Health, Safety, and Environment Incidents: Impact on Non-Operating Partners
Overview of recent public JV health, safety, and environment (HSE) incidents, and their impact on the non-operating JV partner(s).
Protect your joint ventures, employees, clients, business and parent companies from cyber attacks.
March 2021— THERE IS A 29.6%IBM Security: Cost of a Data Breach Report – 2019 likelihood of a security breach at your joint venture (JV), with the FBI reporting a 300%TheHill: https://thehill.com/policy/cybersecurity/493198-fbi-sees-spike-in-cyber-crime-reports-during-coronavirus-pandemic increase in cybercrime since the pandemic started. Cybersecurity is no longer optional; it is a necessity.
Yet cybersecurity risk is often overlooked or deprioritized by large companies when establishing a JV, in favor of a traditional focus on the potential for strategic and revenue growth, access to new markets, cost sharing for large capital investments, and the like. With JVs now commanding a sizeable market share in key industries like oil and gas, renewable energy, chemicals, manufacturing, healthcare and pharmaceuticals – and with the increased push for digital capabilities and for virtual workspaces in the pandemic eras – companies can no longer afford to ignore reliability and security against cyber-attacks in their JV portfolio.
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Meanwhile, cyber attacks are no longer limited to stealing data and intellectual property, but instead wreak havoc across large-scale facilities like those held in many JVs. A sample of recent attacks include:
Compounding the lack of attention on JV cybersecurity is the reality that JVs might face greater inherent cybersecurity risks than wholly owned companies for several reasons:
Large parent companies generally have advanced firewalls, security practices and dedicated teams to respond to threats and handle malicious threats to their own business, while JVs often lack the same focus on cybersecurity.
This does not mean, however, that parent companies are fully insulated from cybersecurity risk exposure via their JVs. On the contrary, when JVs are breached, they act like a trojan horse introducing parent companies to many of the same impacts that they believed were mitigated by their own internal cybersecurity efforts, including:
The oil and gas industry is adopting and expanding the use of digital technologies to optimize production, manufacturing, distribution and supply chain activities. This has revolutionized the industry by improving productivity while simultaneously reducing costs. But it has also exposed this industry to additional dangerous and malicious cyber-attacks (Exhibit 1).
All oil and gas assets – including JVs – face cyber threats that stem from:
JV Directors and management team members should be regularly asking themselves the following 10 key questions on cybersecurity in their JV:
If the answer to any of the above questions is no, it is time to take action to protect your JV, employees, clients, business and parent companies. By having cybersecurity policies and processes in place, you can rest easy knowing you are taking critical measures to protect your joint ventures.
|↑2||New York Times: https://www.nytimes.com/2018/04/04/business/energy-environment/pipeline-cyberattack.html|
|↑3||New York Times: https://www.nytimes.com/2018/03/15/technology/saudi-arabia-hacks-cyberattacks.html|
|↑4||New York Times: https://www.nytimes.com/2020/09/18/world/europe/cyber-attack-germany-ransomeware-death.html|
|↑5||New Navigating The Digital Age: The Definitive Cybersecurity Guide For Directors and Officers|
|↑6||New York AT&T Business: https://www.business.att.com/learn/cybersecurity-report-volume-8.html|
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