Citizen's Advisory Councils WCC Resolution
WCC/Barcelona Resolution 4.089 called on the extractive industry to embrace and support the formation of local Citizens’ Advisory Councils and urged IUCN’s members and governments to support and encourage the formation of local Citizens’Advisory Councils. CEESP SEAPRISE member Rick Steiner provides a guide on how to set up Citizens Advisory Councils.
In many developing nations, large-scale extractive projects often receive insufficient governmental and citizen oversight. While petroleum and mining companies have significant financial, technical, and political resources with which to advance their business interest, most developing governments and civil society often do not. And in the absence of effective oversight, companies have been known to lower social and environmental standards to reduce costs and maximize short-term financial returns, leaving local people, the environment, and governments unfairly disadvantaged and exploited. This insufficient oversight and low standards can result in acute and catastrophic damage (oil spills, chemical explosions, mine disasters), and long-term, chronic degradation.
To correct this problem, local citizens need to be involved in the oversight of industry operations that affect their lives, and to do this they will need an organization with money, staff, authority, broad representation, and most of all, independence. Thus, governments should require the establishment of Citizen Advisory Councils (CACs) to provide informed public oversight for the extractive sector, to be funded either from government resource revenues or from industry directly.
Structure and Function of a CAC: A CAC should be structured to give local citizens a direct voice in the corporate and governmental decisions that affect them and their communities. The group should become the primary conduit through which government and industry communicate to the public on industry issues. In a real sense, the CAC should become "the eyes, ears, and voice" for the local public on industry issues.
Board of Directors: A CAC should be directed by a Board of Directors (either volunteer or paid), consisting of members representing the communities and major citizen constituencies potentially affected by the project – the stakeholders. These board seats might, for instance, represent indigenous people, commercial fishing, aquaculture, conservation, recreation, tourism, communities, tribal entities, and so on. Board members must be chosen by, and serve entirely at the pleasure of, their respective constituencies. Representatives should not be chosen by industry or government. A CAC may also have several ex-officio, non-voting, board members representing the relevant governmental agencies. The Board should meet regularly (e.g., quarterly), and at each meeting representatives of industry and government should be asked to report on their operations and listen to citizens concerns. This regular interchange provides a line of communication vital to the interest of each constituency, and results in a constructive climate for problem solving. The board is responsible for hiring staff, making policy recommendations, and allocating the annual budget.
Staff: The day-to-day activity of the CAC is the responsibility of a paid staff. Depending on the desire of the Board, staffing can include an executive director, deputy directors, public information manager, community liaison, finance manager, project managers, and administrative assistance. The staff serves at the pleasure of the Council's executive director.
Committees: Much of the work by a CAC can be conducted by technical committees, each with a dedicated staff liaison. These committees should be appointed by the Board based on expertise, interest, and willingness to serve. The committees should meet regularly to discuss any and all issues within their purview, draft and recommend policy actions to the Board, and conduct research approved and financed by the Board.
Responsibilities: The broad mission of a CAC is to enable citizens to ensure the highest standards of environmental and social responsibility of an industrial project. The CAC should be empowered to provide oversight on all aspects of extractive industry development in their region - permitting, exploration, production, transportation, refining, public revenue collection, risk management, and environmental compliance. The CAC should provide oversight, advice, and advocacy on issues such as the following: where to allow development, rates of reserve extraction, Best Available Technology (BAT) standards, accident prevention and response preparedness, legal liability, environmental monitoring, regulatory reform, revenues and taxes, and so on. It should have a voice in the selection of export routes and transportation methodologies. The CAC should review and submit written comments on all project operations. This should include government legislation, regulations and permits, and industry policy and procedure, and industry financial matters -revenues, costs, taxes, royalties, etc.
At the request of its Board or committees, the CAC should commission independent scientific studies and reports on issues of relevance to the public, the media, government agencies, legislative bodies, and the industry. This research should form the basis of policy recommendations. Conducted jointly with government and industry, this research will foster a more cooperative spirit among these groups, minimizing conflict and contention. The CAC monitors and plays an active role in all industry and government oversight for the project.
The recommendations of the CAC are advisory and non-binding, and while government regulators and industry are not required to adopt the council's advice, many recommendations will likely be adopted if they result from thorough research and vetting by the council's process. All of the CAC's work should be open to the public on whose behalf it operates, and interested citizens can attend and provide public comment as well. A robust public outreach and communications effort should be developed by the CAC, with a website and regular newsletters, etc.
Funding: Substantial and stable funding for such a group is critical. The budget should be commensurate with the responsibilities of the CAC, and include sufficient funds to commission independent research and technical reports as the CAC deems appropriate. One thing that distinguishes the CAC concept from other advisory structures, it is that the CAC has sufficient funding to conduct its work. Typically, about 1/3 of the annual budget is devoted to staff; 1/3 to administration (office rent, supplies, equipment, audits, etc); and 1/3 for research and contracts.
There are several possible avenues for financial support:
- Direct funding by the extractive industry: Funding could come directly from the companies and/or their consortia (as in Alaska), but must contain sufficient safeguards against industry bias and control. Industry funding would be best in the form of an endowment from which the CAC could operate off the investment earnings.
- Financial institutions requiring the establishment of a CAC as a condition of their loan: Lacking direct support by the extractive companies, the International Financial Institutions (IFIs) could require companies receiving loans to establish and fund such independent, credible public participation as a condition of their loan. The IFIs could stipulate what sort of audit, review protocols, representation, and government and industry cooperation must be put in place for the groups.
- Government support: Governments can themselves establish and finance such citizen participation from public revenues derived from extractive industry projects, thereby removing industry from any direct role in the group's budget.
- Interim, start-up support from philanthropic, non-governmental organizations (NGOs): If none of the above financial instruments are attainable in the short-term, then the assistance of an outside, philanthropic NGO can be solicited. As an interim CAC proves its worth as a mechanism for informed public participation, then their funding should be picked up directly by government or industry.
Avoiding corruption and co-option: To prevent financial corruption, a CAC should commission annual financial audits by independent firms, and report results in their publicly available annual reports. As well, clear conflict of interest and disclosure policies for directors and staff should be instituted. And to minimize the risk of industry co-option, CAC members should remain accountable to their respective stakeholder groups, and have high standards of transparency and openness. Ultimately, it is the citizens groups represented in a CAC that control the process - not government or industry.
Lessons: There have been many important lessons learned from existing CACs that are relevant elsewhere (www.pwsrcac.org), as follow:
- Establishment of a CAC should be required by government in order for the project to be in legal compliance.
- The CAC should exist for the lifetime of the project.
- Sufficient funding is essential.
- A citizens group can be independent with industry funding, with proper safeguards. Funding should come with no strings attached.
- The CAC should represent all stakeholder groups that are potentially affected by the project.
- Board members should be appointed by, and serve solely at the pleasure of, stakeholder groups -- they should not be controlled by industry or government.
- Board members do not have to be experts.
- Cooperation works better than confrontation.
- Conflict is inherent, but common ground is possible.
- Agreeing on how to disagree reduces conflict
- Logic makes passion persuasive, using science, etc.
- A clear mission and identity should be established early on
Conclusion: Given the obvious benefits to democratic governance and sustainable development, it is recommended that governments require the establishment of Citizens Advisory Councils. The importance of these citizens' councils is paramount - they are not government, they are not industry, but they are established and operated solely by and for the citizens of the region. Such councils will provide an unprecedented level of transparency and informed public participation with regard to industrial activities - an important prerequisite to achieving a prosperous, equitable, just, and sustainable society.