Learning from AMEC's Oil and Gas Asset Support ... - CommDev

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In response to social and environmental pressure groups highlighting control of social risks andimpacts are needed, many large oil and gas companies have instituted their own social performancestandards. BP, for example, promotes separate social impact assessment studies at the feasibilitystage of capital projects and new operations. These studies are used to identify the potential socialimpacts, generate management recommendations, and open dialogue with stakeholders. Thestudies are often carried out alongside environmental impact assessment studies and conform toWBG and other international environmental and social guidelines 13 .As part of their contractual obligations, contractors are increasingly asked to act as the executingagency for social impact management measures identified by the client, the project’s investors orregulators. In these cases, competitive advantage lies with those contractors able to demonstrate atrack record in effective social impact management. With the construction phase being a principalsource of adverse social impacts, contractors at this phase may need to demonstrate capabilities to:• investigate local livelihood practices, identify and manage potential impacts project to maintainlivelihood standards;• ensure participation of community representatives in project decisions that affect their well-being;• manage worker camps and how workers interact with local communities;• control storm water runoff and reclaim disturbed areas;• minimise the draw-down on community infrastructure capacity, e.g. transport, water supplies,waste management etc;• ensure safe transportation, treatment and disposal of hazardous and non-hazardous wastes;• render occupational health and safety facilities available to off-site communities where affectedby project; and• meet or surpass minimum national environmental quality standards for noise, dust and airemissions.13BP [B] (2004) see – http://www.bp.com/genericarticle.do?categoryId=2011586&contentId=201698420
4.1.2 Maximising Local Socio-Economic BenefitsBeyond paying compensation to communities for lostassets, or for disruption and displacement, most oil andgas majors now invest in communities in ways that arenot easily integrated into their core business. Again,this is seen as part of operational risk management, butit is also driven by the need for a positive reputationwith opinion formers in the country of the parentcompany, e.g. the media, campaign groups andsocially responsible investors. Some operators havegone to quite extreme lengths in this regard, effectivelybehaving as community development charities,providing livelihood enhancement projects, communityhealth and other local infrastructure. Some companiesprovide this assistance directly from within theirorganisation, others have established a local‘foundation’ managed and resourced by the company,and others still chose to outsource the work to localcommunity development NGOs. Box 2 gives twoexamples of typical community investment projects, inthis case managed by the Pilipinas Shell FoundationIncorporated (PSFI) on behalf of Shell PhilippinesExploration Company.Box 2Community Investment in the ShellMalampaya Gas-to-Power Project,PhilippinesExample 1Funded and managed by the Philipinas ShellFoundation (PSFI), a Social Development Program isbeing implemented for the five communities –Tabangao, Ambulong, Libjo, San Isidro, and Malitam –that surround the Shell Malampaya on-shore gas plantand the Tabangao refinery in Batangas. Theprogramme helps the communities (Barangays)develop self-reliance through five programcomponents, as follows:• employment generation and skills training• youth leadership training• livelihood and micro enterprise training for cocommunity-basedoperatives• health care• environmental clean-up of the Tabangao riverExample 2A Memorandum of Agreement (MOA) was signed inJuly 2000 between PSFI, SPEX (the operator), and theprovincial government of Oriental Mindoro (the islandprovince next to the off-shore pipeline). The MOAprovide technical assistance to the island as follows:• training to fishing cooperatives in coastal resourcemanagement• training in fishing households to developalternative sources of income, e.g. hog raising• training to women and youth of Calapan City todevelop garment livelihood projectsWithin their quality submissions, although contractorsare increasingly required to demonstrate a track record in community dialogue, it is still rare for thefinal terms of a contract to require their participation in the types of community investment projectsdescribed above. This omission offers potential scope for market differentiation by contractors, inparticular for asset support and maintenance contracts where the contractor may be the onlyrepresentatives of the project ‘on-the-ground’ interacting with affected communities. The followingsteps are suggested as a route for contractors to identify how they might best assist their clientenhance its community investment performance:1. Within periodic project risks analysis processes identify the client’s priority operational risks thatrelate to local community factors, i.e. which assets might be affected, in what way, where, andwhich stakeholders are involved 14 ;14ODI and EAP (2004) Enhancing Social Performance through Risk Analysis, Briefing Note 1. London, Overseas DevelopmentInstitute.21
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Page 5 and 6: CONTENTSPageEXECUTIVE SUMMARY 11. I
Page 7 and 8: EXECUTIVE SUMMARY“We’re totally
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Page 37 and 38: Box 7The "Equator Principles": An I
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Page 47 and 48: standards. In practice, this may in
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