A Social License to Operate in the 21st Century: Overcoming the Clash of Two Cultures

Energy development projects that affect local communities frequently face opposition. Industry insiders are often perplexed by this opposition and by the fact that their logical arguments seem to be ineffective at diffusing the opposition.

In a previous Culture Matters article (April 2013), Jen Schneider addressed some barriers to engagement, some factors that make it difficult for industry insiders to communicate effectively with local communities. In this column, Jim Kent and Kevin Preister describe an approach to dealing with local communities that has proved effective.

- Howard Duhon, GATE, Editorial Board of O&G Facilities

The takeover of a public park in Turkey to build a shopping mall, the raising of the public bus fare in Brazil, the government closing the major newspaper in Greece. What do these events have in common with the Keystone XL pipeline proposal? The authorities in all four of the situations made a decision to impose a project solution onto the people without talking to those affected as part of the decision making process.

It was a small public park in Turkey that the government decided to take over and build a shopping mall without talking with people affected by that decision. In Brazil, raising the bus fares (mostly on the poor) seemed to be a reasonable approach to raise revenues for the upcoming Olympics. In Greece, the shutting down of the government newspaper and the firing of a couple dozen workers was done to show the European Union that they were practicing austerity. In Keystone, a proposed pipeline to carry tar sands from Alberta, Canada to Houston, Texas for refining was designed across the Ogallala Aquifer and the Sandhills, which are both sacred cultural icons in Nebraska.

The problem? These were all decisions that were made from the top down on the basis of internal considerations and they reveal a lack of capacity for dealing with emerging social realities across the globe. The decision makers neglected to understand that citizen engagement is a key to business success in today's volatile world where people are insisting on managing, predicting and controlling their environments.

Small acts that seem inconsequential to government and industry can spark a revolt and reaction that in the case of the three countries could bring down governments. The Keystone project could be lost because of the groundswell against the project stimulated by the routing mistake. Ten years ago, in a more formally structured world, these decisions would not have mattered . These days, when citizen resistance and mobilization are becoming routine and global, it matters.

Transmission line corridors, alternative energy sites, and the proliferation of oil and gas development have improved our energy outlook but have also impacted people across the country. In particular, the hydro-fracturing of wells for natural gas production that has caused the most concerns in recent years. It is not hard for a concerned public to find cause for alarm; for example - a recent study documents methane and ethane poisoning of a large number of wells within 1000 feet of fracturing sites. The fracturing issue has now fused in national perception and become widespread throughout hydro-fracturing areas, while also spreading turmoil rapidly to other more traditional oil and gas activities.

One reason resistance has developed is that much of the hydro-fracturing is being done in geographic areas where citizens are not familiar with fossil fuel development. Their cultural experience and practices have done little to prepare them for the onslaught of drilling activity. When people have no mechanism in their daily lives to deal with intrusive change, their only avenue for relief is reaction and resistance. Studies such as the one cited add fuel to the fire when the development company has no connection or serious citizen engagement that they can rely on to interpret these findings. As a result, with no mechanism for communicating, the company is vulnerable not only to local resistance but to national groups who will use these studies to benefit their cause.

In today's environment, the top down approach to project design is still in place. Projects are designed by engineers miles away from the actual site. It is common practice to expend extensive engineering effort early in a project during the FEED phase (Front End Engineering Design). This design process leads to only the technical issues being addressed. The engineering culture wants the design firmly in place, with all the technical details worked out, before going public for review. Companies want to hold the cards close to their chest and not reveal much to residents that they fear could stimulate conflict. Right of way people have incentive to keep things quiet while they negotiate with landowners. Public relations people recognize that to not be transparent is to invite suspicion and mistrust yet they are constrained by corporate culture of controlling all aspects of the development process. This approach no longer is productive or profitable. Corporate neglect of citizen engagement is a costly affair for everyone.

CLASH OF TWO CULTURES

Deep down, the events described above are a cultural clash between horizontal systems of communities and vertically-organized authority of corporations. It is a clash of perceptions and practices. The community is oriented to caretaking and survival and the industry to economic gain. In this article, we show that the current cultural clash is not inevitable. In the end, these two systems must come into harmony if the oil and gas world is to remain productive and profitable. It is essential to recognize that, with communities, one size does not fit all. Just as each project is technically different, each community is different-each has different histories, different beliefs, and different issues.

In any cultural system, life is predictable through routines and language. As change occurs, people within their cultural settings need time to adjust. People continually deal with emerging issues and solve them. It is when there is intrusion, without recognition of how the culture has handled change in the past that projects are at risk.

The figures below show the old and new way of doing business. The old, traditional approach is to design in isolation, propose the design, and then defend it against opposition. This approach is depicted as a wedge into the community, fostering disruption and mistrust. This approach creates local issues. If these issues go unresolved, they offer outside groups the opportunity to take advantage of unresolved citizen issues in pursuit of their own agendas, leading to formal opposition groups such as happened in the Keystone XL project.

The new model gives residents a voice and emotional ownership, which in turn, gives the company a social license to operate. If intentional efforts are made to resolve legitimate citizen issues early in the design stage and to optimize the local benefits of a project, citizen ownership through absorption will serve as a buffer for the project against outside forces.

PREVENTING EMERGING ISSUES FROM ESCALATING

The key to understanding culture from a practical point is to learn about the issues that are currently present in the community or will be created by the project. Community issues do not begin as uncontrollable events that are guaranteed to stop projects. Instead, they emerge as legitimate questions that citizens everywhere have regarding a proposed project. It's not that the local community has formed a steadfast or universal opinion. Rather, people are simply seeking answers to the most basic questions. Some of these include: What will this project do to my property value? Will it increase traffic? How will it impact air and water quality? How many people will be hired locally? Will the project enhance the growth of local businesses? Will community-based training programs or college curriculums be offered to prepare our citizens and youth for employment and advancement opportunities? Will the company ensure local benefits from the project such as reduced electric rates? Will there be assistance for establishing businesses to service the project?

When these kinds of basic questions are not addressed, they can easily escalate from emerging issues to actual ones. By this point, people have formed their own opinions, and the community dialogue changes from seeking information to developing positions. The questions turn to negative statements, such as, "This project will ruin our property values. The traffic and noise from this project will be unbearable. Children and seniors with asthma will suffer, and the incidence of cancer will increase. They will not be contracting or hiring locally. Local businesses will not benefit from this project and may actually lose revenue. The skills necessary for employment are beyond most of our citizens. The company just wants to exploit our community for profits." These sentiments may not be based in fact, but absent community engagement, perception is reality.

As one might expect, if the actual issues are not addressed effectively, events will only become worse. Community opposition is often joined by opportunistic ideological groups, followed by political positioning. The project gets polarized, and the opposition quickly moves it into a disruption. By this point, the project proponent has virtually lost the ability to resolve the individual and community issues. The issues that could have been resolved had the citizens been engaged in the early phases are taken over by outside forces who do not want any development, any time, any place, anywhere.

THE SOLUTION: THE SOCIAL ECOLOGY APPROACH

The Social Ecology approach involves attention at the community level to three concepts: a) a descriptive approach in understanding informal networks and their routines; b) human geography, or the ways that residents relate to their neighborhood and community areas, and c) issue management which creates alignment between citizen interests and company interests. Social ecology is a science of community based on cultural processes operating in any geographic area or in any resource company.

To understand local cultural issues, there are five rules to follow:

• 1. You as a project proponent, an outsider to the community and guest, have a responsibility to learn community first before acting.
• 2. People know more about their environment than anyone else. It is the job of the project manager to bring forward this knowledge and perception and make use of it.
• 3. The project proponent must ensure that citizens can predict, control and manage changes in their environment so the impacts of the project are absorbed into the fabric of the community and the, benefits are optimized.
• 4. People trust day-to-day and face-to-face communication and that method of communication is essential if the project is going to become a fit within the community.
• 5. Whoever understands human and physical geography that creates sense of place of the people controls the outcome.

Procedures to implement the five rules of culture change are:

• - Engage in early citizen contact to avoid surprises. Community engagement must be at parity with technical disciplines in tactical and strategic project decision-making. (Extensive technical work during FEED should be accompanied by extensive community engagement.)
• - The objective of early engagement with the community should be learning. Learn the informal networks of a community and their communication patterns as the basis for community engagement. Learn the language that people use to communicate on a routine basis and use that in project development language.
• - Engage the affected people directly. Do not rely on formal groups or stakeholders as adequate in understanding community interests. Do not use public meetings as a means of first citizen contact. Use the gathering places of a community as a means to foster effective project communication and as a means to be an insider to the culture.
• - Understand human geography, or the ways that people identify and relate with their landscape, to foster responsive siting of facility and corridor projects.
• - Deal with citizen issues at the emerging stage of development when the costs of time and resources are lowest, rather than allow issues to reach the disruptive stages.
• - Make use of local company staff when possible at the design and implementation stages and provide management support in assisting them to create a bottom-up approach.

CONCLUSION

The social risk to project success has become too great for the oil and gas industry to not formally recognize and systematically act upon the underlying causes of how and why citizens go from potential healthy participation to organizing to fight a project. Regardless of whether the project is on public or private land, today's projects require and deserve this level of attention.

Since community relations are now linked to project success, upfront engineering should include up-front community assessment and the establishment of an informal word-of-mouth communication system. Knowing about culture and its influences on citizen behavior presents a creative and successful way for industry leaders to steer their projects around pitfalls and other surprises that cause delays or stop projects altogether. Keeping a project on schedule through a cultural understanding of community saves time and money by learning how to collaborate with communities on their terms in a manner that benefits them directly. The true currency of the present and future is the sustained goodwill that a project creates and maintains with its communities of impact.

 
ENDNOTES:

1 The JKA Group has been tracking this emerging global trend for 30 years and has termed it "citizen-based stewardship". It refers to citizens who claim ownership of geographic place and take it upon themselves, with or without government or corporate partners, to ensure that their families and communities are healthy and safe.

2 Robert Jackson, Duke University, National Academy of Science, June, 2013 http://www.nicholas.duke.edu/hydrofracking/methane-levels-17-times-higher-in-water-wells-near-hydrofracking-sites

3 Schon, Donald A., The Reflective Practitioner: How Professional Think in Action, Basic Books, 1983.

4 One of the breakthroughs of the last 30 years has been the emergence of human geographic mapping systems that reflect cultural boundaries. For a more complete discussion of the use of human geographic mapping as it relates to energy development, refer to Right of Way Magazine, IRWA: "The Promise and Peril of Corridor Expansion" By James A. Kent, Social Ecology Columnist, Jan/Feb 2012, pages 26 to 29. http://www.jkagroup.com/Docs/IRWA-Corridor-Expansion-2011-12-05.pdf