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GRC Professional : GRC Autumn 2012
29 1. Supplier insolvency the oda anticipated that more than 43,000 supply-chai n contr ac t s would be needed to deliver the G ames. the r isk that supplier in solvenc y could cause significant delays was made even more cr itical by the immovable deadlines of the Games and the global economic downturn’s effect on the availability of credit. the oda’s supply Chain Management team implement ed processes to reduce the i mpa ct of cont r actor in solvency. its approa ch wa s split int o three main steps – procurement, awareness and planning, and recovery. just some of the steps included: developing det ailed contingenc y plans; identifying and increasing financial monitoring of critical suppliers; understanding critical suppliers’ risk management strategies and e stablishing insolvenc y recover y team s. as a result, more than £640 million of supplier risk was either removed or mitigated from the construction prog ra m. 43 supplier insolvencies were avoided and while 11 were rea lised, their impact was minimised through early action. 2. Health and safety risk profiling and a commitment to creating and following a compliance review schedule has helped the olympics constr uction ef fort deliver an unrivalled health and safety record, with no fatalities during construction. deliver y par tner h&s assurance monitored the performance of tier one contractors, using risk profi ling to focu s attention on high-r isk elements of work. Works were reviewed three months in advance with risk assessments undertaken for identified key tasks. a weekly compliance rev iew s chedule was then put in place. not only did this process allow project teams to anticipate and minimise health and safety risks, it also delivered risk-profiling data from different sites to allow risk themes to be analysed. 3. Security security risks are not limited to terrorism and stretch beyond the hundreds of olympic spor ting venues. throughout the uK, the public will be enjoying the olympic spir it at special events and celebrations, creating a need for increased use of private security for many businesses and venues. With other events such as music festivals, football finals, Wimbledon and the Queen’s diamond jubilee celebrations all happening at the same time, the availability of properly accredited and licensed secur ity staff will be tested. 4. Bribery olympics are always abuzz with organisations in full promotional swing, using the event to form a nd firm-up business relationships. however, the com mencement of the Briber y act 2010 on 1 july last year represents a serious new risk. uK regulators have expressly indicated that corporate hospitality packages may run afoul of the uK Bribery act, which has significantly toughened the uK’s anti-cor ruption legislation and has been criticised for criminalising behaviour that is acceptable in the global market. as such, foreign and domestic organisations alike will be wise to ensure their promotional activities comply with the law. • •• Now and then: reputational risks of the Games London 2012 London’s Mayor, Boris Johnson, has warned that long delays for passengers arriving at Heathrow airport risk damaging Britain’s reputation in the lead-up to the 2012 Olympic Games, due to commence in July. Passengers have complained of delays of more than an hour due to lengthy passport and visa checks. In a letter to the Home Office, the department responsible for border security, Johnson said delays gave “a terrible impression of the UK” and it was unfortunate that Britain’s main port of entry was “gaining such apoor reputation”. “ London and the UK’s reputation as a welcoming city in which to do business or travel are at stake,” Johnson said. India 2010 The 2010 Commonwealth Games in India was meant to showcase the strengths and aspirations of an emerging global power. Instead, the failure to roll out high-quality infrastructure tarnished ‘Brand India’ – a phrase used to describe the attractiveness of the country as a destination for business – and cost millions in lost investor confidence, according to Suresh Kalmadi, Chairman of the Games Organising Committee. In a 2010 statement, Kalmadi revealed the 12-day event in New Delhi won sponsorships worth around 3.8billion rupees, falling well short of with the aim of9.6billion rupees. According to Martin Tolar, ManagingDirector of ACI, delaysin completing infrastructure projects on time, public facilities that were feared unsafe, concerns around inadequate security, payment delays to suppliers and allegations of corruption caused considerable damage to ‘Brand India’, which was theexact opposite of whattheGames should have achieved for the country. “T his is a cautionary tale for London – examine reputational risks closely or the Games could damage your city’s brand for business and tourism.”
GRC Summer 2012
GRC Winter 2012