Assessing risk abroad starts at home

Assessing risk abroad starts at home
Thales Canada''s GC Daniel Marion updating their risk assessment and business continuity plans is a practice engrained in his company''s culture.
For Canadian companies doing business in high-risk global locations general counsel are taking on greater responsibilities to help keep the organization and its people out of trouble before it happens.

Whether it’s a natural disaster or a terror attack, companies should constantly be updating their risk assessment and business continuity plans when any work is being conducted outside Canada. That means keeping up with what internal clients are doing and understanding what their objectives are.

It’s a practice engrained in the culture at many global organizations including aerospace company Thales Canada Inc., says Montreal-based vice president and general counsel Daniel Marion.

“Globally we do, and in Canada we follow the [Thales] Group policy/guidelines, for example there is an updated list of risk destinations. Some are ‘no go’ while with others we have to notify group security and indicate the itinerary, which has to be approved by local management as a required trip,” says Marion.

Recently the Association of Corporate Counsel held a session in New York about the challenges of investing and doing business in Africa. In light of the Westgate Mall attack in Nairobi it drew considerable interest from in-house counsel responsible for risk management globally, says ACC president and CEO Veta Richardson.

“As companies do business around the world they have to be increasingly focused on these kinds of things,” says Richardson. “Security and executive protection are all top of mind for general counsel these days.”

She says while general counsel are routinely involved in conducting due diligence on a variety of matters, conducting assessments on local partners that may be working for the company abroad is now an even greater consideration.

“Moving into emerging markets means there may also be a need to use international arbitration to resolve disputes and consider what are the best approaches,” says Richardson. “They may need to look at strategic options with respect to contracts, and insurance issues associated with doing business in an emerging market.”

Michael Torrance, an associate with the health and safety practice at Norton Rose Fulbright Canada LLP, says risk management abroad should also be viewed as protecting the well-being of employees.

For specific industries, he says there are international guidelines being adopted including an agreement called the Voluntary Principles on Security and Human Rights specifically designed for extractive sector companies. Many mining companies have signed onto it, including Rio Tinto, Barrick Gold Corp., and Talisman Energy, among others. Torrance says it’s indicative of the voluntary approach companies are taking to address these issues while still preserving the security of their operations.

“It involves an interplay between strategies for securing their personnel, which may necessitate securing third-party security firms. There is a balancing act between that and conducting risk assessments on those companies to ensure the company doesn’t become complicit in human rights violations,” says Torrance. “That’s another thing for the general counsel to help manage because they do have an imperative to ensure the security of their workers and facilities.”

In Ontario, there is workplace violence legislation that requires risk assessments of the hazards that exist and the best ways of mitigating those risks from happening. While it is legislation specific to Ontario, it’s based on a best practice about how to address workplace hazards and can be extended to operations overseas.

In some cases, workers’ compensation legislation has been used to decide a case that originated with an employee abroad. In 2005, the Ontario Workplace and Insurance Appeals Tribunal upheld a worker’s entitlement to benefits for workplace injuries he sustained in the course of his job as a truck driver for a Canadian aid organization while working in Albania.

Staying on top of business continuity plans can help ensure the company is ready should there be an incident.

“It allows a company to be able to respond to an unexpected incident, which could be a terrorist attack. When something like that happens the company has to have a plan that will allow it to take whatever steps it needs to continue but also respond to reporting obligations if, for example, there are injuries,” says Torrance.

Richardson says while in-house counsel do look to external counsel to offer advice on risk management from time-to-time, it is the in-house team that is best equipped to assess impact and scope.

“They’re looking to outside counsel to supplement additional specific knowledge to help manage that risk overall,” she says. “But it starts with having a strong compliance-focused organization and making sure that you maintain strong board and executive support for a robust compliance program and structure. So one lawyer or many can’t know all the nuances of law around the world but they can keep their finger on the pulse of what’s going on from a planning perspective and keeping abreast of what’s developing on the business side.”

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