2011-05-25
By Deborah Ritchie
Will Europe respond to this week’s eruption in Iceland and subsequent ash cloud better than it did last year? A forthcoming Chatham House Report shows that in such crises our governments and global businesses are in a better place to cope for a week – but no longer. This is because the full consequences of worst case scenarios are rarely factored in, according to the think-thank.
“The ash cloud in 2010 is estimated to have cost the EU around $5-10 billion - the airlines bore about $1.7 billion in lost revenues and the tourism industry was hit hard,” explains By Bernice Lee, research director, Energy, Environment and Resource Governance, Chatham House. “The greatest impact felt by many organisations was in human resources - the absence of stranded employees and dislocated management structures – but some companies fared better than others having learnt lessons from 9/11, SARS and other shocks to aviation.
Businesses responding Chatham House’s survey on the impact of the ash cloud said that if the ash event last year had persisted just a few more days there would have been far more serious consequences.
”This is not surprising given our dependence on long supply chains and the just-in-time business model. Since the earthquake and tsunami in March, for example, Japanese national infrastructure has been struggling to cope with fraying supply-chains and significantly slowed production. Carmakers and mobile phone manufacturers across the world were forced to halt or slow production as inventories of essential products – electronic components, car parts and fine chemicals – were quickly run down. Major cities for production, trade and travel are often badly affected by any international shocks, irrespective of the source, rendering the apparent resilience of having multiple suppliers meaningless,” Lee added.
A major scenario planning exercise conducted by Eurocontrol, five weeks ago indeed suggests that the EU might be better prepared for an ash cloud disruption today than it was a year ago. “A key test for Europe now lies in whether member states will succeed in working together better in coordinating responses to ash threat and building public confidence in science-based risk management and planning,” Lee warns. “Policy-makers face again the challenge of communicating a complex problem to a frustrated public. The ash cloud last year demonstrated the complication of crisis management in the media-saturated world, where opinion can be swayed by the most audible, the most active or the most politically powerful voices rather than the best informed or the most legitimate. There are important lessons here on the advantages and potential pitfalls of engaging stakeholders and the public via social and online media.”
The forthcoming report shows a bias in the traditional media towards industry voices rather than those of the scientific community and policy-makers. More to follow on CIR...
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