Business Confronts Terrorism: Risks and Responses

Business Confronts Terrorism: Risks and Responses

by Dean C. Alexander
     
 

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    Central banks and stock exchanges are bombed. Suicide bombers ravage cinemas, nightclubs, and theaters. Planes crash into skyscrapers and government buildings. Multiple bombs explode on commuter trains. Thousands of people are killed and injured while millions are terrorized by these attacks.
    These scenarios could

Overview

    Central banks and stock exchanges are bombed. Suicide bombers ravage cinemas, nightclubs, and theaters. Planes crash into skyscrapers and government buildings. Multiple bombs explode on commuter trains. Thousands of people are killed and injured while millions are terrorized by these attacks.
    These scenarios could be part of a future Hollywood movie. Sadly, they are representative of previous terror attacks against industry and government interests worldwide. Moreover, they are harbingers of global terror threats.
    Industry constitutes a prime target of contemporary terrorism. This timely book analyzes the threats companies face due to terrorism, industry responses to these dangers, and terrorism’s effects on conducting business in the post-9/11 environment. Dean C. Alexander details the conventional and unconventional terror capabilities facing industry. He describes the activities of terrorists in the economic system and the ways they finance their operations.
    Alexander discusses how companies can reduce terrorist threats and that corporate security can minimize political violence. He outlines the dynamics of the public-private partnership against terrorism: government aiding industry, business supporting government, and tensions between the two. He also delineates terrorism’s effects—financial, physical, and emotional—on workers and employers. He highlights the negative financial and economic consequences of terrorism. He discusses the impact of terrorism on traditional business practices and concludes with an assessment of future trends.

Product Details

ISBN-13:
9780299189303
Publisher:
University of Wisconsin Press
Publication date:
09/28/2004
Edition description:
1
Pages:
246
Product dimensions:
6.14(w) x 9.28(h) x 0.78(d)

Read an Excerpt

Business Confronts Terrorism

Risks and Responses
By Dean C. Alexander

The University of Wisconsin Press

Copyright © 2004 Dean C. Alexander
All right reserved.

ISBN: 978-0-299-18930-3


Chapter One

Overview of Terrorist Threats

An explosives-laden truck crashes into a hotel. A suicide bomber carries out an attack at a shopping mall. Electricity grids and railroad tracks are sabotaged. Terrorists attack a housing complex with gunfire and bombs. Sarin gas is released in a crowded subway.

Such terror incidents have occurred globally during the past decade. The United States is a principal target of terrorism. Not only do domestic extremist groups commit acts of terrorism at home, but also, international groups carry out attacks against American targets abroad. Attacks by foreign terrorists on U.S. soil occurred less frequently than attacks on Americans abroad, although the 9/11 incidents are an obvious dramatic exception. It is expected that more terror attacks by foreign groups will occur in the United States.

The United States has been the most popular single target of international terrorism. Also, global citizenry-officials, diplomats, military officers, businessmen, and children-have been victimized by both state-sponsored terrorism (e.g., Libya, Iran, Sudan, and Syria) and sub-state groups, including Marxist-oriented(e.g., Germany's Red Army Faction), nationalists (e.g., Abu Nidal Organization), Islamic fundamentalism (e.g., al Qaeda), and ideological mercenaries (e.g., Japanese Red Army).

This chapter addresses various terrorist threats, including: previous terrorist threats against U.S. and non-U.S. targets and recent attacks against business and non-business interests worldwide. In doing so, we will gain a better understanding of broad private and public targets that have been attacked by terrorists worldwide. This exposure will enable us to have a better grasp of the vast challenges society faces as terrorists view all persons and entities as "worthy of punishment."

Selected Attacks by Foreign Terrorists against U.S. Targets

The most spectacular and deadliest terrorist incidents in U.S. history were the September 11, 2001, attacks. In this twenty-first century "Pearl Harbor," 19 al Qaeda terrorists, wielding knives and box-cutters, hijacked 4 U.S. aircraft, which they used to crash into the Twin Towers of the World Trade Center in New York City, the Pentagon, and a third location, not the intended target, a field in Shanksville, Pennsylvania.

Nearly 3,000 people died and thousands others were injured. The 110-floor World Trade Center twin building, the symbol of American financial prowess, collapsed. Other buildings in the World Trade Center complex and surrounding area fell, partially collapsed, or were severely damaged. Portions of the Pentagon sustained serious damage but were completely rebuilt within a year. The hundreds of billions of dollars in direct and indirect costs arising from the 9/11 attacks, coupled with broad post-9/11 legal enforcement, legal, political, social, and military responses to terrorism, demonstrate the momentous impact of the incidents.

Prior to 9/11, the al Qaeda network carried out other attacks in the Untied States including: the February 1993, bombing of the World Trade Center in New York, killing 6 people and injuring over 1,000; and the June 1993, a Pakistani terrorist opened fire outside the headquarters of the Central Intelligence Agency (CIA), killing 2 and wounding 3 CIA employees. Also that month, the FBI caught a group planning to attack New York City landmarks and various political figures.

Major al Qaeda operations against U.S. interests abroad include:

November 1995: A car bomb explosion outside the American-operated Saudi National Guard training center in Riyadh, Saudi Arabia, killed five Americans and two Indians.

June 1996: A car bombing attack at Khobar Towers, a U.S. Air Force housing complex in Dhahran, Saudi Arabia, killed 19 soldiers and wounded hundreds more.

August 1998: Two truck bombings outside the U.S. embassies in Nairobi, Kenya, and Dar-es-Salaam, Tanzania, killed 234 people, 12 of them American, and wounded over 5,000 others.

October 2000: The suicide bombing of the USS Cole killed 17 and wounded 39 American sailors in Aden harbor, Yemen.

An analysis of American business victimization by domestic and international terrorist attacks abroad illustrates that nearly every type of business sector engaged in by U.S. companies overseas has been targeted. A wide range of U.S. industries that were affected by terrorism overseas were: financial and banking; energy; aviation; automobile and tires; technology, industrial, and defense; mining and engineering; tourism and hospitality; franchises and beverages; pharmaceutical and consumer products; retail; service firms; and other business categories.

These U.S. business targets were singled out because of their symbolism such as the "American way of life" visibility as well as for other practical reasons, including vulnerability of target considerations. The U.S. enterprises attacked overseas ran the gamut from Fortune 500 companies to small firms. The following is a partial list of U.S. companies, from different sectors, that were victimized by terrorism overseas during the past forty years:

Automotive and Tires: Chevrolet (Mexico), Chrysler (Argentina), and Goodrich (Philippines).

Aviation: Bell Helicopter International (Iran), Pan American Airlines (United Kingdom), and Trans World Airlines (Lebanon).

Energy: Mobil (South Africa), Standard Oil (Lebanon), and Texas Petroleum (Colombia)

Financial and Banking: Bank of Boston (Argentina), Citibank (Greece), Diners Club (Colombia).

Franchises and Beverages: Coca-Cola (France), Kentucky Fried Chicken (Peru), and McDonald's (Turkey).

Mining and Engineering: Bolivian-U.S. Mining (Bolivia), Fisher Engineering (Iran), and Minnesota Mining and Manufacturing (Spain)

Pharmaceutical and Consumer Products: Colgate-Palmolive (Mexico); Johnson & Johnson (Mexico), and Squibb (Argentina)

Retail: Sears, Roebuck & Co. (Brazil), and Woolworth (Germany)

Service Firms: Mail (DHL Worldwide Express, Chile), Advertising (McCann-Erickson, Turkey), and Insurance (American Life Insurance, Turkey)

Technology, Industry, and Defense: Bechtel (Indonesia), Rockwell International (Iran), Union Carbide (Mexico), and Xerox (Argentina)

Hospitality: Intercontinental ( Jordan), Marriott (Sri Lanka), and Sheraton (Argentina).

Selected Attacks by Domestic Terrorists against U.S. Targets

During the 1990s domestic terrorist groups in the United States, which include right-wing, left-wing, and single-issue groups (e.g., Animal Liberation Front, Earth Liberation Front, and radical anti-abortion groups), have generally caused less damage than international terror groups here.

An exception to that was the April 1995 attack by a cadre of domestic terrorists. During the deadliest terrorist attack on U.S. soil up to that time, a bomb blast destroyed the 9-story Alfred P. Murrah federal building in Oklahoma City. This devastating attack, perpetrated by two American terrorists, claimed 168 lives, including 19 children, and wounded 674 people. The explosion, emanating from the detonation of a truck-based, 4,800-pound ammonium nitrate fuel oil bomb, destroyed the federal building while severely damaging or destroying other buildings.

Several radical domestic groups-the Earth Liberation Front (ELF) and Animal Liberation Front (ALF)-have attacked business interests as they view Corporate America as harming the environment and animals, respectively. Other single-issue terror groups-including White supremacists, splinter militia, and radical anti-abortionists-have also undertaken diverse terrorist attacks in order to further their goals, though generally against nonbusiness interests.

U.S. extremist environmental groups include the ELF and the ALF. The FBI estimates that between 1996-2002, the groups undertook about 600 criminal acts in the United States resulting in over $42 million in damages.

In fall 1998, the ELF admitted to setting fires at a Vail, Colorado, ski resort, resulting in over $12 million in damages. In August 2003, over 100 sport utility vehicles were set on fire and vandalized in California. In March 2004, William Jensen Cottrell, a member of the ELF, was charged with arson and conspiracy in vandalizing the vehicles. The chosen targets symbolized-for the terrorist groups-exploitation of nature (e.g., cutting trees and damaging the ecosystem) and waste of limited natural resources (e.g., through the negative environmental consequences of gas-guzzling cars).

In October 2002 in Boston, the government indicted a dozen animal rights activists associated with Stop Huntingdon Animal Cruelty (SHAC) for stalking and threatening to burn down the house of an executive of Marsh Inc., a leading insurance broker. The harassment stemmed from the company's alleged business activities with Huntingdon Life Sciences, a British drug testing firm that has used animals in its operations. The SHAC is accused of trying to drive Huntingdon out of business by threatening its clients and business partners.

In December 1999, federal agents arrested two antigovernment militia members in Elk Grove, California, in connection with a planned attack against a facility where 24 million gallons of liquid propane were stored. In May 2002, two men were charged with planning to bomb electrical power substations and a National Guard armory in South Florida (Miami-Dade County). In June 2002, the leader of the Pennsylvania Citizens Militia was arrested for planning to bomb an FBI office in State College, Pennsylvania.

For several weeks during fall 2002, the Washington, D.C., area was paralyzed by sniper killings of nearly a dozen people. As the attacks occurred while the victims were engaging in a typical daily activity-buying gas, shopping for food, going to school-it raised the specter of the vulnerability of society to indiscriminate violent attacks. Although the two perpetrators of the Washington, D.C., area attacks were not connected to any terrorist organization, there was intense speculation that al Qaeda members carried out the attacks.

The sniper attacks caused some people to adjust their daily activities-from exercising outside to forbidding children to use outdoor playgrounds. In fact, a Washington Post poll found that many people felt more personally threatened by the sniper attacks (44%) than during the September 11 incidents (29%) or anthrax attacks (13%). Such findings seem to confirm the premise that repetitive, small-scale terrorist attacks may instill greater fear than large-scale terrorist incidents as they reinforce individual vulnerability.

Selected Terror Attacks against Business Worldwide

On numerous occasions, terrorist groups have indicated their desire to undermine economic interests. Terrorist groups worldwide have made good on such threats, attacking key business and economic symbols, including stock markets, central banks, business districts, and critical infrastructure (e.g., electricity grids and oil pipelines).

By undermining a country's financial interests and capabilities through small- and large-scale attacks, countries are harmed in several ways. For instance, a severe terrorist attack can cause significant physical destruction in terms of human life, national infrastructure, and company assets. Also, the costs of rebuilding after a large-scale terrorist incident as well as responding to terrorist threats take away resources from other societal needs. The costs of rebuilding the World Trade Center in New York (renamed Freedom Tower) are estimated at $12 billion.

As noted earlier, a number of financial centers, including stock exchanges and central banks, have been targeted by terrorist groups in the past as they represent economic power and wealth. For instance, terrorists attacked the Bombay Stock Exchange and Jakarta Stock Exchange in 1993 and 2000, respectively.

In 1996, the Tamil Tigers undertook a suicide terrorist attack against the Sri Lankan Central Bank building in Colombo, resulting in 88 deaths and 1,400 injuries. The incident destroyed or damaged a number of buildings, including hotels. The attack caused significant economic and psychological damage, particularly as it occurred in the center of the Colombo's business district. In the following year, a truck bomb and subsequent gunfight near Colombo's tallest building-which houses the Colombo Stock Exchange-led to 15 deaths and over 100 injuries.

In Israel, terrorist attacks against business interests with many civilian customers have been widespread. Since 2000, there have been hundreds suicide bombing and other attacks against Israeli restaurants, discos, pedestrian malls, hotels, gas stations, bus stops, buses, and casinos. Economic interests have also been attacked in Egypt, Indonesia, and Spain (e.g., tourism); Colombia (e.g., oil); Japan (e.g., transportation); and Greece (e.g., banks).

Following the conviction of Kurdistan Workers' Party (PKK) leader Abdullah Ocalan in summer 1999 in Turkey, there were multiple attacks against Turkish-owned businesses in Germany by suspected Kurdish terrorists, including: Molotov cocktails were thrown at a Turkish shop in Stuttgart and in a Turkish café in Berlin; and Turkish cafes and a grocery store were firebombed near Bonn and Dusseldorf, respectively.

Selected Attacks against Business Targets Globally (2001-2003)

The examples below are illustrative of the breadth of terrorist attacks against diverse business targets globally, including: energy, entertainment and leisure, financial services, hotels, media, real estate, restaurants, retail, and transportation sectors.

ENERGY

Colombia: Six bombs exploded along the Cano Limon-Covenas pipeline, perpetrated by the Revolutionary Armed Forces of Colombia (FARC) (2001).

Israel: A Palestinian suicide bomber killed three people at a gas station in Ariel (2002).

Pakistan: The Muslim United Army group bombed nearly two dozen foreign-owned gas stations in Karachi (2003).

Yemen: A speedboat packed with explosives rammed and damaged a French oil tanker, the Limburg (2002).

ENTERTAINMENT AND LEISURE

Bangladesh: Bombings at four cinemas in Mymenshingh resulted in 17 deaths and nearly 300 injuries. Additional attacks against Bengali entertainment events included: a circus, wounding 30 people; and a bombing at an open-air concert, killing nine and wounding 50 (2002).

Colombia: A car bomb killed 36 and wounded 160 at a sports and social club in Bogota (2003).

Indonesia: Several bombs exploded at two nightclubs in Bali resulting in 202 deaths and hundreds of injuries (2002).

Israel: A Palestinian suicide bomber carried out an attack outside the Dolphinarium disco in Tel Aviv, killing 21 and wounding 120 (2001).

Russia: Fifty Chechen terrorists took over a Moscow theater with 700 civilian hostages. After a nearly three-day siege, Russian Special Forces pumped gas into the theater in order to subdue the attackers. The gas was a bit too effective, leading to the deaths of nearly 120 hostages. The Chechens were killed either by the gas or Russian Special Forces, who later stormed the theater (2002).

FINANCIAL SERVICES

Greece: In Kholargos, two foreign bank branches were set on fire by the Anarchic Attack Group (2001).

Turkey: A truck bomb exploded near a building housing British-based bank HSBC in Istanbul. Another truck bombing that same November day against the British Consulate in Istanbul also caused significant damage. The two incidents resulted in nearly 30 deaths and some 450 injuries (2003).

HOTELS

Indonesia: A car bomb outside the J.W. Marriott Hotel in Jakarta resulted in 14 deaths and over 150 injuries (2003).

Iraq: A suicide terrorist detonated a car bomb alongside the Baghdad Hotel, killing seven and injuring over 40 others. The hotel housed U.S. contractors and Iraqi government officials (2003).

Israel: A Palestinian suicide bomber blew himself up during a Passover Seder held at the Park Hotel in Netanya, killing 29 and injuring 140 (2002).

Kenya: A vehicle packed with explosives crashed into the Paradise Hotel lobby in Mombasa, causing 13 deaths and injuring scores of others (2002).

Spain: A car bomb exploded at a hotel in Roasas. The resulting toll at that tourist resort was one death and three injuries. In Salou, a car bomb exploded at a hotel, killing 13 people (2001).

(Continues...)



Excerpted from Business Confronts Terrorism by Dean C. Alexander Copyright © 2004 by Dean C. Alexander. Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Meet the Author

Dean C. Alexander serves as a consultant in the Washington, D.C., area. His professional experience includes: Director of International Business Development at Grant Thornton International (Santiago, Chile); In-House Counsel at Heron International (London, Great Britain); In-House Counsel at Bezeq Globe (Tel Aviv, Israel); Executive Director at the NAFTA Research Institute (Washington, D.C.); Financial Advisor, UBS Financial Services (Washington, D.C., area); and consultant to the World Bank, Organization of American States, and multinational companies on legal, business, and political risk issues. He has published seven books and numerous articles on business, investment, law, and terrorism. He has lectured on international business law at universities in the United States and abroad as well as on terrorism for the U.S. State Department and at industry conferences. He can be reached at contact@businessconfrontsterrorism.com.

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