Measuring Social Impact and Change, A Private Sector Perspective.
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1 Measuring Social Impact and Change, A Private Sector Perspective. Gerea Aopi, Executive General Manager, External Affairs and Sustainability 18 March, 2015 Oil Search Limited ARBN
2 Overview Resource development is an important catalyst for economic growth Measurement of social, environment and economic impact and performance is important, yet challenging Traditionally, the environmental and social mapping studies have focussed on Project Areas, but social aspects need to encompass the broader impacts The management of change is key - oil price, demonstration effect, increasing awareness and protests. Managing expectations. Benefits management and project delivery are the key differentiators Voluntary & regulated processes are sources of valuable data and information A number of challenges faced in measuring socio-economic performance and real impact Opportunities exist for improved: consistency, comparability, cooperation and collaboration Measuring Social Impact and Change - Private Sector Perspective 18 Mar
3 Oil Search Profile Tunis TUNISIA Erbil Sulaymaniyah IRAQ Dubai» Established in Papua New Guinea (PNG) in 1929» Market capitalisation ~A$13bn (US$12bn)» Listed on ASX and POMSOX (Share Code OSH) plus ADR programme (Share Code OISHY)» ASX 50 Sana'a YEMEN Kutubu Ridge Camp AUSTRALIA PAPUA NEW GUINEA Port Moresby (Head Office) Brisbane Sydney» Operates all PNG s currently producing oil fields» 29% interest in PNG LNG Project, world scale LNG project operated by ExxonMobil. First LNG sales commenced May 2014» Exploration interests in PNG, Middle East/North Africa» Social Responsibility is key commitment» Contribute to relevant SDG s Measuring Social Impact and Change - Private Sector Perspective 18 Mar
4 PNG Oil and Gas: Projects and Fields P nyang Juha Juha North PPL260 PNG LNG Project Gas Fields Papua New Guinea Hides Angore PNG LNG Project Facilities Hides Kutubu Port Moresby Proposed Juha Facility Moran Agogo Non PNG LNG Gas/Oil Fields Hides Gas Conditioning Plant & Komo Airfield Kutubu Gobe Main OSH Operated OSH Interest Oil Pipeline Oil Facility Kimu Oil Field Gas Pipeline SE Gobe Barikewa Elk/Antelope Gas Facility Gas Field Condensate Pipeline Uramu Hagana Flinders LNG Facility Measuring Social Impact and Change - Private Sector Perspective 18 Mar
5 Social responsibility is a key source of value protection for the business, and fundamentally integrated into our strategy Measuring Social Impact and Change - Private Sector Perspective 18 Mar
6 Sustainable development activities, including the Oil Search Health Foundation, supplement regulatory requirements Measuring Social Impact and Change - Private Sector Perspective 18 Mar
7 PNG LNG Project - covering multiple provinces but small footprint Hides Drilling PNG LNG Project Gas Fields Papua New Guinea Juha Hides Hides Kutubu Proposed Juha Facility Angore Port Moresby Hides Gas Conditioning Plant & Komo Airfield HGCP Moran Agogo Kutubu Gobe Main OSH Operated OSH Interest Oil Pipeline Oil Facility Oil Field Gas Pipeline Gas Facility Gas Field Condensate Pipeline TEG unit Gas Pipeline LNG Plant LNG shipped to Asian buyers LNG Facility Measuring Social Impact and Change - Private Sector Perspective 18 Mar
8 Measurement of social and economic impacts is a legislated process in PNG Legislated Process Undefined Oil and Gas Act Environment Act Development Forum Benefits Management Framework Delivering Community Development & Infrastructure Social Mapping and Landowner identification studies (Sec 47 of OGA)- PPL and PRL Section 49 SIA before development forum (before PDL grant) Section 51 requires Environment Impact Statement to be prepared. Development Forum essential before grant of PDL. For PNG LNG project UBSA in Kokopo for 8 weeks LBBSAs for months in the field Defines benefits conferred by the State to LOs Business Development Grants IDG Oil MOU settlements Royalty Development Levy Equity Needs proper governance framework Multi-billion Kina in cash Government is committed, but is capacity constrained Oil Search plays a key role delivering infrastructure projects on behalf of govt Ongoing sustainable development activities 8 The complete paradigm includes measurement, management and making a difference by delivering projects Measuring Social Impact and Change - Private Sector Perspective 18 Mar 2015
9 Sharp and sudden decline in oil price is one major CHANGE Measuring Social Impact and Change - Private Sector Perspective 18 Mar
10 Oil Search Monitoring & Measurement Activities SIA and Community Development Measuring Social Impact and Change - Private Sector Perspective 18 Mar
11 Oil Search measures and monitors change to assess potential impacts and the effectiveness of our community development and management programs» Establish a baseline of the status of economic and social development» Assess actual impacts of our activities over time» Identify areas of socio-economic need, informing the development of sustainable development and management plans» Performance evaluation against agree targets, objectives and desired outcomes» Corporate and Sustainability Reporting commitment to disclosure and transparency in performance» Regulatory requirement Measuring Social Impact and Change - Private Sector Perspective 18 Mar
12 Oil Search Social Impact and Monitoring Activities includes impact assessment, longitudinal socio-economic baseline measurement and community development performance» SIA conducted in all greenfield areas» Bi-annual socio-economic monitoring (Hides, Kutubu, Moran, Gobe & Kikori PL)» Community development outcome measurement database capturing intended project objectives and performance against those objectives.» Government has also conducted a number of studies relating to culture, land use, archaeological sites, and migration patterns. Measuring Social Impact and Change - Private Sector Perspective 18 Mar
13 Oil Search collects a range of additional data» OSL also collects additional data which are stored in an internal database for its own use:» OSL currently assists a number of Districts & LLGs to compile area profiles & 5 Year Development Plans & includes data & information on schools & health facilities, business data, infrastructure, agriculture projects, budgets, etc. Measuring Social Impact and Change - Private Sector Perspective 18 Mar
14 Monitoring activities capture a broad range of socio-economic indicators» No government vetted social & economic indicators used for initial SIA & monitoring thereafter» Developers determine the indicators to be measured & which will be monitored over the life of the project» OSL measures a number of social & economic indicators during the baseline & bi-annual socio-economic monitoring studies: Population Education Health Economic activities Public utilities Housing types Measuring Social Impact and Change - Private Sector Perspective 18 Mar Water & sanitation
15 Oil Search Health Foundation focusses on specific health interventions and outcomes» Measure HIV testing results (anonymous) Sexually transmissible infections (STI's) Condom distribution numbers Maternal and child health data & family planning Occupational and community malaria incidence and prevalence Keep track of training, mentoring, education sessions» Report To donors, partners and stakeholders» Development of new performance framework in 2015 Measuring Social Impact and Change - Private Sector Perspective 18 Mar
16 OSL Medical and Occupational Health Service measures indicators specific to our workforce» Measure Patient presentations; disease classification; workplace injury and illness; demographics; costs per patient/asset» Reporting Analyse data to allocate appropriate level of health services required Use data for compliance with International Oil and Gas Producers (OGP) and local legislative requirements Categorise disease presentations in accordance with World Health Organization (WHO) standards Determine costs associated with medical transfers and evacuations Trend and analyse the acuity of patient presentations Measuring Social Impact and Change - Private Sector Perspective 18 Mar
17 Existing challenges faced in measuring performance and real impact» National census data is not very reliable some villages are missing & some specific data relating to businesses, etc. are missing.» Lack of consistency & comparability:» Coordination: Variety of service provides responsible for discrete areas of delivery lack of coordination constrains effective information sharing for holistic approach» Government oversight is lacking all monitoring is the responsibility of the developer. Self regulated. Measuring Social Impact and Change - Private Sector Perspective 18 Mar
18 Opportunities: Consistency, Comparability, Cooperation & Collaboration Existing» Collaboration with District & LLG leaders & planning teams Profiling District & LLG socio-economic status District & LLG 5 Year Development Plans & Budgets» Compilation of Annual Reports for DPE» Landowner companies data with IPA» Government programs, e.g., TCS, benefits management data, ILG data, compensation & Valuer General rates, land leases, etc.» Developers collect lots of data for their own purposes which might be used to support government activities Potential» Agree and standardise minimum socio-economic baseline, SIA & monitoring indicators» Agreement on frequency of monitoring» Identify and agree minimum common sustainable and economic development indicators» Consistent government investment in & timing of census.» Closer dialogue with NSO on data requirements which developers can incorporate into their activities» Consider collaboration extractives companies share data collected for their own purpose with Government, and then published» Developers can seconde staff to government on shortterm projects to support efforts» Look for opportunities for alignment with the new Sustainable Development Goals (SDG s) to aid international comparison Measuring Social Impact and Change - Private Sector Perspective 18 Mar
19 Future generations will benefit Measuring Social Impact and Change - Private Sector Perspective 18 Mar
20 Extra slides Baseline & monitoring indicators OSL uses in measuring change & impact in our areas of operations Oil Search Limited ARBN
21 Examples of indicators measured in School attendance for children aged 6 to 19 years, by Project Area Males & females aged 6 20 educated to grades 6 & 10, by Project Area Project Area Females 6-14 yrs attending primary school % Males 6-14yrs attending primary school % Females yrs attending secondary school % Males yrs attending secondary school % Gobe Hides Kikori Kutubu Moran Total Total /2008 Total Baseline Total Measuring Social Impact and Change - Private Sector Perspective 18 Mar 2015
22 Examples of indicators measured in Literacy for people aged 15 years & above, by Project Area Males & females 15 years & over literacy levels, by Project Area Project Area Male literacy % Female literacy % Gobe Hides Kikori Kutubu Moran Total Total Total Baseline Total PNG Average Measuring Social Impact and Change - Private Sector Perspective 18 Mar 2015
23 Examples of indicators measured in 2011 Economic characteristics of survey villages, by Project Area Households with income from the following sources in the past year Project Areas Households with cash income % Business activities % Wages % Oil % Traditional sources % Gobe Hides Kikori Kutubu Moran Total Total Total Baseline Measuring Social Impact and Change - Private Sector Perspective 18 Mar
24 Development priorities identified by communities, 2011 Project Area Priority 1 Priority 2 Priority 3 Gobe Water Supply Power Supply/Electricity Road Access Hides Power Supply/Electricity Road Access Water Supply Kikori Education Infrastructure Water Supply Health Infrastructure Kutubu Power Supply/Electricity Water Supply Road Access Moran Water Supply Road Access Power Supply/Electricity Overall Power Supply/Electricity Water Supply Road Access Measuring Social Impact and Change - Private Sector Perspective 18 Mar
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