Our Social License to Operate: The SN Aboitiz Power Experience Philippines. Mike Hosillos Presentation to ICH

Transcription

1 Our Social License to Operate: The SN Aboitiz Power Experience Philippines Mike Hosillos Presentation to ICH

2 Overview The Philippines Energy Situation About SN Aboitiz Power Group Our Social License to Operate Securing Social License: The Ambuklao and Binga Conflict Management Experience October 18&19,

3 The Philippines Energy Situation

4 The Philippines 4

5 Demand Capacity in MW The Philippines 7,107 islands Pop. 100 million Installed Capacity: Total: 17,025 MW Luzon: 12,527 MW Visayas: 2,448 MW Mindanao: 2,049 MW GDP growth: 6.7% (2018) Energy consumption growth: 4% (2017) sources: Department of Energy; National Statistical Coordination Board Peak Demand: Luzon: 9,582 MW Visayas: 1,831 MW

6 Philippine Electricity Industry (before) 18/10/2018 6

7 Philippine Electricity Industry (after) 18/10/2018 7

8 Philippine Electricity Industry (snap shot) 18/10/2018 8

9 Philippines Renewable Energy Philippines has highest RE utilization in Asia 39% RE Utilization 14% 8% 8% 1% Philippines China Singapore Vietnam EU Source: Layug, Jose Jr The National Renewable Energy Program: The Road Starts Here EU-Philippines Meeting on Energy. Mandarin Oriental, Philippines. 27 February /18/2018

10 Potential Hydropower in the Philippines Mini 14% 1,833.58MW Micro 1% 27 MW Hydro Potential 13,097 MW Large and Small 85% 11, MW 18/10/

11 Target Increase in Hydropower 160% targeted increase in installed capacity 2010 (3400 MW) 2030 (8729 MW) In 2010: 87 awarded RE service contracts & 71 pending applications 10/18/

12 About SN Aboitiz Power Group

13 About SN Aboitiz Power Group Joint venture: SN Power and Aboitiz Power Owns 590 MW of hydroelectric capacity in Luzon. Into greenfield development Products & services: Spot market Bilateral contracts Ancillary services 18/10/

14 Our Assets 18/10/

15 Mission To power positive change, we will: develop and operate world-class renewable energy facilities provide our customers with innovative energy solutions that best meet their needs foster an engaging work environment that inspires performance, learning, and growth partner with our communities in their development Vision By having the best team in the industry, we will be the leading developer and operator of renewable energy facilities, preferred by our customers, host communities and stakeholders. 10/18/

16 SNAP Share in Luzon Generation Capacity Source: Department of Energy 18/10/

17 Our Social License to Operate: The SN Aboitiz Power Experience Philippines

18 Our Challenges Regulatory risks: Lack of regulatory predictability Inconsistent regulations Outdated laws and regulations Mandate consciousness Misaligned development priorities of the National and Local governments 18/10/

19 Our Challenges Socio-Political Risks: Significant economic relocation activities and resettlement Unpredictable consent process for indigenous peoples Significant underdevelopment of target areas Historical opposition to large dam projects Well established local and international NGO network against large scale hydro development 18/10/

20 Our Challenges Environmental Risks: Rapid land use conversion resulting to loss of forest cover/watershed conversion Unclear and unpredictable implementation of protected areas management rules Conflict between environmental regulations and indigenous peoples rights Competing water use (irrigation, livelihood, recreation, power) 18/10/

21 Our Approach Adopted the IFC Performance Standards to: Identify risks and vulnerabilities associated with the projects conduct detailed environmental and social impact studies develop social and environmental management systems and actions plans Ensure transparency on project and operational issues through multi-stakeholder participatory processes Adopted social, environmental and quality managements systems to ensure sustainability of the project 18/10/

22 Our Approach Established a Stakeholder Engagement and Grievance Management strategy to: - Do dialogues and consultations - Establish an early warning system to catch issues early - Provide a process where stakeholders can raise issues and - Address grievance Adopted a comprehensive social responsibility and sustainability framework to guide the business to: Ensure compliance with relevant standards and regulations Ensure sustainable operations Help develop the communities where we operate Help maintain our social license to operate 18/10/

23 SNAP s Guiding Principle on CSR? CSR is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as the local community and society at large. --World Business Council for Sustainable Development (WBCSD) 10/18/

24 Pillars of SNAP CSR Safety and Health Labor Standards Quality Standards Human Rights Community Stakeholder Engagement Grievance Mechanism Community Investment and Development Safe and Responsible Operations Human Rights Employees CSR Environment Responsible Procurement Corporate Governance Customer Relations Regulatory Compliance Market Sustainability Programs Watershed Conservation Environmental Compliance and Protection 10/18/

25 Regular Community Investment Fund SNAP is a Funder Voluntary Fund for Development Projects 1 % of NIAT Allocated to Host Communities Implemented through Partnership Principle Projects linked to development goals of the communities 10/18/

26 Key Result Areas Infrastructure Health Indigenous Peoples Governance Livelihood Education Environment 10/18/

27 SNAP: What We Do 10/18/

28 Securing Social License: The Ambuklao and Binga Conflict Management Experience

29 I. The Case The Ambuklao and Binga Hydroelectric Plants were constructed during the 1950s by the state-owned National Power Corporation. The reservoir and dams were built over fertile rice lands along the Agno river in the communities of Ambuklao and Binga inhabited by the Ibaloi s, an ethno-linguistic indigenous people s tribe in the Cordilleras. They are known for their culture and their native rice called the Kintoman rice from which they prepare their native rice wine called Tapuey. Prior to the construction of the dams and reservoir, the Philippine government expropriated the rice lands of the Ibaloi families known to either own or possess these lands without resettlement and relocation of the displaced families. The resulting displacement and the unresolved issues on resettlement and relocation created lasting resentment, distrust and frustration on the part of the Ibaloi communities in Ambuklao and Binga. The stories of neglect and the high-handed treatment of their ancestors were handed down by oral history to the younger generations. 29

30 The Case continued In 2001, a law recognized the rights of indigenous people s over ancestral lands and to apply for titles over these lands. The Ambuklao and Binga dams and reservoir are located in what is now claimed to be ancestral domains of the Ibalois. In 2007, SN Aboitiz Power won the bid for Ambuklao and Binga but the Ibalois threatened to oppose the privatization due to the unresolved issues. A complaint was filed with the Compliance Advisor Ombudsman for IFC not to finance the project. They also lobbied with the privatizing firm and the local government to prevent the transfer of the facilities to SNAP due to unresolved issues during construction. To successfully close the deal and proceed with rehabilitating the plants, SNAP has 270 days (9 months) to secure land rights, convince IFC to approve the loan, and secure the consent of government and community stakeholders both for legal and social acceptability to successfully acquire the plant and rehabilitate the same. Advancing Sustainability on Renewable Energy 30

31 The Case Presentation Title 18/10/

32 Legacy Issues in the Philippines Limited /No consultations Unfulfilled commitments Neglect of IP Rights/Non recognition Hydropower Environmental consequences Human rights violations Displacement Social & Economic 10/18/

33 SNAP Stakeholder Engagement Strategy Identify Critical Stakeholders Adopt transparent, open and proactive communication Use formal and informal processes Enter formal partnership agreements Adopt continuing strategy of engagement IP groups, displaced families and local governments Consulting stakeholders on acquisition and rehabilitation project Facilitated dialogue process to address the legacy issues Use sphere of influence to help affected stakeholders Formalizing participation of IP orgs & stakeholder management councils) Enter into agreements to recognize IPs and help them realize their goals Continuing dialogue on unresolved and emerging issues Institutionalizing stakeholder participation 10/18/

34 The IP Sites Memorandum of Agreement (MOA) entered into by stakeholders on 19 May 2009 resulted in the following: - Access to land by the IPs no longer needed by government through Indigenous Peoples Cultural Heritage - Access to development funds from SNAP through its community investment program - Assistance of the local governments to the IPs in pursuing the development of their domain - Establishment of a Stakeholders Council composed of all stakeholders to collaborate on managing issues related to the project 10/18/

35 IP Site and Stakeholders Council Shared Values Stakeholders Council Composed of Representatives from LGUs, IPOs, NPC, PSALM, SNAP Common Interest to address community concerns on land use, operations of SNAP and development of communities Common Interest becomes shared value in pursuing the successful implementation of the IP Cultural Heritage Site and the development of the communities in these areas IPOs (Ambuklao and Binga IPs) LGUs (Ambuklao & Binga Residents) Land Use Issues Development of Heritage Sites Responsible Operation of Plants NPC/PSALM (Ambuklao and Binga Watersheds) SNAP (Ambuklao and Binga Plants) 10/18/

36 Key Learnings Adopting proven standards on Indigenous Peoples, Stakeholder Engagement, and Social and Environmental Management raises the quality of social acceptability (IFC Performance Standards) Engage early with communities to understand their social, economic and political conditions. Stakeholder engagement is key to understanding the social concerns which is critical to securing social license. Work out creative solutions on resource management with stakeholders. Use sphere of influence to arrive at lasting and binding agreements and understandings among stakeholders. Explore alternative third-party grievance management mechanisms Transparent, open and proactive corporate leadership is a vital advantage, and follow through on commitments. Commit to what you can deliver and deliver on your commitments. 10/18/

37 Watch the Case Study/Documentary in Youtube: Making Monkey Business By the Kennedy School of Government Harvard University 10/18/

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