Oil, mining and natural gas companies often invest in conflict-prone societies – the nature of their business setting some limits on choice of risk profile. Most companies have no interest in exacerbating instability or violence, or otherwise becoming caught up in it. Experience shows however, that all too often they lack the skills and experience to avoid doing so.
Despite advances in political risk methodologies and environmental and social impact assessment (ESIA) standards, and the wider corporate social responsibility sphere, fundamental gaps in company practice remain.These include capacity to understand existing or potential conflict and its actors, causes and consequences accurately; and to grasp fully the spectrum of influence that a company’s investment may have on such conflict, directly, indirectly and at varying levels. Conflict-Sensitive Business Practice: Guidance for Extractive Industries aims to help close this capacity gap and results from several years’ research and development led by International Alert, a London-based peacebuilding non-governmental organisation (NGO).
The publication
Conflict-Sensitive Business Practice: Guidance for Extractive Industries consists of guidance on doing business in societies at risk of conflict for field managers working across a range of business activities, as well as headquarters staff in political risk, security, external relations and social performance departments. It provides information on understanding conflict risk through a series of practical documents, including:
- Introduction to conflict-sensitive business practice, including an overview of the regulatory environment for doing business in conflict-risk states
- Screening Tool for early identification of conflict risk
- Macro-level Conflict Risk and Impact Assessment tool
- Project-level Conflict Risk and Impact Assessment tool
- Special guidance on key Flashpoint Issues where conflict could arise at any point during a company’s operation.
Each section includes additional resources where company staff can find further useful data and analysis. The guidance as a whole is designed to mirror a basic project cycle for companies engaged in mining, oil and natural gas, but can be picked up at any particular point in the cycle. It is also designed to complement current industry best practice in social performance, political risk analysis and ESIA, adding in a ‘conflict lens’.
The research
The research process has included International Alert’s contribution to, and learning from, the UN Global Compact Business Guide to Conflict Impact Assessment and Risk Management, published as a result of its ongoing policy dialogue, ‘The Role of the Private Sector in Zones of Conflict’. International Alert has been an active participant in this dialogue, which included a series of regional workshops in Sub-Saharan Africa, Central Asia and Colombia. The Global Compact workshops provided an important forum for stakeholders to share experiences and challenges in this area, and made a significant contribution to the research process.
Taking this work forward, we conducted a thorough review of current best practice in political risk assessment and ESIA in order to see where these were letting companies down in understanding conflict.3 When this process was complete, we convened a group of representatives from some of the world’s leading oil, mining and gas companies, as well as NGOs and consultancy firms specialised in political risk assessment and management. We brought the group together with specialists from the conflict transformation world to try and progress our goal of closing the capacity gap in companies’ understanding of their relationship to conflict.
The project steering group helped keep this aspiration anchored in business realities, emphasising the business case for developing greater capacity on conflict. The concept and elements of conflict-sensitive business practice gradually evolved from this process. The content and arguments of the final publication are, however, International Alert’s and not attributable to any of the steering group members.
We believe that Conflict-Sensitive Business Practice: Guidance for Extractive Industries provides an opportunity for companies concerned about improving their impact on host countries to begin thinking more creatively about understanding and minimising conflict risk, and actively contributing to peace. Although presented in a practical, step-wise format, it has been developed as an approach as much as a fixed process, and further work needs to be done by individual companies, industry associations and other professionals to adapt and further develop its core concepts through their own practices. Nonetheless, it is our hope that this publication represents a significant step forward in discerning best practice in this sensitive area, and towards promoting more peaceful interactions between companies and host societies around the world.
