Having just completed my 10-week internship with Mercy Corps (MC) Indonesia
supporting the organization's work with
a project in the extractive industries as part of a public/private shared-value
partnership arrangement, I find it important to reflect on and share some
aspects of my experience as well as relevant lessons for the field of Conflict
Resolution. In fact, this internship was motivated by my interest in and
academic focus on the prevention and mitigation of conflicts that may arise
from access to, and management of, natural resources.
At the start of my internship, MC had just completed an independent Participatory
Community Needs Assessment (or social mapping) of an area that is anticipated
will be impacted by the operation of a large extractive industries
project. MC was just getting started to
continue its work with on the project by assisting with an exploratory appraisal
mission in collaboration with a consulting firm specializing in Indigenous
Peoples and aligned social development issues. This appraisal mission came as a
first step in a larger process of supporting the project in meeting the
performance standards of the International Financial Corporation (IFC).[1]
For confidentiality purposes, the project will be referred to as Project X. The
consulting firm that solicited MC’s assistance shall be referred to as Y.
MC’s role working on this Project is twofold. First, it is to support consulting
firm Y in developing a Public Consultation and Disclosure Plan (PCDP) for Project
X in accordance with IFC requirements. A PCDP is intended to ensure the
meaningful engagement of the identified project stakeholders through socially
and culturally appropriate public consultation, participation, and disclosure.
It may therefore be considered both an IFC document as well as a strategic
roadmap for the company itself—providing guidance on how to conduct work in a
sustainable manner adopting a triple bottom line approach (social,
environmental, financial).[2]
Second, MC is to partner with consulting firm Y to
build the project’s capacity to extend more responsible and needs-based,
community-driven community development work through the design and
implementation of social investment programs in the targeted geographical area
(the extraction site and beyond).
My internship was therefore structured in the same way. My role as an
intern was to assist the Mercy Corps Office Director and Program Manager in the
following areas:
- Providing
support on developing key components of the PCDP, including the
stakeholder analysis (identification, classification and prioritization of
stakeholders), the information disclosure framework, the reporting
procedures, and the stakeholder engagement principles,
objectives and criteria.
- Contributing to the design
of appropriate community investment or social investment project proposals
tailored to community needs and based on recent social mapping
information.
The major portion of my work consisted in working on the PCDP, establishing
a plan for the project to comply with IFC Performance Standards (PS) specific
to stakeholder engagement. These included primarily:
·
PS1 Social
and Environmental Assessment and Management System (including information
disclosure, consultation and participation, grievance redress mechanism, and
external communication and reporting)
·
PS5 Land
Acquisition and Involuntary Resettlement
·
PS7
Indigenous Peoples (providing general guidelines in the event that
Project activities are expected to have adverse impacts on Indigenous Peoples).
The task was particularly tedious as the PCDP was intended to be a
working document formalizing the project’s commitment to engage stakeholders
proactively and in an ongoing manner throughout its lifecycle. The rationale
was that this form of relationship with the different stakeholders (local
government, village leaders, civil society, etc.) would provide Project X with
a ‘social license to operate’ from the local communities in question and ensure
its sustainability.
The objectives of the PCDP—and social performance standards more
broadly speaking—link to the shared value partnership rationale that business
bottom line is greatly impacted by the quality of the relationship between
extractive companies and local communities and governments. In fact, a 2011
International Council on Mining and Metals (ICMM) paper points to the fact that
the greatest losses incurred by extractive companies are caused not by
technical issues but rather by tensions/conflicts with local stakeholders.
According to the paper, costs have nearly doubled in the last decade for
projects operated by the major international oil companies, where “non-technical
risks accounted for nearly half of the total risks faced by these companies”
with stakeholder-related risks constituting the single largest category. [3]
The benefits of building positive and sustainable relationships are made quite
obvious and therefore make a good business case for shared value partnerships generating
mutual benefits.
Indeed, considerations of the many and varied sources of investment
risk
are a crucial element for working with the private sector and
bridging the gap between business bottom line and community development, which
this internship was essentially about. In this sense, shared value partnerships
combined with increased corporate and government transparency and
accountability are important factors in making sure that natural resource
endowments do not turn into a “resource curse” and that their extraction also
supports the development goals of the communities concerned.
With
that respect, the second portion of my internship focused on the design of
community investment programs that address the development needs of the
communities and improve livelihoods in a culturally appropriate and sustainable
manner. Where direct project-induced benefits such as employment or revenue
sharing are limited, community investment programs come as an alternative
source of benefits and value sharing with the communities.
My role specifically, was to develop ‘Assessment’ surveys to gather specific
information in order to support the design of three different social investment
programs. I focused in particular on a solar cell program, which was devised based
on community needs identified in the social mapping previously conducted by MC.
My survey for this program was focused on assessing the energy gaps that solar
cells could fill (lighting, electrical equipment and mobile phones, cooking)
and comparing the costs of the available alternative to solar cells (power
generators) with the costs of purchasing and maintaining a solar cell. The
survey was also designed to assess households’ ability and willingness to pay
for solar cells, and the need for financial literacy training as well as for
financial support. The previous social mapping having identified drinking water
shortages in specific communities, the survey also attempted to assess the
possibility of using solar energy to build a water pump.
My interest in this particular program also incited me to develop an
alternative program proposal offering two different approaches: a
household-oriented program addressing the needs of communities at the household
level, and a centralized power supply approach addressing the needs of the
community as a whole.
Overall,
this internship experience was, without a doubt, an extremely enriching and
stimulating one, allowing me to gain a deeper understanding of what 'shared value
partnerships' may mean for communities, government, and the private sector.
This was also an opportunity for me to build on my academic training and
develop new skills in consulting with the private sector for sustainable
development and working on program design and proposal writing.
The Summer Field Program is supported and organized by the Georgetown Conflict Resolution Program. Please visit our website at http://conflictresolution.georgetown.edu.
[1] According to the IFC’s vision, the IFC finances
projects that are expected to contribute to development and poverty reduction
in developing countries.
[2] The PCDP focuses mainly on the ‘social’ dimension
whereas Project-related environmental aspects are addressed in greater detail
in the Environmental and Social Risks and
Impacts Assessment as well as in the E&S
Action Plan, additional IFC financing requirements.
[3] “The Costs of Conflict with Local Communities in the
Extractive Industry” http://shiftproject.org/sites/default/files/Davis%20&%20Franks_Costs%20of%20Conflict_SRM.pdf
This paper was based on “confidential interviews with over 40 key
individuals (primarily from extractive companies but also including industry
bodies, corporate law firms, insurers and research institutes) on the costs of
company-community conflict.”
No comments:
Post a Comment