Tom Cowie
The Power Index
Monday, 06 February 2012

RISKY BUSINESS
Published: “WHO” magazine 4 July 2005
Douglas Wood’s dramatic rescue from Iraqi captors made international headlines – but most kidnappings never will.
On June 15 when Melbourne expat Douglas Wood was rescued after being held hostage for 47 days by Iraqi kidnappers in Baghdad, the lives of countless other kidnap victims remained in limbo worldwide. Business people and holiday-makers are abducted daily by kidnappers on foreign shores – not to make a political or religious point, but for financial gain. “Kidnap for ransom is a good business, “says Peter Stening, a Sydney risk broker who insures companies against their employees’ abduction. “Our business has tripled since 9/11.” When a kidnapping occurs, Stening’s multinational company, Stening Simpson, one of the consultants on the Russell Crowe hostage movie Proof of Life, negotiates the “asset’s” freedom and pays all costs involved including ransom. The 30 year veteran negotiator spoke with Michael Crooks.
What is a risk broker?
We analyse country risks for major international firms. A major corporation will come to us and ask us to advise on security for their employees overseas. We cover them against kidnap, and in the event of kidnap, we cover the cost of getting them back, and paying a ransom if it’s absolutely necessary.
Are you negotiating for someone’s freedom now?
Yes. At the moment we have one, and a possible two more who haven’t reported in for five or six hours on regular checks.
Do you consult with clients before their employees go to high risk places?
Yes. Prevention is better than cure. If you were my client and you were going to Iraq, we would have you met in the customs arrival centre. We use very ordinary transportation to convey them. Never taxis, never anything ostentatious. We’ve had delivery vans that on the outside look like carts, but inside they have plush airline seats and air conditioning.
Which countries are high risk?
It depends what day it is. We’ve had alerts coming out of London. Or tomorrow the focus will then shift to Columbia, then it will go into Jakarta or Bangkok or Sri Lanka.
How do you find out a client’s employee has been kidnapped?
[The kidnappers] will contact in some way and make it known that they are holding the victim – the asset. At that stage we go to our database and we know exactly all about this [victim]. And we take it from there.
What happens next?
We centralise the recovery point. That’s where the teams get together and say, “OK, we work it this way.” Then, we negotiate what we’re prepared to pay.
Is it difficult putting a price on a life?
[The kidnappers] have got something that’s going to cost if we are to get him back. Or her. Or it may be a child. So we’ve got to work out how badly they really want to keep this person. If he’s got a medical problem they don’t want to hang on to them too long because they just might die.
Do victims ever find out how much was paid?
No one ever tells them. That’s the business between the underwriters and negotiators.
During negotiations, do you receive footage of the hostage?
The most common form [we see] is [for the kidnappers] to pick up a daily newspaper that’s recognised and have the asset hold it in front of their face. Beatings quite often happen. They beat for effect. And it’s always the face or head – that can be easily photograghed.
No deaths?
Rarely. They can die from natural causes while they’re being held. But the ones who die are dead within 12 to 24 hours anyway, because it’s purely political.
Do you meet the victim’s family?
Never.
How long do negotiations normally take?
A week is a long time.
How often do you deal with a kidnapping?
I can’t actually tell you that – 98 per cent of kidnaps are never reported. We have to keep it as quiet as possible. It’s a growth business and we don’t want too many people thinking that it’s easy money.
Where does it happen the most?
If you take a look at Colombia, if they see a foreigner who they think may be worth more than $150, they’ll nab the person. If they ascertain that the person is worthless, they’ll probably just let them go.
Douglas Wood’s family asked his rescuers for the name of Wood’s childhood pet for “proof of life” Is this a tool you use?
We’ve had a case where an Italian was asked the name of his mother’s sister. An “asset” has been asked to provide details of his two granddaughters. There are a lot of little quirky things that only that person knows.

Thousands of Australians who fear being abducted while on overseas business trips have signed for kidnap and extortion insurance.

At least three unidentified Australian businessmen have been held for ransom overseas this year, including one case in Colombia, where 10 abductions happen a day.

The Sunday Herald Sun found up to 23,000 Australians had specialised ransom policies in place and the booming industry was tipped to be worth more than $12 million in premiums.

The increase of the policies was the result of increasing numbers of Australians working in countries where kidnappings were common, according to experts.

Specialised risk broker Stening Simpson partner Peter Stening said his company had successfully negotiated the release of 16 Australians in the past 33 years and warned incidents were on the rise.
“Indonesia is getting worse and the Philippines is a basket case,” Mr Stening said.

“Mexico is absolutely shocking – we don’t allow insured people to visit some areas there. There have been major increases in the past five years – that portion of our business has quadrupled. Kidnapping is a lucrative business.”

Up to 24 Australian citizens have been abducted overseas in the past 10 years, according to figures released by the Department of Foreign Affairs and Trade.

To stop the kidnappers increasing their demands, few of the cases were reported in the media.

The case of Australian photojournalist Nigel Brennan and Canadian journalist Amanda Lindhout was the best known in recent years.

Brennan and Lindhout were kidnapped in Somalia on August 23, 2008, at gunpoint outside the capital, Mogadishu, on a visit to a refugee camp.

Neither had insurance and were tortured for 15 months while experts negotiated their release.

Industry experts estimated there were 8000 kidnappings worldwide last year with ransom demands ranging from $5000 to $100 million.

Companies are increasingly aware of the risks of kidnap and extortion for personnel travelling overseas but the incident involving a wealthy Sydney family on Wednesday has come as a shock, experts say.
“The episode was something out of left field, “said Peter Stening, Chief Executive of Stening Simpson Group, which brokers insurance and provides personal protection for executives travelling to high-risk countries.
“We never expected to see that sort of thing happen here.”
Police are investigating a possible extortion attempt after a masked man chained a hoax bomb to the neck of
18 year old, Madeleine Pulver, daughter of Mosman couple William and Belinda Pulver.
Mr. Pulver is Chief Executive of Appen Butler Hill, a company that provides linguistic and voice recognition services for government agencies and clients including IBM, Fujitsu, Hitachi, Toshiba and Motorola.
This type of extortion attempt is uncommon in Australia although extortion demands have been made against high-profile companies such as Arnotts, Herron and Multiplex.
“It is a very unusual and rare crime type in this country,” a spokesman for the Australian Institute of Criminology said yesterday.
Nevertheless, some companies and individuals do take out what is known as corporate protection insurance – or kidnap, ransom and extortion insurance.
The insurance can cover activities conducted in Australia and overseas and payouts are awarded for injury, negotiator fees, rewards leading to arrest, forgone salary for the individual involved, and recuperation.
“People are more and more aware of the threats, especially while they are overseas,” Mr. Stening said. He nominated Columbia, the Philippines, Indonesia and the Middle East as trouble spots. “We are engaged by major organisations to protect and advise their workers who are going into certain countries.”
“We know hour by hour and minute by minute where one particular person will be in a particular country.”
Michael Beveridge, National Manager of income and corporate protection for insurance broker, Marsh Australia, said there were no statistics on take up rates for insurance against kidnap, ransom and extortion because insurers did not want to give potential perpetrators clues as to who might be covered and for how much.
“Most of the corporations would take out this cover especially to protect their expats or travelling staff,” he said.
“A well known individual should probably consider it for himself and his family. One example is a high profile sportsperson who might go to Third World countries to demonstrate his sport.”
While an ordinary travel insurance policy might provide a nominal benefit of led than $1 million, corporate protection carried benefits in the millions of dollars, he said.

David has been with the Group in excess of 15 years and has been directly involved in Surety Bonding for more than ten years.

The standards and systems in place in the Surety Division are testimony to David’s enduring contribution and his adherence to the highest standards.  A role model to his team and his peers David’s integrity, humility and commitment to client service is matched with an enormous respect for the value of team play.

We are privileged to have David on our executive team and congratulate him on this appointment.

Elaine Simpson
Group Managing Director
02 9455 0560
esimpson@steningsimpson.com.au

Testimony of Dr. Thomas R. Hargrove — Hargrove gives his account of being kidnapped by FARC (the Armed Revolutionary Forces of Colombia) and held in captivity for 11 months. Come back soon for a reprint of Adventures in the Ransom Trade, an article by William Prochnau originally printed in Vanity Fair, about the Thomas Hargrove’s case.

Corporate Risk International (CRI) — offers their services in high-risk corporate security, including crisis response, hostage negotiation, and executive protection.

The U.S. State Department — issues travel warnings and Consular Information Sheets for countries where it is recommended that Americans avoid travel.

Fielding’s Danger Finder — a site that gives a listing of some of the world’s most dangerous places, information on their recent crime history, and a sense of how to get around more carefully should you venture into these countries.

Successful Meetings Magazine — an article from Successful Meetings Magazine designed to keep you out of harm’s way and make you more aware of your safety at international airports, hotels, meeting rooms and public places.

Chubb Group Of Insurance Companies — an insurance company that offers Kidnap and Ransom insurance.

Stening Simpson — an online insurance company of specialized risk brokers that offers policies for Kidnap & Ransom.

Henry Holt and Company — read an online interview with Ann Hagedorn Auerbach, author of Ransom: The Untold Story of International Kidnapping.

Overseas Teacher’s Digest — an article that describes how Kidnap & Ransom insurance can improve your odds for survival while traveling the world’s danger zones.

abcnews.com — a story of how eight exiled Rwandan rebels raided a camp in Uganda and kidnapped 14 tourists.

Kroll Information Services — this company offers corporate clients a portfolio of products designed to support risk-management around the globe. This link provides a sample risk report on Colombia.

Wall Street Journal — this article discusses the high frequency of international kidnappings over the past few years and ways to safeguard against it.

The sites can make grim reading.

The Department of Foreign Affairs and Trade issues comprehensive travel advice on all destinations, including the Asia-Pacific region.

At the moment they warn against non-essential travel to Indonesia, including Bali, saying that further attacks are being planned against embassies, international schools, international hotels, churches, shopping centres, transport hubs or identifiable western interests, including businesses.

Australians are advised against all travel to Aceh, and those already in Aceh are encouraged to leave, due to fighting between Indonesian government forces and separatists.

In Bali, the sites say, there have been several recent cases where tourists have fallen victim to organised gambling gangs. These gangs have extorted money from tourists in exchange for their safe release.

In Papua New Guinea, travellers are warned about deteriorating law and order and the possibility of terrorist attacks. DFAT advises that Australians travelling to PNG should monitor local developments that might affect their safety.

According to risk-broking house Stening Simpson’s website, there have been car hijackings in PNG by armed offenders, assault, armed robberies and gang rapes, and travellers are advised not to walk at night. Nor should they use taxis or buses known as public motor vehicles but instead rely on their sponsor or hotel to arrange transport.

Stening Simpson’s Peter Stening advises that travellers in high-risk countries should never take taxis. “Always use the hotel car. It will be more expensive than a taxi, but you are far better off: the driver knows you and knows where you are going and is also trained in evasive action.”

He emphasises that no country is safe at the moment. “It is getting worse daily. After 9/11, I felt that World War III had started, but it is a different war where you cannot tell the goodies from the baddies.

“We are not covering the insurance for clients travelling to the Congo or Colombia. The UAE is now off-limits and so is Saudi Arabia – unless the trip is absolutely critical, and travellers would have to pay for extra security while they are on the ground.

“We are expecting something really bad is about to happen in Saudi Arabia. They are threatening spectacular attacks.”

Stening is also warning people off Bali. “We have intelligence that suggests there is a group planning further action.”

In Jakarta, DFAT says that there have been several incidents where Australians have been robbed after their car tyres were deliberately punctured. DFAT warns: “If travelling with a driver, passengers should remain in the vehicle, with all doors locked, while the tyre is being changed.”

Australians are also cautioned about raids by militant Islamic groups against bars, nightclubs and other public places in Indonesia, particularly during religious holidays.

In February 2004, the Indonesian government implemented a new visitor visa regime at immigration check points throughout Indonesia. DFAT advises that Australia is one of 21 countries affected by this new regulation and Australians should seek advice from the nearest Indonesian embassy or consulate before arriving.

Meanwhile in Thailand, DFAT continues to receive reports that terrorists are planning attacks in tourist and resort areas, along with public areas known to be frequented by foreign tourists or expatriates.

In fact, Thai separatists have publicly warned foreigners against travel to parts of southern Thailand.

On April 28, militants attacked Thai security forces in several locations throughout far southern Thailand. Violent incidents have been endemic in this region for many years, although the violence has become more intense since early 2004. Recent incidents include placement of bombs in shopping districts, armed attacks on security forces and the torching of schools.

Thai authorities have expressed concern that explosives, recently stolen in southern Thailand, may be used in attacks.

Martial law is in place in a number of districts. Australians should closely adhere to instructions from Thai security forces and to the local security measures put in place by these authorities.

The Philippines is also providing a focus for terrorists, and Australians should be very cautious in areas known to be frequented by foreigners.

Kidnapping is also a danger throughout the Philippines.

I never quite saw it that way until my good friend Elizabeth Rich introduced me to a group of young people taking part in the AIME Youth Forum as “the travel industry’s war correspondent”. Liz was most impressed by the fact that I was in Phnom Penh when the anti-Thai riots erupted in the Cambodian city, and that I work within what the media has painted as one of the world’s hottest terrorist spots.

Now, how did safe and sunny Singapore come to have such an exciting label? To think when I was transferred to this place, I was dragged kicking and screaming because I was leaving dynamic Hong Kong for sterile Singapore.

Is this the reason why even the Rolling Stones have included Singapore in their world tour this time round – because it is now wild and dangerous enough for Mick and the lads?

Then, I chaired the AIME Business Events Forum in which I got to interview a political risk specialist, Peter Stening, who runs the Stening Simpson Group based in Sydney and Bermuda. Over drinks the evening before, Peter asked me if I knew Christine Amanpour. Of course, I said yes – who doesn’t know this lady who probably brushes her teeth with iron filings and eats top political leaders for breakfast.

Seems that he’s been interviewed by the chief honcho of war correspondents – and perhaps thought I was the travel industry’s war correspondent. Why else, after all, would a tourism event feature a political risk specialist?

Anyway, interviewing Peter Stening live on stage was one of the hardest things I have done in a long time. These political risk specialists have to be, by nature and deed, very secretive and very guarded with what they say.

I could liken the exercise to trying to pull teeth from a chicken except in Peter’s case, it would be gold-plated teeth. He wears a lot of gold on his person, does Peter.

That’s because gold prices are up and his business is booming – which is good news really for those of us who think the world is going through such a depressing phase that everyone is broke, including us.

Political risk insurance continues to be his biggest income earner – that’s insurance companies’ take against misappropriation and nationalisation.

In layman’s terms, that means when governments change their mind and decide they want to take over or grab a share of the hard-earned money you’ve made in their countries because you are making more money than they are.

His second biggest income earner, since September 11, is kidnap and ransom insurance. That’s insurance you (or your company) buy in case some local thug decides you are wearing too much gold for your own good and wants a slice of it, and they grab you, tie you up, force feed you if you are lucky and wait for someone like Peter to come by and pay them in bags of gold.

Anyway, folks like Peter know a lot more than we do about what is going on in the world of terrorism, thugs and things, and I take consolation from the fact that despite what he knows, he is still out there travelling, like us.

Okay, for us, we may be travelling because ignorance is bliss but for Peter, information is power and if what he knows doesn’t stop him, then why should it stop us?

This is why I want to salute all my Asian friends who will be winging their way to Europe over the next week to hit the streets in the major European cities to drum up business for our region.

Some are heading off to London, which Peter said is now the world’s most dangerous city, for another event called Confex. Some are going off to other parts of Europe on sales calls before ending up in Berlin for our annual bunfight, ITB. And countries on the continent are also on terrorist alerts, as we know.

The only consolation is Berlin could be perceived as safe because Gerhard Schroeder is not letting the US beat him around the Bush.

To you, I share these tips from security experts. Continue travelling, but take precautions – avoid crowded places, don’t wear gold, don’t carry Louis Vuitton luggage. In other words, don’t be loud.

Which I know will be hard to do at ITB. It is one crowded, loud place. But for your own sake, leave the gold and diamonds behind. Otherwise, buy some K&R insurance and be thankful there are folks like Peter looking out for us.

Sundance Resources yesterday maintained it was fully insured for the tragedy even though the group flew together on the same charter plane, in breach of industry protocols as well as the company’s own travel policy.

Cameroon’s aviation authority said today it had retrieved and identified all 11 bodies from Saturday’s crash, among them Queensland mining magnate and Sundance non-executive director Ken Talbot, chairman Geoff Wedlock, chief executive Don Lewis, company secretary John Carr-Gregg, and non-executive directors John Jones and Craig Oliver.

American Jeff Duff from risk management company Dynamiq as well as two British and two French were also on the Casa C212 plane, which was finally located late on Monday afternoon, Congolese time, on the western ridge of the Avima Range in the Republic of Congo, near the Gabonese border.
Dynamiq have been a key adviser for Sundance providing crisis and emergency management, and security and logistics support. They have been a valued and highly professional partner for several years,” Sundance Resources sais in a joint statement with the security company.

Peter Stening, the co-founder of Stening Simpson, the largest risk management firm in the Asia-Pacific region, said yesterday that he was “staggered” that standard procedures to protect VIPs and corporate leaders travelling in danger zones and Third World countries had not been followed.

Mr Stening said that his firm had banned the use of both the Congo-based airline, Aero-Service, and the aircraft type, a twin-prop CASA C-212, as they were flagged as having poor safety records in aviation databases.

He also said that the Sundance executives should have been shuttled to the company’s Mbalam iron ore operation in smaller groups if only one approved charter plane was available.

“This should never have happened. We would never, ever allow a company’s board to travel on the same aircraft. It’s nonsensical. You just don’t do it. The risk is too high,” Mr Stening told The Australian.

Questions about the planning for the trip have also been raised after Sundance was forced to charter a plane from Aero-Service after its initial carrier of choice, Jetfly, did not receive the required clearances to travel into Congo airspace.

The group had flown to Africa on Talbot’s private 19-seater jet. However, it was too big to land at the airstrip nearest to Mbalam.

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