem to almost delight in “taking chances,” as if the exercise was some type of movie escapade.
The briefing necessary to achieve full understanding of the risks should include enough top personnel and professionals to make the right impression. In most circumstances the danger will not justify the expense of body guards but will require the employee or traveler to use more than typical common sense in his or her own activities abroad. Such common sense precautions are easily achieved if the employee is motivated.
We have found the following acronym useful as a basic rule for the employee or traveler in dangerous locales:
We call it “NASCAR:” It stands for:
NO UNPLANNED TRAVELING (Stay in the trip planned. No side trips unless OK’d by office.)
AVOID STRANGERS (No, it’s not like in the movies. The friendly local who wants to help you out or the lovely woman who seems remarkably interested in you…is not your friend.)
STAY IN SECURE LOCALES (Any nation has unsafe locations. To visit those is to give a tremendous advantage to those wishing you harm. Only go there if known in advance by the home office and with good reason.)
CALL THE OFFICE AS SCHEDULED (This is to avoid immediate implementation of the recovery plan described above.)
AVOID “SIN” (This not only is safer but avoids going to the insecure locales mentioned above. The “honey trap” is real. It has been attempted on the author twice. Being intoxicated is being stupid. Don’t be a sucker.)
RETURN AS SOON AS YOU CAN. (Get the job done. Get out. The sooner home and safe, the better for all.)
A useful method of training for those still not convinced is to hear of past examples of failed security precautions and problems and most experienced business people or professionals who travel abroad can provide some good histories that might impress the traveler. One client commented that a rather grim lunch of telling war stories of travels to the Ukraine did more to educate his CFO than all the more formal lectures his company has provided.
But formal instruction can be invaluable. Educate the employee or traveler as to what the actual danger is and why you are concerned. Have them understand how limited your ability to protect is and make it a “team effort” to achieve maximum security. And a good closing comment to the employee: “If you come back thinking we were frightened idiots and over reacting to the threat…then we have succeeded. We very much want that very success.”
Most companies and individuals find it worth while to have a very tough but to the point briefing with security professionals to emphasize to the employee the reality of the need for care if a particular dangerous situation is anticipated and if it is merely traveling to a dangerous locale, a less formal but still scheduled briefing by higher management as to the current condition in the nation or locale visited. A “travel packet” is often made up not only with the recovery plan in it but recent articles about the locale and its particularly dangerous aspects. The employee is expected to sign for the packet and keep the information strictly confidential.
And, of course, there is always the most effective warning: “Complying with the security requirements is an inherent part of your job and you will be judged accordingly.”
STEP THREE: JUDGING THE RISKS AND USING COST BENEFIT
What many businesses discovered after September 11, 2001 was that travel, while beneficial and at times necessary, is seldom vital and almost never a matter of life and death. Business travel plummeted and while it is recovering, many of our clients have determined that much travel was not as required as once thought and almost never required to a dangerous locale.
There are exceptions and some companies thrive in environments that other companies studiously avoid. Iraq in 2004-6 is a business opportunity for those companies willing to spend the money to provide adequate security and having employees willing to risk their lives for remarkable returns.
The overwhelming majority of companies and individuals, however, see little real benefit in earning an extra twenty percent return for the risk of death or maiming and the CFOs point out that the added costs and risk factors require a return hundreds of times greater than in a safer market to make it worth while.
For those companies or individuals engaged in business in noncombatant zones which suddenly become dangerous due to internal conflict or the emergence of criminal elements or corrupt governments, the issue is far more complex. Often a market exists that was once profitable (else why would the criminals try to steal it from you) or a kidnapping economy sprouts up in an otherwise lucrative locale (Mexico and Brazil, for instance) and the company or traveler is faced with the dilemma of how much to fight for the right to stay in that locale and when to abandon efforts to remain in the locale.
That decision making process should begin the moment the danger arises and must be dealt with in an objective…often brutally objective manner. One experienced international businessman told the writer that his criterion was very simple: would he have begun business in the country if he knew then what he knows now. If not, he abandons the business regardless of the local market. Most business people are not inclined to be driven out of a vibrant and growing market, however, and we Americans are inclined to treat any such attempt as a challenge to be met and overcome.
But, remember: this is business. This is not a movie, a game, a sporting event. The people confronted make their livings in ways and by doing things that the business person cannot do. They have a tremendous advantage and even if you win, if the cost was prohibitive you must determine if the cost benefit warranted it. And the death or injury of one employee cannot be evaluated in monetary terms: the ethical and moral obligations of any employer must include deciding when human life matters more than the attempt to save a market.
Yet at times and increasingly in this global market, a stand must be made. Especially with IP, the results internationally once a locale successfully steals it or drives you from the market can be catastrophic all over the world. Ensconced safely in Indonesia or Burma, using the internet to achieve sales, a semi criminal element who has obtained your product or market can easily gut your entire business. If your formula is being stolen by the distributor you created in Cambodia you have to protect it there or you will face illicit competition in three years in China, the following year in Argentina and finally indirectly in the EU and the United States.
Pick your battles wisely: but plan to have those battles. And a most critical weapon in your arsenal is providing that security to your personnel who must face the risks. The above procedures are a good beginning but be sure to consult with professionals before exposing your personnel to the dangers that international business regrettably can create.