Managing Social Impacts of Labour Influx: Lessons Learned from a World Bank Global Portfolio Review

SPE International Conference and Exhibition on Health, Safety, Security, Environment, and Social Responsibility2018

Jay Wagner, Susan Dowse, Murray Jones, Marla Orenstein, Dan Owen

Abstract

Abstract Labor influx is not a new phenomenon and can occur in the context of any major project, including in oil and gas, mining and infrastructure developments. The large-scale and often remote and trans-boundary nature of oil and gas projects can make such undertakings particularly vulnerable to such dynamics. A key driver of socio-economic change in any project context can be rapid population growth or influx in response to project labor demand, or perceptions of direct or indirect economic opportunity associated with the project. Whereas labor influx can have positive effects (e.g., increased opportunities for local businesses, increased human capital), more often than not labor influxresults in or contributes to adverse social, economic, and environmental impacts. If not planned for and effectivelymanaged, labor influx can lead to human welfare risks, including gender-based violence and trauma and negatively affect public infrastructure, housing, natural resource management and social dynamics in the project area and region. These impacts, whichoften long outlast the project and investment cycle, canrepresenta significant risk for oil and gasprojects andlead tocommunity anger and social conflict, reputational impacts, investor concerns, cost overruns, delays, and in extreme cases can put at risk the License to Operate. This paper summarizes the results of a recent global portfolio review focused on labor influx and social impacts commissioned by World Bank (WB). The study was carried out in 2017 as part of a series of actions set in motion by serious allegations of social impact related to a transport project in Uganda, which resulted in the ultimate cancellation of the investment by the WB. While drawing on research into infrastructure projects the paperdiscusseskey observations and lessonsrelevant to the oil and gas industry, and provides recommendations for project planners and managers faced with the potential for labor influx. It concludes that influx is a strategic but often overlooked aspect of project risk management, and outlineskey mitigation measures that should be in every project's social risk management toolkit.

Abstract

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