C O N S U L T I N G - P A R T N E R I N G

Acorn

International

AcornNotes

Issue No. 5 September 2007

Global corporations have made great progress in developing programs to understand and manage the

environmental and social impacts of their activities worldwide. But how is industry actually addressing these

priorities in developing countries that face capacity constraints and competing priorities.

This August, Acorn International hosted a web forum with its international partners to better understand how four

issues of emerging importance are being addressed by multi-nationals and governments in developing countries

when planning and reviewing capital development programs. The issues that Acorn sees as of most emerging

importance to our industrial and investment industry clients are:

•

Stakeholder Engagement and Social Impact Assessment

•

Biodiversity

•

Health Impact Assessment

•

Climate Change

The web forum served as one of the ways we share experiences on these issues and thereby build capacity

among our network of in-country partners in 35 countries. The forum and on-going dialogue with our partners has

provided an opportunity to discuss why these concerns are important to industry and how they are being

integrated into project planning through mechanisms such as Environmental Impact Assessment (EIA). Acorn’s

perspective and key findings from the forum and on-gong partner dialogue are described below for each of the

topics.

Stakeholder Engagement and Social Impact Assessment

International industry and investors are finding that stakeholder and social concerns represent both short term

risks to the success of development projects and longer term reputation risks. Financier requirements such as

the Equator Principles are driving companies to develop grievance mechanisms for stakeholders, conduct an

evaluation of potential economic displacement from a project, and require companies to engage in capacity

building. Emerging government requirements and company policies are integrating stakeholder engagement and

social impact assessment (SIA) into EIA and early project planning, helping concerns to be identified and

addressed up front, and allowing companies to anticipate potential opposition and mitigate future risk and liability.

Through the web forum and dialogue, Acorn learned that although SIA appears to have been well-introduced into

legislation around the world, the process is still being learned by government, the private sector and the public.

The view from some of our partners is that legislators in many developing countries may not have the capacity to

date to thoroughly address concerns. Acorn believes that as continued emphasis on other sustainable

development trends, such as biodiversity, water consumption, and human rights grow, so will the focus on

stakeholder engagement and SIA and the need for governments to develop capacities needed to work with

industry and investors to manage this sensitive issue.

Biodiversity

The risk that developments could cause a reduction of biological diversity or irreversible loss of value of an

ecosystem has become a critical concern to financiers and shareholders. Recognizing the project viability and

reputation implications, some industry leaders are addressing biodiversity concerns early in a project lifecycle –

putting in place corporate policies backed by requirements for Biodiversity Action Plans

1

. This is helping

companies limit delays to projects, build relationships with local stakeholders, improve reputation and secure

future company activity in an area or region.

The web forum revealed that there is a growing application of Biodiversity Action Plans worldwide, with some

governments specifically addressing the topic through regulations or guidelines and attention given to

decommissioning activities as well as for new developments. Acorn’s Colombian partner shared that the Ministry

of Environment in Colombia includes requirements in project Terms of Reference that addresses biodiversity

protection through ecological management plans, monitoring and mitigation and compensation.

C O N S U L T IN G - P A R T N E R I N G

Acorn

International