STRENGTHENING DISASTER AND CLIMATE RESILIENCE OF SMALL & MEDIUM ENTERPRISES IN ASIA. Thailand. Roadmap for SME Resilience

Transcription

1 STRENGTHENING DISASTER AND CLIMATE RESILIENCE OF SMALL & MEDIUM ENTERPRISES IN ASIA Thailand Roadmap for SME Resilience

2 2 ROADMAP FOR STRENGTHENING THE DISASTER-RESILIENCE OF SMES The iprepare Business facility for engaging the private sector in Disaster Risk Management is a joint initiative by the Asian Disaster Preparedness Center (ADPC), the Asian Development Bank (ADB) through the Integrated Disaster Risk Management (IDRM) Fund and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH within the framework of the Global Initiative on Disaster Risk Management (GIDRM). It focuses on building disaster-resilient businesses in the region through partnerships to strengthen the resilience of the private sector, particularly SMEs; providing technical assistance in strengthening resilience on a demand-driven basis; supporting governments in strengthening the enabling environment that promotes risk sensitive and informed investments by private sector; and facilitating knowledge sharing at the regional and national levels. The Asian Disaster Preparedness Center (ADPC) is an independent regional nonprofit organization that works to build the resilience of people, communities and institutions to disasters and climate change impacts in Asia-Pacific. Over the past 30-years, ADPC has expanded its scope and diversified its operations for a programmatic approach that offers long-term and sustainable solutions to addressing the underlying causes of disasters and climate change risks. The Asian Development Bank (ADB) is a multilateral development finance institution dedicated to reducing poverty in Asia and the Pacific. ADB assists its members, and partners, by providing loans, technical assistance, grants, guarantees, and equity investments to promote social and economic development. With support from the Government of Canada, ADB established the Integrated Disaster Risk Management (IDRM) Fund in 2013, to assist the development of proactive IDRM solutions on a regional basis within ADB s developing member countries in Southeast Asia, including Cambodia, Indonesia, Laos, Myanmar, Philippines, Thailand and Viet Nam. The Fund provides a strong mechanism for supporting ex ante investment in IDRM and complements the existing financing modalities of ADB for supporting ex post relief and recovery activities. In order to respond more effectively to the global challenges posed by disaster risks, the German Government, led by the Federal Ministry for Economic Cooperation and Development (BMZ), has founded the Global Initiative on Disaster Risk Management (GIDRM). The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ GmbH) has been commissioned to manage the GIDRM. The aim of the Global Initiative is to bring together German and regional experts from the public and private sectors, civil society and the academic and research community, to facilitate mutual learning across national boundaries as well as to develop and pilot innovative disaster risk management solutions. The Global Initiative focuses on three priority areas including Disaster Response Preparedness and Civil Protection; Critical Infrastructure and Risk-sensitive Economic Cycles; and Early Warning Systems. Publication details On behalf of the iprepare Business facility, Published by the Asian Disaster Preparedness Center (ADPC) SM Tower, 24th Floor 979/69 Paholyothin Road, Samsen Nai Phayathai, Bangkok 10400, Thailand Tel: Fax: adpc@adpc.net

3 THAILAND 3 Acknowledgements The iprepare Business facility wishes to thank all the individuals and organizations who contributed to this Roadmap document, and who continue to support the regional project on Strengthening the Disaster Resilience of Small and Medium Enterprises in Asia. In formulating the Thailand country Roadmap the project team was particularly grateful for inputs and coordination support from national partners: the Department of Disaster Prevention and Mitigation (DDPM) and the Office of SMEs Promotion (OSMEP) to supplement the findings of the survey on understanding SME disaster vulnerability and the policy review on SME development and disaster risk reduction in the country.

4 4 ROADMAP FOR STRENGTHENING THE DISASTER-RESILIENCE OF SMES What is a Roadmap? Principally, the Roadmap document serves as a means of: Collating and clarifying priority areas for enhancing the disaster preparedness and coping capacities of SMEs in Thailand Identifying the relevant actors, stakeholders or policy owners for addressing these issues Outlining potential approaches or pilot initiatives for tackling the identified challenges As such, the Roadmap serves as a guiding document which can inform the relevant concerned agencies and organizations for SME development and disaster prevention and mitigation (DPM) as well as policymakers, on the ways forward for strengthening the resilience of smaller enterprises in the country. Furthermore, the Roadmap is intended to align with relevant national plans and policymaking recommendations, for instance, the National Economic and Social Development Plan ( ) and the respective strategic plans of implementing ministries and agencies, including the strategic targets of the Office of Small and Medium Enterprise Promotion (OSMEP) the lead agency for SME development in Thailand under the its SMEs Development and Promotion Plan ( ). The Roadmap also takes into account pertinent issues identified at the global and regional levels relevant to SME and Business resilience. The Sendai Framework for Disaster Risk Reduction (SFDRR) , the foremost global initiative on risk reduction and resilience building, identifies the private sector as a crucial stakeholder in efforts to build more disaster-proof communities and societies. In comparison with its predecessor the Hyogo Framework for Action , the Sendai Framework also has a more explicit focus on the need to protect people s livelihoods. Private sector resilience is therefore an important component of achieving Sendai s stated expected outcome for the substantial reduction of disaster risk and losses in lives, livelihoods and health in the economic social, cultural and environmental assets of persons, businesses, communities and countries 1. In the Asia Pacific region where SMEs account for a large proportion of all private enterprises, employment and contribution to GDP smaller enterprises are a key component to effectively engaging the business sector in disaster risk reduction efforts. Notably, all of the SFDRR s four priority areas of: (1) Understanding Risk, (2) Strengthening disaster risk governance, (3) Investing in DRR resilience and (4) enhancing disaster preparedness for effective response & build back better in recovery, rehabilitation and reconstruction highlight areas where the private sector including SMEs can support resilience building efforts, including at the national and local levels. 1 UNISDR (2015). The Sendai Framework for Disaster Risk Reduction

5 THAILAND 5 Correspondingly, the Emergency Preparedness Working Group (EPWG) of the Asia-Pacific Economic Cooperation (APEC) seeks to build capacity in the region so that APEC member economies can better mitigate, prepare for, respond to, and recover from emergencies and natural hazards. This aims to more effectively disaster-proof business, trade and economic growth and communities as well as information sharing, knowledge and technology to improve regional capacity on disaster risk reduction. A specific priority area under the EPWG Strategic Plan was Promoting public-private partnerships to develop joint disaster preparedness actions and build up disaster resilience with the objectives of creating stronger partnerships to support business and community resilience to disasters as well as promoting the development of effective business continuity and critical incident tools for SMEs to reduce their vulnerability and promote resilience. Additionally, APEC s Small and Medium Enterprises Working Group (SMEWG) which works to encourage the development of SMEs and to build their capacity to engage in international trade also acknowledges the need to build the disaster resilience of such enterprises to ensure their competiveness and survivability. The SMEWG Strategic Plan for has the objective to improve Natural Disaster Resilience and Ensure Business Continuity of SMEs and MEs under the priority area of Building Management Capability, Entrepreneurship, and Innovation. Alignment of the Roadmap approaches and pilot initiatives for tackling identified challenges with these global and regional frameworks is an important consideration for ensuring that disaster resilience building is undertaken in an integrated and coordinated manner. Towards a Roadmap for SME Disaster Resilience in Thailand Under the aforementioned project the iprepare Business team worked with relevant in-country partners to produce country reports. These presented results from surveys on the disaster resilience of SMEs as well as providing a strategic policy analysis of the enabling framework for SME disaster resilience in the respective target countries. Together with information gathered from consultations the country reports were able to identify a number of key issues and the ways forward for strengthening SME resilience in each country, thereby informing the formulation of the Roadmaps 4. In terms of existing government support for SME disaster resilience, the key finding was that so far the institutional and legislative systems for disaster prevention and mitigation, climate change adaptation (CCA) and SME business development have not joined hands to provide the necessary support. A Roadmap process is an opportunity to create both 2 APEC (2013). EPWG Strategic Plan APEC (2012). SMEWG. Strategic Plan ADPC (2015). Enabling Environment and Opportunities - Disaster-Resilience of Small and Medium Enterprises (SMEs) in Thailand.

6 6 ROADMAP FOR STRENGTHENING THE DISASTER-RESILIENCE OF SMES mutual understanding and awareness, and to establish specific mechanisms for such coordination into the future. Specific Roadmap thematic areas as identified in the country report were summarized in tabular format along with suggested key actions, potential pilot initiatives which might be carried out by relevant in-country agencies in partnership with ADPC or other development partners, as well as suggestions on the relevant actors, stakeholders or policy owners responsible for each of the identified Roadmap issues. The following Thailand Roadmap is the result of the various initiatives and consultations conducted under the Strengthening the Disaster Resilience of SMEs Project. It refers to the findings of the survey on understanding SME disaster vulnerability and the policy review on SME development and disaster risk reduction in the country. These findings pointed to the needs for improved access to information on SMEs, increased awareness by SMEs, capability building, risk financing and participation in policy formulation by the private sector.

7 Roadmap for Strengthening the Disaster Resilience of Small and Medium Enterprises in Thailand Identified Roadmap Theme Suggested key actions Relevant actors, stakeholders or policy owners Potential pilot initiatives Timeline 1. Legislative and statistical base for government SME support a. Review current statistical collection and analysis of SMEs in Thailand to determine whether more quantitative and qualitative data on enterprise characteristics is needed to ensure that policy interventions can address their disaster resilience. b. Consider establishing a legislative base to recognize a category of micro enterprises within the current category of small enterprises. This would be in line with the current regional trend, which is occurring because it assists governments to provide more targeted policy interventions based on the different characteristics and needs of very small businesses compared with those approaching the size of medium enterprises. c. Review the extent of financial incentives for SMEs to reduce risk and prevent damage and loss from disasters, including though measures such as tax deductions for expenditure on preparing BCPs, and reduced insurance premiums or lower interest loans based on evidence of strategies for disaster resilience and broader BCM. Office of Small and Medium Enterprises Promotion (OSMEP) Department of Disaster Prevention and Mitigation (DDPM) Office of Climate Change (OCC) in the Office of Natural Resources and Environmental Policy and Planning (ONEP), Ministry of Natural Resources and Environment (MoNRE) Thai Chamber of Commerce (TCC) Department of Industrial Promotion, Ministry of Industry (DIP-MoI) Collection of gender- disaggregated data of Thai SMEs Identification and profiling of micro enterprises and SMEs located in high-risk areas 1 year THAILAND 7

8 Identified Roadmap Theme 2. Multi- hazard BCM for SMEs Suggested key actions a. Strengthen SME capacities in all-hazard BCM, including risk assessment for all risks and the development of BCPs to increase their resilience to natural hazards, technological hazards and economic shocks b. Government work with private sector industry organizations and technical experts together, to assess SME disaster resilience needs on a sectoral basis and potentially develop tailored all-hazard BCM approaches by industry c. Continue to support SMEs to develop area BCPs and enterprise level BCPs through direct training support and tools, as well as incentives such as tax deductions, or preferential terms of loans and insurance for enterprises with BCPs. Relevant actors, stakeholders or policy owners National Economic and Social Development Board (NESDB) OSMEP DDPM OCC in ONEP, MoNRE TCC DIP-MoI Thai Industrial Standards Institute (TISI) Industrial Estate Authority of Thailand (IEAT) Ministry of Commerce Ministry of Labor Local governments Potential pilot initiatives Promotion of Area BCM to collaborate with local stakeholders comprising of government, academic institution, private sectors including SMEs to strengthen disaster resilience. Timeline 6 months to 1 year 8 ROADMAP FOR STRENGTHENING THE DISASTER-RESILIENCE OF SMES

9 Identified Roadmap Theme Suggested key actions Relevant actors, stakeholders or policy owners Potential pilot initiatives Timeline 3. Institutional cooperation mechanisms for response and recovery support a. Consider how the formal planning processes of DDPM, OSMEP, DIP and the financial institutions can better integrate support for SME disaster resilience as a cross-cutting issue within their main sectoral planning priorities and implementation strategies b. Institutionalize support for SME emergency response and initial recovery by mechanism such as DDPM engaging SMEs at the community level, as well as OSMEP working with DDPM to ensure that future SME disaster response and recovery operations have the full benefit of the data and capacities of Thailand s specialist DPM agency OSMEP DDPM NESDB OCC in ONEP, MoNRE TCC DIP-MoI TISI IEAT National Catastrophe Insurance Fund (NCIF) Bank of Thailand (BOT) Review relevant legislation, plan and institutional arrangement in DPM and SME promotion system as well as economic and social development (e.g., DPM Act, Metropolitan/provincial DPM Plan, National Economic and Social Development Plan) in terms of: Identification of clear roles of private sector in disaster prevention and mitigation Inclusion of SMEs in planning, networks and provision of advisory and training services 1-4 years c. Institutionalize SME disaster recovery support through mechanisms such as standard operating procedures (SOPs) for institutional cooperation, including the high level of cooperation demonstrated in the 2011 flood recovery between SME promotion and financial sector institutions and ministries. This might include planning for recovery cooperation for: Future flood disasters, to ensure recovery programme start-up and access to recovery finance and tax relief for SMEs is more rapid Contingency planning for SME recovery support from other types of disasters, including civil unrest, tailored to the risk profile of different regions and cities Export-Import bank of Thailand (EXIM Bank) Bank for Agriculture and Agricultural Co-operatives, SME Bank Government Savings Bank Government Housing Bank Thai Credit Guarantee Corporation (TCG) Ministry of Labor Department of International Trade Promotion (DITP) Ministry of Commerce DPM Academy Convening forums to bring all stakeholders together e.g. Thai Business Forum Formalization of inclusion of business resilience including BCP in existing curriculum of DPM Academy for local government THAILAND 9

10 Identified Roadmap Theme 4. Private Sector and SME Capacity Suggested key actions Consider ways in which Government institutions can both access existing private sector capacity and improve organizational structures for SMEs. For example: strengthen emerging SME organizations by providing funding or secretariat support, so that the government can more readily access SMEs own concerns, and as a means of strengthening SMEs capacity to raise awareness and offer tailored training and information for improved disaster resilience, and/or work with large enterprises and industry cooperatives to address supply chain issues and economies of scale for SME implementation of BCM that includes disaster resilience. Relevant actors, stakeholders or policy owners OSMEP DDPM OCC in ONEP, MonRE TCC DIP-MoI Potential pilot initiatives Facilitating linkage/dialogue between local officers and private sector organizations e.g. Chambers of Commerce (esp. SME Committee), business association Joint training on e.g. BCM, supply chain management for SMEs in the form of public private partnership Inclusion of area BCM in local DPM, development plan Timeline 6 months to 1 year 10 ROADMAP FOR STRENGTHENING THE DISASTER-RESILIENCE OF SMES

11 Identified Roadmap Theme Suggested key actions Relevant actors, stakeholders or policy owners Potential pilot initiatives Timeline 5. Insurance and risk financing Review the extent to which SMEs have taken up insurance or other risk financing mechanisms to help shield them from disaster losses and maintain business continuity. In particular, review the extent to which the National Catastrophe Insurance Fund (NCIF), which operates as a subsidized reinsurer for premium-rated private insurance policies, has stimulated SMEs to obtain catastrophe insurance, or whether there is a need for policy adjustment or additional types of insurance to meet the needs of SMEs. OSMEP NCIF Fiscal Policy Office, Ministry of Finance Board of Investment (BOI) Office of the Insurance Commission (OIC) IEAT Ministry of Labor Study of effectiveness of NCIF Background research on existing/potential risk financing options for the private sector, SME 1 year DITP Ministry of Commerce THAILAND 11

12 Identified Roadmap Theme 6. Disaster prevention and climate change adaptation - reducing underlying risks Suggested key actions a. Conduct awareness-raising and natural hazard risk mapping at regional, city and local levels, to provide the necessary technical data for enterprise and area BCPs, focusing initially on the localities already known to be at high risk, and where there are concentration of exposed and vulnerable SMEs (e.g. the Chao Phraya River Basin, which has already been a Government focus, or the drought-prone areas of the Northern region). b. Undertake climate change awareness-raising and specific risk mapping to develop technical advice for SMEs by region and area as to the projected effects of climate change. This could focus on enterprises in coastal cities and river deltas, as well as on agricultural production, and include advice and training on enterprise- level adaptation measures. The mapping process would also form the basis for broader government policy on land use planning, for building climate-change-resilient infrastructure, and planning for specific mitigation infrastructure in high risk regions, cities and areas. c. Review BCM and BCP standards and training materials to ensure they provide an adequate basis for SMEs to assess and incorporate natural hazard and climate change risk, along with technological hazards and economic risks. Relevant actors, stakeholders or policy owners OSMEP DDPM OCC in ONEP, MoNRE TISI DIP-MoI Royal Irrigation Department The Geo-Informatics and Space Technology Development Agency (GISTDA) Potential pilot initiatives Conducting community risk assessment jointly with SMEs Review of practicality of BCM and BCP standards and training modules available for SMEs e.g. BCM standards developed by TISI Targeted and intensified information dissemination of BCP/BCM tools for SMEs Development of simplified, practical information, education and communication (IEC) materials on BCP/BCM Timeline 1-2 years 12 ROADMAP FOR STRENGTHENING THE DISASTER-RESILIENCE OF SMES

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14 This publication is an output of the regional project Strengthening the Disaster Resilience of Small and Medium Enterprises in Asia. The overall objective of the project is to build disaster-resilient capacities in SMEs in Indonesia, the Philippines, Thailand and Viet Nam by undertaking the following activities: 1) Identifying actions to strengthen resilience of SMEs; 2) Providing technical assistance in strengthening resilience to selected SMEs on a demand-driven basis; 3) Supporting governments in strengthening the enabling environment that promotes risk sensitive and informed investments by SMEs; 4) Facilitating knowledge sharing; 5) Up-scaling, leveraging and formalizing business resilience tools, platforms and initiatives. National Partners Indonesia Ministry of Cooperatives and SMEs (MoCSME) Indonesian National Board for Disaster Management (BNPB) Philippines Department of Trade and Industry (DTI) National Disaster Risk Reduction and Management Council (NDRRMC) Thailand Office of Small and Medium Enterprises Promotion (OSMEP) Department of Disaster Prevention and Mitigation (DDPM) Viet Nam The Ministry of Planning and Investment (MPI) The Disaster Management Center (DMC)