Business resilience is a key driver of economic prosperity in the Caribbean

Made up of mostly Small Island Developing States (SIDS), the Caribbean faces multiple vulnerabilities to climate hazards such as hurricanes, flooding, landslides, heatwaves, drought and sea level rise

News | 30 March 2021
By Vanessa Phala, Senior Specialist, Employers’ Activities, and Resel Melville, National Project Officer, ILO Caribbean

Made up of mostly Small Island Developing States (SIDS), the Caribbean faces multiple vulnerabilities to climate hazards such as hurricanes, flooding, landslides, heatwaves, drought and sea level rise.

Between 1963 and 2017, countries in the region on average lost 17 per cent GDP in the years they were hit by storms. These losses do not only reflect destruction to infrastructure, they also indicate the severity of reduced business operations and unemployment. Researchers have cautioned that by 2080, annual losses caused by climate change would represent 11.3 per cent of the total annual GDP of all 20 CARICOM Member and Associate States.

For a region that systematically deals with climate risks, it is a necessity to adopt policies towards building resilience, in order to facilitate the recovery process and encourage centralized plans involving governments, employers and workers.

According to the ILO’s Recommendation 205 - Employment and Decent Work for Peace and Resilience Recommendation, 2017, resilience is defined as “the ability of a system, community or society exposed to hazards to resist, absorb, accommodate, adapt to, transform and recover from the effects of a hazard in a timely and efficient manner, including through the preservation and restoration of its essential basic structures and functions through risk management.”

Despite the magnitude in damages caused by climate events in the Caribbean, there is minimal documentation on how businesses can mitigate the impacts of climate risks and minimize disruptions to productivity and livelihoods.

Through its “Guidelines for a just transition towards environmentally sustainable economies and societies for all”, the International Labour Organization (ILO) provides a framework that governments, employers’ and workers’ organizations can use to develop policies that transition to new sustainable business models.

Under the ILO’s Caribbean Resilience Project, a recent study on the impact of the 2017 Hurricanes Irma and Maria on enterprises in Sint Maarten found that there was a lack of understanding of the recovery process for many businesses, and describes the their recovery and / or adjustment process.

In fact, as a result of lack of national disaster planning, many business owners on the island were left without resources they needed for post-disaster, such as payroll insurance. This created even more of a setback for their recovery period. This deficit in preparedness coupled with the burden of providing support to employees in order to return to business, and the loss of market due to the standstill of the main economic pillar of tourism, had substantial impacts on profitability of many local businesses.

Many Sint Maarten employers suggest that a national strategy must be adopted to deal with disaster-desensitized civilians; a workforce with elevated mobility; the realities of the domestic ecosystem for business; and incentives for businesses to engage in disaster preparedness, while an overarching entity absorbs risks that are different per business size. As one study respondent said, “We need to capture the energy from the storm, not run from it.”

Business continuity planning (BCP) provides a significant opportunity for Caribbean SIDS such as Sint Maarten to effectively prepare for and respond to disaster events and keep economic activities ongoing with the human, material and financial resources available at the time.

The ILO recommends the following six-step BCP checklist as essential for recovery and resilience:

Step 1
Identify your key products or services – What are your most important products or services?

Step 2
Establish the objective of your BCP – What do you want to achieve?

Step 3
Evaluate the potential impact of disruptions to your enterprise and workers – How long can interruptions last before becoming unacceptable?

Step 4
List actions to protect your business – Actions to minimize risk to your People, Processes, Profits and Partnerships (the “4Ps”).

Step 5
Establish contact lists – Make sure you have accurate and updated lists of all your key stakeholders.

Step 6
Maintain, review and continuously update your BCP.

Enabling enterprises to develop and implement BCP means transforming social dialogue and partnerships between government, employers and workers to create policies that support greater business resilience. It is through these policy solutions, that Caribbean countries can prevent disruptions of economic activity, loss of assets, jobs and incomes caused by climate risks in order to recover sustainably.

For more information about the ILO’s Caribbean Resilience Project, please visit: