Added global risks impact security planning for oil, gas expat workers

April 22, 2002
Multinational oil and gas companies are scrambling to find ways to cope with worsening and evolving new levels of threats to the security of their expatriate workers.

Multinational oil and gas companies are scrambling to find ways to cope with worsening and evolving new levels of threats to the security of their expatriate workers.

Until recently, oil and gas industry expatriate workers operated under basic company guidelines that addressed such matters as health, accidents, travel logistics, and host-government issues, among others. Today, such concerns have given way to much greater dangers from increasingly overt activism, criminal acts, and even terrorism around the globe.

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Until the Sept. 11, 2001, terrorist attacks on the US, attacks on expats were perceived as isolated occurrences precipitated by local elements, and the industry as a whole did not perceive a global threat.

By way of illustration, 3 years ago, Ron Relf, ex-Navy SEAL and former Federal Bureau of Investigation agent, presented a paper on expat security at the Offshore Technology Conference in Houston. Relf had been a member of the team that repatriated the bodies of four Union Texas Petroleum Corp. auditors shot to death in apparent reprisal killings in 1997 in Karachi, Pakistan, (OGJ, Nov. 17, 1997, p. 2).

"I was focusing on terrorism as I knew it and how I perceived it," Relf said, "They probably had about 70 people in that session, [but] as soon as I mentioned 'terrorism,' it was like turning off the lights. I knew I'd lost them."

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Following the events of Sept. 1, however, such attitudes have since been reversed. Now there are dramatically heightened concerns and stepped-up security measures across the spectrum of an industry now seen as a principal target of attack.

With regard to its worldwide operations, the petroleum industry is quickly seeking ways in which to better protect its expatriates, its data, and its other global assets.

Terrorist concerns

Terrorism has grown steadily since the early 1970s, and more than 48 major terrorist groups and myriad minor ones have been identified as having the potential to harm expats, according to the Washington, DC-based Maldon Institute.

Underlying motivations for terrorism can range from religious or patriotic fervor to concern for animals or the environment. That is why it is important for expatriates to know well the history, background, and current political and religious undercurrents of the countries in which they will be working and traveling before venturing there.

The US Department of State, which has put government facilitates worldwide on a heightened state of alert, places updated credible-threat information and travel advisories on its web site [http://travel.state.gov]. The State department also has warned expats to boost their personal security because, "ellipseas security is increased at official US facilities, terrorists and their sympathizers will seek softer targets." The Mar. 17 attack on worshippers at the Protestant International Church in Islamabad, Pakistan, proved one such example. Expats are advised to monitor local news and maintain contact with the nearest American embassy or consulate.

Why the hatred?

Much of the animosity targeting the oil and gas industry is linked to a long-simmering resentment of the developed nations of the West.

The industry's historic and current dominance by companies based in the US and Europe reinforces this linkage; Western-based oil and gas firms are often perceived in the same light as their home countries: wealthy, powerful, and insensitive to local cultures and their interests.

"Most militant nationalist, insurgent, and political Islamic groups are intensely anti-American and may strike US-related targets, including US-owned business [located] in their own countries," according to intelligence sources at the Maldon Institute.

In fact, documents retrieved from Al Qaeda training facilities in Afghanistan show that worldwide energy and transport infrastructure, power plants-including nuclear-are among Al Qaeda's specified targets for future attacks. The list of targets also includes skyscrapers, airports and airlines, military airfields, national monuments, embassies, and bridges, among others.

US Central Intelligence Agency Director George Tenet verified these targets in his testimony before Congress Feb. 6. Although more than 1,000 Al Qaeda operatives from cells in 66 countries are in custody, Tenet said the threat continues to exist.

"Operations against US targets could be launched by Al Qaeda cells already in place in major cities in Europe and the Middle East," he stressed. "Al Qaeda can also exploit its presence or connections to other groups in such countries as Somalia, Yemen, Indonesia, and the Philippines."

John Rees, director of the Maldon Institute, said that the next three primary targets for which Al Qaeda is probably now preparing are "oil supplies and distribution, ports and harbor installations, and sufficient nuclear material to make one or more 'dirty' bombs [from Russia or Ukraine]." According to a security consultant based in Newport News, Va., 1,500 small-yield nuclear devices remain unaccounted for after the breakup of the Soviet Union.

The prevalence of oil and gas industry expats working in Islamic nations makes them special targets for anti-US terrorist groups such as Al Qaeda, security consultants point out.

Al Qaeda's goals (ultimately, "The overthrow of the godless regimes and their replacement with an Islamic regime") and the extent of their determination make the group especially threatening for expats working in Arabic and other Islamic nations. Planting operatives as "sleepers" to infiltrate future targets, these terrorists have infinite patience. Security consultants warn that oil and gas companies should be especially alert to screen future employees carefully, because the Al Qaeda terrorists are adept at creating forged documents and identities. They recruit from all nations and are trying to recruit more Muslims that don't appear to be Arabs, the consultants note.

Types of global risks

There are many global risks and threats for which oil and gas companies must prepare their expat workers (Fig. 1).

The RiskMap 2002 survey conducted by Control Risks Group, London, has identified eight key risks the industry can expect this year:

  • The likelihood of further terrorist attacks in developed countries.
  • The use of alternative weapons of terror, including bioterrorism.
  • Attacks against foreign economic interests in high-risk countries.
  • Unforeseen disruption to business travel arrangements.
  • An increase in global crime-in drugs, arms, money laundering, and immigrant smuggling-resulting from an economic slowdown.
  • Increased criminal activity fueled by higher unemployment.
  • More white-collar crime.
  • A greater reluctance among struggling economies to implement overdue economic reform.
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In addition, the survey this year increased, to 60, the number of countries or areas of countries rated as a "high" or "extreme" security risk-a 30% jump (see table).

New risks

With the rise of terrorism also comes a set of worsening risks the expat worker faces:

  • Kidnapping. Kidnapping for ransom has long been a staple of criminals in countries such as Colombia, Guatemala, Ecuador, and elsewhere in Latin America, as well as in Nigeria, Malaysia, and the Philippines. Kidnapping has become a $1 billion/year business, the Virginia consultant said. And this will only increase as terrorist organizations turn more to kidnappings to generate money for their causes. More hostages may get killed in the process. The kidnapping and death last year of a toolpusher in Ecuador and the $13 million ransom to get another five employees released didn't have to happen, Relf said. Counseling from consultants can help prevent kidnappings and mitigate results if one occurs. They also teach companies and individuals negotiating skills in these circumstances.
  • Murder. In addition to mass murders like the Islamabad church bombing, murders of individual Western expats, especially by Al Qaeda, are strong probabilities. Rees said the Al Qaeda international network of terrorists have been practicing attacks that are the most innovative, even attacks on golf courses, with the likely goal assassination of world political and business leaders.
  • Bombings and other sabotage of public places and private business infrastructure. Pipelines are especially vulnerable and therefore likely subjects for sabotage, especially those adjacent other targets such as railroads, tank farms, large population centers, chemical plants, refineries, and such. The Cano Limon-Covenas pipeline in Colombia has been dynamited 208 times this year alone and 858 times during the past 16 years. Vulnerability and priority assessments are a must for all energy infrastructure, security specialists advise.
  • Bioterrorism. Richard Lee, medical director of Ecology & Environment Inc., said at a recent E&E seminar on protective responses to terrorist threats that older people and expatriates, both of whom are likely to have had smallpox vaccinations are least likely to fear this virulently contagious virus. However, anthrax, letloose in a large office building, could cost millions of dollars in cleanup and other liabilities, even if no one dies. Chris Quina, vice-president of E&E, said American Media Inc., the first anthrax target in the US, has spent $10 million for cleanup, new equipment, and renting facilities. AMI said, "We're not going to move back into that building because of concerns expressed by employees."
  • Piracy. Hijacking of oil tankers, LNG carriers, drillships, or offshore oil rigs could result in theft of cargo and ship, product disruption, death of crews, destruction of vessel or rig, sinking to block a port or narrow sea lane, ransom of vessel, crew, or cargo or use as a "bomb" in a port to attack another facility. Earlier intelligence reports put Al Qaeda's fleet at 40 craft, of various tonnages, according to Maldon. Just earlier this month, pirates seized a workboat with 10 Royal Dutch/Shell Group oil workers off Warri, Nigeria. The workers were seized Apr. 1 by 40 militants in 8 boats and held for ransom for 6 days, then released unharmed Apr. 6 following the intervention of the Nigerian navy and regional government officials in the Niger Delta. Piracy attacks worldwide dropped to 335 in 2001 vs. 469 in 2000. Indonesia, India, Bangladesh, Malaysia, Nigeria, and the Malacca Strait between Malaysia and Singapore are the worst sites for piracy, although the Car ibbean and Mediterranean are locales for such heists as well.

Government linkages

Even legitimate and necessary connections to governments perceived as corrupt or repressive can carry added risks for expats and multinationals in those countries.

Sometimes requesting official help in security matters can precipitate new problems for expats and multinational companies.

When an expatriate requests military or police assistance from a host country to help quell riots, attacks, or as protection from criminal activity, it sometimes can be a double-edged sword. When called upon to protect the Aceh gas plant in Indonesia's separatist-minded Aceh Province last year, the Indonesian army, according to press reports, was implicated in killing, looting, and rape amid the suppression of a local uprising. ExxonMobil Corp.-whose own expats, the reports said, had been attacked by the army and the demonstrating Aceh separatists-was, in fact, blamed indirectly for the rampage (OGJ Online, Mar. 19, 2001).

Similarly, in May 1998, Chevron Nigeria Ltd. requested the assistance of Nigerian security forces to stop a protest by demonstrators who had seized its Parabe platform off Nigeria. Traveling in Chevron helicopters and accompanied by Chevron personnel, Nigerian Navy and Mobile Police officers allegedly fired upon the demonstrators, killing two people and seriously injuring two others.

Chevron's pilots operated the company's helicopters, and its chief of security accompanied the troops in the helicopters, but the company says that its only action against the occupation was to call the federal authorities to inform them of the incident, which it was obligated to do by law. The company now is the object of a lawsuit over the incident.

Perhaps the most notorious case of company-government linkages creating problems for a multinational oil company was Shell's crisis stemming from the trial and execution of Nigerian Ogoni activist Ken Saro-Wiwa and eight other prodemocracy activists by the Nigerian military regime in November 1995 (OGJ, Nov. 27, 1995, p. 21). Although the company quietly tried to intervene to save the Ogoni activists, its actions were seen by human rights activist groups as inadequate, and the groups claimed Shell was negligent and thus partly to blame for the executions. Apart from the immense negative publicity, global protest, and boycott campaigns-some violent-against Shell and lawsuits that ensued, the company-also bedeviled by the Brent spar dumping controversy the same year-later drastically revised its corporate policies on sustainable development and corporate accountability.

Solutions

After investing sometimes billions of dollars in international energy assets, leaving a country is not always an option, although it must be considered in extreme cases where there is little chance for change or there is a strong possibility of a continuing, unacceptable level of threats to expats and assets. How then do companies keep their operations and personnel safe under such conditions?

"There has to be a better way to take this to the petroleum industry," Relf said, referring to his OTC presentation's reception. So he established a company, Risk Mitigation Group, to advise companies on security issues, and he plans to conduct a security workshop for industry personnel in Houston later this year. "The last thing I want to see is another American come home in a body bag," he stressed.

In fact, many retired intelligence and special operations personnel, who already have the necessary knowledge and generally have a deep passion for their work, have formed security companies that specialize in intelligence gathering, risk mitigation, and security augmentation. They work with industry personnel to identify specific risks and implement security measures for personnel and asset protection.

Most large energy companies have security departments whose heads belong to umbrella organizations such as the Energy Security Council in Houston, which serves as a liaison among these company representatives, law enforcement agencies, and other intelligence agencies involved in security and industry-related criminal and terrorism investigations.

ESC works with the security departments of small and large companies.

"There's more cooperation today since [Sept. 11] at all levels-local, county, state, and federal-between private industry and the government," said ESC Director Bud Covert. "I've attended many meetings with the FBI, the [Central Intelligence Agency], local law enforcement, the Department of Energy, the Department of Transportation, all with the idea of trying to disseminate the information that's required."

Top management buy-in

Covert and Relf believe top management must support security measures for them to succeed.

"The single most important thing in all of this is the executive leadership in the company. If it's important to the CEO, it becomes important to the people in the organization," Covert said. "If [CEOs] do not convey to the people in the organization that this is important, nothing gets doneellipseand as a result, people are caught flatfooted. That's the most important issue-whether it's proprietary information with your computer systems, protection of your people or your facilities, safe travel, [or] good communications."

Additional security precautions management should take include:

  • Training, awareness throughout the company and industry. Each company must perform a thorough risk analysis for each site or situation (e.g., travel) to detect its vulnerabilities, assess the threats, and prioritize them. Then it must communicate to company personnel and service contractors.
  • Boosting security. Having security redundancies in place is a factor important for a successful security plan, according to several security specialists. Relf and Covert both said that security redundancy were absolutely crucial. "That basically means having stopgap measures in place that are mutually supportive to each other so that you can resolve issues as they occur" said Covert. Relf emphasized that three concentric rings of security should be in place (Fig. 2) to secure facilities and personnel. This system would, for example, resolve the controversy involving fishermen wanting to continue tying up to offshore platforms. The fisherman could seek the permit several weeks prior to the fishing date so that his credentials could be checked out. Then he would be required to call a number of days prior to the date and again just before traveling to the platform, where he would be met by onboard personnel. There would be no unauthorized personnel tying up without the security precautions.
  • Use of more-effective technology. There is available today a wide array of sophisticated, prevention-based security technology and equipment, such as computer-connected intrusion detection systems for both manned and unmanned facilities-revealing intruders in real time-underwater inspection systems for port and ship security operations, and smart card entry control.

Better neighbors

Changes in relations with host country communities may be the ultimate answer to improving attitudes toward the oil and gas industry and toward the US.

The US and UK governments established in late 2000 a set of voluntary principles on security and human rights that could lead to more-constructive relationships by establishing and employing corporate social responsibility initiatives within the communities it shares with host countries (see related article, p. 34).

Improving local stakeholder relations is just as critical as increasing vigilance in securing the safety and well-being of multinational petroleum companies' expat workers. And such initiatives are more important than ever, say security consultants.

"Now is not a time to retreat," says Richard Fenning, chief operating officer of Control Risks, "or to stop doing business internationally, but to manage risks rather than be managed by risk."