Feb 8, 2006 | 23:43 GMT

4 mins read

The Mohammed Cartoon Controversy: Security Implications for Multinationals

The wave of protests that has spread throughout the Muslim world over the publication of cartoons satirizing the Prophet Mohammed — much of it focused on Denmark and Norway — illustrates that political turmoil can erupt suddenly, and even involve countries that tend to avoid international squabbles. Multinational corporations from "neutral" countries, therefore, need to be prepared to address issues regarding the safety of their facilities and personnel overseas.

Though originally published in Denmark in September 2005, the offensive cartoons continue to be reprinted in several European countries. As a result, Danish and Norwegian embassies and consulates have been attacked in Syria, Lebanon, Afghanistan, Iran, Pakistan, Nigeria and Indonesia. In Damascus, rioters set fire to the Danish and Norwegian missions, and in Beirut the Danish Embassy was burned. Protests, some violent, also have occurred in Bosnia and elsewhere.

Furthermore, Danish companies have been hit hard by official and unofficial boycotts of Danish products in Muslim countries — to the sum of more than 1 million euros a day. In the first 11 months of 2005, Danish exports — mostly dairy products — to the Middle East and North Africa totaled $1.25 billion. Saudi Dairy and Foodstuff Co., owned by Danish Dairy Co., has seen its stocks fall in recent days, while Arla Foods, a Danish-Swedish food conglomerate that has operated in the Middle East for decades, has seen its sales in the region come to a complete halt. So far, Arla, which does more than $400 million in sales annually in the Middle East and has employees in Saudi Arabia, Kuwait, Qatar, the United Arab Emirates, Oman, Yemen and Lebanon, has lost more than $150 million to the boycott. In Nigeria, legislators canceled a $27 million contract with a Danish firm to import commuter buses, and a Danish contractor has been locked out of the bidding for a $62 million contract to build an electric power station. On Feb. 6, the Iranian government suspended all trade relations with Denmark.

The Danish Foreign Ministry, meanwhile, has issued travel advisories regarding 16 Muslim countries, and has advised against any nonessential travel to Indonesia. With a weeklong Danish school holiday set to begin Feb. 10, domestic travel agencies have reported mass cancellations of trips to resorts in Egypt, Morocco, Tunisia and other Muslim countries.

Denmark tends to remain aloof from the often-controversial politics of the Middle East, though its small size and minor importance on the regional political scene could, in fact, be what is making it vulnerable to Muslim wrath. Muslims are venting their anger at Denmark because "Denmark is an easy victim," Ekrima Sabri, the grand mufti of Jerusalem, told Danish newspaper Kristeligt Dagblad. "It is a small country of no major importance for the Arab countries," he said, adding that he doubts the protests will subside soon.

In addition to the economic cost of the protests, the volatility also raises the possibility that angry protesters could target businesses whose home countries have printed the cartoons. Multinationals from the United States and other countries whose governments have a history of deep involvement in the volatile politics of the Middle East often incorporate security and evacuation contingencies into their operations in the region. Companies from countries that are not as involved, however, might not have considered themselves to be at risk. Although protesters have thus far avoided direct attacks against private business and industry, the reaction to date demonstrates that any incident from any country, no matter how minor it first appears, has the potential to explode into a serious security matter.

Despite all the media attention, the cartoon controversy is as yet relatively minor. Should a major issue erupt, the repercussions could be much worse.

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