Smart Solutions to Manage Community RelationsTue, 01/22/2013 - 16:53
Environmental and social issues have become an increasing concern for companies developing projects in the Mexican oil and gas industry. The successful execution of such is partially dependent on the operator’s ability to execute the work while respecting the traditions and customs that aect the communities around the area of the project. Local communities in the country are sometimes reluctant to allow companies to operate in their backyards. Companies are often compelled to negotiate certain commitments in order to gain access to fields, and companies such as Boréalis help their clients keep track of those commitments and deliver on the promises made to communities.
The idea to create Boréalis came to Jules Paquette and Patrick Grégoire in 1999, when they were developing a 1,000km pipeline project for ExxonMobil in Chad, Central Africa. The project represented a big challenge for the oil major, since it involved negotiating land access rights and giving several other concessions to local communities within the region. When the company finished tracing the route for the pipeline, people at ExxonMobil realized that they had left a trail of promises. Fulfilling those obligations became a di·cult and time-consuming task. Both Paquette and Grégoire noticed the importance of improving the way large energy companies face these commitments.
Boréalis’ goal is to assist in managing both social and environmental responsibilities that large oil companies engage in. “We provide a solution that follows the lifecycle of a project, keeping track of the relationships the company has with the communities and the commitments made to them,” says Jules Paquette, founder and CEO of the company. “Through several detailed metrics, we measure the level of compliance of those commitments and trace them to completion, even when the asset or site changes hands over time. Our software helps support auditing and corruption management processes within social investment.”
Companies have begun to understand the benefits coming from this detailed management of community relationships. “Corporations from all around the world have instituted a new position within their structures in charge of going out to the field, talk to people in the community, and build a link with them,” Paquette says. Boréalis’ CSR software serves the purpose of supervising that link through management of sustainability goals and key performance indicators (KPIs), while also measuring the e·ciency and impact of the project.
Pemex has also realized the importance of this activity, especially after the problems that companies have had with local communities in Tabasco and at Chicontepec. The NOC is cooperating with Boréalis to ensure better community relationships at its dierent undergoing projects. “We are focusing on a specific project in Chicontepec, emphasizing social investment and providing the necessary capabilities to reinforce it,” explains Paquette. “We will work both with Pemex and its contractors on their commitment to social responsibility with the communities, with Pemex overseeing the whole process.” Social investment strategies will be reviewed directly by Pemex in the system. Possessing that information can assist the company in its decision-making process. “The software could provide Pemex with real-time information that allows it to adjust its social investment strategy based on recent developments and the fulfillment of KPIs,” Paquette says. The establishment of precise metrics to get a more clear understanding of where the social investment is allocated will aid Pemex in the definition of its social responsibility strategy. “Through the software, Pemex will have access to more up-to-date information that will empower them to make more conscious decisions, under increased transparency, that will ensure that all investment plans are made in conjunction with local communities.”
A great part of streamlining decision-making is ensuring that information is available at all times, even in remote locations that are out of the usual broadband range. Readily available information at any moment allows decision-makers to react quickly to risk materialization or failure to comply with best practices. “The idea is to make as much information as possible available in order to enhance field performance,” Paquette details. “We have developed oÉine solutions to make information around social impact management available for mobile equipment through satellite connections. The system has been made as light as possible, so even with very limited connectivity people can access it.”
The underlying concept of Boréalis’ solutions is ensuring that communities get the additional benefits that encourage them to allow oil companies operating in their region. “We do not want to provide a competitive advantage to one company or two,” Paquette explains. “We want all companies to use our software, so that welfare flows directly to local communities. And while the solution right now focuses on large-scale projects at later stages of development, we have the proactive challenge to provide an additional solution for entry-level companies that will give them the opportunity to collect data from day one and eectively generate welfare.” By building long-term relationships with communities, companies do not only manage to avoid protests, delays, or halts at their projects, but they also acquire the community’s assistance in protecting the project’s interests. “If the community buys in, they will defend the project,” Boréalis’ CEO adds.
Another advantage that strong community relations oers is the improved access to project financing. “If companies are able to prove that they have a superior understanding of the community and a controlled management of social and environmental risks, financial institutions will have greater security in financing those projects.” Paquette explains. Boréalis’ solution provides information about social and environmental indicators, such as land access and management, social investment management, local business development, environment monitoring, and carbon footprint management, among others. All these data could provide financial institutions with the necessary confidence on the project’s success to grant additional investment.
Regulations to manage social and environmental impacts in Mexico are not yet fully in place; however the increasing attention that both topics have garnered in the country are expected to give them a more prominent place on the energy agenda in the future. Evidences on the government’s ambitions to better regulate these matters in the near future include the Climate Change Law and the annexes on sustainability added on the latest tenders issued by Pemex. “Things are changing in the industry: Boréalis would not have existed 15 years ago, since demand for this kind of services did not exist,” Paquette says.