Area Business Continuity Management
Scalable Cross Sector Coordination Framework of
Disaster Management for Business Continuity
Japan International Cooperation Agency
Why the “Area BCM” initiative?
Climate change, rapid urbanization, industrial agglomeration
and unmanaged development intensifies magnitude of recent
disasters. And the global economic loss is remarkably increasing.
As industries are connected by supply chains and trading
networks, damage affects beyond boarders. And its impact may
spread throughout the world.
Since a disaster has a significant impact on the local economy,
employment and population outflow, business continuity and
early regeneration of local industry is essential for
reconstruction and normalization of socio-economic activities.
Many disaster management forums such as UNISDR highlighted
the importance of private sector’s role to increase economic
resilience and to foster new opportunities for public private
partnerships as part of an overall improved risk governance.
Billion US$ 400
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0
1950
2
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1990
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2010
Source: large photo: AFP PHOTO / Pornchai KITTIWONGSAKUL (Photo credit should read PORNCHAI KITTIWONGSAKUL/AFP/Getty
Images), Small photo: AP Photo/Apichart Weerawong, Chart: Global economic loss of disaster by EMDAT
Background of “Area BCM”
The private sector’s role, in reducing damages
from disasters and in quick restoration of
business operation, is basically fostered by
the Business Continuity Management (BCM)
System of individual business organization
which is standardized as ISO22301.
BCM refers to any effort that aims to achieve
business continuity by doing whatever
necessary to protect company's production,
information, equipment, and employees.
However, we learned from the recent cases that when
a major disaster occurs, the damage extends to roads,
power supplies and other infrastructure as well.
Disruption of those common resources often becomes
bottlenecks for effective business continuity in
widespread area. Therefore, efforts of individual
companies, even if BCMS are prepared, are not enough
to achieve the desired level of business continuity.
Thus, a new concept of area-wide business continuity
management is required.
JICA, in 2013, proposed the concept as Area Business
Continuity Management.
Source: photo: ChiefHira, Internet, 7 June 2011
chart: H Baba, 2014
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Area-wide Business Continuity
Probabilistic analysis of risk and impact is the bases of understanding weakness
of industry in an area of concern and formulating area-wide plan of disaster
management.
Management of critical external resources aims to effectively share the
common business resources among stakeholders in time of a disaster and to
strengthen the availability of the resources. Differently to Internal resources,
such as company’s buildings, facilities, parts and row materials, the external
resources are managed normally by public sector and not controllable by
private enterprises. The external resources are also distributed not only for
business purposes but also for securing community life. Therefore, in case of
emergency that imposes limited allocation of those resource, collaborative
efforts are required between the private sector, public sector and the local
community to maintain the critical external resources.
Area-wide scalability of management can flexibly expand the management
scale based on variable scenarios of disaster and changing situation.
Private public cooperation and coordination is an essential framework of areawide disaster management system.
External Resources* : goods and services such as energy, water, transportation
and communication infrastructures, which are independent of the business
management but are essential for business operation.
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Source: photo: top: Sendai Airport by Mainichi News Paper, 11 March 2011,
bottom: Fire Department of Shiogama district fire Affairs Association, 13 March 2011
What is “Area BCM”?
Scalable
Cross Sector
Coordination
Framework of
Disaster
Management
for Business
Continuity
Area BCM is a cyclic process of understanding risks and impacts, determining common
strategy of risk management, developing the Area BCP, implementing the planned actions
and monitoring to continuously improve the Area BCM System, in coordination among
stakeholders including individual enterprises, industrial area managers, local authorities and
administrator of the infrastructures as well as communities, in order to improve the
resilience of local economy to disasters.
Area BCP then designates a framework and direction of coordinated damage mitigation
measures and recovery actions of stakeholders in order for business continuation of the
industrial area as a whole.
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Understanding
Risks and
Impacts
Monitoring
& Improving
System and
Scientific
Sharing
Area BCM
Strategy
standardized
risk assessment
Risk andImplementing
Impact Analysis
Impact to BusinessContinuity
Large
Volcanic
Eruption
Developing
Measures &
Area BCP
Reviewing
Identify
Predominant Hazard(Plan)
Small
Low
(1/200～1/100)
High
Unknown
Probability
Hazard Simulation
Risk Assessment
Business
Impact
Analysis
Vulnerability of
Infrastructure,
utilities and the area
Current measures by
public sectors and
private enterprises
Disaster Scenario
One of the essential process is to make risk and impact analysis based on scientific and
standardized methodology.
It includes identification of the predominant hazard in the area of concern, detail simulation
of the specific hazard, disaster risk assessment based on the vulnerability of infrastructure,
utilities and facilities and formulation of disaster scenario in which the current capacity of
measures taken by both public and private sectors.
The scenario will be the bases of each organization’s Business Impact Analysis as well as the
area-wide analysis of economic impact.
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Understanding
Stakeholder’s
forum
Risks
and
Impacts
- Sharing risk and impact
Sharing
Monitoring
information
Area BCM
& Improving
- Strategy
and direction of
Strategy
System
business
continuity of the
area
- Scope of Area BCM
coordination among public
and private
sectors
Implementing
Developing
Measures &
Reviewing
Area BCP
(Plan)
Coordination hub should be established with the most important and authoritative positions
of local and national government as well as the management organization of an industrial
cluster in consideration of different types of cooperation as this chart shows. Most simple
one is the cooperation among multiple enterprises in the area, who can share critical
business resources by linking each BCP/BCM or any system of emergency operation. Public
Private Cooperation is an essential framework of sharing the strategy and roles in area-wide
disaster management where public sector plays a role mainly as coordinator while private
sector as operator of actions.
The coordination structure of Area BCM should be organized in such a way as to be able to
expand when needed through the damage prospect, critical resource’s condition and
changing hazard. The geographical scope of a particular Area BCM depends on local
condition or the size of stakeholder’s coordination so that an industrial park, an industrial
agglomerated area or even a nation can be its scope.
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Understanding
DevelopingRisks
andand
implementing
Impacts
the Area BCP
Area BCM organizational structure
Area Business Continuity Plan
Monitoring
& Improving
System
The Area BCP describes various issues from the
organizational structure, industry stats, dominant
hazard, risk and impact, business impacts,
challenges in the area business continuity,
measures to be taken, performance evaluation,
and continuous improvement of the Area BCM
system in the end.
Implementing
Measures &
Reviewing
Sharing
Area BCM
Strategy
Understand
Vulnerability and Risk
of the Area
New
Investm
ent
Challenges in the Area BC
Strategy of Area BCM
Direction of actions
Formulate the Area
BCP
Implement measures
and Evaluate the
performance
Risk
Transfer
Prepare
Alternative
Measure
Make
Temporary
Back-up
Cooperation
and Share
w/ other
stakeholders
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New
Investment
Risk Transfer
Area BCP, including preparedness and
contingency plans
Performance evaluation
Continuous improvement
Developing
Area BCP
(Plan)
Strengthen
Existing
Capacity
Rehabilitation /
Reconstruction
Dominant hazard, risk and impact
Business impact analysis
Prevention / Mitigation
Coopera
tion and
Share
Leading industry of the area
Disaster
Management
Cycle
The measures should be balanced
in all the stages of Disaster
Management Cycle (prevention &
mitigation, preparedness &
response, rehabilitation &
reconstruction), also with
combined tactics (strengthening,
alternation, backup) and multiple
implementation schemes
(cooperation & sharing, new
investment, risk transfer).
Preparedness /
Emergency Management
Cooperation
and Share
w/ other
stakeholders
Strengthen
Existing
Capacity
Strengthen
Existing
Capacity
Prepare
Alternative
Measure
Prepare
Alternative
Measure
Make
Temporary
Back-up
Make
Temporary
Back-up
New
Investment
Risk Transfer
Understanding
Self improving
mechanism of
Risks and
Area BCM Impacts
Monitoring
& Improving
System
The Area BCM System has its own improving mechanism
that monitor the activities of all stakeholders and feedback
the lessons to the revised plan.
The system, by repeating the process, also needs to
continuously address different types of hazards and different
scenarios of risks and impacts in order for enhancing the
resilience of local economy.
Sharing
Area BCM
Strategy
Implementing
DevelopingArea BC Management
Area BCP Planning
Measures
&
Area BCP
DEVELOP
DESIGN
ANALYZE
IMPLEMENT
Reviewing
(Plan)
(PLAN)
(STRATEGY)
(UNDERSTAND)
(ACTIONS)
Fundamental Issues
• Organize
Stakeholders
• Understand Area and
its function
• Analyze Regional
Hazards,
Vulnerability and
Risks
• Evaluate resilience of
infrastructure and
other business
resources
• Analyze Existing DM
• Area BCP Strategy
• Planning Area
Business Continuity
by:
• Critical Infrastructure
Protection
• Coordinated Disaster
Preparedness and
Response
• Quick Recovery,
Supply Chain
Cooperation, etc.
• Sharing Concepts of
Area BCP/BCM
• Preparing Disaster
Risk Scenario
• Business Impact
Analysis
• Problems/Bottleneck
s for Area Business
Continuity
Revision/
Improvement
Revision/
Improvement
Revision/
Improvement
EVALUATE
(MONITOR)
• Effectuate Area BCP
• Measures to reduce
risks, preparedness
and effective
response
• Simulation Trainings
by utilizing Area BCP
• Alternative
coordination
measures
Revision/
Improvement
• Advise
• Evaluation and
feedback to improve
the Area BCM System
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Understanding
Risks and
Impacts
Sharing
Area BCM
Strategy
Monitoring
& Improving
System
Implementing
Measures &
Reviewing
Continuous
Process with
Multi hazard &
Multi scenario
Developing
Area BCP
(Plan)
As one of the advantageous features of Area BCM, through the
analysis of multiple hazards with respective probabilities, it can
estimate future damage cost in certain period of years, or even
indirect economic loss if there would be sufficient data of
damage and impact relations.
The accumulating damage cost and losses will be reduced if
effective mitigation efforts were made by Area BCM actions.
Then it can be compared with the investment cost for disaster
risk reduction in order to evaluate the economic benefit and to
find the desirable disaster management investment.
Evaluation of economic benefit through the probabilistic
analysis of hazards, damages and mitigations
Accumulated
Damage Costs
of Multiple
Hazards &
Probability
10
Period total or
Annual
average of
damage cost
in the area
Expectable
Mitigation of
Damages by
Area BCM
actions
Evaluation of
Disaster Risk
Reduction
Investments
What are the Benefits of
Area BCM?
Encourage Public sector to invest
more robust infrastructure.
Increase responsibility
under the Area BCM.
Start establishing own
BCP/BCM.
Increase asset value for
investment, Attract
other enterprise for
newly settling,
pull down the disaster
insurance cost
Unifies the efforts of the area,
directs toward a common goal,
achieve restoration quickly,
efficiently and effectively.
PublicSupport
Cooperate with other partners
and clients of each enterprise
through enhanced
communication.
Self-Support
Enhancing
Resiliency
CommunitySupport
Enhance supply chain
coordination network,
promote cooperation
among line industry.
OutsideSupport
Add redundancy of
different scheme’s
combination
Foster local economy
and employment
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Case study of Area BCM
The new concept of Area BCM is first applied in three industrial agglomerated areas in
Indonesia, the Philippines and Vietnam.
In Bekasi – Karawang Industry Area of Indonesia, a probabilistic analysis of multi hazards proved
that flood inundation is the dominant hazard and then detail simulation was conducted.
Through the output, all stakeholders got understand the distribution of inundation, flood depth
and its duration, overlaid with their facilities and common infrastructures.
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Case study of Area BCM
Buildings in industrial park:
- Karawang City and surrounding area is inundated more than 2 weeks.
- Industrial parks however are not inundated, facilities are not damaged.
Electric power and Lifelines:
- Two Substations in Karawang City are inundated over 2m depth and stop the operation for
two weeks.
- Some of base stations of telephone and mobile phone stop the operation because of the
shortage of electric power.
Transportation infrastructure:
- Freeway is closed both in west and east of Industry Park for more than 2 weeks.
- Primary Road in Karawang City is closed for more than 2 weeks.
Workers of Industrial Parks:
- Many employee will be absent because of the inundation of their houses.
- Traffic condition becomes worse and induces the workers staying home.
Stakeholders are formulating BCP for strengthening transportation networks, alternative port
development, power sub stations protection, backup of business resources, environment of
stranded workers, etc. The Area BCM System is established and expanding its scope.
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How the Area BCM guide you?
Applied methodology in the pilot areas will be summarized to be disseminated for
guiding any local economy to raise resilience to disasters.
Expert panel,
JICA study team
Area BCP workshops
Seminars on Area BCM
The first application of the new framework,
the Area BCP/BCM in industrial
agglomerated areas, has been introduced in
ASEAN. Since the concept of Area BCP/BCMs
is still new, the experienced members of the
private sector are expected to disseminate
the lessons and knowledge of Area
BCP/BCMs in other industry agglomerating
areas and nations. Also, this concept of
area-wide resiliency will be applicable not
only to industry agglomeration but also for
urbanization.
To foster sustainable urban development,
together with vital economic growth of each
locality, private and public cooperation
needs to be strengthened through the new
opportunities presented by coordinated risk
management.
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Where is the Area BCM going?
The Area BCM is a part of JICA’s cooperation strategy of mainstreaming DRR into all
development activities. The private sector’s participation in DRR initiative is definitely one of
the newly arising agenda we discuss in this context.
The previous Hyogo Framework for Action (HFA) unfortunately didn’t make intense
discussion on it and consequently require new guidance as to how this might be more
effectively represented in the successor framework to the HFA (HFA2).
Through the Area BCM together with other newly developed resources, such as the macro
economic model to prospect how DRR will be effective, JICA contributes for the thematic
research to be represented in the HFA2 by providing the structured cooperation strategy
with four pillars and a base.
2015
HFA2 (the successor framework to the HFA)
Mainstreaming DRR in Development
Breaking away from the cycle of disaster and poverty
Realization of sustainable development by Disaster Risk Reduction
Highlighted
Resilience of
Local
Economy,
Increasing
Importance
of Private
Sector
Participation
Promotion of
common
understanding
and accurate
grasp of natural
disaster risk
Implementation
of risk reduction
measures for
sustainable
development
Rapid and
effective
response with
better
preparedness
Restoration and
reconstruction to
a more disasterresilient society
Establishment and Strengthening of Disaster Management Systems
Understanding
Disaster Risk
Prevention
Mitigation
Preparedness
Response
Rehabilitation
Reconstruction
Area BCM
Scalable Cross
Sector
Coordination
Framework of
Disaster
Management for
Business
Continuity
DR2AD
Macro economic
model to prospect
DRR effectiveness
Intensifying Disasters, Increasing Catastrophes, Global Impacts
2005
The adoption of HFA
The recent efforts of the private sector indicate what can be achieved and what challenges
remain. The private sector can promote disaster resilience by developing BCPs and
establishing BCM systems, as well as strengthening supply chain networks to ensure backup
of business operations. The concept of shared resource management is also becoming
better understood. In some companies, the BCM plans have included concepts of corporate
social responsibility (CSR) in emergency events, by incorporating plans for helping affected
people. However there is still more progress to be made. Area-wide disaster management
with significant participation of stakeholders is one area where further progress is necessary
in order to scale up the coordination system of resilient society. In this, the private sector
can provide one key to success.
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