| | |  Business News | August 2008 
Mexico Businesses Tighten Security Against Drugs
 Michael O'Boyle - Reuters
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Mexico City - Businesses in Mexico are tightening security against drug gangs that sneak narcotics into export shipments to the United States and have turned manufacturing centers on the U.S. border into battlegrounds.
A vicious war between rival gangs and security forces has killed a record 1,900 people in Mexico so far this year.
The violence has hardly damaged the broad economy but several recent embarrassing incidents where illegal drugs were found hidden within the cargo shipments of major exporters have put executives on edge.
"We have had to reinforce security measures," said Carlos Castro, who leads the national council of Mexico's "maquiladora" plants, which assemble electronic and other goods for export.
"Obviously, they are looking for other ways to cross these drugs into the United States," he said.
In May, troops searching the premises of a subsidiary of Japanese electronics firm Sharp Corp near Tijuana found some 1.5 tonnes of marijuana hidden in a Canada-bound truck behind boxes carrying TV screens.
Castro says there have been at least two other recent cases where major companies had their security breached by drug gangs hoping to slip contraband within legitimate shipments. Companies have responded by installing more video cameras and hiring more security guards, he said.
"This is a growing concern," said Julian Bianchi, head of security services for risk consultancy Kroll in Latin America. "Whatever vulnerability that exists in an organization that moves products to and from the United States, organized crime will try to take advantage of it."
The war against drug gangs has become President Felipe Calderon's central policy since taking power in Dec. 2006. He quickly deployed 25,000 troops and federal police against the cartels but a fresh surge in violence this year shows he has a long fight ahead.
Still, higher security costs and the surge in drug gang killings has not deterred firms like Canada's Bombardier Inc and U.S. automaker Ford Motor Co. from laying out big investments for new plants in Mexico.
RIVAL KILLINGS
Drug killings are mostly between rival traffickers and business lobbies say they have yet to see a foreign company pull out of Mexico due to fears about drug violence.
"There is violence, but I think it's at another level that doesn't interfere in the operation of plants or at the corporate level," said a spokesman for a major international company in Mexico, declining to be quoted by name.
"It's not an issue that's impacting either our merchandise, our staff or the sites where we are located."
Foreign companies are, however, spending more on security and insurance, said Deborah Riner, chief economist for the American Chamber of Commerce in Mexico.
"Ten years ago, security costs simply didn't figure into discussions of the cost structure. Now they do," she said, adding that security spending probably makes up one percent or less of a company's operating costs.
Two of the cities hardest hit by drug violence are Tijuana and Ciudad Juarez, where shootouts in broad daylight between rival drug traffickers are commonplace. The cities house hundreds of factories that send goods across the nearby U.S. border.
David Robillard, head of Kroll's Mexico office, said international firms have been largely unconcerned by the spike in violence along the border and in other states like Sinaloa.
But Mexican companies are increasingly looking to set up shop in calmer areas like central Mexico, he said.
"They are concerned in terms of deploying executives where they have seen such a dramatic uptick in criminal violence," Robillard said.
Crime such as hijackings and kidnappings have been a concern for years in Mexico, where some firms protect top staff with bodyguards and bullet-proof cars.
Many in business welcome Calderon's assault on the drug gangs after years of government inaction.
"It isn't an easy issue, but it gives us the confidence that federal authorities at this moment are taking the necessary measures to get it under control," said Miguel Moran, head of the Canacintra industry group. (Editing by Kieran Murray) |
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