Monday 31 August 2015

This time it IS in my Backyard! I'm a Stakeholder, not an International Expert

This time It IS in my backyard!  Can I practice what I preach?

Looking out from my backyard near the proposed site of a major LNG facility

I’ve spent 25+ years working with major extractive projects around the world, helping them to engage and collaborate with local communities and address local concerns, to earn and maintain a ‘social license’ and align community and shareholder interests.  Over seventy-five projects in dozens of countries all over the world.  Suddenly one is in my backyard.

Last week a major LNG project was announced for my backyard, 2 ½ miles from my home on Vancouver Island in Canada and right beside where I love to catch prawns and crabs with my little boat.  

Major resource project.  In my backyard.
It is a partnership between an Indigenous Tribe, the Malahat First Nation and Steelhead LNG of Vancouver.  The project is a floating LNG platform to liquefy natural gas for export to global markets. It is planned for Indigenous owned land just down the shore from my home of nearly 20 years. See project description here.  On the surface it seems an ideal example of an Indigenous/non-indigenous business partnership; strategic and impactful.

But, for me, suddenly I am not the ‘international expert’ but one of the ‘local stakeholders’.  And already I am being bombarded with outrageous ‘facts’ seeking to ensure I oppose the project.  It is different, but somehow still the same.

Here is what I know (or don’t know, as the case may be).

Certainty?  Are you kidding?  Despite the claims and the certainty of opponents and proponents, we don’t know the social, environmental or even economic impacts with any degree of certainty. They will become known as things move forward.  An informed, vigorous and comprehensive discussion is necessary in order to know if this project makes social, economic and environmental sense.

The Malahat Tribe is economically marginalized and deserves better.  The Status Quo is not fair.   Surrounded by non-indigenous people who are relatively comfortable economically, the Malahat First Nation has 80% unemployment and has somehow been excluded from much of the economic opportunity that has occurred around them over the past 100 years.

The Malahat Nation created a huge socio-economic development opportunity for themselves, they deserve a chance to see if it can be developed in an acceptable way.

Steelhead LNG is impressive.  For some time I’ve admired how Steelhead has engaged and consulted First Nations and developed collaborative partnerships and mechanisms for ensuring local benefit and value from Steelhead’s LNG projects. 

Not just sideshow value, but meaningful upside participation and long-term value creation.  It is impressive.  They have integrated Corporate Social Responsibility into their core business strategy.  I was so impressed that I have had Steelhead’s CEO address one of my Corporate Social Responsibility programs.

Opposition helps make the project better.  No project comes out of the gate without room for improvement.  The probes, queries and analysis of investors makes the financial and business model stronger. 

Similarly, social and environmental opponents and criticism help to identify opportunities to improve social impacts and environmental performance.

My son picking out a small octopus as he helps with the prawn catch
Social, environmental and economic optimization will not happen without opposition.  Smart companies and projects find ways to engage with opponents and improve projects.

Viability.  There is no way the project should proceed if it can’t demonstrate financial, social and environmental viability and risk management.  Fortunately our system has processes (financial markets and regulatory structures) that force demonstration of viability and risk management.

Straight truths are rare.  Hyperbole, balderdash and pure bullsh*t are more common.  From opponents and proponents. 

This project won’t solve all the social and economic woes of the Malahat Tribe (nobody has said directly that it will).  It also won’t, as the Anti-everything crowd so quickly claimed, bring Fracking to Vancouver Island or make Saanich Inlet bathtub warm. 

We need discussion informed by truths.  No single project will solve decades of economic marginalization. Fracking happens at the drill hole, not where gas is liquefied.  And, I’m sure science can find a better use for the heat energy by-product of liquefaction than warming up Saanich Inlet.

We can’t afford to get it wrong.  The process needs to work and inform how/if we can develop it safely. We can’t afford mistakes.  We need it to be the best it can be.  We can’t afford mistakes environmentally (I want my grandchildren and their grandchildren to be able to catch prawns and enjoy the Saanich Inlet).  We can’t afford mistakes economically. 

We don’t know.  So relax.  At this stage we have very few facts and know little.  Too much certainty is a sign of a closed mind and swallowing (or promoting) misinformation. We have a regulatory process that is quite good.  A lot better than what many countries have.
Getting ready to head out to lift prawn traps near the proposed LNG project site.
Only with an informed, vigorous and comprehensive debate will we learn if this project makes social, environmental and economic sense.

The world needs energy.  Natural gas is far from the worst form of energy available (would you rather the world used unregulated coal?).  Let’s have the process inform us and the discussion and the eventual decision on whether and how the project might proceed.

I know I plan to try and stay as curious, as engaged, as open as possible, and to be as wary as possible of the questionable ‘facts’ that will undoubtedly flow from those who enter the process with closed minds and unmovable positions.


Wayne Dunn is President & Founder, CSR Training Institute and Professor of Practice in Corporate Social Responsibility, McGill University.  He has worked on nearly 100 projects spanning the globe and industry sectors.

You can sign up for the CSR Training Institute newsletter here and read more from him here.

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Tuesday 25 August 2015

Lessons and case studies in engaging stakeholders successfully

Originally posted by Toby Webb, Founder of Innovation Forum in  Sustainability=Smart Business Blog
 Lessons and case studies in engaging stakeholders successfully

Interview with Wayne Dunn, President & Founder, CSR Training Institute

I’ve known and worked with Wayne Dunn for many years. I’ve mentioned his work before in several posts.
There’s a few links to previous posts on this page: here including this one from last year, which we were particularly proud of: 27 expert tips on engaging stakeholders in emerging markets.
He’s got some interesting new programmes coming up and given his work in what we used to call ’emerging markets’ in agribusiness, forestry and the extractive sector, I thought I’d do another Q&A with him. He always has something interesting to say.
I’ll be in Accra, Ghana, with Wayne from October 24 to November 1, and I hope to see some of you there.
Here’s a few questions I posed him recently, and his responses, which are as always, extremely practical in nature.
Toby Webb: You’ve spent decades helping companies engage stakeholders under difficult circumstances. And you’ve been a CEO of an extractive business working in a tricky environment. Which are the biggest mistakes you see companies making when faced with communities and NGOs concerned with high impact operations?
Wayne Dunn:
Too slow to engage. Too much reaction. Not enough value.
Early constructive engagement and a focus on creating and communicating meaningful value alignment with local stakeholders is as important as a project’s technical and economic viability.
Too slow to engage – often these confrontations develop because companies were slow to engage at the start, thinking it could wait until the project was further along, or they had more budget to work with.
Lack of early and strategic engagement creates vacuums that opponents, wild assumptions (disguised as facts) and other problems will enter.
Too much reaction – often communities and NGOs take aggressive public stances and have ‘facts’ that are skewed or just plain wrong. Or companies have screwed up and invited the confrontation. Or both.
Too often the corporate response is too defensive, ending up in ‘positional’ situations that prevent rather than help them to bridge gaps and find alignment. Engage constructively, not defensively.
Not enough value – developing meaningful alignment between corporate/shareholder interests and those of the community is critical. This should be a concurrent priority, equal in importance and focus with determining the technical and economic feasibility of a project.
Too often an angry community, supported by external interests can trump a project’s technical and economic feasibility.
Toby Webb: Africa has been a particular area of focus for your work, alongside Canada. Where have you seen companies get things right, and briefly, how, when it comes to running a successful and well regarded high impact business or operation?
Wayne Dunn: No company or project ever gets it all right. But, quite a few get it mostly right. I’ll talk about a couple projects I was involved in. Not because they were better than others, but, because I ran one and worked closely with the other, I am more familiar with them.
In the late 1990s Canadian mining company Placer Dome (since acquired by Barrick) was the first major international investor in the South African gold mining industry post-apartheid. They were also the first major mining company to adopt a corporate-wide sustainability policy.
The industry was going through a decade of labour force retrenchment, shrinking by about 100,000 jobs. Placer’s operation was no exception. But, Placer didn’t accept the norm in terms of severance payments, payouts and process.
Guided by their Sustainability Policy they were committed to working with the retrenched miners and their families to help them mitigate the economic impact of retrenchment at the family and community level. This approach was vehemently opposed by the National Union of Mineworkers, who took Placer to court.
After Placer won in court, with costs, the Union named Placer Dome as the worst employer in South Africa. The South African government basically stood back and nodded in agreement.
Two years later, after proving the value of their economic/community approach, Placer Dome was hailed as an Exemplar who, according to the Minister at the time, ‘had changed the social face of the South African mining industry’.
In the process Placer became the first private sector winner of a World Bank Development Innovation Award and had the project turned into a Stanford Business School Case Study. You can read a detailed analysis of the project (from Pariah to Exemplar) and the Stanford Case Study here.
The other involved a venture that I co-founded and led. We secured a concession to harvest old-growth tropical timber that had been flooded with the development of Akosombo Dam and the creation of Ghana’s Volta Lake.
This timber, three billion dollar valuation based on our assessment, was still standing, albeit underwater, and waiting to be harvested. We raised capital in New York and London and started to develop the venture.
We prioritized community engagement and local value creation/value alignment right up with developing the technical solutions to harvesting and processing submerged timber.
We established and maintained engagement with local communities and spent a lot of time thinking about how our venture could be a catalyst to support socio-economic development in one of Ghana’s most impoverished regions.
We also worked with local NGOs, including with an indigenous Ghanaian NGO on an exciting habitat and conservation project for Manatee that had been stranded behind the dam when it was built.
This paid big dividends. Here are two specific examples.
In July 2007, just as we were getting close to closing on our first major financing, the Wall Street Journal sent an investigative reporter to do a story on our project. We found out why later.
No project is without adversaries and one of ours had a connection with the WSJ and brought them over to (they expected) ‘blow us out of the water’.
The expectation was the article would be an exposé that would position us very badly on social and environmental issues.
After the reporter spent few days meeting with communities, government and NGOs we ended up on the front page of the WSJ (and I have the pencil sketch drawing to prove it!).
The article was balanced, discussing the social and environmental challenges, but also recognizing all the work we had done and the approach we were taking.
Remember, this was before we had even raised any substantial financing. We had every excuse to put off engaging with stakeholders and developing value-alignment strategies.
But, had we waited, a negative article would have made financing the project so difficult we probably would never have closed our round. As it was, we used the article in our communications and it helped potential investors to know us.
Fast forward to 2008. We had closed two rounds of financing, raising $20 million and the project was going great. We were on the verge of closing a further $35 million in financing, enough to take us to fully operational.
Unfortunately, before we could close the 2008 sub-prime crisis and market meltdown hit and markets dried up. We couldn’t raise money and suddenly we were technically insolvent.
We managed to wind things down so we could mothball the project and hope for better times. We spent nearly two years in a state of technical insolvency and were way behind on commitments on all fronts, including to local communities and stakeholders and to creditors.
Throughout this time we stayed in open and direct dialogue, keeping communities, government, creditors and other stakeholders appraised of our position and what we were doing. Finally, after nearly two years we found a company willing to invest in the project.
Because we had kept our social license and local relationships intact we had enough goodwill to allow us the space to close on that deal and the project relaunched.
We had every reason to not engage and invest in stakeholders early, and to not continue to invest time and energy in the relationships when we were down and nearly dead. But, because we did, we were able to survive.
Toby Webb: We’ve worked together training cabinet ministers from nations such as Ghana on how CSR and stakeholder engagement should look and be encouraged. Are you optimistic in your engagements with politicians in nations such as Ghana when it comes to understanding long term thinking?

Wayne Dunn: Yes. And no. It is often too tempting for politicians to look at CSR like it is another type of ‘tax’ and to quietly support communities as they try to ‘get’ more from companies.
Investing in policies, structures and mechanisms that can facilitate improved societal benefits from business and, simultaneously enhance shareholder value is not easy and not a quick political win.
Yet, you see some that are open to the idea, and many more who recognize that there is something in CSR that can be valuable for the country, the communities and for investors.
Just today I have a very encouraging discussion with an African Finance Minister on how to use the tax system to encourage and facilitate better impacts from the development and social license spending that companies are already doing.
Not to encourage more of it necessarily, but to facilitate synergy with other spending and thus improved impact on education, on health, poverty and on community infrastructure.
Often what is needed is to help leaders and managers to see things from a different perspective; to enable them to understand how a value creation, rather than a value distribution approach can produce real benefits, for society, for shareholders and for governments.
Our programs focus on giving executives, managers and front-line people from industry, government and the international community the theory, strategy and pragmatic tools that enable them to see and develop value creation approaches to CSR.
Toby Webb: Tell us about your upcoming programmes in Accra in October and November and what’s on the agenda.
Wayne Dunn: Basically it is about helping leaders, managers and executives from industry, government, development and communities to see things from a different perspective; to enable them to understand how a value creation, rather than a value distribution approach can produce real benefits, for society, for shareholders and for governments.
We have two programs. A CSR Bootcamp for Executives & Leaders that runs from Oct 30-31 and an Advanced Masterclass in CSR Strategy & Management that runs from Nov 1-6. (registration links and a special discount code are below if anyone is interested)
They are in-depth, hands-on programs with lectures, panel discussions and group work/case studies and role playing scenarios will engage, stimulate, challenge and transform. They are led by our world class faculty (such as yourself) and a diverse and experienced group of participants from throughout Africa and around the world.
Participants will develop an understanding of the forces driving change and come away with pragmatic strategies and tactics to help them and their organizations transform these challenges and risks into strategic opportunities.
These aren’t my words. You can see here what past participants have had to say about the CSR Training Institute’s programs.
If anyone has any questions they can contact Wayne at:
Aug 24, 2015 | Posted by  in AgricultureCSR and Sustainability | 0 comments

Tuesday 18 August 2015

Canadian Oil Sands - lesser of several evils

Clumsy government support of Canadian Oil Sands industry is hindering the industry's development and risking its social license

The Canadian Oil Sands industry is under global pressures from social and environmental fronts.  And this is at a time of plunging global oil prices that are eroding the industry’s financial license.
Foreign governments, markets, NGOs, celebrities and others are actively protesting the operation and expansion of the industry, focused mainly on the carbon cost that is embedded in the energy from carbon-intensive production and processing methods.

It is interesting that these groups are targeting Canadian oil sands production when energy from other areas, like the Middle East, comes with unacceptable levels of human rights, conflict, military and other costs.

Few seem to be doing the calculus that would objectively compare the socio-environmental cost of Canadian oil sands and Middle Eastern energy production.  I strongly suspect that it is much easier to address the carbon and environmental impact of the oil sands than it is to address the human rights, conflict and military costs of Middle Eastern energy.

I also suspect that part of the reason that the carbon calculus versus the human rights and conflict calculus isn’t done is (at least partly) because Canadian government ‘support’ and Canada’s emergence as a climate change dawdler has helped to make the oil sands an easy international target.

The industry is in much difficulty, despite, or as a result of, a national government and regulator that has been a strong cheerleader for nearly 10 years.  It is facing global activism and opposition and has not been able to get its production to global markets.  Pipelines are stalled, and market access looks increasingly difficult.

These are directly related and have created an, at best, very tenuous social license for the industry.  The Canadian government, who is also the national regulator, has supported the industry in ways that have undermined its environmental credibility globally.

Recent revelations in the Guardian put more strain on the government’s role as an objective regulator and give fuel to opponent’s arguments.

A robust industry requires technical and economic viability as well as some level of societal acceptance.  An industry with international and global markets requires societal acceptance and an industry social license.
While individual projects and companies can, and do, develop their own project- or brand-level social license, many industries also need some level of industry social license.

In order to achieve societal acceptance (social license) industry must be seen to be making a net positive contribution to society and have an acceptable environmental risk and cost.  Notice I said ‘be seen to be making a net positive contribution.’  Perception is reality.

The oil sands is a carbon-intensive industry, and carbon and climate change are increasingly critical global issues.

In the case of the Canadian Oil Sands, there is a public perception (domestic and global) that the industry is a global environmental bad-boy.

The Canadian government’s support for the industry, including considerable tinkering with environmental regulation, coupled with the carbon-intensive nature of the industry, has given industry critics plenty of ammunition and credibility.

Canada’s increasing laggardness on the global climate change file has further eroded the perceived credibility of our environmental regulatory system, and, as a direct consequence, the trust that the Canadian and global public has in the environmental performance of key industries such as the oil sands.

If Canada wants to see the socio-economic benefits of a socially and environmentally responsible oil-sands industry, it needs to start by rethinking how it is supporting the industry and how it is engaging in the global climate change issue.

It may be counter-intuitive, but more stringent and credible environmental regulations will help the industry rather than hurt it — and, hopefully, force opponents to do the hard, but important, work of comparing the socio-environmental costs of energy from Canada’s oil sands with energy from the conflict-ridden Middle East.

Oil sands with an environmental impact that can be improved, or Middle Eastern energy with a conflict and human rights impact that is a lot more difficult to deal with?

I suspect that comparison would favor Canada’s oil sands and also push them to better address their carbon intensity — and at the same time take a small bit of fuel from the Middle East tinderbox.

Wayne Dunn is  President & Founder, CSR Training Institute and Professor of Practice in Corporate Social Responsibility, McGill University. You can sign up for the CSR Training Institute newsletter here and read more from him here.

Monday 10 August 2015

How to find a CSR Job/Project (some thoughts)

I regularly get queries from individuals wanting to begin a career in Corporate Social Responsibility or a related field.

I wish I had good information on how to do that, but I’m not sure that I do.  There are a lot of people wanting into CSR and not a lot of paying, or even volunteer opportunities right now.

We’ve recently had a few projects slowdown or stall and I think the same is happening to many projects, as many industries, especially extractives, are facing slowdown and budget crunches.

Anyway, for what it is worth I have summarized some of my recent responses (I try to respond to everyone but do run out of time so thought I would make a post on it).

My advice is to focus on value.  Find places where you think you can add value and that are interesting and then get involved in them.

But keep your eyes open for the ones that are able to monetize the value you can help create and that may be able to share some of it with you (e.g., pay you!).   I realize that sounds vague.

Let me share a bit of my story below in case it may be helpful.  If interested, you can find more of my story here in an autobiographical address to the 50th Anniversary Celebration of the Sloan Fellowship Program at Stanford Business School.

Thirty years ago when I decided I wanted to get involved in the space where business meets society I started by working with Indigenous Peoples.  I started in Canada and it soon turned international and global.

I struggled because while there was lots of value that I could create they (Indigenous Peoples) seldom had the financial resources to pay me to do the work and the monetizing of it was too often distant, cloudy and cumbersome.

And, when I could find funding for it they also wanted access to the funding (and they had a need as well) and that often created challenges.  I was often in a situation where I was literally competing with my client for resources that we both needed.  Not fun, not sustainable and too easy for both of us to lose site of the original objectives that brought us together.

So, I stepped back and ended up, in about 1998, deciding that the extractive sector was the best place for me to add value as they had real costs and problems when trouble happened where they met with society – and this was a new area for them at the time.

Still a struggle but that at least gave me a focal point and clients/industry that were able to monetize value I could create.

Anyway, something to think about.  Stay involved, stay engaged, read, write, network and always, always, always, look at value that can be created, and monetized and that you can find a way to share in.

But, be sure to start from where and how you can serve.  Then narrow that to how serving others can also serve you.

Come to think of it, that is a good strategy for life in general!

Hopefully this has all been helpful.

Best of luck with the search, and with the future that will unfold in front of you, day by day, as you go about the search.

(I didn't want to make this post promotional so I didn't mention the CSR training that we provide.  If that is interesting you can see upcoming programs here)