Managing social risks
We have recognised for some time that the effective management of both social risks and environmental issues are critical to sound project development. We have established robust processes to meet this challenge.
We use a ‘gated’ management process, which we call the Cairn Project Delivery Process (PDP), (see Operational and project performance). This ensures Corporate Responsibility (CR) risks are assessed and managed throughout the life cycle of a project in a structured and consistent manner. To guide our approach to managing social risks we have adopted a six-stage process, as illustrated below.
The beginning of any major new project includes a review of potential social issues. The review seeks to identify risks that may have an impact on local communities and/or raise local sensitivities and, which may therefore, make our activities a focus of attention for other stakeholders.
Where risks are considered to be high, or where Cairn has not previously been involved in the country, we may seek assistance in this review process from external experts.
We assess potential social risks for all new major projects. These assessments may be standalone Social Impact Assessments (SIAs) or incorporated into other studies such as Environmental and Social Impact Assessments (ESIAs). The scope of any social assessment will be informed by the risk identification process and by the potential needs and concerns of the stakeholders. Increasingly, regulations in many countries require companies to assess the human, social, economic and cultural impacts as a standalone activity or as part of an environmental assessment process. Gauging socio-economic impacts helps us to mitigate adverse effects and ensure that human rights are respected and protected. In 2015, we assessed social risks to our projects offshore Senegal within the revised ESIA.
Our social assessments are informed by our engagement activities, which we set out in a Public Consultation and Disclosure Plan (PCDP). Where challenging issues such as land acquisition, resettlement, water use, human rights, security and potential or perceived impacts on livelihoods are involved, we consult extensively with key stakeholders (see Stakeholder engagement). This engagement helps us to identify and assess potential social impacts and utilise local knowledge in the formulation of plans to manage these impacts. Through this open process, we look to forge strong relationships with communities, governments and business partners, and lay the foundations for long-lasting partnerships.
As part of our offshore Senegal exploration drilling programme in 2014, an Environmental and Social Management Plan (ESMP) integrated both environmental and social mitigations. This plan was revised for our 2015 operations. The 2015 ESMP has focused on reducing any potential negative impact on the activities of fishermen working near to our operations and using the same ports, seeking to incorporate local resources into the supply chain and contribute to local capacity building whenever possible (see Social and economic benefits delivered in Senegal).
Monitoring, evaluating and communicating
Monthly performance reports are required for every major project; from all contractors involved. We stipulate that all such reports must include social performance metrics. These are then collated and reviewed on a monthly basis by project managers. Examples of performance metrics include levels of local employment generated by Cairn and its contractors, the value of contracts placed locally, and the number of grievances made to us about our activities.
We also establish mechanisms for local communities and individuals affected by our operations to raise queries, concerns or grievances so that unresolved issues can be addressed (see Community engagement).
Communicating internally and externally is important for achieving business objectives related to social performance. In addition to the monthly reviews of performance metrics, formal reports may also be required for external authorities to assess our performance against social management plans. In Senegal, we reported to the authorities on our performance to an ESMP under an agreed communication plan. This was agreed and closed out with the authorities in 2015.