Poor quality consultations may lead to project delays, complaints, and added cost, according to a new report by the Inter-American Development Bank
Getting things right with stakeholders is key to success for development projects. We know that conflicts with local communities and other stakeholders can occur if the consultation process is not systematic, transparent, and meaningful to all parties involved. Failing to do this well can lead to project timeline delays, or even project failure, with significant costs for all concerned -- the community, the executing agency, as well as for intended beneficiaries.
The Inter-American Development Bank recently authored a publication that details international good practices for meaningful stakeholder consultation.
“When done well, consultation and stakeholder engagement in project finance brings benefits to the project, local communities, and the broader society,” says Janine Ferretti, Chief of IDB’s Environmental and Social Safeguard Unit. “It contributes to overall project sustainability by building trust and local ownership, and it reduces negative impacts such as those associated with resettlement caused by a project.”
Meaningful consultation, a requirement of IDB policies, involves a two-way process of dialogue and engagement, rather than a one-way dissemination of information. It is a process rather than one or a few single events, and it involves people in affected communities and other relevant stakeholders.
International good practice today establishes ten key elements, which are helpful in guiding the development and execution of meaningful consultation.
1. Identification of priority issues: What are the likely risks and opportunities arising from the project?
2. Stakeholder analysis and consultation plan: Who is affected by the project, and who has an interest that can influence outcomes?
3. Prior information: How will information be provided to stakeholders prior to consultation and consultation events in a meaningful way?
4. Appropriate forums and methods for the consultation process: How should consultation events be organized?
5. Grievance redress mechanisms: How can stakeholders seek remedy if they feel the project is causing harm to them or the environment?
6. Design and implementation decisions considering stakeholder perspectives: How will stakeholder concerns and recommendations be addressed in project decision-making and the overall management system?
7. Feedback to stakeholders and transparency in decision-making: How will the stakeholders be informed about project decisions and how their views and inputs have been incorporated?
8. Baseline data, action plans, and management systems: What are the action plans that the project will implement to reduce risk and enhance benefits for project stakeholders?
9. Documentation and public disclosure: What are the mechanisms established to document and disclose relevant project information?
10. Ongoing stakeholder consultation during implementation: What are the mechanisms established to ensure that stakeholders are kept informed and involved throughout project implementation?
Addressing these ten elements explicitly and systematically is key to designing and undertaking a meaningful stakeholder consultation process.
The IDB is working on improving our engagement with stakeholders and communities in development projects. Every project we finance which has an environmental and social risk requires consultations with affected parties and consideration of their views. In projects financed by the IDB, stakeholder consultation is primarily the responsibility of the borrower through the implementing agency for the project, but the IDB has a complementary role throughout the project cycle, to explain, advise and provide support.
About the IDB
The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region. The IDB is the leading source of multilateral financing for Latin America and the Caribbean.
- Pablo Bachelet