Why Gonu should teach us all a lesson

Headlines in Middle Eastern newspapers right now tend to be about growth and financial gain, and so we have all been taken aback by the ongoing reports of destruction and loss left in the wake of Oman's Tropical Cyclone Gonu. To an extent, however, it could be argued that the havoc wreaked by the cyclone is in itself a measure of Oman's lack of preparation for such an event. That is not to say that The Royal Oman Police didn't do a brilliant job of making continuous announcements over TV and radio on how to deal with the crisis and also evacuating large numbers of the population including the 7000 residents of Masirah Island.

Similarly, the National Committee for Civil Defence was tracking the path and speed of the cyclone and issued a warning to the Omani population that the cyclone would hit within three days. Warnings were issued every three hours and government departments such as health, education, electricity, and telecommunications were kept ready and alert to deal with the crisis.

So why was it then that Oman lost US$200m last week in oil exports, major banks were forced to close and shares on the Muscat Securities Market took a total battering? (Oman's main index was down 3.57% last week, with 21 stocks down on the first day of trading since the cyclone hit.)

Oman is a pertinent example of how badly businesses can be hit if they don't have business continuity and governance measures in place. That the Mina al Fahal export terminal, (the only oil export terminal for Oman's 650,000 barrels per day of crude oil production), and the Mukhaizna oilfield, (with an estimated output of about 10,000 barrels per day), had to have their operations suspended because they didn't have any contingency plans in place is remarkable considering their financial importance.

Many might argue that Cyclone Gonu was the most powerful storm in the region for 60 years and that no natural disaster can ever be averted. While that cannot be denied, it is common knowledge that milder tropical storms are common in the region from mid-May to the end of June and therefore hurricanes and cyclones are not complete aberrations - around 300 people died in a cyclone in Oman in 1981.

And yet a spokesperson for BankMuscat, Oman's largest bank, admitted last week that 10 of its branches had been forced to remain closed for repairs. In fact, the majority of Omani banks did not operate backup sites and so were unable to maintain their systems during the cyclone. As Ray Stanton, BT's Global Head of Business Continuity, Security and Governance, explained in an interview with Arabian Business last month, milliseconds off transaction time are worth thousands of dollars to banks in the region.

So then you look at some of the banks in Oman that have been closed for not just milliseconds or seconds but hours and days - what was that worth to them? The worst-case scenario is banks and organisations that don't have any contingency plans in place whatsoever and consequently not only lose their customers but also all their data.

To date the GCC countries have been fortunate enough to have a very low incidence of natural disasters but with climate change in increasing turmoil, it would be wise for the region to put more considered thought into how well prepared it is for future natural disasters. For example, it would be interesting to know how many regional companies are prepared for an earthquake after the recent discovery that there is a fault line located 120 kilometres from the UAE.

With a large sector of the region's business community still in a nascent stage, institutions based in the region have a great opportunity to implement business contingency plans so as to minimise future impacts.

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READERS' COMMENTS

Taking Precautions for Nautral Disasters
Posted by Gopikrishnan S Menon, Muscat, Oman on Monday 18 June 2007 at 13:44 UAE time

It is always good to understand what is in nature's store for all of us-not only oil and water and other valuable stuff but also some real devasatating calamities as well. As Arabian Buiness put it, next one may be an earthquake and I am sure 90% of the buildings will come down or will suffer serious damages. GCC have to think in common and have high level disaster management committees planning and implementing several control measures before another one strikes.

Lesson from GONU
Posted by Mohammed, Muscat, Oman on Monday 18 June 2007 at 08:01 UAE time


The reported loss of $200 Million from oil revenue, as reported by many - including Arabian Business - is false. There was a 48 shut in of the Oil terminal at Mina al Fahal during the Cyclone GONU but production was mantained throughout those 48 hrs (Wednesday and Thursday) for safety reason. After 48 hrs. of shut down, it was merely re-scheduling of oil tankers - hardly 2 or 3 - and total volume of export for June will be exactly the same - as if there was no GONU. Revenue are generated from Oil Production. Production was not effected. As for Mukhaizna, operation was suspended, not production.  
Arabian Business facts are WRONG!!!... sorry guys, better get your facts from source.

Well prepared action plan.
Posted by Abdallah, Muscat, Sultanate of Oman on Sunday 17 June 2007 at 12:22 UAE time


Though it's sad and heart breaking to see all that destruction in Muscat and other parts where Gonu hit, but I think the folks at civil defence agencies in Oman did an excellent job in terms of preparations, evacuations and initial responses, etc. 
 
Considering the fact that the country has never dealt with any calamity of this nature or none even close. 
 
Job well done to all of them and let's just be ready for the next one because it's bound to strike again, hopefully not in the foreseeable future, Insha Allah. 
 
Abdallah, 
Muscat.

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