Stakeholder engagement
Engaging with and responding to all our stakeholders
2011 highlights
- Completion of a reputation perception survey across eight countries canvassing the views of stakeholders
- First Socially Responsible Investor (SRI) roadshow in Europe
- Ghana-Ireland Trade and Investment Forum
- Introduction to oil and gas courses in Ghana, Uganda, Kenya and French Guiana
Most of our activities are in developing regions and emerging oil countries. This creates a varied and expanding landscape for stakeholder engagement although our broad stakeholder groups are fairly consistent. They include our employees, shareholders, governments (national, regional and local), regulators, policymakers, local communities, non-governmental organisations (NGOs), civil society organisations (CSOs), academics and the media.
Managing our operating environment
Our stakeholders shape our operating environment, directly influencing our commercial success, so we need to engage with them on a regular basis to ensure the smooth continuation of our business. A strong foundation of understanding amongst our stakeholder groups can play a major role in moving a project through the various stages of its lifecycle. Failure to engage effectively can lead to delays in executing our business plans and damage to our reputation. It can have serious implications for Tullow’s ability to secure local buy-in, lead to erosion of shareholder value and make it much more difficult to attract and retain the talent we need.
A guiding principle for Tullow has always been ensuring we put relationships ahead of short-term gains. Taking a long-term perspective has enabled us to invest the time and effort in fostering relationships and building strong and durable bonds in host countries.
In 2011, the management of external stakeholder relationships was one of the specific corporate risks identified and formed part of the Board’s objectives for the year. Given its strategic importance to the Group it remains a Board focus in 2012. Another Board objective in 2012 is to increase the frequency of Board-level interactions with employees, key decision-makers and other opinion formers in our countries of operation.
Stakeholder perception survey
We commissioned a reputation survey in 2011, canvassing the views of key opinion formers in Uganda, Ghana, UK, Gabon, French Guiana, Mauritania, Brussels (EU) and the USA. This provided Tullow with insights into the Group’s main external reputation drivers and allowed us to benchmark our reputation against other oil and gas companies working in the same geographic areas.
The Group’s strongest reputational asset is being seen as a well run business. Stakeholders recognise Tullow’s long-term vision and perspective, strong financial footing and strong management team. To a lesser extent, Tullow’s social and economic contribution to host countries is also acknowledged as an asset in areas such as support for development needs and in using and developing local suppliers. Some clear areas for improvement were also highlighted, particularly the desire for deeper two-way communication and greater transparency both in dealings with Government and in Tullow’s recruitment and procurement practices.
Reputation management in Uganda
Aspects of the internal debate in Uganda on the nascent oil industry during 2011 highlighted reputation management issues for Tullow. As a result, we are working to create a greater understanding of the oil and gas sector and address some of the specific areas of concern for stakeholders; both in Kampala and in the Lake Albert Basin area. Key initiatives under way include:
- More effective communication with parliamentarians about developments in the industry as well as soliciting feedback;
- Two new Lake Albert community information centres to provide easy access to information on the oil and gas industry;
- Further introductory courses to the oil and gas industry, with an increased focus on development activity;
- Improved engagement with donor agencies, industry and multilateral organisations;
- A public information programme about Tullow’s supply chain and local supplier development in Uganda;
- An outreach campaign to Ugandan diaspora to engage and inform them about Tullow in Uganda and address any questions they may have; and
- An employee engagement programme to keep Tullow Uganda staff fully informed, including regular meetings with Tullow Group management.
Developing robust processes
In 2011, we have focused on building more robust internal capacity and processes for external stakeholder engagement. We have developed a competency framework to guide the development of External Affairs in line with the growing demands of the business. We have also established a set of Stakeholder Engagement Guidelines and tools to govern and support our stakeholder engagement processes and stakeholder issues management. These will form the basis of a development pack for new country entry as well as training for existing operations.
Social performance standards
We are progressing the development of Group social performance standards, which will guide the way in which we understand and manage our social impacts across our portfolio. Once finalised, Regional External Affairs Managers will have responsibility for executing regional work programmes in accordance with those standards. In conjunction with this we are continuing to develop our social competencies in each region. In Uganda, for example, Tullow has introduced International Finance Corporation (IFC) Social Performance Standards training for the local team, to include the development of effective IFC compliant grievance management systems for local communities. This year the team will also implement a centralised social information system for stakeholder engagement, baseline data management and land access issues for Tullow’s Uganda operations. The focus of this will be the management and reporting of social responsibility in an operational context, and the management of social risk and reputation management from a corporate viewpoint.
A wide engagement programme
In 2011, the Group External Affairs engagement programme included new initiatives such as a European road show for Socially Responsible Investors and an event in Dublin to encourage Irish investment in Ghana. We have also continued with introductory oil and gas industry courses in Ghana and Uganda, in conjunction with Robert Gordon University, and have extended this during the year to stakeholders in French Guiana and Kenya. In addition, we ran our first course for UK stakeholders, including government departments, NGOs and foreign diplomats based in London.
Our Group Compliance Manager has led engagement with our industry peers, regulatory bodies and NGOs/CSOs in the area of transparency and anti-corruption. Industry partner forums on compliance and ethics have been held in Bangladesh and Kenya to date. The IR team has a highly active IR programme in the UK, Europe and North America. This is supported by the Executive and Senior Management and amounted to almost 50 investor days in 2011, covering 22 cities in 13 countries. HR has been increasing our engagement with diaspora groups as part of our localisation efforts, and Internal Communications at Group and country level have run a variety of initiatives for employees, which are discussed in the our people section of this report.
In Ghana and Uganda, Community Liaison Officers (CLOs) undertake an ongoing outreach programme, including face-to-face meetings, consultations and radio question and answer sessions. Where we have new operations, such as in Kenya, we have held sensitisation meetings with local stakeholders to begin to develop relationships and help ensure our presence is welcomed.
Ghana-Ireland trade and investment forum
In October 2011, over 150 delegates attended the first Ghana-Ireland Trade and Investment Forum in Dublin. The event, which was sponsored and organised by Tullow and The Ghanaian Embassy, brought together Irish and Ghanaian business leaders to discuss opportunities for trade between the two countries. Representatives from 22 Ghanaian companies took part in the delegation visiting Ireland.
Foreign Direct Investment in Ghana has grown by over 70% in the last year and building international trade relationships is a key priority for the country, as the Government of Ghana is keen to diversify investment beyond the oil and gas industry.
For this reason, the forum focused on business opportunities for Irish companies in four sectors: agriculture, food processing, construction and engineering. To date seven Irish companies who attended are either developing business opportunities with the Ghanaian contacts they made or intend to do so within the next two years.
Ireland has a small but developing trade relationship with Ghana. In 2010, Irish exports to Ghana are estimated to have been in excess of $60 million, an increase of over 20% on the prior year. In 2010, Ghana exported approximately $16 million of goods to Ireland. Ghana is one of the fastest growing economies in the world, with double digit economic growth forecast for 2012.
‟Tullow has been developing business relationships in Ghana since the 1980s, long before we discovered oil there in 2007. We believe opportunities for Irish and other businesses are vast, so we are happy to support this event.‟
Rosalind Kainyah, Vice President of External Affairs, Tullow Oil
Hon. Dr Joseph Annan MP, Deputy Minister of Trade and Industry, Ghana speaking at the Ghana-Ireland Investment Forum in Ireland.
