Experts say rising drug violence in Mexico has created a myriad of problems for security directors whose companies have operations in the country.
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Since 2006, the Mexican government under President Felipe Calderon has been embroiled in a bloody war with drug cartels that operate throughout the country. This has obviously created some additional headaches for security directors whose companies have operations in Mexico, but the violence has recently escalated to the point where it is having a direct impact on businesses.
Earlier this year, SIW reported on a growing number of incidents of cargo crime in the country, as the cartels have sought out other ways to supplement their income. Cargo crime remains a big problem in Mexico, but what was once a relatively safe place for corporations to establish plants and send their executives to hammer out business deals is now anything but.
"One of the concerns that I know companies are facing is a lack of concern from the cartels about collateral damage," said Daniel Johnson, senior chief of ASI Global, a subsidiary of medical and security evacuation firm Medex that specializes in kidnap and ransom response.
While a lot of the violence in the country is targeted, Sam Logan, regional manager of Latin America for risk management services firm iJET, says that there have been several recent incidents that involved the indiscriminant killing of innocent victims.
Last month, gunmen opened fire on buses carrying factory workers in the border town of Ciudad Juarez, killing four people and wounding 15 others. The victims worked in a plant owned by car upholstery maker Eagle Ottawa. A spokeswoman for Eagle Ottawa said the company could not comment about the attack due to an ongoing investigation into the incident.
Mexican authorities may be making some headway in the violence in Ciudad Juarez, however, as they recently announced the arrest of Arturo Gallegos Castrellon, leader of Aztecas street gang who claims he is responsible for 80 percent of the murders in the city since August 2009.
"It's not pinpoint precision that they are going after (in attacking) their perceived opposition. They are shooting a busload of people and kind of letting the chips fall where they may," Johnson said. "There used to be, for lack of a better term, a perceived 'immunity' for the Americans that were working down there, which seems to be gone now. They are as much a target of violence or affected by the violence as anyone else."
Despite this incident and others like it, Logan says that they usually don't signal a trend and he doesn't anticipate that most security directors would react strongly to it unless they see an uptick in this type of indiscriminate killing.
According to Mark Hall, vice president of business development for Medex, the country can essentially be cut in half when it comes to the types of threats businesses face, with the north being an epicenter for drug violence and the south being an area where kidnapping and other violent crimes are more prevalent. Hall said that Medex is doing an average of 14,500 operations (secure transportation, executive protection, aircraft guarding, etc.) per year in Mexico alone.
Among some of the most dangerous areas of the country, according to Logan, are in and around Nuevo Leon and Tamaulipas in northeastern Mexico, as well as Tijuana, Sonora, Sinaloa, Culiacan, Ciudad Juarez, and Chihuahua City.
Johnson said that the security climate in Mexico has changed dramatically over the past three years.
"There is definitely a more violent turn to the crime we're seeing down there," he said. "Really, I think where it's more acute is in cities like Juarez, but even more so in Monterrey. I think three years ago, Monterrey was about as safe as any U.S. city and the violence that has come like a tidal wave in there borderlines on the obscene."
Logan says that there are three primary risks that CSOs are currently dealing with in Mexico including travel protection for executives and expatriates, safety of Mexican nationals and infiltration of the organization by organized crime.
One method being used by the cartels to divert police attention away from their activities has been the use of so-called narcobloqueos or narco blockades, in which trucks or buses are carjacked for the purpose of blocking street traffic to snarl police or military response. These incidents can have an effect on business continuity, according to Logan, and some businesses are now having to decide if it would be best to allow their employees to work from home. Another issue regarding the safety of Mexican national workers is that many of them have also received threats or have witnessed the violence up close themselves.
"We're not surprised, but it's also a little concerning to find out that some CSOs, especially at smaller companies, haven't really thought about that," Logan said. "I think CSOs are beginning to realize that their own Mexican national employees are at risk and are exposed to some of this activity."
Numbers just released by the Mexican government show that roughly 80 percent of the nearly 30,000 people killed since the crackdown on the cartels began were concentrated in 162 of the nearly 2,400 municipalities that the country has. Logan says this has created a reality versus a perception issue.
"The reality is that a lot this violence, while on one hand it is discriminate, on the other it's concentrated in tight pockets in the country," Logan said. "A lot of people tend to react to the perception quicker than they understand the reality."
That being said, the increased violence has created a culture of fear in some portions of the country.
"The fear is palatable, you can feel it talking to people," Logan said "But at the same time you can go other places... and they're more talking about (the cities) in northern Mexico. For some Mexicans it has changed a lot, for others it has not."
The impact of the cartels can run much deeper, however, as some companies have found their own Mexican operations infiltrated from top-to-bottom with members of organized crime. Once inside, Logan says that these criminals will use their position to contaminate cargo with drugs.
"The infiltration is often a real concern in a city like Matamoros for example, just south of Brownsville (Texas), you have two unions and if you are operating a factory and you have people that you need to hire for your factory floor, you've got to work with one of the two unions," he said. "Both unions are involved with organized crime so there is a concern there that if you don't take the time to do at least a little bit of due diligence on the people that you're hiring, then you could be hiring a criminal to come do work in your factory and who knows what happens after that."
Despite the rise in drug violence, security experts say that companies have not curtailed travel to Mexico. However, they are taking more precautions than before.
"Our clients aren't holding back travel, they are going down but they are enlisting car and driver services and executive protection specialists depending on the person's travel (arrangements)," Hall said. "It used to be that (company officials) would go down to Mexico for one week or two weeks. Now, the travel periods are shorter and they are doing more and more of their meetings in major hotels instead of going from business-to-business."
While there is no empirical data to show whether or not kidnapping is going up or down in Mexico, Johnson said that his company is currently doing more work on kidnappings in the country than "anywhere else in the world." Johnson said that his firm is helping a lot of companies develop crisis management plans to help them react quickly should something happen to their executives while they are in Mexico. Defensive driver training, situational awareness training and secured transport are also a big part of what companies are currently doing to mitigate risks, according to Johnson.
"We are not advising against travel to Mexico right now," Johnson said. "We think there is still good business that is going to happen down there and there are still safe ways to travel, you just need to take significant security precautions. We recommend having accountability throughout your transit, where you are checking in with somebody from your own country or in a call center somewhere to make sure that somebody outside of you and (who you may be traveling with) know where you are at all times."
Hall also stressed the importance of having prearranged transportation in the country to avoid risks.
"If you don't have prearranged transportation, you are just causing problems. I think that's probably what gets most of the executives and other travelers in trouble, thinking it won't happen to them," he said. "A lot of people think that Mexico is still the Cancun and Cozumel's of the world."
Experts say that it is also important for security directors not to over focus on a particular issue because there are so many other risks that their organizations may be susceptible to.
"In Mexico, it's real easy to take your eye off one ball when another is bouncing around more," Logan said. "When CSOs are reading this news about shootouts and so on, that really takes their attention away from what I think are more critical concerns."
According to Johnson, having situational awareness is a big key to remaining safe in Mexico. In Mexico City, for example, Johnson said there has been a big issue with express kidnapping, which involves people being abducted for small ransoms or forced to withdraw money from ATMs. In many of these cases, Johnson says the victims are targeted because they are staying if five-star hotels, wearing suits or seen paying a large tab.
While the thought of using armored cars and armed guards may be appealing to help protect executives, experts say that such moves only attract unwanted attention. Armed guards would also be overmatched in terms of the firepower that the cartels have at their disposal.
This is also a reason that truck drivers in Mexico are taught not to fight back, if their rigs are hijacked.
As SIW reported earlier this year, Cargo crime remains a huge problem in the country. According to Logan, cargo theft is just one of between 20 and 22 different criminal activities that the cartels have in their "financial portfolios." In fact, some analysts agree that drug revenues only make up about 50 percent of the cartels' annual income.
Learn more about cargo crime in Mexico
Cargo crime on the rise in Mexico
Rigo Garcia, general manager of logistics security solutions provider FreightWatch Mexico, says the aforementioned narco blockades have really presented a big problem for shippers in the country, preventing truckers from getting cargo to their destinations. Garcia says that FreightWatch is using social media and other sources to help get their clients' shipments safely and securely around these roadblocks.
Garcia says that as the U.S. and Mexican governments have stepped up their efforts to prevent the free flow of drugs across the border, the cartels have increased their activity in other criminal endeavors, with cargo theft and contamination being one of their primary operations.
"The cartels are having so many setbacks and they need to collect money, their armored vehicles are getting shot up by the military and they need to buy that stuff," Garcia said. "They have plenty of money, but they want to expand into other regions where they can make more money and keep their criminals heavily occupied."
Garcia added that the recession has also played a role in the increase in violence and cargo crime in Mexico. As job opportunities have dried up, many people have turned to crime as a way to support themselves.
Currently, Garcia says FreightWatch is advising companies in Mexico to only move their shipments in the daytime and avoid night travel if possible in the northern part of the country. Oftentimes, Mexican authorities are tied up with other crimes at night and in some instances, they will not even respond if called upon for help at night out of fear of the cartels. Garcia said that they are also placing more covert tracking devices on shipments.
"It's ever changing," Garcia said with regards to the threats that companies face in Mexico. "What's going on today in one part of Mexico will not be the same in six months. It could still be there, it could be worse or less (of a problem) or it could be a different problem. The cartel violence in Mexico will only get worse, but more importantly, the danger will shift from one area to another."