For many managers, social performance is still viewed as a slightly unfamiliar topic that is unrelated to business objectives, not always strategically implemented, and best left to a specialized department. The assumption behind this view is that since social performance (incorrectly) only deals with people's behavior, it is often unpredictable, if not at times outright irrational, and therefore difficult to manage.
This view is prevalent in business management in general; however an additional layer of complexity comes into play when a company is operating within an area of conflict. Such a context can add a more acute sense of powerlessness, leading to a wide spectrum of company responses, ranging from adopting a wait-and-see approach, to addressing conflict dynamics through community investment efforts, to relying heavily on security provisions.
Throughout this paper we will be distinguishing between macro-level conflict in the broader jurisdictions of a context of operations, on one hand, and conflict dynamics at an asset level, on the other. Companies have difficulties making this distinction. As a result, they deploy approaches that are re-active and focus on management of the manifestations of conflict rather than to take a more pro-active approach based on an understanding of the macro-level context in which they operate. At best this leads to missed opportunities, but more often results in heightened risk exposure for the company.
The objective of this paper will be to demonstrate that Oil & Gas (O&G) companies with operations in areas of conflict actually have much more control over their socio-political risk exposure at an asset level than they generally assume. Gaining this control will require an asset-level social-performance plan that is informed by an analysis of underlying root causes, and serviced by a well-implemented integrated approach that, at a minimum, is focused on avoiding preventable mistakes.