Mysteries & puzzles

Mysteries, on the other hand, could not be answered with certainty even in principle. This is a useful distinction which can be further developed in the security context. Puzzles might be thought of as those issues that have answers and involve facts and data, while mysteries are those issues for which there are no answers and involve judgement, analysis and interpretation.

Alongside traditional threats of, for example, kidnapping, new ones are emerging. Terrorism is a growing and worrying phenomenon, with a four fold increase in attacks in the early part of this decade, driven largely by activity in the Middle East and Pakistan.

In Russia Chechen separatists have, in recent years, increasingly adopted the banner of radical causes and established connections to Al-Qaeda, and their activities have moved to other regions of the North Caucasus, including Dagestan and Ingushetia.

Energy installations face a credible terrorist threat in the North Caucasus while, in the short to medium term, those in the Caspian region, as well as in Siberia and in the Russian Far East, face a less credible terrorist threat.

However, in the longer term, with increasing energy shortages and in the event of increased tensions between the west and Russia, ‘geopolitical sabotage’ against pipelines is possible even in these regions.

A credible rise in fundamentalism in Central Asia could also heighten the risks of terrorist attacks against pipeline infrastructure, owing to the lack of other accessible targets.

But the issue needs to be kept in perspective. The US National Counterterrorism Centre (NCTC) statistics suggest that only a very small percentage of terrorist attacks are directed against the energy sector.

Far more damage has been done by vapour cloud explosions caused by process failure, pipe corrosion and other maintenance failures.

Despite these concerns about the vulnerability of oil and gas infrastructure to terrorism, the threat is broadly manageable with existing technical solutions and management practices.

More challenging from an International Oil Company (IOC) perspective are the growing problems associated with insecurity and poor governance in major producing countries.

Studies by IEA World Energy Outlook and others indicate that 73% of the world’s gas supply comes from medium to high risk states – be it political or security risk or, indeed, both.

By 2020 over half the worlds growing demand for supply will come from developing or transition states. In this medium to high risk context kidnapping of expatriate IOC workers has nearly doubled in the period 2004 – 2006, often driven by new threats such as community issues.

We cannot afford to lose sight of the possible connection between the two, however, and low intensity communities issues can be causal to high impact acts of terrorism and kidnapping.

These dynamics are changing the security environment as the traditional focus on catastrophic events needs to shift to dealing with lower impact but higher frequency threats which can be more disruptive to business.

Petty crime, inter-ethnic clashes between imported and local labour and endemic corruption are the current most realistic risks. For example, clashes broke out in October 2006 between Kazakh and Turkish workers at a residential settlement at the Tengiz oilfield (Atyrau, western Kazakhstan), injuring around 140 people.

Since the early 1990s, thousands of Turks have come to Kazakhstan to work on construction sites in the major cities, such as Astana and Almaty, as well as on the oilfields.

Kazakhstan suffers from an unevenly skilled labour force, with few experienced managers, making it difficult for many foreign companies to meet legal requirements of local content employment.

Elsewhere in the region the illegal tapping of pipelines has resulted in shutdowns while repairs have been made.  In some cases there have been oil/condensate leaks resulting in ground contamination.

In most cases there was a considerable loss in export volume and, therefore, in revenue. Even if an illegal tap has not led to product loss, the pipeline still has to be inspected and repaired, usually involving reducing pressure flow with similar loss of revenue.

It would seem obvious that for illegal pipeline tapping to be successful there needs to be a market for the stolen product; criminal elements with the technical ability and equipment to carry out the attacks; an ineffective security environment and a low probability of being detected and prosecuted.

The security solutions to the problem reflect a mixture of puzzles and mysteries.

For the puzzles it is, of course, relatively straightforward to devise effective physical security measures appropriate to the threat.

Block Valve Stations can be protected with a security management system comprising fence with perimeter intruder detection system and monitored by CCTV, all relayed to a central monitoring station.

Technology exists to monitor pipelines using fibre optic sensing devices that can detect ground movement or vibrations in the vicinity of the pipe.

But no amount of detection or delaying mechanism will be worth the financial outlay unless there is an effective response capability, and this is where we start moving towards the mysteries.

Information gathered from among the local communities may help to thwart intended attacks, as well as identify what happens to the product after an incident, but to be successful it requires an effective community relations plan and close cooperation between the community relations and security teams.

Guard, patrol and response forces tend to be recruited from the same local communities so they will undoubtedly be known to criminal elements that may exert pressure to be involved in corrupt practices, whether by direct involvement in tapping or being persuaded not to report suspicious activities.

Guards therefore need to be effectively managed and well motivated.

They must be adequately recompensed financially and made to feel they are appreciated for the essential contribution they make to the overall success of the operation.

They must be equipped with state of the art equipment, including adequate response vehicles that can reach the scene of a potential tap before it has been completed.

And finally, there needs to be an effective back up from local law enforcement agencies to ensure a proper investigation of incidents, and prosecution of suspected offenders.

The criminal law code in Russia has recently been amended to create specific offences relating to pipeline tapping.

Clearly not all of this rests with security departments, but we have seen a period of rapid change in the corporate security function within IOCs as it evolves to respond to a broader range of threats, increasingly serving core business needs, even though its room for manoeuvre becomes more constrained by regulation, host government sensitivity and stakeholder scrutiny.

We have seen concerned governments introduce legislation, codes or regulation, or setting standards for Critical National Infrastructure, all leading to a tightening of physical security standards at a cost which often has to be borne by the business.

We have seen legal and ethical concerns about whether business is complicit in human rights abuses which can be the root cause of security threats, with increasing NGO scrutiny leading to “no where to hide” and driving the need to manage these softer risks.

And the number of companies participating in the UN Voluntary Principles on Security and Human Rights continues to grow. Duty of care to employees operating in the complex global environment is an increasing issue with growing links to morale and retention.

‘Perception’ of risks causes difficulty in recruitment or retention of expatriates working in difficult environments.

Some of these issues can be seen as ‘puzzles’; for example, how to protect a physical asset from attack by criminals or terrorists; how to protect travelling executives; how to protect intellectual property – there is an answer out there somewhere, it may be simple or complex to work out, others may have done so before.

Mysteries, on the one hand, are intractable risks rooted in complex situations such as how to pre-empt community issues from interrupting business.

They occur mostly when the host government cannot or will not protect businesses to emerging industry standards and focus the emphasis for corporate security professionals on early planning and integrated solutions.

What we need to be aware of, however, is that the answer to some puzzles might in themselves contribute to the existence of mysteries. For example, IOCs are often forced by crime rates and local conditions to build well protected life camps which by their very nature erect barriers between them and their host communities, driving a wedge between them and creating a “them” and “us” attitude.

How to resolve that is indeed a Mystery but it has been successful in Yemen, Papua New Guinea and Indonesia.

Emerging challenges resemble “mysteries” more than “puzzles”; the security function is more proactive, but more constrained and an early involvement of the corporate security function increases opportunities for risk reduction at the most effective and cost efficient time.

Security is converging with other functions but how mature or sophisticated are large companies; is it still a “mystery”? And while Puzzles might be resolved, some answers may contribute to the existence of Mysteries and these could rebound with a much fiercer bite – reputation, media attention, stock market reaction and possible damage to the environment.

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