community relations hseq hq 11-01-00[2]

Community RelationsGuideline

OMV-EP Guideline

Community Relations

Prepared by:

Date 19 May 2003

Peter E Neal, Senior HSEQ Advisor

Approved by:

Date 20 May 2003

Ulrich Peball, Vice President EP-HSEQ

Exploration & Production, HSEQ, Vienna HSEQ-HQ-11-01-00

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1 Scope and Application This guideline applies to all OMV exploration and production activities where OMV has an asset equity share of 50% or greater, or where OMV is the designated operator acting on behalf of a consortium. It shall apply from the conceptual stage of a project and would continue right through to successful handover to production operations. It applies to both ‘greenfield’ and ‘brownfield’ developments. It also applies to major changes and upgrades to existing operating facilities. Effective corporate citizenship is needed because inadequate management of social issues can increase project costs and has the potential to threaten the feasibility of present or future operations. Risks and potential opportunities exist in three main areas:- 1.1 Community Conflicts and Project Design Dissatisfied local communities can take action against projects directly and become a platform for organisations with a broader agenda. Action can take the form of road blockades and infrastructure damage escalating to hijackings of equipment and people. This results in increased project costs.

Antagonism often starts from poor project design with lack of awareness of impacts on communities. By consulting with nearby communities, OMV can become aware of potential social impacts early in the project cycle and consider amendments to project design. Examples include altering the timing of seismic to avoid the breeding season of local game, or moving a road to prevent a community from becoming fragmented.

Consultation can also lead to the identification of low cost ways that the project can be of direct benefit to local communities, such as extending the project electricity supply to include nearby communities, or improving an existing road. Where adverse impacts cannot be avoided, consultation with local communities is necessary to identify appropriate mitigation measures to minimise their significance and to find appropriate compensation measures. It is always essential to notify communities of project activities.

1.2 Securing New Business The proven ability of companies to minimise adverse impacts and maximise net benefit to the host society is an increasingly important factor in securing new business opportunities. Bids can gain a competitive advantage by inclusion of carefully targeted forms of social capital investment backed up with examples of previous performance in similar situations. 1.3 Shareholder and NGO Activism Multi-national companies, particularly oil and gas and mining companies, are under ever increasing scrutiny regarding their impacts on local communities and the wider society. Shareholders are becoming increasingly aware of these risks and expect companies in which they invest to protect investments by managing social and environmental risks in addition to financial risks.

Wider corporate social responsibility is concerned with the impacts of business on individuals and society beyond those impacts governed directly by legal contracts.


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2 Cross-references Corporate Responsibility – Code of Conduct published by the corporate group of OMV AG, January 2003 HSEQ Policy Elements and Objectives, document no HSEQ-HQ-00-01 latest revision. Guidelines for HSEQ in Projects, document no HSEQ-HQ-04-01 latest revision. Community Investment, document no HSEQ-HQ-11-02 latest revision. 3 Management responsibilities The country General Manager shall be responsible for implementing this guideline. Where no country General Manager has been appointed, the Senior Vice President Exploration and Production International shall be responsible for implementing this guideline. 4 Definitions Project – Any physical activity that results from OMV oil and gas operations. It will cover the normal phases: seismic, drilling, facilities and pipeline construction, facilities operation and decommissioning (abandonment). However, a ‘project’ can also be defined as the work being done in Vienna to assess business opportunities at the region or country entry stage; relevant parts of these guidelines may be used for a social impact risk assessment. Stakeholders - Any individual or group who are affected by a project, negatively or positively, can themselves affect a project or have an interest in the outcomes of the project. Stakeholder dialogue - A process through which the views of interested stakeholders are integrated into project decision-making. This dialogue can take the form of:

Information dissemination: one-way flow of information;

Consultation: two-way flow of information;

Participation: shared control over decision making;

Empowerment: transfer of control over decisions and resources. Indigenous Peoples1: People descended from the populations which inhabited a region at the time of conquest or colonisation or the establishment of state boundaries. Indigenous people self-identify themselves as having a social, cultural and economic condition that distinguishes them from other sections of the national community. The status of indigenous peoples is regulated wholly or partially by their own customs or traditions or by special laws and regulations.

1 This definition is drawn from the ILO Convention 169 on Indigenous Peoples.


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Social Impact Assessment: a consultative and analytical process that aims to anticipate the impacts of an activity on, and its interactions with, people and communities; identify strategies to prevent, control and mitigate those that are considered to be adverse, while enhancing benefits; and understand and respond to community and other stakeholder concerns. Social and Environmental Assessment: a consultative and analytical process that aims to identify potential environmental and social impacts and issues; develop prevention, control, mitigation and monitoring strategies; and understand and respond to community and other stakeholder concerns. Social Capital: is the term used to describe the mechanisms and attributes by which a community interacts to utilise its social assets to the well being (development, enhancement and benefit) of the community as a whole. Least Developed Countries: these countries are designated as such by the United Nations General Assembly. The current listing of these countries are available on the internet URL http://esa.un.org/unpp/definition.html


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http://esa.un.org/unpp/definition.html


5 Procedure These guidelines aim to enable OMV to play a responsible role in the community whilst developing a viable business operation by:

Screening for social risks;

Building mutual understanding between the community and OMV;

Minimising negative impacts on the community;

Forming partnerships with key individuals and organisations. Individual managers need to be made responsible for this in each business or country operation. In addition, all employees are expected to be familiar with OMV policies and these guidelines and to conduct themselves in ways that take account of community aspirations and sensitivities. The overall process is shown in Figure 1 below and described in Section 5.1.

Step Key Tools Application

Risk screen Screen for 1 (Appendix A) social risks

2 Assign responsibility All projects Stakeholder dialogue (Appendix B) 3 Integrate into

operating Social and practices environment

assessment (Appendix C)

Develop 4 Community Investment

Only projects in procedures and ‘least developed

(Document No countries’ reporting HSEQ-HQ-11-02-XX) Figure 1 - Social Issues Management Exploration & Production, HSEQ, Vienna HSEQ-HQ-11-01-00

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5.1 Steps to be Taken The following steps should be undertaken by all country or business operations to integrate social issues management into project planning, implementation and decision making throughout the project cycle.

Step 1. Screen Operation for Social Risks Screen the operation for social risks using the checklist provided in Appendix A. Key parameters to consider are as follows:-

Sensitive issues. A number of issues raise social sensitivities and make operations a focus of attention for stakeholders.

Level of community impact. Projects that impact highly on local communities will require greater investment in community consultation and impact mitigation activities.

Stakeholder expectations. This will include consideration of previous activity in the region, particularly oil/gas or minerals extraction.

Step 2. Assign Responsibility Principles that should be reflected in the assignment of responsibility are:-

Demonstration of commitment and support by senior managers;

Allocation of specific responsibility for community relations to an individual in the organisation supported by personal targets;

Knowledge of principles and required actions/behaviour by all personnel including contractors;

Systematic review of performance supported by regular reports to senior managers.

At the early stages of an acquisition or project, or when operations are small scale, it may not be necessary to have a person working full time on community relations and the job function could be carried out on part-time basis. However, whether the person is appointed part or full time, it is important the person carrying out the function has specialist skills2 and where necessary supported by specialist contracted resources.

Step 3. Integrate into Operating Practices Operations should tailor these guidelines to reflect local needs and realities and integrate them into operating procedures considering the following:- Level of risk. Projects with a high level of social risk require a greater commitment of resources to manage them effectively.

2 The mix of skills can be quite complex and the selected person should have had appropriate training or experience in: mediation, communications, sociology, environmental aspects, human rights awareness, dealing with the media, management. Good personal qualities are critical because the person will be a ‘bridge’ between OMV, the affected communities and a wide range of stakeholders. To be effective the person should ideally have good practical working experience in the relevant country and knowledge of how oil and gas companies operate.


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Operating status. If OMV operation is in a joint venture/part of a jointly owned company, it will be necessary to discuss these guidelines with partners and agree a jointly acceptable approach. OMV in-country presence. Where OMV has had a long term presence (e.g. Pakistan), the country head office can provide extensive support in the management of community issues. In new countries of operation OMV managers will not have access to such back-up and should allow more time and resources to gain a fuller understanding of community issues. Existing mechanisms for community consultation. Mechanisms for community consultation always need to be sensitive to the local situation. In some countries there are well established mechanisms for community consultation. These may be mandated in law, be customary as in many indigenous communities, or have been agreed at an earlier stage of the project. Further guidance is provided in the guidelines on stakeholder dialogue provided in Appendix B. Management of community issues should, wherever possible, be incorporated into existing planning and operation practices such as internal skills training sessions and tool-box talk sessions; screening and impact assessments; auditing, monitoring and reporting timetables.

Step 4. Develop Procedures and Reporting Procedures to review community impacts and their management should be established in the management system of each country or business operation. An annual (or more frequent report) shall be produced that:-

Summarises potential community impacts and how these will be prevented, managed and mitigated;

Identifies opportunities for investing in the development of the immediate and wider community;

Lists information dissemination, community consultation and participation activities;

Details any community complaints, incidents and the action taken;

Reviews activities and the results of community projects. 5.2 Implementing a Social Issues Management System Managing social issues is similar to managing environmental issues with one fundamental difference. Each step of social issues management must be informed and supported by stakeholder dialogue. Unlike environmental management that can be considered to be a largely scientific task, management of social issues requires the sharing of knowledge and aspirations between OMV, affected communities and the wider society. The focus of activities to manage social issues varies during the E&P cycle. For example, during seismic and exploratory stages, when activities are of a short duration and OMV involvement may only be short term, the objective should be to minimise impacts and provide appropriate compensation. Where OMV is operating a full scale field development and commitment to the project area is long term, the focus should move to developing partnerships with local communities and other organisations and assisting local communities to increase their social capital.


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5.2.1 Introduction of Key Tools Key tools are introduced below. Further detail is provided in the Appendices. Risk Screening Risk screening is already undertaken by OMV prior to any activity as part of the tollgating and project safety review processes. Appendix A includes a checklist of social issues that should be considered within this risk screening activity. Where risks are considered to be high or where OMV has not been previously involved in the country, a specific risk profile should be prepared. It should include:-

Identification of relevant national legislation and requirements and international legislation;

A preliminary stakeholder analysis;

Preliminary research and local consultation to identify community impacts, expectations and opportunities/risks to the project;

A review of the region's history, focusing on previous resource extraction operations, community unrest and NGO campaigning.

In some very specific situations, the social risks of a development to the local community, and/or to the reputation of OMV, may be sufficient for OMV to decide not to undertake the development. Guidance on identifying such situations is provided below.

When should a development not go ahead? The conclusion of ongoing work by the World Bank looking at social impacts of projects is that two essential preconditions identify situations "where the social impacts of projects are so profound that avoidance is the only acceptable form of mitigation" {1997).

• Communities lack the capacity to adapt to the proposed development, while retaining the integrity of their social and cultural identities. Although rare, this condition may be valid for certain indigenous peoples.

• The affected communities are unwilling to accept the development. Other circumstances where OMV may not want to undertake a development due to the potential risk of reputation damage might include countries:

• Where the extent of bribery and corruption make it impossible for country operations to abide by the OMV Code of Conduct;

• That are on international blacklists;

• With very poor human rights records.


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Stakeholder Dialogue OMV faces significant challenges in identifying and responding to the concerns and expectations of society about how business is conducted. At an operational level, this is most effectively managed by involving affected communities and other interested parties such as community representatives, government agencies and NGOs in dialogue. Stakeholder analysis is a key step in planning appropriate dialogue. It consists of an identification of relevant stakeholders, an analysis of their position on the project, the interests behind this position and a review of their activities. Relevant stakeholders include directly affected communities (often referred to as primary stakeholders), community and local groups, NGOs, research and scientific organisations, church-based organisations, government authorities, other oil and gas operators in the region, etc. Stakeholder analysis leads to a stakeholder dialogue strategy that defines appropriate mechanisms for communication with different stakeholder groups. Both the stakeholder analysis and dialogue strategy should be live tools that develop and evolve throughout the duration of the project to guide business activities. The approach to stakeholder analysis depends on the social and political context. Ideally it involves both desk research and field visits and includes both locally based stakeholders and external organisations such as donors and NGOs with an involvement in the community. Field research will usually involve collaboration with local experts, for example, from universities. There are circumstances where field research is difficult or impossible. In these circumstances a start should be made with desk research; further understanding of stakeholders will build up as the business develops. Major barriers to identifying stakeholders or understanding their expectations are a signal of a high risk project. The level of dialogue with stakeholders that is appropriate varies between individuals and organisations and on the objective of dialogue. For example, appropriate communication with international research organisations may simply take the form of sharing information. In comparison, dialogue with local communities should ideally evolve from information sharing at the early stages of project planning to consultation during the impact assessment. During long term operation communities should wherever possible be fully involved in making decisions that will affect them. Further guidance on stakeholder dialogue is provided in Appendix B.


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Social and Environmental Assessment The social and environmental dimensions of an impact assessment are closely linked (see Figure 1) and analysis of them should therefore be integrated into a combined social and environmental assessment (SEA).

Cultural property

An SEA is best undertaken in three steps. Summarised below, these steps are documented in further detail in Appendix C.

Step 1: Scoping. The scope of an SEA needs to be determined not just by the nature of the project and the environmental and social setting, but by the needs and concerns of stakeholders. Work carried out in this stage will build on the initial stakeholder analysis and risk screening. The aim is to improve the mutual understanding of all stakeholders (including OMV) of the project impacts and the potential issues and concerns that need to be covered in the SEA. This understanding will serve to focus the SEA process and establish clear channels of communication.

Step 2: Preparation of Draft SEA. Consultation with project affected communities and wider stakeholders will provide information for each stage of the impact assessment cycle, i.e. information collection, impact identification and assessment, measures to reduce and mitigate impacts and appropriate compensation for residual impacts. Communication with stakeholders should become increasingly interactive, involving methods such as community meetings and focus groups. The draft SEA and management plan need to be widely circulated for comment using an appropriate channel of communication and language - this will vary between stakeholder groups.

WetlandsAir

Public health QualitySecurity Endangered

species Education Water availability Habitat & quality

Social Quality of life Agriculture

Environmental Energy use Soil

qualityFishing & hunting Marine Demographics conservation

Indigenouspeople Employment Biodiversity

Land use Wildlands

Figure 1 Potential Social and Environmental Issues Interface


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Step 3: Preparation of the Final SEA and Management Plan. It is often necessary to actively seek comments on the draft SEA, especially from affected communities, by arranging public meetings. Once comments have been received the final SEA can be prepared, documenting the results of the consultative process and explicitly indicating how comments have been addressed.

Where it is not possible to carry out an integrated social and environmental assessment, for example, where an environmental impact assessment has already been completed or where legislation mandates in detail an environmental assessment process that cannot be altered, then a separate social assessment can be carried out. In this case the stakeholder dialogue components should, if possible, be carried out together in order to reduce confusion on the part of stakeholders. 5.2.2 Community Investment Community investment - encompassing compensation and community projects – shall only apply to operations in least developed counties (see Definitions) Guidelines on community investment are provided in document no HSEQ-HQ-11-02 latest revision). 5.2.3 Management planning, monitoring and reporting Monitoring and reporting requirements should be included within the SEA Management Plan. This plan should specify:

What parameters should be measured, both environmental and social;

How the parameters will be measured and analysed, e.g. direct measurement, surveys, use of indicators;

The frequency of measurement;

Performance targets and ranges of acceptable values;

Measures to be taken if unacceptable values or unexpected impacts are identified;

Internal reporting mechanisms;

How the values will be verified and reported to external audiences. 5.3 External Dialogue Where OMV has business in countries that are a focus of government or NGO attention, e.g. Sudan, it can be helpful to establish and maintain dialogue with key government and non-governmental organisations with experience and views about the country and about business operations there. The aim of such dialogue is to exchange information and demonstrate responsibility. Such contacts can also be valuable in identifying good local sources for information collection and community investment projects. 6 Record of Revisions None.


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APPENDIX A Social Risk Screening Checklist Questions – If an answer is YES, then it is a sensitive issue and needs to be included in a management plan.

Indigenous peoples

Are indigenous people living in or near the project site? Will there by any impacts on them?

Is any part of the project within the traditional territory of indigenous peoples?

Land acquisition and resettlement

Is the land currently lived on, farmed or used as a resource by people Sensitive without legal title?

Is there a risk that activities, e.g. waste disposal, will affect livelihoods?

Will the project require any individuals/families to be resettled?

Is the land used to supply food to a community with a subsistence economy?

Secondary development

Could the construction/upgrade of roads result in immigration of settlers that are harmful to the local community?

Will the project be supplied mainly from outside the local area?

Will the workforce be transported into the area?

Is the development expected to bring major changes to the local or national economy?

Cultural heritage

Will the project have an impact on cultural heritage?

Security

Is there a history of social unrest in the area?

Will the development require a high level of security?

Human Rights I Governance

Does the country have a poor human rights record?

Is there any previous history of human rights violations associated with multi-national companies in the region/country (particularly oil & gas companies)?

Are there any campaigns about human rights violations in the region/country?

Stakeholder Expectations

Is there any history of opposition to resource extraction activities in the region/country?

Is there any history of opposition to European companies in the region/country?

Is there an absence of clear plans by government about using oil/gas revenues for social development?


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APPENDIX B Stakeholder Dialogue Guidelines The purpose of the guidelines in this Appendix is to support OMV operations in establishing constructive dialogue to improve projects and develop good relations with local communities and wider stakeholders by:-

Introducing a process that can be used to integrate stakeholder dialogue activities into the planning and implementation of oil & gas operations; and

Introducing key steps and tools that can support stakeholder dialogue. These guidelines are aimed at OMV operations in countries where consultation is an accepted practice, where there is willingness by the public to participate and where such participation will not compromise OMV or the people being consulted. Where this is not the case, the guidelines will require amendment. In particular direct consultation may not be possible with local communities but only with government and authorities. Information provided by stakeholder analysis should indicate when this is the case. B.1 Planning for Stakeholder Dialogue The objective of planning is to use the information gathered about stakeholders to form a strategy that will maximise the effectiveness of dialogue. This strategy should indicate the following:

Who should be involved?

What is the appropriate level of involvement for each stakeholder: information exchange, consultation, participation?

What kind of participation is needed from each stakeholder: joint management, monitoring etc?

What level of involvement is expected by stakeholders?

What inputs are needed: human, physical, financial?

When dialogue will take place.

How will the process be monitored and evaluated.

Why this will contribute to the project.

Answering these questions should lead to the production of a Stakeholder Dialogue Plan, an outline of which is shown in box below. This should be a practical working document and should be regularly adapted and refined as further stakeholders are identified and the positions and interests of stakeholders are clarified.


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Outline Stakeholder Dialogue Plan

Outline Stakeholder Dialogue Plan

1. Introduction

2. Statement of purpose

3. Study area: description of the study area

4. Project description: summary of proposed project including any alternatives

5. Decision-making framework: summary of process, roles and timing

6. Key participants: preliminary list of stakeholders, classification of stakeholders, establishing if they have a mandate and legitimacy

7. Stakeholder dialogue strategy and schedule: selection of techniques to be used, information needs, milestones, budget and financial plan

8. Responsibilities: who will do what

B.1.1 Stakeholder Analysis and Preliminary Identification of Expectations Many of the above questions can be answered through a stakeholder analysis that identifies stakeholders and groups them according to criteria such as importance to and influence on the project. This process leads to a greater understanding both of the stakeholders and the objectives of involving them in dialogue.

Identifying Stakeholders To plan stakeholder involvement, it is essential to begin with a "full" list of stakeholders; it may take some time to develop this list, and it may change over time as new stakeholders present themselves. To develop this list, it is helpful to have input from a variety of different sources. Questions which can assist the identification of stakeholders include:-

Who is the project likely to benefit?

What are the likely negative impacts of the project, and who will be affected?

Who will be responsible for implementing the changes introduced by the project?

Whose co-operation or influence is necessary for the project to be carried out?

Who has special knowledge or experience concerning the project?

Who supports or opposes the changes the project will bring?

Stakeholders usually fall into four types:- People who live or work where the project will be located;

People who live nearby or use resources from the project area;

Agencies such as ministries, provincial or local government authorities; and

Others such as NGOs with an interest in the project and other oil & gas companies operating in the region.


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Grouping Stakeholders Once a stakeholder list has been completed, stakeholders can be sorted into meaningful groups. One method of sorting is to decide whether stakeholders are more or less important to the project's objectives, and whether they have more or less influence over it. Influence and importance are defined as follows.

Influence is the power which stakeholders have over a project to control what decisions are made, facilitate its implementation or exert influence which affects the project. Influence may be measured by the extent to which people, groups or organisations are able to persuade or coerce others into making decisions and following certain courses of action. Influence can be positive or negative.

Importance is the priority given by OMV to considering and accommodating a particular stakeholder's needs and interests through the project. This will be driven by recognition of their potential contribution to the project, the extent to which they are affected and also by the ethical commitment of OMV to maintain or increase the social capital of project affected communities.

Stakeholder Classification Matrix

HIGH

Group B Group A

Importance

Group D Group C

Influence LOW HIGH

Once stakeholders are placed on a matrix, it is relatively easy to sort them into four basic groups.

Group A usually includes the people living in the community where the project will be located. These people who will be most directly affected by the project often have very little power to influence it. Group A stakeholders are an especially important and vulnerable group. Some levels of government, especially provincial or district levels, may also be very important to the project objectives but have little influence over it. They are also in Group A. This group needs the greatest attention during the process.

Group B may include many "powerful players" in the project, such as the directly concerned ministry, business interests directly involved with the project. While Group B has a real stake in the project, they already have considerable influence and many opportunities to shape the project. The dialogue process should structure their contribution so that it is balanced with that of Group A and does not overpower it.


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Group C stakeholders may have considerable power to influence the project. They

need full information about the project and structured opportunities to share their views with OMV and other stakeholders. However, it must be remembered that they are not directly affected by the project.

Group D includes the various groups and individuals, national and international with an interest in the project. Some have special agendas relating to development that may cause them to take a stand about the project. Like the Group C stakeholders, they need information about the project and a chance to ask questions, but their role in the stakeholder dialogue process should be limited.

The positioning of stakeholders in the matrix is a subjective process that will differ depending upon the perceptions of those undertaking the classification. The absolute and relative importance and influence of individual stakeholders is likely to change as a project evolves, more information about a stakeholder becomes known, or a stakeholder becomes more or less involved in a project. The classification can therefore only ever be considered to be indicative. The matrix can however form a valuable basis for discussion, within the team. The matrix is also a useful tool to highlight the key stakeholders which will be the focus of the stakeholder involvement strategy and identify stakeholders which will need to be brought in to the process. Problems may result where there is a gap between the level of consultation expected by stakeholders and actual consultation. Understanding Directly Affected Stakeholders Each stakeholder individual or group will have a particular set of concerns and objectives specific to the project under consideration. Indeed people in a single community may have a range of concerns and, to accurately represent a community's views, it is likely to be necessary to subdivide the community into its different interest groups, for example: women and men, old and young, or into those of different religions. The level of sub-categorisation required will depend upon the level of involvement which OMV wishes to achieve with the stakeholder which will in turn depend upon their importance and level of influence. The stakeholder subdivision may therefore change from one project to another and may well change during the project cycle. B.2 Developing a Strategy for Dialogue The dialogue strategy tells you what communication techniques should be used, when they should be used, and which stakeholders they should be used on. The strategy is often complex and can involve a wide variety of media and other communication techniques including:

Mass media (newspapers, posters, brochures, radio and television);

Information channels through which stakeholders can provide and request information;

Meetings and workshops at central, provincial or district levels;

Direct contact with existing networks at district or village level through mass organisations or other structures such as important landowners or tribal leaders;

Direct contact with village level through community meetings or smaller focus groups, or interviews.


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The right approach should build on existing forms of communication and will depend on the type of stakeholder. It will also depend on the objectives of the dialogue. It is helpful to think of the stakeholder dialogue process as including four levels. These levels are recognised by the World Bank and other international agencies.

Level 1 - Information gathering: OMV seeks out basic information about stakeholders and their concerns that might influence the project. The main flow of information during this phase is from the stakeholders to the project developers.

Level 2 - Information dissemination: OMV provides basic information about the project to the stakeholders in a suitable (understandable) form. While stakeholders must be able to ask questions and need to give feedback to show the information is clear, the main flow of information during this phase is from the project developers to the stakeholders.

Level 3 - Consultation: Two way information flow between OMV and stakeholders generally about specific project-related issues often in the context of developing the Social and Environmental Impact Assessment (see Appendix C).

Level 4 - Participation: Stakeholders share the responsibility for making decisions about the project. This is most likely to happen during implementation of the project, but occasionally also happens during the pre-decision phase. Only projects where OMV involvement is long term are likely to include this level of dialogue. However participation is essential whenever people must be resettled or when their lives will be changed in important ways by a project.

B.3 Implementing Stakeholder Dialogue

Although the level of dialogue will vary widely, some basic steps are applicable to any form of communication process, whether it is at the local community level or national level:-

Prepare objectives and messages;

Develop and pre-test materials;

Carry out stakeholder dialogue activities;

Obtain feedback and review effectiveness. B.3.1 Prepare Objectives and Messages The first step in the Stakeholder Dialogue Cycle is to write clear objectives stating what the outcome of communication should be. Once objectives have been set, it is easier to decide on appropriate messages. Different messages may be needed for different stakeholder groups in order to focus on their concerns. However, the messages to each stakeholder group must be consistent with each other and should present a balanced picture of both positive and negative aspects of a project. They should also reflect what early information gathering has revealed about the knowledge and attitudes of stakeholders, as well as their preferred methods of communication.

It is important not to provide too much information in the message or be too general. Messages should be clear and short but designed specifically for each stakeholder category. For example, lengthy explanations about technical details, or speculation about mitigation are not useful to most directly affected stakeholders and should not be used unless specifically requested.


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B.3.2 Develop and Pre-test Materials The team should work with appropriate media specialists to develop materials for mass media including: newspaper articles, videos, radio and television broadcasts, or posters. However, there is always a risk of losing control of the message when working with the media. Materials for person-to-person communication (such as handouts, brochures or visuals) are less complicated, but there is still a 'best way' of developing them which requires experience, skill and understanding of the audience. It is always worthwhile to pre-test materials with a representative sample of that audience. Afterwards, materials should be modified, as necessary, before they are used in the field. B.3.3 Implementation Although an activity may be planned down to the last detail, many unforeseen events can occur, particularly if the project is a controversial one. Reacting flexibly and patiently to these events will signal a commitment by OMV to the process and a respect for the stakeholders. However, it is important that dialogue does not become tangential and open ended. Objectives and milestones need to be clearly defined and ‘stop’ decisions taken where necessary to keep the Dialogue Plan on track. B.3.4 Obtain Feedback and Review Effectiveness Information needs to be analysed and summarised and fed back both into the OMV operation and back to stakeholders. This feedback process is crucial both for the stakeholder dialogue activities to make a difference and for stakeholders to feel valued and therefore be prepared to continue with the process. Careful notes should be taken of all project decisions made which have been influenced by the consultation. This not only validates the process but also makes it possible to keep stakeholders informed of how their involvement has influenced the project, thereby building trust and partnership. The review process should evaluate the stakeholder constituency because it can vary with time. The influence/importance of existing stakeholders may change and new players can emerge. In all cases the mandate and legitimacy of stakeholders should be continuously reviewed.

Monitoring the dialogue process should be apart of wider social monitoring and reporting. Monitoring will help OMV to check for effectiveness and make adjustments to the Stakeholder Dialogue Plan, as necessary. It may also be required to demonstrate fulfilment of legal consultation requirements. Monitoring should be carried out with reference to the overall objectives of dialogue and it is also useful to consider any unintended results of the process, both problems and benefits.


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APPENDIX C Social Impact Assessment (SIA) Guidelines Social Impact Assessment (SIA) is a consultative process that aims to anticipate the impacts of an activity on, and its interactions with, people and communities; identify strategies to prevent, control and mitigate those that are considered to be adverse, while enhancing benefits; and understand and respond to community and other stakeholder concerns.

Benefits to OMV of undertaking the process of SIA and thus managing the social impacts of projects can accrue by:

Increasing support of the community and reducing project costs that may arise through community unrest (e.g. road blockades, heightened security);

Improving decision making and project planning;

Identifying design options to mitigate impacts rather than relying on remedial measures such as compensation that are often more expensive and less acceptable;

Avoiding delays by meeting legal requirements;

Increasing public support by helping to reconcile stakeholder expectations and resolving conflicts;

Providing a baseline against which future claims against OMV can be judged;

Improving OMV reputation as a socially responsible company -an advantage when seeking to develop in sensitive social areas;

Enhancing employee morale. Although SIA can be carried out as a separate study, it is typically integrated with the environmental assessment into a Social and Environmental Assessment (SEA). C.1 Purpose The purpose of these guidelines is to facilitate a consistent approach by OMV companies undertaking SIA in different parts of the world by:-

Emphasising the integral role of consultation in the SIA process;

Introducing the key steps of a SIA process;

Indicating potential problem areas and vulnerabilities which should be considered in performing a SIA.

These guidelines are aimed at OMV operations in countries where a form of formal assessment and consultative process is accepted practice, where there is willingness by the public to participate and where such participation will not compromise OMV or the people being consulted. Where this is not the case, the guidelines will require amendment. In particular data gathering may be restricted and it may not be possible to consult directly with local communities.


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These guidelines are not a detailed manual for SIA, but provide an overview of the types of social impacts, methods and techniques. The approach and methods employed in SIAs will need to be adapted for local circumstances and the scale of effort required will be a function of the potential for impacts, the actual or perceived sensitivity of the social environment, previous experience in the locality of oil and gas activities, and existing co-operation with local people. For more detailed guidance, appropriate expertise should be sought. C.2 Planning Social Impact Assessment There is a strong interdependence between social and environmental impacts. For example, the application of best available technology for pipeline construction may limit the extent of environmental disruption, but will result in far less employment and attendant socio-economic benefits of more labour-intensive approaches. In developing countries especially in rural or remote locations the dependence of local people on environmental resources is strong. During seismic, for example, local people can be severely impacted if they hunt animals that are temporarily driven away by the disturbance. Social impacts can also have environmental implications. For example localised population increase can result in demand for natural resources (e.g. wood for fuel and building materials) that is unsustainable.

A social and environmental assessment (SEA) should therefore be completed before any new activity and should result in a social and environmental management plan that should guide the development. The plan shall be supported with detail procedures for monitoring, reporting and mitigating impacts. A SEA should be undertaken by an interdisciplinary team where environmental, social and technical specialists work closely together.

The SEA process must be related to the culture in which it takes place. At an early stage of the SEA process, the team needs to build links with national, state, and local government officials, appropriate non-governmental organisations and representatives of local communities. Studies may not progress at the speed expected by those involved in project planning. For example, community consultation activities may need to be scheduled such that they do not conflict with busy times of the year such as harvest. Trust will need to be established between the parties before data can be realistically gathered or discussions over the operation of the activity can occur. Often joint venture partners, especially some state oil companies, may need to be persuaded of the value of this process. C.3 Key Steps in a Social and Environmental Assessment (SEA) Step 1: Scoping The scope of a SEA needs to be determined not just by the nature of the project and the environmental and social setting, but by the needs and concerns of the stakeholders. Work carried out in this stage should therefore improve the mutual understanding of all stakeholders of the project and the potential issues and concerns that need to be covered in the SEA. This understanding will serve to focus the SEA process and establish clear channels of communication.


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During the scoping phase, the following activities should be undertaken:-

Identification of stakeholders - this should build on stakeholder identification already undertaking during screening, or previous phases of development3

Development of a strategy for stakeholder dialogue including setting up appropriate channels of communication with stakeholder groups

Provision of information in an appropriate format to stakeholders about the project and the aims of the SEA process

Initial dialogue with stakeholders to listen to their expectations and concerns and agree a plan for consultation throughout the SEA process. This is important in order to be able to establish a realistic set of expectations amongst the stakeholders.

In remote areas, a census of communities that will be directly affected by the project should be considered at this stage so that any later immigration of opportunity seekers can be identified. The scoping step will have largely been completed if the Stakeholder Dialogue Guidelines in Appendix B have been followed. All that is then needed is to draw out the practical conclusions from the stakeholder analysis into formal terms of reference for the SEA and disseminate preliminary project information to stakeholders. Step 2: Preparation of Draft SEA Preparation of the draft SEA should follow the process already familiar to an environmental impact assessment (EIA): baseline data collection, impact identification and assessment, measures to reduce and mitigate impacts and appropriate compensation for residual impacts. Consultation with project affected communities and wider stakeholders should inform each stage of the impact assessment cycle, becoming increasingly interactive. The choice of fora for consultation (community meetings, focus groups, interviews, surveys etc) will vary depending on the culture, stakeholder group and stage of the analysis. Social impacts can be positive as well as negative and will have varying severity and duration. In a long term operation, it is likely that the social impacts will differ between the construction and operation phases. The determination of whether an impact is significant, and therefore requires mitigation can only be done with the involvement of the communities that it will affect. All significant adverse environmental and social impacts should be considered for mitigation and monitoring using a strategy of prevention, reduction and compensation whilst enhancing the opportunities for benefits. Prevention and reduction may involve management or technical modification to the project. Where an adverse impact cannot be avoided, compensation measures are required. To determine appropriate compensation, a clear link needs to be established between the costs and benefits of the project to determine which sections of the community are likely to suffer. Monetary compensation should only be used where other measures are unavailable or are inappropriate. This is because amounts paid are usually linked to the market value of the resource, which rarely reflects the full value of that asset to the individual. In addition, it

3 Whilst it is likely that much of the work will be concentrated on those people that live within the vicinity of an oil and gas activity, impacts can affect populations that live some distance from the project, or only use the project on an occasional basis.


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places the responsibility of solving the problem of the adverse impact onto those affected, instead of those responsible for the adverse impact. However, on occasions, monetary compensation may be the only option available. In these cases amounts paid have to be considered relative to the local income level. Measures to prevent or mitigate environmental and social impacts need to be stated in an SEA management plan to ensure that they do not conflict. The plan should also contain agreed compensation measures, the monitoring strategy and the strategy for reacting to unexpected impacts during project implementation. The draft SEA and management plan need to be widely circulated for comment using an appropriate channel of communication and language - this will vary between stakeholder groups and between countries. In some countries there are statutory requirements for consultation. In all cases good records should be kept to enable subsequent verification of the process. Step 3: Preparation of Final SEA It is often necessary to actively seek comments on the draft SEA, especially from affected communities, by arranging public meetings or other appropriate consultative fora. Once comments have been received, the final SEA can be prepared, documenting the results of the consultative process and explicitly indicating how comments have been addressed. A key output is the Social and Environmental Management Plan that should provide the basis for managing and reporting on the social and environmental dimensions of the development, including ongoing stakeholder participation and community projects. C.4 Identifying and Mitigating Social Impacts Social impacts can be divided into the following broad categories:

Demographic impacts;

Socio-economic impacts;

Health impacts;

Impacts on social infrastructure;

Impacts on natural resources;

Impacts on lifestyle;

Impacts on cultural property. These areas are interlinked and cannot be treated in isolation. For example, a change in the size of the population of an area could affect the health and well-being of the resident population, and increase the demand on the social infrastructure and the use of environmental resources. Social impacts will generally be most significant at the project site and logistical support locations (e.g. ports, airports, supply depots, etc). However, important impacts may also accrue to more remote communities such as fishing communities impacted by offshore operations.


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C.4.1 Demographic Impacts Demographic impacts include changes on the size and make-up of populations (age, sex, ethnic mix, marital status, educational attainment, spatial distribution, etc) and the levels of sickness or disease (morbidity). The influx of project employees will directly impact local demography. However, indirect impacts are often more significant, as people are attracted by potential employment or other economic opportunities (supply services, company hand outs) or due to improved access to the area (e.g. loggers). On the other hand, OMV activities can have a positive effect on migratory trends and the characteristics of a population by, for example, reducing migration away from a location that previously had little economic activity. Management Response Impacts and responses are likely to vary between different demographic groups (old and young, ethnic groups, male/female, etc). Each demographic group therefore needs to be considered in turn. C.4.2 Socio-Economic Impacts Socio-economic impacts include changes on direct and indirect employment, wage levels, purchasing of local/regional/national supplies, revenue in the form of royalties and taxes at the local, district and national levels and associated impacts on public spending and fundamental changes to economic structure. The benefits of OMV operations can be highlighted here, and mechanisms should be considered to leverage these benefits (e.g. maximising the extent of local employment). However potential negative distortions can occur in the local as well as the national economy, most notably creating a boom/bust development. Other impacts may include pushing traditional/subsistence societies into a cash economy and increasing the cost of local goods beyond the resources of local people. Management Response In many cases the socio-economic impacts of oil & gas activities are welcomed. However, it is important to anticipate negative impacts and to take steps to reduce them. Where the socio-economic impacts predicted would be extremely detrimental to the local community (as may be the case for remote indigenous communities), an offshore approach to development, where no new roads are build into the project area, may be the only realistic way to sufficiently control impacts such as immigration. In some countries, little of the revenue that is provided to government from royalties and taxes feeds back into the local area. In such cases, OMV should attempt to work with the national government and try and focus development/investments to bring net benefit to local communities. C.4.3 Health Impacts Isolated local communities can have little resistance to disease brought in by migrant workers, and equally migrant workers can have little resistance to endemic diseases. The health issues of local communities can also be severely affected by changes in environmental quality through poor waste and sewage provision, contamination of air, water, etc, particularly where the communities depend on these resources as sources of drinking water, fish etc. Psychological stress and the impact it can have on physical health should also be considered.


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Management Response Negative impacts can be largely prevented through good environmental management and sensible health precautions. In sensitive locations this should include health screening for employees, good health provision for employees and actions to strengthen health provision for communities. C.4.4 Impacts on Social Infrastructure Demographic changes and project activities can place a greatly increased burden on social infrastructure such as health care, education, transport and roads, waste collection and disposal, housing, water, recreation, police and fire services and power production. This can result in decreased service provision to local communities. Management Response Where the project will increase the burden on existing social provisions or generate a demand for new social provisions OMV should look to extend and strengthen existing social provisions. Many no or low cost opportunities exist for OMV to make a positive contribution. Improvements required for the project, such as upgrading roads, can be of direct benefit. In remote areas, project services such as electricity, water and waste can be extended to the local community. Temporary project buildings for storage, accommodation etc, can be of use to the local community following decommissioning. Local government and communities need to be fully involved in planning infrastructure improvements to ensure that they fit in with existing plans and fulfil community needs. To guard against taking the role of government and to transfer responsibility for long term maintenance of infrastructure, OMV should aim to partner local government in infrastructure development wherever possible. C.4.5 Impacts on Natural Resources The social impact of actual and potential environmental impacts on different groups of the population needs to be examined. Groups that may be affected include those who have access or use the land (or its resources) in addition to owners and tenants. In the case of off-shore operations, groups such as fishermen or nearby communities that may perceive risks from an oil & gas operation need to be considered. Management Response The appropriate response is to minimise the impacts on natural resources and implement adequate safeguards to potentially affected communities. This includes emergency response plans that should be drawn up in consultation with local communities. C.4.6 Impacts on Lifestyle Lifestyle impacts encompass social cohesion, lifestyle, mobility patterns, and social structures. Perceived as well as actual impacts are important. For example, local leaders can feel that they are losing control on the community by the arrival of OMV employees. The fear of environmental risks can also have an impact on the society. The immigration of new people into the community can increase negative influences in society such as alcoholism, crime, prostitution etc. These impacts can be particularly severe for a previously isolated community, or where the security needs of the operation are high.


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Management Response Consultation with community groups throughout the project can address many of the perceived concerns and assist local communities to retain control. In order to minimise lifestyle impacts, measures such as codes of conduct can be worked out with community groups. For isolated communities a policy of minimum contact may be required. Where there is any risk of OMV security arrangements having adverse community impacts (these may range from human rights abuses by security forces to drawing security resources away from the community), guidelines should be developed and arrangements discussed with community groups. C.4.7 Impacts on Cultural Property Cultural property includes sites or structures of archaeological, religious, spiritual, historical, cultural, recreational or aesthetic importance. Most societies have cultural property that is fundamental to their identity, but they are not always obvious. They can be impacted directly, for example through construction activities, or through seismic damage, or indirectly such as blocking access routes. Improved access can also damage previously inaccessible sites by opening them up to outside visitors. Management Response All sites of cultural importance need to be identified. The most obvious way to identify sites is through consultation with local communities. Other sources include aerial photography, national government and the United Nations Educational, Scientific and Cultural Organisation (UNESCO). Once identified, measures should be implemented that safeguard these areas. All measures need to be agreed by local communities.

community relations hseq hq 11-01-00[2]

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