The grave health crisis in China has drawn much of the attention away from Hong Kong’s protest movement. However, the anti-government movement’s shift to direct action through fledging Trade Unions – this at a critical juncture – threatens to degrade the government’s capacity. Businesses must re-evaluate this new threat, and prepare for enhanced, and hitherto unanticipated, risks.

The evolving threat

The number and size of protests have fallen of late, in part owing to protest fatigue and more effective police tactics, but mostly due to the fear that gatherings might accelerate the spread of the virus. However, the decline also speaks to a change in strategy.

In particular, elements within the movement have founded trade unions in the last few months, for strategic reasons. Examples include: the Hospital Authority Employees Alliance (“HAEA”); the Hong Kong Financial Industry Employees General Union; and the Hong Kong Information Technology Workers’ Union – amongst others.

These unions can vote in elections for the Legislative Council (after a year), as part of functional constituencies, and may thus sway political events. Moreover, they provide a means to put pressure on the government – and their members are keen to impose their will.

The HAEA is probably the largest, with at least 7,000 members (10% of Hospital Authority staff), thanks to longer-term support in local medical circles, and to cheerleading by foreign activists (one of whom has published articles in British medical journals accusing the Hong Kong Police of breaches of international human rights laws).

The HAEA has already made considerable use of leverage deriving from the viral outbreak, and carried out a five-day strike in early February. It threatens further action, and may orchestrate large scale resignations, should the Hong Kong Government fail to meet demands to halt movement totally from mainland China into Hong Kong. A vote to discontinue strike action was, however, passed on 7 February; it remains to be seen how long this decision will hold.

On the surface, the HAEA has valid concerns. After all, health care professionals suffered greatly during the Severe Acute Respiratory Syndrome (“SARS”) outbreak in 2003, and today they are angry at the lack of government preparation. Equally, though, elements within the HAEA hope to discredit the government, and to cut links to China for nativist reasons – and so have deeply political goals.

Other unions will take action, in sectors such as finance, IT and the civil service, as the opportunity presents itself. Indeed, the Cathay Dragon Flight Attendants’ Union has voted to strike if the airline maintains any Hong Kong-mainland routes during the health emergency, and seems to share the HAEA objective of discrediting the Hong Kong government. Labour relations seem sure to become more fractious, especially given the gaff-prone Hong Kong administration.

The question of competence

The Hong Kong government’s ability to respond to this challenge is seriously in doubt. A lack of visible leadership over the past year, compounded by eight months of civil disorder, has resulted in an exceptionally low level of confidence in the Carrie Lam Cheng Yuet-ngor administration. Many Beijing loyalists believe that the longer she remains in post, the more difficult the task of exercising effective control will become.

The absence of effective contingency plans, a slow government reaction, poor co-ordination, and a shortage of necessary protective equipment for health professionals’ use (especially surgical masks) have all exacerbated this doubt. In particular, a failure to provide private doctors with masks means that some cannot act as a gateway for patients, consequently increasing pressure on the public hospitals.

Many people, somewhat naively (and disregarding the logistical challenges), see Chief Executive Carrie Lam’s unwillingness to close the border with mainland China as effectively prioritising Beijing’s demands over Hong Kong’s needs. Indeed, the Dragon Air Union representatives have reiterated such allegations.

Even so, a seemingly weaponised social media campaign, cheered on by anti-government forces, has led to panic buying in supermarkets. This situation stands in stark relief to the general level of trust in the government during the SARS outbreak.

All of these developments have raised searching questions as to the competence of Chief Executive Carrie Lam, and her team. A concerted campaign by the HAEA or other unions could now seriously degrade the ability of the government to function properly, particularly if the virus spreads, if strikes in the civil service become the norm, and if the economic downturn worsens.

Such developments will add to existing strains arising from the civil disorder of the past months. The court system is already struggling to process cases emanating from the protests, and pressures on the police, owing to vicious criticism on social media and a burgeoning campaign of improvised explosive device (“IED”) attacks, leave little free capacity to hand.

Looking forward

This situation could well worsen in the days and weeks ahead. The government shows no sign of acceding to requests, and Hong Kong’s people are nervous and agitated; their deep doubts about the local government’s competence are unassuaged. The protest movement thus has every incentive to maintain pressure, both through political action, and more direct means.

The government could possibly respond by arresting some union leaders, with tacit support from Beijing. The authorities could argue that a political strike breaches the Trade Union Ordinance, or that HAEA staff are civil servants, and that strikes constitute misconduct in public office.

Such a heavy-handed response, though, could easily reignite protests, prompt widespread resignations by health professionals, and result in a broadening of the nascent IED campaign – any, and all, of which will weaken the government’s limited ability to hold the fort.

What to do

Ironically, the virus outbreak, damaging though it is, affords a short window of opportunity for businesses to act so as to understand, evaluate and mitigate the wider, and growing, risks. Key actions to take might include:

• Re-assessment of contingency plans to take account of physical threats.
• Establishment of plans to deal with sudden, and lengthy, transport disruptions.
• Monitoring for emergence of radical union cells within businesses.
• Preparation for industrial action by employees, particularly if the business is perceived as “blue” by radical elements.
• Establishment of plans to deal with bomb threats, hoaxes, or real events.
• Measures aimed at instilling confidence amongst employees related to the virus.
• Plans for high staff attrition rates.
• Responses to further incidents of public panic, which could impede access to key resources.
• Development of operational redundancy, such as that within communications and payments systems.
• Some current “work from home” connectivity is insufficient to meet demands.
• Anticipate greater incidences of computer and internet crime as controls are by passed by “work from home” directives.
• Establishment of measures to deal with civil disorder, should it arise.
• Large companies may wish to disperse capabilities around the region.

SVA (www.stevevickersassociates.com) is a specialist risk mitigation, corporate intelligence and risk consulting company. The firm serves financial institutions, private equity funds, corporations, high net-worth individuals and insurance companies and underwriters around the world.

SVA has a dedicated crisis management team which, for our retained clients, stands ready to assist companies during crisis situations. Retained clients pay an annual fee for a 24-hour response capability.

SVA is based in Hong Kong and is the only firm with the local and senior expertise drawn from Intelligence, Operations and research functions of the former Royal Hong Kong Police Force. We stand ready to assist.