Environmental Focus: Government-Mandated, Community-Created

Ask any community activist or environmental advocate about stakeholder engagement. They know it; it is in their bones, their values, and their practices. Why? For fifty-plus years, they have engaged governments, companies, and investors in decisions about how communities develop, where infrastructure is located and needed (e.g., roads, pipelines, parks, and landfills), and how publicly-entrusted resources – such as water, land, and air – are used. Their activism and that of their allies is commonplace around the globe; and in many places their engagement in planning decisions or monitoring and enforcement is mandated by public policy. 

These mandates sometimes address one stage of an investment, project, or business activity. For example, the US National Environmental Policy Act requires engagement only in the planning of projects, US air quality laws ensure opportunities for engagement in government-required permit processes in both the construction and operations stages of projects that affect air quality, while US water quality laws only require such opportunities during the permit processes for operations affecting water quality. 

Globally, international law supports Indigenous Peoples’ right to effective participation in the decisions, policies and initiatives that affect them. Referred to as Free, Prior and Informed Consent (FPIC), this principle and practice is a legal norm that imposes duties and obligations on the nation states and the multilateral finance institutions they underwrite before and during investments on Indigenous Peoples’ lands.,,

Mandated stakeholder engagement opportunities in the operational stages differ from the planning phase as they are initiated by the stakeholders, not by the government or company. Like the planning stage, the specific ways communities can engage varies by the underlying laws.  Some environmental laws provide communities the right to review permit monitoring and compliance reports submitted by companies to the regulatory agencies; they also have the legal right to initiate enforcement actions when the government fails to do so or is perceived as failing to do so. Such actions most often rely on company-reported data; however, citizen-collected data may also be used as evidence if it complies with rigorous collection and analysis protocols. 

Similar legal requirements exist for investments and activities impacting Indigenous Peoples, often through accountability offices. Unlike US environmental laws, the data to initiate complaints and enforcements is primarily from the communities, not companies. Beyond the legally required engagement is the elevation of communities as the primary stakeholders. Whether Indigenous People or frequently disenfranchised groups such as racial and ethnic minorities, and women, all have the legal right and opportunity to participate. Other types of stakeholders such as investors, companies, and customers are not excluded; their participation is expected.

The general approach for engaging stakeholders usually involves the following steps. Specific approaches will vary from this based on the specific legal mandates and how the government agencies choose to implement them. These country- and government-agency differences are critical; however, these steps describe common concepts and processes.

1. Government action to trigger the engagement process. This may be done through the media, the agency website, and by alerting individuals and organizations that have requested to receive such alerts. This includes providing public access to, posting online, or publishing, the proposed activities in detail. Sometimes in anticipation of a formal engagement process, informal engagement efforts may occur before the formal engagement. If done with integrity, such informal efforts may make the formal process more efficient. 
2. Identifying, mapping, and communicating with key community stakeholders. This is a deliberate process necessary to ensure that: a) the range of community voices have an opportunity to engage including racial and ethnic minorities, and women; and, b) those community types receive information in formats with which they are comfortable so that they can engage productively.
3. One or more events to inform stakeholders of the proposed investment or activity, and under ideal circumstances to seek input into the proposed activity, and alternatives to it. 

The role of the stakeholders in this process depends on how the legal mandates define their involvement, and the government agencies actual use of those mandates. Two archetypal approaches are the consultative and partnership models with many variations on both.

In a consultative model, stakeholders engagement focuses on gathering input and information, but the decision on next steps would solely be with the government agency. In a partnership model, input and information exchange is iterative, generative, and flows from and to all parties; decisions on actions and next steps are collectively with the stakeholders (or their representatives).

Whether consultative or partnership approach, consensus-building sessions may be held to find common ground and acceptable. Often specially trained consensus building organizations and individuals are retained to manage such processes. As in any stakeholder engagement, the cultural, racial, and ethnic competencies of the consultants (as well as the government staff) are critical to ensuring the effort has an opportunity for success. 

4. Once the decision is made, stakeholders can stay engaged through the ongoing monitoring and compliance activities of the responsible government agencies. Many of the international multilateral finance institutions have accountability offices, through which stakeholders including individuals and communities who are experiencing actual or potential harm due to a project, investment, or business-related activity. The Accountability Counsel, a key leader in this area, provides details on these stakeholder engagement opportunities.

The benefits of public policy-mandated stakeholder engagement are clear – community voices must be included in the planning, operations, and monitoring of an investment, project, or business activity. Moreover, because of its long history in many different contexts and countries, stories, cautionary tales, lessons learned, and formal research about how to do it well, and how to avoid mistakes abound. These can inform non-mandated stakeholder engagement efforts, as well as offer roadmaps for future public policies.

The challenges are myriad and equally well documented. Mandates are only as good as their implementation, which in turn are only as good as the implementers. The effort lies not in making it happen, but in ensuring the equitable inclusion of, and support for, community voices in the process and in the decision-making. 

Another challenge with current legally mandated stakeholder engagement is that the laws may apply to specific types of investments or business practices. For example, the FPIC mandate applies only to multilateral finance institutions and their private investment partners. In the US, NEPA mandates only apply when federal government funds are being used. 

There are hundreds of examples of legally-mandated stakeholder engagement. The Natural Resources Defense Council offers a list of NEPA success stories, The Colorado Natural Resources Energy & Environmental Law Review offers precedent-setting citizen enforcement examples and their implications, and the Accountability Counsel provides several community cases from around the world.

Prepared by John Sherman from pfc Social Impact Advisors.