Managing Risk in Today’s Mexico
About the Author: Mr. Dennis Maez served for 21 years as a Special Agent of the United States Secret Service and founded Maez Security Consulting, Inc. (MSC) when he retired in September, 2003 as Special Agent in charge of the San Antonio, Texas District. MSC provides security consultation and executive protection internationally, specializing in Mexico and the rest of Latin America.
Whether your organization has been operating in Mexico for decades or you’re currently weighing the benefits, the crime problem is difficult to ignore. As the Mexican government struggles to reign it in, the people of the Americas watch intently, and, as cartel and government relationships evolve, we hear nervous conversations about the apparent degradation of geographical and social barriers behind which we previously enjoyed a sense of security. As we discuss solutions and signs of improvement, there is little to inspire confidence.
If you already operate in Mexico, you understand that there is much to be gained and that those gains far outweigh the security risk. Respectable economic growth over the last two years indicate that businesses are succeeding in spite of the stubborn crime rate and consistently reported violence.
So how do we provide clarity so that organizations can effectively manage their risk? As is the case in most business decisions, the answer begins with gathering information so that the decisions are informed. A good business plan includes market research. We don’t buy property without doing a title search, and we don’t hire critical personnel without a screening process. Gathering information prior to making security decisions is no different, whether in Mexico or anywhere else.
Many business owners are not familiar with the modern methodologies of assessing security risk because they have previously operated in comfortable environments. While there are plenty of neighborhoods in which a manufacturing facility needs little more than locking doors and a perimeter fence, there are no neighborhoods in which banks don’t need vaults. Businesses that are appealing targets, including banks and businesses with assets in areas where there is not a common perception of security, operate with a greater security risk. As this risk increases, so does the organization’s motivation for investing in security, and, as the need to invest in security increases, decision makers often elect to be more methodical about their risk analysis. Since at least the 1950s, public and private entities have been developing methodologies that help organizations make informed security decisions in order to reduce both waste and risk by identifying the ideal security solutions.
For companies considering operations in Mexico, a paradigm shift about security may be necessary. There are many different ways through which an organization determines its threat perception. With businesses that are not an appealing target for most adversaries and/or the geographic area is popularly considered to be safe, the threat perception is often developed informally. Decision makers have their own historical memories and ideas about adversaries and this substantiates their threat perception. The probability of a security problem is not so high that it prohibits success but, rather, is high enough to warrant greater consideration and, potentially, an increased security posture.
We had a large financial institution from the U.S. tell us that they had considered operating in Mexico but abandoned the idea when they were told that they would need Kidnapping and Ransom (K&R) insurance. It wasn’t the cost of the insurance but the concept of having to insure against such situations that compelled them to cancel their exploration of the lucrative idea. While we were not a part of that decision and this information was shared with us years later, it struck us as quite short-sighted. It appears as though the decision makers in this company made a security decision based upon a misperception of threat. This mistake is in no way specific to Mexico.
By conducting a methodical security assessment, companies can clearly define their security risk and conduct cost-benefit analyses on security system upgrades. More often than not, the investments necessary to reduce a company’s security risk in Mexico are fractional when compared to the increased revenue that the environment offers. Had our client mentioned above had a clear perception of their risk, they would have known that plenty of organizations operate in Mexico without K&R and that, in a nation of over 117 million people, approximately 4,000 were kidnapped for ransom last year. Those numbers do not define a prohibitive environment, and the costs of mitigating those risks do not come close to negating the business opportunity that they abandoned.
Maez Security Consulting can help you navigate the complicated and sometimes daunting security environment in Mexico. Before walking away from an opportunity or investing in the wrong resources, do your company a favor and clarify your perception of risk.