Social-Performance Indicators and Maintaining Corporate Social Responsibility
Authors: Denney Dennis 
Published: February 2015

This article, written by Senior Technology Editor Dennis Denney, contains highlights of paper SPE 152353, ’Developing Social-Performance Indicators and Maintaining Corporate Social Responsibility in a Developing Country During Construction and Operation of an LNG Plant,’ by Jeanette Rascher and AbdulSalam Al-Shamsi, Yemen LNG Company, prepared for the 2012 SPE Middle East Health, Safety, Security, and Environment Conference and Exhibition, Abu Dhabi, 2-4 April. The paper has not been peer reviewed.

Maintaining corporate social responsibility is vital in securing a stable operating environment. The selection of social key performance indicators is crucial to promote long-term strategic goals, set targets, track performance, proactively identify triggers for change, and drive future improvement in performance. A range of indicators was developed to support the ongoing monitoring and evaluation of the company’s social-management plan, including community investment projects, livelihood restoration, reinstatement, and the effectiveness of community engagement within the project area.

Introduction

Indicators are used to track process and progress, and to determine whether the social component is making a positive difference (maximizing beneficial project effects) or minimizing risk (mitigating or reducing the negative effects of project activities as far as practicable). A monitoring and evaluation system was established as a tool to ensure that the company would achieve the goals and objectives set in its social-management plan and that the project design and criteria were followed, implementation effects occurred as predicted, emerging or unanticipated issues and projects were managed efficiently and effectively, lender and social-performance review requirements were complied with, international best practice was followed, national legislation was adhered to, and human development and capacity building occurred.

Project Background

A project was launched in August 2005 to design, construct, and operate a liquefied-natural-gas (LNG) plant on the southern coastline of Yemen, with an associated land pipeline to market and export the LNG, as shown in Fig. 1. Primary stake-holders included project-affected people (PAP), local and central government and governmental agencies involved with and exposed to project activities, and project employees. In terms of the LNG project, PAP are defined as communities, households, and individuals who live in close proximity to the project site. There were 22 clearly defined villages within a 5-km corridor on either side of the pipeline right of way and seven in the vicinity of the Balhaf liquefaction plant. Within each of these 29 villages (with their sub-villages), there are highly complex and potentially volatile household and tribal structures based on social, cultural, and religious norms founded in the community over many generations and which determine authority, respect, and status within the community. It is common for many families, relatives, and individuals to reside within a single household in a single village or community. Secondary stakeholders included those who have links (e.g., technical expertise) with primary stakeholders. Secondary stakeholders include nongovernmental organizations, various intermediary or representative organizations, and technical and professional bodies, often representing public interests.