Lessons learned

One of the largest, most powerful storms on record, Hurricane Katrina, smashed into a huge stretch of the Gulf Coast last August, causing massive wind storm and storm surge damage. It also caused the failure of the New Orleans levee system, virtually destroying much of the city. But on top of that, Katrina caused an unusually high number of deaths and created a heart-wrenching debacle as isolated survivors in New Orleans struggled for life amid toxic flood water, acute shortages of food and drinking water, no medical services and a spasm of lawlessness that amounted to nothing short of urban warfare.

For Katrina's millions of victims, the plight was too much to bear, especially in a city famously known as the Big Easy. SC&RA members from all over the country looked on in horror, both at the appalling conditions in the city, and at the governmental failure to control the situation. Why was it, many SC&RA members wondered, that television news people and well meaning movie stars could get money and supplies to isolated survivors, but the National Guard and New Orleans emergency services could not? It boggled the mind and, as the Gulf Coast suffered, the country - and the rest of the world - began looking for answers.

It did not take long before the search for answers turned ugly, especially as the world media showed simultaneous reports of decomposing bodies in the streets of the stricken region while politicians at every level congratulated each other on how well they reacted to the disaster. The resulting public outcry grew in scope and intensity, until Michael Brown, head of the Federal Emergency Management Authority (FEMA), was forced to resign. Even now, President Bush's reputation is reeling from the poor response, and the same could be said about Louisiana Governor Kathleen Blanco and New Orleans Mayor Ray Nagin.

For most Americans, the events that unfolded before, during and after Katrina were nearly impossible to comprehend. How could the world's most powerful nation fail so utterly to manage this disaster? How could an entire city be washed away? How could the president go on camera congratulating the head of FEMA, while FEMA itself was failing to carry out its most fundamental mission?

For ordinary citizens, these are not easy questions to answer but for the risk management professional, it was an object lesson in how (not) to handle a disaster. It was a disaster following a disaster, first the storm, then the breached levees, then the catastrophic breakdown in communications and coordination among the various agencies meant to respond to the stricken Gulf Coast. It was a worst-case scenario that somehow managed to worsen still.

Questions remain

As the situation in New Orleans and throughout the Gulf Coast continues to stabilize, a number of lessons should be apparent. Dr Shawn Adams, PhD and professor of risk management at Pittsburgh State University, assesses the situation: “First, from the FEMA simulation of Hurricane PAM, to the warnings issued by President Bush, Governor Blanco and Mayor Nagin, the government had warning of impending disaster and the results that could follow. Is it so impossible then, for the government to have done better?

“Second, governmental leadership at all levels had problems responding,” Adams continues. “While some might point to the magnitude of the disaster as a reason for poor response times, all levels of government performed poorly, or outright failed at worst. Despite the valiant efforts from the relief workers, top level management was lacking, even with the fore warnings of the FEMA exercise reviewing the hypothetical “Hurricane PAM” and the advance warning that radar and satellites provided of the impending disaster. In the days prior to the storm, one only had to watch the news to see what was about to happen.

“Third, bureaucracy did what it always does - move slowly,” Adams explains. “The national embarrassment of stranded Americans at the Superdome, suffering and dying from dehydration, starvation and lawlessness, further illustrates the failure of bureaucracy.

“Fourth, the physical infrastructure of the United States, which holds itself up as an example to the rest of the world, failed,” Adams says. “Levees gave way and the streets were flooded. New Orleans might not have full electricity, clean water or phone service for months, and even longer in certain circumstances. Convention traffic - the city's primary industry - has been halted until at least March of 2006.”

Other issues, such as how many billions Katrina will cost insurers, or how many billions it will cost public utilities to restore public services over the next few months have yet to be determined. The billions of dollars of losses do not include the indirect losses in terms of worker productivity from those who left their jobs to flee the Gulf or those hundreds of miles away whose attention is now on rebuilding their lives and not their jobs.

Risk management role

Hurricane Katrina serves one very vital positive function, and that is to remind those SC&RA members in risk management that, while the day-to-day functions of loss prevention and claims and insurance buying are all vital, the disaster risk is always present, particularly considering the high risk nature of crane rigging and specialized transportation.

Sometimes SC&RA members can be lulled into complacency, with the lack of frequency of claims (and disasters) in our industry. Now is the time, however, for risk management to show its value to your organization by bringing disaster preparedness into the discussion of daily SC&RA member operations. As we do this for general management, those responsible for emergency planning should take the lessons of Hurricane Katrina, the assumptions of timely governmental help and sound infrastructure, to re-evaluate our own plans for our company. Just as many in the current disaster were worthless to anyone because they were too ill-prepared to help themselves, many SC&RA member firms will be unable to help themselves when adversity strikes.

The result is they will not be able to perform more advanced disaster planning functions, such as to help others, because their employees are ill prepared to deal with disaster.

The question for SC&RA members is not whether the Gulf Coast will recover, but whether your firm will, if disaster strikes today.

Now is the time for all SC&RA members to re-examine their disaster management plans. Now is the time to learn the lessons of Katrina and question the assumptions the plan was based on. Assumptions that SC&RA members take for granted - electricity, water, police protection and so on - must be re-evaluated. Now is the time because, whether we like it or not, soon Katrina will be history, and the next unknown, unnamed, but not unexpected disaster, will be on its way.