Around the world, international industries and investors face stakeholder pressure to increase investment in host country work forces while continually improving the quality of environmental, health, safety and social (EHSS) performance. Striking this delicate balance will challenge companies to improve how they invest in, guide, support and help develop the capacity of in-country consultants, rather than relying on imported international teams. Acorn International was founded to offer a service model based on guided partnerships that ensure world-class assurance and maximized local content in EHSS consulting services. Capacity building is a critical element of our business model.
What is Capacity Building?
Capacity is the ability of people, organizations and society as a whole to manage their affairs successfully. Capacity development is the process whereby people, organizations and institutions (society) as a whole unleash, strengthen, create, adapt and maintain capacity over time. Capacity building is often understood to mean a purposeful, external intervention to strengthen capacity over time.
For the extractives industry, capacity building can focus on internal and external stakeholders, and can encompass any or all of the following:
Capacity Building Position Paper
Acorn International's Position Paper describes some current challenges of international capacity building and outlines why it is important to us, as well as our industrial and investment clients, to continually improve performance in the strengthening of in-country EHSS services.
The World Bank
Two-thirds of World Bank projects include capacity development as an objective. The World Bank Institute's Capacity Development and Results practice provides tools, research, and knowledge sharing to support the design and management of results-focused capacity development programs.
The Capacity Development Resource Center provides an overview of lessons learned, good practices, and links to other knowledge sources. In 2012, the World Bank Institute published a "Guide to Evaluating Capacity Development Results", a collection of guidance notes that explain and demonstrate how to assess capacity development efforts, based on a "results-based" framework.
The website www.capacity.org is a resource portal for sharing research findings, analytical frameworks, policy debates, practical experiences and toolkits. The website also publishes an online journal.
Here, the emergence of the capacity development as a distinct field of thinking and practice has been presented as going hand in hand with advances in human resources - and institutional – development, and can be distinguished by five important strands: (i) training and human resources development, (ii) participatory approaches, (iii) organizational development, (iv) policy and institutional development, and (v) multi-actor processes and systems.
International Monetary Fund
Capacity development consists of 25% of the IMF budget, supplemented by donor funding. In 2012, the IMF announced a new Institute for Capacity Development to support member countries to build more robust economic and financial institutions. These efforts are implemented by eight regional technical assistance centers and seven regional training centers around the world.
The Oil, Gas and Mining Sustainable Community Development Fund (CommDev)
CommDev is a funding mechanism for practical capacity building, training, technical assistance, implementation support, awareness-raising, and tool development.
IPIECA, the global oil and gas industry association for environmental and social issues, has established a working group to communicate how the oil and gas industry is using partnerships to contribute to sustainable development. Their publication, "Practical Tips for Effective Partnering," relates not strictly to capacity building but to effective partnering, which Acorn International views as a critical element of effective international capacity building.
Based on IPIECA members' efforts to develop good practice in managing local content, the "Local Content Strategy" guidance document outlines challenges and opportunities for regulatory requirements that aim to create jobs, promote enterprise development and accelerate the transfer of skills and technologies.
International Council on Mining and Metals
The Community Development Toolkit includes 20 tools aimed at fostering constructive relationships, building capacity and improving opportunities for the sustainable development of communities around mining and metal operations. Tools include Partnership and Competencies Assessments, to determine whether the company, community, NGO or government has the required capacity and skills to implement sustainable programs, and what other skills, knowledge or understanding may be required.
International Finance Corporation
The International Finance Corporation focuses on funding programs in which developers integrate capacity building of local communities into project design. The IFC provides training resources on managing environmental and social performance, and corporate governance.
World Business Council for Sustainable Development (WBCSD)
In the article below, WBCSD examines how the private sector can improve the lives of people in the low-income segment through direct employment, procurement from local suppliers and delivery of affordable products and services.
ExxonMobil has established that developing the skills of local communities surrounding operations abroad supports project sustainability and transfers relevant skills that meet global demands.
With assistance from Acorn International, Kosmos Energy conducted a Capacity Building Needs Assessment and Development Plan for the Ghanaian Ministry of Environment, Science and Technology. Kosmos Energy then conducted a training course focused on key responsibilities for oil spill management, enabling practical decision-making to oversee new oil and gas development.
Chevron has put into practice numerous economic and social development programs in the US and abroad. For example, in Nigeria, Chevron is working to build the capacity of local businesses to create self-sustaining local companies that have the capacity to not only support oil and gas projects in Nigeria, but to also complete for projects internationally.
Marathon Oil has implemented capacity building training and development programs worldwide throughout its company-operated oil and gas developments. Its programs include National Workforce Integration, On-the-Job Training, Technical and Vocational Training and Safety Training.
BHP Billiton focuses on building internal capacity for its employees as well as building the capacity of local content providers. In partnership with the Chilean Government, BHP Billiton has a Cluster Program in place to develop 250 local companies into world-class global resource industry suppliers by 2020.
The Tullow Group Scholarship Scheme aims to build capacity where Tullow's host countries experience significant skills gaps, especially (but not exclusively) around their oil and gas industries. The number of awards allocated to each of the following countries is weighted according to scale of Tullow projects within that country: Congo-Brazzaville, Ethiopia, Gabon, Ghana, Ivory Coast, Kenya, Mauritania, Uganda, Uruguay and Suriname. For the 2013/2014 academic year, the company plans to award 114 scholarships. In addition, Tullow builds local capacity through its local procurement and local content strategies.
The ArcelorMittal Foundation’s philosophy is to encourage holistic development in the communities in which it works in addition to creating employment opportunities. The Foundation promotes entrepreneurism through access to credit and skills training.
Statoil promotes local content and skills building through "spin-offs" and sustainable investments, including proactively recruiting locally, promoting local sourcing, and investing in competitive local enterprises. Statoil has set up supplier development centers and vocational training in Russia. In Angola, the company works with the national oil company, Sonangol, through a Management and Technology Transfer Program.
International Development Sector
United Nations Development Programme
The UNDP Strategic Plan (2008-2013) positions capacity development as the organization's core contribution to development. Working in 166 countries, UNDP uses its global presence and experience to help nations strengthen their institutions by supporting the development of policies, processes, skills and knowledge they need to perform better and contribute to the achievement of national development goals.
Engineers Against Poverty
Engineers Against Poverty (EAP) is a specialist NGO working in the field of engineering and international development. In partnership with the IFC, this group has established a local procurement guide as well as tools for maximizing local enterprise contributions to the supply chain, with case studies from oil, gas and mining companies.
Organization for Economic Cooperation and Development
The OECD's efforts in capacity building are aimed towards good governance in public institutions. The resources contained in the OECD's portal on capacity development are aimed at donor country programs, given that international donors invest an estimated 25% of total overseas development assistance annually in capacity building.
African Capacity Building Foundation
The African Capacity Building Foundation is a partnership between African governments and the international donor community, devoted to building human and institutional capacity for sustainable growth and poverty reduction in Africa. Along with the World Bank Institute, the ACBF maintains an e-library on capacity development.
Acorn International routinely leads capacity building to help strengthen and expand the capabilities of our in-country partners. This is an integral part of our distinctive "local content – global assurance" mission and business model. Please visit our projects/experience page to find out more about our work. Some examples include:
- Webinars on air dispersion modeling and oil spill dispersion modeling, Worldwide Delivered by US-based modeling experts to enhance partners' knowledge of why and how the modeling is performed, how results can be applied to predict and manage potential impacts, and how the use of modeling can be explained during public meetings in remote areas that may be affected by development projects. See presentations and webinar recording here.
- Support in developing an in-country waste management business, Cote D'Ivoire Facilitated meetings with US-based clients and technology providers, and reviewed/supported business plans for developing a world-class oil field waste management facility in Cote D'Ivoire.
- IFC Performance Standard Training, Ghana Delivered training course, facilitated group exercises and provided reference material to Ghanaian consultants on the IFC Performance Standards for Social and Environmental Sustainability and good practices/lessons learned in applying these to extractive industry projects worldwide.
- Grievance Mechanism development and application support, Kenya Developed a model grievance mechanism and shared templates, tracking mechanisms and good practices/lessons learned with local teams retained to lead community engagement in remote areas throughout the course of exploration programs.
- Business expansion support, Colombia Worked with local consultant to enhance business administration tools and practices, identify and attract new talent and manage cash and workflow (including helping to finance growth to meet pending demand).
- Social baseline study and GIS capability development, The Philippines Trained local experts in performing social baseline survey and integrating geographic information systems to meet good international practices, helping groups of specialists form an integrated business model to offer consulting services.
Other examples of capacity building programs (involving Acorn International or others) are provided below.