Security experts offer cautionary tales of complacency

Mining companies have more to fear than collapsing shafts and veins running dry, according to security experts.

Fraud and organized crime aren’t as common as canaries and miners’ hats, OCA Inc.’s chief operating officer told a seminar audience Thursday, but they aren’t as rare as 10 carat diamonds,

either. Jim Cuddie said Sept. 11, accounting scandals and changes in mining security standards have prompted a closer examination of security and safety in the industry.

PriceWaterhouseCoopers hosted the seminar, where security experts discussed how industry insiders best protect their companies.

Aurora, Ont-based OCA conducts independent security and safety audits for the government and private sector. Cuddie said technology can save companies “”substantial dollars,”” but only if complacency doesn’t subvert the system. He cited the example of a company that had that had all the best practices and policies (dual controls, three-quote system, new vendor references) and should have been prepared to protect the company against employee fraud, but the policies weren’t followed.

One company won five bids worth $2.5 million over a six-month period. Upon closer examination, Cuddie said the company in question didn’t so much win as have the contract handed over. When the losing bidders were contacted for confirmation, both denied having been involved, but how did the bids get into the contract file?

“”The resulting investigation identified the client’s purchasing employee (who was) conducting the bid and the contractor’s president as the culprits. The purchasing employee made the deal at the president’s cottage,”” Cuddie said. “”We estimate the company overpaid $750,000 for services rendered.””

Cuddie estimated that 85 to 90 per cent of cases are due to complacency and not the work of criminal masterminds. Getting that number to drop should be easy, thanks to cost-effective technology, he added. Closed circuit television and access hardware the purpose of this central station is to ensure any catastrophes or incidents are recorded at both the operating site and off site.

These elements have two effects, Cuddie said. One, security is improved through the video data. Two, employee productivity went up because they were being watched.

“”With the Internet and Fibre optics, it is not a high cost to implement an off-site data storage facility. Everybody really should consider it,”” he said. “”Side benefits of technology (can) save more dollars than the original purpose.””

Mauro Di Giovanni is a member of the Combined Forces Special Enforcement Unit, a organized crime and anti terrorism task force. He told the audience mining companies are a target for the same reason any other number of companies are exploited: they make money.

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