Social Impact Management Plans: Innovation in corporate and public policy

Environmental Impact Assessment Review 43 (2013) 40–48

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Environmental Impact Assessment Review journal homepage: www.elsevier.com/locate/eiar

Social Impact Management Plans: Innovation in corporate and public policy Daniel M. Franks a,⁎, Frank Vanclay b,1 a b

Centre for Social Responsibility in Mining, The University of Queensland, Sustainable Minerals Institute, St Lucia, Brisbane, Queensland 4072, Australia Department of Cultural Geography, Faculty of Spatial Sciences, The University of Groningen, P.O. Box 800, 9700 AV Groningen, The Netherlands

a r t i c l e

i n f o

Article history: Received 28 January 2013 Received in revised form 17 May 2013 Accepted 18 May 2013 Available online 23 June 2013 Keywords: Adaptive management Sustainable development Community development Corporate social responsibility Greentape reduction Community relations

a b s t r a c t Social Impact Assessment (SIA) has traditionally been practiced as a predictive study for the regulatory approval of major projects, however, in recent years the drivers and domain of focus for SIA have shifted. This paper details the emergence of Social Impact Management Plans (SIMPs) and undertakes an analysis of innovations in corporate and public policy that have put in place ongoing processes – assessment, management and monitoring – to better identify the nature and scope of the social impacts that might occur during implementation and to proactively respond to change across the lifecycle of developments. Four leading practice examples are analyzed. The International Finance Corporation (IFC) Performance Standards require the preparation of Environmental and Social Management Plans for all projects financed by the IFC identified as having significant environmental and social risks. Anglo American, a major resources company, has introduced a Socio-Economic Assessment Toolbox, which requires mine sites to undertake regular assessments and link these assessments with their internal management systems, monitoring activities and a Social Management Plan. In South Africa, Social and Labour Plans are submitted with an application for a mining or production right. In Queensland, Australia, Social Impact Management Plans were developed as part of an Environmental Impact Statement, which included assessment of social impacts. Collectively these initiatives, and others, are a practical realization of theoretical conceptions of SIA that include management and monitoring as core components of SIA. The paper concludes with an analysis of the implications for the practice of impact assessment including a summary of key criteria for the design and implementation of effective SIMPs. © 2013 Elsevier Inc. All rights reserved.

1. Introduction Impact assessment was conventionally approached as the predictive assessment of the environmental and social impacts of project proposals as part of project approval by government; the regulation of environmental impacts through environmental management plans; and the issuing of an environmental license during the operational phase of development. This process was designed to consider if, where, and how a development could be appropriate in a particular context, and to ensure that projects proceed without adversely disturbing ecosystems, communities and economies (Vanclay, 2006, 2012). While this approach to sustainable development that is focused on prediction, harm minimization and the impacts of a single proposal has contributed to improvements in outcomes for communities and environments, the experience of developments in a number of jurisdictions has revealed that such an approach is insufficient (Esteves and Vanclay, ⁎ Corresponding author. Tel.: +61 7 3346 3164; fax: +61 7 3346 4045. E-mail addresses: [email protected] (D.M. Franks), [email protected] (F. Vanclay). 1 Tel.: +31 50 363 8657; fax: +31 50 363 3901. 0195-9255/$ – see front matter © 2013 Elsevier Inc. All rights reserved. http://dx.doi.org/10.1016/j.eiar.2013.05.004

2009). Sustainable and equitable development requires that social and economic impacts, as well as environmental impacts, are managed across the life‐cycle of developments, and that in addition to the avoidance and mitigation of impacts, there is a need to focus on the delivery of long‐term positive outcomes (Esteves et al., 2012; Franks, 2011; João et al., 2011; Joyce and MacFarlane, 2001; Sairinen et al., 2011; Vanclay and Esteves, 2011). Further, the full range of impacts, beyond those of a single development, must be understood and managed in their environmental, economic and social context (Vanclay, 2002; Duinker and Greig, 2006; Franks et al., 2010a, 2010b, 2011). The ongoing management of social impacts has not received the same attention as environment impacts, which are commonly regulated through environmental management plans and systems, and have associated standardization within the framework of the International Standardization Association (ISO), such as ISO 14001 which was implemented in 1996 (Carruthers and Vanclay, 2007; Vanclay, 2004). In contrast, it was only in December 2010 that ISO endorsed guidance on social responsibility (ISO 26000), and even then it was only a guidance document not a standard intended for certification. The historical absence of a governance framework for managing social and economic impacts has left many developments ill‐prepared

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to meet community expectations (Esteves et al., 2012; Everingham, 2012; Ivanova et al., 2007; Kemp, 2011; Lockie et al., 2008; Rolfe et al., 2007; Solomon et al., 2008). This paper reports on innovations in corporate and public policy that have attempted to: strengthen internal management systems; encourage the commitment of resources for engagement with communities and other external stakeholders, and for the development of processes for regularly reporting on social performance; and focus on the enhancement of positive outcomes with an eye to the legacy that will be left to communities and regions upon the cessation of developments. We specifically address the development of Social Impact Management Plans (SIMPs) and related strategies in various jurisdictions. We consider four cases: the International Finance Corporation (IFC) Performance Standards; Anglo American's Socio-Economic Assessment Toolbox and associated corporate management systems; the requirement for Social and Labour Plans in South Africa; and the Social Impact Management Plans which were developed as part of an Environmental Impact Statement in the State of Queensland, Australia.

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business development, local and Indigenous employment, traffic, housing, resettlement, community health, and cultural heritage. For governments, SIMPs offer a means to use the lever of project approval to influence the social outcomes of development. They can encourage preparedness within companies, organizations and other development institutions to address impacts during implementation. For companies (and other development institutions), the promise of SIMPs is that they offer an organizing tool to achieve social performance goals and can assist in meeting the expectations of, and maintaining amicable relations with impacted communities. For financiers, SIMPs are a means to better align investments with any adopted performance standards. For communities, SIMPs offer an opportunity to have an ongoing influence on developments. Below, we analyze the emergence of SIMPs with reference to four corporate and public policy initiatives. 3. Innovation in corporate and public policy: comparing examples of social impact management 3.1. Methodology

2. Social impact assessment as a management process The publication of the “International Principles for Social Impact Assessment” (Vanclay, 2003) codified a shift in social impact assessment (SIA) practice (Vanclay, 2006). The principles emphasized SIA as the “processes of analysing, monitoring and managing the intended and unintended social consequences, both positive and negative, of planned interventions (policies, programs, plans, projects) and any social change processes invoked by those interventions” (Vanclay, 2003, 5). Management and monitoring while identified as components of SIA in some theoretical literature (see for example Becker, 2001; Burdge and Vanclay, 1996; Wolf, 1983) have been underemphasized in SIA practice. SIA has historically been regulated as a once-off, single point-in-time, assessment document. SIA can be considered as a number of distinct yet iterative phases within an adaptive management process with community engagement and participation fundamental to each of these phases. Franks (2011, 2012) summarized the phases of an adaptive management process for SIA (see Table 1 and Fig. 1). The wider adoption of SIA as a management process complemented parallel shifts in the practice of community relations, whereby a dedicated corporate function with capability from social disciplines is responsible for understanding, and being more responsive to, local communities and their concerns (Kemp, 2009; Kemp et al., 2006). Notwithstanding these changes to corporate practice, many government jurisdictions with SIA requirements have continued to emphasize front-end assessment, and thus the potential for integrating SIA with community relations and corporate social responsibility has been largely unrealized. The emergence of SIMPs therefore could offer one means to bridge these fields and better address management and monitoring within SIA.

An extensive literature and desktop review was undertaken to identify all efforts where SIA was being linked with the ongoing management of projects in actual practice. The review considered industry, government, multilateral agency and non‐government organization websites, reports, legislation and policies (published and unpublished), as well as academic literature. Of the examples identified, four were selected for further analysis based on criteria such as: availability of information, period of time since establishment, and extent and coverage. The selected examples also represent a balance across the different types of implementing ‘jurisdictions’ (government, corporate, and multi-lateral agency). The four cases are: the Environmental and Social Management Plans in the International Finance Corporation Performance Standards; the Social Economic Assessment Toolbox of Anglo American, a major resources company; the Social and Labour Plans required by the Republic of South Africa; and Social Impact Management Plans that were required by the State of Queensland, Australia. Targeted consultations were undertaken by telephone, email and, for three of the four initiatives, in person with key government, industry and community informants to understand the initiative, its features, and the drivers and responsibilities of each party. The authors undertook the initial review in 2008–9 as part of an applied research project to inform the development and subsequent introduction of SIMPs by the Queensland State Government, Australia (Franks et al., 2009). Findings were further informed by presentations covering each of the cases at a dedicated session convened by the authors at the 2012 International Association for Impact Assessment conference in Porto, Portugal. Comparative analysis assisted in distilling key findings and relevance for the practice of impact assessment. Below, each example will be described in turn.

2.1. The case for social impact management plans

3.2. Environmental and Social Management Plans — International Finance Corporation

SIMPs are a management tool for addressing social impacts during the implementation of planned interventions (projects, plans, policies and programs). SIMPs have the potential to operationalize the findings of dedicated phases of predictive assessment, outline the priorities, resources, strategies, processes, activities, commitments and staffing employed to avoid and mitigate negative impacts, and enhance the positive impacts of development. They may detail monitoring, reporting and community engagement processes and may be developed with the participation of impacted parties. They have the potential to be integrated with environmental management plans and/or consist of a collection of more specific plans, including plans for community engagement and participation, community development, complaints and grievance handling, procurement and local

The identification, assessment and management of social and environmental impacts are mandatory for all projects financed by the International Finance Corporation (IFC), the private lending arm of the World Bank. According to the IFC, the promotion of the social wellbeing of local communities is an explicit objective of IFC‐financed projects, and social assessment is an integral part of the environmental assessment process (IFC, 2003). Building on the IFC safeguard policies that it had in place since 1998 (and that emulated those of the World Bank), in 2006 the IFC introduced a set of environmental and social performance standards that are a condition of financing. These were updated in 2012 (IFC, 2012). These performance standards require that borrowers prepare Environmental and Social Management Plans (ESMPs) that summarize the findings of the

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impact assessment; outline the proposed measures for mitigation and community development; provide estimates of the timing, frequency, duration and cost of management measures; and establish monitoring and reporting procedures. The performance standards explicitly require borrowers to undertake capacity building activities where there is not the institutional or community capacity to perform the activities. Finally, the ESMPs outline the procedures for how social issues will be addressed in site management systems and plans. PS1 requires funding recipients to develop and implement an environmental and social management system that consists of seven elements: (i) policy; (ii) identification of risks and impacts;

(iii) management programs; (iv) organizational capacity and competency; (v) emergency preparedness and response; (vi) stakeholder engagement; and (vii) monitoring and review (IFC, 2012). Risks and impacts (positive and negative) are to be assessed and managed across the key stages of a project's lifecycle, including consideration of supply chains. The scope of the assessment and management system must be commensurate with the scale of the risks and impacts. The IFC also established a Compliance Advisor/Ombudsman in 1999 to handle community grievances related to IFC financed projects and can issue ‘action plans’ to bring projects into compliance with the performance standards.

Box 1. SIA as an adaptive management process (after Franks 2011, 2012). (1) scoping and formulation of alternatives The scoping phase sets the parameters for the later phases of assessment and management by determining the scale,timing,andfocusofthe assessment, as certaining who is likely to be impacted and identifying the actions that are likely to result in impacts. Scoping will begin by defining the purpose of the assessment and identifying background material that may influence the assessment. Alternative options should be formulated for later analysis and an initial appraisal of the impacts of these alternatives undertaken. The output of the scoping phase may be the definition of the objective, scope, scale, priority issues, and terms of reference for the phases of assessment and management to follow. Community engagement and participation especially important in the early phases of SIA.

(2) profiling and baseline studies Social profiling consists of understanding the communities and stakeholders potentially impacted by the activity through social and economic research. Profiling involves analysis of the social and economic characteristics of a region at a given point of time. Scoping also involves understanding the nature of the organization undertaking the planned intervention. Baselines are an appraisal of the state of a community or social group before an activity takes place. Baseline studies provide a benchmark against which potential impacts can be anticipated and change measured. After a review of secondary information, and the identification of knowledge gaps, a program for the collection of primary data is developed.

(3) predictive assessment and revision of alternatives During this phase likely impacts are identified and predicted, and their scale and significance evaluated, using technical and participatory methods. The choice of methods will depend on the nature of the activity and the stage of the development lifecycle.The outcomes of predictive assessment and analysis are usually prioritised by their scale and level of significance. They are used to provide feedback to stakeholders as well as to engineers and project developers in order to modify and revise the project, and enable them to decide which proposed project alternative best achieves the objectives of the project while still enhancing social outcomes and avoiding negative impacts. For project-level government regulatory approval processes an environmental impact statement is commonly prepared that also includes analysis of social issues and preparation and consideration of the management and monitoring phases of SIA to follow to assist in decision-making about the project. For ongoing projects this phase can be undertaken periodically and be informed by the monitoring phase to follow.

(4) management strategies to avoid and mitigate negative social impacts and enhance positive impacts The outcomes of the predictive assessment must then be embedded a cross all aspects of the planned intervention.This may take the form of a management system, impact and benefit agreements (with government, communities or IndigenousPeoples), social programs and initiatives and development of standard operating procedures for high-risk issues. Examples of management activities to address social issues include social impact management plans, cultural heritage management plans, community reference groups ( sometimes known as community consultative committees), community development programs, trusts and funds, human rights and cultural awareness training (linked to human resources systems), and local procurement and purchasing policies. The socio-environmental aspects of change demand close integration between social and environmental management approaches.

(5) monitoring and reporting The monitoring and reporting phase involves collection, analysis, and dissemination of information overtime. This phase can assist in refining assessments, track the progress of social impact management approaches and identify changes needed, report to communities on impacts and activities, and facilitate an informed dialogue around these issues. Complaints handling processes (also known as grievance mechanisms) and participatory monitoring processes are key activities during this phase.

(6) evaluation and review The final phase is to evaluate and review the assessment and management processes. An active and dedicated process of evaluation and review — and importantly, the adjustment of actions — are fundamental features. The reconciliation of impacts predicted during the assessment phase with the actual impacts experienced during implementation will assist in refining and improving future approaches.

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improve the management of socio-economic impacts on host communities. The tools emphasize the use of core business activities to achieve socio-economic objectives. SEAT was revised in 2007 and 2012 after internal and external evaluation. The 2012 version was made publicly available upon release and was the basis of Anglo American winning the 2012 Corporate Initiative Award of the International Association for Impact Assessment. SEAT has been adapted for implementation by a number of other companies, including Shell, Marks and Spencer, Mondi Paper and Inmet Mining. SEAT consists of the following seven steps: 1) Development of a profile of the operation. 2) Development of a profile of the community and engage with stakeholders. 3) Assess and prioritize impacts and issues 4) Improve social performance management. 5) Enhance the delivery of socio-economic benefits. 6) Develop a social management plan. 7) Prepare a SEAT report and feedback to stakeholders.

Fig. 1. SIA as an adaptive management process (after Franks, 2011, 2012).

ESMPs are public documents and proponents must periodically report to affected local communities and other stakeholders on the progress of the plans. The period and form of reporting must be commensurate with the level of concern held by affected local communities, but not less than annually. The plans provide an ongoing process to update impact predictions and focus efforts on the issues of most relevance. The IFC approach encourages the integration of social and environmental issues, both within the plan and across the organization's planning and management systems. Such integration recognizes that most environmental issues are social issues to some degree, and can be the main source of concern for communities in the vicinity of developments. The IFC also requires consideration of cumulative impacts, with a Good Practice Note on this topic under development in 2013. The IFC Performance Standards have also influenced the development of the Equator Principles, a voluntary set of principles used by financial institutions as a credit risk management framework for responding to social and environmental risk. As at May 2013, they had been adopted by 76 financial institutions (Equator Principles, 2013). The Equator Principles require that projects undertake a social and environmental assessment to determine the potential social and environmental impacts and risks (including labor, health, and safety), and that the assessment undergo independent review. There are also provisions for the independent review of monitoring information and the preparation of action plans and management systems to address issues arising from the social and environmental assessment (in line with those required by the IFC). 3.3. Social Economic Assessment Toolbox — Anglo American In 2002 Anglo American (a diversified mining company with operations in over 20 countries) developed the Social and Economic Assessment Toolbox (SEAT) to incorporate impact assessment into the ongoing management of its operations (Anglo American, 2003, 2007, 2012). Anglo American requires that all its operation sites conduct a SEAT assessment every three years. SEAT is a supplement to SIA required by government as part of regulatory approval. SEAT reports are public documents and must be developed through engagement with community. SEAT provides an opportunity to achieve the objectives of Anglo American's “Social Way” policy framework of social performance management (introduced in 2009). SEAT details guidance for community relations practitioners; is a means to identify and respond to corporate risks; and aims to

The production of Social Management Plans (SMPs) is a key output of the SEAT process. Unlike SEAT reports, SMPs are internal documents and are required to be updated annually. The SMPs summarize regulatory requirements, identify priority issues, develop a stakeholder engagement plan, outline management and monitoring measures (including timelines, targets and costs), and set review and reporting measures. 3.4. Social and Labour Plans — South Africa In 2004 the Republic of South Africa introduced Social and Labour Plans (SLPs) as a prerequisite for the granting of mining and production rights (Government of South Africa, 2002; SADME, 2006; SADME 2009a, 2009b; SADMR, 2010). The plans are embedded within the broader transformation of the post-apartheid era and are an instrument to redress economic and social disadvantage. SLPs aim to promote the employment and advancement of all South Africans and “ensure that holders of mining or production rights contribute towards the socio‐economic development of the areas in which they are operating as well as the areas from which the majority of the workforce is sourced” (SADME, 2006). That is, the labor component is as important as the social component, and resource developers are required to invest in geographic regions beyond the immediate location of the mine. Social and Labour Plans are specified in Part II of the Regulations under the Mineral and Petroleum Resources Development Act 2002 (Act No. 28 of 2002), which came into effect in 2004. SLPs are developed by the proponent and submitted with the application for a mining or mineral production right. The plans are developed in negotiation with government agencies. The government plays a role in the setting of targets and the monitoring of progress. The plan lasts for the duration of a project and until a closure certificate is issued. There is a process for periodic review. The SLPs are confidential, but the annual reports are made publicly available. Amendment of a plan requires ministerial approval. An annual report on compliance must be submitted to the designated agency. The expected contents of SLPs include: 1. Preamble — which includes the details of the project. 2. Human Resource Development Program — including a skills development plan, a career progression plan, a mentorship plan, an internship and bursary plan, and an employment equity plan. 3. Local Economic Development Program — applicable to the area of the operation and the area for which the majority of workforce resides. The plans must ensure the cooperation and participation of communities and government in implementation. The SLP must align with the integrated development plan of the district municipality where the operation takes place and include a social profile, the

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provision of economic activities, a description of the anticipated impact, improvement of housing and living conditions, health measures and a plan for procurement from historically-disadvantaged South African companies. 4. Processes for the management of downscaling and retrenchment — including the establishment of a future forum within 2 years of the establishment of a new operation to promote dialog between worker representatives and management, identify productivity and efficiency opportunities and implement joint strategies. The proponent must also outline the processes adopted to avoid job losses, alternative employment solutions and how the proponent will address the social and economic impacts on communities. 5. Financial contribution — including an outline of how the plan is to be resourced. The Guideline makes it clear that proponent is responsible for all costs, and if there are joint delivery partners, mechanisms must be in place to ensure effective provision. There is an expectation that the proponent would contribute to the costs of the three areas described above (points 2 to 4). 6. A signed undertaking by “the person responsible for the social and labour plan, who is responsible to make known the social and labour plan to the employees and who must be contacted for follow-ups, requests, reports, queries, enquiries, discussions, etc.” countersigned by the Chief Executive Officer or Managing Director (SADME, 2006; SADMR, 2010, p. 25). One informant from a mining company that has negotiated a number of SLPs argued that the governing agencies negotiating the plans demonstrated an emphasis for the funding of tangible infrastructure over social programs such as enterprise development. Enterprise development and local level procurement initiatives have increasingly been a focus of voluntary corporate social investment initiatives by major mining companies in South Africa and elsewhere. The preference for tangible infrastructure by government is probably a function of the mining context in South Africa where SLPs are a means of harnessing the capital and organizational capacities of the industry to invest in critical infrastructure. The human resource focus of the plans is also particular to the circumstances, with a large underutilized labor pool and a historical legacy of disadvantage. There does not appear to be a process for public involvement in SLP review or development. The attempted integration with regional and local planning and alignment of local development activities with anticipated impacts are reportedly underdeveloped aspects of the policy in practice. 3.5. Social Impact Management Plans — Queensland, Australia In 2008, the Government of the State of Queensland introduced the Sustainable Resource Communities Policy (QDTRDI, 2008). The policy required proponents of mining and petroleum projects to prepare a SIMP in conjunction with an Environmental Impact Statement (EIS) to outline the forecasted changes to communities, the agreed strategies for mitigation of impacts, and the responsibilities of various parties in relation to management. The Sustainable Resource Communities Policy was designed to maximize the opportunities presented by developments in resource regions (or ‘resource provinces’) within Queensland and to mitigate and avoid adverse impacts in areas such as community infrastructure and services, housing, amenity, quality of life, health and education. The policy was initially focussed on three resource provinces – the Bowen Basin, the Surat Basin, and the North West Minerals Province (and later extended to the Galilee Basin) – where resource development has significantly or has the potential to significantly affect community infrastructure and services, and the social structure of communities (QDIP, 2008a, 2008b, 2008c, 2009). The policy made specific reference to the cumulative and regional impacts that may be experienced by Queensland communities, economies and

environments as a result of multiple, concurrent and overlapping proposals for resource development. SIMPs were introduced to facilitate ongoing management of impacts identified through the SIA process. The plans were designed to “outline the forecast changes to communities in terms of local and cumulative effects, the agreed strategies for mitigating the effects and the responsibility of various parties in relation to the strategies” and were implemented as a condition of project approval (QDTRDI, 2008, 3). SIMPs were required for all resource projects deemed environmentally significant under the State Development and Public Works Organisation Act 1971 and could be voluntarily prepared for projects assessed under the Environmental Protection Act 1994 (QDIP, 2010). The introduction of SIMPs was not underpinned by legislative reform. Instead, in late 2009 the terms of reference requirements for the preparation of an EIS in Queensland were amended to add requirements for the development of a SIMP. Draft SIMPs were submitted by the proponent alongside the draft EIS. They were expected to be developed with community input and to operationalize the SIA component of the EIS. SIMPs were not expected to cover mineral or petroleum exploration activities. The Queensland Government negotiated a package of social investment commitments within each SIMP. Additional requirements, such as company participation in collaborative form to address priority impacts (e.g. housing), were also determined as conditions of project approval. In addition to the introduction of SIMPs, the policy introduced a specialist SIA function within government, aimed to improve state‐ wide and regional coordination through the formation of a partnership group and local leadership groups and emphasized greater links to regional planning. The role of the partnership group – which consisted of representatives of state and local governments, the Local Government Association of Queensland, and the Queensland Resources Council (an industry peak body) – was to share strategic information, develop and coordinate solutions, undertake research into best practice and assessment methodologies, and facilitate cross‐sector communication (the partnership was formalized by a memorandum of understanding and was reviewed in 2011). Local leadership groups were constituted for each of the three resource provinces. Local leadership groups were designed to be “a ‘sounding board’ for resource companies and will focus on regional planning, and developing projects that address the cumulative effects of resource developments” (QDIP, 2008b, 19). They provided a forum for ongoing engagement, identification of preferred strategies and programs to manage impacts, and opportunities to link activities to regional planning. In November 2012, following a change of government, the requirement for the development of a SIMP was withdrawn. The change echoed earlier waves of SIA innovation and then withdrawal by subsequent state administrations in Queensland and Western Australia (see Dale and Crisp, 2001; Duffecy and Pollard, 2001). The new Liberal National conservative government in Queensland implemented a ‘greentape reduction’ strategy to streamline approvals processes and a ‘Royalties for Regions’ program to coordinate investments in social and physical infrastructure (QDSDIP, 2012). The new Government also signaled a move to outcomes-based project conditioning and a stronger focus on prioritization within SIA as a response to industry concerns that SIMP conditions had been excessively prescriptive, at times overlapped with government responsibilities, and that the issues to be assessed as defined within the terms of reference had been too generic. 4. Discussion Table 1 provides a comparative analysis of the four initiatives. The table demonstrates that while the drivers and jurisdictional context for each initiative differ, there is significant overlap with regard to many of their core features. Efforts to address social impact management

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Table 1 Comparison of four forms of social impact management processes. Criteria

Anglo American SEAT (2002-current; revised 2007, 2012)

IFC ESMP (2006-current; revised 2012)

South Africa SLP (2004–current; guideline revised 2010)

Queensland SIMP (2008–2012)

Scope

Socio-economic (link to environment) Voluntary corporate policy (operational projects) to meet public expectations All operational mining projects managed by Anglo American anywhere in the world must undertake a SEAT Assessment every 3 years Yes (SEAT report public, SMP internal) Stakeholder involvement in issue identification, prioritization and development of management options Prioritization of key stakeholder identified issues

Integrated (social, environ., economic) Required as a condition of an IFC loan (at project development)

Socio-economic and labour

Socio-economic

Required as a condition of mining and production rights

All IFC funded development projects with significant social and environmental risks

All mineral and petroleum resource developments in South Africa

Encouraged

No (but annual reports public)

Required for project development approval (prior to construction) New or expanded mining and petroleum projects within the identified resource provinces in Queensland that require an approved EIS Yes

Government and public involvement encouraged

Public involvement not required

Stakeholder involvement and public comment period on draft plan

Wide coverage

Focused explicitly on human and economic development

No explicit requirements but engagement required with government stakeholders to encourage alignment Yes — direct link to Anglo American Social Way and management systems A SEAT Assessment is triggered every 3 years. This is a formal opportunity to update the SMP. SEAT Assessments include opportunity for stakeholder review.

Government and regional planning should be taken into account and responsibilities differentiated Yes — an Environmental and Social Management System is also required Plan linked to impact assessment. Triggered by loan application. Unspecified assessment process during review of plans or as part of management system.

Negotiated with government — designed to align with district municipality integrated development plan Not explicitly — up to project proponent

Prioritization of key socio-economic issues and rated by consequence Negotiated with government — designed to align with community plans (local) and regional plans (State) Not explicitly — up to project proponent

Coordination with other developments

Not explicitly but stakeholder engagement requirements may encourage consideration

Framework for activities within plan (mitigation, benefit delivery, legacy focused, community development) Partnerships for the delivery of programs

Mitigation and benefit delivery through core business activities. Legacy planning for project closure Yes — tool within SEAT to encourage identification of partnerships. SEAT public reporting and grievance handling process required. Impact monitoring encouraged. An output monitoring framework for community development sits alongside SEAT Lists plan commitments and company policies

Developments required to understand and respond to impacts of third parties but no specific requirement to coordinate Mitigation, avoidance and offset of negative impacts

Driver

Application

Public availability of plan Public involvement during preparation

Issue prioritization

Plan aligned with government or regional planning

Plan linked to internal management systems Review process and link to assessment

Reporting and social impact monitoring

Articulation of all proponent community commitments

Plan must include a social profile and description of impacts. Unspecified review frame and trigger for updating of impact assessment.

Not explicitly

No explicit requirement

Benefit delivery through infrastructure provision and human development of employees No explicit requirement

Monitoring process and grievance handling required. Public participation encouraged.

Process for government reporting. Impact monitoring not required.

Lists plan commitments

Not publicly available

have been advanced through voluntary corporate policies (e.g. Anglo American), conditions on the project financing provided by multilateral development institutions (e.g. International Finance Corporation) and government policy (e.g. Republic of South Africa and the State of Queensland). Leading practice companies have developed policies and practices for social impact management partly in response to pressure from their local communities and non-government organizations to improve corporate social performance. The advantage of such an approach is the flexibility to tailor initiatives to the local context and needs. A major limitation of the various voluntary corporate initiatives is that there is wide variation in practice between different companies, and also an insufficient number of companies adopting comprehensive policies and standards, and investing in the capabilities required for the

Plan initially developed as part of project level impact assessment. Annual reporting during construction. External review timelines negotiated but usually after 2 years then every 3 years. Process undetermined. Plans include collaborative activities across multiple developments and must consider other known projects Predominantly mitigation framework for social infrastructure and a focus on benefit delivery No explicit requirement but usually conditioned as part of approval Process for government reporting and requirement for monitoring plan and grievance handling

Lists all project related commitments conditioned as part of approval

ongoing management of social impacts. Enforcement of the policies also relies on the strength of internal corporate drivers and pressure from civil society and the local community. Where requirements for social impact management are a function of loan financing from multilateral financial institutions, the reach of the initiative is supra-jurisdictional. There is evidence that the IFC performance standards, which were designed to accompany lending for projects in a developing country context, have also influenced the standard of practice within OECD jurisdictions. In Western Australia, for example, the proponents of a large liquefied natural gas project invoked the relevant sections of the IFC performance standards to undertake SIA in the absence of a government SIA framework (Chevron Australia, 2005). The IFC ESMPs have a wider coverage of

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issues (socio-economic and socio-environmental) than the other reviewed examples. Enforcement, however, relies on the capacity of IFC staff to follow up on projects and encourage incremental improvements through remedial action plans. The implementation of social impact management requirements by governments as part of project approval processes presents an opportunity to raise the standard of practice across all companies operating within a jurisdiction. For companies with their own corporate policies, this can present challenges of alignment due to contradictions in the timing or scope of what is required by both sets of policy. There is anecdotal evidence that the implementation of SIMPs in Queensland prompted companies that did not previously have a social performance or community relations capability to develop this capacity during the process of implementing SIMPs, and there is evidence that at least one company has now abandoned the development of that capability now that the requirements for SIMPs have been withdrawn. Both the South African SLP and the Queensland SIMPs aimed to coordinate plan commitments with broader local and regional government planning. In both cases there were reported challenges in meaningfully achieving this objective in practice. A further challenge was experienced in Queensland where there was a heavy focus on the negotiation of social investments as part of SIMPs. This had the effect of de-emphasizing the role of SIMPs as a demonstration of a management system to address social impacts and constrained the flexibility of the plan to adapt to changed circumstances. Resource sector stakeholders also expressed concern that the strong focus on social investments blurred the lines between mandated and voluntary social commitments, and the responsibilities of government and industry to fund essential services and infrastructure, even where projects had demonstrable impacts on such areas (an issue that arguably contributed to the withdrawal of SIMPs in Queensland). The political nature of the introduction of government requirements for social impact management can potentially influence the effectiveness of such processes (Lane, 1997; O'Faircheallaigh, 2009). Each of the government-mandated SIMP processes analyzed here pre-empted the issues that required management and, to some extent, the means by which the issues were to be managed, thus limiting the role of the assessment phase in directing the activities of the SIMP. Further, the activities outlined in project level SIMPs may not necessarily be sufficient to address issues where responsibilities are shared with other parties (for example other proponents or government itself) unless collaborative governance processes are explicitly identified. In light of the preceding analysis and discussion, we distil below a number of key criteria for the design and implementation of effective SIMPs that may assist future social impact management initiatives. 5. Key criteria for the design and implementation of an effective SIMP Expression of a management system: SIMPs are ideally a demonstration and a product of an integrated internal management system that is responsive to, and assigns responsibility for, social and environmental issues. While a SIMP document is an important communication tool, the most important feature of SIMPs are their ability to prompt the mobilization of decision-making processes, people, activities and commitments within organizations to address the social impacts of development. Adaptive management across the lifecycle of developments: Adaptive management across the lifecycle of developments: SIMPs have the potential to consider the full mitigation hierarchy (João et al., 2011) such that negative impacts are avoided and mitigated, residual impacts are offset or compensated, and positive impacts are enhanced. SIMPs should be designed to be responsive to changing circumstances and to any increase in knowledge or awareness of the impacts over time. Social impacts should be identified and responded to at all

stages across the life-cycle of developments, with processes to integrate social management into all aspects of development. Prioritization: Plans should summarize issues identified during assessment phases and prioritize the key issues to be addressed. Impacts are often disproportionately experienced by different stakeholders and thus prioritization should consider the perspectives of impacted parties. Engagement: SIMPs are an opportunity to outline ongoing engagement processes with, and participation of, community and government stakeholders. Where appropriate, active processes that seek community involvement in decision-making should be prioritized over passive methods of consultation. Plans should be available to the public. The development and review of plans and activities should involve and, where appropriate, led by the impacted stakeholders. Periodic review and reassessment of impacts: Periodic assessment phases should be built into the revision of SIMPs and data obtained from impact monitoring activities utilized to inform management activities. Coordination, integration, alignment: Coordination across corporate functions, individual developments, government agencies and geographic regions should be reflected within SIMPs. When external consultants are involved in the preparation of engagement, development, assessment, management or monitoring activities, the integration of these activities into the proponent institution must also be considered. Alignment of SIMPs with community and government planning priorities and the preferences of the local community may require a governance framework that links SIMPs to broader planning processes. In practice, alignment between SIMPs prepared within a geographic region might be achieved by undertaking reviews of co-located SIMPs at specific time periods. There is also an opportunity for the more strategic use of funds, trusts and other investments and activities within plans. Building capacities: The social investments and community development activities outlined within SIMPs should, where possible, seek to empower communities to take control of the development process, undertake the desired activities and minimize dependency. Leaving a long-term legacy: SIMPs should be encouraged to plan for outcomes that reach beyond the life of developments and should tailor approaches toward enhancing post development futures. Leaving a positive legacy goes beyond mitigation — it means enhancing positive impacts and providing something of value beyond the life of the development. Partnerships: Where appropriate, the implementation of SIMP activities should include partnerships with local and state government, communities, other developments, and with other industries to address issues of concern and mutual interest. There is often a tension that exists between the responsibilities of different actors (e.g. government, corporate, civil society). SIMPs should be cognizant of these tensions and explicitly outline the responsibilities of each stakeholder. Balance between operational and regional context: SIMPs must find a balance between the immediate operational context and the broader regional context to ensure that the totality of impacts from other operations, industries and activities are considered. Efforts to coordinate the management, monitoring and mitigation of impacts should be explored. This is particularly important where multiple developments are co-located. 6. Conclusion This paper has reported on the emergence of social impact management plans. From our analysis of four social impact management initiatives, key criteria were identified to assist the design and implementation of SIMPs and the requirements for SIMPs in the future. SIMPs have the potential to link assessment to ongoing management and proactively respond to social and community issues across the lifecycle of developments. SIMPs may be developed in partnership

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with regulatory agencies, investors and community, and should identify the responsibilities of each party in the management of impacts, opportunities and risks. Ideally, SIMPs are a demonstration and a product of an internal management system to understand and respond to social impacts. Management plans also provide the facility to coordinate project activities with service and infrastructure planning by government, and an opportunity to link activities with local and regional planning processes. To date, however, this latter aspect has proved difficult to achieve in practice. The coordination between the management plans of geographically co-located developments is another area that has proved difficult to achieve in practice, but could be a means to address cumulative impacts. The emergence of SIMPs is an opportunity to practically include management and monitoring as core components of SIA. Acknowledgments The research reported in this paper was initiated as part of the implementation of the Queensland Government Sustainable Resource Communities Policy in 2008, in particular the introduction of Social Impact Management Plans (see Franks et al., 2009). The authors acknowledge financial support provided by the Sustainable Resource Communities Partnership group under the auspices of the then Queensland Department of Tourism, Regional Development and Innovation. We would like to express particular thanks to Lisa Pollard and Freya Walton from the Queensland Government who led the policy development and implementation process and acknowledge the research assistance of Courtney Fidler, Phil Clark and Tamar Cohen. The paper was also informed by subsequent sessions chaired by the authors at the 2012 International Association for Impact Assessment Conference in Porto, Portugal. References Anglo American. SEAT: Socio‐Economic Assessment Toolbox; 2003 [London]. Anglo American. SEAT: Socio‐Economic Assessment Toolbox. Version 2; 2007 [London. Available at: http://www.angloamerican.com/development/social/communityengagement/~/media/Files/A/Anglo-American-Plc/siteware/docs/seat_toolbox2.pdf [accessed 27 Jan 2013]]. Anglo American. SEAT Toolbox: Socio‐Economic Assessment Toolbox. Version 3; 2012 [London. Available at: http://www.angloamerican.com/~/media/Files/A/AngloAmerican-Plc/docs/seat-toolbox-v3.pdf [accessed 27 Jan 2013]]. Becker H. A. Social impact assessment. Eur J Oper Res 2001;128:311–21. Burdge R, Vanclay F. Social Impact Assessment: a contribution to the state of the art series. Impact Assess 1996;14(1):59–86. Carruthers G, Vanclay F. Enhancing the social content of Environmental Management Systems in Australian agriculture. Int J Agric Resour Gov Ecol 2007;6(3):326–40. Chevron Australia. Draft Environmental Impact Statement/Environmental Review and Management Programme for the Gorgon Development. Chapter 14. Social and Cultural Environment: Effects and Management. September. Available at:http://www. chevronaustralia.com/Libraries/Chevron_Documents/Chapter_14_Social_and_Cultural_ Environment_Risks_and_Management.pdf.sflb.ashx, 2005 [accessed 27 Jan 2013]. Dale A, Crisp R. Institutionalising social assessment in Queensland: the Social Impact Assessment Unit 1993–1996. In: Dale A, Taylor N, Lane M, editors. Social assessment in natural resource management institutions. Collingwood, Victoria: CSIRO Publishing; 2001. p. 125–35. Duffecy J, Pollard L. The Western Australian Social Impact Unit 1989–1993: nicety or necessity? In: Dale A, Taylor N, Lane M, editors. Social assessment in natural resource management institutions. Collingwood, Victoria: CSIRO Publishing; 2001. p. 136–47. Duinker P, Greig L. The impotence of cumulative effects assessment in Canada: ailments and ideas for redeployment. Environ Manage 2006;37(2):153–61. Equator Principles. Members and reporting; 2013 [Available at: http://www.equatorprinciples.com/index.php/members-and-reporting [accessed 14 May 2013]]. Esteves AM, Vanclay F. Social Development Needs Analysis as a tool for SIA to guide corporate-community investment: applications in the minerals industry. Environ Impact Asses Rev 2009;29(2):137–45. Esteves AM, Franks DM, Vanclay F. Social impact assessment: the state of the art. Impact Assess Proj Apprais 2012;30(1):34–42. Everingham JE. Towards social sustainability of mining: the contribution of new directions in impact assessment and local governance. Greener Manage Int 2012;57: 91–103. Franks DM. Management of the social impacts of mining. In: Darling P, editor. SME mining engineering handbook. Colorado: Society for Mining, Metallurgy, and Exploration; 2011. p. 1817–25. Franks DM. Social impact assessment of resource projects. Mining for development: guide to Australian practice. International Mining for Development Centre, Australian

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Wolf CP. Social impact assessment: a methodological overview. In: Finsterbusch K, Llewellyn LG, Wolf CP, editors. Social impact assessment methods. Beverly Hills, CA: Sage; 1983. p. 25–33. Daniel Franks is Deputy Director at the Centre for Social Responsibility in Mining, Sustainable Minerals Institute, The University of Queensland. His research and consulting work traverses the policy, social and earth sciences, with a particular interest in the socio-environmental change that accompanies resource extraction. He holds a PhD from Griffith University, and undergraduate and honors degrees from the University of Queensland. He is co-Chair of the social impact assessment section of the International Association for Impact Assessment.

Frank Vanclay is now Professor of Cultural Geography, Department of Cultural Geography, Faculty of Spatial Sciences, The University of Groningen. He was previously at the University of Tasmania in Australia. He is a specialist in the field of Social Impact Assessment and the social aspects of natural resource management. He was convener of the International Association for Impact Assessment's task force to develop International Principles for social impact assessment and is co-Editor of The International Handbook of Social Impact Assessment (Edward Elgar, 2003) and New Directions in Social Impact Assessment: Conceptual and Methodological Advances (Edward Elgar, 2011).