Stakeholder Engagement in the Decommissioning Process
When done well, planning for closure serves as a foundation for sustained socioeconomic well-being, beneficial reuse of project assets, and accountable decision-making. This ultimately contributes to an operator’s social license.
The idea of a “social license to operate” is not a new concept. However, much focus has been on establishing such a concept in the early stages of development. What is now emerging is the need to obtain and maintain a social license at later stages of a project—at decommissioning and beyond. The complete paper highlights some of the challenges in maintaining a social license to operate during the decommissioning process.
Defining Social License to Operate
This term refers to the ongoing acceptance of a project, company, or industry by its stakeholders. It is granted at the discretion of stakeholders, based on perceptions of a project or operation. Once gained, it can be lost, and thus requires ongoing focus in order to be maintained.
The backdrop for obtaining and maintaining a social license to operate is becoming increasingly complex. This is in large part the result of social media, which has provided a platform for stakeholders to share concerns in a new way and at instant speed.
For the oil and gas industry, this has meant that what historically would have been a local issue quickly can now become a global issue affecting a company’s reputation. The result is vigilance across operations to safeguard a company’s positive public reputation. It also means that new projects, or the decommissioning of existing operations, attracts not only local but also global attention.
Effective Stakeholder-Engagement Planning
Stakeholder engagement plays a vital role in obtaining and maintaining a social license to operate. Good engagement starts with structured planning. This provides a solid understanding of a project, operation, or the stakeholders themselves, including their likely interests, concerns, and influence.
Mapping of a project or operation’s stakeholders is the first step in the planning process. The mapping process should identify the full breadth of stakeholders. This includes nongovernmental and community-based organizations, regulators, neighboring communities, and media. Mapping provides an opportunity to identify not only a project or operation’s stakeholders, but also the relationships that exist between stakeholders. Understanding these relationships is critical because key influencers often exist within a group of stakeholders. Focusing at least initially on these individuals typically helps to maximize the efficiency and effectiveness of engagement efforts.
The planning process can also help interpret stakeholder preferences with regard to preferred communication channels. Understanding this will help in tailoring the engagement approach and increase the likelihood that the messages being communicated are heard. Social media should form one critical avenue of communication. The complete paper provides details and insights on the use of social media as an engagement mechanism.
It is important to note that not all stakeholders will require the same type or frequency of messaging, information, or engagement. With a good understanding of a project or operation’s stakeholders, the population can be stratified, and different stakeholders can be provided the messages and information they require.
Early Engagement in the Decommissioning Process
In an ideal scenario, engagement regarding decommissioning will begin during the early stages of a project or operation planning process (i.e., during the design of the project or operation). By engaging early, the operation’s end state can be defined so that it can later be achieved clearly. This proposed end state should be determined based on feedback from stakeholders—in particular, directly affected stakeholders and communities as well as regulators and government agencies.
Numerous opportunities exist to drive positive outcomes during the decommissioning process. However, these opportunities must be identified early. For example, in order to reuse a former onshore processing facility site, an understanding of the level of effort (e.g. remediation or infrastructure removal) needed for the proposed future land uses to occur is required. This effort needs to be built into the decommissioning approach, and agreed upon by stakeholders, including regulators.
In a range of geographies, regulators drive consideration of potential effects associated with decommissioning as part of the project or operation’s initial approval process. This aspect is likely to continue to evolve, with more jurisdictions requiring consideration of decommissioning at the early stages of a project or operation. Many oil and gas operators have also embedded a requirement to consider decommissioning as part of their early-stage decision-making. This development has begun to influence to some extent the design of an operation. Despite these early-stage considerations, the extent of planning varies. Often, the engagement with stakeholders is focused on the construction, commissioning, and operation phases, rather than decommissioning.
Much early-stage planning is for new projects or operations. However, for existing projects or operations, engagement on decommissioning often occurs at later stages. Historically, the reason for this delay has often been the timeframe for decommissioning, which usually is planned to occur at a time in the distant future. It is often assumed that the regulatory environment and local context will change before decommissioning, meaning that the effects and likely end-state requirements will change. Thus, it is commonly believed that detailed planning is not required.
Engagement During Decommissioning To Build a Positive Legacy
Stakeholders should be provided an opportunity to participate actively in the planning for decommissioning. This will provide an opportunity for procedural fairness to be achieved. This normally involves an ongoing dialogue with stakeholders, which is an iterative process. Having a representative body, such as a community reference group or community consultative committee, of stakeholders facilitated by the project or operation, has been shown to be a useful tool to generate participation. This typically involves establishing a group of stakeholders that meets at regular intervals during the planning process.
To realize the benefits of establishing and maintaining such a representative body, an ongoing commitment to engagement is required. This includes putting in place the appropriate resources to facilitate the body and maintain momentum. Although having a dedicated group is a useful mechanism, it should be complemented by other engagement forums. The wider community must have opportunities to provide input.
Impact Identification and Management
As part of the engagement process, information should be made available regarding the potential effects and opportunities that will be created through the decommissioning process. Decommissioning can bring about a range of changes. This includes a reduction in direct and indirect employment, as well as a reduction in taxes, rates, and other revenue streams, such as social investment. Where a substantial onshore footprint exists, changes in population size and composition of nearby communities may occur, as well as changes in the sense of place, community identity, and social cohesion.
However, the extent of this impact is dependent largely on the nature of the project or operation. Many such identified effects are magnified in instances where an onshore operation is adjacent to a community or offshore platform, or another infrastructure is adjacent to a commercial fishery or subsistence fishing location.
Strategies must be put in place to help mitigate these effects to the greatest extent possible. Examples of potential mitigation strategies include helping relocate or reskill workers. Often, the management and mitigation strategies that are most effective are selected jointly with a project or operation’s stakeholders, including representatives from local communities as well as government agencies and regulators. This helps to establish early buy-in and ongoing support during implementation of these mitigation strategies.
Capitalizing on Opportunities
Although many of the identified effects or impacts are likely to be negative, potential benefits may also exist. These include a reduction in noise and air emissions, which may be linked to traffic movements or operation of an onshore plant. There may also be opportunities to repurpose infrastructure or rehabilitate land to support economic diversification.
Stakeholders often have innovative, creative ideas about identifying and captialziing upon opportunities that do exist. Their views often reflect what may work best in the local context. This presents a natural point for engaging stakeholders.
Although an increasing body of literature focuses on opportunities to repurpose infrastructure, liability (e.g., potential residual contamination) and land tenure issues (e.g., incompatible zoning) often exist, and must be addressed for opportunities to come to fruition.
It is also important to engage with government. Official infrastructure will have a role to play in managing potential changes in jobs, revenue, or population in an area. Providing a long lead time can help local government in planning for the transition that comes with decommissioning a project or operation.
Companies increasingly seek opportunities to differentiate or distinguish themselves. This may be through innovation, societal contributions, third-party assurance or certification, or alignment with international good-practice standards. Despite this, industry is often judged by its lowest common denominator. In other words, the actions of one operator can, and increasingly do, affecting other operators. It is important that individuals work to maintain their project or operation’s social license to operate, but also work together to maintain the industry’s social license to operate. It is at this juncture where industry organizations have an opportunity to bring together the industry and mobilize their collective response to stakeholder concerns, and, in some instances, activism.
Through well-planned engagement, a company can help build and maintain its social license to operate. However, this requires ongoing focus and a dedication to open and transparent engagement with stakeholders at every phase of the project life cycle, from exploration to decommissioning. Decommissioning presents a unique opportunity to help stakeholders plan for a future that they can influence and drive. When done well, this engagement planning provides an opportunity to build the organization’s legacy and contribute to its social license to operate.
This article, written by JPT Technology Editor Chris Carpenter, contains highlights of paper SPE 199203, “Stakeholder Engagement in the Decommissioning Process,” by Sabrina Genter, Environmental Resources Management, prepared for the 2019 SPE Symposium: Decommissioning and Abandonment. The paper has not been peer reviewed.