Trust and respect between companies and communities can be tested or strengthened as the planned project turns into reality in the development and operations phase. If all involved honor their commitments and maintain open and responsive communications and engagement, this can be a period of mutual benefit and collaboration. However, if the relationship is neglected or if commitments go unmet, challenges and grievances can begin to fester and introduce conflict into the relationship.

Construction brings a flurry of activity and changes. An influx of people, vehicles, and machinery can be accompanied by increased levels of noise and dust, as well as new demands on housing, markets, and other local systems and infrastructures. Most impacts should have been identified – along with mitigation measures – in the environmental and social impact process of the pre-permitting phase, but concerns or tension may arise if reality differs from set expectations, or if impacts arise which were not anticipated. Unmet or delayed commitments can lead to dissatisfaction and distrust.

Trust and respect between companies and communities can be tested or strengthened as the planned project turns into reality in the development and operations phase. If all involved honor their commitments and maintain open and responsive communications and engagement, this can be a period of mutual benefit and collaboration. However, if the relationship is neglected or if commitments go unmet, challenges and grievances can begin to fester and introduce conflict into the relationship.

Site “lifespans” vary significantly, from a few years to several decades. As the site develops and reaches a rhythm of ongoing operations, the agreed systems and protocols for ongoing engagement, communication, and joint decision-making (e.g., monthly meetings, grievance mechanisms, community development plans) may need to be periodically revisited and adjusted to ensure they suit the evolving needs and realities of all involved.

Project ownership and company staffing often changes in the transitions between exploration, construction, and long-term operations. When this happens, efforts may be needed to effectively transfer agreements, commitments, and communication practices. A failure to transfer commitments creates risk of tension and distrust.

The agreements established in the pre-permitting phase should serve as a roadmap for communication and engagement during the development and operations phase. In this stage, communities and companies should be:

  • Engaging through a range of methods: regular visits by Community Relations officers; use of a grievance mechanism to collect, resolve, and communicate about challenges or concerns; any established recurring meetings; joint committees to oversee or advise on governance of Community Development funds and projects; etc.
  • Monitoring and communicating about impacts and their management: how impacts are being monitored and mitigated; any new data or information about cumulative or unanticipated impacts and mitigation options;
  • Sharing updates on implementation of commitments: what shared benefits (e.g., revenue shares) established in the agreement have accrued; are any ongoing compensation commitments being met? Are there new opportunities (e.g., new job openings, local procurement opportunities) or ideas to be jointly developed?
  • Discussing updates on any new developments related to the project feasibility or potential lifespan: is there any new information about geology or operations, and what are potential implications; how further information will be communicated and considered.
  • Periodically assessing the functionality of the relationship: are the processes, protocols, frequency, or triggers for ongoing information sharing and decision making working? Are additional or different roles or functions needed?

In the construction and operations phase, communities’ needs partially revolve around their continued ability to engage with and trust the company. This ability is largely contingent on whether the community feels that expectations about impacts flagged during pre-permitting were accurate; whether promised compensation and shared benefit are being delivered; and whether ongoing communication is sufficiently addressing information needs and supporting resolution of any concerns.

Photo courtesy of Newmont Corporation

If detailed agreements from the pre-permitting phase exist, these can be a useful tool for monitoring how commitments are being met, and for holding companies or governments accountable when they are not delivering as promised. If such documentation does not exist, communities should request that it be developed. Some companies also keep public “Commitment Registers” to document additional commitments relating to issues arising after formal agreements have been signed; communities can encourage this practice. In some jurisdictions, agreements made with the company in the pre-permitting phase are subsumed into larger agreements under legislative arrangements between the state, community, and company. The community and company should request that the more formal agreements make allowance to retain the intent of the pre-permitting agreements.

In addition to meeting commitments, ongoing engagement and communications is also critical for maintaining trust and “the spirit of FPIC” in the operations phase. Ideally, formal agreements will already have identified several mechanisms and forums for communities to request and receive information and to raise and resolve concerns. If these forums are not sufficiently addressing needs as intended, communities might suggest a new approach that would better meet members’ needs.

It is an unfortunate aspect of human nature to often take for granted or under-nurture those relationships which are going well or seem to require little maintenance. Many anecdotes exist about company-community relationships which become “stale” or transactional over time. In these situations, even in the absence of major conflicts, communities sometimes feel that they need to “speak up” in order to maintain a company’s attention. To avoid stalled relationships, communities and companies may wish to jointly agree to periodic evaluations in which a trusted third party can speak candidly with community members, and separately with company representatives, to flag any areas of concern, distrust, or misalignment. The aggregate results can then be shared with both parties as a basis for a shared assessment of strengths, gaps, and opportunities. If seen as legitimate by community and company, this kind of independent monitoring can be an invaluable tool for verifying perceptions, airing and resolving concerns and grievances before they escalate significantly, and reaffirming commitments and trust.

Internal Challenges

In addition to meeting commitments, ongoing engagement and communications is also critical for maintaining trust and “the spirit of FPIC” in the operations phase.

As impacts are realized and benefits or compensation are distributed, communities can also experience several new internal challenges. Major projects have significant social impacts, which can transform traditional societies and internal social relationships. Developments often attract new people to the area, which can strain existing resources and infrastructure. Long-time community residents may be frustrated by perceptions of inequitable distribution of impacts and benefits (e.g., not everyone can be employed by the company; some may experience more intense impacts than others). This can lead to resentment or even conflict, as well as undue pressures on some community members. For example, local employees sometimes experience pressure to share income with family or friends, or feel that they are expected to be able to unilaterally address individual grievances. Communities may need to adapt to new pressures and risks that require new approaches to internal governance or decision-making. It is important that social and cultural impact assessments in the pre-feasibility stage anticipate and make plans to mitigate or compensate for these impacts – and to monitor changes and impacts throughout the life of the project.

During the construction and operations phase, communities are assessing if expectations match reality and if company and government commitments are being honored. If anticipated impacts were downplayed – or if benefits were overestimated – in the pre-permitting phase, companies should expect that communities will become dissatisfied and distrustful.

Companies should ensure internal sensitivity and awareness of the cultural and social changes generated by the operation, should continue to monitor changes, and adjust – in consultation with the community – processes to manage these impacts in a timely fashion.

FPIC protects the interests of Indigenous communities, and it also leads to better outcomes for investors and governments.

— Dr. Kanyinke Sena, Maasai/Ogiek peoples of Kenya; Director, Indigenous Peoples of Africa Coordinating Committee

Good corporate practices relating to stakeholder engagement and conflict management can be valuable tools to enhance FPIC processes and to maintain consent throughout a project’s lifetime. Extensive information and resources are available to support and guide companies in establishing and maintaining grievance mechanisms, commitment registers, public forums, ongoing community engagement, etc.

The absence of visible tension with the community should not be perceived as a rationale for reducing community engagement. It is worth noting that such an absence can also be a signal that mechanisms for information sharing or capturing grievances are perceived as inaccessible or ineffectual. Further, maintaining the spirit of FPIC – and minimizing financial and reputational risks – requires ongoing investments in the health of the relationship and attention to the implementation of agreements. Companies should track their commitments to communities and monitor how they are being implemented. Periodic third party evaluations may help to ground-truth perceptions, elucidate tensions of which the company is unaware, and provide a shared assessment of how agreements have been implemented. At times, it may be helpful to jointly consider adjustments to the agreed protocols for information-sharing and joint decision-making, to reflect changes in community preferences and needs over time.

Construction and Operations Resources

The Spirit of FPIC

FPIC means that community decisions about prospective development are: FREE from coercion and manipulation by third parties such as governments, companies, political parties, and NGOs. Also free from manipulation by...

Agreements

By setting out the respective roles and responsibilities of companies and communities, agreements are a central part of FPIC implementation. Agreements can set out a mutually agreed basis for realistic...

Construction and Operations Resources

The Spirit of FPIC

FPIC means that community decisions about prospective development are:

  • FREE from coercion and manipulation by third parties such as governments, companies, political parties, and NGOs. Also free from manipulation by “elites” within the community; inclusive, accessible processes are critical.
  • Made PRIOR to the commencement of the activities being decided upon. Communities must also be given the time they need to fully understand and consider options, and to reach a decision.
  • INFORMED, with communities receiving all the information they need in a manner that is trusted, accessible, and culturally appropriate.
  • Premised on the community’s ability to give – or withhold – CONSENT

FPIC means consent. For communities, the essential value and power of FPIC is not just in consultation, but it is in the ability to give or withhold consent. Indigenous communities must have the ability to say ‘no’ (or ‘yes’, or ‘yes with conditions’). This is true at all stages of a project.

This guide frequently refers to “the Spirit of FPIC.” By this, we are referring to the following:

  • FPIC is not a “tick box” exercise. FPIC comprises and is a safeguard for a number of human rights – including the right to self-determination; free pursuit of economic, social, and cultural development; and meaningful participation. Operating in “the spirit of FPIC” means recognizing and supporting the expression of these rights.
  • FPIC means consent. For communities, the essential value and power of FPIC is not just in consultation, but it is in the ability to give or withhold consent. Indigenous communities must have the ability to say ‘no’ (or ‘yes’, or ‘yes with conditions’). This is true at all stages of a project.
  • FPIC is not a one-time decision. Formal consent must be secured at several stages throughout the life of a project. In between these milestones, operating in the “spirit of FPIC” means maintaining that consent by engaging proactively and respectfully, in accordance with agreed protocols or processes, so communities are informed, their knowledge and preferences are incorporated into ongoing operations, and so any conflicts or grievances which arise are meaningfully addressed. Projects and communities change over time; agreements may also need to change.
  • It is never too late to incorporate FPIC principles. Planning at the front-end of project development creates the best conditions for good relationships and to enable true consent for a project. However, this is not always feasible – such as when sites are acquired mid-development. In these instances, FPIC implementation can be triggered when changes or expansions to the site are proposed. Relationships can be established, improved, and reinforced; new agreements can be made. Although developing good agreements from the outset is strongly preferred, all is not lost in cases where failing agreements have been inherited, or where the company-community relationship has stagnated. An honest and open assessment of the status quo can be an essential first step in re-setting the tone of a relationship, and can create an opportunity to establish new common goals and monitoring mechanisms.

Agreements

By setting out the respective roles and responsibilities of companies and communities, agreements are a central part of FPIC implementation. Agreements can set out a mutually agreed basis for realistic expectations, and processes for communication and project modifications.

Because large projects change over time, and are complex in scope, several agreements may be appropriate over time. For example, in the pre-feasibility phase of a project, impacts and profitability will be unknown, so a short-term land access and communication protocol would make sense. Detailed plans for closure may not be concluded until a project is mature. When a project affects several communities, multiple agreements may be required. And parties may prefer to have “layered agreements” so that some elements (e.g., communications processes) can be adjusted easily without renegotiating other parts of the agreement. Every project and every community is unique; at the same time, good agreements should cover the following considerations:

Agreements between companies and communities should set out implementation and management plans, timelines, contingencies/ accountability mechanisms for addressing unmet obligations, and protocols for managing conflicts and grievances.

  1. Communications and Decision Making Processes. Companies and communities will be able to interact more effectively when both identify and understand their respective decision-making processes, authorities, and governance structures. It is important for all parties to have details such as the process, frequency, or triggers for ongoing information sharing; decision making protocols, roles, and timelines – including any election or review of representation; the process for flagging, discussing, and addressing conflicts; the potential milestones or issues for which FPIC will be sought; and the process and frequency for re-evaluating and/or revising any of these protocols. Separating the agreement on relationship management from discussions about impacts and benefits provides a stable framework for addressing unforeseen circumstances, project modifications, shifts within company, shifts in the community, or context.
  2. Impacts & Compensation. Communities and companies should reach a shared understanding of the environmental, social, and cultural impacts of a project and how impacts will be managed. This part of the agreement should be informed by baseline environmental, cultural, and social assessments, as well as the formal ESHIA. It should account for changes in community access to lands and other natural resources over the course of the project. It should also describe how impacts will monitored and re-assessed over time to account for cumulative impacts and evolving social and cultural realities, values, and capacities. This is also where company commitments to the community can be recorded in terms of how the company will avoid, mitigate, monitor, manage, and compensate for those impacts. The process for assigning value and distributing compensation for impacts should be discussed (e.g., the value of grassland to a company is different than to a pastoralist; and value is not always monetary for communities). From the standpoint of accountability and flexibility, it is important that agreements specify what happens if companies do not meet these commitments.
  3. Shared Benefits. Community benefits are different from impact compensation, and it can be useful to distinguish between company compensation for negative impacts, and agreed benefits the company will deliver to the community. When the level of benefits may be contingent on commercial factors like commodity price, this can be included in the agreement. These discussions offer an opportunity for the company and community to develop a common vision and realistic expectations for impacts, future development, and benefits. Agreements may also look at the role of “trust funds” and how they can be governed to reflect diverse needs within the community and to avoid political manipulation.

The process for developing agreements is just as important as finalizing them. Ensuring that communities have sufficient time and resources (including possible external counsel) to fully consider and deliberate about conditions within a prospective agreement is essential to securing free, prior, and informed consent.

Agreements between companies and communities should set out implementation and management plans, timelines, contingencies/accountability mechanisms for addressing unmet obligations, and protocols for managing conflicts and grievances. Allocation of adequate company resources is important for implementation success. In addition to operational and capital budgets that correspond to mitigation, compensation, and community benefits, it can also be important to allocate resources for legal counsel, independent monitors or advisors, or funding/capacity for community members to play identified roles.

The process for developing agreements is just as important as finalizing them. Ensuring that communities have sufficient time and resources (including possible external counsel) to fully consider and deliberate about conditions within a prospective agreement is essential to securing free, prior, and informed consent. Please see the Inclusivity and Gender in FPIC resource for additional guidance on the importance of thoughtful, inclusive engagement leading toward agreements. The Agreements and Community Outcomes resource also outlines several considerations for ensuring that agreements lead to positive outcomes for the community.

Further Resources:
Gender and Inclusivity
Agreements and Community Outcomes
Why Agreements Matter, 2016. Ali, S., Brereton, D., Cornish, G., Harvey, B., Kemp, D., Everingham, J. and Parmenter, J. This document contains a “How to guide” outlining key elements of agreements, good practices for inclusive engagement in agreement-making, and practical guidance for planning for successful implementation and monitoring.