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Management
Functions
What’s in this section?
Coordinate activities and assign
overall responsibility
Hire, train, and deploy the right personnel
Create clear reporting lines between the
community liaison function and senior
management
Communicate the strategy internally
Develop and maintain a stakeholder
database
Develop and maintain a commitments
register
Stay in control of “third-party” engagement
Manage contractor risks
Track changes in the quality of
stakeholder relationships
Stakeholder engagement should
be managed as one would manage
any other business function.
(^100) STAKEHOLDER ENGAGEMENT: PART ONE
■ (^) ongoing stakeholder analysis and the assessment of stakeholder concerns from a “risk” perspective ■ (^) the hiring and training of community liaison officers ■ (^) consultation processes designed to meet the company’s own policies and/or compliance requirements of lenders and regulators ■ (^) input and suggestions received from stakeholders on project design and proposed mitigation measures ■ (^) grievance mechanisms that capture and respond to stakeholder concerns ■ (^) the involvement of local stakeholders in project monitoring ■ (^) reporting information to stakeholders
(Part Two of this handbook identifies some of the key management tasks for each phase of the project cycle.)
Most importantly, stakeholder engagement should be managed as one would manage any other business function — with clearly defined objectives and targets, professional, dedicated staff, established timelines and budget, and senior management responsibility and oversight. Some good practice principles for managing stakeholder engagement processes are given below.
✔ Coordinate activities and assign overall responsibility
Over the life of the project, affected communities and other inter- ested parties will likely interact with a variety of representatives from within the project company. It is essential that this diverse set of engagement activities be coordinated. Consistency of information
Consistency of information conveyed to
stakeholders by different teams or business
units within the company is important.
MANAGEMENT FUNCTIONS 101
conveyed to stakeholders by different teams or business units within the company is important, as is keeping track of such activities in order to reduce inefficiencies, confusion, and conflicting messages or commitments. This is usually best achieved by giving a senior manager overall responsibility for stakeholder engagement. This high-level oversight not only helps to underscore the importance of the function, but is needed in order to effectively implement the strategy and coordinate the various activities across the company.
✔ Hire, train, and deploy the right personnel
Initial stakeholder analysis will provide you with a sense of the type of stakeholder groups the project will need to engage during dif- ferent phases of the project cycle. Engaging different types of stakeholders requires different skills and staffing considerations. For example, engaging with local communities might require one or more field-based community liaison officers, whereas engage- ment with government officials or local, national, and international organizations will likely require different skill sets and more direct involvement of senior managers. For projects where the stakeholder engagement process is likely to be complex or sensitive, consider bringing in social advisors or other expert staff to help design and facilitate the process and assist with participatory methodologies and other specialized techniques.
When hiring community liaison staff, consider people who will be able to develop and maintain good working relationships with the
When hiring community liaison staff,
consider people who will be able to
develop and maintain good working
relationships with the local communities.
MANAGEMENT FUNCTIONS 103
✔ Communicate the strategy internally
If stakeholder engagement is to be truly integrated into day-to-day business operations, the concept needs to be “owned” by all staff. Every business unit needs to be aware of the strategy and under- stand why the company is committing time and resources to this endeavor. Too often, stakeholder engagement programs are compartmentalized within the company and regarded as a “soft concept” that is the domain of a few community liaison staff. Avoiding this fate means taking the time to communicate the message internally. By clarifying the links between stakeholder engagement and environmental and social performance – as well as its potential to impact on reputation and project outcomes – you can raise awareness that stakeholder relations is a collective responsibility and give staff across the company an incentive to serve as “ambassadors” in helping to cultivate and maintain good working relationships with external stakeholders.
✔ Develop and maintain a stakeholder database
A current and regularly updated stakeholder engagement data- base can be a useful management tool. Ideally, it should contain details of the various stakeholder groups (their representatives, interests and concerns); details of any consultations held (including when these took place, the topics discussed and results); any commitments made by the project company, both those outstanding and those already delivered; and a record of specific grievances lodged and the status of their resolution. Maintaining such a database is important for continuity purposes, especially in the transitions between project phases where personnel changes are common. It can also come in handy for reporting purposes or when a company might need to demonstrate the adequacy of its consultation process.
104 STAKEHOLDER ENGAGEMENT: PART ONE
✔ Develop and maintain a commitments register
Doing what you say you will do is essential when it comes to build- ing trust and establishing good working relationships with stake- holders. Timely follow-through requires keeping track of all the various commitments made to stakeholder groups (affected com- munities, local government, lenders, NGOs, or other organizations) over the life of the project. Typically, the number of commitments made to stakeholders is highest in the early phases of the project around the scoping and environmental and social assessment processes, and relating to grievances and monitoring of impacts during construction. A “commitments register” has emerged as a good practice management tool to record and follow up on a company’s many environmental and social commitments made
SASOL, MOZAMBIQUE:
ESTABLISHMENT OF A STAKEHOLDER
DATABASE FOR THE EIA PROCESS
I
n conjunction with gaining rights to off-shore hydrocarbon exploration in Mozambique, Sasol developed an initial list of stakeholders and discussed it with key government agencies. Based on the feedback received, an expanded stakeholder list was developed and contacted by the company. This became an iterative process, with additional contacts being either sup- plied by existing contacts or joining the process in response to media advertisements or public meetings. The expanded list was converted into a database containing names, affiliations, contact numbers, and e-mail addresses (where applicable). The stakeholder database became a very useful company tool, used throughout the public engagement process to ensure ongoing communication with all interested and affected parties.
(^106) STAKEHOLDER ENGAGEMENT: PART ONE
during the consultation process and contained in the various environmental and social assessment documentation and action plans. It should contain timeframes for action and, importantly, assign responsibility to the appropriate individuals, business units or implementing third party (which in some cases may be the contractor, an NGO or local government agency).
✔ Stay in control of “third-party” engagement
Part of managing stakeholder relationships is keeping track of who is speaking on the project’s behalf and what is being said by third parties. External specialists and consultants, as well as government regulators, and NGOs and contractors working with the project company, may be required to interact with project stakeholders. There are times when such third-party engagement involves risks that will need to be actively managed. These include disclosure of project information that is inconsistent with that disseminated by the company; consultation activities that are culturally inappropriate or that exclude certain stakeholder groups; the raising of false expectations about project benefits (e.g., compensation levels and employment opportunities); the making of commitments on behalf of the company without having obtained prior agreement; and the failure to implement impact mitigation measures or community development projects to the satisfaction of the intended beneficiaries.
Part of managing stakeholder
relationships is keeping track of who
is speaking on the project’s behalf
and what is being said by third parties.
MANAGEMENT FUNCTIONS 107
One way to reduce such risks is to have project staff present during these interactions, at least initially, and on a periodic basis there- after. Where feasible, written terms of reference or contractual agreements can be helpful in clarifying the roles of third parties up front, while regular monitoring by project staff once activities are underway is an important means of oversight and quality assurance.
✔ Manage contractor risk
Perhaps more than other third parties, contractors have the potential to directly impact stakeholder relations through their behavior and day-to-day interactions with the local population. During the con- struction phase, contractors and their sub-contractors can have more frequent contact with local stakeholders than do project staff, and affected communities often do not make a distinction between contractors and the company – both are viewed as part of the “proj- ect.” Contractor actions can therefore pose a risk for companies that should be managed from the outset. This involves selecting contrac- tors that have the capability to deal effectively with stakeholders and putting such requirements into their contract. Contractual require- ments might include having their own mechanism for managing grievances, their own manager of community relations, and providing training for their staff and sub-contractors on how to interact with the local population. Company staff should be deployed to monitor contractor actions on the ground and to assist in resolving any complaints from project stakeholders about contractors.
✔ Track changes in the quality
of stakeholder relationships
Because the quality of relationships can change over time and the frequency or intensity of engagement varies during different phases of a project, it might be useful to periodically “test the temperature” of your key stakeholder groups and their level of satisfaction with
MANAGEMENT FUNCTIONS 109
LONMIN, SOUTH AFRICA:
STRENGTHENING COMPANY
MANAGEMENT OF STAKEHOLDER RELATIONS
L
onmin, a large platinum mining company based in South Africa has had an historically poor relationship with its key stakehold- ers. However, since 2004 the company has taken active steps to try to transform these relationships and strengthen the company’s management of stakeholder issues. Key elements of Lonmin’s strategy include:
- Contracting an experienced international consultancy to facili- tate the establishment and operation of a Stakeholder Engagement Forum
- Providing Lonmin staff and community members with the nec- essary capacity-building to effectively participate in this Forum
- Commissioning independent “Community Perception Surveys” annually to gauge satisfaction among key stakeholder sub- groupings in respect to Lonmin’s activities
- Publicly disclosing and disseminating the results of these perception surveys
- Publishing a monthly newspaper focusing on tangible progress and results emanating from the stakeholder engagement process
These efforts have led to significant improvements in community support for Lonmin’s activities to date. In addition, the company has made a concerted effort to improve its internal capacity to engage with key stakeholders and to more clearly define and focus these interactions to ensure consistent communication. This has entailed appointing an additional Relationship Manager, clarifying lines of communication both internally and externally, and identifying responsible managers within the company to manage community engagement activities.
