Holistic Security in Oil & Gas – How to Stay Safe in a Dangerous World

The following true story is retold by Tony Ling* of LPD Risk:

“Brian Wellcome’s job was just to get the stuff out of the ground. Yes, he was in charge, but someone else would look after the politics: the locals, guerrillas – whatever.  Some security guy had said something to him once, but he knew they always exaggerated.  Anyway it was now all to late – just guns, screaming and death. He knew he was going to die.

But when Brian’s well site was attacked he was not killed; he was far too valuable as a hostage. He was released after nine months captivity and the payment of a considerable ransom.

The irony in all this was that it had all been so preventable. An independent enquiry ordered by the Board revealed that far from being a long planned terrorist attack, Brian’s capture had been a result of village revenge and guerrilla opportunity.  The Company had upset its neighbours.  A week before Brian’s kidnapping a distressed pregnant woman and her husband had come to his fenced rig site asking for help from the clinic only to be turned away by the guard who came from a different tribe with a long running feud with the surrounding people.  Brian had then refused to meet a deputation from the village. The woman died in childbirth but the baby son lived.

The son was raised to think only of revenge and hatred of the foreigners who had stolen his land and his mother. He became a guerrilla leader and scourge of the oil industry.

The evening before the attack on the rig the talk in the village was still about this rebuff; the hatred oIraq 01f the company was palpable. There happened to be a stranger passing through this previously peaceful village.  He immediately saw an opportunity for political gain and offered revenge that was immediately accepted.  It took him no more than a few hours to gather a dozen well armed comrades from the hills to attack Brian’s rig-site.  The guerrillas were able to capitalise on their popularity and quickly took over the area, the Army moved in to counter them and the company never operated there again”.

What does this story teach us?  In short, Brian’s company had failed to engage the local community as stakeholders.  In our dangerous world security must be managed holistically to ensure operations, or a project, can work securely and peacefully; no company can afford neighbours as enemy.  A holistic approach manages security risks under four pillars:

  1. Working with host government security agencies:  this benefits security but, if the company is not careful, it can also bring liability and risk to its reputation.
  2. Physical protection:  the old way of looking at security, but still important.
  3. Ownership:  security, like safety, is everyone’s responsibility.
  4. Working with the community:  the term ‘community’ embraces the whole of civil society, national and international, but it is a company’s local community in the area of operations that is usually the most crucial to their security.

In this article I will focus on the last pillar, working with the local community.  As Brian and his company learnt, lose the support of your local community and you can lose the operation.  Here are the main areas to focus on:

  • The security team should work with your company’s social and community function:  increasingly companies are combining security with other functions working to ensure a peaceful environment.

    A company sponsored clinic in the Philippines

  • Understand local political dynamics:  this is particularly critical where there is a tribal, religious or cultural clash between the local community and the host country government.
  • The security of the community is important to the security of the project:  in many areas these are inseparable.
  • Community based security:  this is increasingly seen as both cheaper and more effective than relying on the traditional  ‘guard force’ concept, particularly when the guards come from another tribe.  In short community support comes when local people feel that they gain more than they lose from the operation’s presence.  There is no better way of achieving this than providing employment.
  • Manage the impact of outsiders:  the security risk to local people is increased by the presence of an extraction operation because immigrants, including criminals, are attracted by the new opportunities. Often the host government does not have the will or resources to deal with this so the company may have to become involved (within the terms laid down in the Voluntary Principles on Security and Human Rights).
  • Consult:  in order to facilitate the required peaceful environment companies should develop a consultation process to engage locals.
  • Invest in the community:  ensure “sustainable local benefits” for communities and equitable distribution of royalties. Don’t invest in infrastructure such as a school or clinic without resources such as teachers or medicines to maintain it.
  • Help:  focus on resolving the problems that communities themselves are concerned about.
    A company sponsored information poster in the DRC

    A company sponsored information poster in the DRC

  • Dialogue:  engage in genuine dialogue with communities and listen to their concerns and deal with them. But never make promises to the community that you cannot deliver.
  • Gain consent:  ensure that consent is provided according to international good practice (such as the UN-REDD Programme Guidelines on Free, Prior and Informed Consent) and that communities have access to independent technical experts, such as water engineers.
  • Do not polarize:  do not contribute to the “divide and rule” approach of separating indigenous communities or other groups or networks by polarizing them into “pro” and “anti” an extraction operation.
  • Joint ventures:  A company should consider developing a joint venture with the community so that it is directly involved with the development of the project.
  • Human rights:  implement a robust mechanism to deal with allegations of human rights abuse.

*The author is Tony Ling, Chairman of LPD Group, a company that provides risk management services to a range of clients in hostile and unstable environments.  This story was first told as part of Tony Ling’s long article in ‘Risk and Energy Infrastructure Cross-­‐Border Dimensions’, Global Law and Business, August 2011.  Tony can be contacted at:  tonyling@lpdrisk.com.  www.lpdrisk.com   ‘Where Security Meets Social Responsibility’

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