Author: John Foster

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Brazil Trucker Strike Paralyzes Economy Endangers Livestock

Rising fuel prices have brought the trucker strike in Brazil to its ninth day. Over the past year fuel prices have risen 50%. Drivers have parked their vehicles and refused to deliver food for both humans and livestock, medicine, and other essentials. President Michel Temer has called for national security forces to unblock roads and has called on local governors to do the same. Petrobras workers plan to strike later this week adding complications to the trucker strike. There are 20 billion chickens and 20 million pigs that are at risk of starvation with over 150 poultry and pork processing plants shut down according to trade group ABPA.

Strikes are a form of business interruption that need special attention. ISO 22301 requires that organizations address risks and opportunities relating to business continuity and business interruption events. Strikes can involve your own workforce, your suppliers, or you may a bystander. Assessing the risk of strikes in your business is essential, but you should not ignore third-party risk. What if livestock feed became unavailable for your farm? Would your delivery business be able to function if a trucker strike had blocked all the roads? Assessing risks caused by other parties or events such as a trucker strike or soaring fuel prices that could lead to protests should be part of your continuity plans. You could mitigate the risk by using your current plans for severe weather or pandemic disease since the outcomes of reduced ability to travel or available workforce would be the same. Transferring the risk is also a financial strategy.  Does your business interruption insurance policy cover strikes? In many cases you will need to buy added coverage for losses caused by a strike among your workers or for strikes at elsewhere that affect your business. Your policy review should include replacement of perishable goods, damaged equipment, and other losses.

Performing a risk assessment of your supply chain and including events caused by unrelated third parties is a crucial step to avoiding a disaster or continuity of operations event. Assessing the entire supply chain or key suppliers can be a complex project. Our consultants can assist you with assessing your supply chain, economic risk, and other factors that may lead to a disruption in your business. Contact us today and setup an appointment to discuss how

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US Bans Component Makers From Selling Parts to ZTE

The US Commerce Department has prohibited component makers from selling to ZTE. The action has caused the stock of various component makers to drop. Acacia Communications Inc. (NASDAQ: ACIA) receives 30% of its total revenue from ZTE and saw its stock drop over 30%. Oclaro Inc (NASDAQ: OCLR), received 18% of its revenue from ZTE and experienced a drop of over 15%.

Implementing ISO 31000:2018 and  assessing risk is one method of mitigating the effects of losing a supplier. Clause 6.4.2 tasks the organization with identifying uncertainties. Geopolitical activities would be  indicators of emerging risks. The recent political change in the USA would need to be evaluated. Clause 6.5 discusses risk treatment. In this case diversification of the customer base to mitigate the loss of a single customer could be undertaken by the organizational leadership. Insurance against geopolitical events would also be a way of reducing the impact of losing customers.

Structural issues with the organization my continue for many years before a geopolitical event may disrupt your business. We recommend assessing risks and opportunities periodically during the business cycle and taking long and short term measures to exploit upside risk while minimizing downside risk.

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Canary Islands Hit By More Than 70 Tremors

La Palma has experienced 70 small quakes between Monday and Wednesday between 1.5 and 2.6 on the Richter scale.

A statement by the government given to Express.co.uk:

“Given the increase in seismic activity recorded on the island of La Palma, the Ministry of Territorial Policy, Sustainability and Security of the Government of the Canary Islands, in application of the Special Plan for Civil Protection and Emergency Care for Volcanic Risk (PEVOLCA), has convened tomorrow Friday, February 16, a meeting of the Scientific Committee of Evaluation and Monitoring of Volcanic Phenomena.

“On the agenda of the meeting, which will be chaired by the Deputy Minister of Environment and Security, Blanca Delia Pérez, will be to discuss the precursors and parameters of seismic activity on the island in recent weeks; assess the activity and evolution forecast, and appoint the sole representative of the Steering Committee.

“The Scientific Committee for Evaluation and Monitoring of Volcanic Phenomena is formed, in addition to the Government of the Canary Islands and representatives of the General State Administration, by the National Geographic Institute (IGN); the Superior Council of Scientific Investigations (CSIC); the Canarian Volcanological Institute (Involcan); the Geological and Mining Institute of Spain (IGME); State Meteorological Agency (AEMET); Spanish Institute of Oceanography (IEO); specialists of the two Canarian universities (ULPGC and ULL) and representatives of other prestigious institutions in the study and research of volcanology in the Canary Islands.

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Bill Bans US Government Use Of Huawei or ZTE

  • HR 4717 prohibits the US government from procuring  “covered telecommunications equipment or services”
  • Equipment made by Huawei Technologies Company or ZTE Corporation
  • an entity that uses any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system.

A recently introduced bill in the US House of Representatives threatens to ban the use of ZTE and Huawei equipment by the government. It also prohibits contractors who use equipment made by those companies. Portfolio diversification is important in investing and business. A diverse portfolio of services would allow a supplier to continue doing business in the event of a product embargo. Supply chain risk should become part of your risk register for business continuity.

Contact us if you need assistance with establishing or updating your ISO 22301 program. Our certified professionals can assist with your business continuity needs.

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USGS warns of 8 California volcanoes

  • USGS has classified California volcano hazard zones
  • Very-high threat: Mount Shasta, Lassen Volcanic Center and Long Valley Volcanic Region
  • High threat: Clear Lake Volcanic Field, Medicine Lake Volcano and Salton Buttes
  • Moderate threat: Ubehebe Crater and Coso Volcanic Field

The International Volcanology Assembly is meeting August 14-18 with planned fieldtrips to some volcanic hot spots along with symposia covering a broad variety of volcanological fields with plenary speakers emphasizing integrative and intersecting themes. There will be much discussion over the very high threat volcanoes in the area.

The eruption of Eyjafjallajökull in 2010 shut down European airspace for a week. The International Air Transport Association estimated that the impact was $200 million per day and the total loss for the industry was around $1.7 billion. Over 95,000 flights were cancelled during this time.

Can your business continue to function with air travel disruptions? Do you have alternate transportation available? These are questions that should be asked when establishing a Business Continuity Plan. California businesses should take this time to revise their list of BCP risks. An eruption could disrupt business travel and impact airlines and their supply chain.

If your small business does not have a Business Continuity Plan, now is a great time to get started. Contact us today to speak to one of our implementation specialists.

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Initial Coin Offerings Hold New Risks

  • Almost $50M in ETH stolen in a month
  • SEC rules crypto currencies are securities
  • ICOs now need securities registration

Cryptocurrencies and Blockchain hold many potential benefits in the economy of tomorrow. Businesses may choose to accept payment in Cryptocurrency as an alternative to credit cards, checks, or ACH. Ethereum is a decentralized computing platform and blockchain. Within Ethereum there is a crypto currency, Ether. There is also a way of issuing smart contracts.

Thieves love anything of value. Almost $50M in ETH has been stolen in multiple incidents. One recent trend is to exchange Cryptocurrency for future services in an Initial Coin Offering. The SEC announced today that ICOs are securities.

The SEC said in its report it has decided not to bring civil charges at the end of its probe into The DAO, but instead use the case as a cautionary tale for the market.

Cryptocurrencies and ICOs are a new frontier. This newness means that risks are still unknown. Where there is great risk there is great reward. Remember to tread carefully in this new territory.