1948 years ago in AD 63 an earthquake in southern Italy by the gulf of Naples seriously damaged the ancient city of Pompeii causing an undetermined number of deaths and spread out destruction, but the locals went to work rebuilding in the same spot until they were buried by the eruption of the Vesuvius volcano 16 years later in AD 79.
Galveston TX Hurricanes
Average Brushed or hit every 2.94 years Average Direct hit every 8.63 years
The Great Storm of 1900 - Sep 8th 1900 - Pop: 42,000 residents Category 4 @ 135 mph -Great loss of life between 6,000 and 12,000 individuals – officially 8,000
The 1915 Storm, August 17th, Category 4 @ 135 mph 42 people dead in the Galveston area
$60 - 1915 million dollars in damage
Ike Sep 13th 2008 - The third most destructive hurricane to ever make landfall in the United States Final landfall in Galveston Texas as a strong cat 2 with cat 5 equivalent storm surge winds extended 120 miles from the center.
Blamed for at least 195 deaths – 74 in Haiti and 112 in the USA 300 still missing. - Damages estimated at 24 billion (2008) US Dollars
Resulted in the largest evacuation in the state of Texas history and the largest search and rescue operation in US history
Chernobyl, An Experiment Gone Wrong
On Saturday, April 26th, 1986 at 1:23 am, one of the reactors at the Chernobyl nuclear power plant exploded. Ironically, the experiment consisted in testing how the power plant would respond in the event of an accident. The operators at the plant wanted to bring down the power output of the reactor to 25%, but over-confidence, poor training and poor knowledge of how a reactor works caused them to overdo it, and they ended up bringing down the power output to 1%. When they then tried to bring it up to 25%, the reactor overheated and exploded causing the worst nuclear accident in history.
Silent Disasters affecting small and medium size businesses
By: Roberto O. Ramirez Thousands of isolated incidents causing disasters are recorded every year in cities big and small across the country. Some of those incidents are caused by failure of equipment or infrastructures that have decayed due to lack of proper maintenance, replacement or simple neglect. Nevertheless, when equipment or infrastructures fail, they cause disasters of unimaginable proportions. Businesses of all sizes, families and communities are affected, leaving swaths of local grief and disruption in their path. Most of these incidents are barely mentioned or do not receive coverage on the evening news. Most incidents are eclipsed by new incidents, leaving its victims to deal with the aftermath and navigate the complicated bureaucracy of insurance claims or obtaining government assistance, if any, a daunting task indeed.
Complete neighborhoods go without electric power for one reason or another all across the country creating statistics to be repeated over and over again.
In July 2006, the Northwest part of Queens, New York experienced power outages, leaving thousands of Con Edison customers without power for several days. The power outages were caused by a fire that broke out in an underground conduit, triggering a series of cascading effects.
The Queens Power outages, which coincided with a heat wave in the New York City area, affected the neighborhoods of Astoria, Long Island City, Sunnyside and Woodside. Also affected were La Guardia Airport, which experienced massive delays and cancellations, parts of the NY Mass Transit system and Rikers Island, causing them to switch to backup generators
The fire initially damaged two of the primary electric feeders causing additional feeders and circuit breakers to fail to a total of five feeders. Further complications were caused by when workers trying to repair and to restore one of the five feeders to service caused an “inrush,” or a sudden surge of current. Ultimately, 13 of the 22 feeders failed at some point during the power outage, and on two occasions, 10 were out at once leaving about a hundred thousand residents without electric power for about ten days.
This outage was originally estimated by Con Edison (the power company responsible for the grid) to have affected only 1,600 customers. Con Edison defined a customer as a single edifice such that an entire residential building is counted as one customer. Con Edison later revised its estimates tenfold to approximately 100,000 residents.
Blackout Hits Small Business Owners Hard
Needless to say, people's and business’ dependency on electric power goes beyond the functioning of traffic lights, elevators and kitchen appliances. The lack of power puts in jeopardy the continuity of operation of businesses large and small, including hospitals and clinics that run life supporting and emergency equipment
According to official city estimates, approximately 750 small to medium-sized businesses without the cushion of corporate profits and business interruption insurance were affected by the blackout, with losses reaching into the millions of dollars. Businesses in the food service industry were immediately impacted and many were totally devastated. With the intense summer heat, it was only a matter of hours before the smell of rotting food to permeate the neighborhoods
Under the New York Public Service Commission and Con Edison rules, residential customers may receive compensation for losses such as food spoilage during power outages due to distribution system failures. A form with an itemized list of damages is required and for damages over $150, documentary proof is required. Businesses may receive compensation to up to $7,000 for documented losses of perishables. However, during a long term outage business losses mounted as businesses stay closed unable to open to receive customers. Many small businesses were not able to sustain continued losses and were forced out of business.
A Grim Outlook
This is not the first time that shortcomings in the power distribution system have caused problems. In 1999, as many as 200,000 people in the northern Manhattan neighborhoods of Washington Heights and Inwood lost power for more than 19 hours. The Public Service Commission, the state agency that regulates utilities, put much of the blame on aging or inadequate equipment.
According to Kate Asher, author of “The Works: Anatomy of a City”, much of the city's infrastructure "was designed 100 years ago, when the city was a fraction of what it is now". The failure to maintain and improve the aging infrastructure is being cited as a cause of the recent blackout -- and reason to fear that there may be more in the future.
The North American Electric Reliability Council, the group appointed by the federal government to oversee the North American power grid has also documented the situation and recommends the upgrading of transmission systems and building of new power plants. The Council reported in 2006 that “the power sector reliability is bound to get worse as electricity demand out-paces new generation capacity and that the power supply cushion in the country will drop to unhealthy levels.”
Old infrastructures combined with increased demand outpacing capacity and slow building of new generating plants are ominous of more pain and business disruption in the horizon.
With this grim outlook, other neighborhoods can expect to experience similar incidents as old infrastructures continue to deteriorate, fail and power generating problems permeate the landscape. A summer heat wave may trigger another power outage and cause distribution systems in other areas of the city to collapse.
Are You Ready?
As demonstrated in past incidents, it is the small and medium size businesses that suffer and are exposed to hardship if action is not taken before an incident occurs.
Planning for Businesses Continuity
Planning for business continuity may be one of the most misunderstood and dreaded areas that many business owners and managers face today. Why spend money and resources on a potential problem that may never materialize? Why plan for an outage that may never happen?
Business Continuity Planning (BCP) is not a profit-making endeavour. However, forming and implementing a strategy can result in cost savings and cost avoidance. The cost of not having an effective strategy greatly exceeds the cost of creating one.
If your vision of BCP is one of insurance, it is possible that you are relying on expectations that your insurance contract may not cover, and if your concept of BCP is one of overhead affecting your bottom line, it is not where it belongs.
You cannot prevent disasters from happening, but developing a plan in today’s business environment is a need, and no longer an option.
Being prepared to take control of your actions and protect your business during disasters takes planning.
Get Informed, Get Involved, Get Help
Contacting your local emergency management office may be the first step in learning what plans and resources are available in your community.
Get yourself involved with community preparedness and the development of your own business continuity plan. Getting your employees and family involved and prepared for disasters may be the difference for survival or between a calm assured response and chaotic disarray.
In today’s business environment, where additional responsibilities may strain your workforce and resources are scarce, there are consulting companies that can assist you in the development of your plan.
The process of developing Business Continuity processes is about earning a return on investment, not in the profit sense of dollars that drop to the bottom line.
The return derived is:
• Reduced levels of risk and potential injury to your people, facilities, systems, and processes.
• The lessening of the likelihood that such injury will impair, or halt the intended functioning of your business.
• Readiness of having alternate means for the business to function at acceptable levels.
• Being able to deliver products and services during the period of disruption.
• Correcting problems and bottlenecks that are normally identified in the BCP process, thus streamlining your operation and reducing potential threats to your business.
• Lastly but of equal importance - enabling your business to restore operations in a timely manner, after being affected by a disaster.
The process of creating an integrated workable plan and recovery strategy is not about finding the means of minimizing the cost of the plan, but, developing the capability for the business to survive in adverse environments and for some to comply with internal and external audit and/or regulators.
Now, imagine that you have planned and implemented an effective plan and have alternate capability to prevent major disruptions;
Think of all the positive aspects.
• The sense of preparedness the organization, the board of directors and investors will derive from the assured continuity process and having their assets protected.
• New customers you can generate, especially if your competitors are not as well prepared.
• An advertising aspect that emphasizes the protection of your customer’s investments, and promotes the continuity of your products and services.
• The minimal disruption your business will experience in a disaster situation, by having a plan ready for execution.
• The minimized impact on your business ensuring large degree of transparency to your customers and users in a disaster situation.
It makes perfect business sense!
Roberto O. Ramirez
President of Enterprise Risk Worldwide, Inc.
Has over 25 years experience in Business Continuity Planning and Information Technology
"Rikers Island jails still running on generators," Newsday, 7/21/2006
"Power outage hit more than 100,000, mayor says," Newsday, 7/22/2006
"Queens Areas Stew on 4th Day Without Power," New York Times, 7/21/2006
Con Edison's "Initial Report On The Power Outages In Northwest Queens In July 2006"
10/16/06 10:25 EDT
Copyright 2006 The Associated Press.