A new report by the Inter-American Development Bank (IDB) identifies ten key elements that can help projects improve their sustainability and reduce potential social conflicts, from proper community engagement and legal foundations to adequate monitoring of results.

Social Impact Assessment: Integrating Social Issues in Development Projects looks at how governments and other key players can better utilize social assessments in their projects to improve development outcomes, ensure greater social acceptance of the project and manage potential risks, among others. The recommendations are in keeping with international best practices.

“Social impact assessments are a powerful tool to facilitate the integration of social issues in the planning and implementation of projects,” says Janine Ferretti, Chief of IDB’s Environmental and Social Safeguard Unit. “It improves the quality and sustainability of projects, supports and strengthens national requirements, and enhances project acceptance and local ownership.”

The Spanish-language edition of note will be  launched during the VI Regional Policy Dialogue (RPD) at the IDB’s headquarters in Washington, D.C on September 11-13. Since 2015, the Environmental and Social Safeguards Unit (ESG) of the Bank has held a series of 5 RPDs on Environmental Licensing and Compliance. These dialogues have brought together hundreds of senior officials from the licensing and enforcement authorities in countries within the Latin American and Caribbean regions to better understand the challenges and needs to strengthen environmental and social permitting and compliance. The note will be a key point of conversation throughout this year’s Dialogue.

The Social Impact Assessment (SIA) note is structured around ten key elements, which should be embedded in an SIA process in projects of moderate to high risk, scale, and complexity – typically big infrastructure investments.

A recent IDB study of 200 conflict-affected infrastructure projects have revealed that social drivers led to conflicts in many cases, including a lack of community benefits (84%) and reduced access to resources (78%).

These elements are not addressed separately or sequentially. They inform each other, and may be studied, consulted on, and managed at different times of the project cycle. The ten SIA elements discussed in the note are:

1. Legal and Normative Foundation. An SIA should be done with a normative framework in mind, reflecting country legal frameworks and other relevant norms and standards.
2. Social Context. The SIA process should provide an understanding of local social groups, categories and institutions, with a particular emphasis on poverty, social exclusion, and vulnerability.
3. Stakeholder Engagement. Stakeholder analysis and meaningful engagement are essential parts of the SIA process, providing inputs to informed decision making. (The IDB published an in-depth  note on meaningful stakeholder consultation in 2017)
4. Benefits and Opportunities. The SIA process provides the basis for determining how a project can benefit local communities and other stakeholders, and promote local ownership and support for the project.
5. Risk Identification. The SIA process helps ensure that any potential or actual adverse impacts a project may cause or contribute to are identified.
6. Indicators, Baseline, and Methodology. Having good data is essential to monitor and manage project implementation, and to document impacts on project stakeholders.
7. Design and Implementation. Once risks have been identified, they must be managed. This is done through applying a logical sequence of steps, referred to as a mitigation hierarchy.
8. Reports and plans. There needs to be systematic documentation of the analysis and consultations undertaken, and of the various action plans where relevant.
9. Project Management System. The SIA process should provide the information needed not only to produce studies and reports, but also to ensure that social issues are appropriately managed and integrated into project decision-making processes on an ongoing basis.
10. Monitoring, Adaptive Management, and Evaluation. A system of monitoring and adaptive management should be established to reflect changing circumstances, demonstrate accountability, and contribute to knowledge and learning.

The earlier the SIA starts, the easier it is to maximize benefits and minimize risk, and to add value to the project through improved designs and implementation.

This note on Social Impact Assessment (SIA) is part of a series of guidance and good practice publications prepared by the Inter-American Development Bank’s Environmental and Social Safeguards Unit. The series covers assessment and management of environmental and social risks and opportunities, and aims to provide guidance on international good practice and IDB’s requirements in applying environmental and social sustainability principles.