When it comes to social impact, money does not always talk. Sometimes the most overlooked step is to listen, Alfonso Caso, Director General of ANAF Energy, told the audience at Mexico Energy Forum 2018 on Wednesday in Mexico City. “We need to build relationships not buy consent,” he cautioned.
In response to moderator and Principal at Fondo de Fondos Carlos Michel’s question, Caso detailed his own experience with social impact and shared what, in reality, it involves. “When a company reaches a community, there are positive and negative impacts on the social fabric of that community,” he explained. “Sometimes there are issues that are not economic and it is necessary to start listening first of all to take care of the social fabric.” These issues can include deep-rooted religious or cultural beliefs, he added.
Gabriela Valle, Deputy Director General of Social Impact Assessments and Previous Consultations at the Ministry of Energy, added that the ministry is taking steps to bridge the communication gap that can exist between private companies and the communities. “The way that the secondary legislation incorporated social responsibility creates a win-win situation for all parties,” she said. “On one hand, we ensure that companies are responsible for their behavior and respect basic human rights, and on the other we are able to deliver certainty and viability to the company involved.”
Several companies can facilitate this process, including Conecta Cultura and Vera & Asociados. The latter consultancy’s Founding Partner Luis Vega explained the services it offers. “We propose the possible scenarios and present each of the parallel routes,” he said, “We also do data mining to make certain decisions about social issues. But without a strong framework, nothing can be done.”
Conecta Cultura, explained the company’s Founder and Director General Victoria Contreras, offers statistical methodologies based on geology, history and the politics of an area. “We offer solid data that gives these players the tools to make decisions,” she said. “Social feasibility studies are useful for the client to have a social picture of the place where it plans to develop projects, providing solid indicators.”
She echoed Caso’s sentiment that, beyond knowing what the local representative thinks about a project, approaching the affected persons is a must in any infrastructure project, highlighting the importance of field work in this area. Nevertheless, she said Mexico is still a step behind in terms of generating certainty in the face of political groups and rights of way issues. “More than 50 projects have been stopped because social impact was not given enough importance,” she said.
But according to Valle, the industry seems to be doing things right. In 2017, she said, the Ministry of Energy received 3,000 requests for social impact evaluations. But she warned that a variety of issues must be taken into account for each individual project, such as the price, the client and the locality in which the project will be located. “Success in social issues does not come overnight; all of the country’s stakeholders, from public to private, have to work on creating a proper governance framework,” she said.
Caso agreed that, while methodologies like that of the IFC can help build a strategy, in such a culturally diverse country as Mexico, there are many other factors that need to be taken into account. Both he and Valle stressed the importance of making the reform a success in all aspects. “All these projects have an impact, not only socially and environmentally, but they also impact communities economically,” concluded Valle.