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Kidnap and Ransom: Crisis Management Introduction (Part 1 of 2)

By Daniel W. Houston

This is the first of a series of articles relative to kidnap and ransom.

Judge Simon Goldstein described kidnapping as “…the crime of kidnap is, after murder, the vilest and foulest crime known to English criminal law.” Nearly a decade ago, then FBI Director Louis Freeh stated that “The world has become a much smaller and much more dangerous place. We are confronting dangers today — here in the United Stated and abroad — that even a short time ago were incomprehensible.”

In many areas of the world, kidnapping has become the crime of choice and an accepted part of life. Kidnap incidents increase approximately 10% annually. Also increasing is the size of ransoms. Unfortunately, only a small number of kidnappers are ever caught. Many kidnappings take place in countries where there is political upheaval, extreme poverty, or low levels of law enforcement.

Most kidnap incidents are not reported to authorities, perhaps because of fear, mistrust, corruption, reprisal, or because they could be the kidnappers. A U.S. Senate subcommittee study recently found that 63% of Fortune 1000 companies would report losses connected with kidnapping only if they were required to do so by law.

High-profile government representatives, the wealthy, and multinationals are no longer the prime candidates for kidnapping. Today, tourists on “package deals,” children, middle managers, etc. are potential victims.

During the 15 years before the early 1980s, there were fewer than 1,000 known kidnappings worldwide at any given time. This year, it is estimated that there will be more than 40,000 reported kidnappings.

There are a number of reasons cited for kidnappings:

• Demand for money. Most kidnappings are carried out to obtain a ransom, and in most cases it is paid. How much? $25 million or more is a common demand. The settlement is usually 10-20% of the demand, except in the former Soviet Union. The Russian Mafia is extremely reluctant to negotiate and uses excessive violence to achieve its aims.
• Develop war chests. Funds are collected to finance future activities and to continue wars. Moral issues!
• Economic disparity. In the Philippines, the ransom was for basketball courts and uniforms for the hostage takers. In Nigeria, it was for jobs in security for the kidnappers. Poor countries see soap operas and want that way of life.
• Gain technology, trade secrets. By individuals, corporations and governments.
• Outside investors, corporations, and tourists are spoiling valuable farmland, natural resources and traditional industries. Kidnapping has the power to scare and intimidate.
• Blackmail governments politically.
• To publicize causes. A ransom demand in Sierra Leone was for education abroad for the West Side Boys.
• To displace governments.
• Demobilized soldiers looking for work. A severe escalation has been felt since the collapse of the former Soviet Union.
• Crackdown on drug cartels and cultivators. This has spawned a class of drug operatives turned kidnappers.
• Abundance of targets. Targets include business people, tourists, wealthy, diplomats, and missionaries.

There are basically three types of kidnappers:

• Professional. Professional kidnappers tend to be tougher in their demand, knowing what requirements have to be met (for example, proof of life after each conversation). If paid, they generally release the hostage.
• Criminal. Criminal groups are usually more spontaneous and usually have few resources to hold a hostage. They usually feel it is safest to get the money and kill the hostages.
• Political. Religious and political groups tend to be passionate, and therefore unpredictable.

Latin America remains the leading region in the world for kidnap incidents. Together, Columbia and Mexico account for nearly three-quarters of the reported kidnappings for ransom. There are 13 countries most affected by kidnappings:

• Columbia
• Mexico
• Brazil
• Philippines
• Pakistan
• United States
• Russia
• Guatemala
• Venezuela
• India
• Nigeria
• Ecuador
• South Africa 

Read Kidnap and Ransom (Part 2)

ABOUT THE AUTHOR

Daniel W. Houston is Senior Vice President and Risk Management Practice Leader for Hilb, Rogal and Hamilton (insurance brokers and risk management consulting). His office is located in Atlanta, Georgia.

riskVue | The webzine for risk management professionals
March 2003