To support local development, companies often rely on community-level foundations to channel and oversee funds. Community Foundations collect donations into a coordinated investment and grant-making facility committed to the social and economic development of a particular place or region. Given the many different models in existence, it is important to share experiences about the possible roles and structures of community foundations in varied contexts. CommDev seeks to share experience about the different roles and structures of foundations established to ensure that community development is implemented with win-win benefits and is sustainable.
Companies around the world engage in community investment (CI) efforts as a way to promote local development and benefit stakeholders in their areas of operation. For the private sector, community investment—a subset of overall social performance and corporate responsibility—is linked to competitiveness and to creating an environment conducive to private investment while promoting local development. In contexts where social risks and expectations are high, benefits channeled effectively through community investment programs can help companies gain a social license to operate, access land, reduce project and reputational risks, boost productivity, meet government requirements or global standards, and/or successfully compete for the next venture.
Good practice in this area continues to evolve. Companies are moving away from philanthropic donations and ad hoc practices to more sophisticated and strategic ways of planning and delivering their community investment programs. There is greater emphasis on the business case—on creating “shared value” by aligning business goals and competencies with the development priorities of local stakeholders. Other trends include a focus on building social capital and local ownership through multi-stakeholder processes; factoring sustainability and handover strategies into project design; and measuring and communicating results to optimize the business value derived from CSR.
In many communities, education remains a significant development challenge in terms of access and quality. As such, many companies invest in local schools and other education programs—vocational, adult literacy, health awareness. One of the most valuable assets a company can bring into an isolated community is information, knowledge, skills and outside connections. Companies that work collaboratively with community groups to identify creative, sustainable ways to share those assets will likely improve community welfare as well as corporate relationships with diverse local leaders. Some communities request companies to provide services more closely related to small business development, including micro-credit programs. This in turn helps companies take advantage of local capacities for sustainable operations.
The development and operation of private sector projects across a range of industries has the potential to adversely impact fish resources and peoples‟ access to and use of these resources. In particular, project activities involving the development of infrastructure ( shoreline and off-shore), and/or increased shipping traffic inevitably impact upon fish habitats and resources, small-scale subsistence and artisanal fisheries exploiting these resources, and the fishing-based livelihoods of communities within the project-affected area, thereby require the Project to implement measures to avoid, minimize or mitigate these impacts.
Private sector activities often represent both risks and opportunities for community health and safety. Companies typically bring access to improved medical supplies and counseling to rural communities. But in addition, many projects can attract ills such as drugs, prostitution and HIV/AIDs. Some companies invest heavily in awareness raising and procedures to limit occupation risk while also conducting campaigns to reduce secondary risks such as transport accidents and poor sanitation. Adding to this complex landscape is the typical population explosion that rural communities endure during certain projects. Such influxes exacerbate social dilemmas. Ironically, socially conscious companies that bring new hospitals to isolated regions in an effort to be good neighbors may find that they have further induced the immigration of outsiders by offering rare services and then the whole community bears the consequences. Company contributions to national and local revenue may be used by governments to improve the quality and reach of health services.
In the field of human rights and business, states have a duty to protect human rights including providing access to justice for victims of violations. Companies themselves have the responsibility to respect human rights within their sphere of influence. Responsible companies consider the (potential) negative and positive implications of their activities on the human rights of stakeholders, including employees, shareholders, customers and communities in all aspects of operations. This applies to an extent that goes beyond ordinary statutory obligations. It requires a due diligence process, which guides companies in becoming aware of, preventing and managing human rights impacts within their sphere of influence.
Indigenous or tribal people, are often characterized by strong attachment to the land; dependence on renewable natural resources, subsistence practices, distinct languages, and cultures; historical identities as distinct peoples; and, often, mistrust of outsiders. The challenge for companies implementing large footprint projects and other actors is to incorporate such diversity of culture, language, ecological adaptation, and history into development planning. Cultural barriers make it especially difficult for the outsider to communicate with indigenous groups, understand their institutions, or discern their needs. The characteristics of indigenous groups make participatory approaches especially critical to safeguarding their interests in the development process. Such approaches call for changes in attitudes, policies, and legislation to address the key issues: recognizing rights to land and natural resources, ensuring culturally appropriate procedures for consultation and communication, and building on the strengths of traditional lifestyles and institutions for decision-making.
Demand for labor is seen by companies as one of their main contributions to local livelihoods, however, the pursuit of economic growth through employment creation and income generation should be balanced with protection for basic rights of workers. Additional labor challenges include occupational health and safety, child labor, opportunities for women, and equitable pay. The government plays an important role in defining and regulating fair and safe labor practices even in remote areas. Increasingly companies are investing in developing a local labor force and supply chain that can serve the company over the longer-term (rather than relying mostly on ex-patriot employees and suppliers). This shift requires accompanying capacity building among the local community in technical skills and business development, as well as among company staff to better understand and appreciate the local culture and context.
Large-scale land acquisitions have become a major topic of policy discussion in recent years.
There are significant risks associated with acquisition of land for large scale projects and could result in major conflicts with local stakeholders if not managed well. Land conflicts often have extensive negative effects on economic, social, spatial and ecological development. This is especially true in developing countries and countries in transition, where land market institutions are weak, opportunities for economic gain and illegal action are widespread and many poor people lack access to land. Projects requiring land acquisition and resettlement of communities to allow for project development typically develop a Resettlement Action Plan, which outlines plans for the replacement of housing, infrastructure, services, and utilities and the restoration of displaced households' livelihoods.
Conflict is frequently a feature around large footprint projects because of the disruption and change that these projects can generate in societies and the natural environment. Private sector's investments can also exacerbate or trigger latent conflict. Project related mitigation and community investment programs, intended to be positive, can unearth conflict because of perceptions of uneven distribution of benefits (“winners and losers”). The design and implementation of sustainable community investment and related programs in the context of large footprint project development requires careful analysis and implementation to optimize positive benefits and avoid generation of additional strife and conflict. The right decisions and actions on community relations, social investment, local hiring, environmental protection, and security arrangements can contribute to economic growth and prosperity in affected communities.
Partnerships involving public and private actors are becoming key institutional pathways for enabling international development and the delivery of public goods. Companies, government, civil society and donors, are piloting ways to further community development without circumventing local government and traditional leaders. This involves capacity building for local government in areas such as: revenue management, participatory planning and monitoring, transparency and communications. Providing evidence not only of the viability of partnerships but also that partnership approaches can provide substantially better outcomes for all parties than can more traditional approaches to development or corporate social responsibility.
Private sector has become increasingly aware of the potential for impact on local economic indicators through various means of operations. Local procurement offers a natural intersection between continued company operations and the opportunities it can provide for local business sector. Also known as business linkages, local supplier development, local content or local sourcing, is increasingly favored as a strategic business tool by international companies.
Local procurement requires a real commitment from the company to work with and build capacity of local suppliers in a way that enables them to become more competitive and profitable. Typically these suppliers will be small and medium enterprises (SMEs). To compete for bidding and contracting opportunities local SMEs will often need training to bring them up to the required operational, safety, environmental and technical standards.
Effective M & E of community development programs can improve management, accountability, participation, trust, learning, efficiency and development impacts. Monitoring is as much about building relationships, trust and mutual learning as it is about collecting and reporting data. Participatory monitoring--engaging diverse local stakeholders throughout the community development program--is an effective way to institutionalize local participation and improve local impacts. This potentially benefits the company, through improved local relations and productivity, as much as the community. Ideally, participation will begin in the design and planning phases of a community development intervention and be sustained over time through monitoring.
Today, the term “stakeholder engagement” is emerging as a means of describing a broader, more inclusive, and continuous process between a company and those potentially impacted that encompasses a range of activities and approaches, and spans the entire life of a project. The change reflects broader changes in the business and financial worlds, which increasingly recognize the business and reputational risks that come from poor stakeholder relations, and place a growing emphasis on corporate social responsibility, transparency and reporting. In this context, good stakeholder relations are a prerequisite for good risk management.
Many countries rely on revenues collected from extractive industries in the form of taxes, royalties and production shares. For some states these revenues can be the sole source of funding for social development and economic growth. Unfortunately, in some countries, the lack of accountability and transparency in revenue management can exacerbate poor governance, leading to corruption, conflict and increasing inequality. Campaigns such as the Extractive Industry Transparency Initiative combined with more inclusive governing approaches, such as participatory budgeting, show promise for improving the impact that extractive revenues have on community welfare. Capacity building for government, civil society including media, and companies is essential to take advantage of finite extractive resources.
Access to water is recognized as a universal human right. Globally, water is one of the most critical sustainability issues facing our planet. Ineffective management of water resources by the private sector companies can result in interruption of natural water cycles, direct impacts to ecosystems, biodiversity, and increase in competition for access with other water users; and can imperil local water endowments upon which local communities rely. Sustainable water management and access – by companies, communities and local governments – requires raising the awareness and building the capacity of all parties to collaborate in order to design and implement integrated development plans to protect and maximize this critical resource.