Is centrally directed emergency response and recovery from a natural disaster the only viable option anymore? This belief “seems to be faulty,” judging from the poor response from the federal government and the comparatively effective response from private retailers after Hurricane Katrina, argues economist Steven Horwitz, Ph.D. “Big-box retailers such as Wal-Mart were extraordinarily successful in providing help to damaged communities in the days, weeks, and months after the storm,” he declared. (1-3)
What were the root causes of private retailers’ successful response to Katrina? What implications do their organization culture and practices have for public policy, if any?
Bolding below is by author (MRO).
- Private Sector Performance during Katrina Event
The assumption behind centralized government (especially federal) solutions, such as financing and directing both the response to and recovery from natural disasters is the belief that “the private sector’s profit motive would thwart the charitable impulses generally regarded as essential for effective relief,” says Dr. Horwitz. However, “the private sector’s involvement in the response to Hurricane Katrina…has provided strong reasons to be skeptical of this argument,” he cautions.
The major media and political actors focused on the failures of the Federal Emergency Management Agency (FEMA), while the successes of the private sector received much less publicity after Katrina. The effective responses mounted by the private sector deserve greater consideration, asserts Dr. Horwitz. “During the Katrina relief efforts, the more successful organizations were those that had the right incentives to respond well and could tap into the local information necessary to know what that response should be” (more below). (3)
Indeed, many private firms responded effectively to Katrina, but Wal-Mart, the world’s largest retailer, was exemplary. (4) Wal-Mart “arrived in the New Orleans area long before FEMA and had the supplies that the community needed,” writes Horwitz. “Both President Aaron Broussard and Sheriff Harry Lee of Jefferson Parish in suburban New Orleans lauded Wal-Mart’s work. In an appearance on Meet the Press, Broussard noted that Wal-Mart had delivered three trailers of water only to be turned back by FEMA and quoted Lee in saying, “if [the] American government would have responded like Wal-Mart has responded, we wouldn’t be in this crisis.” (5)
“Phillip Capitano, mayor of the New Orleans suburb of Kenner, reported, “The only lifeline in Kenner was the Wal-Mart stores. We didn’t have looting on a mass scale because Wal-Mart showed up with food and water so our people could survive.” Similar reports of Wal-Mart’s prompt and effective involvement came from community leaders across the Gulf Coast. (6) Other private-sector firms, especially Home Depot and Lowe’s, also provided much-needed supplies, many of which were free, in the immediate aftermath of the storm. (7)
- Wal-Mart Stores, Inc. Emergency Plan and Procedures
Five years ago (2003), Wal-Mart Stores, Inc. (2007 sales of $387.69 billion) founded its emergency management department at its Bentonville, Arkansas, headquarters. “The department’s planning section produced detailed emergency procedures, including charts that let store managers and employees flip quickly to advice on problems ranging from electrical outages to animal infestations. A preparedness group trained managers, response teams, and associates in executing the plans they were given.”
Wal-Mart also founded “Wal-Mart Alarm Central” in Bentonville where six to eight people sit at a bank of computers monitoring fire and burglar alarms at all 3,218 Wal-Mart stores and 555 Sam’s Clubs nationwide. “The group also watches CNN, Fox News, and the Weather Channel, scrutinizing world events and weather patterns for developments that could affect store operations,” notes Susan Rosecrant of the John F. Kennedy School of Government. (8)
Alarm Central’s most high-profile function is as the emergency operations center (EOC), where it “oversees coordination, response, and recovery for business disruptions ranging from tornadoes to terrorism to epidemics,” continues Rosecrant. “Jason Jackson, a former Arkansas State Trooper/Special Agent who took over emergency in 2004 in time to experience back-to-back hurricanes in six weeks, describes the EOC as a ‘quasi incident command system’ that operated with just a few people to handle small situations, but that could quickly expand and draw in additional resources as needed. He is currently director, emergency management, Wal-Mart. (9-10)
“The EOC,” according to Jackson, “operate[s] under three levels of activation. Jackson and his team handle small events from their desks. If from five to 50 Wal-Marts or Sam’s Clubs [are] likely to be affected—for example, by wildfires or a small hurricane—Jackson call[s] a Level Two alert and ‘activate[s]’ the EOC, a stark, rectangular room in a building on Wal-Mart’s Home Office campus filled with rows of desks separated by low partitions. A Level Two response typically involve[s] from six to a dozen senior representatives from functional areas such as emergency merchandise, transportation, logistics, and corporate giving who would come to the EOC and closely coordinate the response along with Jackson’s team. A Level Three, a large hurricane or other major event, could draw in as many as 60 people, including representatives of 35-40 different departments.” In 2004, Jackson trained 150 managers. (10)
- Wal-Mart’s Preparations for Katrina Began August 23, 2005
Jason Jackson’s team typically ratcheted up its monitoring and preparedness during the Atlantic hurricane season (June 1 to November 30).” (11) On August 23, 2005, Jackson and his team decided that a storm developing into a tropical depression over the southeastern Bahamas had the potential to disrupt Wal-Mart and Sam’s Club operations in Florida. Jackson called a Level Two alert and activated the EOC, setting of a highly organized emergency preparation apparatus.”
“A half dozen functional representatives came to the EOC, and Jackson’s team called or emailed the senior vice presidents and regional managers responsible for the southeast region, including Florida, giving them the latest predictions about when the storm might hit and what its impact might be. It was then up to the regional managers—responsible for such functions as stores, loss prevention, and logistics—to pass that information down to their district managers, who communicated with managers at the store and club level…”
“Next, a range of typically two-person teams were stationed in and near Florida ready to respond. Loss prevention teams would be first to move in after a major storm or hurricane. Under normal circumstances, loss prevention was responsible for the safety and security of Wal-Mart assets, including guarding against theft, responding to accidents, and ensuring employee safety. After a major storm, loss prevention teams evaluated the condition of stores and decided if it was safe for managers and associates to return, often consulting with local law enforcement. If teams found major damage, they would typically stay at stores until enough associates returned for them to be secured. Depending on what needed to be done, the EOC would dispatch other teams stationed in the area, including information systems teams, which brought in portable satellite systems to restore phone service and credit and debit card processing capability; generator reams, which trucked in mobile generators to stores w
ithout power; and restoration teams, third party contractors hired to clean merchandise, and even money, and to provide immediate repairs.” (12)
At the store level, managers put into effect a pro-active price freeze for the region to “block any increases just before, during, or after the storm.” Wal-Mart had instituted the price-freeze policy in 2004 so that the media could not accuse its stores of price gouging, as other retailers had experienced. The Wal-Mart store and district managers conferred with merchandising and logistics representatives at the Home Office to figure out what emergency products were needed and when. “The goal,” said Jackson in an interview with Rosegrant, “was to have emergency merchandise in stores before well know forecasters like the Weather Channel’s Jim Cantore showed up on TV to announce the storm’s imminent arrival.” Jackson continued, “That’s when the community turns out to buy stuff, and we’re not ready for that, our shelves go dry immediately.” “The ‘replenishment’ department, which already had a list of items most likely to be in demand before and after a hurricane, then placed orders at Wal-Mart’s disaster distribution centers, and trucks began to roll.” (12)
In 2004, Wal-Mart had more than 100 distribution centers nationwide, eight of which were designated disaster distribution centers, with “space set aside for $4.7 million of emergency merchandise. What this consisted of depended on what part of the country the centers served, but in the southeast, the focus was on hurricanes, and included water, batteries, lanterns, lamp oil, and ready-to-eat food, such as canned ravioli—all packed on palettes for easy delivery and presentation to customers. In 2005, the top 15 food items, carefully identified through an ongoing evaluation of buying patterns, included peanut butter, Gatorade, SnackPak puddings, Vienna sausages, Spam and strawberry Pop Tarts.” (12)
Jason Jackson said during an interview, “The intent was not to stockpile enough for the biggest emergency [as] an emergency might never materialize, and even water could not sit long without ill effect.” For example, “palletized water set on asphalt on a hot day quickly [takes] on an unpleasant flavor, and even under proper storage conditions, water in plastic bottles eventually [begins] tasting like plastic.” (12)
Wal-Mart operates under a just-in-time system, which means it minimizes inventory by tracking products sold, sending that information instantly to suppliers, and shipping out replacement products almost as soon as they arrive in the highly automated distribution centers. Thus, if disaster supplies are depleted during an event, the system can pull from its regular supply chain to meet demand.
As Katrina approached Mississippi and Louisiana, individual Wal-Mart store managers began shutdown procedures that took about six hours, including “boarding over windows with plywood, storing away loose shopping carts…, and pre-positioning sandbags and sump pumps.” Employees moved frozen food to freezers stocked with pallets of dry ice that kept food cold for 48 to 72 hours. Managers stored personnel records out of harm’s way and took home computer hard drives and employee contact information. Managers were supposed to contact local law enforcement to provide a phone number before closing their doors, “although managers admit this didn’t always happen.” (13)
- Katrina Preparations Ratchet Up August 26, 2005 as Katrina Changes Course
On Friday, August 26, 2005, Hurricane Katrina shifted its path from northward up the Florida Panhandle to the west, towards the Mississippi and Louisiana coasts. “Wal-Mart,” said Jason Jackson, “shifted its response towards New Orleans and Mississippi.” Jackson recalls that he “went to the usual Friday officers’ meeting—a group that included all company officers down to the vice president level—and briefed them on the coming storm. Wal-Mart chief executive H. Lee Scott, Jr. said, ‘This company will respond to the level of this disaster. A lot of you are going to have to make decisions above your level. Make the best decision that you can with the information that’s available to you at the time, and, above all, do the right thing.’” His words flew down the line to store managers and set the tone for how the company’s response. (13)
Regional Vice President Ronny Hayes who was responsible for all stores in Louisiana held his first daily conference call with district managers, distribution center managers, and Home Office representatives including operations, logistics, loss prevention, and the emergency operating center on Saturday, August 27, 2005. His Sam’s Club counterpart Mike Turner began staging teams in Baton Rouge, about 80 miles northwest of New Orleans, and elsewhere. All regional Wal-Mart stores closed at 4:00 p.m. on Saturday, August 27, 2005 to await Katrina’s landfall predicted for Monday August 29, 2005. By Sunday morning, August 28, 2005, Katrina was a category 5 hurricane.
- Katrina Impact Monday, August 29, 2005
As soon as Katrina passed over New Orleans as a Category 3 storm, Wal-Mart district loss prevention teams travelled with difficulty from Baton Rouge to the disaster area. “We were already looking at opening stores back up like we normally do after a hurricane,” explains Jackson. What they found was startling. “Stores in towns outside New Orleans, such as Slidell, northeast of Lake Pontchartrain, had not sustained major damage. But in New Orleans and its neighboring parishes, some stores were battered.” People had begun to break into a few stores while water levels appeared to be deepening (the levee system was failing). As more than 80% of New Orleans came under water, Jackson said, “We actually had to retreat out of New Orleans. We never had to do anything like that before.” (14) Communications systems had failed forcing the district loss prevention teams to drive back to Baton Rouge to call the Home Office.
- Wal-Mart Begins Its Katrina Response, Which Became Bigger than Expected
By Tuesday morning, August 30, 2005, the Wal-Mart EOC learned that Wal-Mart was also a victim of the storm. “More than 170 Wal-Mart facilities in Louisiana, Mississippi, Florida, and Alabama had been impacted in some way, and 126 were closed—many because of power outages. The storm affected about 34,000 Wal-Mart employees (five died).
Wal-Mart’s chief executive launched the response, just as he had done many times before during lesser hurricanes. However, because New Orleans’ levee system had failed and the city flooded, the situation “grew into something much larger than just the aftermath of a large hurricane. As government first responders became overwhelmed by the spreading casualties, public disorder and chaos, the giant retailer found itself playing a more central part than anticipated. Indeed, Wal-Mart trucks rolling into New Orleans became an iconic image of the unfolding response,” says Ms. Rosegrant.
On Tuesday morning, August 30, 2005, the loss prevention teams, Regional Vice President Ronny Hayes and Deb Hoover (regional manager for Wal-Mart’s One-Hour Photo group) flew into the region and then drove to the Boutte (Louisiana) Wal-Mart Supercenter, about 28 miles west of New Orleans.” There, they set up a command post before entering the “red zone.” Because of (false) reports about anti-social behavior in New Orleans, EOC Director Jason Jackson (back in Bentonville, Arkansas) designated the Katrina impact zone “red,” meaning that it required “stepped up security.” (15) Wal-Mart employees first “register[ed] at the command post before entering the red zone, and were strongly urged to travel with police escorts when possible, signing out when they emerged.”
Hayes and Hoover, accompanied with sheriff’s deputies, visited stores in the “red zone” and conducted an initial damage assessment. “In some parts of the country, Wal-Mart’s reputation had been hurt by lawsuits challenging its wage and advancement policies and by charges that it was driving out local stores. But the retailer had decades of experience in the south, and in states like Louisiana and Arkansas it was seen as a mainstay of the community and a generous backer of local initiatives. In part for that reason, Jackson says, law enforcement typically was eager to cooperate with Wal-Mart.”
Hayes recalls his experience at the Tchoupitoulas Wal-Mart Supercenter. “People were milling around in the parking lot and pushing shopping carts filled with clothes, diapers, TVs, and other merchandise.” Hayes and Hoover, wearing prominent Wal-Mart identification badges, entered the store and found it overrun with looters,” writes Rosegrant, “with police simply looking on. The entire gun section had been cleared out.” Hayes says, “We went in to try to assess what was going on in the store, but it became so uncomfortable, we had to just leave.” “When Hayes later reported the theft of guns, the EOC directed managers to pull guns out of any store they could get into so that they wouldn’t be stolen during future break-ins. Based on [reports], a security group back at the EOC decided to simply give up certain stores,” says Loss Prevention Director Wes Grube. “The store’s not worth the safety of our associates,” he said. Even police apparently were taking items from the store. (14-15)
“After the thwarted inspection, deputies took Hayes and Hoover to meet Jefferson Parish Sheriff Harry Lee, who was talking with FEMA officials in a Sam’s Club parking lot that FEMA was using as a helicopter landing zone.”
- Oh My God, What Can We Do to Help these People?
Wal-Mart manager Ronny Hayes said, “When I went in initially, I was thinking I need to determine the damage to our stores and find out what’s the situation with our associates [employees]. But after being there for a couple of hours, it totally shifted from that to, oh my God, what can we do to help these people?” (16)
Hayes asked Sheriff Lee to go to the Harahan Wal-Mart. “If Lee’s deputies could secure the building form further looting, he said, they could take whatever they needed form the store. That same afternoon, Hayes and Hoover met with Mayor Philip Capitano of Kenner, a community within Jefferson Parish, and struck a similar bargain.” In exchange for securing the Kenner Wal Mart, the police could fill pickup trucks and merchandise for city workers and police. Hoover said, “I don’t think anybody was worried about being paid for anything.” (16)
“But beyond giving law enforcement access to certain stores, Hayes and Hoover didn’t know what to do, and, with the exception of Sheriff Lee and Mayor Capitano, the public sector wasn’t giving them any direction. ‘At that point, [government officials] were trying to get organized, with Jefferson Parish doing one thing and the city New Orleans doing another thing and FEMA doing their thing,’ Hayes recalls. ‘I was trying to figure out, how do we get these groups together so that they can tell me how we can help them?’”
- Less Damaged Wal-Mart Stores Open
Rosecrant provides two examples of Wal-Mart stores in the Katrina footprint that opened. The Slidell store was without power. Nevertheless, employees began repairing and cleaning out the store as residents came by for goods. District Manager Janie McNeill and others “began handing out diapers, water, formula, and ice. Over the next couple of days, residents and dozens of police officers and firefighters came by for food, sleeping bags, toiletries, socks, and underwear. Some customers paid cash, but for most of the first responders, McNeil adopted a crude credit system—tallying purchases on slips of paper that the buyers then signed. A number of stores that opened without electricity adopted similar systems. McNeil later sent law enforcement receipts to the Home Office for submittal to FEMA.” (16)
The Wal-Mart store run by Assistant Manager Jessica Lewis in Waveland, Mississippi, had been engulfed by storm surge thirty feet high. She decided to salvage what she could. Unable to reach the Home Office, she drove “a small bulldozer through the ruined store, loading it with shoes, clothes, and other items,” which she then piled in the parking lot to give away to anyone in need. “When a police chief and a local hospital representative appealed to Lewis, saying they were running short of critical drugs, she broke into the store’s locked pharmacy.” Wal-Mart EOC Director Jason Jackson said, “What Jessica did is a good example of autonomy.” (17)
- Wal-Mart’s Experience with Government Entities
Wal-Mart’s EOC grew to about 200 people as the company wrestled with the impact of Katrina. “To keep CEO Scott and the rest of the company’s officers informed and to regularly get their input, Jackson’s boss, Ken Senser, vice president for global security, aviation and travel, organized twice daily conference calls lasting about 20 minutes each. The 7:30 a.m. call focused on key developments and actions to be taken that day, while the 5:00 p.m. call recapped the day’s accomplishments and summarized expectations ahead. ‘Everyone knew where we were going,’ Jackson says, ‘so you had a single direction for this huge, massive company.’” (17) Within 48 hours of Katrina’s landfall only 56 Wal-Mart facilities were still closed.
The Wal-Mart EOC was exchanging reports with FEMA’s National Infrastructure Coordination Center, the Department of Homeland Security Operations Center, and state EOCs. “Jackson recalls that one DHS report looked eerily familiar. ‘I pulled up our previous situation report, and I’ll be darned if they didn’t cut and paste stuff out of our report and put it in theirs!” Jackson says. (18)
Ronny Hayes organized a massive water transport, but had problems getting the water to where it was needed, as described elsewhere. (18) “Jackson says he was making his own attempts to coordinate efforts through state emergency management officials, but the crisis had exposed the gaps in those relationships, particularly in Louisiana…At the federal level, Jackson had conversations with both DHS’s private sector office and FEMA. But neither organization seemed to have though through how to engage the private sector, or what role retailers should play. DHS had set up an online National Emergency Resource Registry; companies and individuals could list goods or services available, and would be contacted if and when the donation was needed. But after several conference calls with DHS and other companies, Jackson says, he concluded it wouldn’t work for Wal-Mart. ‘Wal-Mart’s stock and product is in such a dynamic, fast-flowing system that there is no way I could say, ‘Here’s 5,000 gallons of water, take it whenever you want,’ because two minutes later, that 5,000 gallons is gone.’” (18)
“Public sector requests continued to pour in, but Jackson couldn’t identify who was in charge. ‘There was a lot of adversarialism among the governments,’ Jackson says, ‘so Louisiana wasn’t playing nice with New Orleans, who wasn’t playing nice with the feds. FEMA was in there saying one thing and the state was saying another thing and the county parishes were saying something else.’ Increasingly, the delayed and often ineffective government response was generating widespread criticism from rescue workers, evacuees, the media, and the thousands of residents still stranded in New Orleans.” (19)
The public sector placed large orders with Wal-Mart, even though Wal-Mart was not a federal government supplier. (20) FEMA instead had “standing contracts with wholesalers with large warehousing operations and disaster supply companies that charged more for products but guaranteed they’d be available when needed,” notes Rosegrant. The largest orders came from different units of the National Guard, which were outfitting large evacuation centers such as the one at Fort Chaffee, Arkansas.
On Monday, September 5, 2005, Army and Marine troops arrived in New Orleans to take over the disaster response. “Wal-Mart offered to help the Department of Defense with logistics, Jackson says, but the offer was not accepted. It was still hard to know who was in control; FEMA head Michael Brown still hadn’t set up the joint field office intended to coordinate the federal, state and local response. ‘Is it the city? Is it the state? Is it the DOD?” asks Jackson. ‘We found ourselves trying to make inroads into a lot of different organizations…The joint field office was finally established 12 days after Katrina hit.” (21)
- Root Causes of Desirable Outcomes Produced by Wal-Mart
Wal-Mart produced desirable outcomes in the Katrina event because it had both the right knowledge and the right incentives in place, compared with those of government agencies [the U.S. Coast Guard is not included], declares economist Steven Horwitz. (22) “Whether organizations are able to acquire such knowledge and have the appropriate incentives depends on the institutional environments in which they operate and the way in which the organizations are structured,” he continues.
“In general, the environment of market competition is superior to that of the political process in providing both the knowledge necessary to respond to people’s needs and the profit incentive to act on that knowledge in ways that create value. Within the political process, agencies face different incentives, as they do not operate by profit and loss. Instead, government agencies are more often concerned with pleasing other political actors and finding ways to expand their budgets and power. This often makes them less sensitive to the direct needs of the people who rely on them to get specific tasks accomplished. On the market’s superiority at providing both the knowledge and incentives for efficient resource use and greater value creation, Horwitz directs interested readers to the essays in F. A. Hayek, Individualism and Economic Order. Chicago: University of Chicago Press, 1948.
“In addition, the absence of a competitive market for their product means that, in general, government agencies face knowledge problems in determining what their output should be and how best to produce it. However, government agencies with a more decentralized structure that puts them in more direct contact with the people they serve may be able to overcome these knowledge problems. Larger, more centralized government agencies will lack the incentives of firms in competitive markets as well as the knowledge provided by true market prices, but more decentralized ones may do better along the latter dimension.
- Typology for Disaster Relief Organization Performance
Dr. Horwitz developed the following table to illustrate his perspective on the qualities of public and private entities and centralization or decentralization of decision making (23):
Horwitz Typology
|
Centralized decision making with insufficient local knowledge |
Decentralized decision making with access to local knowledge |
Public (incentives of political process for power and larger budgets) |
FEMA |
Coast Guard |
Private (disciplined by profits or civil society competition for funds) |
X |
Private sector (e.g., Wal-Mart, Home Depot) |
- Wal-Mart Implications for Disaster Relief Policy
Based on the experience of Wal-Mart during the Katrina event, Steven Horwitz offers policy makers four specific recommendations for improving responses to natural disasters, as follows:
- Give the private sector as much freedom as possible to provide resources for relief and recovery efforts and ensure that its role is officially recognized as part of disaster protocols.
The idea here is that the government should make sure it does not interfere with the private sector’s attempts to provide relief “within the parameters of non-disaster related laws and regulations. Allowing the private sector to do what it does best in the same ways that it does during non-crisis times is the most important principle for policy makers to follow. Because governments at various levels will have oversight roles to play in any disaster response, it is critical that they recognize the legitimate role of private firms when developing response protocols.”
“One concern that many have about giving the private sector explicit permission to be central to disaster relief is that their desire for profits would conflict with their
willingness and ability to help [as noted at the beginning of this article]. Corporations, indeed, are not charities, but…engaging in disaster relief is in these companies’ long-term self interest, as it both helps the communities they depend on for their business and creates goodwill amongst their customers…The last thing firms that are in a community for the long haul want to do is alienate their actual and potential customers by either idly standing by or dramatically raising prices during a natural disaster. The incentives of the private sector are very much aligned with their ability to provide disaster relief in the way we saw during Katrina.”
“The challenge for the public sector is that lacking the incentive of profit and its alignment with getting the job done, the temptation will always be for government agencies to want to be overly involved so that they can continue to justify their current budgets. Although agencies wish to avoid errors of commission, they want to remain involved to justify their existence. Thus, agencies often move in after the fact in the most conservative ways possible. However, the bottom line in any disaster situation is getting the needed resources to those lacking them. As the glowing terms in which Gulf Coast residents speak of the work done by Wal-Mart demonstrate, people do not care whether assistance comes from FEMA or Wal-Mart;
they just want someone to get the job done. If the lesson of Katrina is that the private sector is better at marshalling resources and delivering them quickly, then disaster relief policy should remove the barriers that hinder the private sector from getting the job done.” (24)
- Increase decentralization of government relief to local governments and non-governmental organizations and provide that relief in the form of cash or broadly defined vouchers.
Dr. Horwitz writes, “Because no natural disaster is identical to any other, particularly in the case of catastrophic events such as Katrina, each will have unique elements that require local knowledge and the ability to respond quickly to novelty. Additionally, because such disasters always involve the intersection of the forces of nature and a variety of social and cultural processes, disaster response and recovery organizations have to be especially attuned to the complexities and subtleties of local norms, cultures, and demographics. Strategies that work for hurricane relief along Florida’s Gold Coast may not work in the Ninth Ward of New Orleans or in the agricultural communities of the Carolinas. Effective response requires the ability to tap into local knowledge and to give the affected citizens themselves maximum control over how they engage in the process of relief and recovery. Where government agencies are needed, they should attempt to act in the most decentralized, flexible ways possible.”
“FEMA was criticized for being insufficiently responsive to the particular needs of Gulf Coast residents, especially those in the New Orleans area who are characterized by
a unique mix of races and cultures with a long, complex history. FEMA is large, highly centralized, and driven by fairly inflexible rules and hierarchies, all of which made it ill-prepared for the complexities of Katrina recovery. Local organizations were better situated to provide assistance, given their knowledge of the geography and
culture of the area. It is likely that future relief efforts will be more effective if FEMA dollars are transferred to local governments or non-governmental organizations.”
As a corollary to this recommendation, Dr. Horwitz notes that hiring government agencies with more experience will not cure the fundamental structural problems FEMA and other government agencies face. “Redesigning protocols and rules will be of little help if the real problems are the incentives facing public agencies, although expertise might help on the margin in decentralizing some elements of the organization. The argument for decentralization is that the relevant knowledge is that of time and place rather than more global or technical expertise. This is a point that disaster research and policy recommendations have not taken seriously enough in their calls for reform.” (24)
- Move FEMA Out of the Department of Homeland Security.
FEMA was moved under DHS in the aftermath of 9/11 with the belief that it would be part of any comprehensive response to a terror-related disaster scenario. Unfortunately,
that move has had three problematic consequences. First, it continues to hamper FEMA’s ability to engage in long-term planning and organizational learning by moving it within a bureaucracy, changing its mission, and exposing it to the rapidly changing and highly politicized environment of anti-terrorism policies. Second, adding the various layers of complexity and potential competing missions that come with the DHS makes it more difficult for FEMA to do its traditional work with natural disasters. This was clearly a problem during Katrina. In prior years, when FEMA was more independent…, it seemed to perform somewhat better. Third, to the extent that FEMA diverts DHS resources to natural disasters that FEMA could address as a more independent agency, the current organizational structure weakens the department’s ability
to engage in the rest of its mission.” (25)
- Reform “Good Samaritan” laws so that private sector actors are clearly protected when they make good faith efforts to help. (22)
“One implication of increasing the private sector’s role in disaster preparedness and response is that states and localities may have to take a closer look at their Good
Samaritan laws. Although these laws differ from state to state, they generally shield from any civil liability those who attempt to aid others in good faith at the scene of an
emergency but are unsuccessful (assuming they were not “willfully or wantonly negligent” or the like). Whether commercial actors are protected by these laws is currently unclear in many states. For example, Texas law explicitly excludes the shielding of “a person who was at the scene of the emergency because he or a person he
represents as an agent was soliciting business or seeking to perform a service for remuneration.” Although such a law may at first appear to clearly exclude private
companies from protection under Good Samaritan laws, the ambiguity lies in whether employees of private-sector firms who are engaged in disaster relief in an official
capacity are considered agents performing a service for remuneration.
“If there is not a quid pro quo (such as employees being directly paid for specific acts), or if, for example, Wal-Mart employees are clearly just distributing donated goods, it
seems that they would be shielded from civil action if they were to somehow cause injury or death. However, some private-sector leaders are concerned that there is still room for legal action when the law is not sufficiently clear. Several states have begun both to redraft their Good Samaritan laws to take disaster response into account and to incorporate that redrafting into their larger disaster response revisions. In fact, the American Public Health Association has developed model legislation, which accounts for lessons learned from Katrina and other recent disasters and explicitly extends Good Samaritan protection to commercial and non-profit organizations. All 50 states and the federal government should look at this legislation as a model for reform. The ambiguity of what actions the existing laws would and would not protect caused needless and wasteful uncertainty, delays, and work-arounds during the Katrina response, particularly
by medical personnel. These problems need to be addressed, especially as more localities include the private sector in other forms of disaster response.” (26)
- Summary
Professor Horwitz makes a good case for aligning incentives and local knowledge with desired outcomes for stakeholders involved in disaster relief. He provides four reasonable recommendations to improve disaster policy developed and mandated by government entities.