Demystifying the Process: Influencing Social and Economic Decision Making In Oil and Gas Development Pandora Snethkamp, Ph.D Houston, TX Women in Energy Conference

Scope of SE Issues Traditionally SE issues include: –employment/labor management –subcontractor/local business management Scope expanded to include: –compensation –stakeholder consultation –mitigation of impacts and ongoing commitments to local communities

General Perceptions of Non- Traditional SE Responsibilities Responsibility of the government Tremendous pressure to minimize costs since no direct “value” to company The extent to which work is done is viewed as a cost of doing business Best viewed in terms of “risk assessment” primarily related to costs incurred as a result of construction/production delays

Stages in the Life-Cycle of a Project Upstream Country Entry (lease/exploration agreements) Exploration (seismic and exploratory drilling) Construction (pipelines, production facilities) Downstream Operations Abandonment

Origins of Socio-economic Actions Upstream Activities Mandatory - laws, regulations, negotiated agreements Mitigation-of-Impact Measures –Proactive –Passive Downstream Activities Discretionary or “Social Bonus”

Key Organizations/People Upstream Activity Country Entry Exploration Construction Downstream Organization Law Exploration HSE (esp. SE manager) Public Relations Prime Contractors In-country Organization

Chad Export Project Development of three field in SW Chad with a 1000 km + pipeline through Cameroon Construction cost estimated at 3.5 billion US dollars Infrastructure construction has just started with pipeline construction beginning in the Fall of 2001

Country Entry Base agreement(s) Foundation for all future activities Primarily based on mandatory requirements Often include provisions for: –compensation, land acquisition, employment, and business development Least input from individuals knowledgeable on SE Issues

Chad Export Project Country Entry Compensation and land acquisition –Governments responsible for freeing the land for Project land needs –Chad - Project paid all compensation –Cameroon - ROC paid all compensation Commitments to Public Road Improvements and Maintenance

Exploration Often associated with mini-environmental assessments (often in-house documents) Although recommended- social impact assessments may or may not be completed. Implementation of mandatory agreements and some mitigation measures Decisions concerning economic viability of Project and decision to proceed offers opportunity for significant inputs on SE issues

Pre-Construction Environmental Planning Major environmental assessments with SE component First real input from stakeholders, NGO’s Development/adoption of mitigation measures Discretionary/social bonus actions defined through public relations issues

World Bank Group Involvement Environmental review standards/review Revenue Management Plan Capacity Building Social Transparency/Standards through Operational Directives –Compensation and Resettlement –Indigenous Peoples Plan –Consultation

Resettlement Significant issue during siting of fixed facilities and pipeline corridor routing 30 families in OFDA in Chad, of whom half selected retraining Pipeline was routed to avoid all houses in through Cameroon and Chad

Compensation Principles Fair and transparent Required supplementary compensation in Cameroon Emphasis on in-kind compensation In-kind catalogs based on interviews with individuals eligible for compensation and included large number of items requested by women

Individual Compensation Individual compensation in cash and/or in- kind Approached as gender neutral Payments made directly to user Followed traditional patterns Cash and/or in-kind (+80% participation) Cash paid directly to user (provisions made to deposit funds in a banking facility)

Community Compensation All compensation will be in-kind. Provided for loss of access to land during life of project Non-timber forestry products Emphasis on items needed by community Initial consultation showing distinctive gender differences in preferred compensations (e.g., soccer fields vs. water supply)

Participatory Consultation in Cameroon Major program completed just prior to initiation of compensation activities Team of national and expat women and men Purpose: assess compensation rates and outstanding issues stakeholders, about half women 200+ village meetings, women focus groups

Monitoring Programs Project of monitoring of a wide variety of impacts to communities including food inflation using “bread basket of staples.” Project and Country Environmental Monitoring staff Contractor monitoring World Bank independent monitoring group

Implications for Women’s Issues Approach as “gender neutral.” General impacts, issues are predictable Go directly to key manger(s) Emphasize in early planning, country entry and pre-construction agreements through mandatory and/or revenue management measures As a mitigation measure, have a clear plan directly linked to Project impacts

Implications for Women’s Issues As a discretionary measure, health, education, and water resources are most traditionally funded There is a distinct preference for “things” without liability and/or long-term maintenance issues. Energy resources tend to be associated with the latter. Innovative partnerships should be pursued.