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More Bad Press for Apple

Here we go again.

In response to Apple’s bad reputation for its alleged unethical working conditions and treatment of employees at its manufacturing plants in China, users of Apple products are fighting back. Local customers are planning to deliver a quarter of a million petition signatures to Apple stores in headquarters such as Washington, DC; New York City; San Francisco; London; Sydney; and Bangalore. The petition demands that the consumer electronics giant make the iPhone 5 “ethical.”

This Thursday, February 9 at 10am, local consumers plan to deliver a signed petition to the Apple store in Manhattan’s Grand Central Terminal. The movement was started by Mark Shields and his site, Change.org.

“I have been a lifelong Apple customer and was shocked to learn of the abusive working conditions in many of Apple’s supplier factories,” Shields. “At Foxconn, one of Apple’s biggest manufacturers, there is a history of suicides, abusive working conditions, and almost no pay. These working conditions are appalling, especially for Apple.”

The conditions at Apple’s Foxconn plant are hardly news as the topic has been in the national press for several months (we covered the issue last year in Risk Management and have written about it extensively on this blog). It seems, however, that Apple is being less-than-forthright in correcting a wrong that has been made public and, in doing so, has scarred the company’s reputation. What will it take for Apple to get a hold of a risk that is affecting their image and, possibly to come, their bottom line? Their recent, minimalist damage control methods may not be enough.

Business Travelers Refuse Assignments to Dangerous Areas

When bossess tell employees they have to travel to dangerous locations — effectively asking them to put their company’s profits ahead of personal safety — workers are increasingly saying thanks, but no thanks. According to a new report by the insurer Chubb, nearly one-fourth of people surveyed would refuse to go on a business trip to a location they consider dangerous unless their employer provided them with emergency medical and other services. In all, 23% of business travelers said they would refuse to go on the business trip, 21% said they go but would refuse to go on the next trip, and 14% would go but look for a new job after returning.

Workers apparently become more willing if services are provided, however. If their employer provided access to reliable emergency medical services, 42% said they would go on the assignment, and 47% would travel if their employer provided pre-travel information about the country. If their employer provided access to legal assistance abroad, 38% would agree to go.

“Organizations that fail to address the risks may lose employees as the economy improves, and even face reputational damage and legal liability,” said Jim Villa, senior vice president of Chubb’s accident and health business.

Chubb, not so surprisingly, offers some products and services to mitigate travel to high-risk locations. As do others. I spoke with Charlie LeBlanc, an exec at ASI Group, last year following all the turmoil in Egypt. With Cairo in chaos, he helped several Westerners get out safely.

Here’s an excerpt of the piece I wrote at the time.

Having traveled to Egypt many times, he knew there were many foreign nationals living and working there who would need assistance when the riots broke out. He did not know there were close to 80,000 expats, however. And he never imagined there would be an event so widespread that so many would need his company’s advice at once. “It seemed like all 80,000 were calling at the same time,” said LeBlanc. He expects that this will be the largest event of this type that he will ever come across. “We can’t envision a larger-scope scenario,” said LeBlanc. “You know, short of Armageddon.”

LeBlanc’s company is who you want to call if you are trapped in such a situation. Through a 2008 acquisition, his ASI Group, which was founded in 1989 as Air Security International, became part of MEDEX, a travel assistance and international medical insurance provider that works with insurers including Travelers and Chubb.

Immediately following the unrest in Egypt, the ASI team had some 30 corporate clients seeking consultation on how to keep their employees safe. All told, the company directly chartered more than 800 people out of Egypt in short order.

There were many others who wanted advice but wound up on State Department flights. ASI provided them with information on where they needed to go and how to sign up to get evacuated, but they made final arrangements on their own. LeBlanc does not know how many cases of indirect assistance his firm was involved in. “We stopped even counting,” he said.

For most people, all they wanted was a way out of the country. “When you’re talking to these folks,” said LeBlanc, “they’re frustrated, they’re upset, they’re discouraged and some of them…are worried that they’re not going to be able to get off the ground.”

Situations like this help illustrate that travel assistance services can be of value. The Arab Spring scenario was unprecedented in many ways, but it’s likely that companies working in the Middle East or other treacherous locations may find themselves in need of help when their employees get stuck.

And according to this latest Chubb survey, it will be increasingly harder to even get them to go in the first place if you have no plan to help them out when trouble arises.

ERM Best Practices in the Cyber World

Using ERM to assess cyber risk

If you read the news in 2011, it should be no surprise that data is more vulnerable than ever. The threats are growing more sophisticated by the day and the fallout if you suffer a data breach can cost a fortune. Risk managers need to take a more active role in this arena. It can no longer be the sole responsibility of IT.

“The volume and value of sensitive data has never been higher and the sophistication of those who want to steal it continues to increase,” said David A. Speciale, of Business Acquisition at Identity Theft 911. “All the while, the potential cost of a data breach grows ever more catastrophic in terms of financial, legal, and reputational damage. Failure to act is not an option.”

To this end, RIMS (the organization that publishes this blog) has released a new paper on how ERM can help. “ERM Best Practices in the Cyber World” discusses looking at cyber-risk as less an exercise in patching network systems and more about changing your mind-set. It’s about using ERM principles to better prioritize the actual threats and gauging how severely each could hurt the company.

The paper also provides advice on creating a better information security plan and gives an excellent, detailed overview of the many cyber-related rules and regulations that companies must abide by in 2012: HIPAA, Sarbanes-Oxley, Graham-Leach-Bliley, the FAIR Act, the Red Flags Rule, the PATRIOT Act, the Data Protection Directive, and the many state-specific notification laws that kick in following a data breach.

“ERM Practices in the Cyber World” is free to RIMS members and $29 for non-members.

 

January/February Issue of Risk Management Now Online

 

The January/February issue of Risk Management is now online here.

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