Focus On Risk Management

For Disaster Management, Louisiana Looks to Business


As Hurricane Gustav bore down on Louisiana in 2008, state officials wanted to avoid the food shortages that had followed Katrina three years earlier. So they bought thousands of MREs—“meals ready to eat,” foil-bagged military rations available from the Federal Emergency Management Agency—for about $8 each. They also called local caterers and restaurants to see whether those businesses might help feed evacuees. The food vendors, it turned out, were able to serve fresh, hot meals of jambalaya and red beans and rice at half the price of FEMA’s rations. “We probably saved close to half a million dollars during that one event by tapping into the private sector,” says Pat Santos, who oversees disaster relief in Louisiana.

After enduring calamities such as Katrina, Gustav, and the Gulf oil spill, Louisiana has discovered that businesses from corner gas stations to big-box stores can help improve the state’s response to disasters. Officials there and at the federal level recognize that companies are often better equipped than government to help. When Hurricane Irene approached the East Coast in late August, retailers extended store hours and shipped extra generators, bottled water, and other supplies to the region. “The private sector owns an enormous amount of infrastructure that the government depends on,” says Joseph Booth, a former state police official who now directs the Stephenson Disaster Management Institute at Louisiana State University in Baton Rouge.

The cornerstone of the state’s strategy is the Business Emergency Operations Center at LSU, which Booth helped set up last year. During an emergency the center brings together 40 representatives from critical industries such as food, energy, transportation, and communications to help match assistance offered by companies with needs on the ground. Through e-mail and online updates, officials in the center alert a network of more than 1,300 registered businesses that may be able to supply required materials. For example, during the BP (BP) oil spill last year the group put out a call for oil containment booms to protect the coastline from the slick.

Following an evacuation, officials will ensure that the first returnees include employees of businesses that provide essential services. “You need bankers and bank tellers, you need grocery stores, you need gas stations, you need water,” says Bonnie Canal, a member of the team that will run the Business Emergency Operations Center. “You need all these components of a community so the people can come back.”

Emergency managers from other Gulf Coast states have toured the center, and FEMA Administrator W. Craig Fugate cites it as a model for communities across the country. Fugate says private companies need to be “part of the team” with government responding to disasters. Last November, FEMA started “embedding” representatives from companies such as Target (TGT), Verizon Communications (VZ), and Brookfield Office Properties (BPO) in three-month rotations at its National Response Coordination Center in Washington. Working out of FEMA’s headquarters, they communicate with affected businesses and let agency officials know how companies can help. “In the really big catastrophic disasters, [even] if you bring everything that government can bring, including the military, it’s not enough if you don’t have the private sector involved,” Fugate says.

Katie Dempsey, an attorney with Target, last winter became the first industry representative to work at FEMA’s command center. During storms she relayed reports from Target and other retailers about locations where snow and ice were so severe that stores couldn’t open. Fugate says he got the news faster from Dempsey than he did from state officials. In more severe disasters, Dempsey says big retailers can provide vital help for responders. “We know everybody’s resources, where distribution centers are,” she says.

Fugate says he realized the need to work with businesses when he oversaw emergency management in Florida. After hurricanes he watched retailers bring in generators and resume business faster than his own teams could provide substantial help to many residents. “We couldn’t get where we needed to go,” Fugate says. “The private sector was better at it than we were.”

The bottom line: Louisiana has recruited businesses to participate more directly in responding to disasters. FEMA is trying it, too.

John_tozzi
Tozzi is a reporter for Bloomberg Businessweek in New York.

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