Contributing Lawyers

Canada

Cyndee Todgham Cherniak

United States

Susan Kohn Ross

Australia

Andrew Hudson



Canadian Businesses Should "Open Their Eyes" to the Business and Political Risks of International Business

Canadian businesses should continue to pursue international business opportunities because we can and should. Canadian businesses should also reflect on current events in Egypt, Tunisia and Libya (and Madagascar, Honduras, Oman, Jordan, Saudi Arabia, Bahrain, Ivory Coast, Congo, etc.). Any business who has been caught in the middle of a political uprising knows that it can have a serious affect on business operations and spooks investors.

The political unrest will continue says Canadian astrologist Georgina Nichols. She posted the following this morning:

Let's look at something that affects us for the next decade, instead of just the next week. Wild, unpredictable Uranus was last in Aries from 1927 to 1935. This week (for the first time since the Great Depression), it returns to Aries to stay until 2019. This does not necessarily mean we're going to have another Depression. (Other planets are in different signs; nothing is ever "just the same.") But it does mean there will be revolutions and revolts (we see this already in the Middle East) and, to a lesser extent, protests anywhere against authority that is viewed to be repressive, undemocratic or unfair. But it also shakes up different areas of our lives in a fresh, rebellious way. We are all going to wake up and smell a different brew of coffee. Sorry, no decaf available.

http://www.georgianicols.com/weekly/

This may mean something to some and may be rejected as hocus pocus by others. Regardless of your views on astrology, I think Georgia may have a point. Assuming that she is correct, Canadian businesses who operate or have activities internationally should ask what they should be doing to reduce business risk (that is the risk of losing money, investments, reputation, lives, etc.).

What we are learning is that a close relationship with the leader of a country may not be the best way to manage political risk (especially if that leader may not be the leader after a coup or a citizens' revolution). We are also learning that the tools used to do business may not be available (e.g., access to the Internet may not be available) and international business may be negatively impacted by actions beyond the control of businesses. What we have learned is that banks may be closed or access to funds may be restricted. What we have learned is that human resources may not be able to work or may need to leave an area where they live and/or work.

Canadian businesses engaged in activities internationally, especially in near failed states, failed states and other countries of concern need to "open their eyes" and see the risks more clearly. The first question businesses must ask is:

Do I have activities in or with a near failed state, failed state or country of concern?

If you do not know how to answer that question, you have your first problem to solve.

If your business has activities in or with a near failed state, failed state or country of concern, you need to look at what you are doing and ask what are the business and political risks? Then and only then can you take steps to protect against the business and political risks. You may need assistance in this undertaking.

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