Getting it Right: Making Corporate-Community Relations Work
Woodrow Wilson Center,
The authors of this book, are among the wisest of those who advise corporations on community relations. They, and colleagues involved in the Corporate Engagement Project, have published over the last few years a series of valuable 'field notes' that dissect relations between corporations and communities and recommend actions to establish or maintain good relations, and repair damage (www.cdainc.com). This book draws on these findings and expands the insights from individual cases into a general model that provides a framework for thinking about corporate community relations, and provides specific advice on a series of topics such as compensation and local employment that are central to those relations.
The book is not a mainstream development text. Its subject matter is large-scale corporate investments in developing countries - the oil fields, mines, power stations, and plantations that involve multimillion dollars of largely foreign investment, take several years to plan, often involve the host-country government providing the rights to explore for oil, extract minerals, or establish plantations, and, once up and running, are expected to operate for several decades. Such projects are commercial, profit-making activities, often in remote, rural areas. Their development impacts consist of the revenues that they generate for governments, and their influence on how a country is perceived as an investment destination, and on the people and communities living nearby.
This book starts from three important observations, which match my experience of working on such projects worldwide. First, communities often welcome these projects: 'They look forward to the creation of jobs and other income opportunities, and they look forward to being connected to the outside world through the company' (p. 5). Second, the corporations running them are typically not villains: 'They try their best to run effective, profitable and beneficial operations that take account of the needs of all their stakeholders, including the local surrounding community' (p. 6). But third, despite initial good intentions, when both companies and communities want to get it right, 'in a short time, tensions between the two rise and negative attitudes surpass positive ones' … 'we have seen policies and programs, intended to establish positive relations, backfire, and instead, bring angry demonstrations at the company gate and seemingly endless negotiations and demands'(p. 6). The authors contend that this trajectory is not an inevitable consequence of multinational investment in developing countries; nor something that happens due to backward, fractured communities where most people are poor and uneducated. They argue that three aspects of the interaction between companies and communities are central to how the relationships develop. First is benefits distribution: how the jobs, salaries, contracts, and infrastructure that are created by company operations, as well as the intangible benefits of a company's arrival, are distributed. Second is corporate behaviour - not only that of the community-relations staff, but the overall way in which corporate employees and their contractors comport themselves. Third are side effects: the degree to which a company does or does not take responsibility for how the side effects, such as an influx of outsiders, cash, and environmental impacts, affect people's lives.
The book provides clear guidance to company managers on how to get each of these issues 'right' and 'wrong', and proposes what is needed in the many projects where relationships are damaged, to make the transition from getting it wrong to getting it right. Running through the analysis is the argument that to get community relations right, companies must be open; must listen to communities and not make assumptions about their priorities and concerns; should look into their own behaviour and implicit assumptions; should engage with communities in ways that both treat people with respect (including respectful disagreement) and recognise that discussion and negotiation based on commercial and legal concerns often fail to address what matters to the people whom a company affects. They quote a farmer who refused to sell land to a company despite a generous offer: 'If you ask me the right way, I will sell you my land for almost nothing, but if I don't like your condescending tone, I won't sell it to you for even a high price' (p. 93).
The book applies the lens of benefits distribution, company behaviour, and side effects in detailed analysis of the core issues over which companies and communities often clash: hiring, compensation, contracting, community consultation and negotiation, and community projects. They also address company relations with NGOs and governments, and make proposals on company's internal management. This book should be of immense use to corporate managers and their bankers, consultants, and advisers. It should be read by project directors as well as managers responsible for community relations. It shows how to achieve the community-relations objectives embodied in the Equator Principles (a set of environmental and social benchmarks, developed by private-sector banks, for managing environmental and social issues in development-project finance). In the last few years, many companies have started investing in Africa, Latin America, and Asia for the first time. For these companies, getting together investors to finance a project; producing the detailed engineering design; working within the legal framework; and making the commercial arrangements to transport and sell the product are all complex and absorbing. This book points out that community relations are not a 'nice to have' add-on, but a critical factor in project success, and amenable to clear-headed and committed management in the same way as other aspects of the business. While I have no problems with the authors' arguments about why community relations matter, and how they should be addressed, I think that this book would have been even more useful if the discussion had addressed some of the very difficult issues that confront practitioners trying to apply the approach that they recommend. One such issue is achieving fairness in benefits distribution and openness in community consultation, where groups of the population - often, but not always, women - are excluded from decision making. Second, it would be of value if the authors also addressed the question of how far a company following their advice might nevertheless fall victim to the wider external environment, for example, the behaviour of other companies operating in the country, or the failure of government to invest its revenues from private-sector projects for development purposes.
In conclusion, this book is essential reading for company managers and construction contractors working on major projects in developing countries, It should be read by their bankers too. It also throws valuable light on how companies interact with communities, the dilemmas they face, and the opportunities they bring. This should be of interest to other development practitioners. Certainly the three key themes of benefits distribution, behaviours, and side effects are as much relevant to traditional development practitioners as they are to company managers.