Issue No. 21, March 2014
Above-ground Facilities and Stakeholder Engagement: Deploying the 'CAC'
Oil and gas facilities are located around the globe, often operating in close proximity to local communities. Though cultural contexts near projects, refineries and terminals may differ enormously, stakeholder concerns regarding potential environmental degradation, health and safety risks, inequity, and revenue sharing are common across borders. This briefing offers observations 'from the field' regarding the use of an increasingly common stakeholder engagement tool, the Citizen's Advisory Council (CAC), and provides guidance on when and how such a tool might be employed.
For companies or projects that need to build and demonstrate meaningful and direct local community engagement, citizen advisory councils provide an attractive model. CACs can offer oil and gas companies unequaled stakeholder engagement (SE) credibility, provided they are well-designed, able to meet local interests, and adequately resourced. Nonetheless, they do not represent an engagement model that fits all contexts.
PWSRAC / CIRCAC The best known U.S.-based oil and gas CAC is the Prince William Sound Regional Advisory Council (PWSRAC). This group and the associated Cook Inlet Regional Citizen's Advisory Council (CIRCAC) were established in 1990 in the aftermath of the Exxon Valdez spill as permanent, industry-funded councils to oversee both the oil transportation industry and its government regulators. Prior to their founding, only regulatory hearings offered local stakeholders a regular opportunity to give feedback, advice and opinion to industry.
Role and Features
- PWSRAC and CIRCAC were established by Congressional mandate, rather than collaborative and mutual industry-stakeholder agreement.
- PWSRAC has more than a dozen voting board members that represent major public stakeholders, including cities, villages, and groups representing Alaska Natives, conservation, tourism, commercial fishing, and aquaculture. Representatives of state and federal agencies sit as non-voting members. All member organizations and agencies appoint their own representative to the Council.
- CIRCAC Board of Directors includes Alaska native organizations, state chamber of commerce (tourism), environmental groups, recreational groups, commercial fishing groups, and aquaculture associations.
- Council function: environmental monitoring, spill prevention planning, public relations, port operations, scientific advice, et al.
- Effectiveness and support: Council activity has been undertaken in an atmosphere far from consistently harmonious1 with industry; however there is some indication of improvement in relations with oil and gas companies.
LOGCAC On May 23, 2013, the City Council of Lubbock, Texas appointed an Oil and Gas Citizen Advisory Committee to "analyze current methods of oil and gas exploration, development and production — including hydraulic fracturing — and make recommendations to the council."2 As one councilman explained, the role of the CAC would be considerably narrower than the Alaska councils, namely to determine that the local ordinances were appropriate and provided adequate protection. Including a petroleum engineer and an industry representative on the Committee has apparently limited the contentiousness of the body, which last met in February 2014.
Role and Features
- LOGCAC was established by the City Council.
- Function: provide feedback to the Lubbock City Council regarding local oil and gas regulation, particularly with regards to hydraulic fracturing and environmental performance in the Permian Basin.
- Effectiveness and support: It appears that LOGCAC has been undertaken with industry support; the longevity of LOGCAC is unclear, as the group's limited mandate may be considered fulfilled by some stakeholders.
CCAP In Cape Town, South Africa, a Community Advisory Committee meets with the management of Chevron's Cape Town Refinery on a semi-regular basis. Established by Chevron in 2008, CCAP facilitates company-community engagement on issues ranging from emergency response plans to environmental performance, flaring and noise.
Role and Features
- CCAP was a company-generated initiative, but is reported to have considerable support in the refinery's fence line communities.
- Committee function: public relations, communication regarding refinery events (flaring, expansion, etc.), collaboration regarding social investment, information sharing regarding expansion and/or other opportunities for community involvement, sharing and updating regarding emergency response.
- Effectiveness and support: CCAP has operated for six years as an effective tool for regular communication and exchange between the refinery and local community members. While it does not eliminate the need for other forms of engagement with local authorities and other interested parties, refinery staff indicate3 that the CCAP has been effective and will continue to be supported.
ASRC BP's Azerbaijan Social Review Commission (ASRC) was set up in 2007 to promote transparency, dialogue and public engagement regarding company activities in country. In regular engagement with the Business Unit Leader and senior company management, focus of the ASRC has included community interaction with the Sangachal oil and gas terminal as well as broader trends, challenges, and longer-term issues4, with a focus on social performance.
Role and Features
- ASRC was established as a means of continuing BP-civil society engagement undertaken during the construction of the BTC and SCP pipelines.
- The Commission includes five Azerbaijani experts (NGO leaders, university professors, students, union activists), and two international members (U.S., U.K)
- Commission function: collaboration regarding social performance strategy, effectiveness and potential new directions. Topics of consideration include community investment, information sharing regarding expansion and/or other opportunities for community involvement, grievance response mechanism and results, et al.
- Effectiveness and support: the ASRC met and provided input to BP leadership from 2007-2011. The Commission was an effective means of dialogue during early Ops for major projects and assets, and received considerable support from all participants.
As the examples above demonstrate, CACs have varied considerably in their initial appointment and mandate, function, scope, and approach. Rather than a one-size fits all model, CACs can and should be designed and deployed to meet the interests of stakeholders internal and external to major oil and gas activity. In doing so, decisions should be made regarding:
Appointment and Mandate:
- Is the CAC to be company-driven and/or funded?
- Has the CAC been requested by community members?
- Does the CAC retain the ability to adjust its charter / terms of reference / focus area?
- Who will serve on the CAC? (NGO representatives? Academia? Local community members? Interest groups?)
- Whom within the oil and gas company will the CAC interact with and advise?
- Will the CAC perform specific activities (e.g., monitoring or spill response design and outreach?)
- Does the CAC have an outreach role to play?
- Is the CAC focused geographically, or on a theme/issue? (or both?)
- Does the CAC respond to industry or company specific challenges and needs for input?
- Will the CAC be independent?
- Who will design the CAC, including membership, objectives, and terms of reference? (joint design, company design, or CAC member design?)
- How often will the CAC perform its activities, and for what duration of tenure?
'Consultation and Disclosure' is often the first step in engagement between oil and gas (O&G), civil society, and local communities. Meaningful O&G – NGO interaction often commences during formal 'public consultation' activities, and provides a baseline transparency tool for both company and civil society.
Properly managed, continuing communication about project activities allows companies regular insight regarding their reputation and the level of support/concern they have earned with stakeholders. Citizens Advisory Committees represent one tool for such continuing communication.
CACs allow interested stakeholders to gain a 'seat at the table' or some degree of influence over decisions affecting their local environment. CACs may also help community members understand where project activities are, or are not having an impact on their lives. They have played an important role in O&G efforts to meet community development goals.
As advisory bodies, CACs can take on a facilitating role in helping community members understand how their local facility manages the environmental and safety-related aspects of its operations. After regulatory hearings have been completed, they may represent the sole opportunity for input from stakeholders to the business. CACs may even support dialogue between company and community about the roles that business can and cannot take on, helping to manage expectations. In such cases, properly designed and implemented CACs begin to play the role of bridge between civil society, community and company.
Acorn International LLC delivers social and environmental risk management consulting services to the extractive industries and investors worldwide. With experience in over 50 countries, we look forward to engaging in continuous improvement for the industry and helping our clients better manage their non-technical risks thru proactive, context-driven stakeholder engagement.
1 Author interviews with oil and gas representatives; http://www.gpo.gov/fdsys/pkg/FR-1994-08-29/html/94-21142.htm
3 Interviews with author, 2013.
Acorn International Notes
Acorn Notes is a series of periodic papers to share ideas regarding EHSS and sustainability management for international industry.
Issue 21 - March 2014: Above-ground Facilities and Stakeholder Engagement: Deploying the 'CAC'
Issue 20 - March 2014: A Starting Point for Shared Equity
Issue 19 - March 2014: What It Takes to Run a Great Consulting Firm
Issue 18 - February 2014: Considering Human Rights - Trends and Lessons in Oil and Gas Impact Assessments
Issue 17 - June 2013: Managing Environmental Health in International Development Projects
Issue 16 - January 2013: Integrating Environmental and Social Performance throughout the Project Lifecycle
Issue 15 - January 2013: The State of Shale Play in 2013
Issue 14 - August 2012: Building Environmental and Social Governance in Host Countries
Issue 13 - May 2012: Human Rights and Business: A New Era
Issue 12 - February 2012: Extractive Industries Confront Pressure for Greater Transparency
Issue 11 - January 2012: Key Updates to the IFC Sustainability Policy and Performance Standards
Issue 10 - June 2011: Oil & Gas and NGOs: New Rules of Engagement?
Issue 9 - February 2010: Annual Study of Sustainable Development Priorities
Issue 8 - January 2009: Annual Study of Sustainable Development Priorities
Issue 7 - May 2008: Top Ten Lessons Learned About Health Impact Assessment
Issue 6 - January 2008: Annual Study of Sustainable Development Priorities
Issue 5 - September 2007: Results of web forum with our International Partners
Issue 4 - January 2007: Annual Study of Sustainable Development Priorities
Issue 3 - May 2006: Suggestions and tips for safe international travel
Issue 2 - January 2006: Annual Study of Sustainable Development Priorities
Issue 1 - November 2005: The Top 10 “unspoken" criteria for determining the success of EIAs