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A frightening event in January 2005 that killed nine people shows how coordination among the public and private sectors is critically important to saving lives and how it needs to work better.

Because of an improperly set switch, at 2:39 a.m. on Jan. 6, 2005, a northbound Norfolk Southern train traveling through the small town of Graniteville, S.C., trundled onto an industrial siding. There, it rammed into a parked, unmanned train. The collision derailed 16 of the northbound train's freight cars, including three tank cars containing chlorine.

A night shift worker at one of several plants adjacent to the accident called 911. The first responders arrived within two minutes. Within nine minutes, the Aiken County emergency unit began "reverse 911," automatically calling phone numbers in the area warning residents to stay indoors.

The first county hazardous materials team arrived at 3:21 a.m. Later in the day, the Aiken County Sheriff's Department conducted a door-to-door evacuation of the 5,400 residents living within a mile of the accident.

Nine people, including the northbound train's engineer and six workers employed at a nearby textile plant, perished from chlorine gas poisoning within minutes of the accident. A total of 75 were admitted to hospitals.

For the U.S. Department of Homeland Security, a chlorine tank car spill is a nightmare.

A federal investigation of the accident concluded that emergency response was "timely, appropriate and effective."

Others differ, including a safety professional who studied the incident closely. The consultant found local fire and county sheriff personnel fighting their own petty turf battle as the fires raged and the chlorine spread.

Turf wars erupting between federal, state and local agencies called upon to deal with the same emergency are nothing new. For proof, readers need look no further than the nation's delayed and inadequate response in the aftermath of Hurricane Katrina, which devastated parts of New Orleans and surrounding counties and states in August 2005.

In the case of the Norfolk Southern accident, the railroad company had to rely on a fax machine to confirm to local emergency responders the damaged tanker's contents.

AN ISSUE FOR HOMELAND SECURITY

Both the private and public sectors learned at least one hard lesson from Hurricane Katrina, which was that public emergency responders failed to coordinate as effectively as they could have with businesses that wanted to help, or that needed help.

But there is now an effort to learn from the past by involving business coalitions and corporations such as The Home Depot, Marriott International Inc. and Wal-Mart Stores Inc., where the primary goal is to protect businesses' ability to stay afloat, minimize business-interruption losses and restore the purchasing power of communities in the wake of disaster.

For some crisis managers, those employed by the largest corporations, fitting business into emergency response is a front-burner concern, though it ultimately remains the province of too few risk executives.

"If you ask about the need for business to understand public-sector emergency management programs, you hit a real basic nail on the head," says Jim Shortal, director of crisis management at The Home Depot, the nationwide home improvement store.

"We encourage our store managers to engage with local police and fire, and county regional emergency managers," he says. "They want to know you, the corporation."

"You may be granted access to the county or state Web site where you can get situation reports, to figure out, 'Oh, they opened up Highway 1 at 6 p.m.,' so you can begin to plan on that," he also says. "It's a great intelligence source so that you can plan your response."

Home Depot has signed onto formal public-private sector programs in eight states.

Penny Turnbull, senior director of crisis management and business continuity at Marriott, says that being familiar with these programs "is key to ensuring good coordination with local, state and federal agencies."

This knowledge is also vital for us to fully understand how the public sector will respond in an emergency, she adds.

During a disaster, consumers and Main Street shops need the community to recover quickly, just as much as the community needs big-box retailers to be open for business, says Jason Jackson, Wal-Mart's director of emergency management.

"Getting a Wal-Mart store back up and running takes away the pressure on local communities to provide life-sustaining assets that are much needed," says Jackson, speaking at a conference last year. Hurricane Katrina destroyed four Wal-Marts.

Forging public-private partnerships matters because insurance will not cover all or even most business-interruption mishaps from a natural or manmade event.

Business-interruption losses are, generally speaking, covered only if there is physical loss or damage to property, according to George Stratts, executive vice president of Lexington Insurance Co., which insures hospitals and universities for evacuation expenses even if no physical loss occurred. Where civil authorities curtail physical movement, impose curfews or such, business-interruption coverage without physical loss is also available.

However, a lot of business interruption will simply not be covered.

And it's more than just a matter of getting back to work. Businesses are almost always critical to returning a community to normalcy as they will likely be the ones to sell products and services to meet the surge in demand that follows on the heels of disruption.

To do that, a tightly coordinated response between private employers and public emergency agencies is critical.

ESCALATION MATTERS

Three models for corporate emergency arrangements with government are in use today, according to Shortal.

One is to work directly with a state or local emergency operations center, such as in Texas, Virginia and Washington state. This can include training with public personnel.

A second model is to work through industry trade conduits, which Home Depot does in Florida and North Carolina.

A third model is to develop a business-operations center dedicated to coordinating the response of private industry. Such centers exist in Iowa, Georgia and California.

The state of Washington's Emergency Management Division set up a business outreach program in 2007, and hired Wendy Freitag to run it. She worked previously for Microsoft to create emergency response plans for its facilities worldwide.

Freitag says that companies need a way to "escalate an issue."

Last December, when storms pummeled the Pacific Northwest with torrential rains, a large food distributor still found ways to ship supplies to its store, one of the few left open, despite hundreds of miles of closed roads and downed power lines, which left 35,000 without power.

"We got the state transportation and state public-safety people to identify an alternate transportation route into the community, thus keeping the supply chain open," says Freitag. Moving goods through the West Coast's main north-south artery, Interstate 5, parts of which were closed, was also a challenge as the transportation companies had to prove their trucks were carrying critical supplies, she says.

Freitag also cites a case of a public health official in a community that lost power who ordered a grocery store to dump its stock of perishables. Had the grocery store been connected to the local emergency operations center, store managers might have been granted a waiver, which would have allowed it to dispose of less, thereby cutting its losses.

The emergency management community needs to leverage all the technology at its disposal to increase the speed and the accuracy of the information it shares, says Freitag.

The question for corporate crisis managers is, how tightly are you connected?

PETER ROUSMANIERE is a Vermont-based columnist for Risk & Insurance®.

April 15, 2008

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