SENER’s Social Impact Assessments

The 2014 Energy Reform gave formal birth to the Social Impact Assessments (SIAs) in Mexico. Previously, they were just a component of the Environmental Impact Statements, where the social affairs were briefly addressed. This requirement turned out to be groundbreaking at the moment, although sometimes it is requested in a simplified way in areas such as real estate development, format, content and scope of the Social Impact Assessment required by SENER (Ministry of Energy) is broad-spectrum.

In our country, the concerns of communities where infrastructure projects are developed, have been traditionally negotiated on individual terms with owners, ejido members – or their leaders -and the enterprise. Usually there is no record of agreements that prioritize collective dialogue or the vast knowledge of the commentators, but the economic power prevails as a single or central tool in the negotiation. Experience has shown that these kinds of relationships are losing validity and effectiveness in different countries, lines and stages of infrastructure developments.

There are plenty of examples of the effects that poor decisions on the infrastructure projects of the social considerations have. Emblematic cases, such as the Estado de Mexico’s Atenco airport Project, the Guerrero’s hydroelectric project La Parota or the Siglo XXI highway in Morelos prove that, besides the operation delays; projects with high social conflicts are frequently cancelled, having profound economic implications, discrediting the builder and leading to social discontent. Therefore, significant political implications on the affected areas, in addition to the developer’s considerable loss of material resources.

There are other cases, not so notorious, that have even denounced human rights violations, assassinations or persecutions, as well as irreversible damages to the social capital of the communities where they take place.

If well-executed, the Social Impact Assessment may be used to prevent conflict, take care of the community environment and achieve better industrial operations. The Social Impact Assessment, according to the International Association for Impact Assessment (IAIA), “includes the analysis, monitoring and the intentional or unintentional social consequences management processes, whether positive or negative, of (public policies, programs, plans, projects) planned interventions and any other social changes process, caused by these interventions”. ¹

Social Impact Assessments must seek not only the social conditions of the Project’s environment, but to trace ways to contribute to a better quality of life for the communities, benefiting not only the investors, but socializing success too.

Failing to analyze, forecast, procure and monitor the community might represent substantial economic damage for companies, according to studies focused on extractive industries. These costs are focused on safety issues, initial project modifications, risk management, material damages and productivity loss, among others. Although it is difficult to quantify the community’s conflict in monetary terms in a homogeneous way, this study estimates, for example, that a seven-day blockade on the supply route of a Middle Eastern country’s energy project, represented a loss of USD$20,000 per day. These kinds of expenses may be prevented or minimized by seeking cordial, respectful relationships and agreements with the community in a timely manner.

Additionally, making Social Impact Assessments suits the developers, as it opens the doors to finding financing from international organizations committed to the Ecuador Principles and those institutions that have social impact items already incorporated into their performance guidelines. If, in addition to meeting a requirement, you are interested in fully exploiting the benefits of carrying out a Social Impact Assessment, contact us.

In addition to meeting a requirement, you are interested in taking advantage of all the benefits of carrying out a Social Impact Assessment, get in touch with us