CBI Lessons from IFC-Dinant Dispute Resolution Roadmap Experience

The dispute resolution process associated with IFC’s investment in Dinant required examining both company responsibilities as well as the deeper structural problems in the operational context of the Bajo Aguan region of Honduras. A proposed pathway forward, known as the Road Map, was developed over two years to address these structural issues via in-depth joint stakeholder consultation. However, the Road Map has so far not found sufficiently broad support among the stakeholders to begin implementing the dialogue process it envisions. It does provide useful guidance for future IFC investments in fragile and conflict-affected states, as well as lessons for organizations like CBI, that are in the business of conflict mapping and dispute resolution.

The complex issues influencing Dinant’s relationships with some stakeholder groups and members of local communities near its palm oil plantations (and the CAO complaint that precipitated the dispute resolution intervention) demanded much more than course corrections in Dinant’s corporate policies and procedures. By late 2014, IFC, guided by CBI’s methodology and expertise in dispute resolution, realized the need to acknowledge the underlying structural problems at play in the Aguan Valley because they were directly relevant to the ability of its client Dinant to meet IFC’s Performance Standards. The most fundamental of these were: longstanding disputes over land rights and access; pervasive regional crime interwoven with drug trafficking; the lack of prosecution of human rights related crimes (impunity); and polarized views regarding what sustainable socio-economic development should look like in practice.

Materially addressing any one of these issues is a daunting task. Yet stakeholder acknowledgement of their inter-relationships, and the intense international pressure on Honduras to do something to solve these destabilizing problems, also created a window of opportunity to bring the parties together for dialogue and seeking common ground. Indeed, potential progress required that key local and external stakeholders rise above political and ideological agendas and commit to facilitating a platform for dialogue around key structural issues that would create a precedent for solving the concerns of greatest relevance to them. Ultimately, a number of key needs surfaced from the overarching endeavor that would help a) support a shift in company culture to meet, and in some cases exceed, IFC performance requirements; b) enhance understanding of key stakeholder perspectives and relationships, and c) clarify remaining work that would need to be jointly embraced to achieve meaningful results for concerned stakeholders. Seven design elements stand out in their importance to effective engagement:

Prioritizing acknowledgement and reciprocity in stakeholder engagement.

In contexts of distrust and polarized views, those seeking to build common ground need to define core issues and their scope in ways that stakeholders jointly view as legitimate. Doing so requires would-be conveners and facilitators to take well-informed and sequenced steps where intentions are made clear, and documentation of viewpoints is corroborated. Further, it is important to build among stakeholders a sense of shared influence and agency on the process of consultation and on the substantive issues to be addressed. Consistent follow-through with respect to information sharing and consultation also amplifies the likelihood that stakeholders will recognize and reciprocate each other’s good faith efforts to participate. In the IFC-Dinant case, such an approach opened the doors to frank conversations with business, NGOs, civil society and national government, helping both to build trust, and to clarify what was possible, and what was not.

Naming structural issues outright.

When corporate-community conflict intersects with national-level structural issues, conveners and facilitators ignore those deeper issues at their peril. A key step in the Dinant case was the clear naming of issues and problems perceived to be significant even if, as was the case initially, they appeared to be beyond the scope of what local community actors, Dinant, or IFC could address. A further challenge was framing structural issues as opportunities for shared value creation, rather than insurmountable problems beyond the stakeholders’ control.

Imagining a way forward on structural issues required an ongoing effort to explore the possibility of differentiated responsibilities among state, multi-lateral, private sector, and community actors in addressing those issues. A persistent tension in this sense was whether and how to support and encourage constructive governmental leadership on sovereign issues (esp. impunity, human rights and land disputes). For example, and as identified in the Roadmap, strengthening the Government’s administration of justice via some form of independent oversight of the regional, land-related criminal investigation; and Government convening of an inclusive development plan for the Bajo Aguan were both seen as essential elements of a credible response to these structural issues.

The Dinant case was further complicated by the limits of IFC’s institutional mandate and the need for shared purpose and collaboration across the World Bank Group when engaging the government. Gaining the necessary internal consensus within the World Bank was time consuming and at times resulted in sub-optimal outcomes and lost opportunities to maintain positive momentum.

Recognizing informal influences.

When assessing conflict in contexts of weak governance, it is essential to understand that informal influences on stakeholder agendas are real, serious, and often profoundly polarizing – especially the warping pressures of corruption and crime that skew economic and social interests as well as motivations, both within government and within civil society. Acknowledging and navigating issues that cannot be directly controlled is difficult, but the risk of ignoring them and leaving them untended is very high. Indeed, there are forces at work in these kinds of disputes (e.g. those involved in narcotics and human trafficking) that don’t benefit from consensus building, and may even seek to perpetuate conflict. Thus, the obstacles to success posed by these forces, and any prospects for shifting their perceptions, behavior or influence, should be realistically weighted in such contexts. Leveraging international frameworks and protocols.

Addressing structural issues (e.g. land access, human rights, impunity) via jointly credible norms and principles -- perceived by all the stakeholders as fair and legitimate -- is an enormous challenge. Voluntary international social and environmental frameworks can become a mutually credible means for addressing the toughest corporate-community issues. Dinant became the first company in Central America to implement the Voluntary Principles on Business and Human Rights (www.voluntaryprinciples.org ), with independent third party verification of its security force protocols, training programs and ultimately the disarmament of its guards. Ideally, with appropriate international market pressure and interdependence among several companies (e.g. operating in the same region) such efforts could actively contribute to transforming not just single companies but also entire sectors -- enhancing both the business environment and social wellbeing.

Sequencing issue engagement and emphasizing joint learning.

It’s no surprise that in polarized disputes with power imbalances, there are competing priorities and big confidence gaps to reconcile and bridge. A foundational question for the CBI team was: what, if any, were the common ties that bind? In the Dinant case, building greater clarity on security, labor and human rights protections (for both civil society and the company) appeared to be a starting point for creating initial constructive engagement. These also happened to be the issues on which the company had the most control, and thus offered a chance at demarcating quick and measurable progress.

Organizing joint learning among stakeholders (including but not limited to ‘fact-finding’) also provided initial scaffolding for strengthening relationships and helped build at least some level of confidence in the process. Though pervasive distrust continued, side-by-side review of critical issues of shared interest helped build mutual understanding of issues, options, interests and values at stake. In this sense, the team found it helpful to think of trust building (in all its nuance) as a function of the number of authentic and repeated joint actions among stakeholders, divided by the number of unilateral, negative actions (and failures to act).

Patience, transparency and iteration.

It’s natural for stakeholders to feel frustration in disputes such as these. Nobody wants wasted time or effort, especially where confidence is low and particularly where past violence and inequities have left scars. Indeed, development institutions, companies, and advocacy groups at large are easily disposed to naming problems, and less adept at framing them in a constructive way. In the Dinant case, it became increasingly important to strike a balance among validation of concerns, noting progress made, and respectfully naming uncomfortable truths to each actor about the actions it would need to take to make further progress.

Envisioning the roadmap.

Finally, powerful and practical metaphors are often very helpful to clarify issues, align views, and motivate stakeholders. A solid (graphical) narrative reflecting how the stakeholders might ultimately work collectively toward a better place (i.e. a roadmap) was a useful engagement tool in the Dinant-IFC engagement effort. Building a shared narrative and vision is inherently hard. It requires an earnest and incremental exchange of stakeholder viewpoints, translated by the facilitator into an initial metaphor or way of thinking. That metaphor then becomes the focus of joint refinements that co-create the path ahead, ideally superseding polarized and competing visions of both process and outcome.