Local communities can experience negative environmental and social impacts from fracking, which can result in reputational risks and affect a company’s social license to operate.

Issues such as water, noise and air pollution, as well as increased traffic and impact on local infrastructure, are all key concerns communities may have. Community conflict can result in costs to the company financially through lost productivity and resources to address the conflict.

Companies can go beyond minimum regulatory requirements to implement a higher standard, and practice where possible. This will help to manage stakeholder relations effectively and take into account the interests of local communities. Even if risks are managed by the company, constructive and open dialogue still needs to be undertaken in order to consult with, raise awareness, listen and respond to the concerns of the local community and other stakeholders. A company needs to demonstrate appropriate channels and mechanisms are available to ensure stakeholders are informed and can communicate all issues with the company.

Engagement questions

1. Does the company identify benefit sharing and economic impacts?

Basic expectation

The company has committed to implement Community Development Agreements (or similar) at their projects.

Follow up questions

  • Does the company provide employment opportunities and hire employees from the local area at the operation site?
  • Can the company demonstrate sustainable economic development at its projects through using and building capacity of local supply chains and businesses?

2. Does the company undertake community consultation?

Basic expectation

The company has a policy which commits to stakeholder engagement in the planning and implementation of projects.

Follow up questions

  • Is there a policy and what actions is the company taking to consult with stakeholders in general?
  • Is there a policy to seek free, prior and informed consent (FPIC) for companies that are exposed to indigenous peoples populations?
  • If the company experiences conflict around land use planning and boundaries, does the company act beyond state regulations and local zoning codes?

3. What fracking-related grievance mechanisms does the company have?

Basic expectation

The company has a policy commitment to maintain an active grievance or complaints mechanism.

Follow up questions

  • How does the company track performance to address how the complaints and grievances are resolved, monitored and recorded? The grievance mechanism should have a recourse to an independent organisation.
  • Is the company reporting publicly on the use and effectiveness of these grievance mechanisms?

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    Engaging with oil and gas companies on fracking

    January 2017