What has happened?
Burkina Faso has experienced a spate of kidnappings in recent months, with foreign nationals the principal targets. On 15 January 2019, approximately 10 individuals attacked a mining site owned by Canadian firm Progress Minerals, located in Tianbongou in Yagha province. A Canadian employee was kidnapped during the attack, and subsequently found dead two days later. It has been reported that attackers also stole property including computers and money. No group has claimed responsibility for the attack, and the theft of valuables raises the possibility that armed bandits were responsible.
The incident followed the suspected kidnapping of a couple, who were last seen in the city of Bobo-Dioulasso in December 2018, and were believed to be travelling to Ouagadougou. The current whereabouts of the Canadian and Italian nationals is not known and it is not clear which group may be responsible for the kidnapping.
In September 2018, two people of Indian and South African nationality were kidnapped along with their local driver in northern Burkina Faso. The individuals were believed to be working at the Inata goldmine and have not been heard from since their disappearance.
What are the wider implications?
The most recent kidnappings in Burkina Faso reflect a rapid deterioration in the country's security environment, which occurred in the last 12 months. A number of jihadist groups have operational capabilities in Burkina Faso, including Islamic State in the Greater Sahara (ISGS), Ansarul Islam, and al-Qaeda-affiliated Jama'at Nusrat al-Islam wal-Muslimin (JNIM). Burkina Faso's porous borders make it difficult to prevent incursions by militants based in Mali, resulting in a number of serious attacks which have spread throughout northern, central and eastern areas in 2018.
A number of incidents have targeted the security forces. In December 2018, 10 gendarmes were killed in an attack close to the Malian border, which was claimed by JNIM. However, terrorists also successfully targeted the French embassy in Ouagadougou in March 2018 in an attack which left eight people dead. In response to rising risks, the government introduced a state of emergency in six of the country's 13 regions in December 2018. The state of emergency will restrict freedom of movement and allow for the confiscation of weapons.
All of the jihadist groups active in Burkina Faso are prioritising the destabilisation of the wider Sahel region, and are working to target sectors of strategic economic importance in Burkina Faso. The country's gold mining sector is the fourth largest in Africa and critical source of foreign investment for the economy. As a result, foreign mining firms will remain a priority target in the foreseeable future, particularly in those areas currently under a state of emergency. Foreign nationals present at mining sites will face a significantly elevated risk of kidnap, while locals working at projects may be forced into granting access to militants. Kidnapped individuals are likely to be moved across national borders into Mali or Niger. Attackers are likely to replicate attacks seen in Mali, deploying improvised explosive devices (IEDs) and guns. There is also evidence that JNIM in particular has strengthened operational capabilities, which will allow it to deploy suicide vehicle-borne improvised explosive devices outside key assets.
The deteriorating security environment in Burkina Faso reflects wider changes in West Africa. The relative success of counter-terrorism operations in Mali is driving a renewed focus on Burkina Faso. Burkina Faso's intelligence and security capabilities are underdeveloped, making it an attractive target for groups seeking to destabilise the Sahel region. However, security risks are not isolated to Burkina Faso and mining firms will have to contend with persistent insecurity when operating across the Sahel. Al-Qaeda and Islamic State linked groups co-operate in the region, and are able to stage attacks across the Sahel from their bases in Mali. In December 2018, Malian authorities arrested four people suspected of planning attacks in Mali, Burkina Faso and Côte d’Ivoire in concert with JNIM. Groups are also seeking to destabilise the region by stoking inter-communal rivalries.
WORLD RISK REVIEW RATINGS: BURKINA FASO (January 2019)
How can JLT Specialty assist?
Most mining companies operating in emerging markets have significant experience in dealing with the challenging and diversified economic, political and security risks that these countries present. It is, however, important to recognise that these risks are changing rapidly and companies constantly need to adapt their risk management tactics to address the new emerging risks.
For Canadian mining companies, the safety of their workforce is paramount. Yet, as more miners operate in frontier markets such as Burkina Faso, rapidly changing security environments mean there is an increasing requirement to assess people risks and provide adequate duty of care to all employees. Appropriate strategies must be put in place to mitigate these evolving risks.
It is also important to remember that a company’s duty of care will legally extend beyond simply full-time employees. Guests and customers undertaking travel under a mining company’s supervision, employees performing contractual obligations, and consultants and contractors temporarily working for the mining company are all owed varying degrees of duty of care. It is the mining company’s duty to ensure these persons are adequately protected whilst under the company’s guardianship.
Arguably, the most important aspect to monitor and avoid complacency with is security and providing adequate education and protection to employees, guests, contractors and consultants that are operating on site and travelling to and from the mine site. Ultimately, any security incident, particularly those involving foreign nationals, will attract media attention and therefore a company’s ability to manage a crisis effectively and efficiently will be under scrutiny. Poor crisis management and media-handling strategy could result in corporate brand and reputational damage, or even potential loss in share price.
Contingency planning, stress-testing crisis management and evacuation plans and comprehensive travel security plans are just some of the key issues to address. There are a diverse range of security consultancy firms offering these services, but it is also worth noting that insurance policies focusing on people risks, such as a kidnap & ransom policy, can also unlock a level of funding from insurers to conduct a range of pre-loss consulting services. With people risks changing rapidly, the insurance market has responded with new products that enable mining companies to tailor their coverage to their risk profile, that extends cover to new risk scenarios, and access consulting services.
JLT's specialist team, dedicate to people risks are always on hand to confidentially discuss security risks and the wide variety of available solutions including coverage for any of the following perils built into a tailored programme:
- Kidnap for ransom
- Malicious detention
- Hostage crisis
- Disappearance/missing person
- Active shooter/violent assault
- High Risk Personal Accident
- People focused terrorism risks
- Tiger kidnap
- Emergency security repatriation and relocation
- Express kidnap
- Virtual kidnap
While we pride ourselves on being a dedicated security risks insurance broker, we can also offer our clients access to a wealth of information and contacts throughout the security, intelligence and response community and facilitate anything from safe travel advice and training, personal security, crisis management drafting and planning, hostile environment training, kidnap prevention and hostage survival as well as having in-house capabilities for country risk information services and country risk assessments.
Property damage and business interruption risk
Clients in the mining sector are generally experienced in procuring complex property and business interruption insurance programs but, in our experience, political violence risks such as terrorism and war are not always adequately addressed in the cover.
Islamist militant attacks against mining assets in the region, such as the 2013 attack against a French-owned uranium mine in Niger, demonstrated the ability of these groups to cause property damage and significant consequential loss of revenue.
Our starting point when structuring a new policy is to precisely understand our clients’ needs. Our brokers sit alongside a team of risk consultants drawn from security, technical and academic backgrounds. Their substantial knowledge is utilised to help us understand the precise nature of each client’s risk profile given their operations and geographical exposure.
Using this, we are able to custom-build insurance solutions that dovetail existing property or liability covers to ensure seamless, comprehensive cover for a host of political violence risks:
terrorism, sabotage, malicious damage, strikes riots and civil commotion (SRCC), insurrection, revolution, rebellion, civil war, war on land, malicious attack and nuclear, chemical, biological and radiological (NCBR)
This approach of placing a specialist political violence cover can also prove cost-effective as removing elements from existing non-specialist insurance policies can result in premium savings when placed with insurers who are able to expertly underwrite these risks.
For more information, please contact Ed Yauch, EVP, Head of CPS on 914-358-0443
This article is compiled for the benefit of clients and prospective clients of companies of the JLT group of companies (“JLT”). It is not legal advice and is intended only to highlight general issues relating to its subject matter; it does not necessarily deal with every aspect of the topic. Views and opinions expressed in this document are those of JLT unless specifically stated otherwise. Whilst every effort has been made to ensure the accuracy of the content of this document, no JLT entity accepts any responsibility for any error, or omission or deficiency. If you intend to take any action or make any decision on the basis of the content of this document, you should first seek specific professional advice. The information contained within this document may not be reproduced and nothing herein shall be construed as conferring to you by implication or otherwise any licence or right to use any JLT intellectual property.