Letter from... Hong Kong

Bradley Leon reports from Hong Kong

Last November, a group of executives gathered at Noble Group’s Hong Kong headquarters to plan for the worst. Their goal: ensuring the safety of the company’s 1,330 employees and limiting the impact to its $11.7bn supply chain management business during an avian flu outbreak.

At the meeting were staff from the human resources, treasury, information technology, risk management, legal and global insurance departments. “The starting point was the worst case scenario,” recalls Lelia Konyn, Vice President of global human resources.

Noble’s task force assumed that 25% to 50% of its workforce would be absent during an epidemic. Supply chains would be crippled, and many of the institutions on which the company depends - banks, public transport, utilities and trucking - would be severely affected.

As cases of avian flu, also known as the H5N1 virus, appear around the world, crisis planning meetings like this one are becoming increasingly common.

Nowhere are these exercises more familiar than Hong Kong, where bird flu first jumped to humans in 1997, killing six people and forcing the Government to slaughter about 1.5m chickens. An outbreak of severe acute respiratory syndrome brought the city to a standstill three years ago.

Now, with birds starting to die from H5N1 in Hong Kong and the number of cases around the world rising, the Government is cracking down on backyard poultry ownership and stepping up public health education.

Some companies in the former British colony have been preparing for months. HSBC, the leading bank, and airline Cathay Pacific have set up internal committees similar to Noble’s. HSBC has offered free flu vaccinations to employees in Hong Kong and other parts of the region. Both Cathay and HSBC say they will use their company intranets to communicate with employees on health issues.

HSBC has warned that 50% of its staff could be affected by an avian flu epidemic, higher than the World Health Organisation’s estimate of 25%. So far, the mortality rate from avian flu is about 50%.

Noble, which operates 76 offices in 36 countries globally, has taken its planning even further. It chose 40 employees around the world to take charge of managing the risks of a bird flu epidemic in their region. These people are now creating telephone trees to communicate with employees in case they are too sick to use e-mail. In countries where the risk of an outbreak is higher, such as China, India, Vietnam and Indonesia, Noble is paying for employees to travel to work by taxi rather than use public transportation. It has even distributed directions on thorough hand-washing.

“Hopefully [an outbreak] won’t happen,” says Konyn. “But we believe we’d rather be prepared for the worst and never have to use these preparations than for it to happen and to catch us unaware or unprepared.”

Despite efforts by some Hong Kong companies, analysts say relatively few groups are thinking this far ahead. Richard Martin, managing director of International Market Assessment Asia, a Sydney-based executive advisory group, estimates that only 5% of companies globally are adequately prepared for an avian flu epidemic.

“The primary reason for [this lack of preparedness] is the scale of the threat is so much larger than any other external threat that faces a company that they’re having trouble coming to grips with it,” says Martin, who recently published a report based on interviews with managers around the region about bird flu.

Martin argues that one of the largest challenges companies must overcome is communication, both within the group and to customers and business partners. Having a plan that is well-known both inside and outside the company before the flu begins to spread among humans, he says, will allow companies to restore operations more quickly after an outbreak than those without a plan.

“It’s the difference between days and months after the initial onset to be able to get on top of business, to be able to secure your people, to secure your business.”

Bradley Leon is based in Hong Kong.