1. ORIGINAL PAPER
Earthquake risk to industry in Istanbul
and its management
Eser Durukal Æ Mustafa Erdik Æ Eren Uc¸kan
Received: 20 September 2006 / Accepted: 20 February 2007
Ó Springer Science+Business Media B.V. 2007
Abstract Istanbul is home to 40% of the industrial facilities in Turkey. Thirty percent of
the population working in industry lives in the city. Past earthquakes have evidenced that
the structural reliability of residential and industrial buildings in the country is question-
able. In the Marmara region the earthquake hazard is very high with a 2% annual prob-
ability of occurrence of a magnitude 7+ earthquake on the main Marmara fault. These facts
make the management of industrial risks imperative for the reduction of socioeconomic
losses. In this paper we present a first-order assessment of earthquake damage to the
industry in Istanbul and raise issues for better characterization and quantification of
industrial losses and management of urban industrial risks.
Keywords Istanbul Á Industry Á Earthquake Á Risk Á Mitigation
1 Introduction
Following the losses suffered during the two major earthquakes that struck Turkey in 1999,
there has been broad recognition among Turkey’s governmental, nongovernmental and
This paper borrows from the project report entitled ‘Earthquake Risk Assessment for Industrial Facilities
in Istanbul’. The full report can be found at http://www.koeri.boun.edu.tr/depremmuh.html under the link
‘Research and Applied Projects’.
E. Durukal (&) Á M. Erdik Á E. Uc¸kan
Department of Earthquake Engineering, Kandilli Observatory and Earthquake Research Institute,
Bogazici University, 34684Cengelkoy, Istanbul, Turkey
e-mail: durukal@boun.edu.tr
M. Erdik
e-mail: erdik@boun.edu.tr
E. Uc¸kan
e-mail: eren.uckan@boun.edu.tr
123
Nat Hazards
DOI 10.1007/s11069-007-9119-0

2. academic organizations of the need for extensive response planning based on detailed risk
analyses of likely seismic hazards in Turkey in general, and Istanbul in particular. One of
the largest risks evidenced by the earthquake and partly assumed by the insurance sector
has been associated with industrial facilities.
The Kocaeli earthquake is considered as the largest event to have caused damage in an
industrialized area since the 1906 San Francisco and the 1923 Tokyo earthquakes. 70% of
the total insured losses were related to direct damage and 30% were due to business
interruption. Estimations of the insurance industry towards the total insured losses as a
result of the Kocaeli earthquake were on the order of 1.5–3.5 billion USD (RMS 2000)
compared to an estimated 550–750 million USD paid by the industry (Johnson 2000). The
epicentral area of the 1999 Kocaeli earthquake can be considered as the home of Turkey’s
heavy industry. The major industries in this area are automobile, petrochemicals, manu-
facturing and repair of motor and railway vehicles, basic metals, production and weaving
of synthetic fiber and yarns, paint and lacquer production, tire factories, paper mills, steel
pipes, pharmaceutical, sugar, cement, power plants and tourism. The industrial damages
and losses that took place have been the subject of several papers and reports (among
others: Durukal and Erdik 2007; Cruz and Steinberg 2005; Erdik and Durukal 2003; EERI
1999; MCEER 2000; PEER 2000; AIJ 2001; Johnson et al. 2000; Johnson 2000; Moat
et al. 2000; Rahnama and Morrow 2000). The Kocaeli earthquake experience has very
important implications for the type and extent of damages likely to be sustained by the
industry clustered in and around Istanbul, the most important city in Turkey, which has a
significant earthquake hazard and a very dense concentration of population, buildings,
industry and commercial activities, during a future large earthquake. It also has important
implications for mega-cities with a significant industrial presence and industrialized
regions worldwide threatened by earthquakes.
This paper consists of three parts. In the first part we present a short summary of the
historical extension of industry in Istanbul. In the second part the distribution of several
industrial sectors in the city is presented based on an inventory created for large, medium
and small enterprises. The third part covers a general assessment of industrial earthquake
risks and losses in the occurrence of a M7+ earthquake near the city, the need for better
characterization and quantification of industrial losses, and recommended actions for the
mitigation of industrial risks.
2 Development of the industry in Istanbul
Istanbul is believed to be one of the oldest continuously occupied metropolises in the
world. In recent decades it has experienced unprecedented growth. Between 1950 and 2000
the population increased at least ninefold from about 1 million to 9 million. Today,
Istanbul houses one-eighth of the total population and one half of the industrial potential of
Turkey. According to Tu¨mertekin (1997) 40% of the industrial facilities in Turkey are
located in the city and 30% of the population working in the industry lives in Istanbul.
Similar statistics can also be found in the database for industry of the Union of Chambers
and Commodity Exchanges of Turkey (http://sanayi.tobb.org.tr).
Istanbul was the capital of three empires, the Roman, Byzantine and Ottoman. During
these years all urban functions and activities were clustered in distinct parts of the city; the
Old City, Galata and Kadıko¨y. The old city, also called the historical peninsula, was where
most of the population lived and where the administrative and political activities took
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3. place. The commercial life of the city was led by Galata and later by Beyog˘lu, across the
Golden Horn. Obviously the density and intensity of these activities grew with time. It was
not until the second half of the 19th century, however, that the city started to grow towards
the north. Along the Bosphorus there were only small settlements and summer resorts.
With the start of industrialization, small-scale facilities started to appear. With time
industrial facilities started to cluster along the shores of Halic¸ (Golden Horn), which
eventually became the first industrial area in Istanbul.
Industry in Istanbul started to grow considerably in the 1950s. Although industrial areas
were marked and planned in the land-use plans prepared for the city, lack of control and
authority mainly hindered those plans from being followed fully. Today there are a variety
of industrial activities and services in Istanbul in terms of both type and quality. In the
historical peninsula there are still a lot of small-scale facilities in old and very poorly
maintained buildings, often relying on hand production. There are industrial areas that have
been surrounded by residential buildings with the growth of Istanbul over time and that
have been left within dense urban regions, which house light industry with generally newer
and higher-quality facilities. The new industrial facilities on the Asian side of the city are
mainly in areas towards _Izmit, starting in Tuzla to the east of Maltepe (see Fig. 2 for the
location of Tuzla). They are positioned along the two highways connecting _Istanbul with
Ankara. On the European side Topkapı, Zeytinburnu and Bayrampas¸a to the immediate
west of the Old City and further west Rami, Halkalı, Sefako¨y, Gu¨ngo¨ren, Avcılar on the
outskirts of Istanbul are example localities that have grown as industrial areas since the
1970s along with clustering of residential units. The region roughly extends as far as
Ambarlı and Hadımko¨y-_Ikitelli, marked as E1 and E5, respectively, in Fig. 2.
Recently localities in neighboring cities have become areas where industrial invest-
ments from Istanbul have been focused, such as C¸ orlu, C¸ erkezko¨y and Lu¨leburgaz on the
European side and Gebze on the Asian side.
3 Industrial facilities in Istanbul
Industrial facilities in Istanbul can be classified into two groups: small to medium-sized
facilities and large-scale facilities. The inventory of small to medium-sized facilities is
based on TurkTelekom and Istanbul municipality data. The inventory of large-scale
facilities relies on data from local municipalities, special reconnaissance surveys and
questionnaires.
3.1 Small to medium-sized industrial facilities
The maps of the Turkish Telecommunication Association have been a source of infor-
mation for the compilation of data regarding various facility stocks in Istanbul. The maps
(usually at 1/1000 scale) were on raster image format for the European side and on paper
format for the Asian side of Istanbul. For some dense areas 1/500 maps were also available.
All the maps were visually screened by a group of students and engineers, and data were
compiled for small to medium-sized industrial facilities. The categorized sectors are given
in Table 1.
A total of 1060 maps for the European side and 1573 maps for the Asian side of the city
of Istanbul were screened. The resolution of the maps allowed for reliable data compila-
tion. Data entry was in a spreadsheet format suitable for the generation of thematic maps.
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4. The resulting database contains fields from where a variety of attributes (such as name,
total area covered, type and number of buildings) about each facility are easily attainable.
These data have been transferred to GIS in order to be associated with grids of 600 m by
900 m, generated in MapInfo format, corresponding to the original TurkTelekom maps.
These facilities were then overlaid on the site-dependent intensity maps. Another source of
information for the compilation of the industrial facility database was obtained from the
metropolitan municipality of Istanbul. GIS maps at a 1:1,000 scale gathered from aerial
photographs reveal the locations of factories in the city. In Fig. 1 a pie chart of the eight
sector groups for each cell is presented. The size of the pie chart indicates the total number
of industrial facilities in the cell.
3.2 Large industrial facilities and industrial parks
The risk associated with large-scale facilities needs to be analyzed separately due to their
economical importance and/or hazardous nature. The earthquake risk estimation of these
facilities can also be related to the observed earthquake performance of industrial facilities
during the past earthquakes. The information summarized on large-scale facilities and
industrial parks is by no means complete. Only important large-scale industrial facilities
are considered under the following groupings.
3.2.1 Waterfront structures
In Turkey there are governmental, municipal and private ports. The governmental ports are
operated by state economic enterprises. The Turkish State Railways (TCDD) ports, which
are connected with the railway network and the ports of the Turkish Maritime Organization
(TDI) are two state enterprises under the control of the Ministry of Transport. The mu-
nicipal ports are comparatively small and address a small volume of coastal traffic serving
the local needs of provincial towns. The private ports mostly serve the particular needs of
industrial plants but are also rented for use by third parties.
In addition to port structures, liquid storage tanks, power generation units, cranes,
winches, waste water treatment plants, crude oil, and pressurized liquefied natural gas
(LNG) storage tanks are the most important components of the waterfront structures in the
regions of Dilovası, Tuzla, Ambarlı. Marmara Ereglisi, as well as in the Haydarpasa port in
Istanbul.
Table 1 Description of
industrial sectors
Sector no. Description
Sector 1 Mining, construction, ceramics, glass
Sector 2 Commercial facilities, food and beverage
Sector 3 Textile, leather
Sector 4 Wood products and furniture, agriculture
Sector 5 Chemical and petroleum products
Sector 6 Iron, steel and other metals
Sector 7 Machinery and automotive
Sector 8 Transportation and telecommunication
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5. 3.2.2 Industrial parks
There are a number of industrial parks in Gebze and Vicinity, _Ikitelli, Hadımko¨y and
Cerkezkoy and vicinity.
3.2.3 Individual facilities
There are chemical, petrochemical, steel mills, metal forming, cement and other large
facilities in the Gebze, Darıca, Bayramoglu, Silivri and Buyuk Cekmece regions.
Essential industrial facilities/complexes in Istanbul surveyed through helicopter flights
and contacts with trade unions and local municipalities.
Two helicopter flights were realized. The flights enabled a detailed look at industrial
parks and at individual large facilities. The seismic vulnerability of an industrial facility is
a matter of significant importance in economic and safety terms and needs to be analyzed
by considering three major components: building structures (prefabricated, reinforced
concrete, steel, composite), non-building structures (pressurized tanks, vessels, power
Fig. 1 Pie chart for the distribution of the eight sector groups. The size of the pie chart indicates the total
number of industrial facilities in the cell. For the sector descriptions see Table 1
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6. generators, storage areas, towers, chimneys, silos, port structures/jetties and cranes) and
nonstructural elements. The building and non-building (structural and nonstructural)
components in these locations show significant sectoral variations. The following industrial
parks and concentration zones can be cited: (Asian side) Dilovası: port structures, storage
tanks, chimneys, power generation; Gebze: storage tanks, power generation, steel mills;
Tuzla coastal line: port structures, cranes; Tuzla: wastewater treatment plant, and industrial
parks building structures; Haydarpas¸a customs: port structures and cranes; (European side)
Ambarlı: petrochemical, port structures, hazardous structures and cranes; Marmara
Ereg˘lisi: LNG storage tanks and port structures; Cerkezkoy and Corlu: textile industry and
industrial parks; C¸ atalca, Hadimkoy and Ikitelli.
The locations of these essential industrial facilities overlain with the intensity map are
presented in Fig. 2. The map shows the expected earthquake intensities (median values
assuming normally distributed intensities) in Istanbul that would result from the rupture of
the segments of the North Anatolian Fault in the Marmara Sea (marked in the figure)
producing a magnitude 7.5 earthquake. Due to their close distance to the fault and high
concentration of industrial facilities, the Tuzla, Gebze and Dilovasi regions are considered
to carry the highest earthquake risk. The sectoral distribution at these industrial concen-
trations include petrochemical, chemical, metal, transportation, textile, leather, and
machinery for steel mills.
3.2.4 Tuzla and vicinity
The region is occupied by waterfront structures such as dockyards, ports and harbors,
which are susceptible to submarine landslides and ground settlement due to liquefaction.
Fig. 2 Locations of essential industrial facilities (industrial parks and large facilities) overlaid on the
intensity map for a M7.5 scenario earthquake. A1: Dilovası, A2: Gebze, A3: Tuzla; A4: Haydarpas¸a
Customs, E1: Ambarlı, E2: Marmara Ereg˘lisi, E3: Cerkezkoy and Corlu : E4: C¸ atalca, E5: Hadimkoy and
Ikitelli
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7. About 30 closely spaced shipyards operate in Tuzla. Cranes and winches are the typical
non-building structural components in the region and these structures are most likely to be
subjected to rocking motion during strong earthquakes. During the 1999 Kocaeli earth-
quake, the quay walls of the Tuzla Port moved about 40 cm horizontally and the backfill
settled by about 10 cm. Damage may be expected in a major earthquake. Berths can be
damaged due to ground subsidence. Rigid and slender structures such as overhead
conveyor equipment or cranes on weak foundations may suffer damage due to loss of
foundations. Another critical facility in the region is the wastewater treatment plant
operated by the Istanbul municipality. The facility is founded on a highly liquefiable area.
3.2.5 Gebze and vicinity
The region is marked with sporadic industrial development along the shores and in near-
shore areas, which is very mixed in terms of age, structural type, industrial sector and
quality. Further inland towards the north this irregularity is replaced by large industrial
parks. Major industrial parks are located in the region: the Tuzla Organized Leather
Industrial Zone, the Tuzla Organized Leather Chemical Industrial Zone and the Gebze
Organized Industrial Zone (GOSB). Additionally Honda and Isuzu have their plants in
Gebze region. The three industrial zones are home to important assets. In the Tuzla
Organized Leather Industrial Zone the most important component is the 36,000 cubic
meter/day capacity treatment plant with a pipe network of 40 km length. The Tuzla
Organized Leather Chemical Industrial Zone is located adjacent to the leather industrial
zone and provides chemicals required for leather processing. Finally the Gebze Organized
Industrial Zone (GOSB) is founded on a 7.3 million m2
area and is home to a wide range
of industrial enterprises. Additionally the Istanbul Leather Free Zone, with an area of
114,000 m2
as a specialized free zone adjacent to the Istanbul Organized Leather Industry
Zone, has an annual trade volume of nearly 100,000,000 USD as of 1995, which in-
creased by 25% in the first 10 months of 1996 and has been constantly increasing since
then. Its activities of production (ready-made clothes, textile goods and clothing) and
commercial and service functions associated with machinery and parts related to pro-
duction, stock, exhibition, and sale. The majority of the buildings are 2–4 storey, rein-
forced concrete or prefabricated structures. Since the structural elements are comparably
new and of good quality, nonstructural and non-building damages, such as damage to
vibration-sensitive equipment and stock or consequential hazards such as fire-induced
damage and hazardous material release, will be more important than direct damage to
structural elements.
3.2.6 Dilovasi and vicinity
Dilovasi probably has the largest concentration of industrial facilities with a very high
potential for hazardous material release triggered by a natural disaster in the region. The
region is home to a wide spectrum of critical industry including ports, petrochemical
plants, steel fabrication plants, pharmaceutical firms, chemical industry and other indus-
tries. The rate of increase in the number of industrial facilities in the Dilovası region in the
three years from 1997 to 2000 is reported to be 45% by the local municipality of Dilovası.
50% of the facilities in Dilovasi are chemical and metal industries. The beverage sector is
also substantial (13%). Critical non-building components are storage tanks, silos, fossil-
fuel co-generation plants and electric power generators, and electric power transmission
and distribution and substations.
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8. During the 1999 Kocaeli earthquake there was damage to reinforced concrete buildings
in Dilovasi probably due to site amplification in the Dilovası Basin. Areas further to the
north were affected by landsliding.
Many companies have their ports and all related equipment and non-building compo-
nents in the costal zone of the Dilovasi region. The soil conditions beneath the port area are
known to be soft and some of the port structures founded in this region suffered consid-
erable amounts of damage during the Kocaeli 1999 earthquake. Units contained at the ports
include storage tanks, cranes of various sizes, jetties, cargo-handling facilities, weigh-
bridges and warehouses. Overall port functions assumed by companies in the area include
storage of liquid chemical, oil, petroleum products and dry cargo; loading and discharge of
iron and steel products, containers. Major industries using chemicals, plastics, rubber,
petrochemical, paint, food, paper, lubricating greases, explosives, candles, emulsifiers,
cosmetics, pharmaceuticals, chemical intermediates, textile and leather auxiliaries, etc.
Fats and oils, chemicals, solvents and petroleum products are served.
4 Expected earthquake losses to the industry in Istanbul
On the basis of a study carried out for the quantification of likely industrial losses during
the Kocaeli earthquake based on questionnaire and literature surveys the mean damage
ratios for buildings in industrial facilities are given in Table 2 (Durukal et al. 2002).
The average losses can be predicted as in Table 3 in reference to the factual loss
information and existing earthquake vulnerability information for equipment and
machinery, and Stock losses in EMS-98 (MMI) IX intensity zone for industrial sectors
(Durukal et al. 2002).
It should be noted that these loss ratios are associated with large variations depending
on the physical properties of the industrial facility and the possibility of consequential
hazard related losses. Although very limited empirical data exist at intensity level VIII for
losses at industrial facilities, empirical findings indicate that the equipment and machinery,
and Stock losses would be realized at about 1/3 to 1/4 of the average losses associated with
intensity level IX.
The information provided in Tables 2 and 3 can be used to estimate the expected
industrial losses in Istanbul. The majority of the industrial plants in Istanbul are expected to
be in the intensity zone VIII–IX. The overall loss to industrial buildings was assessed as
between 6 and 8%. In intensity zone IX for all industrial sectors the business interruption
losses may be about 5–10% of annual turnover. In the chemical, textile and automotive
sectors this may reach 50, 30 and 20%, respectively. In intensity VIII regions the business
interruption losses vary between 2 and 3% for almost all sectors. Lost jobs may reach
250,000–300,000. The largest losses will be sustained by small and medium-sized facili-
ties, since about 50% of these types of enterprises have no earthquake insurance, as was the
case in the Kocaeli earthquake, while the large-scale facilities will be able to recover most
of their losses. It should be noted however that a large earthquake near Istanbul might lead
to long-lasting business interruptions, which the insurance coverage may not be able to
address appropriately. This is a factor that will increase the losses to be sustained by
Table 2 Mean damage ratios for buildings in industrial facilities
EMS-98 I or MMI VII VIII IX
Mean damage ratio 3% 8% 20%
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9. large-scale facilities. Moreover if time to normal operation is very long after an earthquake,
this will mean significant losses of market for many enterprises, which may easilyreach
much higher levels than physical losses. Direct industrial losses may reach 8–10 bil-
lion USD. These figures do not include additional losses due to loss of market, loss of
human resources, reduced demand etc. The loss figures obtained just to provide an indi-
cation of the order of losses to be experienced by the industrial facilities in Istanbul after
the occurrence of the scenario earthquake. They are based on gross assumptions and
across-the-board generalizations.
5 Mitigation of industrial earthquake risk
In general, an industrial facility consists of many integrated components and processes. As
such, the operation of the facility depends on the performance of its critical components.
The performance of nonstructural and non-building components and of machine and
equipment, are very important in the overall earthquake performance of the facility and
depend on appropriate design and/or retrofit of these elements. In this connection, the
preparation of a contingency plan to be followed in the event of earthquake is essential to
minimize damage and restore operations as soon as possible.
It can be said in general that the earthquake damage observed in Turkey is not really
different from industrial damage observed in worldwide earthquakes. Large storage tanks,
pipelines, transmission lines and precision machinery seem to be particularly susceptible to
damage by earthquakes. Due to the high relative value of their contents, their vulnerability
and dependence on structural performance are key to assessing loss potential especially for
heavy manufacturing facilities. Port and harbor facilities are particularly susceptible to
submarine landslide or ground settlement due to the liquefaction that may occur during
earthquakes. In addition, all processes that involve a substantial risk of explosion, for
example processes in the petrochemical and metal industry, should be examined very
carefully, since failures in the case of a natural disaster often lead to cascading events.
Economic growth and the broadening role of globalization and multinationals has
created a class of high-value industrial facilities worth tens of billions of USD in the
Marmara region that would be exposed to damage by a large earthquake. Large
Table 3 Mean loss ratios for
equipment and machinery, and
Stock for MMI IX
Sector
no.
Description Machine
and equipment
loss
Stock
loss
1 Mining, construction, ceramics,
glass
10% 10%
2 Commercial facilities, food and
beverage
10% 10%
3 Textile, leather 10% 30%
4 Wood products and furniture,
agriculture
10% 10%
5 Chemical and petroleum
products
30% 35%
6 Iron, steel and other metals 2% 2%
7 Machinery and automotive 2% 2%
8 Transportation and
telecommunication
10% 2%
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10. earthquakes have always evidenced existing weak points in technology, structural design
and equipments. Where there is the expectation of large earthquakes, as is the case in the
Marmara region, such weaknesses should be detected in a proactive attitude through
investigation of the seismic vulnerability of components and systems. The figures pre-
sented in this paper are a first-order assessment of what might take place in Istanbul. The
magnitude of expected losses and possible releases of dangerous materials calls for a
rigorous assessment with the involvement of manifold expertise. The next steps should be
the development, prioritization and implementation of strengthening measures for build-
ings, storage tanks, silos, stacks, electrical equipment and other critical components of the
facility, as well as the preparation of contingency and business continuity plans.
The greatest risk from an earthquake is that to life. Building code requirements in most
countries, including Turkey, are set with the intent of protecting the lives of the occupants.
The building is allowed to experience damage but without any collapse, thereby allowing
the occupants to evacuate safely with the minimum risk of casualties. As far as industrial
systems are concerned, severe earthquakes not only cause losses to physical assets, but may
also cause both consequential hazards to human life and environment due to fires and
chemical spills and long business interruption with the risk of unrecoverable market losses.
As such, the design (or seismic retrofit) of industrial facilities should preferably be based
on performance-based methodologies with the intent of controlling the structural and
nonstructural damage.
Sector-dependent characterization and quantification of business interruption becomes
important. Very limited information exists for sector-based characterization and quantifi-
cation of expected business losses, business vulnerability and resilience of industry. Business
interruption, loss of market, loss of demand, loss of human resources may have different
weights in the total loss depending on industrial sector, that needs to be well understood.
For Istanbul and urban areas with concentrations of industrial facilities overlapping with
high residential and population densities, awareness and assessment of risks associated
with technological disasters trigered by natural hazards becomes very important, since such
events lead to cascading events that become very difficult to control in the aftermath of a
natural disaster and that lead to very high losses. It is worth mentioning that during the
Kocaeli earthquake releases of toxic materials with consequent needs for evacuation
interrupted rescue activities, with consequent increase of human losses. There is clearly a
certain concern in the reinsurance sector about the consequences of a large earthquake near
Istanbul. However it is difficult to say that a similar concern is growing among facility
owners in and near Istanbul, risk managers, stakeholders such as local chambers of industry
and commerce, local, regional and national government bodies and insurance companies.
Facility owners and risk managers alike in Turkey are largely unaware of the earthquake
risk for their facilities. The role and importance of insurance is generally overestimated.
This leads managers to think that they will be able to cover all their losses in the event of
an earthquake. The details of insurance coverage is not well known. There is a hesitation in
the industry to share even general information that in many cases is publicly available; a
resistance to accept and a lack of openness to express the weaknesses and problems
associated with the facility and a resistance to cooperate even in generic awareness,
assessment, and mitigation projects that will help the whole sector and industry.
The effect of a large earthquake near Istanbul on the industry can hardly be understood
or quantified without a proper understanding of the likely effects on regional, national and
international finance and insurance sector.
Business continuity planning is important for industrial facilities for the post-earthquake
sustainability of operations. Such planning incorporates both the initial activities to
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11. respond to a disaster/emergency situation and the restoration of the business and its
functions to pre-disaster levels. This planning needs to be carried out at the facility level by
the facility managers, at the sector level by associations, and at the local and/or national
level by municipalities, governmental bodies and boards. The National Fire Protection
Association’s (NFPA) standard on disaster/emergency management and business conti-
nuity programs (NFPA 2004) provides a very good example for defining the essentials of
business continuity planning.
An essential element of business continuity planning is business impact analysis. NFPA
2004 defines impact analysis as a broad description and quantification of a potential event
that can impact on an entity. The purpose of such an impact analysis is to arrive at a
general economic and financial loss expectation that demonstrates what is at risk, to guide
measures to mitigate the effects of a disaster/emergency, to identify essential or critical
functions or processes, and to help decide where to place emphasis in planning efforts. In
other terms, this analysis should assess: what hazards are most likely to occur; what entity
facilities, functions, or services are affected based on their vulnerability to that hazard;
what actions will most effectively protect them; and the potential impact on the entity in
quantifiable terms. Within the impact analysis, the entity should consider the impact
external to its area of influence that can affect the entity’s ability to cope with a disaster/
emergency. In order to maintain continuity of operations, the entity should identify
essential or critical functions and processes, their recovery priorities, and internal and
external interdependencies so that recovery time objectives can be set. The analysis should
also examine the potential economic or financial loss resulting from disruption of the
functions, processes, or services over time.
In developing business continuity plans, consideration should be given to long-term
goals and objectives that addressimportant issues on strategic planning, funding and
coordination of activities and opportunities for disaster mitigation. In addition to these
long-term goals with broad perspectives, short-term goals and objectives should be
established to include essential personnel, systems, operations, data and equipment;
priorities for pre-event mitigation and post-event restoration with acceptable costs and
downtimes.
Noting the existence of problems associated with a code of compliance for the design of
nonstructural and non-building components in the industrial facilities and recognizing
that understanding the vulnerabilities associated with each industrial process is vital for
successful mitigation of associated earthquake risks, the following actions are needed at
different responsibility levels for the reduction of industrial damages and losses in Istanbul:
National government
• Raise awareness and involve all stakeholders in developing a national policy to
mitigate risks.
• Involve assistance by international organizations in developing such a policy, if and
when needed.
• Develop and control enforcement of measures and mechanisms associated with the
earthquake safety of industrial facilities, with that of the buildings and other facilities at
the periphery of a facility and for the environment. These will involve chemical spills,
explosions, fire, use of automatic control and shut-off systems against the effects of
earthquakes, earthquake resistant design codes for new and existing industrial facilities
(structural, nonstructural, non-building).
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12. • Assess the likely effects of an earthquake near Istanbul on the industry, on regional,
national and international finance and insurance sector; develop and implement
mitigation plans.
• Establish regulatory professional, financial and environmental liability insurance
schemes for industrial facilities via public-private partnerships.
Facility management
• Establish sound risk management systems.
• Assess structural, nonstructural, process-based vulnerabilities and losses, as well as
losses due to business interruption, loss of demand, loss of market associated with the
facility and operations.
• Carry out necessary actions for the retrofit/strengthening of structural, nonstructural,
and non-building elements.
• Develop and implement business continuity and contingency plans.
• Implement earthquake early warnings (if and when necessary) and rapid response
systems for automatic control and shut-off of critical systems in the facility.
• Negotiate with the insurer for a risk-based premium scheme.
• Contribute to sector/industry-level projects for the reduction industrial risks.
• Establish contingency plans and cooperate with local governments for their
implementation.
Local government (municipalities)
• Develop, enforce and control measures and mechanisms associated with the earthquake
safety of industrial facilities, with that of the buildings and other facilities at the
periphery of a facility and for the environment. These will involve chemical spills,
explosions, fire, use of automatic control and shut-off systems against the effects of
earthquakes, earthquake-resistant design codes for new and existing industrial facilities
(structural, nonstructural, non-building).
• Mandate financial liability and environmental liability insurance as a requirement for
operation licences.
Insurance sector
• Develop and campaign for a risk-based premium scheme for large-scale industrial
facilities.
• Develop premium reduction schemes for industries that have installed automatic
control and shut-off systems for earthquakes and consequential effects.
• Develop and campaign for a compulsory earthquake insurance scheme for small and
medium-sized facilities.
Stakeholders (financial institutions, industrial institutions,
commercial institutions)
• Raise awareness among members and related bodies about earthquake risks and likely
losses.
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13. • Organize initiatives for developing action plans to address the identified risks, develop
schemes for the realization of the plans.
• Assess the likely effects of an earthquake near Istanbul on the regional and national
industry, on national tourism, on regional, national and international finance and
insurance sectors.
International institutions
• Cooperate with their expertise in assessing the likely effects of an earthquake near
Istanbul on the industry, on regional, national and international economy, finance and
markets.
• Assist national and local government bodies in developing alternative models for the
reduction of the effects of an earthquake near Istanbul on the national and international
economy and markets.
Acknowledgements We would like to thank Munich-Re for supporting this study. Marsh Istanbul kindly
provided assistance in publishing the project report and dissemination of project results. The Istanbul
metropolitan municipality enabled the helicopter flights. We benefited from discussions with Prof. Charles
Scawthorn and Dr. Peter Yanev. Finally we would like to express our thanks to Dr. Aniello Amendola and to
two anonymous reviewers whose comments helped us to improve the manuscript.
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