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New Maplecroft country risk briefings highlight political violence, corruption and the regulatory environment among primary risks in Colombia, Lebanon, Russia and Spain

27/04/2011

Colombia

The Country Risk Briefing for Colombia includes detailed analysis and maps of the governance framework, the regulatory and business environment, political violence, labour rights, human rights, an economic overview, the environment and climate change, and energy security.

Risks in terms of conflict and political violence have intensified in 2010 throughout Colombia, compared with 2009. This is evidenced by surge of internally displaced and a rise in incidences of massacres. A February 2011 UN report concludes that neo-paramilitary groups pose the "greatest threat" to human security. The northern department of Arauca is one of the regions at higher risk of political violence. This is largely due to the strong presence of armed groups and the porosity of the border with Venezuela. Given the department's extensive oil infrastructure, armed groups that target the oil industry have also been drawn to the area.

On 10 March Colombian President Juan Manuel Santos warned companies against paying off guerrillas and illegal armed groups that threaten their workers with kidnapping and extortion. An increase in oil and mining activity in rural areas may have led to a surge of extortion and kidnapping attempts by terrorist groups, most notably the Revolutionary Armed Forces of Colombia (FARC). President Santos stated that 'Any company that pays even one peso to these criminals, they must leave the country, they must leave.' Foreign companies have suffered attacks on workers and infrastructure this year.

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Lebanon

The Country Risk Briefing for Lebanon includes analysis of the governance framework, the regulatory and business environment, political violence, labour rights, human rights, the environment and climate change, plus an economic overview.

Lebanon continues to be wracked by political uncertainty after the government collapsed in early January. Newly appointed Prime Minister Najib Mikati has failed to form a cabinet since 25 January. Lebanon has also seen demonstrations, inspired by those seen elsewhere in the MENA region, calling for an end to political sectarianism, corruption and family dynasties in politics. The drastic deterioration in security in neighbouring Syria also risks spilling into the country.

Lebanon may face increased sectarian tensions and possibly violence due to the impending announcement of the Special Tribunal for Lebanon. The tribunal is expected to implicate members of Hezbollah for the assassination of former Prime Minister Rafiq al-Hariri. Rising Islamist radicalism in Palestinian refugee camps increases the risk of violence affecting areas outside of the camps. Foreign personnel may be targeted by some groups, especially radical Islamists, as the recent kidnapping of Estonian tourists should not be seen as a one-off event. Businesses would be wise to monitor developments regularly and safeguard the security of employees.

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Russia

The Country Risk Briefing for Russia includes detailed analysis and maps of the governance framework, corporate governance, the regulatory and business environment, political violence, labour rights, human rights, the environment and climate change, plus an economic overview.

During 2010 and 2011, insurgent violence has increasingly targeted civilians. In Moscow, a suicide bomb attack at Domodedovo airport killed at least 35 and wounded over 100 in January 2011. Terrorist attacks continued in the North Caucasus such as that in Vladikavkaz, (capital of North Ossetia-Alania), which killed 17 and injured over 100. These attacks were mostly perpetrated by sympathisers or those directly linked to Islamist and separatist insurgencies in the North Caucasus. These insurgents appear ready to target major transport hubs and infrastructure in and around Moscow and similar events may result in increased risks and costs for business.

Corruption is a serious challenge to the state's capacity to conduct operations efficiently. It also severely impinges on business activities, which often must contend with state institutions that are non-transparent, do not conduct impartial decision-making and are burdened by bureaucracy. A package of anti-corruption legislation was passed by the Duma in December 2008 and January 2009, giving a wide definition of corruption to capture both active and passive bribery and cover public and private sectors alike. However, the National Anti-Corruption Plan for 2010 - 2011 is lacking in specific actions to address corruption. Businesses should be aware of endemic problems with corruption and a high risk of complicity in corrupt activity of public authorities.

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Spain

The Country Risk Briefing for Spain includes detailed analysis and maps of the governance framework, the regulatory and business environment, political violence, labour rights, human rights, the environment and climate change, plus an economic overview.

Spain's global rankings in both the World Bank and World Economic Forum reports highlight the country's downward trend in key indicators assessing the ease of doing business and other areas of relevance to the business environment. This not only poses a direct risk to business but an additional challenge to Spain's economic recovery. Businesses wishing to operate in Spain also continue to face obstacles in essential areas such as starting operations and this means additional time and costs incurred in interactions with bureaucracy.

Basque separatist group ETA has been seriously weakened by police and judicial action, but remains a chief security concern for the Spanish government and a potential risk for businesses. ETA's current ceasefire was declared on 10 January 2011 and presented as "permanent and verifiable." However, the government has warned that the group's statement does not go far enough, as it does not declare an irreversible and definitive end to ETA. Companies, especially if operating in the autonomous communities of the Basque Country or Navarra, should monitor the evolution of the current ceasefire and keep in mind the severe risks the terrorist group posed in the past including kidnapping, bombing of assets, intimidation and extortion. Risks increase for companies engaged in higher-profile activities, such as construction of motorways.

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