Coffey has called on resources companies to engage early and often with local communities in Papua New Guinea (PNG) as the PNG Mining and Petroleum Investment Conference continues this week.
With project approval delays and work stoppages or shutdowns costing the global resourcing industry US $9 billion a year, a social licence to operate can have a direct and significant impact on project profitability.
Coffey principal social performance Chris Mahoney said industry analysis found costs associated with work stoppages and social conflict in PNG were higher than the global average as a proportion of project capital.
He said it was essential that resources companies operating in PNG worked closely with local communities to build their social licence to operate.
“PNG has a unique social diversity and the experience of communities engaging with resources projects is varied,” Chris said.
“Ultimately, a project’s success relies on ensuring the project positively impacts the community in which it operates.”
Chris recommended completing values analysis before the project begins to understand the motivators for getting the community on board, such as through employment and small to medium enterprise development.
“When a community’s first experience of a project is a negative one, it’s extremely hard to regain trust,” he said.
“Understanding the community and their values right from the start, and working closely with them throughout the entire process, will help ensure productive relationships for project delivery.”
Chris said community needs should be actively monitored over the life of a project, as needs and expectations changed over time.
“Enhanced evaluation provides an independent assessment of how a project’s community engagement measures are working, and can give insights into how to improve their effectiveness,” Chris said.
Coffey has released an insight on building a social licence to operate to coincide with the conference, drawing on its extensive work in PNG across the mining, oil and gas and international development industries.
For more information, you can access the insight here.