Amara is appointed as the manager of a newly approved project in country X, which is a country that historically had violent conflicts between different ethnic groups. The situation seems to have calmed down now, except for some insurgent groups that live as outcasts in remote areas.

At the project site, she delegates Bahati to be the human resources director who will oversee all hiring procedures. One day, about a year after the project started, the workers find out that the project site has been bombed overnight. It is unclear who is responsible for the attack, but rumour has it that it was a response to the perceived injustice of the hiring process. Apparently, Bahati had only been hiring people within his own ethnic group. While there is no evidence that any of the surrounding communities have been involved in the attack, it is almost certain that some of their members have ties with insurgent groups.

On the other side of the world, company Y intends to construct a windfarm in a rural community. The company pledges to pay rent to the farmers who will have to give up some portion of their farmland where the windmills are to be constructed. However, after a few months of operating the windfarm, violence breaks out amongst the community. It turns out that while some community members have been compensated by the company, some others have not received a penny because the windmills weren’t placed on their land.  They were nevertheless affected by the project. The loud noise of the neighbouring windmills is stressful for the cattle and it seems that the process to decide where the windmills would be placed had not been completely transparent. Thus, this group of uncompensated people has been revolting against their luckier neighbours. In addition to the community distress, the project was constantly being interrupted, resulting in an unexpectedly high cost of operation. A once peaceful community has now turned into one with much tension.

In the two scenarios, the projects have contributed differently to the uprisings. In the first example, the tension between the two ethnic groups already existed before the company intervention. In the second scenario, the community was in a peaceful state before project implementation. Although not anticipated, both companies have played a significant role in shaping the community relations by exacerbating or triggering tensions, ultimately increasing the social and financial cost of the projects.

These two cases illustrate the importance of assessing how a project can impact the social relationships on the ground, as well as create serious risks for the project itself. Conflict analysis, as part of the social impact analysis, should be conducted and multiple options to mitigate conflicts should be prepared beforehand. Some of the questions worth asking to assess the situation include*:

• In what ways does social context make people more vulnerable or resilient to risk?
• What are the mechanisms of social exclusion? Are there systematic barriers to opportunity?
• Are there aspects of the social context that favour some groups over others when it comes to accessing project benefits or opportunities?
• Where are actors in competition for power and resources?
• What relationships or experiences cut across lines of tension or division?
• Who has the most influence or decision-making power and why?
• How does each cultural group typically resolve problems?
• What are some important societal norms regarding gender, age, religion, status, rank, etc.?
• What are the power dynamics among and between different groups?
• To what extent are public sector actors and institutions trusted to engage meaningfully in addressing and resolving difficult issues?
• What kind of connectors do groups have and how have they played a role in solving previous conflicts?

In addition to a proper social impact assessment, a good way to prevent and address these risks is by establishing solid and trusted channels of communications between the project management and the affected or potentially affected people or communities where concerns and grievances can be raised and addressed. Such is the function of Grievance Redress Mechanisms (GRMs) like the Independent Redress Mechanism (IRM) of the Green Climate Fund (GCF).

Given the importance of these GRMs for good development outcomes, as well as the sustainability and financial integrity of projects, all Accredited Entities (AEs) of the GCF are required to have their own GRMs to respond to grievances at a level closer to the project. It is also the IRM’s mandate to build the capacity of this wide “ecosystem” of GRMs to ensure that grievances can be heard and taken care of at the earliest stage possible. It is hoped that building this strong ecosystem for addressing grievances, along with proper planning before projects are implemented, will enable the GCF to fulfil its promise of helping developing countries reduce their greenhouse gas emissions and enhance their ability to respond to climate change.

*The example questions above are retrieved and modified from Brian Ganson’s book entitled “Management in Complex Environments: Questions for Leaders“ and the Inter-American Development Bank (IDB)’s publication on Social Impact Assessment.