Issue 63 - Article 12

The private sector: stepping up

January 19, 2015
Serena Brown
Conference with business owners, vendors and entrepreneurs in Tacloban, May 2014

The private sector response to Typhoon Haiyan was more sophisticated than for any preceding natural disaster. It responded at scale, with a wide array of resources and expertise, mainly in close collaboration with the government and traditional humanitarian actors (civil society, the Red Cross and the United Nations). Most companies responded out of a sense of shared humanity: Filipinos often expressed this as the spirit of ‘Bayanihan’ (mutual cooperation for the common good). Although most large companies had limited direct economic exposure to affected low-income island communities, companies present in the Philippines know that their employees, customers and the government expect them to assist in the event of a major natural disaster. For foreign investor companies ‘It shows how we feel about the country we want to invest in; that we respect it. You cannot drive investment where you only have commercial benefits; you need to employ people and gain support from local authorities’. Interview with Vanessa Hans, Head of Business Support, France- Philippines United Action, 27 June 2014.

This article draws on interviews with over 30 represen- tatives from the private sector, civil society, the UN, the IFRC/Philippines Red Cross and the government of the Philippines. The interviews probed private sector alignment with the OCHA-WEF ‘Guiding Principles for Public-Private Collaboration for Humanitarian Action’ and contributions to the five pillars of the ‘Hyogo Framework for Action on Disaster Risk Reduction’. See and

Quicker, bigger and better

The private sector made the humanitarian response quicker, bigger and more effective. Companies with local presence were often the first responders, leveraging their networks, people, assets and products. They donated relief items (for example water, food, tarpaulins, water filters, solar torches, blankets, clothes, pharmaceuticals, medical equipment and hygiene items), logistics (vehicles, air and sea freight, warehouses), services (including communications, passenger flights, port services), expertise (such as project management, financial and logistics surge capacity) and volunteers for packing, distribution and rapid assessments.

After the early relief phase, one of the primary contributions of the private sector was to revive distribution chains for essential items, reduce predatory pricing (many prices increased between four and ten times their pre-typhoon levels) and rebuild livelihoods. Interview with Rene Fortune, Director, PBSP, 28 July 2014.  For example, Coca-Cola provided 15,000 Sari Sari store (small convenience store) owners with temporary structures, and together with Procter & Gamble it partnered with USAID to rebuild (with permanent structures, sometimes including a small dwelling), and to restock 1,000 Sari Sari stores and train their owners. According to Adel Tamano, Vice President for Public Affairs and Communications at Coca-Cola: ‘One of our core tenets is that sustainability is part of everything we do so we are moving away from a philanthropic model … We don’t see a conflict that our support for Sari-Sari stores helps our business and also has a humanitarian purpose’.

The private sector also made substantial contributions to recovery and reconstruction in the form of financial dona- tions from companies, corporate foundations and employee giving campaigns, and donations of products and expertise. These resources have been channelled into repairing and constructing houses, schools, healthcare facilities and other infrastructure, as well as helping people to recover and diversify their livelihoods.

Companies also provided financing for relief and recovery through payment of insured losses. Given low insurance penetration in the Philippines (ranked 65 out of 88 countries by Swiss Re in 2013), insured losses were estimated at $1.5 billion, including losses from public infrastructure insurance, compared to estimated total losses of around $13bn. Insurance thus comprised a small, though important, proportion of disaster loss financing. Some microinsurers were able to settle claims promptly, starting within three days of the typhoon, by using their grassroots networks, easing documentation requirements and, for the first time, using satellite imagery and crisis maps for damage assessments. However, in most cases claims payments took longer than normal because staff and infrastructure had been affected by the typhoon. It also proved difficult to locate displaced people and identify the missing.

In addition, companies used their networks and customer base to increase giving from third parties. In the UK, for example, the airline easyJet asked passengers to donate on flights; mobile network providers EE, Orange and T-Mobile texted customers to ask them to donate £5 to UNICEF; and UK retail store H&M asked people visiting its 200 stores to donate spare change into buckets at tills. Technology also proved to be a key enabler. Facebook’s News Feed and Twitter’s home timeline (together accessed by 1.5 billion users every month) launched a banner campaign encouraging people to click and donate. The Yahoo-owned Tumblr and Apple’s iTunes ran similar campaigns. BT’s MyDonate technology platform powered and securely processed donations raised through the UK’s Disasters Emergency Committee (DEC), and BskyB’s interactive giving facility enabled viewers to use the interactive ‘red’ button to donate.

Locally led, rehearsed and coordinated

Three critical success factors stand out. First, as a middle-income country with an active private sector, Filipino companies – together with the Philippines arms of international businesses – led the private sector response. These companies understand the local context, they have established relationships with local government and civil society and they were able to quickly deploy local resources. For example, 90% of the pro bono personnel deployed by the Logistics Emergency Teams were Filipino.

Second, the frequency of natural disasters in the Philippines has given the local private sector plenty of practice in responding. There is a conducive legal framework, and over recent years companies have refined their approach to disaster risk management, complemented by other actors improving the ways in which they leverage private sector support. This created the foundation for a strong and proficient private sector response when Typhoon Haiyan struck. Companies activated tried and tested protocols, collaborating with NGOs that had already earned their trust.

Third, the private sector response was generally well coordinated with the government and other humanitarian actors. Coordination mechanisms included bilateral relationships between companies and government ministries at national, provincial and local levels; private sector platforms; and the humanitarian cluster system (Typhoon Haiyan was the first disaster where OCHA and the UN Global Compact deployed private sector focal points to help inform and coordinate the private sector response).  To help coordinate private sector rehabilitation efforts, the Office of the Presidential Assistant for Rehabilitation and Recovery (OPARR) is taking the novel approach of securing a private sector sponsor for each of 24 Areas of Intervention and Development: ‘The sponsor adopts an area and becomes an overall shepherd to make sure rehabilitation in that area is in accordance with the building back better approach under the Comprehensive Rehabilitation and Recovery Plan (CRRP), working with OPARR, the local governments and other private sector donors and partners in that area’. Interview with Atty. Karen Jimeno, Director for Communications, OPARR, 18 August 2014.

The power of platforms

The Philippines has several well developed private sector platforms/ consortia. These platforms galvanise private sector resources for disaster management, improve the quality of preparedness and response, cluster activities for greater impact, and coordinate with the government and other humanitarian actors. A few examples are particularly noteworthy, although the range of their activities is far wider than can be discussed here. The Philippines Disaster Recovery Foundation funded relief and rehabilitation activities, and acted as the main national coordinator of private sector efforts and link to the government. The Philippines Business for Social Progress (PBSP) foundation, which is supported by 250 private companies, identified north-ern Cebu as a priority; under its Project ‘New Dawn’, it designed five major social investment programmes including health and school infrastructure, disaster risk reduction training and mangrove protection. The Corpor- ate Network for Disaster Reduction has a flagship project, Noah’s Ark, which develops government capacity through a series of seminars and workshops including risk assessments, emergency procedures and evacuation drills.

Several Chambers of Commerce also secured and coordinated private sector support. For example, the Cebu Chamber of Commerce and Industry, which has a permanent disaster committee in its External Affairs Division, led local private–public coordination of relief efforts and (amongst other things) provided logistical support to the development of Cebu Mactan Airport as an international hub for relief flights. The French Chamber of Commerce and Industry in the Philippines established ‘France–Philippines United Action’ as a taskforce to coordinate and cluster the activities of French businesses; it evaluated and selected projects to support, led engagement with other stakeholders and developed collective communications. The Philippines Chamber of Commerce and Industry launched the Eastern Visayas Business Recovery Center, in partnership with the Department of the Interior and Local Government, to increase the viability of businesses affected by the typhoon. The potential of global industry associations was clearly demonstrated by the GSMA (which represents the interests of 800 mobile operators around the world) and the Global VSAT Forum (which represents the interests of SatCom companies around the world). Both have established a Disaster Response Programme and are Observer Members of the UN Emergency Telecommunications Cluster. GSMA supported Filipino mobile operators with preparedness in advance of Typhoon Haiyan, and was well positioned to deploy a representative to act as a link for mobile operators in the typhoon’s aftermath, collating, synthesising and sharing information on network availability and other services (e.g. mobile money) with humanitarian actors, and aggregating and coordinating NGO, UN and government requests for support.

Opportunity knocking?

Many leading companies now integrate social and environmental considerations into their core business, rather than viewing them as the preserve of a Corporate Social Responsibility department. Increasingly, companies are catching on to the ‘shared value’ opportunity: i.e. they are seeking to create economic value by creating societal value. However, when it comes to natural disasters the large majority of companies are still thinking only in terms of philanthropy (i.e. donations of funds, goods and services) and business continuity. The next opportunity is to re-imagine products and markets for a world characterised by escalating disaster risk. As Butch Meily, President of the Philippines Disaster Recovery Foundation, commented: ‘CSR budgets are finite; we need to unleash the commercial muscle of the private sector’. The Philippines, as a highly disaster-prone middle-income country, is an obvious market in which to ‘hot house’ game changing solutions.

Collaboration between the private sector, the government and civil society is on the right trajectory. Even so, Typhoon Haiyan was a wake-up call to accelerate these positive changes: from disaster management towards resilient development; from response towards risk reduction, mitigation and preparedness; from projects towards an integrated system view; and from donations towards skills sharing. In September 2013 the Bank of the Philippines had sponsored a workshop in Tacloban to assess the city’s preparedness for future client scenarios including a super typhoon in 2021; just a few weeks later Typhoon Haiyan struck allowing insufficient time to translate workshop recommendations into action. Typhoon Hagupit is yet another reminder that we need to seize the opportunities we have available today.

Next year heads of state will adopt the Sustainable Development Goals and the successor to the Hyogo Framework for Action. The private sector has been a significant voice throughout the global consultation processes, and 2015 will shine a spotlight on the centrality of the private sector to resilient, sustainable development. With its well-developed private sector platforms, the Philippines can further enhance its global reputation by becoming a beacon of good practice for public–private collaboration which accelerates resilient development.

Serena Brown, Global Development Initiative, KPMG International.


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