Quite often, communities which host infrastructure and natural resource projects have unmet social needs. Therefore, it is essential for businesses and investors to create and implement programs which address social issues and yield tangible community benefits. These include efforts centered on job creation, local supplier development, and local government capacity building. Identifying and recognizing the concerns of the community is an essential component of managing expectations and reassuring the local communities that they will not be excluded from the benefits that come from the development of their lands.
IFC’s Sustainable Infrastructure Advisory follows a proven set of good practice principles to develop community investment strategies. One critical component of this is stakeholder engagement that helps build an understanding of concerns and priorities across the diverse spectrum of people that make up the fabric of a project’s host communities. These priorities need to be analyzed against a project’s policies and commitments, business objectives and risks, and the environmental and social impacts. Once this step is completed, the goals and objectives of a company’s community investment strategy can be established.
There has been an increased focus on the social license which makes the appropriate and effective implementation of community investment efforts even more critical. The experiences from various industries have demonstrated that investment in the community, just like any other business function, should be approached strategically. It requires a thorough understanding of the local context and stakeholders as well as an examination of the business case and the company’s values and culture. Also invaluable is the selection of community investment programs and implementation mechanisms that make the most sense for the given context and business model.
The Sustainable Infrastructure Advisory team works with clients to think through the implementation techniques. This proactive approach is critical in helping companies manage potential social risks. Key activities centered around this could include the organization of community teams, the selection of an implementation model, the development of a partnership strategy and the establishment of M&E systems.
In Ghana, IFC worked with Newmont Mining, one of the largest gold mining firms in the world, to create a safer operating environment. We worked through strategic committees to engage in proactive stakeholder management. Community grievances decreased, leading to savings in resources and time spent to resolve conflicts. As a result of this, Newmont Mining had an annual expenditure on security which was $1.6 million less than other mining companies in the country.
IFC worked with Cairn India, an oil and gas company with business operations in the South Asia region to provide agricultural information to thousands of remote farmer families living along its pipeline route. Farmers began communicating with representatives of the company by sending phone text messages. Over the course of a single year, representatives from Cairn India received information about five separate cases of pipeline sabotage. It enabled the company to act quickly and avoid pipeline damage which could have resulted in environmental damage and the interruption of crude flow at the cost of $2 million a day.
In Myanmar, IFC’s Sustainable Infrastructure Advisory team worked with a team from our Environmental, Social & Governance department to deliver a benefit-sharing training program to thirty participants from the public and private sectors.
In India, we worked with the paper manufacturer, JK Paper Ltd to develop a community investment and farmer engagement strategy. This helped to secure access to 93,000 hectares of land in surrounding communities to meet the company’s future raw materials needs. We also piloted a capacity building program which led to an action plan establishing strong links between the company’s Corporate Social Responsibility and Extension teams.