Raising awareness is only half the battle

Thailand floods 2011 © dany13 CC BY 2.0

Sri Lanka, Thailand

It is highly improbable that any resident of the District of Ratnapura, Sri Lanka is unaware of disaster risk. Since 1990, Ratnapura has reported a staggering 2,601 extensive disaster events, an average of over 100 per year, which have damaged or destroyed 23,000 homes, affected over a million people and eroded essential local infrastructure.

Ratnapura is one of thousands of municipalities around the world that experience recurrent extensive disasters. In general, the residents of these localities are fully aware of the risks they face. But their choice as to where to live and work is often constrained by social and economic factors, including a lack of access to safer land, the need to be close to employment opportunities, insufficient investment in risk-reducing infrastructure by local and national authorities, and sometimes discrimination. With constrained opportunities, people faced with recurrent extensive risk often have no choice but to live with risk and periodically recover from disaster loss and damage.

In contrast to Ratnapura, it is probable that very few of the companies that built factories on the floodplains of the Chao Phraya River in Thailand before the massive flooding in November 2011 were fully aware of the risk they faced. Flood risk in the basin had never been modelled, and the scale of the disaster took global businesses, the government and the insurance industry by surprise. Rippling through global supply chains, the disaster affected production around the world and resulted in massive losses. The total loss of operating profit to Toyota and Honda alone was estimated at US$1.25 billion and US$1.4 billion, respectively (UNISDR, 2013a).

Despite the scale of these losses, very few companies have decided to relocate to less hazardous areas of Thailand or to other countries. All of the businesses in the area are now fully aware of the flood risks. While it may not always be a matter of choice, particularly due to financial constraints (Government of Japan, 2012; Japanese Chamber of Commerce, 2012), for most businesses the value creation opportunities provided by the location outweigh any contingent liabilities posed by future floods.

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