Building Your Social Risk Register for Project Excellence

In the intricate dance of project management, one misstep can lead to a cascade of consequences, affecting not only the project's delivery but also the reputation of the company behind it. That's where a Social Risk Assessment (SRA) steps onto the stage, serving as a crucial component in the broader evaluation of project risks.

The primary aim of an SRA is to pinpoint the material risks that could potentially influence project delivery or tarnish a company's standing. This process involves a thorough examination of contextual and project risks, and a comprehensive review of associated mitigations.

Picture this: a stoplight of social risks and opportunities, each color indicating the level of risk—red for high, yellow for medium, and green for low. At the heart of this assessment lies a meticulously curated risk register, capturing the nuances of each risk and opportunity.

Here's what you can expect to find in such a register:

1. Risk Categories: These encompass various social focus areas such as governance, labor, political risks, and Indigenous rights, among others. Each risk category delves into specific concerns pertinent to the project's context.

2. Contextual Risks: These are the external factors that could pose a threat to the project, often beyond the control of the project proponent. For instance, political upheavals or regulatory reforms could significantly impact project delivery.

3. Project Risks: These risks emanate directly from the project itself, ranging from labor shortages to inflationary effects. Unlike contextual risks, project risks are within the project proponent's sphere of influence, allowing for the greater implementation of mitigating measures.

4. Consequences: From negligible to severe, the consequences of each risk are assessed, considering factors like schedule, capital cost, and operating cost. This evaluation provides insight into the project's resilience in the face of potential risks.

5. Likelihood: What are the chances of a risk materializing? This aspect evaluates the probability of occurrence, ranging from rare to almost certain.

6. Overall Risk Level: By weighing the potential consequences against the likelihood of occurrence, an overall risk rating is assigned, guiding the prioritization of social risks.

7. Mitigation Strategies: These are the proactive measures put in place to mitigate or limit the impact of social risks on project delivery or company reputation.

As you embark on your SRA journey, it's essential to consider a myriad of material risks. These could include proximity to areas of community importance, ongoing political elections, challenges associated with an influx of workers, governmental expectations regarding local participation, and regional skills shortages.

Remember, an exhaustive risk register may span pages, reflecting the intricate web of factors that can influence a project's trajectory. By conducting a thorough SRA and crafting a robust risk register, you pave the way for informed decision-making and, ultimately, project success.

The Crucial Role of Social Performance Elements in Project Execution

A project execution plan (PEP) serves as a roadmap for effectively implementing a project, encompassing key aspects such as project management, commissioning, schedule, human resources, and more. However, in today's evolving landscape, companies are recognizing the importance of integrating social elements into their PEPs to ensure holistic project success. Such social elements include:

Community Risk and Reputation Plan (CRRP): The CRRP assesses social risks, pinpointing tools to either maximize opportunities or mitigate threats. Its aim is to proactively identify material risks, allowing for timely addressing of community needs throughout the project lifecycle.

Stakeholder Management Plan (SMP): The SMP categorizes stakeholders as individuals, groups, organizations, or communities who may influence or be affected by the project. It typically organizes stakeholders into relational groups (e.g., rural municipality, government, media) and leverages the CRRP materiality evaluation to gauge their impact on project execution. The SMP's significance lies in determining the appropriate engagement strategy—whether amplification, neutrality, monitoring, or mitigation—to fulfill stakeholder needs crucial for project delivery and success.

Project Communications Plan (PCP): The PCP serves as a roadmap for project communications, both internally and externally, throughout the project's execution. It encompasses various elements such as site communication protocols (including approvals, branding, key messages, distribution lists, and language considerations), communication tools, key issues management (such as traffic, dust, and safety), as well as a detailed production schedule assigning responsibilities for delivery.

Local Procurement and Contracts Plan: An LPCP supports the maximization and leveraging of opportunities for Indigenous and local business entities, which are integral to the successful execution of a project. It identifies strategies, approaches, and tools to be implemented to ensure the optimization of local benefits throughout the project's execution – most notably for delivery contracts and procuring services.

Depending on the project proponent and location, additional social performance plans may comprise an Indigenous Engagement and Participation Plan, Social Value Plan, and a Workforce Inclusion Plan (typically included within the Human Resources PEP).

Incorporating these social elements into PEPs not only enhances project outcomes but also strengthens community relationships and promotes sustainable development. By prioritizing social considerations alongside traditional project management practices, companies can achieve long-term success while positively impacting the communities they operate in.

Government mandated vs. voluntary community economic inclusion: A balanced case for both

In my work across different countries, I've encountered diverse approaches to community participation – from government mandates to voluntary inclusion. Each approach presents its own set of opportunities and challenges, shaping the dynamics of project involvement. Drawing from real-world examples, let's explore the contrasts between Broad Based Black Economic Empowerment (BBBEE) in South Africa as a case of government-mandated inclusion, and Canadian inclusion practices as a model of voluntary participation.

In South Africa, the government has prioritized reconciliation through various programs aimed at redressing historical imbalances. BBBEE stands out as a transformative policy, seeking to increase economic opportunities for previously disenfranchised communities. While some view it as compliance-driven, it has become widely adopted, shaping business practices across the country.

The advantages of mandated inclusion are clear: it fosters a transparent, level playing field where rules are applied uniformly. Industries often require specific levels of compliance for licensing, ensuring broad adherence to the initiative. Additionally, robust monitoring programs help enforce compliance, reducing instances of non-compliance.

However, challenges persist. Talent shortages within targeted groups can create artificial demand, while low economic growth limits opportunities for new entrants. Furthermore, resistance to change and attempts to circumvent legislation undermine its efficacy, highlighting the importance of continued improvement and enforcement.

Canada offers a contrasting approach, where Indigenous rights are constitutionally enshrined, and inclusion is often integrated after the Duty to Consult process. While not mandated by legislation, voluntary inclusion is encouraged and varies widely among project proponents.

Flexibility and creativity characterize voluntary inclusion efforts in Canada. Companies explore diverse strategies, from workforce development to equity sharing and business incubation, tailored to both community needs and corporate objectives. Without a minimum standard, there's room for innovation, although discrepancies in inclusion levels among project proponents exist.

The absence of a regulatory ceiling allows for ambitious initiatives that benefit both communities and companies alike. However, the lack of uniformity in approach highlights the need for greater consistency and commitment to inclusion principles.

Both government-mandated and voluntary inclusion approaches offer pathways to community participation in economic activities. While mandates provide clarity and accountability, voluntary initiatives encourage innovation and flexibility. Striking a balance between regulatory frameworks and creative solutions is essential for fostering inclusive economies.