Why Canadian industry needs to fix how it engages with the public

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TheGlobeandMail.com – ROB/Commentary
Jun. 23, 2015.   David Mclaughlin

Collapsed prices, a looming recession, calls for a development moratorium, halting federal action on emissions – the oil sands are under pressure on many fronts. In coming days, contributors will offer views on how Canada’s energy sector can move forward in a changing world. Today: building political consensus.  High-tech environmental push needed for oil sands: Tory-requested report

David McLaughlin is sustainability advisor to the faculty of environment at the University of Waterloo. He was the last president and CEO of the National Round Table on the Environment and the Economy.

When it comes to innovation, Canada consistently falls behind its global peers. Just last month, the Conference Board of Canada concluded that “Canada’s current level and concentration of business R&D indicates a weak commitment to innovation among firms.” That earned us a “D” in their innovation rankings.

But innovation is more than coming up with a new idea, product or technology. It is equally about innovation in processes.

Yet, when it comes to resource development and market access, the inability of Canadian businesses and industry to forge new public-engagement processes to meet heightened environmental standards, disclosure, and, yes, social licence, is as much an innovation failure as anything ranked by the Conference Board.

Like generals fighting the last war, our captains of industry seem intent on adhering to past strategies of following traditional governmental regulatory processes to get product to market. It worked before, so it must work again.

But known and familiar is no longer tried and true.

Every pipeline proposal today is controversial and faces deeper scrutiny. Timelines for developing a lucrative liquefied natural gas industry are up for grabs. The energy security mantra of the first decade of this century that assumed “the oil will always get through” has given way in the first half of the second decade to a climate-change and sustainable-development frame that casts fossil-fuel exploitation as a declining benefit, at best.

This is as radical a challenge to Canada’s oil-and-gas sector as plummeting prices – maybe worse. Prices may rebound, but this new frame is here to stay.

Typical tactics of any industry under siege are to “get the facts out.” Just explain harder and people will get it, the advice goes. Multimillion-dollar ad campaigns ensue, talking points are manufactured and chief executives undertake corporate “own the podium” campaigns to sell and be seen.

But it changes little on the ground, where it counts most. Despite streamlining of regulatory approval processes by governments and expensive image-marketing campaigns, major resource projects still face enormous public-acceptance hurdles in getting built. Wealth delayed risks becoming wealth denied, for good.

One reason is that independent, fact-based regulatory reviews – designed to keep political meddling out – have themselves become targeted as inadequate or illegitimate.

Consider recent demands that the National Energy Board take climate change and greenhouse gas emissions into account as part of its assessment of pipelines. This is the “purview of governments,” not us, said its chair in a November, 2014, speech aptly titled In The Eye Of The Storm.

Projects with big economic stakes and high environmental impacts are crucibles for polarization. So, how can progress be made when the polarization of views on resource development issues is now part and parcel of the landscape?

Invest in processes; invest in dialogue.

Focusing on price margins is natural for business, but it is the margins of public opinion – right and left – now squeezing the sensible centre where policy needs to be made, that matter more and more. Governments and industry have let this dynamic take root in a mistaken belief that labelling others as “extreme” was enough to discredit opposing views. But what if you, too, were seen as extreme?

There are clear economic, social and environmental consequences of remaining on the current polarizing path. Equally obvious are the benefits of a new path based on serious, sustained public engagement and dialogue.

Conventional consultation approaches are woefully inadequate in bridging adversarial divides and forging consensus that allows progress. They simply reinforce old conversations and past behaviour while guaranteeing previous results.

Sustainable development, by definition, views the economy and environment as an integrated whole, not a simple balancing of competing interests. It requires a more collaborative approach to project governance and policy development.

This means giving stakeholders just that – a stake – both in the outcome and its implementation. How else can behaviour be changed? It requires sitting down early and often with those who are, and those who might be, affected by a project. How else can trust be built? It recognizes that even those you disagree with have a role in finding solutions. How else can progress be ensured?This is tough, but it can be done. The forestry sector did so, signing the Canadian Boreal Forest Agreement in 2010 – a world away from the “war in the woods” havoc that preceded and instigated it.

On the mission-critical Canadian economy issue of resource development, businesses need to re-engineer the way they plan and communicates major resource projects. Businesses design innovation needs to embrace the software of policy-process applications as much as the hardware of technology.

The sooner industry – with government – figure this out, the healthier both our environmental and economic bottom lines will be.

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