The document discusses two major disruptive events - the Buncefield oil depot explosion in 2005 and the Eyjafjallajökull volcanic eruption in 2010 - and their impacts on business continuity. It notes that the Buncefield explosion damaged over 1000 homes and disrupted over 300 businesses, while the volcanic ash from Eyjafjallajökull grounded flights across Europe, costing the aviation industry $1.7 billion in losses. The document emphasizes that having business continuity plans is crucial for organizations to withstand such disruptions, as evidenced by companies near Buncefield that were able to continue operating due to such plans. It concludes that more severe or prolonged disasters could have much broader economic implications and that organizations

1. The Impact on
Business Continuity
of Buncefield and
Eyjafjallajökull
David Alexander
Global Risk Forum - Davos (CH)

2. Redundancy
The ingredients
of resilience
Adaptability Attitude
Participation
...and
communication

3. CRISIS
OPERATIONS
REPUTATION (ACHIEVEMENTS)
Perception Concrete
developments
• positive
Communication
• negative

4. Crisis management as a combination
of management of events and
management of reputation
ACHIEVEMENTS
failed unknown, hidden
succeeded known, publicised
positive perceived
negative not perceived
REPUTATION
Inside influences Outside influences
Resilience of organisation Resilience of system
Crisis management capability External factors:
"force majeure"

5. Civil contingencies
Business Civil Civil
continuity protection defence
management
Resilience
The risk environment

6. Buncefield

7. The fire burned for
three and a half days
Explosion and fire at an oil storage depot,
Buncefield, Hertfordshire, United Kingdom
Sunday 11 December 2005, 0602 hrs

8. Oil storage depot
Business park (22 tanks)
Entrance
to site
Motorways
Residential
area

9. The effects of the explosion extended 3 km
with damage to 1000 houses and 300 companies.

10. Interruption of traffic circulation, of
commercial activities for 300 firms,
and to the lives of 3,500 people.

11. Effects on the nearby commercial area.

12. According to a study by the London
Chamber of Commerce, started in
2003 and updated ever since:-
• 80% of commercial companies that do
not have a well-structured emergency
plan risk bankruptcy within one year of
suffering a major incident or disaster
• 90% or companies that suffer major
losses go into liquidation within
two years

13. • 43% of companies that suffer the
effects of disaster never recover their
market position
• In the United Kingdom, half of
commercial companies have no
contingency plan (data unchanged
from 2003 to 2006)
• in the United Kingdom one company
in 500 per year suffers a disaster.

14. More than 85% of the largest companies
depend totally or largely on
information technology.
On average, a company will lose one
quarter of its daily earnings by the
sixth day in which it cannot access
its IT system. The figure rises to 40%
for banks, financial service firms
and public service companies.

15. At Buncefield three
multinational companies
suffered serious effects,
but 8000 jobs were
saved by having
business continuity plans

17. Northgate Ltd
administered
the payment
of salaries
for 209
clients
....and it was
almost
Christmas....

19. Northgate started work again the next
day from other sites, including employees
working from home by Internet.

21. The local municipality, Dacorum, had a
business continuity plan, which it used in
parallel with its emergency plan.

22. Permanent emergency plan
Aftermath
Monitoring Strategic,
prediction tactical & operational
& warning planning
Business continuity plan
Recovery and
reconstruction
planning
Disaster

23. Eyjafjallajökull

24. Volcanic Ash Aviation Hazard
• from 1935 to 2003 102 aircraft
encountered significant
concentrations of volcanic ash
• ash is not detectable by
weather radar as it is dry
• ash can reach cruise
altitudes in five minutes
• stratospheric ash concentrations
may remain at circa 20,000 metres.

25. Eyjafjallajökull eruption of Apr-May 2010:
• started 20 Mar 2010, ended 22 May
• volcanic explosivity index VEI 2-3
• Vulcanian eruption style
• maximum plume height 13 km
• ash had 58% silica concentration.
Eyjafjallajökull eruption of 1821-3:
• started 19 Dec. 1821, ended Jan. 1823
• central vent, subglacial explosive eruption
• volcanic explosivity index VEI=2
• 4 million m3 of tephra emitted

26. Impacts of Eyjafjallajökull on business
• US$1.7 billion losses for civil aviation
• air delivery of perishables and
medical supplies knocked out
• business travel down, meetings cancelled
• passengers left stranded everywhere
• imbalance created in
tourism and business travel.

27. Implications of Eyjafjallajökull for business
• potential civil aviation mass bankruptcy
• need for regulation and integrated
planning for transportation in general
• liability issues for transportation
(EU regulations)
• alternatives to travel, meeting
and delivery need to be studied
(create redundancy).

28. Conclusions
• two big unanticipated (but
not improbable) events
• longer or worse disaster of similar
kind would equal threshold crossed
to much more profound implications
• use scenarios to explore
implications and identify needs
• in crisis radical changes needed
in ways of doing business
• organisational learning.

29. Environmental context
Latent organisational
Active
Active context
context
organisational
(members'
tools)
context
Practical
Knowledge
experience
After: Argote and Spektor (2011)

30. d.alexander@alice.it
www.emergency-planning.blogspot.com