Management

Functions
Whats in this section?

100

Coordinate activities and assign

overall responsibility

101

Hire, train, and deploy the right personnel

102

Create clear reporting lines between the

community liaison function and senior
management

103

Communicate the strategy internally

103

Develop and maintain a stakeholder

database

104

Develop and maintain a commitments

register

106

Stay in control of third-party engagement

107

Manage contractor risks

107

Track changes in the quality of

stakeholder relationships

Stakeholder engagement should

be managed as one would manage
any other business function.

 M. Gunawan

MANAGEMENT FUNCTIONS

Management Functions
Increasingly, good practice points to incorporating stakeholder
engagement activities into a companys environmental and social
management system. In practice this means making its management systematic by integrating it with core business activities. To
achieve this, managers will need to identify critical points in the
life of the project where stakeholder engagement will be needed,
and determine who will deliver these actions and how they can be
integrated with core business functions. This involves trying to
work out how best to deliver and integrate a number of different
aspects of engagement discussed in the previous sections, including:

99

100

STAKEHOLDER ENGAGEMENT: PART ONE

ongoing stakeholder analysis and the assessment of stakeholder

concerns from a risk perspective

the hiring and training of community liaison officers

consultation processes designed to meet the companys own

policies and/or compliance requirements of lenders and regulators

input and suggestions received from stakeholders on project

design and proposed mitigation measures

grievance mechanisms that capture and respond to stakeholder

concerns

the involvement of local stakeholders in project monitoring

reporting information to stakeholders

(Part Two of this handbook identifies some of the key management

tasks for each phase of the project cycle.)
Most importantly, stakeholder engagement should be managed
as one would manage any other business function with clearly
defined objectives and targets, professional, dedicated staff,
established timelines and budget, and senior management
responsibility and oversight. Some good practice principles for
managing stakeholder engagement processes are given below.

Consistency of information conveyed to

stakeholders by different teams or business
units within the company is important.
Coordinate activities and assign overall responsibility
Over the life of the project, affected communities and other interested parties will likely interact with a variety of representatives from
within the project company. It is essential that this diverse set of
engagement activities be coordinated. Consistency of information

MANAGEMENT FUNCTIONS

When hiring community liaison staff,

consider people who will be able to
develop and maintain good working
relationships with the local communities.
conveyed to stakeholders by different teams or business units within
the company is important, as is keeping track of such activities in
order to reduce inefficiencies, confusion, and conflicting messages
or commitments. This is usually best achieved by giving a senior
manager overall responsibility for stakeholder engagement. This
high-level oversight not only helps to underscore the importance
of the function, but is needed in order to effectively implement the
strategy and coordinate the various activities across the company.

Hire, train, and deploy the right personnel

Initial stakeholder analysis will provide you with a sense of the type
of stakeholder groups the project will need to engage during different phases of the project cycle. Engaging different types of
stakeholders requires different skills and staffing considerations.
For example, engaging with local communities might require one
or more field-based community liaison officers, whereas engagement with government officials or local, national, and international
organizations will likely require different skill sets and more direct
involvement of senior managers. For projects where the stakeholder
engagement process is likely to be complex or sensitive, consider
bringing in social advisors or other expert staff to help design and
facilitate the process and assist with participatory methodologies
and other specialized techniques.
When hiring community liaison staff, consider people who will be
able to develop and maintain good working relationships with the

101

102

STAKEHOLDER ENGAGEMENT: PART ONE

local communities. Since their job will involve listening and responding to local concerns and suggestions, qualities to look for include:

good people and communication skills

a good understanding of the local language and

community/cultural dynamics

open-mindedness and respect for the views of others

a solution-oriented approach

a high integrity/degree of trustworthiness

a genuine commitment to the position and its goals

Create clear reporting lines between the community

liaison function and senior management
In order to be effective, community liaison officers need to have the
authority to negotiate on behalf of the company. This requires a
clear reporting structure and clarification as to which decisions they
can take unilaterally, and which are to be passed on to higher levels
within the company. Direct reporting lines also enable senior managers to more effectively control risks by being kept informed of this
type of field-level information in a timely manner. The more likely it is
that the concerns of local stakeholders might pose a risk or reputational issue for the project, the more important it is for community
liaison officers to have a direct channel to senior managers.

The more likely it is that the concerns of local

stakeholders might pose a risk or reputational
issue for the project, the more important it is
for community liaison officers to have a direct
channel to senior managers.

MANAGEMENT FUNCTIONS

Communicate the strategy internally

If stakeholder engagement is to be truly integrated into day-to-day
business operations, the concept needs to be owned by all staff.
Every business unit needs to be aware of the strategy and understand why the company is committing time and resources to this
endeavor. Too often, stakeholder engagement programs are
compartmentalized within the company and regarded as a soft
concept that is the domain of a few community liaison staff.
Avoiding this fate means taking the time to communicate the
message internally. By clarifying the links between stakeholder
engagement and environmental and social performance as well
as its potential to impact on reputation and project outcomes
you can raise awareness that stakeholder relations is a collective
responsibility and give staff across the company an incentive to
serve as ambassadors in helping to cultivate and maintain good
working relationships with external stakeholders.

Develop and maintain a stakeholder database

A current and regularly updated stakeholder engagement database can be a useful management tool. Ideally, it should contain
details of the various stakeholder groups (their representatives,
interests and concerns); details of any consultations held (including
when these took place, the topics discussed and results); any
commitments made by the project company, both those outstanding
and those already delivered; and a record of specific grievances
lodged and the status of their resolution. Maintaining such a
database is important for continuity purposes, especially in the
transitions between project phases where personnel changes are
common. It can also come in handy for reporting purposes or
when a company might need to demonstrate the adequacy of its
consultation process.

103

104

STAKEHOLDER ENGAGEMENT: PART ONE

SASOL, MOZAMBIQUE:
ESTABLISHMENT OF A STAKEHOLDER
DATABASE FOR THE EIA PROCESS

n conjunction with gaining rights to off-shore hydrocarbon

exploration in Mozambique, Sasol developed an initial list of
stakeholders and discussed it with key government agencies.
Based on the feedback received, an expanded stakeholder list
was developed and contacted by the company. This became an
iterative process, with additional contacts being either supplied by existing contacts or joining the process in response to
media advertisements or public meetings. The expanded list
was converted into a database containing names, affiliations,
contact numbers, and e-mail addresses (where applicable). The
stakeholder database became a very useful company tool, used
throughout the public engagement process to ensure ongoing
communication with all interested and affected parties.

Develop and maintain a commitments register

Doing what you say you will do is essential when it comes to building trust and establishing good working relationships with stakeholders. Timely follow-through requires keeping track of all the
various commitments made to stakeholder groups (affected communities, local government, lenders, NGOs, or other organizations)
over the life of the project. Typically, the number of commitments
made to stakeholders is highest in the early phases of the project
around the scoping and environmental and social assessment
processes, and relating to grievances and monitoring of impacts
during construction. A commitments register has emerged as a
good practice management tool to record and follow up on a
companys many environmental and social commitments made

MANAGEMENT FUNCTIONS

BAKU-TBLISI-CEYHAN PIPELINE: KEEPING TRACK

OF COMMITMENTS MADE IN THE ESIA

or the Baku-Tblisi-Ceyhan Pipeline project, the Environmental

and Social Impact Assessment (ESIA) documents contained
hundreds of management and mitigation measures that the company had committed to implement. Because these commitments
were scattered across various sections of the documentation, the
company initially experienced difficulty organizing these commitments into actions, so that the environmental and social management program for the project could be developed. To overcome
this, a comprehensive list of all of the commitments was developed in a Commitments Register. The register clearly laid out
each commitment, its original source, and where in the management program the commitment would be covered.
Once established, the commitments register was a valuable tool in
the development of the environmental and social management system. It served as a link between the ESIA documentation and management system and provided a mechanism whereby commitments
made could be followed through to actions on the ground. However,
extracting the commitments into a register for the BTC project after
the fact was a time-consuming process. It was also found that once
extracted from the original documentation, the commitments were
often vague, responsibility for implementation was not always clear,
and there was significant duplication of commitments.
A lesson learned from the project is that clear and concise
language should be used when making commitments and a register of commitments is recommended as part of the overall ESIA
documentation deliverable. Ideally, commitments registers could
then be organized into a structure that is in line with the project
phases (e.g. construction or operations) and sorted by issue (e.g.
waste management) to provide greater clarity for both the company and the contractor as to responsibilities for implementation.

105

106

STAKEHOLDER ENGAGEMENT: PART ONE

during the consultation process and contained in the various

environmental and social assessment documentation and action
plans. It should contain timeframes for action and, importantly,
assign responsibility to the appropriate individuals, business units
or implementing third party (which in some cases may be the
contractor, an NGO or local government agency).

Part of managing stakeholder

relationships is keeping track of who
is speaking on the projects behalf
and what is being said by third parties.
Stay in control of third-party engagement
Part of managing stakeholder relationships is keeping track of who
is speaking on the projects behalf and what is being said by third
parties. External specialists and consultants, as well as government
regulators, and NGOs and contractors working with the project
company, may be required to interact with project stakeholders.
There are times when such third-party engagement involves risks
that will need to be actively managed. These include disclosure of
project information that is inconsistent with that disseminated by
the company; consultation activities that are culturally inappropriate
or that exclude certain stakeholder groups; the raising of false
expectations about project benefits (e.g., compensation levels and
employment opportunities); the making of commitments on behalf
of the company without having obtained prior agreement; and the
failure to implement impact mitigation measures or community
development projects to the satisfaction of the intended beneficiaries.

MANAGEMENT FUNCTIONS

One way to reduce such risks is to have project staff present during
these interactions, at least initially, and on a periodic basis thereafter. Where feasible, written terms of reference or contractual
agreements can be helpful in clarifying the roles of third parties up
front, while regular monitoring by project staff once activities are
underway is an important means of oversight and quality assurance.

Manage contractor risk

Perhaps more than other third parties, contractors have the potential
to directly impact stakeholder relations through their behavior and
day-to-day interactions with the local population. During the construction phase, contractors and their sub-contractors can have more
frequent contact with local stakeholders than do project staff, and
affected communities often do not make a distinction between
contractors and the company both are viewed as part of the project. Contractor actions can therefore pose a risk for companies that
should be managed from the outset. This involves selecting contractors that have the capability to deal effectively with stakeholders and
putting such requirements into their contract. Contractual requirements might include having their own mechanism for managing
grievances, their own manager of community relations, and providing
training for their staff and sub-contractors on how to interact with
the local population. Company staff should be deployed to monitor
contractor actions on the ground and to assist in resolving any
complaints from project stakeholders about contractors.

Track changes in the quality

of stakeholder relationships
Because the quality of relationships can change over time and the
frequency or intensity of engagement varies during different phases
of a project, it might be useful to periodically test the temperature
of your key stakeholder groups and their level of satisfaction with

107

108

STAKEHOLDER ENGAGEMENT: PART ONE

the project in general and the engagement process in particular.

An annual or semi-annual perception survey, independently
administered, which uses the same set of questions over time to
achieve continuity, is a tool some companies use to help them
manage the stakeholder engagement process. By gauging
changes in satisfaction levels and identifying the underlying
causes, the survey information enables staff and managers to
make adjustments to the process or take actions where necessary
to get communications and relationships back on track.

COSAN SAIC: ESTABLISHING A COMMUNITY

CONSULTATION PLAN AS PART OF AN
ENVIRONMENTAL MANAGEMENT SYSTEM

osan SAIC, the leading sugar and fuel ethanol producer in

Brazil, undertook an expansion of its facilities that involves a
range of environmental issues, including waste water management, energy consumption, and production waste, among others.
The particular region of Brazil in which the company is operating
has more stringent environmental regulation than in other parts of
the country. Along with providing corporate financing to the company, IFC advised Cosan SAIC in establishing its first-ever integrated Social and Environmental Management System for its facilities.
In addition, the companys senior management also committed to
integrating community consultation into its management systems
and appointed full-time staff to manage their implementation.
Because the company is receiving a corporate loan, its commitment to prepare and implement community consultation plans as
an integral part of its social and environmental management systems will apply to all future greenfield facilities of Cosan SAIC.

MANAGEMENT FUNCTIONS

LONMIN, SOUTH AFRICA:

STRENGTHENING COMPANY
MANAGEMENT OF STAKEHOLDER RELATIONS

onmin, a large platinum mining company based in South Africa

has had an historically poor relationship with its key stakeholders. However, since 2004 the company has taken active steps to try
to transform these relationships and strengthen the companys
management of stakeholder issues. Key elements of Lonmins
strategy include:
Contracting an experienced international consultancy to facilitate the establishment and operation of a Stakeholder
Engagement Forum
Providing Lonmin staff and community members with the necessary capacity-building to effectively participate in this Forum
Commissioning independent Community Perception Surveys
annually to gauge satisfaction among key stakeholder subgroupings in respect to Lonmins activities
Publicly disclosing and disseminating the results of these
perception surveys
Publishing a monthly newspaper focusing on tangible progress
and results emanating from the stakeholder engagement
process
These efforts have led to significant improvements in community
support for Lonmins activities to date. In addition, the company has
made a concerted effort to improve its internal capacity to engage
with key stakeholders and to more clearly define and focus these
interactions to ensure consistent communication. This has entailed
appointing an additional Relationship Manager, clarifying lines of
communication both internally and externally, and identifying
responsible managers within the company to manage community
engagement activities.

109