Our newsletter traditionally focuses on the prevention of violence in the workplace. However, I feel compelled to comment on the current situation in Ukraine. We are only in the beginning stages of this massive crisis, and I fear the impact on western democracy and businesses will be long-lasting and far-reaching.
My connection to this issue is professional, but also personal. One of the highlights of my professional career was serving as the FBI’s Legal Attaché in Moscow from 2012 to 2015. During that time, I developed a deep and abiding respect and admiration for the Russian people, their culture, and their history. It is important to draw a distinction between the political regime currently in power and the Russian people. As a career law enforcement, intelligence, and security professional I was also directly exposed to the threat to democracy and free trade posed by Vladimir Putin and his security and intelligence organizations. The threat is real and acute. Organizations must acknowledge this fact.
What are the threats and risks?
In the practice of behavioral threat assessment, we always consider the impact of our interventions on the person posing the threat. The challenge in conducting our assessments is to view the world from their perspective. We must always consider how our interventions may change that person’s perception of events. The same principle holds true when we are looking at the war in Ukraine. Western leaders including French President Macron and President Biden have been very careful to avoid war-like rhetoric regarding Russia. Following the imposition of financial sanctions, Vladimir Putin stated that the West is in a state of economic warfare against Russia. He equated the financial sanctions to a declaration of war. We in the West may not believe we are at war with Russia, but the Russian leadership believes the West is at war with them. It is important to remember that understanding does not equal agreement. We must acknowledge that reality and consider that mindset in our contingency planning.
Russia maintains a powerful, significant, and formidable cyber warfare capability and they are not afraid to use it. Organizations should anticipate malicious cyber activity originating from Russia. Financial organizations and those organizations that have announced their intent to cease or curtail operations in Russia are at acute risk for retaliatory cyber attacks. Organizations must acknowledge this threat and adopt an aggressive defensive posture against cyber attacks.
Supply Chain Disruptions
Our global supply chain has already been stressed and disrupted because of COVID-19. As a result of financial sanctions, commercial shipping will likely also be disrupted. A recent Washington Post article reported that United States Customs and Border Protection officials were not allowing Russian or Ukrainian Mariners to disembark from their ships when in United States ports fearing they might overstay with their visas. The shipping industry trade associations have complained that these actions have impacted staffing — further exacerbating supply chain disruptions.
Western organizations with business functions in Ukraine have almost completely shut down operations. Ukrainian employees have either fled the country, are in hiding, or have taken up arms to fight. Expatriate employees are at significant risk to their personal safety. As Russia becomes more financially isolated any Russia-based expatriate employees at western organizations are also at significant risk. They should evacuate if they have not already done so. Restrictions on commercial airlines’ use of Russian airspace has also limited the options for evacuation of employees from Russia.
In a firm and strong show of global unity, Russia is now facing severe financial sanctions. They are joining the ranks of North Korea and Iran as global financial outlaws. Russia is financially isolated after being restricted from utilizing the SWIFT system for international financial transfers. This move may very well push Russia to align with China. According to a report in Reuters, Russian banks may soon start issuing credit cards using the Chinese UnionPay card operator’s system after Visa and MasterCard said they were suspending operations in Russia.
Nationalization of Assets
To retaliate against the current financial sanctions, Vladimir Putin and many prominent Russian legislators are openly discussing the possibility of nationalizing the assets of western companies in Russia. The Russian legislature (Duma) has already proposed draft legislation that would seize the assets of those corporations leaving Russia. This would put those organizations with large operations in Russia (Apple, McDonald’s, Microsoft, IBM, Exxon, Hewlett-Packard, etc.) at risk for the seizure of assets.
Russia’s invasion of Ukraine has resulted in the most significant refugee crisis facing Europe since 1945. According to the United Nations, more than 2.5 million people have fled the war in Ukraine. 1.3 million of these refugees have fled to Poland. The nation was quickly inundated. Western democracies are scrambling to provide emergency aid, housing, and refugee visas to resettle the displaced. The magnitude of this refugee crisis will place significant financial and social burdens on those nations bordering the war zone. Organizations with business operations in these countries should assess and monitor for any adverse impact on business operations.
Employee Mental Health
It just doesn’t seem to end. Employees, already emotionally exhausted after two years of COVID-19 and the divisive domestic politics are victim to a new drumbeat of war reporting — including threats of nuclear warfare. The news media brings us constant reports of new horrific details of death and destruction from Ukraine. Even though the war in Ukraine this occurring far away from many domestic workplaces we cannot assume our employees are not adversely impacted.
What Should Organizations Do Now?
These events, risks, and threats have highlighted the need for organizations of all sizes to assess and update their business continuity plans as well as their crisis management plans. In our interconnected economy, events on the other side of the world may have a profound impact on our business operations. Consult with trusted advisors who are knowledgeable of crisis management best practices, as well as those who have specific subject matter expertise in the countries you operate in.
Don’t assume these risks are limited to Russia. Any organization with operations overseas must consider how its operations will be impacted by political or social events in that country.
Do not dismiss or discount the impact the war in Ukraine may have on your employees. Does your employee assistance program function as advertised? Are counselors and therapists actually available if your employees attempt to access services? A six-month waiting list for a therapist does little for an employee in crisis. A recent Washington Post article highlighted the critical shortfall of therapists in the United States despite a growing need for such services.