Commentary: Engage NGOs to reduce risk

What happens to companies that try to operate where they have few friends?  It all depends on their approach. But one thing is certain — corporate engagement with non-governmental organizations (NGOs) and local stakeholders is now a major component of business practice for companies taking on mining and exploration.

Companies must make allies out of potential enemies, because in today’s climate, if you haven’t earned your social licence to operate, it won’t be a secret for very long. 

But developing healthy working relationships with NGOs isn’t easy. It’s a slow process that often requires constant effort, and for both sides to re-examine their policies. But a company that engages and becomes part of the greater dialogue will always have more influence and remove an enormous amount of operating risk. There isn’t a more disarming response than saying: “Here are our challenges. If you want to get involved, help us find a solution.”   

With the number of NGOs focused on mining practices, it can seem overwhelming. But not all NGOs are partnership material. Jane Nelson, director of Corporate Social Responsibility at Harvard University’s Kennedy School of Management, describes the NGO movement as falling into three categories. First, there are radical NGOs that oppose capitalism and are unlikely to sit down with a business. Secondly, there are groups set up or primarily supported by business. And lastly, there are those in the middle who have a “kiss and punch” mentality of working with a business — both opposing and supporting. “You have no choice but to work with this middle group,” Nelson says. “Even if they are not always reliable partners, they can play a vital role in helping companies improve their social and environmental performance, build trust and credibility and develop more environmentally sustainable and inclusive business models that serve low-income producers and consumers.”   

So, if you and your company have a sincere interest in community development and improving operations, you shouldn’t hesitate to leave the unwilling behind. Because the most successful NGOs,  the ones that are able to make the most difference and create real movements, will be determined by their strategic capacity as an organization —and that means their willingness and ability to work with both insiders and outsiders. 

Just like all relationships, engaging with different views can result in a new and perhaps unexpected alignment. And when both sides make investments in the relationship — that’s what drives the dialogue forward.  

How to get started

• Understand the landscape. You have to gather intelligence on NGOs the same way they gather intelligence on you. Look at their track record — have they worked with other companies to improve business practices before? Remember it’s not opposition research — it’s a search for partners. 

• Signal that you’d like to chat. The simplest way is often the best: just pick up the phone and call the NGO director. Understand that you won’t reach an agreement on your first call or at your first meeting, but make a commitment to open dialogue.   

• When things sound promising, start having quiet talks with those groups. Has their language become less aggressive?  Are you able to talk about finding solutions to the risks of operating? Remember communication starts with listening, so make it about finding the best ideas.

• Take any promises gathered from NGOs back for internal discussion. You may need to go back and forth at this stage, but you need internal buy-in. There is little you can do at this point if you don’t have management support.

• Draft a plan if the conversation gets far enough. The alignment of your interests won’t come easy, so test the plan to see if it will satisfy your opponents, and which partners arouse the greatest resistance.

At the end of the day it’s about building a solid reputation and maximizing the chances of operating successfully by minimizing the impact of operations that arouse anger. Always keep in mind that when you request the confidence of stakeholders, you must reciprocate. The good news is that a strong reputation is something a committed leader can decide to have.

— Megan McIver is the president of Toronto-based Verona Communications Inc. For more, visit www.veronacommunicationsinc.com.