Transcript Study Abroad Programs

STRIMA 2010 Annual Conference
“Foreign Exposures”
September 2010
Jean Demchak
Global Public Entity & Education Practice Leader, Marsh
Session Objectives

Better understand the business and legal risks
associated with expansion into the global market

Describe some of the problems that can arise with
international contracts and agreements

Identify the most critically needed tools to help risk
managers identify and mitigate international
exposures
2
MYTHS OR A NEW REALITY SHOW?

State governments have no exposure to foreign
liability

The University System has complete control over their
foreign exposures

Given the economic conditions in the U.S., a State
Risk Manager’s priorities over the next 10 years will
be focused solely on their State

Global relations aren’t a priority for US State
Governments
3
STRIMA MEMBER SURVEY 2009



73% of STRIMA members include University &
College System as clientele
53% of STRIMA members provide Workers’
Compensation for University Employees
Other coverages provided for University
– 2 states provide student health coverage
– 2 states provide athletics and college benefits
– 1 state provides Foreign WC and liability exposures
– 1 state provides fidelity bond coverage
– 1 state provides coverage for International Students
4
State Government Foreign Exposures?

Contractual agreements

Employee travel

First responders

Border States
– Employee travel
– Security

Shared program with non-U.S. governments

Lack of insurance to protect State

Centralized function?
5
Trends in Study Abroad

College and University President’s Increase
Emphasis on Internationalization
– Serving more Students with Less Resources

Study Abroad is more popular than ever among
students

International travel a critical component of higher
education

Short term programs on the increase

Move to the Developing World

Inconsistent academic, support and safety
standards
6
11-Year National Growth in Study Abroad
150% increase in the last decade
14.6%
13.9%
10.6%
7.4%
4.4%
8.5%
9.6%
7.7%
8.5%
8.2%
8.5%
SOURCE: Open Doors, Institute of International Education, 2009. http://opendoors.iienetwork.org
Copyright 2010, IES Abroad. All rights reserved.
7
New Trends Affecting Risk

Aggressive growth

Expansion into developing world where risk types &
levels differ

More ad hoc trips

Shorter durations of trips

More faculty led programs, often with less
infrastructure

Varied approaches to crisis management, drills,
training of faculty and staff among providers

Uneven approaches to health and safety among
programs
8
Current Destinations*
Middle East
1.0%
North
America
5.8%
Latin
America
14.4%
Oceania
4.8%
Multiple
regions
4.7%
Europe
63.1%
Africa
4.8%
* Institute of International Education - 2008
Asia
10.6%
9
Legislative Support

NAFSA Panel’s goal triple students studying abroad
– Lincoln Fellowship Program


Increase number of students to 1,000,000

Stipends / funding for students

Top priority destination: developing countries
Global economic downturn with high unemployment
leads to increase in crime (e.g., Spain at nearly 20%
unemployment; Argentina, etc.)
10
Developing Concerns

Kidnappings are common:
– Significant income stratification
– Internal political conflict
– Corrupt government


Al Qaeda’s Global Network of Networks
– Africa, Middle East, Central Asia, Southeast Asia
Terrorism (e.g., Mumbai, London, Madrid, U.S.)
11
Risk Issues

Crime
– Pick-pocketing
– Petty theft
– Assault
– Robbery
– Sexual assault
– Murder

Substandard health care

Inexperienced traveler

Communication
12
Risk Issues

Cultural and religious issues (e.g., discrimination and
harassment, hate crimes)

Differing laws and legal standards
– Caning
– Longer-than-expected prison terms
– Execution for certain offenses
– Arrests and imprisonment

Kidnapping

Civil unrest
13
International Travel Incidents

Transportation

Bodily Injury (non-traffic i.e. drowning, etc.)

Sexual Misconduct

Natural disasters (tsunamis, earthquakes, etc.)

Health concerns:
– H1N1 which is now in 190+ countries at pandemic
levels
– HIV: 30 Million died in Africa alone
– Mental health issues
14
Incidents and Claims

Koobi Fora Field Station, Kenya – Vehicle upset

Merida, Mexico – Sexual Assault – Rohypnol – Alcohol





Valencia, Spain – Knifing Assault, Improper Admission of
Participant
Haifa, Israel – FX Spine, Rock Climbing
Madrid, Spain – Sleep Walking, Fall 3rd floor, Alcohol, No
HIV Blood Supply Testing Protocols
New Delhi, India – Severe Illness after Fumigation
Shanghai, China – Students present when US Bombed
Chinese Embassy, Increased Anti-American sentiments
15
LEGAL CLIMATE
16
Elements of Negligence

Careless performance of a legal duty that causes harm

Failing to act reasonably when there is a duty to do so

Conduct below the established legal norm for
protecting others
17
Know The Legal Climate

Is it the same away from campus as on campus?
– Tort Theory
– Contracts
– Federal Regulations and Legislation

How is the legal climate different when outside of
the U.S. borders?

Increased litigiousness in American society in
general
– few legal precedents
– Web site headline: “Travel Abroad, Sue at Home”
18
Legal Responsibilities

Three areas of law that may affect study abroad
liability risks:
1. Tort Liability: claims which involve negligence such
as failure to protect others from a reasonable risk of
harm

in international study cases, institutions have a legal “duty
of care” for participants
19
Legal Responsibilities

Continued:
– 2. Contract Law: documented relationships between
participants & program. Any written agreement determines
responsibility and right of involved parties.

All representations by program sponsor may be
considered by court, including:
- program brochures, catalogs & posters
- Neiswand v. Cornell (1988)
¯ Cornell U unintentionally guaranteed a student’s
safety in writing and was later held responsible for
student’s injury
20
Legal Responsibilities

Continued:
– 3. Federal regulations and legislation: US government has
adopted a variety of laws & policies affecting higher
education, which may affect international education. They
include standards on:




Title IX (Earlham College & E. Michigan cases)
Campus Security -- Clery Act (Crime Reporting)
ADA (Disabilities)
- Clear communications re reality of circumstances
FERPA (Student Records)
21
In-country legal advice is essential

Guidance is needed on:
– How to register
– Specific HR practices
– Insurance requirements
– Tax Law
– Local legal contact for emergency
22
It’s a Complex Legal Arena: Some
Relevant U.S. Laws

Americans with Disabilities Act of 1990 (ADA),
42 USC §§ 12101-12213.

Title IX of the Education Amendments of 1972,
20 USC §§ 1681 to 1688.

Jeanne Clery Disclosure of Campus Security Policy and Campus
Crime Statistics Act (Clery Act),
20 USC § 1092(f).

Foreign Corrupt Practices Act of 1977 (FCPA),
15 USC § 78a.

Family Educational Rights and Privacy Act of 1974 (FERPA),
20 USC § 1232g.
23
Counter-intuitive Foreign Laws/ Unexpected
Penalties for Crime Abroad

China: Foreigners have been executed for drug offenses.
Sentences for distributing non-authorized Christian literature may
range from three to five years imprisonment. Sexual assault can
be punishable by life in prison.

Japan: In most drug cases, suspects are detained
incommunicado, barred from receiving visitors or corresponding
with anyone other than a lawyer or consular officer (no family or
university contact).

Ecuador: The accused is often incarcerated awaiting trial and
sentencing. In serious cases, bail is not an option. Food is often
insufficient
andAll prisoners
must pay for adequate nutrition.
Copyright 2010, IES Abroad.
rights reserved.
24
DEFENSE BASE ACT
25
State Government and University as a
Global Business

The commercialization of university research, technology,
engineering, agriculture has drawn an increased number of contracts
originating with various branches of the US Government.

When this revenue source takes this work outside of the United
States, you may have an obligation to purchase Defense Base Act
insurance.

Even if a contract does not specify this requirement, it’s important to
understand when this is required.
26
When is Defense Base Act Coverage
Required
> Work on any military, air, or naval base acquired after January 1,
>
>
>
>

1940, by the United States from any foreign government; or
Work on any lands occupied or used by the U.S. for military or naval
purposes outside of the U.S.*
Work on public work contracts through any U.S. government agency
to be performed outside of the U.S.*
Work on contracts approved and funded by the U.S. under the
Foreign Assistance Act, which, among other things, provides for cash
sale of military equipment, materials and services to its allies, if the
contract is performed outside of the U.S.*
Work for U.S. employers providing welfare or similar services outside
of the U.S.* for the benefit of the Armed Services (i.e. USO)
If any one of the above criteria is met, all employees engaged in such
employment, regardless of nationality, are covered under the Act.
27
An Extension of the Longshore
Harborworkers Compensation Act
(LHWCA)

As DBA extends the provisions of the LHWCA,
employees of U.S. government contractors working
overseas are assured protection of a law that is uniformly
administered, providing uniform benefits, regardless of:
– The state in which the employee was hired
– The state in which the employee maintained residence
– The local law of the country in which the employee works

LHWCA and DBA are rarely amended federal statutes
– Unlike LHWCA, there is no minimum compensation rate
under the DBA.
28
“Public Work”

Defined in the DBA

Covers work related to national defense,
war activities, or a public “use of the US or its allies”

Not limited to construction projects

Includes service contracts/subcontracts

Differs from grants which are not covered by the DBA
29
Examples of DBA Exposures

Design and fabricate five-blade cascade into the existing
wind tunnel facility; instrument static pressure taps,
perform measurements, analyze and provide pressure
distribution data for CFD prediction. Contract for this
work is for the Army, performed in Mexico.

Seed research contract with the Department of
Agriculture, performed in South America.

Energy Systems Laboratory: Fan Testing for the Dept of
Energy, performed in Taiwan and Canada.
30
Examples of DBA Exposures

Contract with NIH to perform specific Infectious Disease
research and associated clinical trials in various African
countries.

Deliver traffic accident avoidance class in Malta - a
subcontract to a prime contract with the Army.

Assist the Beijing Transportation Research Center with
technical assistance regarding traffic congestion
measures.
31
RISK MANAGEMENT
AND
RISK TRANSFER
32
Mitigating Risk

Transfer risk via contracts (e.g., by contracting with
third party providers) and via insurance

International HR Practices may differ:
– Insurance requirements
– Pension benefits
– Worker’s Compensation
– Death benefits
33
Crisis Management: How best to respond

Have a detailed crisis management plan
– Keep it simple
– Dovetail with existing institutional plan

Train on the Plan: All employees traveling abroad or
faculty/staff taking students abroad, plus students
(each term)

Drills: Drill every program every term

Utilize Technology (e.g., required cell phones, use
text messaging to communicate).
34
Crisis Action Plan for Overseas Programs

Protocol for Response to crisis
– Foreign Crisis Management Team (UCMT)
– Coordinated and comprehensive response
– Communication with On Site Coordinator
– Community Relations and Media Contact
– Commitment of Resources – Insurance

Final Authority
– State Risk Manager
– Executive VP for Academic Affairs
35
Some Recent Incidents Requiring Crisis
Management Team Mobilization

Earthquake in New Zealand, September, 2010

Earthquake in Chile, February 2010

Health Related Death of a Student, October 2009

H1N1, May 2009

Mumbai Attacks, November 2008

Delhi Bombings, September 2008

Bacterial Meningitis Cases, London, March 2008

Glasgow Bombings, June 2007

London Bombings , July 2005

Madrid Bombings , March 2004

Avian Flu – December 2003

SARS Crisis – November 2002 to July 2003
36
Local Response

Each site (destination) abroad should have its own Local
Contingency Plan that addresses known local risks.

Built-In Redundancy (e.g., primary and secondary
meeting locations, means of communication, & backups
for employees/faculty/staff)
– Safe haven may not mean US Embassy

Required Post Mortems After Each Crisis
37
Role of the International Oversight Committee

Historical focus on health, safety and security

Evaluate information presented by responsible party

Restrict or suspend international travel to
countries/regions with heightened health, safety and/or
security concerns

Grant exemptions to decision to restrict or suspend travel
due to special circumstances

Manage/respond to critical incidents abroad, including
decisions on emergency evacuations and emergency
policies and protocols
38
Progressive Role of the Risk Manager

Initiate and implement institution forums and activities on
key risk topics

Expand the role of the International Oversight Committee

Strategic vs. transactional involvement

Focus discussion on both upside (opportunity) and
downside (protection) risks

Facilitator and Leader
39
Guidance for University Administrators

Students
– Receive the relevant information
– Receive the necessary assistance
– Understand their responsibilities

Institution/Employer
– Comply with statutes/legislation/regulations
– Minimize institutional liability


Policies/Procedures
Crisis Plan
40
Responsibility to Students

Include parents

Full disclosure of risks
– Cultural differences, crime

Evaluation of fitness of students
– Medical exam
– Health insurance
– Maturity
– Mental health concerns

Participation forms/waivers

Maintain veto power

Orientation – home campus, on-site, interim
41
Policies and Procedures

Designate a Travel Abroad Administrator

Review contractual language with collaborators and/or
participants

Evaluate extraterritoriality of US Legislation

Adopt a Code of Conduct for employees/students

Manage transportation risks

Review housing policies

Communication
42
Insurance Issues

Analyze Institutional insurance (domestic and local
country) to verify coverage in foreign jurisdictions
– Workers compensation
Defense Base Act WC effective 8/1/06

- Mandatory coverage required to be carried by
US government for any US entity contracting
with the US government on work taking place
in foreign lands
– Automobile liability
– Health coverage
43
Insurance issues

Other insurance issues
– Foreign travel accident, medical evacuation and
repatriation coverage
civil unrest
– Employee / Student health insurance
– Locally mandated insurance

– Special Risk
44
Coverage Design: Primary Limits

Auto Liability - $1,000,000 primary

General Liability including Abuse & Molestation $1,000,000*

Workers’ Compensation & Employer’s Liability $1,000,000*

Repatriation - $100,000 - $250,000

Kidnap & Ransom - $1,000,000 - $10,000,000

War & Terrorism – Included in coverage limits

Travel Accident & Sickness – Your call
45
Country of China – Insurance Environment

Mandatory coverage
– Automobile Liability (placed with agent/broker)
– Social Security (compulsory by SS Bureau)
– Workers Compensation (compulsory by WC Bureau)

Labour Law requirement

Non-residents working temporarily for a non-registered US firm
are not subject to the provisions of the local WC act

Labour dispute arbitration system in China

State Fund has no recourse against employer
– Provisions exist for extra-territorial coverage under insurance
coverage or official law
46
Country of China – Insurance Environment
continued



Legal Liability – Laws by which members of the public may seek
indemnity for bodily injury and death or damage to their property:
– General Principles of the Civil Law of PRC
– Consumer Protection Law
– Law of Products Quality
– Contract Law, etc.
General Liability (third party)
– Limits recommended for American Enterprises:

At least US$1M (RMB 8M)
Claims – courts / judges are inclined to liberal awards
47
Other Considerations

Coverage options (include international 24-hour global
and multilingual network for Medical Evacuation &
Repatriation)
– International SOS Company, Philadelphia,
www.internationalsos.com/company/ (product demonstration page)
– HTH Worldwide, Radnor, PA -- www.hthworldwide.com/

International health program and online health & security information

New policy for health insurance for foreign students in U.S.
48
Other Considerations (continued)
– Medex Assistance, www.medexassist.com/scholastic.cfm

Emergency medical evacuation

Medically supervised return

Repatriation of mortal remains

Travel assistance for dependent children

Travel assistance for companion if member is hospitalized when travelling
– Universal Travel Protection --www.utravelpro.com/

Menu approach

New Terrorism options
49
An Ounce of Prevention

Early planning is key

Management review of operations or future plans

Full evaluation of risks required

Disclosure of risks to employees, participants and
interested parties

Informed decision-makers
50
Resources


“Perspective” The Campus Legal Monthly
“International Study Abroad Programs: A Critical Legal Planning
Session” by Gary M. Rhodes, Ph.D., USC

Overseas Security Advisory Council (OSAC) -- www.ds-osac.org/

National Association of College & University Attorneys (NACUA) www.nacua.org

The Chronicle of Higher Education - www.chronicle.com

National Association of International Studies (NAFSA) www.nafsa.org
– 56TH Annual Conference, Baltimore, May 23-28, 2004

“Safety is an Important Part of Studying Abroad”, Mike Halligan, U of
Utah, Campus Firewatch, February 2004, www.campusfirewatch.com
51
Resources

U.S. State Department -- http://travel.state.gov/index.html or for
student access -- http://travel.state.gov/studentinfo.html
– Bureau of Consular Affairs
– Overseas Citizens Services Tips for Students
– Overseas Security Advisory Council
– Travel Safety for Student: Press Release
– Travel Warnings
– Services and Info for American Citizens Abroad
– How Consular Officers Can Help in An Emergency
– Important Telephone Numbers
– Links to US Embassies and Consulates Worldwide
– Bureau of Educational and Cultural Affairs
– Country Reports on Human Rights Practices
52
Resources

The U.S. Centers for Disease Control and Prevention www.cdc.gov/travel

American Council on Education (ACE)/The International Initiatives www.acenet.edu

Institute of International Education - www.iie.org

US Peace Corps - SAFETI Adaptation of Peace Corps Resources

International Student - www.internationalstudent.com

Study Abroad - www.studyabroad.com

Center for Global Education/University of Southern California www.usc.edu/globaled

University Risk Management & Insurance Association
www.urmia.org
53
Jean Demchak
Managing Director
Marsh Global Public Entity and
Education Practice
(860) 723-5635
[email protected]