Building Corporate Castles, Part 3

Safety managers must become familiar with or update their anti-terrorist skills.

• By Joe Teeples, MBA
• Sep 01, 2003

IN previous articles (March and June 2003), we discussed how companies can evaluate their response to terrorism and provided some insight into the types of weapons that terrorists may use. Some recommendations for hardening the facility were provided in the second article.

America's strength lies in its people. The role of federal, state, and local governments hasn't changed much since our nation was founded. The people organize into business groups and local, state, and federal governments to provide for the common good. It is this cooperation between public and private industry that requires the safety professional to understand the key role of government and how best to apply it to the private sector.

Many companies have turned to their security department to satisfy their homeland defense commitment. Safety professionals must coordinate their efforts with federal, state, and local law enforcement agencies, as well as understand how this issue affects the bottom line of the industry.

Safety's Intersection with Homeland Defense
Company executives are increasingly turning to safety professionals for assistance with homeland defense. Safety managers are familiar with the benefits of a sound safety program and understand the use of cost-benefit analysis and consensus standards to create synergy and bring order to the chaos that could otherwise reign. Still, safety managers must become familiar with or update their anti-terrorist skills.

Safety professionals must understand and become proactive in homeland defense concepts. They are being called upon to conduct homeland defense training and should consider domestic terrorism, as well as international terrorists. Such topics as Hazard Communication, HAZWOPER, and Process Safety Management already include many requirements for homeland defense that span the fields of both safety and security.

The Role of DHS
The U.S. Department of Homeland Security is a relatively new agency that is charged with providing similar guidance to American business. A logical sequence of events for this agency is the prevention of terrorist attacks, the mitigation of any attack that may occur, and, finally, recovery from the attack in order to bring businesses back to full operation. The new agency provides unifying oversight to the concept of homeland defense.

From its very beginning, this agency noted the critical infrastructure of the United States was predominantly in the hands of private industry. Presidential Directive 3 was implemented in March 2002 to provide guidance to the nation in the form of the Homeland Security Advisory System. This color-coded alert system was designed to provide guidance to Americans to respond to terrorist threats as they develop. It provides a signal that the nation--states, counties, and even local companies--need to understand and react to. Recently, we have seen that while the nation's alert system signals may go up or down, some cities enforce their own level of security to respond locally.

It is the role of the federal government to provide early warning and intelligence. It does this using the HSAS system and by providing information to state and local law enforcement agencies. The FBI has the task of providing businesses with information that affect their area, so business leaders should be in contact with their local FBI offices, as well as the local police and emergency management departments for their county.

OSHA's Involvement
Through OSHA, the Department of Labor has established minimum guidelines, enforceable by federal law, that require businesses to develop and maintain safe and healthy workplaces. The spin-off of these guidelines is that businesses and insurance companies can benchmark and compare themselves, their subcontractors, and their vendors as safe or accident-prone.

Consensus standards such as those from ANSI, CGA, and NFPA that are cited by OSHA have been developed over a span of many years and have proven themselves to be a viable part of any safety culture. Firms that embrace those guidelines are rewarded with a safer workplace, less turnover, lower accident costs, and often reduced insurance costs. Firms that demonstrate a lack of safety culture find themselves paying more for labor and insurance and may even find they cannot obtain insurance or are prohibited from bidding on certain jobs.

Another change that is on the horizon is OSHA's stand on terrorism. OSHA has released a five-year strategic management plan that covers such topics as workplace violence and motor vehicle accidents. OSHA plans to use cooperative and outreach programs to assist employers in addressing these topics; the agency will also focus attention on emergency preparedness to help employers get ready to respond to workplace emergencies such as terrorist attacks.

The plan states that OSHA will be more active in the field of homeland security. The recent change in the egress standard (as of December 2002, companies can establish a place of refuge, as opposed to having their workers escape to a public way) indicates the direction OSHA is heading as an enforcement agency.

As a provider of information, OSHA has offered training material for years on its Web site. The recent SARS incidents resulted in a very nice presentation that safety managers could download from OSHA for free.

More Scrutiny of Security Guards?
A year after the September 11 attacks, four out of 10 security guards questioned said there had been no change in their security posture. Training for security guards is often minimal.

Washington State, for example, requires four hours of training for late-night retail workers to prepare them for robbery and theft, yet the security guard who may be required to respond to that clerk must only have four hours of training and must submit to a state background check. U.S. Sen. Carl Levin of Michigan has pushed for a federal standard with background checks of guards using FBI data.

Private firms rely heavily on security guards. USA Today reported in January 2003 that the private security guard industry is a $12 billion per year industry with more than 11,000 security firms nationwide. The chink in our security armor may be the guard who has access to the ventilation system, keys to the building, and knowledge of the company's escape routes. While more than 1 million security guards are working nationwide, most earn an average salary of $18,000 with no health benefits. There is no federal screening for these guards, and 22 states do not even require licensing of security guards. Sixteen states do not require any type of background check.

Terrorism Insurance Rates and Trends
Many companies and mortgage holders require terrorism insurance today. The insurance industry has developed a system of premiums wherein the company with the greatest risk pays the highest premium. (Compare this to worker's compensation premiums, where an iron foundry pays a higher premium than does a bank or office building.)

There are three established tiers:

• Tier 1: New York; Chicago; Washington, D.C.; San Francisco--$30 per $100,000 of coverage
• Tier 2: Seattle; Houston; Los Angeles; Boston; Philadelphia--$18 per $100,000 of coverage
• Tier 3: All others--$1 per $100,000 of coverage

• Unlike its treatment of the worker's compensation system, the insurance industry has yet to determine an effective "experience modification factor" that can further adjust the insurance rates. So a company with a large security force and a proactive anti-terrorist stance pays the same rate as its neighbor who employs one part-time security guard. This concept probably will evolve in the same fashion as the worker's compensation experience modifcation factors were established and standards were developed and adopted.

The insurance industry recognizes that firms must be rewarded for their security actions if they are expected to put them into place. By establishing guidelines that can be met, losses to terrorist activity can be reduced. One set of guidelines has been established in NFPA 1600, "Standard on Disaster/Emergency Management and Business Continuity Programs." This standard was approved by the NFPA membership in 1999 and by the American National Standards Institute (ANSI) in 2000. It requires that firms coordinate their efforts with law enforcement agencies, conduct a survey of hazards in the workplace, and develop plans to mitigate the results of any attack. The standard goes on to require resource allocation and planning in the form of strategic, emergency operations, mitigation, and business impact analysis.

How to Proceed
What's a safety professional to do? Take a proactive role in the world of counter-terrorism. Find out how the local FBI office, police, and emergency management system of the county can help your company. Realize that the government has roles and rules that it must follow. Contact your insurance carrier and find out how you can best protect your firm in its eyes; seek some way of lowering the economic burden of the insurance premium.

Get a copy of the NFPA 1600 standard and compare it to the way your company is currently doing business. Review security plans and ensure they mesh with the overall safety plan that is established and understood by the workers.

This article originally appeared in the September 2003 issue of Occupational Health & Safety.