Political Risk Latin America Blog @PolRiskLatam

Report Card 2011: Mexico Corporate Security

Posted in News and Articles, Political Risk by politicalrisklatam on July 6, 2011

by The American Chamber & Kroll Tendencias, July 2011.

In an annual survey conducted by Kroll and the American Chamber, a majority of respondents from local and multinational firms say the security situation in Mexico has further deteriorated. Some firms have considered moving operations, but most
are learning to adapt.

News of drug gang executions and bloody turf battles are daily occurrences in Mexico. It is no wonder then that companies doing business there are concerned. A recent survey of executives from local and multinational companies measures the depth of that concern. More than 90 percent of respondents feel there has been no improvement in security over the past year and more than two thirds think the country is less safe. Overall, 45 percent of company executives feel their companies are at greater risk today than one year ago.  The upshot?  Eight percent of companies surveyed say they have considered moving their operations to another country, while 27 percent say they have reconsidered investment plans in Mexico.

The Impact of Security in Mexico on the Private Sector is the name of the study which resulted from this third annual survey conducted by the American Chamber/Mexico (AmCham) and Kroll. The study reflects the opinion of more than 500 executives, who are members of the three AmCham organizations in Mexico City, Guadalajara, and Monterrey, as well as the Japanese Chamber of Commerce and Industry, and the Canadian Chamber of Commerce.  A total of 4,232 surveys were sent by email to managing directors, CFOs and heads of security around the country. Nearly 80 percent of those who participated in the survey were from multinational firms.

The report notes that not all  regions of the country are as infiltrated by the drug gangs as the northern states of Tamaulipas, Nuevo Leon and Chihuahua. In fact, in some areas, such as Queretero, home to a growing aerospace industry, companies are investing and thriving. Still, the influence of the drug cartels spreads far and wide. Of most concern to company executives is the threat of extortion by organized crime. That threat can manifest itself in a number of security risks for businesses, according to the survey. Topping the list is aggression against employees, followed by breaches in the companies’ supply chains, and internal fraud.

For the first time, the AmCham/Kroll survey asked companies if the Mexico’s security challenges had prompted them to consider moving their operations to another country. An overwhelming majority of companies — 87 percent — said “no”, while 8 percent of companies, most of which with fewer than 500 employees, said “yes.” For companies with large investments in Mexico, uprooting from Mexico is not an option. As a result, their focus is on adapting to the situation and implementing preventative measures to reduce their exposure to organized crime. (continue reading… )

Download the full Report in English here.

Download the full Report in Spanish here.

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2 Responses

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  1. MXSECURITY said, on July 6, 2011 at 3:09 pm

    Very interesting indeed. Regards.

    • politicalrisklatam said, on July 7, 2011 at 3:59 pm

      We are glad that you found it useful. Keep on reading us! Regards,

      PolRiskLatam Team


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