Despite Five-Year Buffer, Cost Of Terrorism Remain

March 1, 2007       Marla Nobles      

Despite the more than five years and change that sit between September 11, 2001 and today, everybody in the sector remains concerned to a degree about terrorism, whether it’s organizations funding terror acts under the guise of a charity, rising insurance and transportation costs, or simply completing the mission of the organization in conflict areas.

Responding to the increased violence and political unrest in the many nations where they work, Save the Children and other international charities continued their ramped up security measures into 2007, at a mounting cost of time and money.

Like most non-government organizations, Save the Children (STC) has responded to the change in the environment by increasing its staff security measures, which include improved communication tools and transportation systems, according to the security team at STC. Even areas of health, such as ensuring that all staff members have protection against malaria and other diseases, have been emphasized.

“These measures have been included in our grant proposals and have been appreciated by our donors, as they know program stability and success depend on staff security,” said spokeswoman Wendy Christian.

Screening is another security measure that STC embraced. “Screening our partners and sub-recipients is our normal course of business now — part of our routine,” said Nancy Otterstrom, director of grants management in Westport, Conn. According to Otterstrom, STC has tightened its process for observing the guidelines of the U.S. Patriot Act.

More recently, Christian noted, “there are many areas (the security team) covers, and terrorist concerns are just one small part of the plans to keep our programs and staff safe.” She declined to provide specifics about those plans.

Four years after President Bush signed into law the Patriot Act of 2001, the bill was extended and modified. The revised version, the U.S. Patriot Reauthorization Act, supplemented by the U.S. Department of Treasury’s voluntary Anti-Terrorist Financing Guidelines, “tackles terrorism financing by increasing existing penalties and closing loopholes ‘concerning terrorist financing through hawalas (informal money transfer networks) rather than traditional financial institutions,’” according to a White House press spokesman.

“I wouldn’t say that it’s restricted our giving or financing,” said Mark Howard, chief counsel for World Vision, near Seattle, Wash. “It does impact the way we effect relief overseas. We do have to be much more careful in terms of who our partners are in the field, and of course screen the folks who we’re working with against the anti-terrorist guidelines and all the various lists that the various government agencies in the (United Nations) post.” That increased scrutiny, said Howard, has resulted in additional hours.

During the summer of 2005, attorneys for World Vision and other like nonprofits met with attorneys for the U.S. Departments of Justice and Treasury. “We’ve been very deeply involved in discussions with the government over how to interpret and implement it,” Howard said of the anti-terrorist statutes. He said that he first was “concerned that they were very broadly written, which would make it almost impossible for us to do work in some parts of the world.”

According to Howard, there were concerns that the anti-terrorist laws required World Vision do background checks on every single entity the organization contracted with or bought supplies from. “How do you go and check out the guy who sells you pencils in the local bazaar?  That’s almost impossible.”

There was also concern that the laws required charities screen down to the beneficiary level, potentially putting staff at risk, said Howard. “(They’re) going to be seen as part of the U.S. government’s intelligence gathering, and that’s a security issue for our people.”

Howard said additional screening had to be done on staff and on potential sub-grantees, and “organizations that are going to be granting funds under a U.S. government grant, we have to screen them, their list of principals, officers, directors, all against the 10 government lists (of known terrorist organizations). That’s an extra layer of work that has to be done,” he said.

The 2005 meeting resulted in a clarification of the guidelines’ primary objective: to track how terrorist organizations are financed and choke off the channels of support and money getting to those groups.

Terrorism concerns impact many international food relief organizations as well. According to Michael Halligan, senior vice president of food sourcing and logistics at America’s Second Harvest (A2H), insurance costs have risen due to bioterrorism concerns.

“Insurance costs are one of the top 10 concerns of the trucking industry,” said Halligan. “And that (bioterrorism) — coupled with fuel costs and driver shortages and hours of service, regulatory changes — has caused transportation costs to increase, which in turn causes our costs to increase.”

Despite that A2H receives the bulk of its food donations domestically and is exempt from the Bioterrorism Act of 2002, Halligan said it doesn’t absolve them of the responsibility for being able to track and trace product.

“From a legal point of view, we are exempt. However, from a food safety point of view, the concerns are as great or greater than they’ve ever been. And therefore inventory control and management procedures that we use are as important as they’ve ever been.”

Direct Relief International ships hundreds of millions of dollars worth of product annually, and due in most part to terrorism, the nonprofit continues to grapple with transportation costs gone through the roof.

“Our transportation costs to get material into Afghanistan has definitely increased,” said Jason Kravitz, communications director at DRI in Santa Barbara, Calif. “There’s not an official surcharge for bringing materials into conflict zones,” said Kravitz, who said the rare shipping company that does work in conflict zones will charge as much as twice what they would have charged pre-9/11. Kravitz said the cost per pound often exceeds $8.

Kravitz called the vetting process DRI underscored post-September 11 “an additional layer. With all our partners that we deal with out in the field, from a technical compliance standpoint due to the various laws passed since 9/11, we do our due diligence.” And following the disastrous tsunami that hit Southeast Asia in late 2004, DRI designated one of its staff to focus solely on emergency response, a first for the nonprofit.

Kravitz said they had to purchase an “enhanced” insurance policy for the staff member, who will be heading to Afghanistan in March. “There’s always ongoing needs around the world,” said Kravitz. “Due to terrorism, there’s a greater need.”  NPT