Operational risks refer to potential loss as a result of inadequate or failed internal processes, people, and systems or external events. The operational risks of business activities in conflict affected areas are extensive and can have far reaching impacts. 

These may include: 

  • interrupted operations
  • difficulty in retaining a stable workforce
  • security and safety risks for staff and infrastructure
  • involvement in criminal activity
  • direct targeting of company assets
  • decrease in the value of company assets (such as land, factories, and mines) 

Pillage 

One of the major risks companies face in times of armed conflict is the misappropriation or looting of assets and investments.  Business premises and investments are protected under international humanitarian law (IHL), as is any privately-owned housing provided for company personnel. The unlawful appropriation of business assets during a conflict amounts to pillage, which is a war crime. 

Hiring private security forces

Companies should also prepare themselves for the risks associated with contracting security forces as a means of protecting company sites and assets.  These forces may include government security forces, paramilitaries, private security companies or rebel forces and other armed groups. Companies must ensure that the actions of contracted security providers do not violate IHL nor trigger or intensify civil violence in conflict prone regions, as the company itself may be found liable for complicity in the commission of any violations. The Voluntary Principles on Security and Human Rights is the leading multi-stakeholder initiative providing companies with best-practice guidance on hiring and training security personnel in compliance with IHL.

Charity donations of $2 or more to Australian Red Cross may be tax-deductible in Australia. Site protected by Google Invisible reCAPTCHA. © Australian Red Cross 2022. ABN 50 169 561 394