Chengbo Wang, Director, Advisory Services and Morgan Zhang, Manager, Advisory Services, BSR
A series of violent protests against large-scale construction projects—the proposed oil refinery in Shifang, the garbage incinerator project in Panyu, and the waste discharge plant in Qidong—have attracted enormous amounts of public attention in China. All of these projects have either been postponed or canceled altogether. The protests have been unprecedented, and the Chinese government is under increasing pressure to curtail the prospect of more violent protests.
The launch of a social risk assessment (SRA) in China is a move to counter this rising dissatisfaction. SRAs require government agencies to map out the likelihood of community unrest in areas where large-scale projects are being planned.
But what makes a good social risk assessment? Five key elements come to mind—drawn from BSR’s community engagement work with extractive companies in Mongolia and China:
- Identify project objectives and social benefits. Companies need to identify the local community’s needs and public interests to ensure that they are integrated into the project’s long-term business plan.
- Build a community development plan. This involves working with local government agencies and other civil society organizations to contribute to the community’s long-term strategic plan and leveraging the company’s resources to operationalize elements of the community’s plan through employee engagement, skills-sharing and long-term community-based programs.
- Communicate with the community. Throughout any type of social risk assessment, companies have to keep their lines of communication open, which often involves a community-based company representative (or sometimes an independent party) who is trusted by both sides, can relate to the needs of the community, and most importantly, does not demonstrate a vested interest in the project.
- Ensure that information is transparent. Companies need to ensure that technical project details such as impacts on the local environment, society and public health effects, and the measures to address these issues are disclosed to the public in a timely fashion. And the local government has a duty to ensure this happens.
- Establish internal coordination. Social risk management is not only related to a company’s CSR department, but relevant to all other business departments. Internal alignment helps business to leverage available resources to further advance its social management goals and encourage more effective collaboration across business units. Achieving senior management buy-in and cooperation across different business units increases the likelihood of establishing a more effective community-to-company relationship.
BSR Human Rights Advisor Christine Bader further explored the topic of social risk assestments in China in a previous blog post, "China’s Social Risk Reviews: A Tool Not a Burden."