How Important Are SIAs and Community Consultations?Wed, 02/22/2017 - 17:28
The archeological sites often found during the construction stages of infrastructure projects are a silent reminder of Mexico’s cultural richness. Having different world views and languages is part of the country’s charm but they also add complexity to the strategies project developers must use to communicate and connect with local communities. The existence of the ejido figure also complicates the process of obtaining land access or rights of way for large energy projects.Some of our interviewees shared their experiences, highlighting the importance that local communities play in the development of Mexico’s energy infrastructure.
Social aspects are extremely important for large-scale projects such as wind farms. There are regions in Mexico that are more sensitive than others, like indigenousowned lands. Wind energy companiesare bound by law to perform a social impact assessment, which is challenging now because not all the regulations and guidelines have been defined. A right approach to the communities implies close interaction and well-designed communication strategies that get the message clearly to the communities. Many communities in Mexico tend to think that infrastructure projects are equal to money but they must keep in mind that private companies are not the government. Project developers should have social plans to make a positive impact on the project’s surrounding communities but these plans do not substitute government actions.
We are investing in social projects in Yucatan together with our partner ViveEnergía. For the past three years we have had a local office with a team fully dedicated to working with the communities on social initiatives related to our wind farms and additional projects. We also are working with other project developers in Yucatan, including solar and wind energy producers, to further expand communication and development initiatives with local communities. We are convinced that energy projects are positive for society, not only as electricity providers but as drivers of wealth, economic growth, job creation and businesses development. Having a diversified commercial activity will be beneficial for Yucatan’s economy and population because the state relies heavily on tourism and other limited industries. We are also working to maintain open communication channels.
Social-related risks are a common concern among different energy sectors, including electricity transmission and distribution companies. As is the case with generators, companies in this sector must obtain right of way permits to move their projects forward, which involve liaising with local authorities and communities. The situation is particularly critical in indigenous communities that are not regulated by federal laws but by customs and traditions that endure from the past century or before. The other relevant risk for distribution and transmission companies the transmission fees set by the government, which have a strong impact on the financial viability of a project. In both cases, Marsh can make use of its extensive local expertise to help companies understand the risks associated with these activities and to establish particular strategies to address them.
We always visit landowners to understand what they expect as remuneration for their land, making the proper negotiations before advancing the project. For many of these people, that land is everything they have. Energy infrastructure projects are designed so the economy evolves in the area and we always try to communicate that. Following the right processes is extremely important as the construction cannot proceed if we do not have the required permits. Moreover, companies that do not comply with the established processes might be subjected to expensive fines. We agree with the authorities that having these kind of controls is necessary because it prevents abuses. In addition, following the right social management strategies is crucial to secure financing for the project because many financial institutions ask that projects comply with the Equator Principles
Rights of way permits for natural gas projects are especially complex in Mexico, particularly due to the novelty of the industry, which has been present in the country for less than 20 years. During our business activities, we have observed a recurrent lack of awareness about natural gas risks and benefits in the communities located near transportation infrastructure. Natural gas is usually perceived as a dangerous element, with high risks of exploding and polluting the environment. Our strategy is to contact communities involved in the development of new infrastructure and communicate to them the positive effects that natural gas has, such as attracting industries and boosting the local economy, as well as the objective risks by using open and clear information. At ACCESGAS we believe that honesty and education are the most important aspects to ensure the success of a project.
The social dimension of energy projects must be managed as a win-win situation. We are making use of this approach for a 12km electricity transmission line that is being constructed in the state and it has proven successful. We have not yet experienced any problems with obtaining the rights needed. Another important aspect has been the close collaboration with the municipal and federal governments. Baja California Sur’s energy department contributes to easing this process by providing legal and technical support for all the documents and permits required.
Social challenges are not just particular to Mexico. Project developers in the US also need to consider many aspects to ensure their projects will be accepted by local communities, particularly if they cross a Native American territory. We believe that bringing communities on board is more of an opportunity than a challenge. It leads to a win-win situation. Communities can have better services and economic development and companies can have a local labor force and easier access to land, even in regions outside the project’s scope because locals are likely to spread the good news. Being clear about the added value that a project can bring to a community is the best way to avoid hurdles along the way. To ease this process, the Mexican government can set up working groups to support companies in this process and act as a mediator between them, local governments and communities.