Beri: Poor  Risk Management Practices Responsible for Economic  Setback

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Antonia Beri

Antonia Beri is the managing director of Safety Consultant & Solutions Provider (SCSP) and lead consultant  at National Fire Protection West Africa (NFPAWA).  In this interview with Omolabake Fasogbon,  she says weak risk management culture is crippling Nigeria’s  economy  

The  Central Bank of Nigeria recently warned that the country may soon  slide into recession  . What’s  your reaction to this warning?

If the CBN is passing such a note of warning, then all, including government ,investors  and individuals need to fasten their seatbelts so tightly,especially as  economy  activities in  previous year have not been too pleasing to the ears ,such that the International Monetary Fund, I M F, projected a drop in growth from 2.1 percent to 1.9 percent. This is happening again this year as  IMF’s  growth forecast for the economy  drop from the 2.3  percent its projected last year to 2 percent last month. Several factors have been attributed to the struggling state of the economy including declining oil production ,contraction in the agriculture sector  and late passage of 2018 budget. No doubt,these factors are  quite influential,however, there are two key areas that have been overlooked as a critical part of the economy. These are  safety and  operational risk management practices  . This is where we can talk of protection  of lives, sustainability of  our hard earned investment in all sectors, and then boast economy bouyancy. If all sectors were performing well without any provisions for disaster prevention or mitigation ,then we are not looking at development.  As much as I know that the economy is full of prospects, what do we say  of  unforeseen events as droughts, fire outbreaks, conflicts and  many others , have we any provisions to prevent or mitigate these ones which are inevitable at times?

 I must say that not being prepared to confront accidental occurrence are largely responsible for the country’s  underperformance,as we keep reinvesting in disaster,thereby , shifting away from focus.

Are you saying  that both government and private investors have not been proactive enough in the area of protecting investments ?

The core requirement for operational excellence is proactive risk mitigation for continuity and profitability. In this clime,we are good at reacting to occurrences, we really don’t take action  before  emergency erupted. Unfortunately, we have still not learnt our lessons. A general assessment of Nigeria’s performance in the area of  life, environmental, security and fire safety  in 2018 revealed  that the country has greatly retrogressed , no wonder the economy struggled all through the year.According to the statistics, 910 people died to Boko Haram  insurgency in 2016, the figure increased to 967 in 2017. Report from Amnesty International also showed that not less than  1,814 deaths was recorded across 17 states in Nigeria in 2018.   In the course of the year,there were cases of community displacement, fire disasters at various locations including  markets, gas plant, petrol tanker and oil pipelines that swallowed away fortunes as a result of inadequate response framework, building collapse, unmitigated cyber risk and many others. The above figures show a declining state of security for life and properties in Nigeria.These are situations that distract focus and  divert resources that should have been deployed to developmental projects.

How then can efficiency be attained and measured in risk management practices?

While some occurences could be inevitable,many at times, disaster can be averted or limited, if professionalism and standards were considered at all times.Operational risk management is complex with vast multi-disciplinary interface.The chain starts from the government policy, project owner and financier through strategy, design, implementation, facilities, and insurance.  

What about the equipment used in project execution, do they guarantee safety of lives and investments? Safety equipment are manufactured to protect lives and properties. Safety equipment  may   be in form of personal protective device or first response equipment like smoke and heat detectors, fire extinguishers, hydrant system etc., and they must be reliable.

A fake or substandard product is usually wrongly labeled or  does not have a certification. Most end users do not know the quality of what they buy except for the labels. 

That is why it is a good practice to have the correct label on each safety equipment.   

Fake safety equipment are not reliable and they increase risk to lives and investment. Lets take an example of a fire blanket, a safety device used to suffocate fires by covering a burning substance so  as to remove the oxygen component of fire. 

An ordinary cloth do not have that capability, so you  can imagine what happened if  a fake fire blanket is sold to the end user. It will rather leave the user at a very high risk. 

 It is therefore better to have none than to keep a fake one. Sadly,safety regulators and  banks have neglected their roles in this regard.

How do the banks come in this picture ?

Safety is everyone’s business, while  it is  exclusive preserve of regulators like  the Standard Organisation of Nigeria (SON) and  National Council for Occupational Safety and health (NCOSH), to ensure safety standards are met, the banks need to have the assurance that the businesses they lend to will continue without interruption due to occupational health and safety hazards.  The bank is a strong institution that can control safety standards by simply asking for health and safety certifications before lending money for business owners. Most businesses in Nigeria operate  without adherence to Occupational Safety and Health Administration (OSHA) laws,  and this exposes workers to avoidable health risk. Financial institutions should ask for certifications that show that  businesses they   finance are fire protected and compliant to  OSHA standards.

 

What is  your assessment of safety regulators in the country?

There are various agencies that see to standards and safety compliance, chiefly, SON and NCOSH, under the sponsorship of the Federal Ministry of Labour and Productivity. While  SON regulates safety of standards of products and processes in Nigeria, the NCOSH is responsible for creating safety awareness, inspection of factories and sealing of non-compliant factories. 

Obviously, not many factory workers know about NCOSH. Most factories we visited in 2018 were not compliant to OSHA and NFPA codes. It is expected that the agencies implement the health and safety policies as should. They must also ensure equipment expired are disposed such that they are not be re-used. In the developed countries,  they are disposed off in orange bags.

How can government  intervene to raise the standards of safety in the country?

By  adopting  proactive and retroactive means, government can implement existing health and safety policies in both private and  public sectors, this will also help an average Nigerian to understand how important it is to work and live in a safe environment. Beyond this, there should be regular training programme for business operators, their employees and safety professionals and  all that are concerned. Government should make adequate provision of resources in time of emergencies. 

 Fire services should be improved on  by making adequate plans and provision for trained firefighters to get to fire accident places in less time for efficiency. More importantly, the enforcement players should be equipped and strengthened to carry out their work effectively.

How  is NFPAWA helping to raise safety standards in the country and ensuring right  risk management practices?

NFPAWA identifies  gaps in skill and knowledge in security, fire and safety operational risk management as a critical challenge to development and sustainability in the African region. This weakness continues to result in massive loss of life, environmental damage, economic hardship and financial losses. The effect of poor understanding and absence of set performance benchmarks for evaluating, assessing and investigating niche specific operational risks is now more glaring especially in today’s economy. NFPAWA sought to bridge this knowledge and skill gaps through training in corporate governance, capacity building, consultancy, standardisation , advocacy, and proffering of targeted solutions , all geared towards public and private sector initiatives on life, fire & safety risk management.

Our capacity building goal is to ensure a sustainable pool of at least 500 well-trained emergency response personnel annually, to strengthen  sectors’ ability to respond efficiently and effectively to all crises scenarios, thereby reducing incidence of loss of lives and property when such events occur. Equally, this will ensure reduced exposure to risks that create disruption to business continuity, restore investor confidence, and drive sustainable private sector growth and inevitably economic development. 

 

How is  the organisation involving government at all levels to boost safety practices across all sectors? 

The organisation sought to advance the highest standards of regulation and education by promoting best practices in compliance to local and international codes through the provision of professional certification. NFPAWA partners regulatory authorities, public and private sector enterprises committed to best practice in life and safety risk management. Our programmes are not limited to the perspective or styles of corporate enterprise management, but also serve to facilitate avenues for security, fire and life safety solutions advocacy and anti-disaster management field training, for the utility, security and emergency management sectors.