our social license to operate: the sn aboitiz power

Our Social License to Operate:

The SN Aboitiz Power Experience

Philippines

Mike HosillosPresentation to ICH

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, 2018Advancing Sustainability on Renewable Energy 2

The Philippines

Energy Situation

The Philippines

4Advancing Sustainability on Renewable Energy

The Philippines

7,107 islands

GDP growth: 6.7% (2018)

Energy consumption growth: 4%

(2017)

Pop. 100 million

Peak Demand:

Luzon: 9,582 MW

Visayas: 1,831 MWDem

an

d

sources: Department of Energy; National Statistical Coordination Board

Installed Capacity:

Total: 17,025 MW

Luzon: 12,527 MW

Visayas: 2,448 MW

Mindanao: 2,049 MW

Cap

aci

ty in

MW

18/10/2018 6

Philippine Electricity Industry (before)

Advancing Sustainability on Renewable Energy

Philippine Electricity Industry (after)

18/10/2018 7Advancing Sustainability on Renewable Energy

18/10/2018 8

Philippine Electricity Industry (snap shot)


Philippines Renewable Energy

▪ Philippines has highest RE utilization in Asia

10/18/2018

39%

8%

1%

14%

8%

Philippines China Singapore Vietnam EU

RE Utilization

Source: Layug, Jose Jr. 2012. The National Renewable Energy Program: The Road Starts Here EU-Philippines Meeting on Energy. Mandarin Oriental, Philippines. 27 February 2012


Potential Hydropower in the Philippines

Large and Small85%

11,132.45 MW

Mini 14%1,833.58MW

Micro 1% 27 MW

Hydro Potential13,097 MW


▪ 160% targeted increase in installed capacity

▪ In 2010: 87 awarded RE service contracts & 71 pending applications

Target Increase in Hydropower

10/18/2018 11

2010 (3400 MW)

2030

(8729 MW)


About SN Aboitiz Power Group

About SN Aboitiz Power Group

18/10/2018 13

▪ 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


Our Assets


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

Mission

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.


SNAP Share in Luzon Generation Capacity

18/10/2018 16

Source: Department of Energy


Our Social License to Operate:

The SN Aboitiz Power Experience

Philippines

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


▪ 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

18/10/2018 19

Our Challenges


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)


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


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


“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)

SNAP’s Guiding Principle on CSR?


24

CSR

Community

Environment

Market

Employees

• Stakeholder Engagement• Grievance Mechanism• Community Investment and

Development• Safe and Responsible

Operations• Human Rights

• Sustainability Programs• Watershed Conservation• Environmental Compliance

and Protection

• Safety and Health • Labor Standards• Quality Standards • Human Rights

• Responsible Procurement• Corporate Governance• Customer Relations • Regulatory Compliance

Pillars of SNAP CSR

10/18/2018Advancing Sustainability on Renewable Energy

▪ 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

Regular Community Investment Fund


Key Result Areas

10/18/2018 26

Infrastructure

Health

Livelihood

Education

Indigenous Peoples

Governance

Environment


SNAP: What We Do

10/18/2018 27


Securing Social License:

The Ambuklao and Binga

Conflict Management

Experience

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


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.

▪

30


The Case

18/10/2018Presentation Title 31

Legacy Issues in the Philippines

Hydropower

Limited /No consultations

Neglect of IP Rights/Non recognition

Human rights violations

Displacement – Social & Economic

Environmental consequences

Unfulfilled commitments


SNAP Stakeholder Engagement Strategy

• IP groups, displaced families and local governmentsIdentify Critical Stakeholders

• Consulting stakeholders on acquisition and rehabilitation project

Adopt transparent, open and proactive communication

• Facilitated dialogue process to address the legacy issues

• Use sphere of influence to help affected stakeholders

Use formal and informal processes

• Formalizing participation of IP orgs & stakeholder management councils)

• Enter into agreements to recognize IPs and help them realize their goals

Enter formal partnership agreements

• Continuing dialogue on unresolved and emerging issues• Institutionalizing stakeholder participation

Adopt continuing strategy of engagement


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


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

10/18/2018 35

Land Use Issues

Development of Heritage Sites

Responsible Operation of Plants

LGUs

(Ambuklao & Binga Residents)

SNAP

(Ambuklao and Binga Plants)

NPC/PSALM

(Ambuklao and Binga Watersheds)

IPOs

(Ambuklao and Binga IPs)


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.


▪ Watch the Case Study/Documentary in Youtube:

“Making Monkey Business”

By the

Kennedy School of Government

Harvard University


For more information or to let us hear from you, please visit: www.snaboitiz.com

You may also email us at: [email protected]

our social license to operate: the sn aboitiz power

Documents