January 23, 2017 CONFIDENTIAL & PROPRIETARY

Significant Events

SOUTH KOREA AND TAIWAN: World Freedom Day, Jan 23
ROMANIA: Public Sector Holiday, Jan 23
KAZAKHSTAN : Russia, Iran, and Turkey will hold Syrian peace talks in Astana, Jan 23
COLOMBIA: French President Francois Hollande will visit, Jan 23-24

Hazard & Event Risk

Hazard & Event RiskThis section contains reporting and analysis on situations that may affect business resiliency and/or physical security such as workplace violence, natural disasters, fire, civil disorder, riots, disease/health, etc.

Incidents

State Of Emergency Declared Due To Wildfires - Chile

Reuters

Reuters

Reuters


On January 22, 2017, Chilean authorities declared a state of emergency due to massive wildfire outbreaks close to Santiago and the south-central area of the country. President Michelle Bachelet had authorized the military to assist firefighters in controlling them. Official sources have stated these wildfires are the largest reported in the last decade. According to media, more than 37 wildfires have burned approximately 80,000 hectares (123,500 acres). Rural communities, factories, and vineyards have been the most affected by the outbreak. Per the latest reports, the military and firefighters are battling at least 18 separate blazes in the center and south of Chile, which have been fueled by high winds and a heat wave.

Analyst Comment:

Clients are encouraged to defer non-essential travel to the regions affected until the government lifts the state of emergency. Businesses are encouraged to monitor the events regarding the spreading of wildfires in central and southern Chile. According to sources, the largest blaze has consumed 24,000 hectares (59,000 acres) only 87mi (140km) south of Santiago. Employees operating close to the affected areas should follow all official instructions by firefighters and civil protection authorities to avoid any incidents. As this is a developing event; continually updated information can be found on the official website of the Chilean firefighters http://www.bomberos.cl/.

Prepared by: Nabila De la Cruz, Mexico

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Anti-Government Protests Staged Over Proposed Law Reforms - Romania

Reuters

Reuters

Reuters


On January 23, 2017, thousands of protesters in Bucharest and cities across the country took to the streets to protest proposed government plans to decriminalize some offenses and pardon some convicted prisoners. Critics have stated that the new measures are likely to undermine a crackdown on high-level graft and are troubling as they were enacted by decree rather than by going through Parliament. The government intends to decriminalize abuse of power actions causing financial damage of less than USD 47,500 (EUR 44,274). The new laws will also allow for the pardon of convicts sentenced to less than five years for committing certain crimes, and cut sentences by half for all prisoners aged over 60, or those who have a terminal illness or children to support.

Analyst Comment:

Pinkerton suggests that additional protests are likely in the short term. Beyond Bucharest, other cities in Romania that saw sizeable protests on Sunday include Cluj, Timisoara, and Sibiu. These cities may experience additional protests in the upcoming weeks. Romania also experienced rioting from 2012-2015 as the result of austerity measures and political scandals. Such rioting may erupt again in response to the proposed laws. Clients are advised to monitor local media and avoid all demonstrations in Romania.

Prepared by: Chad Sisemore, the United States

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Technology & Information Risk

Technology & Information RiskThis section contains reporting and analysis on situations that may affect corporate controls such as IT assets, cyber-security, internal network efficacy and security, and identified systemic technology threats.

Incidents

New York Times Video Twitter Account Hacked, Fake News Posted - The United States

NewsDay

NewsDay

Getty Images


According to media reports, a Twitter account of The New York Times was hacked on January 22, 2017. The hackers sent out a tweet claiming that Russian President Vladimir Putin was planning to attack the U.S. with missiles. The compromised account is The New York Times Video handle, which as the name suggests posts videos on Twitter. Reports indicate that the account has more than 259,000 followers. However, this is significantly lower than the main New York Times page, which has more than 33 million followers. The company later admitted that its video account had been hacked, and issued the following statement “We deleted a series of tweets published from this account earlier today without our authorization. We are investigating the situation.” Hacker group OurMine later took responsibility for the attack.

Analyst Comment:

Pinkerton advises clients with a large social media or online presence to increase their cyber-security measures. Media outlets should not only increase their security for websites and social media, but also mobile devices for all employees. Transmitting sensitive information over unsecured networks or messaging apps could lead to further compromises. Aside from making sure that all devices have the latest software updates, passwords should be strengthened and all information should be transmitted over virtual private networks (VPNs).

Prepared by: Gautham Ashok, India

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Lloyds Bank Hit By Massive DDoS Attacks - The United Kingdom

The Financial Times

The Financial Times

The Financial Times


A series of major cyber-attacks on banks in the United Kingdom by international hackers brought down the digital services of Lloyds Banking Group for more than two days. Lloyds customers were most affected as they could not access their accounts or make any transactions. The cyber-attack also affected Lloyds Halifax and Bank of Scotland brands. Per latest reports, Lloyds Banking Group has not issued any statements on the matter.

Analyst Comment:

There has been no financial loss reported by any customer of the bank. However, it is advised that banks take necessary steps to upgrade to latest technologies as many still use outdated core technologies. Clients are advised to have basic security measures in place. Any suspicious activity noticed by the bank should immediately be reported to the requisite authorities. Clients are also advised to train their employees in basic cyber-security practices. Clients are advised to be vigilant while making transactions online. Avoid falling into phishing traps by not opening links from third parties and other unknown sources that could likely end up stealing data.

Prepared by: Sridhar Ramaswamy, India

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Operational & Physical Risk

Operational & Physical RiskThis section contains reporting and analysis on situations that may affect business continuity and/or operations including supply chain, logistics, facility/physical infrastructure functions, and workforce stability.

Incidents

Protest March In Jakarta Against Police For Investigating Cleric - Indonesia

The Straits Times

The Straits Times

Radio Elshinta


On January 23, 2017, thousands of people took to the streets of Jakarta to protest against police investigating Habib Rizieq Shihab, the leader of Front Pembela Islam (FPI). The cleric is expected to report to Jakarta police headquarters for questioning over allegations of blasphemy and disrespecting national symbols of Indonesia. Shihab had claimed that the newly released Indonesian banknotes feature the hammer-and-sickle symbol that resembles the logo of the banned Indonesian Communist Party (PKI), which is now disbanded. The protesters will march from the Al-Azhar mosque to police headquarters in support of the leader. The cleric rose to prominence after leading a series of street protests against Jakarta Governor Basuki Tjahaja Purnama in 2016.

Analyst Comment:

The protests have reportedly led to major traffic disruptions in the areas surrounding Jalan Jenderal Sudirman. The movement of traffic from Jalan Jenderal Sudirman in theDukurh Atas area towards Karet Bivak came to a standstill due to the protest. Security has been tightened in these areas. Clients are advised to follow local news updates on the protests to keep abreast of the situation. Clients are advised to avoid any affected area until the protests end. Businesses are further advised to protect their assets to prevent any physical damage.

Prepared by: Sridhar Ramaswamy, India

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Power Outages Expected Nationwide - Honduras

El Tiempo

El Tiempo

El Mundo


On January 22, 2017, the Honduran Energy Company (EEH) announced a general power outage in the northern region and the Atlantic coast of Honduras. The suspension of electricity service is expected to last at least eight hours, from 0800-1600 local time on January 23. According to media, the maintenance work on the distribution lines made by the EEH are the main cause of the power outages. The localities that will be affected are Olancho, El Paraiso, Tegucigalpa, Intibuca, Colon, Villanueva, Santa Cruz Yojoa, and Atlantida. Authorities expect constant power outages during 2017.

Analyst Comment:

Clients with operations in Honduras are advised to factor in several power outages in the mid to long term in their logistical plans. It is highly likely that the outages will disrupt operations in several cities. Businesses should incorporate an alternative power source, especially in the localities affected. Clients are encouraged to monitor the Honduran Energy Company website and its press releases to keep track of places where power outages may happen in the near future. Pinkerton recommends the development of contingency plans to avoid any incidents related to electricity in the country.

Prepared by: Nabila De la Cruz, Mexico

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Sierra Nevada Brewery Issues 36-State Recall Of Select Beers - The United States

Associated Press

Associated Press

Beerpulse.com


On January 22, 2017, Sierra Nevada Brewing Company announced a recall of select products due to a packaging flaw. The flaw could result in a piece of glass breaking off into the bottle upon opening. The recall involves eight varieties of beer: Sierra Nevada Pale Ale, Beer Camp Golden IPA, Sidecar Orange Pale Ale, Torpedo Extra IPA, Tropical Torpedo, Nooner, Hop Hunter, and Otra Vez. The recall affects 36 states: Alabama, Arkansas, Connecticut, District of Columbia, Delaware, Florida, Georgia, Iowa, Illinois, Indiana, Kansas, Kentucky, Louisiana, Massachusetts, Maryland, Maine, Michigan, Minnesota, Missouri, Mississippi, North Carolina, New Hampshire, New Jersey, New York, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Virginia, Vermont, Wisconsin, and West Virginia. The affected beers were produced between December 5, 2016, and January 13, 2017, and have a brewery code of “M” printed on bottles and packaging.

Analyst Comment:

Although Sierra Nevada estimates that only 1 in 10,000 bottles of the beers being recalled is affected by the packaging flaw, the recall could have some impact on both future production and distribution. Additionally, the recall will likely affect beverage distribution in the affected states due to the need to remove the recalled product from retailers in addition to previously scheduled deliveries. Pinkerton advises clients conducting business in the affected states, especially those involved in or dependent upon beverage distribution services, to anticipate delays as the recall is executed.

Prepared by: Paul Monhollen, the United States

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UPDATE: Shipping Companies Avoid Piracy "Hotspots" In Sulu-Celebes Sea - The Philippines

Manila Bulletin

Manila Bulletin

Approximate locations of incidents in the Sulu-Celebes Sea and the status of the abducted crew in 2016; the Regional Cooperation Agreement on Combating Piracy and Armed Robbery against Ships in Asia (ReCAAP) Annual Report 2016


Per reports on January 22, 2017, a surge in piracy incidents in the waters to the west of the Philippines has resulted in shipping companies using alternative maritime routes in the region. In context of the growing risks of piracy, shipping firms are increasingly avoiding the Sulu-Celebes Sea route for both “empty and laden voyages.” The diversion from the area has reportedly increased operational costs and the supply chain times in transporting goods to key Asian destinations. To this end, shipping data from media reports indicate that vessels from at least six shipping companies are now “sailing through the open Pacific Ocean, to the east of the Philippines.” These shipping firms include U-Ming Marine Transport, Eastern Pacific Shipping, Diana Shipping, and Anglo-Eastern Ship Management. According to the Regional Cooperation Agreement on Combating Piracy and Armed Robbery against Ships in Asia (ReCAAP), there have been 16 attacks recorded in the Sulu-Celebes area since March 2016. Over a dozen crew members are still being held hostage by the Abu Sayyaf militant group (ASG) in the southern Philippines. The Sulu-Celebes Sea annually accounts for the passage of around USD 40 billion (EUR 37.29 billion) worth of cargo.

Analyst Comment:

Pinkerton finds that the threat of armed piracy is projected to increase over the near to medium term in the Sulu-Celebes area, likely resulting in the continued diversion of shipping routes. The International Maritime Bureau’s piracy reporting center in Kuala Lumpur, Malaysia, has indicated that the kidnap and ransom technique used by armed groups such as the ASG are likely to focus on large-scale commercial vessels and crews. Pinkerton therefore, assesses that the use of alternative routes to prioritize security is likely to impact operational costs and supply chain times over the medium term. For example, Pinkerton notes that the diverted route adds approximately “half a day to a 14-day voyage from Port Hedland, Western Australia’s main iron ore export terminal, to northern Asia.” Further, the extra daily shipping expense for fuel amounts to nearly USD 300 (EUR 279.55) per journey. For an industry which is already dealing with an extended period of substantially low-profit margins, this development is likely to have a significant business impact. Pinkerton further assesses that the development is likely to impact commodity pricing in metal ores across the Asia Pacific region over the same time period.

Prepared by: Nayantara Shaunik, India

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Market & Economic Risk

Market & Economic RiskThis section contains reporting and analysis on situations that may affect corporate strategy such as brand reputation and shifting political factors that influence a region’s business climate and investment risk.

Incidents

Modern Industrial Strategy To Lead Post-Brexit - The United Kingdom

BBC

BBC

GOV.UK


On January 23, 2017, Prime Minister Theresa May will convene a regional cabinet meeting in northwest England to discuss and unveil a modern industrial strategy. On January 22, the U.K. government stated that the primary focus of the new strategy would be around research and development (R&D) of smart technology and offering “sector deals” to life sciences and low emission vehicles. According to the Prime Minister’s office, additional funds of GBP 4.7 billion (USD 5.8 billion) would be made available to fund R&D in the sectors of smart energy, robotics, artificial intelligence, and 5G mobile network technologies, among others. Further, the government is expecting a close collaboration with key industries, as the government will provide support for trade and regulatory barriers to enhance exports. The Prime Minister will emphasize technical skills, science, and mathematics in the education system. Funds worth GBP 556 million (USD 690 million) will also be announced for infrastructure projects during the same meeting.

Analyst Comment:

Pinkerton assesses that the latest slew of announcements may enable the U.K. to diversify from its decade-long dependence on the services sector, mostly finance and banking. With the Brexit negotiations scheduled to begin in May 2017, Pinkerton assesses that the U.K. government will likely reveal additional strategies in medium term to prevent investor flight. Pinkerton notes that the above approach indicates a government intent to micro-manage industrial growth. However, it also emphasizes the opportunity for industries to consult with the government on elaborating the nuances of the regulations, which could be beneficial. Pinkerton advises clients to monitor these developments closely over the short to medium term, and counsel may be sought regarding potential opportunities and obstructions.

Prepared by: Vaagisha, India

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President Trump Preparing To Renegotiate NAFTA - The United States, Mexico, and Canada

Reuters

Reuters

Whitehouse.gov


On January 22, 2017, President Donald Trump announced that among his first actions he will renegotiate the 1994 North American Free Trade Agreement (NAFTA) trade pact with Mexico’s President Enrique Peña Nieto and Canada’s Prime Minister Justin Trudeau. Trump said that meetings with the leaders of the NAFTA countries have been scheduled, and the White House told the media that Trump will meet with Peña Nieto on January 31. Reportedly, Trump said that he will withdraw the United States from the NAFTA agreement if Mexico and Canada refuse to enter into renegotiations.

Analyst Comment:

Pinkerton finds it likely that actual change to the agreement will take many months, if not years, to accomplish – if the negotiations move forward smoothly. It is unlikely that either Peña Nieto or Trudeau would refuse to come to the table; however, they are certain to want to protect as much of the benefits NAFTA confers on them as possible. Trump will likely push for a swift and clear resolution but Trudeau, and particularly Peña Nieto, likely will seek to drag out the renegotiation for space to consider their options rather than jump precipitously into any decision.

Prepared by: Victoria Allen, the United States

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TABLE OF CONTENTS

Hazard & Event Risk
Chile - State Of Emergency Declared Due To Wildfires

Romania - Anti-Government Protests Staged Over Proposed Law Reforms


Technology & Information Risk
The United States - New York Times Video Twitter Account Hacked, Fake News Posted

The United Kingdom - Lloyds Bank Hit By Massive DDoS Attacks


Operational & Physical Risk
Indonesia - Protest March In Jakarta Against Police For Investigating Cleric

Honduras - Power Outages Expected Nationwide

The United States - Sierra Nevada Brewery Issues 36-State Recall Of Select Beers

The Philippines - UPDATE: Shipping Companies Avoid Piracy "Hotspots" In Sulu-Celebes Sea


Market & Economic Risk
The United Kingdom - Modern Industrial Strategy To Lead Post-Brexit

The United States, Mexico, and Canada - President Trump Preparing To Renegotiate NAFTA



 


ABOUT THIS REPORT

Pinkerton Insights is a daily intelligence brief distributed Monday through Friday. The report contains information provided by The Pinkerton Vigilance Network and expert analysis from Pinkerton’s Global Risk Group.

We use a unique, risk-based approach to report on and analyze the issues that could impact organizational value. 



Pinkerton Insights is designed to address the four main risk areas of a business and its operation: Hazard & Event Risk, Operational & Physical Risk, Technology & Informational Risk, Market & Economic Risk.
 


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ABOUT PINKERTON

Pinkerton traces its roots to 1850 when Allan Pinkerton founded the Pinkerton National Detective Agency. Today, Pinkerton offers organizations a range of corporate risk management services from security consulting and investigations to executive protection, employment screening and security intelligence. With employees and offices worldwide, Pinkerton maintains an unmatched reputation for protecting clients and their assets around the globe.