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International Finance Corporation World Bank
Executive Summary
As the world’s demand for energy and other extractive industry commodities continues to grow, extractive companies are increasingly driven to explore and develop in areas that are more prone to political instability or conflict. As such, extractive sector investments in both the project itself as well as community development initiatives can exacerbate or trigger conflict.
 
This section 1) explores various links between local conflict and community development, 2) illustrates where conflict can arise during the project cycle, 3) provides a set of lessons learned, and 4) introduces a set of tools to help prevent or mitigate conflict around community development.  An in depth explanation of the tools can be found in the resources section of this brief.
 
Local Conflict and Community Development in the Extractive Sector
While intended to provide communities with opportunities for development, community development programs can stir up conflict and, and at worst, reverse existing development trends. Hence, community development program designers need to be conscious of their ability to create conflict and design programs accordingly.
 
Community Development can assist in conflict resolution in three core areas:
·         Ensuring that projects are successfully implemented, which can help encourage behaviors of participation, accountability and peaceful change to take root within the community;
·         Helping community leaders take ownership for managing conflicts constructively and providing them with the tools to do so – through local and targeted capacity building; and
·         Helping prevent local conflicts feeding into regional or international tensions.
 
In addition, conflict revolves around people and the issues that concern them. Thinking conflict through in terms of issues and actors can be useful for community development practitioners since it helps identify:
·         The types of issues that are at the root of conflict or potential conflict (helping you to take action that reflects the degree to which conflict issues can be influenced by a community development program); and
·         Relationships and tensions among actors (helping you to resolve, reduce or mitigate conflict by influencing certain actors and targeting certain beneficiaries).
 
Community development initiatives should help everyone acknowledge that local level conflicts are a natural part of the development process.
·         Conflict-aware community development can help company and community members to develop skills to anticipate conflicts and address them in a timely manner without obstructing the development process.
·         Conflict resolution activities address the issues and actors of conflict directly or indirectly by contributing to creating the conditions necessary to achieve peace in support of a broader process.
 
Understanding and managing the links between local conflict and community development is a complex and often daunting task for even the most experienced practitioners. In recent years, there have been several high profile initiatives which have looked at the potential and short-comings of community development around extractive sector projects, and associated dimensions of local conflict, in an effort to create a body of knowledge on the subject. These have included the World Bank Group’s Extractive Industries Review (EIR) and the International Council on Mining and Metals’ (ICMM) Resource Endowment Project. Others, such as International Alert (IA), have designed toolkits like the Conflict Sensitive Business Practice (CSBP)
 
Conflict, Community Development and the Project Cycle
The extractive industries follow a number of discrete stages of project development - the project cycle. Each stage may represent potential for various types of intrinsic conflicts and/or propensity to introduce conflict. Each stage also presents opportunities for company-led community development activities, scaled appropriately to match the stage of a project’s development. While there are variations between the oil and gas and mining project cycles, particularly in relation to the intensity of the project footprint, the six stages that typically apply to the extractive industries are:
1.       Project concept/exploration;
2.       Feasibility studies and project planning;
3.       Construction;
4.       Operations/Expansion;
5.       Downsizing, decommissioning and divestment; and
6.       Post-closure legacy.
 
The following report illustrates what the company and communities think or may be concerned with at each stage of the project cycle, suggests appropriate types of community development activities companies can consider and implement, and includes a list of potential tools which might be useful at that stage.
 
Lessons Learned
Companies, donors and development organizations already have extensive experience implementing community development around extractive sector investments. However, the understanding of what community development means has changed considerably over time. Conflict prevention and mitigation is, for most companies, a relatively new item on the agenda.
 
An increasingly large group of extractive sector companies have started to think more strategically about community or social investment as a way of not only “doing good” but also creating the type of operating environment which is conducive to business. The idea is that good business for the company is also good business for the local community, which is self-reinforcing, and that gaining the social license as well as the government permit to operate, is a standard requirement in the modern business world.
 
This strategic community investment, as it is often called, is focused on sustainable community development. It is more complex and more difficult to implement than corporate philanthropy, but, done well, its effects can be considerably longer lasting and more in line with both company and community needs. It also provides more flexibility for considering issues surrounding conflict in terms of program design. Five key points for practitioners to keep in mind when practicing strategic community investment are:
 
·         Community Development always has the potential to cause conflict so ensure that, at a minimum, your design is conflict-aware.
·         Engage your stakeholders. Involve them in participatory processes which build trust and involve them in both the design and implementation of your projects.
·         Implementing just any community development is not always good for communities or for your company. Effective community development is conflict-aware, participatory, based on a systematic identification of needs and opportunities and strategic to the business.
·         If you are operating in a conflict environment, you can often make a positive contribution to peace-building using indirect approaches through community development, thereby making your own business environment more stable.
·         Deal with company-induced conflict as quickly and transparently as possible to avoid escalation. Community development is no substitute for understanding and resolving grievances head-on.
 
Tools
This set of tools can be used by practitioners to understand and navigate conflict when designing and implementing community development initiatives around extractive projects. The tools fit into three broad categories:
 
1.       Conflict analysis tools: tools to help diagnose and understand existing and potential conflict;
2.       Community development tools: tools to design and implement community development initiatives that take conflict into account; and
3.       Dispute resolution tools: tools that help put in place systems that help mediate and resolve conflict
 
While some tensions and conflicts are unpredictable, many can be anticipated and understood through adequate contextual and social analysis. The following analytical process can help reveal how the causes of tension can be turned around to increase the positive connections among communities and groups which can, in turn, be critical in strengthening communities’ ability to manage conflict for peaceful change.
 
The tools presented in the report are as follows:
 
Conflict Analysis Tools
1.       Raising Team Awareness of Conflict Causes & Intervention Strategies
2.       Conflict Mapping – Channel Research
3.       Conflict Sensitivity Business Practice
4.       Stakeholder Identification and Mapping
5.       Actor Mapping
Community Development Tools
6.       Do No Harm Framework
7.       Using ESHIA results to identify potential conflict related community development programs
8.       Participatory Needs Assessment
9.       Community Environmental Monitoring
Dispute Resolution Tools
10.   Grievance Mechanism
11.   Alternative Dispute Resolution
 
An in depth explanation of these tools can be found in the Resources section of this brief. Additional tools to assist with the design of Community Development programs more generally can be found Here, along with associated guidance documents in this series.

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