Conflict Resolution|International|Negotiation

Corporate Investment in a Community: CSR That Works

This post comes from the island of Luzon, in the Philippines, where a team from the Corporate Social Responsibility Project of Harvard’s Kennedy School of Government has worked on a film documenting the tensions between operators of two hydroelectric dams and the communities that were inundated, destroyed and displaced during the construction of the dams.

One company ignored the communities and the other engaged them, and the difference is so palpable that you wonder why any company would ever do anything other than engagement.

In the mid-1950s, the government-owned National Power Corporation (NPC) constructed two dams in the province of Benguet, about 275 km north of Manila.  These were the first hydroelectric plants in the Philippines, and supplied the needs of the Manila Power Grid.  The dams were sited in two small villages, or barangays:  Ambuklao and Binga.  NPC promised that the residents of these valleys — soon to become reservoirs — would be relocated and compensated.  However, their homes of generations were lost; the graves of their revered ancestors were disturbed or flooded; and the basis for their agrarian culture was destroyed.  The residents were angry with NPC and sustained that anger for over fifty years.

In 2008 the dams were privatized by sale to SN Aboitiz.  One of Aboitiz’ first moves was to drive the six hours or so from Manila to Benguet, meet with the residents in their barangay halls, eat tilapia and rice with them, and explain their intentions to rehabilitate the dams and assist the community while doing so.  Some senior Aboitiz executives were shocked and dismayed to be greeted with skepticism and, in some cases, uncharacteristically overt hostility.  They heard elders accuse them of mouthing the same “sweet words” by which NPC had betrayed their fathers and mothers.  Some wept expressing the heartbreak at the loss of their rice fields, their churches and their schools.  One related the story that his mother had told him, about being removed from their home one morning by government agents and then watching it be destroyed by bulldozers.

Some residents took the privatization as an opportunity to seek redress for these old injuries, and wrote to the Office of Compliance Advisor Ombudsman (CAO) of the International Finance Corporation (which was funding the rehabilitation project), asking that funds be withheld until these matters were finally resolved to the satisfaction of the indigenous people.  The CAO engaged the services of a Manila-based ADR organization, CoRe, and conducted an assessment of the problem.  Professor Annabelle Tecson-Abaya of CoRe then worked to identify ten stakeholders — companies, community groups and political entities — and conducted an intense five-day workshop involving three representatives of each.

The stories of the workshop are eye-opening.  At the beginning of the week participants seldom spoke to each other and, in one instance, openly accused each other of insensitivity and callousness.  By Friday morning, by contrast, all 30 participants conspired to arrive together, ten minutes late, and formed a conga line to enter the workshop space.  To this day they stay in touch with each other and lines of communication are not just open — they are personal.

At the end of this negotiation “capacity-building” workshop, the barangay leaders understood the principles of collaborative negotiation, and the representatives of SN Aboitiz knew they had a team of partners.  Sub-teams worked on issues:  If the reservoirs could not be drained, could a cultural heritage site nevertheless be constructed so that the children of the barangays could understand who they are?  If the surrounding land could not be sold to the residents, could they not nevertheless have the right to operate it for community purposes?  If the agrarian traditions could not be continued, could not funds be available to improve roads, develop clinics, and invest in sustainable environmental practices and encourage tourism?

In May 2009 all stakeholders entered into a Memorandum of Agreement undertaking to pursue these and other creative ideas.  Now that the dams are no longer tax-exempt government assets, the Governor of Benguet reports that 5,000,000 pesos come into the province revenues each year.  The Binga/Tinongdan barangay receives over 1,000,000 pesos a year from Aboitiz’ corporate social responsibility fund, and requests for the fund are received by the designated CSR liaison to the barangay — the son whose mother told him of the loss of their home to an NPC bulldozer.

And SN Aboitiz?  CEO Emmanuel Rubio said it makes perfect sense to him, to his joint venturers, and to his parent company.  They are in the business of creating electrical power.  They are therefore in a community for the long term, he explained, and are taxpaying citizens of that community.  Their employees come from that community.  The proposal that they should not invest in the community makes no sense to him.  As part of the SN Power Group’s business strategy, he explained, they try their best to be transparent, to communicate their intentions to the people who are affected by them, and to work in partnership with all their stakeholders — including the people they work among and their governments.

When the team left Binga on Thursday afternoon, the barangay was pounding red rice and engaging in the ritual slaughtering of a pig in preparation for its annual cultural festival — the costs of which, this year, are being partially underwritten by SN Aboitiz.

Learning the values of the indigenous people of the Iowak and Ibaloy took some time.  Learning what they valued and what they needed took even longer.  And things are not perfect — nor will they ever be.  But as problems arise, now channels are well established to address them, rather than bulldozing them into the ground.

1 Comment
  1. Belo Monte is only a small part of development-induced displacement in Amazon Region (see. the situation in Ecuador, Colombia and Peru. Many NGOs estimates that forcible “development-induced displacement and resettlement” now affects 10 million people per year. According to the World Bank an estimated 33 million people have been displaced by development projects such as dams, urban development and irrigation canals in India alone.

    India is well ahead in this respect. A country with as many as over 3600 large dams within its belt can never be the exceptional case regarding displacement. The number of development induced displacement is higher than the conflict induced displacement in India. According to Bogumil Terminski an estimated more than 10 million people have been displaced by development each year.

    Athough the exact number of development-induced displaced people (DIDPs) is difficult to know, estimates are that in the last decade 90–100 million people have been displaced by urban, irrigation and power projects alone, with the number of people displaced by urban development becoming greater than those displaced by large infrastructure projects (such as dams). DIDPs outnumber refugees, with the added problem that their plight is often more concealed.
    This is what experts have termed “development-induced displacement.” According to Michael Cernea, a World Bank analyst, the causes of development-induced displacement include water supply (dams, reservoirs, irrigation); urban infrastructure; transportation (roads, highways, canals); energy (mining, power plants, oil exploration and extraction, pipelines); agricultural expansion; parks and forest reserves; and population redistribution schemes.

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