An industrial fire, or indeed any major incident will significantly disrupt a business. How well prepared and resilient that business is, will be critical in determining the scale of the impact. In this article, we will look at the effects of industrial fire and what businesses can do to improve their resilience. But first, what do we mean by resilience?
Operational resilience is the ability of an organisation to rapidly adapt to changing environments allowing the business to continue to operate, provide services, manufacture and/or distribute products. A truly resilient business will see opportunities, even in difficult times, reap dividends from change and ultimately grow. Resilience is an organisational feature - the way an organisation is structured, its culture and the ability of its leadership to drive that culture and ensure it is embedded across the organisation are all attributes of a resilient business.
Resilience as a concept has evolved significantly during the early part of this century. Emergency planning and the Civil Contingencies Act of 2004 was born around the turn of the century, prompted by terrorist activity and major incidents in the previous decade. In the UK, this led to local resilience forums and the first semblance of resilience planning. Focus was very much on dealing with incidents and disaster response management where large industrial sites would be viewed as potential risk locations, particularly if the processes within comprised use of chemical or hazardous materials.
Around ten years later the United Nations introduced the much broader concept of disaster risk reduction. This brings us closer to resilience, as it considers localities more widely as economic areas and explores their assets with citizens and communities in mind.
In the following decade, the concept of resilience has further evolved. It considers not only the need to respond to and recover from incidents, but also to plan ahead to reduce the impact from incidents, more readily bounce back from them, or even seek out opportunity arising from them.
For businesses this means not only considering the risks to business operations but the wider impacts of its operations, for example, on the environment or the communities around them. Increasingly, businesses are also needing to consider how these wider aspects can impact their operational resilience, for example, the effects of a changing climate at a vulnerable site.
Resilience planning now involves all sectors, rather than just emergency services and public sector responders. The contribution of the business community in enhancing resilience will increasingly be expected in a whole-of-society approach.
Business as part of a whole society approach
In response to this evolving resilience concept, the UK government, in 2021 held a Call for Evidence consultation on a proposal to introduce a National Resilience Strategy and to review the Civil Contingencies Act (2004). A report on the findings of the call for evidence was then published by the Cabinet Office in December. Highlights included:
- A majority believed that more can be done to assess and communicate risk at national and local levels.
- There was a need to have everyone play a part in improving the UK’s resilience with support for a whole-of-society approach and active partnership from individuals, businesses, the voluntary sector, community groups, and academia.
- The Civil Contingencies Act has broadly been working well, although, the guidance supporting the Act could be updated, including that for Local Resilience Forums.
HM Government is set to review and analyse all responses to the Call for Evidence with the UK National Resilience Strategy expected to be published in 2023.
Many organisations will have processes and systems in place to assess risk and enhance resilience. But these are not always enough to avert disaster. The death of thousands of people at Bhopal in December 1984, following a leak of gas from the insecticide plant that was owned by the Union Carbide Corporation, occurred not because the risk was unknown but because of substandard operating and safety practices at an understaffed plant. It was down to the negligence of the Indian subsidiary whose focus was on productivity and cost rather than safety or the residents of the city around about.
More recently, a fire at a firework factory in Enschede in the Netherlands in May 2000 led to a catastrophic explosion occurring at the SE Fireworks depot. SE Fireworks was a major supplier to pop concerts and major festive events. Prior to the disaster it had a good safety record and met all safety audits. It was, though, in the wrong place, or rather, residential property had migrated towards the site over many years. The fire led to an enormous explosion which killed 23 people including four firefighters and injured nearly 1,000. A total of 400 homes were destroyed and 1,500 buildings damaged. The first explosion had a strength in the order of 800kg TNT while the final explosion was within the range of 4,000-5,000kg TNT. The biggest blast was felt up to 30 kilometres away. Fire crews were called in from across the border in Germany to help battle the blaze before it was brought under control by the end of the day.
These are examples of extreme significance and although thankfully rare, an indication of what can go wrong if business planning is insufficient. Incidents, and most regularly fires at industrial sites remain common and can have significant local impact even without loss of life. Risks to public health, damage to neighbouring property and disruption to local businesses can have longer-lasting economic consequences and clearly widen the effect of the incident beyond that of the business implicated.
What businesses can do
This is where the culture of the organisation is an important consideration. Culture is something that comes from the top of the organisation. By defining its own culture, the Board, or the highest governance body within the organisation, provides the focus for the whole organisation. The Board needs to set the culture that lends itself to a resilient workforce. Having a risk register is fine, but just bringing it out for review from time-to-time will not make the business resilient.
A fire on the premises as a risk is predictable, but the business needs to go beyond dealing with fire itself and immediate safety concerns. The consequences need to be thought through and many of these will be specific to each location and business. This can be a wide variety of issues, and clearly operational disruption will be one. Businesses, though, need to also think through reputational risk and communications. Financial insecurity is another – how long would your business run without revenue and could it look at diversifying? An industrial fire doesn’t even have to be at a business’ own premises to affect it. The consequences of disruption to supply chains from a fire elsewhere or from other nearby industrial premises, could have serious implications for the operation of a business.
Preparation, therefore, is key to resilience. BS ISO 22301 is the international standard which specifies the requirements for business continuity. Business continuity certification can help to provide a process to follow and encourages businesses to take a structured, methodical approach. A management system will help to identify potential threats to the business and build the capacity to deal with unforeseen events.
This is the kind of planning that will help businesses to better understand what risks could have the most significant consequences for their operational delivery. It to include the unexpected as well as the more predictable. A closure of an industrial premises - due to fire or any other reason – is a potentially catastrophic event for the business. Planning for such an event is critical if the business is to survive. Not only does this allow a company to assess where else and how it may run its operations if its primary location is disrupted, but it allows the company to consider what support systems, such as IT, may be needed for this. The plan also needs to consider who else may be impacted, e.g. later in a supply chain, and the importance of communications with affected businesses and customers. If the pandemic taught us nothing else, it showed how unprepared many were for not being able to access their usual workplace. Fortunately for many in business during the pandemic, that provoked a national response. When it is only your business’ site that is implicated the responsibility for planning to cope lies solely with the business concerned.
Testing of systems is very important. It may sound simple, but it is effective and essential. It need not be frequent, but it does need to be regular. Without the testing of systems, it will not be clear if the systems will work when needed, therefore worst-case scenario testing is recommended.
Insurance cover is essential if a business is to enhance its resilience. But it needs to be the right level of cover, too. For example, would the business be covered if faced with being denied access to their property in the event of fire in an adjoining or nearby building? If your business was affected by a fire, would the insurance company’s claims processes be straightforward and accessible so that a business can gain access to vital funds and insurances when it is most needed? And will the insurance build back better and adapt to the change, or is it just a like-for-like replacement? Insurance companies, too, need to embrace the desirability of resilience and encourage and incentivise this in their own policies.
The risk of fire is a reasonable one and businesses can take action to reduce this. Fires are preventable but no-one can expect to always anticipate what shocks and stresses may be coming round the corner.
Resilience, therefore, is thinking in greater detail about what can disrupt a business over and above the immediate consequences and what those consequences will be. As this article has demonstrated, benefiting from being resilient is about more than just being able to deal with the incident. Planning must take into account the wider consequences from shocks and stresses and walk through all parts of the business, all sites and all dependencies and act on any that are critical for its operations.
Being prepared to adapt to predictable events – as well as those events that are less likely – is essential if a business is to be able to not only bounce back but survive and thrive in a world increasingly defined by disruption.
Accessing resilience best practice is therefore vital and allows businesses to be properly prepared to face shocks and stresses, for the betterment of both the businesses themselves and the wider communities in which they operate.