The burden of escalating crime and the general erosion of the rule of law is hitting businesses where it hurts – their bottomline.

In addition to their normal overheads, many companies now have to add the cost of relocating staff members because of a flare-up of violence in the community in which these employees live; closing early so employees can get home before dark; pulling down shutters and losing much-needed revenue whenever the guns begin to bark; battling or simply giving in to extortionists, while still paying millions to security firms.

These are only just some of the challenges faced by many companies that do business in Jamaica and some people say it’s getting worse.

Restaurants of Jamaica (ROJ), for example, which operates the local KFC and Pizza Hut franchises, is now studying the impact that a recent fall-off in the number of night-time eat-in diners has had on its bottomline.

The SuperPlus chain of supermarkets has been rattled by the brutal murder of one of its cashiers at her home earlier this year, and the company has had to absorb the cost of relocating employees whose home communities have simply become places that are just too dangerous to live in.

According to World Bank data released this year, the quality of Jamaica’s rule of law (which measures the effectiveness of the police and the courts, the likelihood of crime and violence and the quality of contract enforcement) is 22.2 per cent below the regional average.

While Jamaica got a 43.5 per cent grade for 2004, the regional average stood at 65.7 per cent.

The rule of law indicator, one of six governance indicators the World Bank used to analyse data for 209 countries between 1996 and 2004, has fluctuated for Jamaica over the years. It is now at its second lowest level.

The only year when it was lower was in 2002, when it stood at 38.3 per cent. The ranking was highest in 2000, when it stood at 54 per cent. This was 2.6 per cent more than the 51.4 per cent ranking in 1998 and 6.4 per cent more than the 47.6 per cent of 1996.

“Comparisons of international ratings show that Jamaica is significantly under-performing in the area of law and order relative to countries with comparable incomes per capita (such as Trinidad & Tobago and the Dominican Republic),” said the World Bank in an earlier 2004 country study.

In 2001, according to World Bank data, violence caused firms about $1 million each, on average, forcing them to close an average of three days out of the year.

They spent another $1 million on private security and lost millions to extortionists, thieves, as well as persons who defrauded or set fire to their companies.

SuperPlus CEO Wayne Chen is familiar with some of these challenges.

“In this year alone, we have had one cashier murdered, but not in a store,” he said. “This was Kimona Simpson who was murdered up in Gordon Town on January 13.”

Simpson, 24, her nine-year-old brother, Tevin Parchment, and her boyfriend, Richard Miller, 24, were all shot in the head during an early-morning assault on their home. They had been labelled “informers”, suspected of telling cops how to find an illegal gun, police said at the time of the murders.

Other SuperPlus employees, afraid of the crime around them, have had to leave their homes, Chen said. The company has stepped in to help, adding yet again to the cost of doing business.

“Then there is just the sheer cost of security,” the SuperPlus head said. “There is the internal cost of our own SuperPlus security people. Plus you have the cost of the (surveillance) system like the cameras, monitors, all the other security features.”

Outfitting a supermarket with surveillance cameras, monitors, door buzzers and other security features can cost about $1 million. The price tag varies with the size of the building and the intricacies of the security system being used.

“It has always been a problem,” Chen said, when asked if crime has made it increasingly difficult to do business here since the World Bank released its 2004 country study, The Road to sustained growth in Jamaica.

But the ROJ’s director of restaurant operations, Donald Baugh, thinks crime is making it more and more difficult to do business in Jamaica.

There had been a gradual trend over the years, he said, but there was now a noticeable slowdown in night-time business.

“It is my impression that the cause of the slowdown of business at night is because of a society gripped by fear,” he said as he explained that the cause of the slowdown is still being debated within the company. “I wouldn’t say it is sudden this year. I think it has (now) gotten to the level that it compels attention.”

Baugh, who has been with ROJ for 30 years, said there has been increased use of the drive-in at their Kingston facilities, a factor he attributed to customers’ increasing unwillingness to be on the road late at night. Many simply get their meals and go home, these days.

“This is suggesting that people don’t really want to sit in the restaurants. I think the reason for that is fear,” he said.

With the erosion of law and order, private security firms have had to step in simply because the police cannot cope.

The Word Bank data showed that the average firm doing business in Jamaica spent about two per cent of its annual revenue on private security in 2001.

The gap has also been filled by those who run protection rackets.

“Jamaica’s most conspicuous and severe problem is the erosion in the rule of law,” said the World Bank, adding that an ineffective police force has contributed to the growth of the protection racket, especially in Kingston.

“In the case of protection rackets (as opposed to outright extortion), the person or group receiving the payment provides a real service in protecting the firm from all criminal activity, not just the potential criminality of the protector,” it said on page 123 of the country study.

“Those with expertise in the use of violence and who have influence in the underworld are well placed to provide these services. In 2001, about five per cent of all surveyed firms were forced to pay extortionists, while eight per cent paid for protection.”