William E Browning, Thomas J Dimitroff

soft objectives (eg, social investment). It may be helpful, for example, contractually
to involve human rights organisations in the context of community and
environmental investment programmes (CIP, EIP). In the case of
BakuTbilisiCeyhan, the different priorities, aims, tactics and impacts of the various
groups were analysed and required different strategies and techniques of
management. A practitioners focus should be to anticipate and manage the
commercial and operational impact of criticism, to assess and manage stakeholder
(eg, investor, lender, contractor, host government, local community, civil society)
exposure, and perhaps to negotiate with the aim of concrete positive outcomes but
never with the expectation of approval.
Project finance brings with it a high degree of international visibility, third-party
scrutiny and potential behaviour modification, to the extent that host countries
wish to maintain the approval of international financing institutions and
international commercial banks. Community investment, on the other hand, brings
in-country visibility and an important level of buy-in for the project within the
communities affected by the project. Specifically, sustainable community investment
programmes identify project impacts both positive (job creation) and negative
(disabling land from traditional use). They attempt to channel investments into areas
that help local communities to take advantage of positive impacts (eg, education and
training) and to mitigate negative impacts (eg, by deploying construction crews and
equipment to install access roads and irrigation systems).
BakuTbilisiCeyhan employed a successful process which built internal staff
confidence, effectively managed questions and answers, simplified routine
communication, developed consistent messages, was committed to quality
administration (distribution lists, document dispersal and so on), and noted the
value of spending quality time with two to three credible, global civil society
organisations. In addition, community investment proved to be an important key.
The Community Investment Program (CIP) budget was $25 million during the
construction phase and supported working with 82 communities in Azerbaijan, 72
communities in Georgia and 300 communities in Turkey. The CIP targeted income
and employment creation, infrastructure, health and sanitation, capacity building
and agriculture. The money has continued to grow, with the original investment
having been further leveraged with external funds.
The standards set by BakuTbilisiCeyhan are arguably those by which project
stakeholders (local communities, investors, lenders and host governments) will
measure future projects. Sensitivity around reputational risk and the power of civil
society organisations will be a factor in all future development, and the successful
projects will require a dedicated, focused programme to identify the specific risks and
to put in place a multi-faceted engagement plan. Not every project will have the
promotional resources (financial and human) available to BakuTbilisiCeyhan.
However, the BakuTbilisiCeyhan example contains elements of a plan that may be
applied successfully by any transboundary pipeline development company hands-
on identification and a dedicated, targeted management of risks. In this way, it is
possible to turn this area of risk into a positive and to showcase the regional benefits
of a given project.

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