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Rules of engagement

Nov 2008

Source: Oilweek Magazine  

A new study provides solid waypoints for navigating the soft issues of community relations 

by Paul Stastny

Twentieth-century French philosopher Gilles Deleuz said, “tyranny is a regime in which there are many laws and few institutions, while democracy has many institutions and few laws.” Corporate social responsibility has yet to emerge as something akin to the institution of marriage. But clearly, the hit and run, do your business, and disappear approach isn´t the way of the future.

In the oil and gas business, the overused phrase “social licence to operate” points out the industry´s dependence on land access and what that means. There may be laws to ensure access, but without the goodwill of the community, the process can become long and costly with uncertain results.

Corporations invest, barter, educate, partner, plead, and fight with communities in order to work in them-with varying success. Each company takes its best shot at community relations based on what has worked in the past, what it feels will work in the future, and what others are doing. Certain themes have surfaced, but there is little solid understanding to guide corporations through the soft issues of social responsibility.

Seeing this relative void in research, the University of Calgary´s Haskayne School of Business made a study of community engagement. Its report, Engaging the Community, explores the complex decisions around who to engage, how, and with what likely result.

“We did a systematic review of all the current knowledge that we have-academic and practitioner-based on an analysis of over 200 sources,” says the study´s team leader, Dr. Frances Bowen, associate professor of strategy and global management area and director of the International Institute for Resource Industries and Sustainability Studies.

The study

As with any academic study worth its salt, Engaging the Community begins by defining its terms. “Community” isn´t as straightforward as it sounds. The study identifies three ways of looking at community, essentially as individuals linked by:
• Geography-neighbours, community associations, etc.
• Interaction-online networks, sports leagues, and groups brought together by regularly interaction.
• Identity-environmental activists, Aboriginal groups, and others that share common beliefs, values, or experiences.
The meat and potatoes of the study is its “continuum of community engagement.” It identifies three waypoints on this continuum starting with transactional engagement (“Giving Back”), through transitional (“Building Bridges”) to transformational engagement (“Changing Society”).

Under the heading of “Giving Back,” transactional is the simplest form of community engagement. An example is an oil company building an ice rink for a community. There are an infinite number of permutations of this form of philanthropy, which typically involves one-way communication.

“Building Bridges” is a more demanding level of engagement. Transitional engagement has become common on projects that require public consultations. The Mackenzie Gas Project is an elaborate example of this type of engagement that relies on two-way communication.

At the top of the continuum is the most sophisticated form of community relations, transformational engagement, involving extensive interactions with strategic community partners over time.

“This is different because it´s a genuine attempt to transform society,” Bowen says. “It´s about shared learning and shared management of projects. It´s quite an extreme form of engaging with the community.”

Transformational engagement is a difficult concept to see in practice and perhaps even to grasp. The example Bowen uses is the relationship between Royal Dutch/Shell plc and Living Earth Foundation, an environmental education and advocacy group based in the United Kingdom. Living Earth works on a unique portfolio of projects that have set new standards in education, environment, and community development.

Shell´s involvement with this non-governmental organization (NGO) is now approaching on two decades. Years ago, Shell realized it was in the building bridges mode and was running into the barriers inherent to that form of engagement. Since transitional relationships are primarily based on reciprocity, one stumbling block was the radical disparity of resources available to Shell versus the NGO.

“In a transformational world, relationships are built on trust and a history of doing things together,” Bowen explains. “You can take a little more for granted in the relationship. It is joint project management, joint decision making.”

While it is tempting to assume that transformational engagement is the most effective form of community engagement, a key finding of the study is that despite growing pressure for companies to strive towards transformational engagement, giving back through monetary donations, time, and employee skills can be a successful strategy, with a payback that is easier to measure than some of the more involved forms of engagement.

More important, according to the study, is to tailor the type of engagement to the strategic objectives, and to be clear about which strategy a company is using.

If a company´s talk is of “changing society,” while it actually only pushes out a one-way communications strategy, the results are often disappointing to both community and company.

“You can end up with a lot of miscommunication when companies think they are doing something proactive, but are only comfortable giving money or time,” Bowen explains. “The community then expects a little more and experiences it as a one-off gesture or as buying their way into the community.”

Changing expectations

Sheila Carruthers, owner of corporate responsibility consulting firm CSR Strategies Inc., says community expectations are generally rising. Communities are recognizing their rights, there is more banding together of people in farming areas and, in general, a greater willingness to hold companies accountable for what they do in communities.

One upshot of this trend is that if a community relations strategy misses its mark, the public tends to hear about it.

“If its community engagement strategy is effective, companies typically are not in the public eye,” Carruthers says. “This is because they nurture their relationships with their communities, make themselves available, and clip the issues in the bud before they become more public.”

Sylvia Holcomb, senior affiliate with Implementation and Advisory Group Ltd., a company that consults in community relations, also notes that community expectations have changed. In turn, companies have to adapt to this change.

“It´s been a learning process for both communities and companies,” she says. “In the past, companies would come into a community and almost expect a marching band.”

Conversely, Holcomb adds, a company´s announcement to enter a community may have been met with silence, misinterpreted by companies as flushed anticipation, only to be followed by a NIMBY (Not In My Back Yard) protest.

“In the last decade, communities and companies both have come to a better sense of the appropriateness of their mutual involvement. It´s a two-way process.”

Government requirements for consultation on certain projects with the potential to infringe on a community´s quality of life have provided some of the impetus for these changes. But companies, in general, genuinely want to be part of the community where they operate.

Holcomb maintains that community consultation is the only way oil and gas companies will be successful. “The difference is that today companies do their homework before they announce or make their entry into a community,” she says.

While large companies with well-staffed community relations teams may seemingly have the advantage in this game, the U of C´s Bowen points out that smaller companies are often more embedded in communities than large companies.

“Small companies may well be doing more building bridges sort of activity without even really trumpeting up. This is because their employees may live locally and everybody knows each other and that sort of thing,” Bowen says.

By and large, the two-way communications approach, the “building bridges” form of community engagement, seems to be winning out in the oil patch over the “giving back” strategy.

Mark Brownlie, sustainability consultant and principal of Responsibility Matters Inc., says community-needs assessments and consultation with NGOs, First Nations, government officials, community leaders, and economic development bodies are becoming more common.

“Community building has moved on from philanthropy only, to something more responsive. I don´t know how many companies have community advisory panels, but there are some now,” he says.

While these advisory panels are made up of experts, Brownlie adds, they could be even more useful if they were to include a few regular citizens as well.

So as the oil patch in western Canada appears to have moved to a “transitional” approach to community engagement, it may be “transitional” in more ways than one. As community expectations change, companies may have to move more towards a “transformational” strategy where the benefits of the development are shared between the community and the firm.


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