Business risk remains despite smog shift

Singapore’s skies may have cleared considerably, but the extent of current and future business interruption in the region remains hazy with a blanket of smoke from Indonesia’s forest fires now covering much of Malaysia.

Companies operating in the affected region are being advised to review their risk-management controls and crisis-management plans, with conditions expected to remain challenging in coming weeks.

While air quality and visibility have improved in Singapore, parts of Malaysia are now bearing the brunt of the hazardous haze. A state of emergency has been declared in parts of the southern Johor state, with schools in and around Kuala Lumpur ordered to close on Monday.

Furthermore, health officials in Singapore advise that the smog is likely to return soon. Prime Minister Lee Hsien Loong has even raised the possibility of the smoke haze remaining well into September, which marks the end of the dry season on Indonesia’s Sumatra Island.

There are risk implications for organisations in the areas of business continuity and workforce health and safety, with the initial impact of the haze felt most keenly by the travel and tourism industries. Supply chains have also been affected, particularly where suppliers have reduced their workforce or business activities.

A risk alert produced by Marsh Risk Consulting states that while many firms have procedures or plans for emergencies that impact on business continuity and crisis management, they might not adequately cover a situation such as prolonged periods of haze affecting employees and the general population.

Asia Business Continuity Management Leader for Marsh, Lim Sek Seong, said it was a timely reminder to organisations that effective business-continuity and crisis-management plans were of vital importance.

“Whether it’s haze, pandemic, earthquake or civil unrest, companies operating in Asia should have the business resiliency programs and policies in place to succeed in a constantly changing risk environment,” he said.

“Marsh strongly urges businesses to regularly test and update their existing business-continuity and crisis-management plans.”

The Pollutant Standards Index (PSI) has often reached hazardous levels in Singapore during the past week. Not since 1997, when similar fires produced smog that hung over the region for months, has the PSI been so high. Singapore’s National Environment Agency is predicting the 24-hour PSI for Tuesday to be in the moderate band (51-100), down from the “Unhealthy to Hazardous” levels (101-300+) experienced in recent days.

Singapore’s Foreign Minister K. Shanmugam says that he will raise the issue of smoke from forest fires at the upcoming meeting of foreign ministers from the Association of Southeast Asian Nations.