Fraud, cyber attack and security breaches rise in global natural resource sector

Cyber attacks affected 87% of water and other natural resources industries worldwide over the past year according to the findings from a survey of sector executives. And 85% of those polled said their firms had been hit by a fraud over the same period.

The incidence of experiencing at least one instance of fraud over the past 12 months was fractionally above the 85% global average across all indstry sectors.

The study found that 81% of natural resources companies reported at least one security incident during the past year – the global average was 70%.

The survey findings – the Kroll Report – showed that the natural resources sector saw information-related risks as causing the greatest concern. Management conflict of interest was the most prevalent fraud experienced in the natural resources sector with 35% of respondents, citing it as so. That was a 20% increase the previous year. Market collusion was second – reported by 29% of executives, followed closely by intellectual property theft at 27%.

Three quarters or more of respondents – depending on the incident in question – said employee privacy, safety, or morale was damaged by incidents and customers too were adversely affected according to between two thirds and three quarters of respondents. Nearly a third of respondents said their company had lost 7% or more of revenues following attacks of the types covered in the survey.

Insiders and ex-employees were found to pose the greatest fraud threat to companies in the natural resources sector. Respondents revealed that fraud incidents were often inside jobs with junior employees (45%), ex-employees (41%), or senior or middle management (34%) the perpetrators. Vendors/suppliers and joint venture partners were next on the list each at 32%.

Ex-employees were the main culprits of cyber incidents (33%) and senior or middle management were responsible for 40% of security incidents in the natural resources sector.