Increased political radicalism, rising crime and corruption, pirating of intellectual property, and military conflict are among the top security challenges confronting U.S. businesses operating abroad, according to a year-end analysis by the Overseas Security Advisory Council (OSAC).

The Overseas Security Advisory Council (www.osac.gov) was established in 1985 as a Federal Advisory Committee with a U.S. Government Charter to promote security cooperation between the U.S. Department of State and American business and private sector interests worldwide.

“Two thousand six was a defining year for the American private sector abroad,” said Doug Allison, a Special Agent with the Department of State’s Bureau of Diplomatic Security and Executive Director of OSAC. “The threats from traditional sources-such as crime, terrorism and political instability, as well as from non-traditional, non-routine sources-such as acts of nature and potential global pandemics, have demonstrated that firms must incorporate security and risk management into their core business operations if they are to overcome these threats.”

“Corporations that develop an internal culture of resiliency are better prepared than their international competitors to deal with predictable and catastrophic challenges,” he said. “Such firms are better able to exploit opportunities in riskier environments and in the aftermath of a major event.”

Over the past year, OSAC analysts noted a steady increase in political radicalism throughout Europe fueled by Islamist extremism, and neo-Nazi-related and other right-wing and nationalist movements.

In Africa, OSAC saw increased challenges to U.S. businesses due to corruption at ports, product counterfeiting, theft, and violent crime against employees. OSAC also cited increased violence against foreigners in the Niger Delta, where “Westerners have been kidnapped, oil pipelines sabotaged, facilities overrun and production severely restricted.”

While declaring that kidnapping is “evolving as a global threat,” OSAC said abductions for profit pose a particular problem to U.S. entities in Latin America.

“In the Americas, kidnapping has now become its own cottage industry,” the OSAC year-end analysis said.

Theft of intellectual property and natural disasters posed the greatest threat to U.S. businesses and other private-sector organizations operating in Asia.

And in the Middle East, the Israeli-Hezbollah conflict in Lebanon led to an unforeseen evacuation of thousands of U.S. citizens and significant consequences for U.S. organizations and firms operating there, as well as in neighboring countries.

“The events of [last summer] taught American organizations operating in the region that they need to be more forward-thinking in their crisis management and evacuation plans,” the OSAC review said.

OSAC’s regional specialists analyze information and develop informational products on security abroad that are then delivered to its private-sector members, explained Allison.

“By working with our OSAC partners, sharing our analysis, and pushing out our information, we aim to help the U.S. private sector better prepare for, respond to, and recover from the security challenges that may arise in 2007,” said Allison.

OSAC's Top 10 Private-Sector Security Issues Worldwide for 2006

Africa: Targeting of Western Interests in the Niger Delta

Local populations in the Niger Delta began taking their frustrations with the Nigerian federal government out on resident Western interests in this oil-producing region, as Westerners were kidnapped, oil pipelines sabotaged, facilities overrun and production severely restricted. The violence did not stay onshore, either, as criminals ranged as far as 50 miles into the Gulf of Guinea to attack facilities and personnel.


Africa: Corruption and Crime

Some African governments, such as those in Sudan and Guinea, were rated by the international watchdog organization Transparency International as being among the most corrupt in the world. U.S. businesses experienced bribery at some ports of entry, delaying shipments of goods and raising costs. They also experienced high rates of loss due to internal and external theft, and suffered from sophisticated counterfeiting operations, especially due to increased trade with Asia. Additionally, many African cities were rated “critical” for crime by the State Department, subjecting employees to violent crimes such as carjacking and armed robbery.


Asia: Violation of Intellectual Property Rights

Piracy and other violations of intellectual property rights have quickly become one of Asia’s key regional issues. With an influx of U.S. and multinational companies investing in overseas operations via outsourcing and other business practices, this issue is one that will not fade soon. India and China, Asia’s two largest players on the international business stage, are countries where the U.S. private sector faced the most intense threat of IPR-related commercial losses.


Asia: Natural Disasters

Typhoons, flooding, earthquakes and tsunamis don’t discriminate on location or victim, and affect many of Asia’s prosperous nations to include Japan, the Philippines and India. Whether a private sector organization has facilities in the country or employees on vacation there, an area prone to natural disaster raises the stakes for all involved.


Europe: Radicalism

“Radicalism” incorporates several trends that OSAC monitored throughout the year, namely the rise in Islamist extremism across the continent, the extreme wing of animal rights organizations, and right-wing groups associated with skinhead and/or neo-Nazi violence. The presence and power of each of these entities increased in 2006.


Europe: Militant Activism

Violent activism was visible during disturbances in France that began in autumn 2005 and ended in January 2006 and were reportedly prompted by immigration and employment policies, and during anti-government protests in Budapest reportedly driven by flawed economic reporting. In addition, demonstrations across Europe in response to the Mohammed cartoon publication and Pope Benedict’s remarks about Islam, although peaceful, underscored the potential for anti-Western activism in some of those countries.


Latin America: Political Violence and Civil Unrest

For several years, the private sector has been a target for anti-globalization and anti-establishment groups in the region who have conducted regular attacks as invasive as small bombings or as minor as graffiti vandalism. Civil unrest has also become a concern-even when private sector assets are not directly targeted-because unrest can paralyze entire cities, as has occurred in Bolivia, or simply cripple major economic areas, as in Mexico City this past summer.


Middle East: Israel/Hezbollah Conflict

The conflict in southern Lebanon over the summer between Israeli forces and Hezbollah was the most significant event of the year for OSAC, in terms of constituent communications and reports produced. Thousands of Americans evacuated Lebanon during the height of the conflict, either by traversing dangerous and traffic-filled roads to Syria or via ship to Cyprus. There was also serious concern over Hezbollah rocket attacks in northern areas of Israel. The events of this summer taught American organizations operating in the region that they need to be more forward-thinking in their crisis management and evacuation plans, preparing for issues such as: unavailability of air transportation; the needs of local employees, and; the potential for dependent minors to be caught in dangerous situations while on vacation without their parents.


Middle East: Persian Gulf Threats

Numerous threats, arrests and attempted attacks throughout 2006 indicated that Gulf countries continue to be at risk from terrorists. Attacks on major oil installations in both Saudi Arabia and Yemen in 2006 were thwarted by tight perimeter security and actions taken by guard forces, but the attacks show that the oil industry in the region is still a highly valued target.


Worldwide: Kidnapping

Kidnapping has evolved as a global threat. In the Americas, kidnapping has now become its own cottage industry, conducted in a much less targeted, haphazard manner, with hostage detentions taking much less time, and smaller ransoms being accepted. In Africa, employees of western oil companies are targeted and ransoms in the millions of dollars are requested from their employers; these hostages are rarely hurt. In Iraq, kidnappers are targeting local employees, who have very limited chances of surviving as hostages.