ISME, the Irish Small and Medium Enterprises Association, issued the results of its National Crime Survey today (15th August). The survey found that 31% of businesses have been the victim of crime in the past twelve months, with 45% experiencing more than two incidents. More than one in five crimes go unreported, as a result of 98% reporting a lack of faith in the legal system.
According to ISME CEO, Mark Fielding, “The reduction of business crime is fundamental to business prosperity and is not being prioritised by government. The business community has the right to expect that, when found guilty; a perpetrator of crime against business will be dealt with appropriately within the legal system. This survey clearly shows that there is a total lack of faith in the justice system, as 98% of respondents feel that it is ineffective in dealing with business crime”.
“In order to tackle crime against business, the Garda need to know the scale and scope of the situation. It is essential that we record incidents against business separately from other types of crime, to allow for the allocation of proper resources to deal with business crime. Until this issue is taken more seriously at official level, business owners will remain fatalistic about the legal system and not put in the time and money into reporting a crime unless they are convinced of adequate action being taken against the perpetrators of crime in their businesses.”
The fact is that there is no classification for ‘Commercial or Business Crime’ – it is either ‘domestic’ or ‘non-domestic’ and therefore, there are no ‘official’ statistics. What isn’t measured isn’t managed. The Government has a responsibility to act now to ensure that the detrimental impact of crime against business; the economy, local communities and employment is reduced.
With modern technology, it must be at least feasible to log and classify all crimes by their type. Key Performance Indicators could then be set to determine the effectiveness of any steps taken to decrease business crime. This is important to ensure that actual progress is made in the area and to avoid the risk of a strategy being set that simply pays lip service to the problem but does not effectively address it.
The survey respondents were unambiguous in their calls for more visible policing, increased CCTV surveillance and tougher court sentences. The Government will argue that we simply do not have the financial resources to invest in these actions. However, it is imperative that funds are allocated to tackle this growing problem.
ISME has eleven recommendations for reducing the level of crimes perpetrated against businesses:
Introduction of a single, national definition for business crime in Ireland to enable these offences to be properly ‘tagged’, measured, analysed and ultimately solved by the Garda. Business crime must be measured and recorded so that the extent, nature and scope of the issue can be properly assessed.
The Annual Report of the Garda Commissioner should contain a specific section concerning business crime, backed by figures on the number of business crimes reported and detected, in the same way as other crime statistics and specific recommendations.
Set ambitious targets for Key Performance Indicators in this area to gauge the effectiveness of the efforts being made to reduce business crime.
A National Forum on Crime should be created to analyse this problem and propose solutions. The Forum should include representatives from law enforcement agencies and the business community, to build closer partnership work between business, government, law enforcement and others to fully utilise the sector’s data, knowledge and expertise.
Provide training to Community Police Officers to improve their understanding of how local businesses operate and the impact and extent of business crime.
Reassess the sentences handed out by the judiciary when dealing with business crime to ensure that they are an adequate deterrent.
Increase levels of CCTV surveillance, particularly in town centres, and increase the number of Gardai on patrol by outsourcing administrative duties to the private sector.
Allow for sharing of CCTV data among business under Data Protection legislation.
Conduct an awareness campaign to educate businesses about the existence of the Crime Prevention Office and its benefits.
Develop and implement business watch initiatives and ensure that they are advertised effectively to businesses.
Launch and promote a ‘Mind your Business’ website which outlines best practice methods and tools for business crime prevention.
“Crime against business is often seen as victimless but it has a very real impact on SMEs and their employees. SMEs are particularly vulnerable to business crime as they lack scale and therefore, they experience greater difficulty in absorbing the direct and indirect costs of crime. The €1.83bn that is being drained from the economy through business crime could be better used in creating jobs and developing businesses”, concluded Fielding.
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Note to Editors:
KEY FINDINGS OF ISME CRIME SURVEY 2016.
31% of companies have been the target of criminal activity in the last 12 months; this is a 5 point decrease on the 2015 figures.
The direct cost of crime per enterprise has risen to €6,570 per annum and the annual cost of prevention is €5,428 per enterprise. This gives a total average cost of €11,998 per company annually.
The total cost of crime against businesses nationally is €1.83 billion.
98% of SME business owners see the judicial system as ineffective in the fight against crime.
On a regional basis the highest incidence of crime was reported in Dublin City (47%), followed by Dublin County 36%. Munster showed the least at 19%.
The Retail sector was the area of the business community most affected at 45%. It was followed by Construction and Distribution at 36% and 31% respectively.
The most common crime reported was 'theft by outsiders' by 32% of respondents, closely followed by 'burglary' 29%, ‘attempted burglary’ 24% and ‘vandalism' 27%.
The number of businesses experiencing more than two instances of crime stood at 45%, down from 48% in 2015.
There was a reduction in the number of respondents being victims of theft by members of staff; down from 21% to11% this year.
47% reported that they felt that the general level of crime has increased in the last 12 months, down from 54% in 2016.
28% of respondents said they believe that crime in their locality is ‘getting worse’, down from 33% in 2015. This is an improvement of 15 points in two years. (43% in 2014)
The survey results confirm that 12% of SME owner/managers are confident that if they were the victim of a crime that the criminal would be apprehended (an improvement from 7% in 2015).
After the direct cost of crime, increased security costs at 52% are the biggest impact of crime on business (down from 56% in 2015). This is followed by ‘disruptions to trading’ as reported by 30% of respondents.
The indirect costs of crime cannot be underestimated; of SMEs who suffered from criminal activity 16% indicated ‘poor staff morale’ and 13% identified ‘reputation damage’ as being a particular problem.
Alarms and CCTV are the primary crime prevention methods at 69% and 63% respectively. This is followed by the use of monitored alarm response rates at 61%.
There has been a marginal increase in the non-reporting of crime to the Gardai. This has gone from 20% non-reporting rate in 2015 to a 21% rate in 2016.
No change is Garda satisfaction ratings. 69% of those who reported a criminal incident to the Gardai were satisfied with the response it received. This is on par with the 2015 figure.
Of those who did not report the criminal incidents, 56% stated that it was because they believed it was ‘too trivial’ (up from 43% in 2015), while 39% stated they had ‘no faith that the criminal would be charged’.
62% of respondents were not covered by insurance for their loss due to crime, a small decrease on the 67% who suffered this fate last year.
40% of companies have never requested crime reduction advice. Of those who did, 22% received their advice from a security company and 22% received it from the Gardai.
22% of companies have liaised with the Gardai on crime prevention strategies, up 3% from 2015.
Of the 67% of respondents who were aware of the Crime Prevention Office, only 19% had used the service. Dublin City businesses use this service the most at 28%.
SME owner-managers rate an increase in Garda numbers as the most effective deterrent against crime at 81%. Tougher sentencing follows closely behind on 72% and 60% would like to see more CCTV in town centres.
Interestingly, 58% of respondents favoured the concept of sharing CCTV data among businesses to combat crime.
The national cost of crime is based on the average cost multiplied by the incident rate multiplied by the number of business entities in Ireland. Our estimates are 245,000 SMEs trading.
(According to the latest CSO figures there were 237,753 SME’s in 2014.)
Direct cost of crime per company is €6,570. There are 245,000 SMEs in Ireland of which 31% are affected by crime.
245,000 x 0.31 x €6,570 = €499m.
The cost of security is based on the average cost of security multiplied by the number of business entities in Ireland.
Crime prevention cost €5,428 per company.
245,000 x 5,428= €1.33bn.
Total Cost of Crime
€499m + €1.33bn = €1.83bn
This report details the results of the 2016 survey which was sent by email on the 24th of July to 6,000 member companies. A total of 1184 companies responded by the deadline of the 31st of July, a response rate of 20%.