Disaster Advances Vol. 13 (7) July (2020)

Business Continuity and Resiliency Planning in Disaster Prone Area of , Lehan Nur Fadzlina Aini M.1, Razak Khamarrul Azahari1,2 and Kamarudin Khairul Hisyam1,2* 1. Razak Faculty of Technology and Informatics, Universiti Teknologi Malaysia (UTM) Kuala Lumpur, Jalan Sultan Yahya Petra, Kuala Lumpur 54100, MALAYSIA 2. Disaster Preparedness and Prevention Centre (DPPC), Malaysia-Japan International Institute of Technology, Universiti Teknologi Malaysia (UTM) Kuala Lumpur, Jalan Sultan Yahya Petra, Kuala Lumpur 54100, MALAYSIA *[email protected]

Abstract development such as natural disaster event2. However, the High frequency, magnitude and intensity of natural increasing numbers of natural disaster slow down the disasters in Malaysia have driven many governmental development of economic in developing countries in Asia and non-governmental initiatives to mitigate the including Malaysia. disaster risk, yet it is very difficult to reduce its impact. Malaysia lies in a stable region spared from severe natural Even more challenging, an increasing trend of natural disasters such as earthquake, typhoon but commonly faces disasters has significantly impacted the business monsoonal flooding, tsunamis, drought, landslides and haze. community and its continuity. Few international efforts Population in Malaysia is highly exposed to these natural have been developed and implemented but lacking of disasters such in December 2014. Malaysia faced the worst local content and largely focused on the impact monsoonal flood which affected over half million people towards global and multi-national Corporations. across the States and caused extensive damage to the Besides, impacts of disaster on business are normally infrastructures3. represented by certain figures based on approximation from existing datasets, expert judgement or interviews Malaysia has experienced 51 natural disaster events in the with vulnerable business owners. last two decades (1998-August 2018). In that time period, 281 people died, over 3 million people were affected and disasters caused nearly US$2 billion (MYR8 billion) in Business Continuity Plan (BCP) and its associated damages4. All of the natural disasters impact to the countries recovery program have been widely developed, but a is depending on the communities’ preparedness to reduce the comprehensive (BCP) in Malaysia is still elusive, even economic losses and rejuvenate process of the businesses to so for multi hazard, multi sectoral and local the normal after the disaster strikes5. complexity. This study presents findings of BCP practices among the local Small and Medium Disaster Risk Reduction (DRR) is the concept and practice Enterprises (SMEs) in disaster prone area of of reducing disaster risks through systematic efforts to 6 Kundasang, Sabah. analyse and reduce the causal factors of disasters . In Malaysia, the National Security Council (NSC) is the Keywords: Business continuity plan, Business impact, principal policy making and coordinating body for disaster Small and Medium Enterprises, Multi-Hazard and Disaster management which has prepared NSC Directive No. 20 as Risk Assessment, Malaysia. "Policy and Mechanism on National Disaster and Relief Management" in 1997.

Introduction In line with Eleventh’s Malaysia Plan (2016-2020), under Malaysia and natural disasters: In year 2018, economic one of the six thrust, pursuing the green growth and losses stated around $131.7 billion U.S dollars (MYR500 strengthens disaster resilience, Malaysia is committed to billion) across the world. Asia suffered the most with highest reducing disaster losses and infrastructure’s damages. impact accounted on disaster events, death tolls and people 1 Malaysia has been adopting several strategies including the affected . Asia pacific has borne the brunt of this alarming integration of DRR and climate change adaptation into land trend in which natural disasters are now more likely to affect use planning system, disaster planning and prevention, the region as well as expose it to the populations within the poverty reduction and national legislation7. region. This is mainly due to the Asia’s large and varied landmass including multiple river basins, flood plains and Malaysia has also provided a national platform and action other zones at high risk from natural hazards and high plan towards implementing the priority areas for the Hyogo population densities in disaster-prone regions. Framework for Action (HFA), 2005-2015 so called as The Melaka Declaration on DRR in Malaysia8. A post 2015 Likewise, the economic development has been rapidly framework, known as The Sendai Framework for DRR growing in many countries of the region. Average Gross 2015-2030 (SFDRR) is one significant priority to observe Domestic Product (GDP) growth in this region continues to the growth of disaster risk through the recovery, improve while there is always a risk to hinder the rehabilitation and reconstruction phases that need to be

25 Disaster Advances Vol. 13 (7) July (2020) prepared ahead of a disaster. It is called as the Build Back minimum losses. Other than that, BCP is also strengthening Better (BBB)9. This brief presents a concept of resilient the organisation preparedness for future incident that could recovery: what it is; why it is important and what measures negatively affect their operations. communities, countries and regions can adopt to ensure that efficient and effective recovery leads to sustainable Review of literature indicated many benefits of BCP development. including cost reduction due to disruptions and better potential for unacceptable risks to be insured for any Therefore, there is an urgent need in implementation of liabilities5,10,25. For small and medium businesses, BCP is comprehensive disaster recovery in Malaysia including potentially life-saving9. In some cases, the concept has been helping the businesses players, supply chain and associated put in place for testing and effective BCP can save lives and stakeholders9. The initiative was name as Business minimise bigger revenue and income losses, hence promote Continuity Planning (BCP) and it is a subset to disaster better recovery for business. recovery plan, often focusing on recovering IT assets. The inclusivity of all private and public sectors promoted Business Continuity and Resilience Planning: through BCP has shown the significance of spatial and non- Occurrences of disaster can cause business disruptions spatial based analysis in determining the impact of multi- anytime and anywhere. With or without data, business hazard on businesses. Periodic updating of element-at-risk operators are still facing difficulties to predict how much in a systematic database is crucial particularly in developing damage a disaster can affect their business activities in term countries where urbanization rate is high and the capacity of of their daily operations as well as their economic losses10. the country for disaster risk management is still low level11. To reduce the impact or to rejuvenate the business operations Furthermore, businesses are increasingly subject to in shortest time as possible, it becomes compulsory for disruptions. It is almost impossible to predict their nature, organisations in disaster-prone areas to establish Business time and extent. The implementation of BCP for businesses Continuity Plan (BCP). Preparation is the best defence area especially Small and Medium Sized Enterprises against these disasters. Figure 1 shows the BCP chart (SME’s) in disaster prone areas in Malaysia is poorly treated concept diagram. and is becoming a subject of research.

Based on figure 1, BCP is the process whereby the business Therefore, this study will investigate the local practices operator or company is creating the prevention and recovery among SMEs operators mostly linked to nature-based systems specifically to deal with potential threats of a tourism in relation to business continuity and resiliency disaster. BCP resulted in formulation of a detailed plan for planning and findings from this research might provide some how an organisation or business entity could face disasters new insights related to local BCP practices among SMEs in without jeopardising their operations/ productions or with disaster-prone area of Kundasang, Sabah.

Figure 1: BCP Concept Diagram10

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Key Elements of BCP productivity employees during disruption period. At the Review of literature25 indicated a list of key elements of same time, organisation needs to protect business data and BCP: constantly share information with their customers about the situation so they are not left uninformed. Establishing A clearly defined BCP team: In the event of emergencies, emergency remote operation and/or offsite backups with information regarding context number and key personnel in specific standard operation procedures (SOP) might be a charge becomes crucial. Establishment of BCP team with wise option when dealing with the worst-case scenario that membership across different departments within the could happen. business entity will encourage larger participation to disaster response at their own section/department and cross Continuous operations: In order to maintain the department. organisation’s vital function and performance during disruption period, BCP team need to identify backup plan Members of BCP team should continue their training, particularly for business data that need to be secured but still exposure and involvement in planning and testing of BCP all accessible by responsible personnel. By doing so, main year round to ensure effective implementation of the plan operations of the business should not be disrupted. through up to date information and field practice mimicking strong understanding of the plan and an actual emergency. Study Area West Coast Sabah: Sabah is the north eastern province of Detail and meticulous planning: Planning in advance East Malaysia and lies within the Sunda block between the together with expecting a worst-case scenario that can oceanic basins of the South China, Sulu and Celebes Seas13. happen and will disrupt the business, requires meticulous Sabah has long been known as the most tectonically active and well thought plan. Assuming the worst situation, the area in Malaysia due to its relative proximity to the major BCP team should figure out possible actions needed to plate boundary faults in the Philippines and Sulawesi active maintain their organisation’s most vital functions and subduction zones14. The June 5, 2015 magnitude 6 operations. These possible actions also need to be prioritised earthquake which jolted the town of and Kundasang using business terms such as revenue, regulatory spectacularly reinforced active tectonics in Sabah15. implications, brand concerns, customer protection and any other elements being considered as main threats to your Based on Sabah Structure Plan 2033 (SSP 2033)16, Sabah is organisation followed by mapping all these elements to preparing to change in term of land use patterns that will be sections of the organisation including its people, facilities shaped by infrastructure connectivity. Other than that and equipment. influencing factors such as population, sustainable economic development and protecting natural environment are key Effective testing: Every plan that has been developed points in SSP 2033. should undergo continuous testing to measure their applicability and effectiveness. Normally, BCP should be Figure 2 shows the overall areas of Sabah. West coast reviewed ad updated at least once a year according to division is selected as study area because each of state changing business priorities, operational structure and other selected represents different land use. Ranau-Kundasang internal and external factors. area is selected due to the tectonic plate of Kundasang area and occurrences of multi-hazards severely affected Crisis communications: Maintaining good communication livelihood and local economies. with employees during crisis and disruption is crucial for business survival. Under BCP, the team needs to formulate Ranau-Kundasang: Ranau a district located in Sabah, a tool-kit that contains wide range of communications Malaysia that sits 108 km east of Kota Kinabalu26. The channels including phone, email, texting, social media etc. population back in 2010 was 94,092, an almost entirely Sample massaging text (with reference to disaster agencies Dusun ethnic community. The Kundasang area is located in texting massage) should be made known to other employees the Sabah highlands on the southeast side of Kinabalu so they might act promptly during actual emergency. Mountain in tectonically active region in Malaysia. Kundasang township straddles the trunk road between Safety of employees as key: Under BCP, safety of and Ranau. Ranau is also famous for world heritage employees is always a top priority and this can be achieved site and tourism spots23. It is located in the foothills of the through training and continuous exposure to emergency world first heritage site in Malaysia17. As drills and safety practices at work place. BCP team, land development and human activities in Kundasang grow however, should be able to determine type of training rapidly, the issues on landslide factors contribute to landslide suitable for their organisation based on the nature of business occurrences in Kundasang.18 and location. Research Methodology Uninterrupted access to business resources: It is Dataset: A field study was carried out in Kundasang Sabah important to keep people working i.e. to maintain in November 2015 after the Mv6.0 earthquake reported in

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June 201526. This preliminary study is to investigate the (Figure 3). The selection of these five villages is made after effect of the earthquake tremors to the local people and their analyzing the information obtained with respect to the initial businesses in Kundasang, Sabah. Five (5) villages were direct impact of disasters on the lives of people following the selected in this study namely as Dumpiring Atas, Dumpiring June 2015 earthquake. Bawah, Mesilou, Lembah Permai and Kundasang Lama

Figure 2: Map of Sabah (Source: SSP 2033)16

Figure 3: Location of the selected villages (Source: Kamarudin)20

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Figure 4: Interview and questionnaires session with the local businesses (hotel/homestay, owner of restaurant, manager of and owner of Kinabalu Golf Park24

The method used for this preliminary study is using (Table 1). Almost all of the respondents are . questionnaires distribution and interview session (Figure 4). The majority of respondents (80 %) are those who were born The questionnaires were distributed to the main local and raised there, while the remaining 20 % said that they businesses in those areas such as at the Kinabalu Park, were moved to the village from other areas of the marriage Mount Kinabalu Golf Park, Desa Dairy Farm and so on. and employment issues. Other than that, there are many homestays as well as the hotels for tourist accommodations. These types of Table 1 businesses are the main focus for business continuity study General information of the respondents and plan for natural disaster-prone areas. The interviews Information Respondents Total (%) were held with important people or upper management team such as the assistant district officer of Ranau, Mr Bernard Genders Male (22) 38 Kimin and a few of local people who were selling the Female (35) 62 vegetables and managed their own local businesses within Origin Born and raised in the 80 the villages. villages (45) Transferred to the 20 Most of the local people were so cooperative during the villages (12) 24 interviews and they are willing to fill in the questionnaires. Source: Research fieldwork A total of 57 questionnaires were successfully collected using this approach. Some difficulties to collect more Jobs and Occupancies: The types of works for the respondents were found because some of them were still respondents before and after the disasters were demonstrated affected by the earthquake and its cascading geohazard and in table 2. Results of the analysis found that the main work did not continue their jobs for certain period. as farmers (cultivation of vegetables) and trade represents more than 55% of respondents work. While the remaining Results and Discussion 45% of the work consists of working as the workers in the hospitality sectors (24%), government and private sectors Profile of Respondents: Analysis of the questionnaire (10%) and the unemployed (11%). The findings were revealed a total of 57 respondents from five villages around significant to the Kundasang image as the main supplier and Kundasang involved in this study with 35 people (62 %) as production of the stock and supply of vegetables as well as women and the remaining 22 people (37 %) were male agriculture- related business activities in the state.

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Comparative analysis was done to see the changes in the type answered based on their own opinion. Table 6 shows of work before and after the disasters (post-June 2015). The feedback given by the respondents for self-assessment. analysis in table 3 shows the existence of the decrease trend for the main work as farmers and traders but only at a small Table 5 percentage (2%). Reason of the natural disaster happening

Reason of the natural n = 57 % Table 2 disasters Type of works of respondents Un-controllable 29 51 Type of Works Respondents Total (%) development Farmers 31 55 Earth’s phenomena's 40 70 Hospitality sectors 13 24 Climate change / extreme 35 61 Government and 6 10 weather private sectors Others 15 26 Unemployed 7 11 Source: Research fieldwork24 Source: Research fieldwork24 Table 6 Table 3 Self-assessment questions for respondent

Type of works of respondents Questions Answer (before and after disasters) (Indicators) Type of Respondents Total (%) I have no problem to communicate with 5 Works employees during emergencies Before After Before After Important records of my business are 3 disaster disaster disaster disaster protected from damage due to disasters Farmers 31 30 55 53 I'm willing to take the risk of continuing 1 Hospitality 13 14 24 26 the business despite receiving warnings sectors of disaster Government 6 7 10 11 My business is insured 4 and private I know the importance of spreading the 5 sectors disaster experience to the community Unemployed 7 6 11 10 I have a safe area to move my business 1 Source: Research fieldwork24 operations in the event of disaster I know which agency should be 5 Disaster Impacts to Local Businesses: There were contacted in case of disaster questions focusing to the disaster impact to the businesses. I have set up an emergency procedure 3* Respondents can choose more the answers for this type of & disaster kit to protect my business & questions. Tables 4 and 5 show the distribution of the type employees of losses to businesses and the reason for the natural disasters Clogged drains can contribute to 5 to occur. disasters (floods, landslides) Table 4 I believe my business is safe from 1 Type of losses to the businesses disasters

Types of losses to the local n = 57 % I know about the business that are prone 5 businesses to disasters Source: research fieldwork24 Loss of customers 48 84 Note: *Positive start for formalizing BCP in near future All the equipment's were 39 68 destroyed and cannot be used Table 7 is the list of all the places visited during the field trip Supply chain of the products 30 53 in Kundasang area. Although the number of respondents is were stopped not high as initially planned, but their participation and Others 25 44 feedback are sufficient and predominantly covered the most Source: Research fieldwork24 businesses and economic activities in Kundasang, Sabah.

In the last part of the questionnaire, the questions were From the questionnaires distributed, the awareness of focusing on the self-assessment of the entrepreneurs and Kundasang community is relatively high even though they businesses. They were given the indicators such as 5 for are living in the prone disaster areas. They managed to strongly agree and 1 for strongly disagree. Respondents survive and face their daily life as usual. For the time being, there is no specific law or requirement by the local authority

30 Disaster Advances Vol. 13 (7) July (2020) regarding the needs for BCP for tourism operators and other to move out from their village because they grew up there SMEs in Ranau-Kundasang area. However, as mentioned by and love the nature and Mount Kinabalu itself. respondents, having BCP in the long run might improve business protection from disruption as well as securing jobs After the earthquake, the roads were badly damaged and for local people. some of the bridges collapsed. Due to this matter, local people could not send their vegetable and local produces to Table 7 Kundasang town or Pasar Tamu (weekly farming market). List of places visited during the field-trip Some of the houses and businesses structure were also affected. S.N. Places visited

1 Offfice Conclusion 2 Local businesses This study gave the opportunities to determine how the local 3 Celyn Resort organisation and SMEs survived in term of maintaining their 4 Farmers in Pasar Tamu businesses before and after the natural disaster occurred. It 5 Dream World Resort is widely recognized by the respondents that BCP is a 6 Homestays in Mesilou and Kundasang continuous process although majority of them currently did Lama not formalize the plan into report. They managed to turn 7 Desa Dairy Farm around their company into minimal disruption since the scale 8 Mount Kinabalu Golf Park of activity is rather small due to external support for disaster 9 Kinabalu Park recovery by various government agencies. 10 Kiram’s village 11 Alpine Resort However, for a long run, local businesses shall not continue 12 Rocky Lodge with the notion that they will operate under normal 13 TM resort circumstances, because effectiveness of their organisation is 14 Perkasa Hotel also dependent on their ability to remain functional during 15 Mile36 lodge disruption and abnormal circumstances. Therefore, it seems 16 Restaurants that having a BCP is a sound strategy for any organisation 17 Grocery shops operating in disaster-prone areas in order to protect the 18 Mesilou Atamis Homestay business assets and to prevent losses. 19 Kinabalu view Resort 20 Anjung Rehat Homestay References 21 May Homestay 1. Centre for Research on Epidemiology of Disaster (CRED), 22 Tagal Fish Massage Natural Disasters: An Opportunity to Prepare Report (2018) 23 Hot Spring 24 2. Economics and social survey of Asia and The Pacific, Source: Research fieldwork Mobilizing Finance for sustained, inclusive and sustainable economic growth, Economic and Social Commission for Asia and the pacific (ESCAP), United Nation (2018) The relationship between the resiliency community and cooperation in the disaster was found among the 3. Malaysia, Disaster Management Reference Handbook report, communities. They live in a small area and they have their Centre for excellent in Disaster management and humanitarian own head of village which always held up a meeting on how assistance (2019) they should be managed and protect their villages. These heads of villages are also maintaining their harmonization 4. Prevention Web, Malaysia: Disaster Risk Reduction is Everyone’s business, Dr Khamarrul Azahari Razak, UTM with events such as sport activities between villages and so Geohazards Leader, May 2, https://www.preventionweb.net/news/ on. view/650764 (2019)

During the earthquake, the local people had problems of 5. Hitoshi B., Itsu A., Hiroshi T., Noriaki N., Shiro N., Matsumoto damaged infrastructure and disruption of clean water supply. H. and Toshiyuki S., Introductory study on Disaster Risk This is due to the debris and mud flow to the river which is Assessment and Area Business Continuity Planning in industry their main source for clean water. Therefore, they need to agglomerated areas in the ASEAN, J. Integr. Risk Manag., 3(2), rely on the help from the outside i.e. Ranau for supporting 184–195 (2013) them with the clean water tank for months. This is really disadvantage for local businesses such as homestay and 6. Beavan Davies S., Conradson D., Densmore A., Gaillard J., Johnston D., Milledge D., Oven K., Petley D., Rigg J., Robinson hotels. Other than that, some of the villages need the support T., Rosser N. and Wilson T., Towards disaster resilience: A from the government to move out from Kundasang because scenario-based approach to co-producing and integrating hazard most of them were below the standard national poverty. and risk knowledge, Int. J. Disaster Risk Reduction, 13, 242–247 However, most of the local people said that they do not want (2015)

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16. Sabah Structure Plan 2033 Draft Final report, Town and 26. Mohd Lehan N.F., Razak K.A., Kamarudin K.H. and Mohamad regional planning department, ministry of local government and Z., A Preliminary Study on Disaster-Derived Business Continuity housing (2014) Management in Kundasang, Sabah, Paper presented at the 4th Regional Conference on Natural Disaster 2016, 6-7 Sept, Kuala 17. Bibi T., Azahari Razak K., Abdul Rahman A. and Latif A., Lumpur (2016). Spatio Temporal Detection and Virtual Mapping of Landslide Using High-Resolution Airborne Laser Altimetry (Lidar) In (Received 12th February 2020, accepted 25th April 2020) Densely Vegetated Areas of Tropics, The International Archives of the Photogrammetry, Remote Sensing and Spatial Information

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