15 Nov, 2019

Managing Non-Technical Risks: A Major Operator Dealing with Conflict

I always thought business was contrary to violence—and I still do—but sometimes non-technical risks take the form of challenging human security issues, especially in politically volatile settings. This is particularly acute with strategic resources like oil and gas, and industry members must be prepared to use available experience to manage and uphold their social license. An international operator faced such a situation when it entered Indonesia in 2000 to implement an LNG project in the province of West Papua.

Indonesian Papua is a historically unstable region, thus the company was stepping into a mixture of elements that some scholars argue is prone to breed conflict.

In 2001, Amnesty International reported that a militarized police unit had detained and tortured around 140 people in the province after attacks by an unidentified armed group. A number of them were extrajudicially executed. Some alleged, as had indeed happened before with the Freeport/Rio Tinto mine, that the operation was staged to encourage the operator to hire qualified public security forces. Based on recommendations by the human rights impact assessment it commissioned, NGOs and the Independent Advisory Panel it established, the company insisted instead on what came to be called Integrated Community Based Security (ICBS).

This community-company partnership appealed to the indigenous Papuans. ICBS kept security an internal affair while relegating official security forces to high-level threats only. Alongside this approach, the company joined with multiple stakeholders to implement various sustainable development initiatives. The fear of violence in the site was thus mitigated. While other dynamics arose, like inter-village rivalries as well as social issues associated with rising migration, the company built the necessary relationships and institutions to continually reassess their approach.

Yet, there’s only so much a single societal stakeholder can do. It is impossible for the company to take a governmental role and establish sovereignty within its area of operations, and it should not bear such an important political responsibility. Indeed, some of its activities depend on approval and cooperation with official entities, the same entities that may endanger human security. While none of us wish to be complicit with human rights violators because of indispensable engagement, the reality is challenging.

Luckily, standards, guidelines, tools and methodologies exist to help oil and gas companies to take their responsibility in doing things right. Personnel at all levels of the industry ought to be prepared to face security, human rights and other non-technical challenges, and PetroSkills’ Managing Non-Technical Risks (MNTR) course offers the tools and methods of engagement needed to work together with communities, NGOs and governments.

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Written by: Katinka C. van Cranenburgh & Christiaan Luca

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