The success of a business can depend on its ability to communicate with the local community, both before operations begin and throughout the project. Companies that interact with local people should be able to respond to their concerns and needs and manage their expectations.
Addressing the issues often associated with resettlement
Involving local communities in development projects
Developing and maintaining good relationships
The pressures caused by growing urban centres
Anticipating and minimizing the possible undesirable effects of migration
Voluntary and involuntary resettlement
Oil and gas activities sometimes involve involuntary resettlement of people and/or their economic activities. Involuntary resettlement refers both to physical displacement (i.e. relocation or loss of shelter) and to economic displacement (i.e., loss of assets or access to assets that leads to loss of income sources or means of livelihood) of individuals/communities as a result of project-related activities. Voluntary resettlement can also create challenges both for companies and communities. Issues often associated with resettlement include: intensive public consultation; evaluation of potential effects on communities by loss/gain of household incomes; fair and transparent compensation for land and resources; and consideration of cumulative impacts if project development is phased. The early and careful assessment and siting of project components, and the minimization of land requirements, can significantly reduce the need for resettlement.
Further discussion on resettlement can be found in IPIECA's publication Indigenous Peoples and the oil and gas industry: context, issues and emerging good practice.
Free, prior and informed consent
Free, prior and informed consent (FPIC) is an issue, which is increasingly raised in relation to extractive industry projects on indigenous lands.
The principle of FPIC should be understood in relation to indigenous peoples claiming their rights to their lands and ancestral territories, as well as their rights to self-government. For advocates of FPIC, FPIC is seen as the exercise of these rights, and refers to a process whereby affected indigenous peoples freely have the choice, based on sufficient information concerning the benefits and disadvantages of the project, of whether and how these activities occur, according to their systems of customary decision-making. Specifically, FPIC means:
- Free – people are able to freely make decisions without coercion, intimidation or manipulation.
- Prior – sufficient time is allocated for people to be involved in the decision-making process before key project decisions are made and impacts occur.
- Informed – people are fully informed about the project and its potential impacts and benefits, and the various perspectives regarding the project (both positive and negative).
- Consent – there are effective processes for affected Indigenous Peoples to approve or withhold their consent, consistent with their decision-making processes, and that their decisions are respected and upheld.
Companies are more likely to thrive if they nurture their relationships with local communities, host governments, non-governmental organizations (NGOs) and security forces. Sharing information for mutual benefit helps to develop and maintain the good relationships that enable communities, countries and industry to thrive.
A company’s relationship with the local communities where it operates is especially important. An open dialogue, in which the company and the community feel able to voice their views freely, maximizes the likelihood that the company’s presence will have positive impacts for all.
As urban centres grow, the pressures increase on existing industrial facilities to reduce their environmental footprint or relocate altogether. Urban encroachment can bring added costs, increased risks and often unwanted public exposure. Managing these issues can be resource intensive if not undertaken early and often during the lifecycle of a facility.
IPIECA has developed a guide to assist members of IPIECA and their stakeholders to better understand and manage the risks associated with the social, political, environmental and economic impact of growing urban populations.
The start of new oil and gas operations can improve short and long term local employment prospects and create new business opportunities. However, it can also attract high levels of migration into the operations area, which can lead to conflict with the local community, pressure on community health and education provision, and environmental impacts.
Consulting with local communities helps companies to anticipate and minimize the possible undesirable effects of their operations. Social impact assessments help identify potential consequences and generate a management plan to mitigate these effects.
IPIECA has produced a guide that outlines the use of social impact assessments by the oil and gas industry. It provides managers of existing oil and gas operations, or new projects, with an understanding of how to make the best use of social impact assessments.