Your Business Abroad

Risk assessment key to overseas expansion

The Globe and Mail

Small businesses thinking about expanding overseas could be forgiven for getting cold feet after watching uprisings spread from Tunisia to Egypt to Libya and beyond.

But is it really necessary to hunker down and keep your employees at home?

Not if you’re prepared, says John Proctor, vice-president of Integrated Human Risk Solutions Corp., an Ottawa consulting firm that advises companies on security issues at home and abroad.

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The first step to take, before you put your marketing manager on a plane to meet with a client in Pakistan, Saudi Arabia, or Nicaragua, is to assess the risks and create a contingency plan, Mr. Proctor said.

Among the risks that must be considered is whether the business you are doing could draw unwelcome attention. A tourism operator, for example, might be considered a likely target by terrorists keen to destabilize a country by making travel unattractive.

Once the risks have been assessed, “you need to create an in-house company plan, based on the what-ifs,” Mr. Proctor said. “You run through some of the scenarios that could happen to your people, and then run through the plans.” All parts of the company, including staff from human resources, public relations, and operations, should be included in the discussions, he said.

At Transformix Engineering Inc., a 90-employee company based in Kingston, Ont., planning for foreign contingencies is crucial. Ninety-five per cent of the firm’s business is done outside Canada, much of it in South America. At any one time, as many as a dozen Transformix workers may be on the road.

“Employee safety is paramount,” said chief executive officer Peng-Sang Cau, “whether they are here in Canada in the plant or when they are travelling.” Training is the key to making sure employees stay safe, she said. “It is all about educating people so they think ahead, and aren’t stupid when they are travelling.”

Transformix, which make automated equipment for manufacturing operations, provides its travelling employees with emergency phone numbers, extra cash, and instructions on where to go if things go wrong.

It also has staffers who speak the language of the countries where it operates, and has an emergency response team at head office that can jump into action when necessary. Fortunately, none of this has been required yet, Ms. Cau said. “When you are prepared, you usually don’t need it.”

Mr. Proctor said an emergency plan should include details on the precise makeup of a crisis management team, how communications will be handled, the backup plan for evacuations and how families will be contacted, as well as scenarios dealing with every contingency from criminal acts to natural disasters or epidemics.

A company should also consider buying insurance, he said. There are lots of options, from basic medical and travel coverage to sophisticated kidnapping and ransom policies. But companies should check the fine print to see if the policy applies in a war zone or in the case of civil unrest.

While legal opinions differ on how much liability a company faces if an employee is injured or killed, Mr. Proctor said, it is clear that in some provinces – including Ontario – labour laws apply to employees working outside Canada. That means they must have a safe workplace, even when halfway around the world.

Scott Ferris, director of business development at the Forum for International Trade Training, an Ottawa agency that helps train people to operate in global markets, said companies often ignore the resources under their own roof when they need help in foreign markets. Even a small firm might have a machinist in its plant, or a worker in its office, who has connections in a country where it wants to do business.

“These individuals have family, friends, and connections” that can be useful when problems and emergencies arise, he said.

Mr. Ferris said small companies also need to fully use current technology, both to gather intelligence before a trip and to keep in touch with employees on the road. Skype, Twitter and Facebook are crucial – and free – means of exchanging information with those outside the country.

Mr. Proctor notes that Canadian companies planning for overseas work are fortunate to have easy access to data from the federal Department of Foreign Affairs and International Trade. As well, trade commissioner service around the world and Canadian embassies and consular offices can help when people get into trouble.

DFAIT is a crucial source of help and information, he said. “Their travel warnings are very good, they are responsive, they have a help centre and help desk,” he said. “And small companies that don’t have an enormous amount of revenue … have already paid for their services with their taxes.”

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