Kidnapping.
It is every executive’s unspoken fear when traveling to Latin America, the Middle East and Southeast Asia, where kidnap-for-ransom schemes are a big business that is growing by the day. But these executives can limit the risk of being abducted and increase their chances of survival if taken. The keys are vigilance, common sense and preparedness.
Since companies rarely divulge such cases, statistics on the number of executive kidnappings are hard to come by. A report issued by London’s Control Risks Group last December estimated that 521 kidnappings occurred in the first ten months of 2001. Overall, the security consultancy tallied 10,521 kidnappings worldwide between 1993 and 2001, an astonishing number considering that only a few grabbed headlines.
“The current situation is the worst I’ve seen since 1979,” says Thomas Clayton, founder and president of New York-based Clayton Consulting, an international business and security consulting firm. “We’re at a point where kidnappings are now a daily occurrence. What used to be in two or three dangerous countries in Latin America has now spread to all of Central America and even to once-peaceful places like Argentina. In Brazil, the risk was confined largely to Rio and São Paolo, but now there are kidnappers waiting to spring in every major city there. The situation has become intolerable.”
In the United States, kidnap for ransom is virtually nonexistent because effective law enforcement keeps success rates low. But this is not true in Latin America and other politically and economically unstable regions where corruption is rampant among police officers, says Robert Hartwig, chief economist at the New York-based Insurance Information Institute. In such places, he says, kidnap for ransom “is viewed as a viable way to make a living.”
Unfortunately, the worldwide rise in kidnappings indicates that many executives, particularly those spending extended periods of time abroad, are not heeding the advice provided by corporate security directors and consulting firms.
“More than 85 percent of all kidnappings occur on a weekday morning on a public highway while the victim is on the way from home to work or vice versa,” says Clayton. “Executives know this and yet many fail to take steps to reduce the risk. They’ll drive pricey autos, wear expensive clothes and take the same routes to and from work every day. Instead of being unpredictable and doing things that are unexpected, they play right into the hands of kidnappers.”
Take the Necessary Precautions
“Companies would never think about not insuring a manufacturing plant in Latin America,” Hartwig says. “In the same way, they must insure their ability to get kidnapped employees back unharmed. If they don’t and the victim is killed, they’ve got a PR disaster on their hands. And they’ll have a difficult time attracting quality people to manage their businesses abroad. If American companies are going to operate in these countries, they must consider the loss of an employee and insure the potential costs.”
Many insurance companies offer stand-alone kidnap and ransom (K&R) insurance policies; some even offer coverage through homeowners’ policies. The top K&R insurers are Lloyd’s of London, New York-based American International Group (AIG) and Warren, New Jersey-based Chubb & Son.
“As a market we could piece together $100 million in protection,” says Diane Borden, a vice president at American International Group’s underwriters crisis management division. “But that would be extremely steep. Kidnappers are never going to be that greedy.”
K&R insurance policies carry about $20 million to $30 million in limits, more than enough to cover a typical ransom paid in Colombia, which ranges from $2 million to $10 million, Clayton says. The policies are largely similar, covering expenses like hostage negotiation fees, lost employee wages, salary expenses, medical costs, family counseling and, of course, the ransom. The terms and conditions are fairly liberal, although, since September 11, insurers have stopped covering accidental death and dismemberment for anyone at the scene of a kidnapping.
“Underwriters also are looking closely at restricting emergency repatriation coverage that reimburses companies for the expenses involved in repatriating expats,” says Maureen
Richmond, a vice president for global risk at insurance broker Willis of New York. “We’re seeing some caps being put on this now in recent policies.”
In addition, underwriters are raising prices. Last year’s increases ranged from 10 percent to 20 percent, although some exceeded 30 percent. “And insurers are loath now to offer five-year policies,” Richmond says. “The furthest they’ll go out now is about three years.”
Underwriters maintain close relationships with K&R security consultants. AIG, for example, works with Clayton, Lloyd’s with Control Risks and Chubb with the Miami-based Ackerman Group. The consultancies advise risk managers and traveling executives about changing kidnap risks in geographic hot spots and are involved in post-kidnapping negotiations, delivering ransoms and securing victims’ release. “What we don’t do is swing out of helicopters with bowie knives in our teeth like Russell Crowe,” says Clayton, referring to the film Proof of Life, a movie K&R security consultants universally abhor for its over-dramatization of the facts.
Surviving a Kidnapping
Politically motivated kidnappings, such as that of The Wall Street Journal reporter Daniel Pearl, grab the most attention. Pearl was seized in Karachi, Pakistan, in January 2002 as he waited to meet and interview Muslim extremists tied to Al Qaeda.
But although the risk of political kidnapping has grown in the current climate, Clayton says, “there has not been a rash of similar kidnappings” since the Pearl case.
In fact, very few executives are kidnapped for political reasons, according to Borden. Still, she cautions that the prominence of the Pearl kidnapping and the fact that his captors achieved their purpose of worldwide publicity indicate that complacence would be a mistake. “No kidnapping should be taken lightly—the risk looms large no matter the intended purpose,” she says.
By and large, the prevailing form of kidnapping is the kind practiced in places like Colombia (which Clayton calls “the capital of kidnapping”) and Mexico.
“There are two kinds of abductions in Mexico,” Clayton says. “There’s what we call ‘express kidnapping,’ in which a kidnapper spends about a minute sizing up the victim, grabs him or her and then locks them up for a few hours until a quickie ransom is paid by family. Then, there’s more long-term kidnappings where the victim is abducted and brought to some remote location for a period of weeks, and intense negotiations ensue.”
In the latter scenario, security consultants concur it is best for victims to stay calm and do what they are told. “Do not get into a confrontation with abductors,” advises Ackerman Group managing director and former CIA agent Mike Ackerman. “This is difficult for executives, since they’re used to being in command, but the fact is they’re entirely subordinate as a hostage. Do not be assertive in trying to resolve the situation—leave that up to the pros. And whatever you do, don’t try to escape unless you’re convinced you’re going to be seriously harmed or killed. Escapes only work in the movies.”
Once a kidnapping occurs, Clayton says, K&R consultants work closely with family members and employers to resolve the situation. “Typically, there is chaos after a kidnapping, with all kinds of suggestions and opposing viewpoints,” Clayton says. “What we advise is to put together a small group of four people to whom we will provide the wealth of our expertise on how to manage the situation. We’ll guide you through the negotiations, give you an idea of the appropriate payment and try our best to get the matter resolved quickly.”
Generally, firms like Clayton’s and Ackerman’s work with natives from the region where the kidnapping takes place to handle the telephone or short-wave radio negotiations with captors. “I can persuade a Colombian I’m from Mexico or a Mexican I’m from Chile, but I can’t convince a Mexican that I’m Mexican,” says Clayton, who is fluent in Spanish. “We’ll sit side-by-side in earphones with indigenous people to whom we give actual scripts and nudge them what to say and when to say nothing.”
Forewarned and Forearmed
Most executives can avoid being abducted by following relatively simple guidelines. But the best risk management strategy, says Richmond, is for companies to avail themselves of good security firms—preincident.
Even in the absence of purchasing insurance, retaining a good firm like Ackerman or New York-based Kroll Inc. is probably the best defense, Richmond says. “They can advise on developing risk conditions down to a particular street in a particular region. And they can help risk managers draw up very good basic plans.”
What do these plans counsel? One thing is how to spot kidnappers. “Other than express kidnappings, most kidnaps for ransom require surveillance and planning,” says Richard McCormick, vice president of New York-based Pinkerton Business Risks International. “The kidnappers do this for a living and they are quite expert at finding the right target and tracking that person’s routines. Thus, the key to thwarting these kidnappings is to be alert. Look up and down the street coming out of the house and office. If you see a strange car that seems out of place, take notice. Once is happenstance, twice is coincidence and three times is enemy action. That’s when you pick up the phone and call law enforcement. I can’t tell you how many times we’ve secured the release of a victim and he or she says ‘I thought I was being followed.’”
Ackerman counsels executives abroad to be as inconspicuous as possible. “You don’t want to attract attention via how you dress or what you drive,” he says. “Blend in as best you can.” Since kidnappers seek employees of big-name companies—which they perceive as having deep pockets or being insured—he advises not to wear clothing or carry luggage with corporate logos affixed to them. “I wouldn’t even give the name of the company you work for to the hotel you’re staying at,” he says.
McCormick and other experts also give these recommendations:
• Vary the routes taken to work.
• Always walk away from a commotion, never toward it.
• Never leave a drink unattended at a bar or restaurant—drugging of victims is a new modus operandi for kidnappers.
• Keep your picture, as well as those of family members, out of local newspapers.
• If kidnapped, never reveal if your employer has K&R insurance, which will only protract negotiations.
Ackerman offers one final piece of advice to follow if kidnapped: “Come across like a decent human being, even if you aren’t one.”
