Emerging Markets Focus
In most of these villages, a formal waste collection system is absent. Alongside your company’s commitment to ensuring minimal damage to the environment- you could advocate programmes promoting locals to collect waste, recycle and even create valuable products from waste items.
When a foreign investor demonstrates that it is not there to merely strip them of their natural wealth, but has a general interest in their economic well-being, then the project becomes a symbol of growth and progress. In certain cases when an investor is able to introduce services that the local government has not so been successful in implementing themselves, then the locals align their personal success in life together with the presence of the oil project.
Engaging with NGOs
The influence of NGOs in Sub-Saharan Africa is very strong. NGOs tend to employ large amounts of university educated individuals in these countries, and are therefore rightly or wrongly well-regarded in the communities they operate, meaning the interactions between the Oil and Gas community and the local NGOs must be handled adequately. Developmental institutions are divided into different focus areas; some firms pay particular interest to human rights abuses, some are geared on the environment and water management issues and other are focused on the social and developmental issues of women in the community. There are several good practises that a foreign investor can adopt in working alongside NGOs.
When entering a new area, it would be useful to identify the NGOs operating in your area and gauge their influence both locally and internationally.
In light of identifying the various organisations, sessions can be arranged to strategize and plan on how they would impact the success of your project, whether it be by public relations or competition for local labour skills into your respective projects. In most cases these NGOs have been operating in the area for a number of years, and can provide a wealth of intelligence on the area you are operating in.
As a foreign investor, you must also aim to understand the projects that the NGO is likely to be conducting, you may find that you can work with them on various projects, perhaps it could be building a new school or even an advanced health facility.
An investor must aim to keep the channels of communication open with the NGOs, especially as they possess a wealth of information about the dynamics of the community and region you are operating in as well as being a mouth piece to other international organisations that could scrutinize your company’s reputation in terms of social and environmental issues, such issues may impact the share price of your company.
Benefits of Engagement with Different Stakeholders – Summary
Your company creates a good brand for itself amongst the local community, regulatory bodies and local NGOs
The project can achieve long term potential savings in operating costs- by educating local communities to run Oil and Gas projects. The need to bring in expatriate labour and expensive consultants would decrease over the time of your project.
As project owners you could have more direct control on meeting local content criteria without it being viewed as a burden
The presence of your project in the area can help stimulate new industries and create new markets for goods and services coming out of that community
Certain projects like building hospitals and schools alongside NGOs allows exchange in skills and expertise between entities operating in that area
In most cases, Oil projects have a lifetime of 25 years plus and traditionally the oil and gas business in Africa has specific and often challenging characteristics. But an extremely attractive deposit along with a precisely managed and well planned execution strategy can help grow a company into a long term sustainable business.
Effective engagement at the government levels can result in your project achieving approvals at a faster pace, thereby sticking to project schedules and staying within budget constraints. From a local community perspective, when the local population directly feels the benefits of having an Oil project in their neighbourhood, the chances of social unrest are diminished as individuals realise the value of having investments into their area. Active communication with NGOs allows a project owner to stay in tune with other developments in the area and understand how the presence of an oil project can be leveraged to contribute to other projects. Knowing which bodies are responsible for which activities also helps to ensure that you minimize unnecessary fines and penalties.
Ziwase Ndhlovu – Principal –
Ziwase.Ndhlovu@mukazi.com
Mukazi Consulting is a speciality firm focusing on these sectors with operations on the African continent:
Our expertise lies in the areas of:
Oil & Gas, Energy Markets- Conventional and Renewable Energy, Metals and Minerals and Infrastructural Development Projects
Facilitation of investment into Africa Techno-commercial Services
Market Analysis and Competitor Intelligence Business Development Services Commercial & Technical Due Diligence
Drillers and Dealers :::
::: February 2011 Edition
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