Global supply risks

The Cauvery Water Violence in Bangalore and Its Potential to Affect Your Business

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“The curfew came after rampaging mobs set fire to dozens of buses, trucks, and cars and attacked shops and businesses in Bengaluru and some other parts of the state”- The Indian Express, September 2016.

Bangalore has set a horrific picture of social violence this September. Section 144 was imposed in the IT Capital of India causing a loss of around INR 25,000 crore (~US$3.7 B). It is true that all countries experience some degree of social tension, but to incorporate such risk in the risk management program is a major challenge. What is the significance of ethnic violence in risk analytics? Keeping in mind the recent Cauvery Water Dispute Violence in Bangalore, this blog offers practical guidance to mitigate the possible impacts of such risks to businesses.

 The Backdrop

The Cauvery Water Dispute has been a historical issue between Karnataka and Tamil Nadu for over 120 years and a combination of several legal, political and social factors have further complicated the situation over the last few decades, resulting frequent and sudden social disruptions across sensitive areas in major towns and cities from both sates.

 Violent Scenes in the City

Violence erupted in southern part of Karnataka on September 12. The activists set ablaze many vehicles bearing Tamil Nadu registration plates and attacked government offices. As a consequence, a curfew was imposed in parts of Bangalore. A 12-hour bandh (lockdown) was declared which brought India’s Silicon Valley to a virtual standstill. One death and several injuries were reported.

Repercussions of the Violence

The violence over Cauvery water dispute caused Karnataka to suffer losses of around INR 22,000-25,000 crore (~US$3.3B- US$3.7B) with the widespread agitation hitting transport services and businesses. There had been severe damage to vital urban infrastructure, interruption in the transport including, roads, rail and air and inability of the workforce to safely move to and from offices and factories in Bangalore City. Widespread loss had accrued to IT and ITeS facilities due to poor attendance. Inter-state tourism particularly involving pilgrims and domestic travelers were also affected. Cancellation of air tickets was reported to and from Bangalore. Likewise, industrial production, movement of cargo and retail trade including malls, cinema halls and restaurants were halted.

Well, an uneasy calm fell upon the city by the next day and within another day or two, the city returned to its normal pace. As per latest news the Supreme Court has ordered Karnataka to release 6000 cusecs of water daily till further decisions are taken. As a stable conclusion has not been reached yet, an uncertainty and tension prevails in these states. Under such circumstances, these risks will happen and are bound to reoccur. Therefore, it is highly essential for global businesses to closely monitor and watch out for the recent updates on this issue.  This would help them define their risk tolerance level and figure out an efficient method of transferring the risk. Social violence as a whole has the potential to slow down a business process. Therefore, it is evident that anticipating such risks and monitoring them is crucial.

In places where such situations occur frequently, businesses need to have a robust plan and budget for prevention and mitigation. The immediate problem is to commute to the workplace. One solution could be remote-login process, especially for time-bound, high-importance processes that cannot be compromised. If the employees are stranded within the office premises, arrangements must be made for their safety. It’s best to prepare ahead of time through proper planning and drills to ensure that infrastructure and premise security are properly staffed with enough personnel and equipment. In addition to physical safety, it is also important to account for the concealed impact of violence-related anxiety on relationships in the workplace. Regular sensitivity workshops and open discussions are effective ways to ease tension and build stronger relationships. Violence prevention and redressal can also be incorporated into a company’s corporate social responsibility program with better involvement in local peace organizations, community development initiatives, etc.

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