CommDev has developed this section in partnership with Business for Social Responsibility (BSR).
Executive Summary | Importance of Stakeholder Engagement | Stakeholder Engagement Throughout Project Cycle | How to Engage Stakeholders
Stakeholder engagement is vital to community development planning, implementation, and evaluation, ensuring that development projects are appropriate, effective, and sustainable. This section explores the importance of stakeholder engagement to development initiatives, the correlation of stakeholder engagement processes and development efforts with the cycle of extraction projects, and provides guidance on effective stakeholder mapping, initial and ongoing consultation, and engaging partners in creating financial sustainability.
This section also provides inks to additional tools and resources for engaging stakeholders in development.
THE IMPORTANCE OF STAKEHOLDER ENGAGEMENT
Stakeholder engagement refers to substantive, two-way dialogue between a company and its stakeholders. A stakeholder is anyone who may be affected by, or may affect a project. In the case of community development, stakeholders may include project donors, partner NGOs, government agencies, community participants and others. Engaging stakeholders can help to:
- Identify and prioritize community development needs and opportunities
- Identify potential positive or negative impacts from extractives operations that development projects may further leverage or help to mitigate
- Gather innovative ideas
- Identify community resources
- Encourage community member involvement in project design, implementation, and monitoring
- Identify and evaluate potential partners
- Monitor project impacts and ensure that development projects are meeting community expectations
This kind of participatory approach to community development requires an investment of company time and resources to be successful. For companies accustomed to traditional community investments such as local infrastructure or philanthropy, the required time commitment may feel burdensome. Ultimately, however, involving stakeholders in the planning, implementing, and evaluation phases is more likely to result in community development projects stakeholders perceive to be appropriate, effective, and sustainable.
Oil, gas and mining companies also engage stakeholders regarding their ongoing operations at the local level. Engaging those who can affect – or be affected by projects – in dialogue throughout the life of an operation is considered
international best practice and may be contractually required by host governments or lenders. Establishing and maintaining good relationships with communities and other key stakeholders is critical to a company’s efforts to earn its ‘social license to operate’ and may help to surface stakeholder issues, concerns before they become potential risks
A company’s community relations and community development efforts are often closely aligned. Positive community relations are the foundation of successful community development projects and may help to shape project design and foster constructive partnerships with stakeholders. Likewise, effective community development projects may provide a springboard for building and maintaining positive community relations.
STAKEHOLDER ENGAGEMENT THROUGHOUT THE PROJECT CYCLE
Figure 1 (below) depicts the key stakeholder engagement steps during each phase of the community development cycle. During the planning phase, the company should focus on identifying key stakeholders, the potential positive and negative impacts of the operation, community needs and existing community resources and assets. During the implementation phase, ongoing dialogue and participation is required to inform key decision making. In the monitoring and evaluation phase, the impact of projects should be assessed together with stakeholders and communicated along with lessons learned.
FIGURE 1: Stakeholder Engagement & Community Development
Although extractive companies will initiate and complete a number of local community development projects over the lifecycle of an operation, most of these efforts should map loosely to the cycle in the phases depicted below in Figure 2. Planning for development generally occurs prior to construction. Projects begin and are monitored during construction and operation. Evaluation and monitoring of long-term impact should be maintained during and after downsizing or closure.
FIGURE 2: Community Development Throughout the Project Cycle
- Stakeholder Mapping: Identify Who to Engage The first step to involving stakeholders in community development projects is identifying who to engage. Companies often use stakeholder maps to identify key stakeholders for consultation as an operation is developed. While mapping is a critical step to ensure stakeholders who are most likely to be impacted by or have the ability to impact an operation are identified, stakeholders such as potential project partners (who may not necessarily be impacted by the operation, should not be overlooked. It is also important to remember, however, that stakeholder maps represent the knowledge of their creators and constitute an initial hypothesis regarding an operation’s relationships to its stakeholders. It is imperative to conduct interviews with stakeholders to validate these assumptions and ensure that the full range of stakeholders has been accurately captured and to regularly assess the status of these relationships.
- Initial Consultation Initial consultation with stakeholders can take a variety of forms, such as:
- Structures for Ongoing Engagement in Community Development After initial stakeholder engagement to identify needs, opportunities, & assets, and design development projects, ongoing processes for engaging with stakeholders are needed to:
- Financing Community Development Community development can be financed in a number of different ways that ensure the availability of resources for development for individual projects and over the long term. These can include:
A more difficult task is defining the community who will benefit from development efforts. This is a crucial decision, and can consume a great of thinking and planning. Criteria that can be used to make such decisions include:
• Neighboring communities
• Particular ethnic or social communities
• The budget available for development
• Existing government, community, or partner development plans
These decisions should be made in consultation with an operation’s key stakeholders. However, companies can help by advocating for equity in distribution of benefits. It is also important to remember that there is a whole spectrum of ways companies can contribute to development, from infrastructure to workforce development to social development projects. Community expectations therefore may not be met through a single project but through the whole range of a company’s contributions.
• Community meetings
• One on one conversations with individual stakeholders
• Small group workshops
• Meetings with community organizations
• Surveys
Small group meetings can provide greater opportunity for dialogue and problem-solving, although large groups allow for better representation of community interests. Other key considerations during the consultation process include: conducting consultation in a culturally appropriate manner in the local language, and providing information in oral and visual format as well as written to accommodate different levels of literacy.
• Make key decisions about project direction & resource allocation
• Allow for ongoing stakeholder participation in implementation
• Build capacity
• Enhance transparency and communication
• Oversee project budgets
Mechanisms for engagement include:
• Multi-stakeholder community development committees/boards
• Project advisory committees
• Regular project update communications
• Information offices
• The creation of community trusts
• Endowing a community foundation
• Self-financing projects such as microcredit for small business development
• Co-financing with government, partners, and community members/ organizations
• Pooling resources with peer companies in the same region
Engaging stakeholders – from community members to partners – in creating and operating mechanisms for financing can increase transparency in the operation of development programs and enhance their confidence in the wise and sustainable investment of financial resources.
Related Items
Center for International Studies and Cooperation
CECI provides services to support development in many of the poorest countries on the planet and has done so for many years. It has mobilized thousands of mostly volunteer cooperants, providing them with proper supervision in the field, in partnership with local organizations. CECI has also mobilized major financial and material resources. It is recognized for its expertise in economic development, social development and democratic development.
Impact Alliance
The Impact Alliance is a global action network committed to strengthening the capacity of individuals and organizations to generate deep impact within the communities they serve. It is a dynamic space for partners and members to share, learn and collaborate to define and develop standards of excellence in the art and practice of capacity building.
Pact
Pact’s mission is to build empowered communities, effective governments and responsible private institutions that give people an opportunity for a better life. Pact achieves this by strengthening the capacity of organizations and institutions to be good service providers, represent their stakeholders, network with others for learning and knowledge sharing, and advocate for social, economic and environmental justice.
Knowledge Forum on Engaging the Community: Best Practices in Community Engagement
The purpose of this event was to bring together experts from academia, industry, government, and non-governmental organizations (NGOs) to discuss an important issue in business sustainability.
Building Consensus: History and Lessons from the Mesa de Diálogo y Consenso CAO-Cajamarca, Peru: Monograph 2 - The Independent Water Study (2002-2004)
This monograph is divided into two main chapters. The first provides the context and background information on the mine and community concerns about water issues. The second analyzes the major challenges that the Mesa, the water study team, and the CAO confronted during the water study process, the actions taken to overcome these challenges, and lessons learned during the process.Stakeholder Inclusion in Caspian Basin Natural Resource Management
Building Consensus: History and Lessons from the Mesa de Diálogo y Consenso CAO-Cajamarca, Peru
The Mesa de Diálogo y Consenso CAO-Cajamarca was convened to address and resolve conflicts between Yanacocha, the largest gold mine in Peru, and the surrounding communities affected by its operations. The Mesa sought consensus based solutions under a framework of good faith, cooperation, and tolerance.
Anglo American Socio-Economic Assessment Toolbox (SEAT): A Public Evaluation
SEAT represents an international best practice in sustainable community development: BSR believes SEAT represents industry best practice compared to analogous tools and processes across the industry. This assessment is based on findings from the interviews conducted with stakeholders in Australia, Brazil, China, Namibia, the United Kingdom and the United States, and supported by BSR’s own knowledge and experience in community development.The Oil Industry Experience: Technology Cooperation and Capacity Building
This publication, produced jointly with the United Nations Environment Programme, aims to demonstrate through actual experiences, the contribution of international and national petroleum industry partnerships in economic development and environmental protection through technology cooperation and capacity building.
Socio-Economic Assessment Toolbox (SEAT)
Improving the management of the social and economic impacts of significant mining and industrial operations has become an increasingly important public policy issue in recent years. It is a critical element in the sustainable development agenda. This manual provides a process designed to assist Extractive Industry operations to identify and manage their social and economic impacts (both positive and negative). It also provides guidance on how to improve overall social performance where this is necessary.
Stakeholder Engagement: A Good Practice Handbook for Companies Doing Business in Emerging Markets
This handbook aims to provide the reader with the good practice “essentials” for managing stakeholder relationships in a dynamic context, where unexpected events can and do occur, and facts on the ground change. The focus of this handbook is on stakeholder groups “external” to the core operation of the business, such as affected communities, local government authorities, non-governmental and other civil society organizations, local institutions and other interested or affected parties.
Crossing Borders: face-to-face with development initiatives
Crossing Borders brings business leaders face-to-face with local communities to listen and learn about how business impacts on, and interacts with, the local communities where they operate. The aim of the initiative is to highlight how business practices contribute to local development solutions and how business can grow more sustainably through profitable and successful partnerships with communities.
