Community relations: Getting Out of the Black Box

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Maximize community benefits? Mitigate negative impacts? These questions were not really on the radar screen when Gary MacDonald, with over 20 years in social performance management in extractive and agro-forestry projects, began as a business consultant. But after years of experience, including creating social management systems and teams for four megaprojects, he and the Monkey Forest teams of practitioners have become experts in helping companies address these complex questions. Looking back, and then forward, he gives his thoughts on improving community relations, project planning and best practices in the mining, oil and gas industry.

Vincent Frigon: For a long time, many companies were reluctant to engage in community relations. Why?

Gary MacDonald: When I started out in 1992 there was no effective community relations practice in the extractives. But generally, companies would build schools, health clinics, or other things and then transfer them to communities, thinking that was all they needed to do. And they would be a failure because they created relationships built on dependence. Companies would have a donation program but no real community relations department in the way we would think of it now. Some people were doing development work based on public-sector needs. Others would have public relations people working to get information into the communities, but they weren’t equipped to deal with trouble and weren’t sure what to do when they encountered it. People used to say, “but we gave them a school, how can they be unhappy?” There were no standardized techniques on how companies should build and maintain relationships over time.

V.F.: What was the turning point?

G.M.: Certainly part of it was the rise of the banks in the late 1990s, which led to the growing dominance of the International Finances Corporation Performance Standards as the floor for performance. Plus, companies became more receptive to the idea of trying new practices and getting social performance management out of the black box. They started to experiment with people working in the communities gathering as well as delivering information, doing research instead of assuming they already knew how the community functioned. It started with people focusing on community consultation, which took time but paid off: we found out how people wanted to be communicated with, what their issues were, etc. And along with that came the increasing realization that we needed to find better ways to document the work and make it more understandable to people who aren’t social specialists. In the end, we did what companies involved in successful mega-projects do today almost as a routine, which is translating social impact assessment into actual performance.

V.F.: We are moving toward better practices but what should be the driving force? The industry itself? Practitioners? Governments and NGOs?

G.M.: I believe the impacts on the ground should be the driver. Individual practitioners have always been responsive to those impacts and how those impacts will be perceived. Practitioners listen to companies who want to be more productive, but also to communities who want to mitigate negative impacts. In fact, a group of us – who are “competitors” in our daily lives – have come together to start work on a platform we can all use to improve social performance management as a practice. We’re very excited about it – its launch will be at the World Mining Congress in Montreal but I’ll be talking about it also at the Boréalis Conference 2013 in Brisbane, Australia. It’s an initiative for practitioners, not organizations.

V.F.: Large companies now have community relations departments and more resources dedicated to social performance. But they’re still facing challenges…

G.M.: The economic slowdown has had a major impact, especially in the mining industry. At times like these it’s easy to see “relationships” as a nice to have, instead of a must have, and managers have a lot of pressure to reduce staff and resources dedicated to social performance. But community relations are built over the long term. It is important to assess the impact of budget reductions on community impacts – communities are certainly watching and assessing how companies react when times are bad!  But the real key is that social management systems must be fully integrated into management structures, just like operations, finance and human resources are fully integrated departments, and not something you can ignore when the situation becomes more difficult.

Gary MacDonald is a principal and cofounder of Monkey Forest Consulting. He will be one of the guest speakers at the Boréalis CSR Conference in Brisbane, Australia, on September 18-19, 2013.

Please note that the opinions and ideas expressed in this article are those of their authors and do not necessarily reflect the opinions and ideas of Boréalis.

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