Demand for oil and gas has increasingly led operators to enter more sensitive environments. Frequently these sensitive environments are located in less developed countries (LDCs). Operators have traditionally misunderstood the degree to which these sensitivities are impacted upon, often leading to inadequate attention being paid to social and environmental issues.
Recently this has been forced to change. Investors, the public and environmental organisations today expect a more transparent, efficiently run and profitable operator who can manage its affairs with increased social and environmental responsibility. In this paper we argue that the onus on achieving this rests on the operator.
LDCs are often financially under-resourced, under pressure to pay off debts while meeting the needs for economic liberalisation, and unable to enforce their already weak legislative framework on their own. Consequently, they are often unable to turn away potential foreign investment.
We discuss the use of ‘critical success factors’ (CSFs), en compassing new techniques based on an HSE MS, as a possible approach to achieving increased corporate social and environmental responsibility and obtaining a publicly endorsed ‘licence to operate’. The implementation of these CSFs is argued as a means of minimising or avoiding potential opposition to the project, gaining consensus form stakeholders, enhancing long-term project success, and increasing overall profits.
We use several examples to demonstrate how selfregulation has led operators to implement CSFs such as adopting a new policy statement, stakeholder participation, social impact assessment, and internal auditing. The paper focuses on one case study in particular, that of a current operation in the Peruvian Amazonian basin, in a region of high bio-diversity and sensitivity.
We conclude that self-regulation enables an operator to take personal responsibility in raising its own standards to provide benefit in the long-term. It can therefore be used as a powerful lever for combined peer and government pressure to set the benchmark for other operators, and may provide the catalyst for change.