This paper examines the nature and scope of terrorist threats directed at the commercial sector. It begins by defining terrorism and establishing why a clear definition matters for legal and security purposes. The paper then analyzes how political violence affects businesses—through direct attacks, supply chain disruption, cyber-terrorism, and indirect economic damage—drawing on examples such as the 9/11 attacks, the IRA bombing of London transport, and a series of hotel bombings from 2008 onward. It also explores why commercial targets, including hotels, shopping malls, and global brands, have become increasingly attractive to terrorist groups. Finally, the paper argues that effective counterterrorism requires coordinated action between private-sector organizations and government agencies.
With the current wave of terrorist activity and attacks, the terrorist threat is incredibly real to the commercial sector. Since 2008, terrorists have targeted commercial organizations such as hotels that accommodate large numbers of people. In 2009, for example, terrorists bombed the JW Marriott and Ritz-Carlton hotels in Jakarta, Indonesia, leaving 9 people dead and 42 injured. Although terrorism has existed in geographical isolation for scores of years, approximately 20% of terrorist acts affect the business community (Levene 2007, p. 7). The contemporary historical record is full of horrific incidents carried out by extremists for divergent reasons. Terrorism is, in effect, the plague of a contemporary and civilized society — real and deeply detrimental to the commercial sector.
Numerous countries across the globe experience terrorism triggered by ideological, social, religious, and other causes. The effects of terrorist attacks and threats negatively affect businesses in lasting ways. The IRA attack on London transport paralyzed the commercial sector, while the 9/11 attack on the World Trade Center destroyed and disrupted over 14,500 businesses in New York (Press and Public Affairs 2005, p. 11). That attack caused significant loss of tax revenue, a drop in tourism, a fall in property values, and serious effects on the leisure and hotel industries. This paper highlights the effects and threats of terrorist attacks on the commercial sector, the vulnerability of that sector to terrorism, and how the commercial sector — in collaboration with government agencies — can deter and mitigate the effects of terrorism.
Although there is no universally accepted definition of terrorism, defining the term is crucial. A clear definition helps people understand terrorist actions by clarifying the offences carried out by terrorists (Jackson 2011, p. 5). Defining terrorism also enables security agencies to handle terrorist properties, cordon off affected areas after attacks, arrest terrorist suspects, proscribe organizations, and question and detain suspected terrorists at major entry points.
Terrorism refers to acts of deliberate harm perpetrated to cause serious destruction or death, with the aim of intimidating or coercing an individual, a local or global government, or an organization into adopting a particular policy (Jackson 2011, p. 5). It is a vicious activity that jeopardizes the health of human populations, destroys property, and contravenes the criminal laws of a state — instilling fear in citizens, governments, the commercial sector, and other sectors in pursuit of entrenched collective objectives (Gill 2005, p. 67).
Most organizations recognize that they operate in a considerably dangerous world. Business leaders express major concerns about threats from terrorist attacks and other forms of political violence, and about the impacts of these threats on their organizations (Levene 2007, p. 7). For organizations operating internationally, the danger of involvement in political violence is real. A report by Levene (2007) indicates that business leaders believe the risk of political violence is both real and increasing. According to that report, seven percent of organizations in the international arena suffered collateral damage from political violence, while five percent suffered direct attacks on facilities located in their home countries.
Most business leaders believe that the commercial sector is now a target of attack on a par with the government (Levene 2007, p. 3). They estimate that political violence will continue to rise internationally over coming years, with conflict and terrorism set to become a more significant issue than ordinary crime. Terrorist threats targeting the commercial sector prevent business organizations from investing in countries or locations of their choice. Instability and conflict are key impediments to foreign investment, with political violence causing thirty-seven percent of organizations to stop investing in foreign markets. A Lloyd's report identifies four major emerging threats associated with the rise of political violence (Levene 2007, p. 3).
One of these threats is risk to the supply chain. Many companies sustain collateral damage from indirect attacks affecting energy supplies and supply lines. Companies also face threats from cyber-terrorism directed at their IT systems; accordingly, many firms invest heavily in IT security to counter such threats (Levene 2007, p. 3). Homegrown terrorism compels businesses to strengthen security measures at operational locations and in employee vetting. In addition, business leaders regard chemical, biological, nuclear, and radiological risks as significant threats, prompting them to develop and test contingency plans to cover these scenarios.
The terrorist threat in the commercial sector is tangible and serious. The United States and the Middle East are the regions most susceptible to terrorist threats. The Middle East is prone to jihadist terrorism, inter-state wars, and local revolutionary movements (Levene 2007, p. 10). The United States faces both domestic and international terrorist attacks, the most severe being the 9/11 attack — the worst terrorist attack in the country's history. Companies are increasingly becoming terrorist targets because of what they represent. Global brands can assume symbolic significance for terrorists: McDonald's restaurants, for instance, experienced 24 terrorist attacks between 1993 and 2005 at their major centres around the world. The motivations behind those attacks included anti-globalization, Marxism, religion, and nationalism (Levene 2007, p. 11). Attackers viewed McDonald's as a symbol of America rather than a supplier of goods. Corporate behaviour, public familiarity with a business, and its size were all determining factors in whether a firm would suffer a terrorist attack prior to 9/11. As Wilkinson (2006) notes, business targets are, in many respects, easier to hit than government sites and facilities (p. 205).
While jihadists remain a primary point of reference in discussions of prospective terrorism, modern technologies also facilitate attacks on the commercial sector. Terrorists can monitor businesses electronically, and the global community scrutinizes corporate behaviour to identify areas of weak governance, bringing reputational considerations to the fore (Wilkinson 2006, p. 205). Companies that benefit from poor labour standards become targets for terrorist action. Natural resource scarcity also instigates political violence that affects the commercial sector and broader society. Companies that exploit natural resources inevitably become terrorist targets, as their activities provoke conflicts over the distribution of those resources.
"Private sector duties and public-private cooperation"
Private-sector companies that form part of critical national infrastructure are direct terrorist targets. A company's country of origin and the nationality of its staff or management can also make it a major target (Wilkinson 2005, p. 25). A business's trading links and the nature of its operations are additional contributing factors. A firm may also become an indirect target due to its location in an area prone to attack. From this perspective, all businesses — regardless of size — have an interest in preventing further attacks such as the Madrid train bombing and 9/11 (Press and Public Affairs 2005, p. 11). The increased deaths and injuries caused by terrorist attacks negatively affect the entire commercial sector. Following the 9/11 attack, for example, the business community suffered losses estimated at $11.0 billion while property destruction amounted to $9.6 billion. Well-informed organizations understand that any terrorist attack poses critical dangers to the commercial sector. Because the government alone cannot prevent everything, it is the responsibility of private-sector organizations to bear the cost of improved security and to develop robust contingency plans (Wilkinson 2005, p. 25), with the military providing advice and guidance in collaboration with businesses.
The aerospace, airline, and tourism industries related to civil aviation are all vulnerable to terrorist attacks. When an attack hits one sector, other connected sectors experience a corresponding downturn (BENS 2003, p. 6). When terrorist attacks cause mass destruction and mass casualties, share and stock values in affected sectors decline dramatically as public trust in operational security erodes. As a result, all large, medium, and small private and public sector organizations situated in regions prone to terrorist threats must put in place all measures necessary to protect their businesses and staff. Proper crisis management structures — including fully briefed, trained, and regularly exercised response plans — are paramount (Homeland Security 2011, p. 27). Crisis management teams must be able to handle common emergencies such as bomb threats and attacks, as well as threats specific to their industry.
Companies that send employees to conflict hotspots must train and prepare them for the likelihood of terrorist attacks. In the food and drink industry, crisis management teams must also develop capabilities to respond to threats of product contamination (BENS 2003, p. 8). The threat of terrorism is evident across the commercial sector: in the financial sector, maritime industry, energy industry, information and communications sector, tourism industry, civil aviation industry, and hotel industry, among others (LaTourette 2006, p. 3). Consequently, the commercial sector and the government must collaborate to curb, deter, or minimize terrorist attacks through the use of business intelligence — which provides data unavailable in the public domain — and through the adoption of new and enhanced technologies (Homeland Security 2011, p. 27). Such technologies, including biometric techniques applicable at airports, make crucial contributions to security.
Terrorism is a foreseeable risk for businesses and the public alike. Companies may be held liable if they fail to demonstrate the steps they have taken to prepare for and respond to terrorist attacks. Insurance policies against terrorism are available to corporations, reflecting the fact that the terrorist threat to the commercial sector is extremely real and that emergency preparedness is critical for many businesses. Most organizations are vulnerable to a range of manufactured and natural hazards. Businesses become targets for terrorists because of their locations, their operations, the types of commodities they offer, their symbolic value, and their corporate behaviour. For companies that do not suffer direct terrorist attacks, indirect harm comes through the degradation of fundamental services — including communications, mail, and transport — that result from attacks on surrounding communities. Anthrax, for instance, disrupts mailing systems, while chemical, biological, radiological, and explosive threats endanger the transport networks that underpin business operations.
In the contemporary world, terrorist attacks are more intricate and diverse than those that preceded 9/11. Modern terrorists target commercial facilities such as shopping malls, hotels, and office buildings that accommodate large numbers of people (Homeland Security 2011, p. 24). These facilities provide space for economic activity, which is precisely why they become major terrorist targets. Hotels in particular have become a primary focus of attack. Since 2008, several attacks have been directed at hotels: on 10 June 2008, terrorists bombed the Pearl Continental Hotel in Peshawar; in January 2008, terrorists threw hand grenades at the perimeter wall of the Serena Hotel in Kabul; and in September 2008, the JW Marriott Hotel in Islamabad suffered a terrorist attack. These incidents illustrate a dramatic shift in the trend of terrorism, with terrorists increasingly targeting the commercial sector to maximize casualties.
Shopping malls and other consumer-facing facilities are also major targets, offering perfect cover for pre-operational surveillance. Most terrorist attacks on property involve industrial and business premises. The most vulnerable individuals are members of the public — tourists, shoppers, passengers, and worshippers — who do not benefit from professional security protection (Wilkinson 2006, p. 205). Consequently, the government cannot prevent terrorist attacks alone and requires the leadership of both the private and public sectors to join forces in providing national defence against terrorism. Each new attack on a business organization, government facility, or item of infrastructure confirms that the terrorist threat is continuous and genuinely serious.
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