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Oil companies are coming to realise that they need a ‘Social Licence to Operate’—the acceptance of locals—to reduce social risk associated with their activities. But how do they achieve this community acceptance, especially in areas of the Amazon forest inhabited by indigenous peoples?
Extractive companies are usually unpopular and mistrusted. For them, it is increasingly evident that a legal, formal licence of operation from governments is not enough. To avoid costly protests, they need a Social Licence to Operate (SLO), generally defined as the acceptance of local communities of their activities. It is a kind of social, unwritten contract that ensures an enterprise’s social risk is reduced as long as priorities and expectations of the local communities are satisfied: the higher the SLO, the lower the risk (Prno & Slocombe, 2012).
Although the SLO concept was developed in Western contexts, it has been increasingly adopted in developing regions as well. In Latin America, for example, in the case of projects affecting indigenous peoples, the main common issues are power imbalances, conflicting worldviews, and informed consent, but these SLO key elements are largely overlooked (Ehrnström-Fuentes & Kröger, 2017).
As a contribution to filling this gap, my research aims to critically analyse the usability of the SLO concept as indicator of community acceptability in Latin America. In particular, I am focusing on the oil context of Block 10, in the Ecuadorian Amazon, managed by the Italian company Eni-Agip. The area is inhabited by indigenous groups, which are mostly Kichwa. Eni-Agip’s good reputation at the national level, its community investments (medical assistance and education programmes), and the apparent low level of conflicts in the block could suggest that the company has obtained an SLO from the locals. But is this the case?
To answer this question, I went to Ecuador and got in touch with researchers from the local university, the Estatal Amazónica of Puyo. Together, we planned a household survey in the villages of the affected area, examining people’s perceptions of positive and negative effects related to Eni-Agip’s operations. We also investigated whether locals perceive that the ‘Free, Prior, Informed Consent’ (FPIC) principle has been applied in this context. FPIC establishes that indigenous communities have the right to participate in the decision-making process pertaining to the activities that affect their territories. Before beginning oil operations, communities should have a full understanding of project’s risks and benefits and freely give informed consent (Hanna & Vanclay, 2013).
In order to facilitate interactions with the community members who don’t speak Spanish at all, a group of Kichwa students attending the university was included in our research team. This enabled me to be more easily accepted inside the communities: since I am Italian, people initially saw me as a potential spy of the Italian government or of the enterprise.
A total number of 346 questionnaires were completed and all villages of the influence area were surveyed. Preliminary results show that most respondents think the presence of the company is compromising the environment and irreversibly changing their culture. On the other hand, people rely on the social programmes previously offered by the oil company which Eni-Agip now claims are the duty of the State.
In effect, the most recent national oil contract stipulates that the government shall now provide these social services, but the State has been unable to meet this responsibility, in part due to the remoteness of these communities.
Almost 87% of the population doesn’t know what FPIC is. In addition, some of the interviewees reported cases in which they have been forced to accept the decisions of the company, with attempts of coercion.
It is noteworthy that during the survey, many people told us they fear that if they criticise Eni-Agip in any way, the company would cut social programs altogether.
In conclusion, despite the low level of conflicts and the good reputation of the company, interviewees reported the same impacts found in many other oil contexts of Ecuador and Latin America, such as cultural changes, dependence on the company, and lack of respect of FPIC procedures. Overall, the evidence of Eni-Agip’s high control of community consent, the absence of the State, and the vulnerability of indigenous communities are elements that seem to limit the genuine achievement of balanced power relationships, the core elements of a social licence. Therefore, caution is necessary prior to claim that a company has achieved an SLO in such a complex and conflicted territory. Much has to be done by the State to meet its responsibilities and by the company for a full respect of indigenous populations’ rights.
This blog article is part of a series related to the Development Dialogue 2018 Conference that was recently held at the ISS. Other articles forming part of the series can be read here, here , here, here here, and here.
About the author:
Alberto Diantini is a PhD researcher in Geographical Studies at the University of Padua, Italy, supervised by prof. Massimo De Marchi, coordinator of the “Territories of ecological and cultural diversity” research group. The main objective of Diantini’s research is investigating the usability of the concept of Social Licence to Operate in the oil contexts of the Ecuadorian Amazon.
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Social cash transfers are becoming more popular, especially in regions such as sub-Saharan Africa. But what happens when the government does not support these programmes? Roeland Hemsteede shows that in Malawi, the dependence on donor funding and lack of government buy-in pose a risk to hundreds of thousands of people whose livelihoods depend on these transfers.
Direct cash transfers to the poor and vulnerable are rapidly gaining popularity around the world, reaching 750 million to 1 billion people, including many in sub-Saharan Africa. They typically aim to improve the welfare of beneficiaries as well as to increase their investment in human capital (Arnold, Conway, & Greenslade, 2011).
Malawi’s Social Cash Transfer Programme (SCTP) targets the ultra-poor and labour constrained and reaches 10% of the population. Currently, it reaches 276,063 beneficiary households with a total of 1,159,691 members. While national leadership is seen as essential to development processes, the SCTP bears all signs of being donor-driven, with limited buy-in from Malawi’s political elites. This jeopardises the long-term future of the SCTP. This blog explores some of the causes and consequences of this limited buy-in.
SUPPORTING MALAWI´S SOCIAL CASH TRANSFER PROGRAMME
The funding landscape for the SCTP is highly fragmented (Hemsteede, 2017). Donors fund the transfers in 27 out of Malawi’s 28 districts, while the Government of Malawi (GoM) funds the remaining district. This GoM funding is the result of one donor requiring 10% counterpart funding, yet its provision has been irregular. Several other development partners provide technical assistance to the two GoM ministries that are involved.
WHY THE DEVELOPMENT COMMUNITY LIKES THE SCTP
The development community sees the SCTP as the ‘golden boy’ of social protection in Malawi. It is generally well run and the impact evaluations are positive (Handa, Mvula, Angeles, Tsoka, & Barrington, 2016). The GoM realises that donors like the programme, which contributes to its reluctance to finance it; after all, many programmes that donors are less interested in also need funding. Meanwhile, the donors are happy to retain strong (financial) control over the cash transfer, not least because of the ‘cash gate’ scandal.
‘Cash gate’, a large corruption scandal uncovered in 2013, strongly damaged donors’ confidence in Malawi’s public finance management. As a result, many donors felt that providing direct budget support was no longer acceptable, but project support was still an option. The SCTP was such a project, as much of its finances are managed by an independent consultancy firm that is hired by one of the donors. Moreover, the idea that the money directly went to beneficiaries appealed to donors. As a result, funding for the SCTP increased, but the system operates almost completely in parallel to the government’s own systems.
PERCEPTION OF POLITICS
Politicians in Malawi, who ultimately control budget allocations, are less enthusiastic. In my interviews with them, they frequently voiced the opinion that money should rather go to the ‘productive poor’ and that cash transfers were not a good solution—an opinion also held by others (Hamer & Seekings, 2017; Kalebe-Nyamongo & Marquette, 2014).
Members of Parliament also often criticised the SCTP’s implementation, arguing that as representatives of the people, they should have a role in the targeting of beneficiaries, and that it bypassed government’s systems, making it hard for them to maintain oversight. All this contributes to a situation whereby some politicians feel that they don’t own the SCTP and that it is a ‘donors’ thing’.
THE IMPORTANCE OF NATIONAL OWNERSHIP
My data point to at least three major reasons why national ownership of the SCTP should be important.
In the case of the SCTP, however, the development community drives the programme by controlling the funding and technical knowledge. The two involved ministries: the Ministry of Gender, Children Disability and Social Welfare, and parts of the Ministry of Finance, Economic Planning and Development, appear strongly committed to the programme, but their hands are tied by the lack of resources.
CONCLUSION
The SCTP resulted from a strong push by development partners, who funded its creation and expansion. They strongly influenced its design and the decision to create parallel structures for managing the SCTP. Malawi’s political establishment meanwhile feels little ownership over the programme. Without this sense of ownership, they are unlikely to ensure the sustainability of the SCTP. This poses a risk to the hundreds of thousands of people whose livelihoods depend on the SCTP if donors reduce their funding in the future.
This blog article is part of a series related to the Development Dialogue 2018 Conference that was recently held at the ISS. Other articles forming part of the series can be read here and here.
About the author:
Roeland Hemsteede is a PhD student at the University of Dundee in Scotland, United Kingdom. In his research he explores how power relations at the national and international level affect the design and implementation of cash transfer programmes in Malawi and Lesotho. Previous blogs on this subject have been published on SocialProtection.org and can be found at http://socialprotection.org/learn/blog/authors/author/1338/latest-posts. Roeland obtained his Master degree (by Research) in African Studies from Leiden University in 2013 and took several extra-curricular courses focussing on the political economy of development at the International Institute of Social Studies in The Hague in 2012/13.
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The Development Dialogue, an annual event organized by and for PhD researchers, this year welcomes over 80 participants. The conference theme is “Social Justice amidst the Convergence of Crises: Repoliticitzing Inequalities”. Does this sound intriguing, and do you want to know more? Perhaps you’re interested in attending some of the panels? This article provides a short summary of the conference.
The Development Dialogue (DD), an annual event for and by PhD students from across the globe, is taking place on 1 and 2 November 2018 at the ISS. It will bring together two renowned scholars and over 80 participants to share scholarly works and reflect on ideas and views around the topic “Social Justice amidst the Convergence of Crises: Repoliticizing Inequalities”.
The 16th Development Dialogue will offer PhD students and other early-stage scholars working within the broad field of Development Studies the platform and space to revisit and bring back politics into the inequality debate in particular and development discourse in general as a way of advancing the course of global social justice.
What’s in a name?
This year’s focus finds resonance in the global call to tackle inequalities, which has intensified in some parts of the world, and hence, has undermined the attainment of a dignified and just society. In view of this, this year’s DD is focusing on the repoliticization of inequalities as a pertinent and overlapping issue in the development studies debate and in struggles for social justice.
The main motivation behind this year’s topic “Social Justice amidst the Convergence of Crises: Re-Politicizing Inequalities” lies in the fact that although advances have been made in addressing various inequalities, the world is experiencing backlashes both at the national and global levels, on partial account of the emergence and/or convergence of multiple crises on the economic, environmental, humanitarian, and political fronts among others.
Moreover, responses to inequalities have largely been technocratic and simplistic, as they have repeatedly skirted around structural and institutional factors, which are at the core of these challenges. Therefore, the call to repoliticize inequalities challenges the overuse of the inequality rhetoric and demands a deeper inquiry and interrogation of the existing power relations, and the structures and institutions of (re)distribution that have engendered and sustained the disparities and divisions between and amongst societies.
It is an invitation to engage in the crucial debate on how to secure a world where the vulnerable and disadvantaged are able to obtain a fair share of the public good, claim their voice, and attain a secured sense of dignity.
What’s happening at the DD16?
Responses to the call for papers have been overwhelmingly as a good number of abstracts from PhD students and young scholars were received. We are expecting to host around 80 participants from at least 25 different countries. The scientific works to be presented will be put in fourteen different parallel panel sessions.
You can view the conference programme here
In addition to the parallel panel sessions, this year’s DD will host two renowned scholars as guest speakers: Prof. Barabara Harris-White of the University of Oxford, and Prof. Dzodzi Tsikata of the Institute of African Studies of the University of Ghana and CODESRIA, who will both present keynote addresses during which they will share very exciting views on the topic in two different plenary sessions.
Professor Barbara Harriss–White is Professor Emeritus of Development Studies and Emeritus Fellow of Wolfson College of the University of Oxford. Her research interests include the political economy of India and poverty and social welfare, particularly on the issues of destitution, disability, malnutrition, and gender-biased development in South Asia. She has a long-term interest in agrarian transformation in Southern India and has tracked the economy of a market town there since 1972. She held academic posts at the University of Oxford since 1987 until her retirement in 2011. She has been an adviser to the UK’S Department of International Development (DFID) and to seven UN organisations, as well as a trustee of the International Food Policy Research Institute and of Norway’s Institute for Environment and Development.
Professor Dzodzi Tsikata Dzodzi Tsikata is Research Professor and Director of the Institute of African Studies, (IAS) at the University of Ghana, Legon–Accra. Prior to assuming her current role, she was Professor at the Institute of Statistical, Social and Economic Research (ISSER), also at the University of Ghana. Since 2015, she has served as the President of the Council for the Development of Social Science Research in Africa (CODESRIA), after she was elected to that role at the 14th general assembly meeting which took place between 8-12 June 2015. Her academic interests include gender and development issues, as well as gender equity policies and practices.
The session of Prof. White will take place on 1 November at 09:00 in Aula B, and the session of Prof. Tsikata on 2 November at 11:00 in Aula B.
Together with the parallel panel sessions, the two plenary sessions therefore offer the intellectual platform and space where scholars can share their work with peers in a very friendly and relaxed environment. Indeed, participants can be assured that they will walk away after the DD not just with great feedback and an enhanced network of personal friends, but also with a sense of community with people coming from all over the world, and with whom they can continue to share and benefit from new ideas on development research.
Authored by the DD16 Organizing Committee: Ana Lucía Badillo Salgado, Ben Yiyugsah, Emma Lynn Dadap-Cantal, Mausumi Chetia and Natacha Bruna.
