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FAO/UNEP/UN-Energy Bioenergy Decision Support Tool -
MODULE 6: People and Processes
Community Engagement in Projects
Medium to large-scale bioenergy projects and programmes will
inevitably have signifcant implications for local communities that
live in the vicinity of the project or are otherwise directly affected
by project operations. The affected communities can face diffcul-
ties in having their voice heard in decision-making processes.
Meaningful engagement of local communities is not only in the
interest of the affected communities; failure to engage communi-
ties can lead to real costs to project developers such as when
local opposition causes delays to project implementation or
damages the reputation of project developers (examples of
the types of risks mitigated are given in Box 2). But community
engagement is more than a means of reducing risks; it can help
in identifying, preventing and mitigating environmental and social
impacts that can threaten project viability, building upon local
communities’ unique understanding of the local environment and
social context. Furthermore, project proponents can enhance
their reputation by their adoption of practices of corporate social
responsibility (CSR).
While community engagement is referred to or even required by
many national laws and international good practice by public
and private lending agencies as well as large corporations,
practical guidance is not abundant. Without clear rules on the
manner in which engagement is conducted, communities often
do not understand how the process works and cannot therefore
participate as effectively as they should. WRI (2009) identifes
seven principles for effective community engagement:
1. Prepare communities before engaging.
2. Determine what level of engagement is needed.
3. Integrate community engagement into each phase of the
project cycle.
4. Include traditionally excluded stakeholders.
5. Gain free, prior and informed consent.
6. Resolve community grievances through dialogue.
7. Promote participatory monitoring by local communities.
In many rural communities, illiteracy is still common, and the
engagement and eventual negotiation processes must take
such constraints into account and identify appropriate means of
communication and reaching agreements. Communities are not
necessarily homogeneous and confict between different parts of
the community may be common. Engagement processes must
identify where such conficts exist and design mechanisms that
can assist confict management at the local level. The seven steps
are discussed now.
PREPARE COMMUNITIES BEFORE ENGAGING
Engagement can only be meaningful if the right people are
engaged and if they are informed about the process and the full
set of likely impacts. Hence, two major activities must be pursued
at the outset of project identifcation:
Identify Decision-Makers:
Communities may have multiple
leaders, including local politicians, civil servants and tradi-
tional and religious leaders. Not all of these will represent the
interests of all groups in the community. Project proponents
should therefore conduct participatory mapping to identify
different interests in the community, encourage community
leaders to discuss with stakeholders throughout the process,
and continue to engage with multiple leaders in the commu-
nity to avoid exclusion.
• Provide access to information:
Beyond disclosing full infor-
mation available at different stages of the project preparation
process, it may also be appropriate and necessary to
train community representatives, for instance in social and
environmental impact assessment, to allow them to make
informed decisions. In large projects it may be appropriate to
provide access to independent legal and technical advisers.
DETERMINE LEVEL OF ENGAGEMENT
The level of engagement and the respective investment in
managing community engagement should be commensurate
with the size of the project and the anticipated level and nature of
the impacts on local communities. In order to gauge the extent
of the latter, a thorough assessment should be carried out to
ascertain that no signifcant groups are excluded from the analysis
and that no signifcant risks are overlooked. Figure 3 depicts the
spectrum of community engagement approaches ranging from
informing communities, to consulting and negotiating with them.
The process and outcome of these different approaches differ
substantially, as do the fnancial and time implications. One-way
communication may be cheaper and faster in the short term, but
two-way communication systems can deliver community support
for the project, improve the identifcation and management of
environmental and social risks and ensure that compensation
mechanisms and community development programmes closely
match community needs and aspirations.
Informing communities involves the communication of decisions
already taken to those communities affected by the decisions.
Consulting communities requires that project proponents provide
access to information before formal engagement, that communi-
ties are engaged before the decision is taken and that proponents
Box 2: Project Risks Mitigated by Community Engagement
Effective community engagement can help identify, prevent, mitigate, and manage a variety of project risks:
• Financing Risk: Financial institutions and investors may delay fnancing, require more conditions or decide not to participate.
• Construction Risk: The proponent may not be able to complete the project on time or budget.
• Operational Risk: The proponent may not be able to access necessary inputs, produce suffcient output or sell at a suffcient
price, which can disrupt operations.
• Reputational Risk: The project may harm the proponent’s or fnancial institutions’ brand identity, which can translate into loss of
market value.
• Credit/Corporate Risk: Delays or interruptions may reduce the proponent’s proftability and asset values, decreasing the propo-
nent’s stock value, lowering its credit rating, and raising the cost of borrowing.
• Host Government Risk: The host government may withdraw permits and licenses, commence enforcement actions, impose civil
or criminal penalties on the proponent, or tighten requirements.
• Host Country Political Risk: Political forces in the host country may threaten the project.
Source: Herz et al, 2007