1. 1 Managing risk and maintaining license to operate: Participatory planning and monitoring in the extractive in the extractive industries A training module

2. 2 Training module overview Session 1: Participatory approaches to corporate-community relations in the extractive industries: context, concepts, benefits and risks Session 2: Participatory planning and monitoring tools and mechanisms for the project cycle Session 3: Key focus areas, challenges and success factors Session 4: Understanding diverse perspectives

3. 3 Participatory planning and monitoring Session 1 Participatory approaches to corporate-community relations in the extractive industries: context, concepts, benefits and risks

4. 4 Key concepts for a shared vocabulary What do the following terms mean to you? Participation Engagement Accountability Social license to operate

5. 5 The natural resource context GroupsQuestions for discussion Community representatives What are common problems for communities? What kinds of changes tend to occur in communities around extractive operations? Company representatives Other stakeholders (eg donors, INGOs) What are common social, political and environmental characteristics of localities where extractive companies have operations? Government (local and national)

6. 6 Common characteristics of the local context Weak local governance Legacy of conflict Struggles over distribution of the benefits of extractive development Uncertain land tenure Perceived lack of legitimacy of the laws and regulations which govern MNC activity Varied institutions of culture and history in isolated areas Complicated network of relationships within communities Population migration into economic zone of opportunity Companies as de facto governance and/or service providers

7. 7 Implications for companies, communities and governments Participatory approaches mean a shift in: Corporate culture and roles Strategic thinking Business practices and communication To achieve: Jointly defined problem and solution Shared resources and responsibilities Leveraged cash, expertise, systems and networks

8. 8 Features of participatory approaches Source of expertise Time scale of parties Accommodates changing conditions, changing needs, priorities and changing expectations. Actions and implementation are collaborative; responsibility is shared Long term process, but indicators of progress and co-monitoring can demonstrate achievements.

9. 9 Spectrum of Community-Company Engagement

10. 10 Participatory approaches How might a participatory approach help you in your work? How might a participatory approach hinder you in your work?

11. 11 Benefits and risks What potential benefits and risks can you see from taking a participatory approach: - From a company perspective? - From a community perspective?

12. 12 Potential benefits for companies Improve / maintain local social license to operate Enhance employee morale, satisfaction, motivation and retention Reduce risk of conflict and delays / ensure stable operating environment Prospect of faster permitting and approvals Reduce risk of global criticism and reputational damage Help obtain project financing Ensure more effective use of corporate resources Help meet regulatory requirements for local benefit from extraction Local knowledge can complement and enhance technical expertise Increase productivity

13. 13 Potential benefits for communities Greater voice in planning and decision-making. More likely that development outcomes meet the needs and aspirations of local communities. Sustainability and increased self reliance, and strengthened local institutions over time. Access to resources, including new ideas, technology, skills. Potentially stronger economic base, which could contribute to rural capital formation. 13

14. 14 Risks and challenges For companies Building shared understanding requires significant investment of time and resources Relinquishing control over how resources are allocated can be counter-intuitive and uncomfortable Higher cost outlays which may not be recoverable Obligation schedules and procurement concerns Different expectations and language Requires skills and capacity for working across cultures and with communities For communities Building shared understanding and trust requires significant investment of time Expected benefits are not clear, and are usually only realized after many social and economic costs have already been borne by communities Risk of being ‘co-opted’ into appearing to support something they do not Changing power relationships Losing independence and ability to criticise Different expectations and language

15. 15 Participatory planning and monitoring Session 2 Participatory planning and monitoring tools and mechanisms for the project cycle

16. 16 The project cycle E n g a g e m e n t Feasibility Construction Exploration Operations Expansion Divestment Legacy Concessions negotiations

17. 17 Range of participatory tools and mechanisms Participatory planning Community forums Good neighbor agreement Community suggestion boxes Participatory budgeting Community scorecards Citizen report cards Community monitoring Training and capacity building, access to information, and mutually agreed-upon metrics for monitoring are integral to each of the tools.

18. 18 Tools and mechanisms on the spectrum of participation Create linkages with different actors to open information flows Naming, shaming and faming Stakeholders are co-decision makers Industrial sabotage, hostage taking Company ignoring local knowledge Civil society organization Register complaints with local authorities Training/ hiring/ sourcing strategies Information sharing Community suggestion boxes Co-planning committees and partnerships Community forums Co-budgeting Co-evaluation Co-monitoring Heightened security Third party facilitation stakeholder engagement Community monitoring Community scorecards Citizen report cards Good Neighbor Agreements Description Tools NonparticipationCo-planning and monitoring No shared understanding Lack of legitimacy No power sharing Shared-understanding Legitimacy Power-sharing Trust No actionInformConsultInvolveCollaborateEmpower Increasing levels of participation and community impact

19. 19 Tools and mechanisms in the project cycle Expansion Exploration Information meetings Co-monitoring Contract negotiations Feasibility ESIA Sourcing Co-identification of issues and indicators Co-target setting: hiring, sourcing, training Roles responsibilities agreements Closure planning Information sharing Local skills training programs Contract and concessions negotiations Construction Employment and training Sourcing and procurement Infrastructure access Community monitoring Community reviews Good neighbor agreements Suggestion box Interest group committees and forums Community scorecard Operations Employment and training Sourcing and procurement Co-budgeting Support community forums Company scorecard Evaluation Citizen report card Legacy Company responsibility for unforeseen consequences Advocacy tools, accountability tools, and community capacity to hold company accountable for unforeseen consequences Divestment Participatory sustainability planning and budgeting Citizen report card Environmental restoration Sustainable livelihoods Transfer of assets Co-monitoring, measurement and verification Partner of choice

20. 20 Applying tools to case examples What is the priority? Which tool or tools would best address the priority? How would it work? At which points in the project cycle might it be useful?

21. 21 Discussion questions Which tools / mechanisms might be useful in your context? At which stages in the project cycle? What are the benefits and risks at each stage?

22. 22 Participatory planning and monitoring Session 3 Key focus areas, challenges and success factors

23. 23 Critical focus areas 1.Employment / hiring locally and training 2.Sourcing and procurement / supply chain 3.Intra-household dynamics and the family 4.Access to infrastructure 5.Environment

24. 24 Case example exercise What factors might promote success or limit impact? How viable might this mechanism be in your context? What might the benefits and risks be in your context? How could it be modified / adapted to better fit your context?

25. 25 Challenges and success factors Understanding the many actors Multiple realities Power relations and equity participation Bias towards science Trust Style of communication

26. 26 Possible diagnostic questions What stage of the cycle is the project in? How robust are local governance institutions? How organised is civil society? How cohesive is the local community? How high is standard of living in local community?

27. 27 Exercise 1.Conduct preliminary diagnostic for particular district or region 2.Select candidate PPM mechanism 3.Design basic strategy for introducing mechanism 4.Assess risks 5.Develop key performance indicators

28. 28 Participatory planning and monitoring Session 4 Understanding diverse perspectives

29. 29 Multiple actors in the extractives context Community people Internatl Stake- holders Donor Community Operating company Economic Environment Society Financing institutions Partner Corporations State company Federal Ministry Local NGOs Local businesses Local government Other - individuals Intl media, bloggers Local-Global Interactions Local Media, internet