3. Active Risk Management This section explores the role that pro-active risk management played in the delivery of the VSCF, a function of the Facility Manager that was especially important in a pandemic context and given the speed at which projects had to be delivered, the complexity of the project partnerships, and the innovative content of VSCF projects. “In many ways COVID-19 provided an opportunity to take risk – but these were calculated risks across a portfolio approach where projects were selected through a rigorous competitive process selection which allowed for failure but prioritised impact.” Liz Patterson, Business Partnerships Team Leader, FCDO
Collaboration on risk identification, mitigation, and management. As noted earlier in this paper, risk identification and the development of risk management procedures formed an important part of the co-creation process. This collaborative approach to risk management continued throughout implementation. Collaboration on risk management was extremely important given the very different appetites for risk, and different appetites for different kinds of risk, amongst the range of partners participating in the VSCF. From the outset, the Facility Manager had to accommodate the differing risk positions of the FCDO, multi-national corporations, SMEs, international and local NGOs. The Facility Manager actively managed risk in several ways. Risks were monitored continuously, by the Facility Manager, and by partners, using the agreed risk management tools. Every quarter, partners submitted updated Delivery Chain Risk Maps, including any new partners or additional downstream players. New risks identified, and the materialisation of known risks were managed through agreed escalation protocols. In addition, the Facility Manager established a careful balance between scrutiny and flexibility that worked for the partnerships. Significantly, the FM established weekly risk discussions with the FCDO providing oversight of project risks and opportunities to take action to mitigate them. The Facility Manager also met weekly – and more frequently where required – with lead partners of VCSF projects. Proactive dialogue on contextual risks were considered on a weekly basis due to the changing nature of COVID-19 in country and the short implementation timeframe. The level of engagement meant neither the Facility Manager, VSCF project partners, nor FCDO were taken by surprise by unanticipated challenges. Enhanced due diligence. Prior to contracting, the Facility Manager carried out full due diligence checks on all Lead Partners, as usual. However, given the heightened risks in this programme, the Facility Manager also performed checks on selected named subcontractors. In addition, the Facility Manager secured assurances and declarations from partners on risks of potential business behaviour during implementation. Minimum standard checks described as the ‘Know Your Customer’ process was rolled out by Lead Partners. Furthermore, additional ‘Know Your Customer’ checks were made on factories participating in the high-risk projects ‘Bridging the Gap: Supporting the transition from crisis to resilience’ project in Myanmar and ‘Supporting women in the garment industry earn a living, stay safe and be respected in a COVID-19 environment’ project in Bangladesh. This included ensuring beneficiary entities were conducting ethical business practices and not violating human rights. Scenario planning with associated risk assessments. At key moments in the lifetime of the VSCF, the Facility Manager deployed scenario planning with associated risk assessments to support programme partners’ decision making. For example, when Primark’s Myanmar suppliers were attracting negative press coverage for order cancellation and sacking unionised workers, thereby threatening the integrity of the Primark-Impactt project ‘Bridging the Gap: Supporting the transition from crisis to resilience’, the Facility Manager played a key role between Primark and FCDO by outlining risk scenarios. These scenarios equipped FCDO, Primark and Impactt to clearly identify the project related risks and mitigation measures. The approach provided the information needed to approve the project with confidence that the eventualities in any of the scenarios could be foreseen, and managed. When the coup in Myanmar presented new risks, the Facility Manager developed new scenarios, helping the partners quickly review options and make the decision to pivot away from Myanmar and reinvest the VSCF funds elsewhere. The Facility Manager presented three possible scenarios, each with pros and cons to FCDO to make an informed decision. Within three weeks of the decision to leave Myanmar, following approval of the preferred scenario by the FCDO, three existing contracts for VSCF projects were amended to incorporate additional funds for extra activities. This rapid pivot was possible due to advance thinking and forward planning of the Facility Manager who had started the conversations for possible proposals with the partners across the garment’s portfolio ahead of time while keeping FCDO informed.
10
