19 Dec 2017
Company-Community Conflict: How can mediation help?
By Liadh Troy
Conflict arises in all aspects of our lives, and in business, it can be resolved in a variety of different ways. Some types of dispute, however, are not easy to resolve without management from a third party. Disputes between companies and communities, in areas in which they operate, can be devastating to all involved.
Company-community conflicts can be extremely hard to resolve effectively. Many of these conflicts last several years as they are not addressed in an appropriate way. In these circumstances, the mediation process is sometimes overlooked due to a lack of understanding surrounding the process. Those familiar with ADR and the legal sector are likely to be aware of mediation, however, there is a lack of understanding of this process among communities.
In 2012, Shift, the leading centre of experts in the UN Guiding Principles on Business and Human Rights, and the Social Corporate Responsibility Initiative at Harvard Kennedy School of Government commissioned a study examining both the tensions and dialogue between companies and communities. The series of videos and essays, on which this article is based upon, told the story of each community’s struggle in their own words, recounting how a resolution was reached through conversation and mediation. This study looked at three case studies: a copper mine in Peru; a hydroelectric power project in the Philippines and an oil and gas company in the Niger Delta. Each example illustrates how mediation and engagement has helped to resolve the dispute. This project shows how dialogue has helped companies and communities work together and construct immediate and long-term solutions.
As 2018 approaches, we must revisit the case studies from this project and see if we can draw on the key learning points and consider how corporate entities are engaging with communities and the important role that dialogue plays. We can extract how mediation and effective dialogue can be used to improve the corporate social responsibility movement for the future.
Peru: A mining community on the edge
Historically, the relationship between Peru and the extractive industry has been volatile. The growth of large-scale mining is linked to several factors, including: the demand for minerals from global markets; reforms in Global Direct Investment in the 1990’s and development in mining technology. These factors opened up the Peruvian mining industry to a wealth of investment. This growth impacted existing mining regions, in addition to areas with little to no industrial influence. The influx of mining investment since the 1990’s has resulted in significant political and economic influence for this industry in Peru. The power that the mining industry has gained has generated conflicts with communities over how the mining process occurs and how the social and economic benefits of extraction are distributed – or not as the case may be.
The Shift Project focused on the Tintaya Marguiri community who were evicted from their land to make way for a government-run copper mine. The Tintaya community faced a forced eviction, with no prior consultation. This forced eviction lead to loss of property, land, income and livelihood. Many reported that possessions were lost or destroyed in the relocation and that the newly allocated area was unsuitable. Some members of the community found the relocation process so distressing and disruptive, they suffered emotional repercussions, with some turning to alcohol. The forced displacement of the Tintaya communities showed how little consideration the government gave for the rights and quality of life of the people affected. As the development of the mine continued, tensions and anger between the community and local government grew.
When the mine was privatised and eventually acquired by BHP Billton in 1994, the situation was still highly unstable between parties due to the lack of respect shown for this community by BHP and the local government. This lack of respect was a key factor in the resentment that community members felt towards the mine, the government and the private owners.
In the late 1990’s, Non-Governmental Organisations (NGO’s) including Oxfam and CopperAction identified that this was a serious dispute and began to try and open dialogue between the communities and BHP. Roundtable discussions began in 2001. Through facilitated discussions, parties we able to move away from feelings of distrust and begin to understand each other, providing constructive and beneficial conversations.
Philippines: Hydroelectric dam project
The Filipino study looked at communities in the Benguet Province who were affected by the construction of the Ambuklao Binga Dam. This was one of many infrastructure projects proposed by the Filipino Government and the National Power Corporation (NPC) in the 1950’s, following political independence in 1946 from the United States. This push for infrastructural investment contributed to the Philippines being relatively well developed in comparison to others in the region during the same period.
The expulsion of the Ambuklao and Binga communities from their land began when the NPC and local government began construction. The displaced families were offered monetary compensation and new land under a ‘land for land’ scheme, both of which were insufficient and unsuitable. Alternative land which members of these communities received was located in the Isabella province, several hundred miles from the indigenous lands. These lands are of particular cultural importance to the communities, as it is where their ancestors are buried. When these communities were stripped of their land, there was little or no consideration regarding the cultural implications of this action. The impact on these communities was devastating, they not only lost their land, but they have also lost their livelihood, cultural identity and traditions.
The lack of cultural understanding from the NPC, as well as national and local governments, fostered a culture of blame and distrust. Those who were mistreated believed there was no acknowledgement and understanding for the suffering they endured. Nearly 60 years on, distrust lead to the filing of a court case, as this was seen as the only ‘safe’ place for the parties to communicate.
When the plant was privatised and bought by SN Aboitiz in 2008, the Office of Compliance Ombudsman (OCO) was alerted to the unrest in the community and was tasked with facilitating a resolution. The CAO addressed issues through mediated dialogue and worked with the parties to find an effective resolution. The process allowed for parties to discuss the animosity between one another, caused by the litigation process and to allow for positive emotional engagement and effective dialogue. Due to the deep-rooted tensions and distrust between parties, the mediators had to work extremely hard to break perceptions and barriers. Removing these barriers allowed for parties to get to know one another and understand their cultural backgrounds.
After seven months of discussion and negotiations an agreement was drafted. The agreement, like any mediation agreement, was the beginning of a long process of continual relationship development and understanding. As one interviewee put it, “all agreements are like marriage, it is not plain sailing all of the time. All parties must work hard to achieve a successful relationship”.
Nigeria: Tension with oil production
Since discovering the abundant oil reserves in the Niger Delta in 1956, Nigeria has become Africa’s largest oil producer. The ‘Black Gold’ from the Delta has contributed significantly towards the economic development on the country, accounting for 95% of exports and 80% of national income. Although the region provides a vast amount of economic wealth for the nation, 70% of the local population live in extreme poverty. The feeling among the local community is that their welfare has been neglected by the national government as a result of the presence of foreign oil multinationals, perpetuating the socio-economic divide in the area.
Discussions between parties lead to a General Memoranda of Understanding (GMOUs) being signed between Chevron and the local communities. This process began after a violent conflict in the region in 2003 led to the withdrawal of Chevron from the area and the destruction of property, including schools and hospitals, the company had built for communities. After this violent upheaval, Chevron decided to reassess their approach to community dialogue and engagement. The use of a GMOU as opposed to other approaches, such as mediation, was seen by the Chevron as the best way to improve community engagement, primarily because there were more opportunities for controlling how communication paths were developed and how funds were spent.
The head of the New Nigeria Foundation, a local NGO came in to mediate the dialogue and help build the foundations for increased trust between those involved. It showed how and why communities needed to engage in the dialogue process, what progress and challenges may emerge along the way, and the outcomes that could be achieved. It also reflects how this experience spawned a continuing process of periodically evaluating and renegotiating the GMOUs, again with the full participation of the communities themselves, to keep them relevant and vital.
Why Commercial interests and mediating with communities works.
Each case study highlights how different types of facilitated dialogue and discussion helped to resolve the conflict. They also illustrated the range of different barriers that the facilitators or mediators and parties, may come up against during the process. Each case study used a different method to facilitate dialogue to achieve a positive company community understanding and relationship. All cases had to take a different approach to overcome the unique challenges of each dispute. They clearly illustrate how the company community dispute resolution process can continue to evolve.
What is consistent across all three cases is that they are characterised by huge power imbalances between parties. For the negotiations or discussions to start leaders must address this. They highlight how communities with minimal resources and influence are marginalised in pursuit of economic progress for the benefit of the elites and multinational companies. The team in Peru identified this imbalance during the roundtable negotiations. To overcome this, the facilitator organised for community leaders to receive training on negotiation. This is an effective way to make sure all parties have an equal voice during and after negotiations. Disputes of this nature have an extremely imbalanced power dynamic. The corporate machine has, what seems like, unlimited legal, intellectual and physical resources for action against communities who have very little in comparison.
All communities stated that they did not feel listened to by the corporations, their objections and complaints went unaddressed, feeding their feelings of mistrust and neglect towards the companies. To engage with communities effectively, companies sought to use techniques to facilitate a meaningful partnership with them, through initiatives such as local or part ownership, shaping the outcome of negotiations by allowing communities to take a central role in the decision-making process. The GMOU used in the Niger Delta helped to ensure the community had an equal say in what they wanted from Chevron. However, this dialogue took place following a community crisis. Companies should look to engage an interest-based negotiation or dialogue from the outset to foster a long-term relationship that is beneficial for all parties.
This project provided a valuable and achievable framework for communities and companies to work together when tackling conflicts of this nature, and won the CEDR prize for Best Communication or Publication in 2012. The cases in the Shift project show how the principles of facilitated dialogue and mediation can be applied to a range of different scenarios and help to achieve positive outcomes. This is extremely important, as there is still a lack of understanding, from all parties, of how mediation works in the corporate community context. Each case study provides a real-life example of how the process has been used, giving reassuring examples for future users of mediation in this context.
All companies recognised the importance of good community relationships and how effectively managing conflicts is essential in order to continue their work in that area. To continue to work towards better community engagement, companies need to make a more concerted effort to change corporate attitudes towards communities. Internal corporate attitudes must reflect CSR policies and not seen just as a means to continue to maximise profits. To achieve truly long-term partnerships and trust, companies must actively change their attitudes towards local communities and fully invest in the process.
While there is no one-size-fits-all approach to resolving company-community disputes we can formulate best practice protocols that were highlighted in these case studies. The processes used in these examples can be applied to other companies and communities around the world, looking to resolve and improve relationships with one another.
Learn more about the Shift and Harvard Kennedy School of Government project here.