· 6 min read · Features

Would you die for your company?


Should a company pay up when faced with a ransom demand for an employee? Malcolm Brown reports on the dark side of the expat world

Kidnapping, says Tom Hargrove, is the deliberate creation and marketing of human grief, anguish and despair. He should know. On the morning of 23 September 1994, Hargrove, an agricultural adviser with the International Centre for Tropical Agriculture, near Cali, Colombia, decided to take the scenic route to work. It was a big mistake. Minutes later he was stopped at a roadblock and abducted by guerrillas belonging to FARC (the Colombian Revolutionary Armed Forces). The FARC guerrillas, who have been fighting the state on and off since the 1960s, finance their revolution in two ways by hiring themselves out to the Colombian drug cartels and by kidnapping people for ransom. They held Hargrove for 11 months and demanded $6 million for his release.

During his captivity Hargrove kept a diary. His definition of kidnapping was jotted down on 13 August 1995, his 325th day of captivity. He didnt know it then but freedom was only a week away. On 22 August, his captors released him. Hargrove got his freedom. His kidnappers pocketed several hundred thousand dollars.

Five years later and now living quietly in Texas, Hargrove remembers every detail of his ordeal, from the feeling of disbelief as he was snatched by young men waving AK47s to the despair he suffered when he thought he might have to spend years in captivity.

His story is not unique. In April last year the Hiscox Group, a London-based insurance company that writes kidnap and ransom (K&R) policies, reported that kidnappings for ransom the previous year had reached a record 1,789 and that even that figure was likely to be a considerable underestimate since many incidents go unreported to the authorities or are dealt with privately. A month later the oil giant Shell revealed that during 1999 Shell personnel were kidnapped in four of the countries in which it operated. It also experienced severe security incidents in 28 countries, including one bomb attack, and 10 of the countries in which it operated faced war or major community disturbances. Armed security personnel were used in more than 30 countries.

If Hargroves or Shells experience are anything to go by, it seems that the world of the expatriate has a dark side. The Foreign Offices daily-updated Travel Advice web site provides a rough and ready snapshot of it. On 1 November 2000, for instance, there were 22 countries on the FOs A list (dont travel there under any circumstances) and 16 on the B list (travel only on essential business). Some countries enter and leave the lists within days or weeks as difficulties, such as coups, resolve themselves. Others, like Chechnya, remain for years.

Most small and medium-sized companies still deal with the safety of travelling executives and expatriates on an ad hoc basis, perhaps issuing them with lists of dos and donts which draw on the experience of previous travellers and executives living abroad. But the world of multinational or global organisations is much more complex. They often operate in scores or even hundreds of countries and, as the Shell example shows, face a wide range of difficult situations. Many are now turning to specialist security and crisis management consultants for help. No fewer than 96% of FTSE-100 companies and 86% of the top 100 of the Fortune 500 are clients of the London-based Control Risks Group (CRG). Other leading consultancies like Kroll Associates and the Ackerman Group, run by ex-CIA man Mike Ackerman, have equally impressive client lists.

The consultants provide companies with detailed intelligence about the countries in which they operate, or plan to operate, and teach travelling executives and expatriate staff how to stay safe. They also provide on-the-spot advisers to help in kidnap or extortion negotiations and evacuation teams to bring people out of areas made dangerous by war, civil unrest, natural disasters or epidemics.

The consultancies are often portrayed as slightly raffish organisations in which John Le Carrs George Smiley would feel at home. The characterisation is not entirely false, just exaggerated. They do recruit MI5 and MI6 officers, Customs and Excise investigators, SAS men and senior police officers but in CRG, for instance, such people are out-numbered three to one by those from much more down-to-earth backgrounds such as accountancy, banking, the law and academia. They do have special kidnap squads CRG keeps a 14-man kidnap team on permanent standby in its London headquarters and is reputed to have once worked on seven kidnappings simultaneously but equally important are the political risk analysts who monitor the information that pours out of the media 24 hours a day, supplement it with reports from stringers in the field and warn client companies of impending dangers.

Christopher Grose, director of CRG, believes a continuous flow of such information is a sine qua non of good security. So is an alertness by company security staff to any changes which might signal potential problems. The recent events in Honduras are a case in point, he says. The country was going along quite normally until suddenly, in August, there were four high-profile kidnaps by criminal gangs. This sort of activity should trigger an immediate response for companies with operations in the area, says Grose. They should check with local management that security procedures are being correctly observed and ensure that visitors are being properly briefed.

The consultants work on the principle that the best way for companies to handle crises effectively is to be prepared for them before they happen. They spend a great deal of time helping companies to draw up crisis management plans to deal with kidnappings or extortion and procedures for evacuating employees from unstable areas. These contingency plans give the company a proper structure and strategy for dealing with a crisis, says Bill Ilsley, Krolls managing director, risk management, who before joining Kroll ran the Metropolitan Polices kidnap and ransom department.

A typical crisis management plan would identify a crisis management team, allocate each person with a clearly defined role and area of responsibility, indicate the initial actions that should be taken when a crisis occurs, list all the people who should be contacted, and outline a strategy for dealing with the media (press attention is not always helpful during a crisis).

The crisis management team will usually consist of key executives at the companys HQ, says Ilsley, but the company should also, if possible, make provision for incident management teams, or a mechanism for immediately appointing such teams, at its key locations. It is the incident management team that will have to make the day-to-day decisions.

One of the key questions that chief executives and their boards have to address is what they should do in the face of ransom demands from kidnappers. Should they make any concessions to kidnappers or extortionists? Should they pay up? Governments, the UK one included, tend to occupy the high moral ground on this one: This government does not pay ransoms, says a FO spokesman, and we dont meet any other demands made by terrorists. But can, or should, companies do the same?

Unofficial estimates in the City put the matter in stark perspective. It is said that more than 60% of all abduction cases end in some kind of financial settlement, 15% are released without payment, around 7% are brought out by rescue teams and 10% are killed. It scarcely bears thinking about but it would be interesting to know what proportion of those that ended in the victims death were cases in which the negotiators refused to talk about money.

Control Risks, which has worked on more than 1,000 cases of kidnap or extortion since it was set up in 1975, takes a pragmatic view. We dont know of any authority in the world that says to a bank teller that rather than hand over the cash when somebody points a gun at them they should die for their company, says Grose. In a kidnap you cant see the gun but its there.

Not that anyone would suggest paying over the full amount of money demanded immediately. Experience has shown that kidnappers will normally settle for a comparatively small percentage of the initial demand, that the expectation of a pay-off staves off drastic action by abductors and, crucially, that in skilled hands the money can be used as a lure to draw the kidnappers out it can, in other words, be used as part of an entrapment policy.

A related (and equally thorny) moral issue is raised by the existence of the market in kidnap and ransom insurance. An unofficial but widely quoted estimate in the City is that between 60% and 65% of FTSE-500 companies have K&R insurance. The question is: does the very existence of K&R insurance actually increase the likelihood of kidnapping?

These are difficult questions but they need to be answered by the board and embodied clearly in company policy even if the policy is not broadcast loudly so that crisis and incident teams know from the start exactly where they stand.

Hargrove knows where he stands. What does he think of those who say one should never pay a ransom? Its terribly naive, he says in his slow Texan drawl. I doubt if anyone would follow that policy if it really hits home with them.

Further reading

Forewarned is Forearmed online survival manual for international business travellers www.hrworldclass.com. 50.00 to subscribers

The Foreign Office publishes daily updated advice for travellers on its web site:www.foc.gov.uk