Surviving Hostile Territory: The Dangers Facing US Businesses Abroad
The preceding few months have seen a flurry of activity on the international stage, which include Russia’s ongoing use of hostage diplomacy involving the arrest of the Wall Street Journal reporter, fighting, conflict, and evacuations in Sudan, and widespread demonstrations across France in response to proposed government pension reforms.
While debates surrounding the US’s status as the leader of the global order continue[i] along with fractures in relationships, institutions, and international norms that have helped keep the peace, the international arena is becoming increasingly turbulent for governments and businesses alike. US and western companies—and the employees that work for these companies—appear to be more entwined in, susceptible to, or at the center of disputes and disagreements between governments or their populations.
The aforesaid incidents and examples are stark reminders not only of the risks of international travel for employees and for the companies that have offices abroad, but also the responsibility and need for business leaders to regularly review and assess geopolitical events, company office locations, traveler and foreign employee support, office and business contingency plans, risk tolerances for travel to and operations within specific countries and regions, and duty of care obligations.
These responsibilities and obligations may seem like no brainers to our followers and audience; however, we continue to work with a number of companies that have long neglected or overlooked these critical components. To help educate our clients and network and raise awareness to the criticality of establishing and implementing measures and mechanisms around travel security and companies’ duty of care obligations, we wanted to focus on several current examples that have made headlines in recent months.
The Rise of Hostage Diplomacy?
The detention of Wall Street Journal reporter Evan Gershkovich in Russia and the government’s refusal—until recently—to grant consular access is an alarming, albeit not surprising, trend in Russian tactics to use US and dual Russian citizens detained under dubious circumstances (i.e., hostage diplomacy[ii]) as bargaining chips to extract concessions from the US.[iii][iv]
Such actions are concerning not only for those US and dual citizens that continue to reside and travel within Russia and countries that are friendly to Russia, but also for US travelers and dual nationals that travel to countries controlled by other authoritarian governments, like China, Myanmar, Nicaragua, and Cuba.
Business and personal travel to China has increased steadily since China reversed its zero COVID strategy and reopened its country to international arrivals and business.[v][vi][vii] The Chinese government, which has a reputation for disappearing Chinese citizens[viii] and detaining dual nationals[ix] and foreigners[x], has not yet resorted to the escalating tactics that Russia appears to increasingly favor.
Nevertheless, US, dual national, and foreign employees that work for US and western companies with operations in China, along with reporters, professors, students, and employees of NGOs face an increased risk of being subjected to detentions, government scrutiny, personal and business device confiscation and examination, and intensive monitoring. Western governments continue to issue and update warnings about these matters for their travelers and expats.[xi][xii][xiii]
Given the trajectory of Chinese and US relations and embargoes, investment and access restrictions to critical technologies and know-how[xiv], China will likely resort to a variation of this pressure campaign (hostage diplomacy with a Chinese twist) against US and western businesses and travelers to gain a concession from the US, send a message to a specific business, or temporarily gain access to people and electronics that have knowledge of or contain proprietary information or names and networks that could be of relevance to the Chinese government. Such strategies may not be deployed immediately, or to the same effect as Russia; however, the success of Russia’s actions is illustrative of how it can be used to extract gains by others.
In response to Russia’s norm busting behavior and belligerence and China and other countries potential interest in resorting to similar tactics, it is our assessment that US and western business leaders should take the opportunity to reexamine and reassess employee and executive travel programs and policies to China and other countries that have increased government control. As part of this reassessment, leadership should not only prioritize employee safety considerations from a duty of care perspective, particularly the criticality of and need for business travel to higher risk areas and guidance and support if unlawfully detained, but also device and data security measures for employees and executives that travel to China.
C-Suite leadership should understand that personal and business computers and phones carried into China—and the content within those devices—are likely accessible to Chinese government monitoring and copying. Furthermore, the “examination” of such devices could possibly provide government personnel with the names and email addresses of company employees, as well as valuable Intellectual Property (IP) on those devices. Absconded names and addresses could even be targeted in future cyber-directed operations against company networks and employees.
We at SRG continue to believe that direct confrontation with Russia and even with China is not inevitable. The international developments around employee safety are concerning, as is the potential loss of IP that could come from any detainment. It is also our belief that a resilient global security and travel program is one that does not wait for government advisories and geopolitical circumstances to change before resiliency plans, travel postures, and program assessments are reviewed and strengthened.
As to Gershkovich’s fate (and others who are detained around the world), Russia, China, and the world will be watching with anticipation how the US resolves this detainment; specifically, any concessions the US grants Russia in exchange for his release. If Russia continues to be the benefactor of its deviant behavior, China and other countries will almost certainly resort to similar tactics or variations of such tactics against US citizens and dual nationals to tip the scales in their favor when it is in their benefit to do so.
US businesses and the employees and travelers from these countries have the most to lose from these escalatory actions, and should be prepared to adjust their travel postures, provide employee support and outreach, and issue guidance in anticipation of such eventual escalatory maneuvers.
Employee Safety Amid Pension Reform Protests in France
In other parts of the world, demonstrations and protests across France over pension reform laws—often seen as a nuisance and inconvenience for summer business travelers and tourists—escalated to involve both French and international businesses on at least three occasions in April when protesters in Paris made their way into buildings housing Blackrock offices, the headquarters of LVMH, and the offices of the stock market operator Euronext.[xv][xvi][xvii][xviii][xix] The decision to storm the offices appeared to be centered around protestor demands to find money to finance the pension from the companies. Trading operations did not appear to be disrupted by the incident at Euronext, and employees did not appear to be injured in any of the incidents, despite the presence of flares and smoke bombs.
Such flagrant aggression and escalation on behalf of protestors represents a significant safety concern for the employees of Blackrock, LVMH, Euronext, and many other employees from French and multinational companies that likely reside in nearby buildings and neighborhoods. Was the protestors’ primary motive to raise awareness to the pension reforms and the need for the French government to reach an agreement quickly, or was a partial goal of these incursions to send a message to the companies as well? While it is likely the former, did Blackrock, LVMH and Euronext employees at any point fear for their safety? How much notice did the employees get before the offices were occupied and overrun by the mobs? Were these acts spontaneous events or were they planned to give the appearance of spontaneity? Were there security officers or police onsite at the time of the protestor gathering? Would they have been able (or willing) to intervene? How would the incidents unfold if anarchists were hidden among the pension protestors? Anarchist groups such as Blac Block were responsible for the destruction of property and the ransacking of a McDonalds in late March.[xx] These are all valid questions that we hope the leadership of the companies involved, as well as leadership elsewhere, are asking and solving for.
We admit Paris is not the US, and that the behaviors we question may be tolerated to a greater extent in France; however, the brazenness of the protestors’ actions is alarming, particularly when one considers that these acts occurred in in the capital of a major Western European city that adheres to laws and has a responsive police force. Would the events and outcome be any different if they transpired in Mexico City, São Paulo, Jakarta, or Bangalore? While not all details are known, the Paris incidents shed light on the ability of police to maintain order and security and respond to incidents when they are likely prioritizing other gatherings and incidents around the city.
The prioritization of calls is nothing new for French police or agencies and departments in other cities around the world. What these protest cases demonstrate is that companies should not rely exclusively on local law enforcement to respond to emergency calls and escalating activity at company offices and headquarters, whether they be manmade incidents or natural disasters.
It is becoming increasingly important that companies of all sizes and from all geographic locales adopt contingency and response plans that center around the notion that their employees will need to be prepared to react and respond with minimal assistance from law enforcement, medical first responders, and even headquarters. As part of this response plan, businesses should adopt a tiered strategy that considers employee and office requirements when there is a need to shelter in place within the workplace for an extended period, evacuate the office and area, or remotely work when circumstances necessitate such work.
Given the remote nature of some jobs and company decisions to outsource remote work abroad due to labor shortages and rising wages[xxi], special attention should also be given to remote employees working in locations where companies do not have a physical presence. Take remote workers in Mexico as one example. These full-time remote employees may cost less than what the same employees make stateside; however, the security environment is significantly more challenging and volatile. What happens if an employee is kidnapped or threatened outside their home by criminal groups or cartels, or are forced to shelter in place because of a localized confrontation in the city? What obligations does the company have to support the employee prior to and following such an incident?
At a basic level, playbooks and operating plans at all office locations should include guidance for office employees, remote workers, and travelers on what to do and how to respond if faced with an escalating situation that threatens the safety of employees and company assets, whether it be an evacuation, shelter in place instructions, or travel guidance to get to a safe location. Local leadership should also have communication plans established that can be used to both notify local employees of developing circumstances and company leadership. The assembly and storage of go-bags is also a prudent measure to ensure employees have the supplies and resources to stay safe and nourished during prolonged shelter in place scenarios. The utilization of a 24/7 Security Operations Center (SOC) can serve both as an intelligence collection resource for early identification and warning and a centralized hub for coordinating actions and performing employee wellness checks as the situation on the ground unfolds.
Sudan: Limited Options for Expats and Employees
After weeks of escalating tension, violence finally broke out between Sudan’s armed forces and the paramilitary group Rapid Support Forces (RSF) in Khartoum and in other cities on April 15, 2023.[xxii] The conflict follows months of buildup by the two forces around Khartoum, with both sides blaming the other for initiating hostilities.[xxiii] Only a day before fighting erupted, the head of RSF announced that he was willing to meet with the army chief to de-escalate tensions.[xxiv] Instead, violence erupted.
Media sources have shed light on international efforts to mediate in the days leading up to the violence, with some sources calling out a lack of seriousness on behalf of western and international efforts in bringing about a peaceful resolution when such an outcome appeared increasingly dire.[xxv] Shock and criticism toward the US and other countries’ misreading of the impending confrontation, government scrambles to evacuate personnel, the lack of departure guidance from the US mission prior to April 15, 2023, and the acknowledgement by the US that, for now, no attempts would be made to evacuate other US citizens from Sudan, have foreigners and employers scrambling to find solutions to get out of the country safely.[xxvi] Locals that reside within cities of conflict are also increasingly on their own to get to a safe location, whether that is within a neighboring country or city.
The Sudan escalation is yet another example of the fragility and uncertainly within the international arena, and how western governments can still be caught off guard, despite direct lines of communication with government officials. This particular crisis, specifically the US’s apparent decision to not issue departure guidance for its citizens prior to April 15, along with its announcements that (for now) attempts would not be made to extract remaining expats and dual nationals due to the tense situation on the ground should awaken western companies to the reality that the US government and other governments cannot always be counted on for sound advice and emergency assistance should a developing situation necessitate country evacuations or other emergency measures.[xxvii]
Although wars and acts of god cannot always be anticipated, the Sudan case is a demonstrative example of the importance for companies operating in cities and countries that are deemed higher risk to have contingency plans established for occasions when civil unrest, environmental disasters, and armed conflict demand the closure of local offices, the evacuation of local staff and traveling employees, and the safe removal (or destruction of) company assets and IP.
In response to announcements that US evacuations of citizens and dual nationals from Sudan would cease, C-Suite and companies should consider and prepare for similar situations in other countries, as well as extended shelter in place guidance for local employees. Supplies, including communication equipment, should be stocked to permit emergency communication with company personnel and US and western government officials when evacuations are not possible. Multiple departure options and routes—by land if necessary—should also be plotted, implemented, and rehearsed.
Other considerations for companies with multinational workforces is the reality that US and other Western government evacuation and response efforts may differ from those of other countries; specifically, western countries will likely have more resources to arrange sponsored flights and evacuations to safe international locations. These evacuation efforts will not likely extend to employees who are not US citizens or citizens of other western countries. How will company leadership ensure that these employees get to safety and have the resources to remain secure when local power, telecommunications, and transportation infrastructure is unavailable or not navigable?
Increased Volatility, Reduced Support, and the Need for Self-Reliance
It is our assessment that more companies and employees in the near term will be increasingly exposed to events and circumstances where governments (whether it be the US and western governments or host country governments) will face challenges that will likely make it more difficult for them to reliably assist with evacuations, provide timely warnings, and ensure the protection of company employees and expats within foreign cities. This is not to say that companies and employees should give up hope for any kind of government response or assistance. Rather, given the increased precariousness in country relations, companies should place more emphasis on self-reliance and the development and implementation of practices that can strengthen self-sufficiency.
The common theme found in these three examples—and others that we did not mention—is the risks that come with operating offices overseas and having employees travel to overseas conferences and site visits and for those who work remotely. What is also apparent is the international scene (and country relations, particularly with the US and western countries) will not likely become more tranquil in the near term.
Relations between nations will likely always be in a state of flux. There will be temperate times as well as times when the potential for aggression, hostility, and miscalculation is elevated. The events that have unfolded over the last few months, as well as statements and veiled warnings of potential aggression and violations of international norms and rules, suggest the world is in an increasingly precarious place. Companies with international footprints and employees (and the leadership that run these companies and lead the employees) must consider the possibility, however remote, that governments and resources may not be available to guarantee assistance and support in times of need.
It is therefore incumbent on C-Suite to implement the necessary guidance, reviews, and planning that enable companies to be self-reliant and better prepared to anticipate and respond to unforeseen events and rapidly deteriorating situations, whether that event is the unprovoked detention of an executive, the takeover of offices by protestors, or the complete breakdown of order within a country.
In addition to strategies that were mentioned in previous sections, businesses and leadership should also rehearse crisis planning exercises that take into account such topics as unannounced government inspections, detained executives, offices being overrun and compromised by mobs, and the safe evacuation of employees and staff from rapidly deteriorating hotspots. Additional efforts should include the creation and use of operations centers that can coordinate communication and outreach, the integration of intelligence products and playbooks for contingency planning; specifically, country assessments, travel reports, and evacuation measures for employees traveling to higher risk areas. Crisis management teams can also be assigned to help manage the developing crisis.
For those companies that have a need to operate within heightened risk areas, considerations should be given to the establishment and use of safe houses and other secure locations away from city hubs. Similarly, temporary relocations to adjacent countries are additional solutions that can be implemented for staff working in increasingly hostile environments. The former solution may not get the employees out of the country when hostilities first occur; however, it will get them away from major hotspots and help buy time for companies to work through contingency plans with the knowledge that employees are safe and secure for the time being.
No company or government has a crystal ball that forewarns of the dangers, threats, and acts of aggression against people, assets, businesses, and nations. At SRG, our approach to helping businesses prepare for and respond to unforeseen events and declining situations centers around our work on architecting, adopting, and implementing strategies and practices for our clients that enable greater resiliency.
In precarious times like the one the world is experiencing today, an overreliance on governments for support and faith in international institutions and norms to keep and maintain the peace will not always hold. C-Suite and business leaders therefore have the duty to assess and strengthen their own capabilities to safeguard employees and assets abroad and respond scenarios like the ones transpiring on media networks.
[i] Stephen Fidler, “Michael Gordon, “Russia, China Challenge U.S.-Led World Order”, The Wall Street Journal, February 21, 2023.
[ii] Louise Radnofsky, Warren Strobel, Aruna Viswanatha, “Evan Gershkovich’s Arrest Marks a New Era of Hostage Diplomacy”, The Wall Street Journal, April 2, 2023.
[iii] Daphne Psaledakis, Simon Lewis, Chris Reese, Jonathan Oatis, “Russia violating international law by not allowing consular access to WSJ reporter – U.S. State Dept”, Reuters, April 10, 2023.
[iv] William Mauldin, Ann Simmons, “WSJ Reporter Evan Gershkovich Allowed First Visit From U.S. Official Since Detention”, The Wall Street Journal, April 17, 2023.
[v] Alice Fung, Karmen Li, Frank Jordans, Olivia Zhang, Wayne Zhang, Henry Hou, “Travelers rush to take advantage of China reopening”, AP, January 8, 2023.
[vi] Allison Lampert, Jamie Freed, Doyinsola Oladipo, “Analysis: Airlines face hurdles to cashing in on China re-opening”, Reuters,January 17, 2023.
[vii] Chris Lau, “China is fully reopening to tourists after three years of border restrictions”, CNN Travel, March 14, 2023.
[viii] Jennifer Wang, “Disappearing Billionaires: Jack Ma And Other Chinese Moguls Who Have Mysteriously Dropped Off The Radar”, Forbes, January 7, 2021.
[ix] No Author, “China defends holding fugitive businessman’s US children”, BBC News, November 26, 2018.
[x] Paula Newton, “Two Canadians imprisoned by China have been released, Prime Minister Trudeau says”, CNN, September 25, 2021.
[xi] No Author, “China Travel Advisory”, US Department of State, March 10, 2023.
[xii] No Author, “China travel advice”, Government of Canada, April 18, 2023.
[xiii] No Author, “China”, Gov.UK, April 21, 2023.
[xiv] Andrew Duehren, “U.S. Prepares New Rules on Investment in China”, The Wall Street Journal, March 3, 2023.
[xv] Noemie Olive, “Protestors storm Paris Euronext building in anger over pension law”, Reuters, April 20, 2023
[xvi] Xiaofei Xu, Oliver Briscoe, Saskya Vandoorne, “French protestors storm headquarters of luxury giant LVMH”, CNN, April 13, 2023.
[xvii] Pierre Bairin, Hanna Ziady, “Protestors storm Blackrock’s Paris office holding red flares and firing smoke bombs”, CNN, April 6, 2023.
[xviii] No Author, “Réforme des retraites : des manifestants envahissent le siège de LVMH à Paris”, Ouest France, April 13, 2023.
[xix] No Author, “Retraites : des cheminots ont envahi un immeuble parisien hébergeant BlackRock”, Économie, April 6, 2023.
[xx] Horaci Garcia, John Irish, Ingrid Melander, “Violence hits France in day of anger over Macron’s pension changes”, Reuters, March 23, 2023.
[xxi] Konrad Putzier, “Next Wave of Remote Work Is About Outsourcing Jobs Overseas”, The Wall Street Journal, April 11, 2023.
[xxii] Emmanuel Akinwotu, “Gunfire and explosions erupt across Sudan’s capital as military rivals clash”, NPR, April 15, 2023.
[xxiii] No Author, “Sudan’s army and rival force battle, killing at least 56”, Associated Press, April 15, 2023.
[xxiv] No Author, “Hemeti ready to meet al-Burhan to ease Sudan tensions: Mediators”, Al Jazeera, April 14, 2023.
[xxv] Mat Nashed, “Analysis: Fighting erupts in Sudan after months of tension”, Al Jazeera, April 15, 2023.
[xxvi] Michael Phillips, Nicholas Bariyo, Benoit Faucon, “Swift Evacuation of U.S. Staff from Sudan Prompts Questions”, The Wall Street Journal, April 23, 2023.
[xxvii] Nicholas Bariyo, Gabriele Steinhauser, “Options Narrow for People Trapped by Fighting in Sudan”, The Wall Street Journal, April 24, 2023.
