Climb 7 Places in FICCI-Pinkerton’s Risk Survey
FICCI, in partnership with Pinkerton
Corporate Risk Management, launched the India Risk Survey 2015 Report on March
27, 2015 during the Seminar 'New Age Risks – 2015' at Federation House, New
Delhi. The objective of the report is to inform and sensitize all stakeholders
about the emerging risks for the developing economies like India so that
well-planned and strategic policy decisions can be made.
The India Risk Survey 2015 (IRS 2015)
attempts to showcase the views and perceptions of key business leaders, public
figures, as well as professionals across various sectors and geographies
regarding operational, safety and strategic risks. The survey spreads across
the entire industry spectrum covering the different geographical zones of the
country. The survey results will provide the industry and Government
decision-makers with a very important tool to holistically analyze the impact
of various risks so as to plan and execute strategies to prevent, mitigate or
control the impact of these risks to business establishments.
As evident, the survey encompasses 12 key
risks that pose a threat to the entire economic system of the country; and
though each risk is rated on a mutually exclusive basis for the purpose of the
survey, a deeper reading would reveal their interconnectedness across domains.
Continuing with the trend evident from last
year, the focus of the respondents for risk analysis continues to be on how the
entire gamut of corruption, scams and corporate frauds are affecting the
economy. In 2015, ‘Corruption, Bribery and Corporate Frauds’ continues to be
ranked as the topmost risk. The recent news coverage and public uproar related
to various cases involving major corporate houses, justifies this trend as
having the highest mind recall value, and has also been assigned the greatest
concern in recent times.
If one were to conduct a root-cause
analysis of the major corporate frauds of recent times, a common cause that
would emerge is pilferage of data / sensitive information.
Information security
is a growing concern keeping in mind the technological advancements and the
tendency of corporate houses to create more and more intellectual property and
competitive strategies. Any compromise with the same is interlinked with
providing an opportunity for frauds and for the corporate to stand a risk of
incurring unimaginable losses. The realization of every industry waking up to
this as a looming threat is best defined through the ranking of ‘Information
and Cyber Insecurity’ this year, which climbed up 3 positions from 2014 to be
ranked at No. 2.
The entire gamut of risks faced by
corporate houses has enabled a typical perception from respondents across the
globe; they are concerned with both the gravest external threat and the most
perceived internal threat.
Over the last few years in India, the
rising threat of terror incidents in major cities has caused considerable
alarm; the devastation from these incidents may have easily disrupted the
entire business continuity structure of the land. This concern can also be said
to be the fastest growing one amongst the Indian professionals and can be seen
by the rise in ranking of the risk of ‘Terrorism and Insurgency’ from 10th
position in 2014 to 3rd in 2015.
Similarly, when speaking of internal
threat, the impact of business espionage can no longer be ignored. Recent
occurrences only illustrate various modalities of insider threat and how it
affects and compromises the health of a company. The rise in ranking of the
risk of ‘Business Espionage’ from 9th position in 2014 to 4th in the current
survey validates the stand to bring our attention to this shifting concern of
business organization.
For any economy that faces the
above-mentioned risks, the external threat or risk of ‘Crime’ cannot be ignored
and the respondents to this survey have ranked the same at No. 5 in 2015. This
is also supplemented by the growing instances of crime against women in India,
which has not only come in for severe criticism within the country but has also
been a topic of discussion in all international forums, affecting the image of
India as a suitable business destination.
The analysis of the above illustration does
indicate that the top five risks that impact Indian business environment
include: ‘Corruption, Bribery, and Frauds’; ‘Information and Cyber Insecurity’;
‘Terrorism and Insurgency’; ‘Business Espionage’; and ‘Crime’. The risks of
‘Strikes, Closures and Unrest’ and ‘Political and Governance Instability’,
which were earlier in the top five risk brackets, have dropped in the rankings
from No. 2 and No. 3 positions to No. 6 and No. 11 respectively. This is a
major shift in the yearly trends primarily due to the positive impact caused by
a perceived stable Government coming to power at the Centre post the 2014
general elections.
Trends in Terrorism & Insurgency
• Terrorism
and insurgency related incidents saw a marginal increase in 2014.
• The
states of Chhattisgarh and Jharkhand recorded the most incidents related to
Left Wing Extremism, whereas the majority of terror-related incidents were
reported from Assam.
The Year-on-Year Ranking Story
Terrorism has been one of the growing
concerns for the Indian sub-continent in recent times. After the year 2000,
serious attempts were made to stop the growing menace and India has been
successful in combating causalities caused by terrorism. Incidents like the
Mumbai attack in 2008 and other recent insurgent attacks in various parts of
the country seem to be pushing the trend upwards.
To turn our attention to the Global
Rankings, India ranks 6th on the Global Terrorism Index of 2014 (as provided by
the Institute of Economics and Peace) out of a surveyed base of 162 countries.
Another study conducted by the same institute, titled Global Peace Index 2014,
also highlights the need for India to work on its internal conflict issues.
Plunging Deep - Incidence Mapping
There have been a series of arrests,
wherein 77 people were nabbed across the country in 2014, in connection with
terrorist plots and subversive activities. India has been on the radar of
terrorists throughout the year; sporadic terrorist activities were reported
from the active regions. Jammu and Kashmir (J&K) reported an attack in
March 2014, preceded by an ambush in Chhattisgarh; similar attacks were
witnessed in Assam.
In 2013-14, 205 of the country's 640
districts continued to be afflicted by insurgent and terrorist activities,
including 120 districts where the Maoists remained active; 20 districts in
J&K were afflicted by Islamist separatist terrorism; and 65 districts in
six north-eastern states where numerous terrorist and insurgent formations
operate.
The analysis of the fatality pattern
indicates that the Indian states of Chhattisgarh and Jharkhand remained most
prone to the incidents of Left Wing Extremism during the last three years 2013
- 2015. More than 50 per cent of the total fatalities reported across India
occurred in these two states. The Indian state of Assam witnessed the majority
of incidents related to terrorism during the last three years, i.e., 2013 -
2015. The majority of fatalities were reported in 2014 from Assam which stood
at 305 vis-a-vis 101 in 2013. Terror related deaths in the state of Jammu and
Kashmir also saw a marginal increase in 2014 with a figure of 193 vis-a-vis 181
in 2013.
Terrorism and Insurgency - Impact and Combat
Between terrorism and insurgency, India has
suffered on multiple fronts. Apart from creating a vulnerable domestic
environment with skeptical citizens, terrorism also affects the way the world
sees a country as a potential business opportunity.
Realizing this, the Indian Government has
launched multiple policy and strategy-led initiatives in order to ensure a
peaceful life for its citizens and also to provide for comfort when it comes to
grooming the business landscape of the land.
Extracted from FICCI-Pinkerton India Risk
Survey 2015, released at the New Age Risks 2015 Seminar held at FICCI on 27
March 2015 in New Delhi.
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