New Approaches to Community Engagement

Q: How has the inclusion of social and environmental impact studies affected project development in Mexico?

A: Social variables need to be considered by companies as part of their preliminary stages of any endeavor. The social aspects involved in a project should be deemed strategic elements to ensure a successful outcome. During the life cycle of a project, social opposition could cause construction delays, legal trials and increases in costs. For example, there are several gas pipelines that cannot be finished due to unsuccessful social negotiations. Two fundamental success factors need to be considered: an early community engagement to understand community behavior and identify the critical aspects that the project will need to manage, and an adequate legal strategy. One of the main problems faced by new investments is the negotiation of the right of way, which was traditionally carried out by the government. Under the current circumstances, negotiations must be executed jointly with local authorities. In many cases, financial institutions request compliance with IFC regulations (Ecuador Principles) regarding social benefits, impacts and risks. As previously pointed out, early involvement with community leaders would facilitate the understanding of the scope of the project and possible mutual benefits.

Q: What have been some of your most informative experiences working specifically in the Mexican oil and gas sector?

A: The oil and gas industry shapes the lives of local communities either in a negative or positive way, depending on the approach and work plan the company developed. In the implementation of social management plans, we have had pleasant experiences that will increase the quality of life of the communities in the influence areas of the projects. In the north of the country, for example, we identified a community that lacked running water due to the impossibility of paying the electricity bills generated by the pumping of its well. In agreement with the community, we carried out the installation of solar panels to provide energy to the community water pump, reducing the electricity bill by 90 percent. In southern Veracruz, we implemented a program of health caravans with one of our clients, taking preventive medicine to communities that would otherwise have to walk several hours to get help. Respiratory disease rates and gastrointestinal illnesses have consistently decreased since the project’s arrival in 2015. In the south of Tabasco and north of Campeche, we started a program in two communities to dispose and manage garbage to provide a more sustainable situation for health and education practices. We also drafted the social management plans and revised the social impact studies of two round winners. Through this process we learned two lessons. The first was the importance of identifying the social liabilities of each project. Companies and private investors need to understand the behavior from the past and try to developed a new approach of community cooperation. The success of this program is based on the CSR principles that each company has established. A main issue is that private companies cannot assume government responsibilities, which leads to the second lesson: private companies can make certain medium to long-term commitments that governments cannot due to a number of limitations, such as annually negotiated budgets. The perception of this distinction is not widespread in Mexico, so plenty of advantage can be taken from introducing communities to it. At the same time, the conditions that limit this also have to be explained, which are that companies have limited resources and cannot assume local investments that are the responsibility of the government.

Q: What would be your strategy to reactivate projects, such as pipelines, that have stalled due to social issues?

A: A number of relevant factors can be used favorably in these scenarios. One is the fact that President López Obrador is counting on social support to carry out oil and gas projects. The president himself has expressed explicit interest in finishing three specific projects: the thermoelectric plant in Morelos, the new refinery in Dos Bocas and the Mayan Train.

AOS Social is a project consultancy that provides technical, feasible, community engagement and contract evaluation solutions. Its area of expertise is the analysis of social risk factors that can interfere with large infrastructure projects.