Perenco (Oil & Gas) Published First CSR Report –Why Now?

Inaugural sustainability reports, even if they don’t hit all the right notes, empower internal champions and create opportunities for better stakeholder engagement and transparency, and can help drive  performance improvements. But are you not intrigued to find out what catalyzed and motivated Perenco, an independent oil and gas company operating in places like Gabon, DR Congo, Peru and Guatemala, to create its first CSR report? Is it perhaps related to the recent creation of a $2.8bn reserve-based lending involving Equator Banks, which will also assist with completion of a controversial oil pipeline in Peru’s rainforests?

In her latest blog entitled "Is any report better than no report ?", Elaine Cohen expertly dissected Perenco’s first CSR report. I will not add to that but prefer to speculate about drivers behind Perenco's first  CSR report. As some of you will know, Perenco has been in the NGO advocacy news over the past couple of years, particularly with regard to its activities in Peru (see for example of article in the Guardian here). Some of Perenco's activities appear to be linked to indigenous blockades in rainforest of Peru and heavy handed response by the Peruvian army – you get the picture. But my guess is that this may not have been the trigger of Perenco’s CSR reporting.

My money is on Perenco’s recent creation of a $2.8 billion reserve-based lending facility. This was set up to enable Perenco's growth strategy, including completion of the above noted oil pipeline in Peru’s rainforests. According to an article in Legal Week,  law firms Herbert Smith and Allen & Overy have been advising on the creation of this lending facility, which is the largest ever of its kind. It is designed to enable the company to grow its business with new acquisitions and develop its current assets.

The Legel Week articles lists some of the banks involved in this lending facility. They include Societe Generale, Bank of Scotland, and a number of so called Equator Principles Financial Institutions:  Bank of Tokyo-Mitsubishi UFJ , BNP Paribas , Credit Agricole Corporate & Investment Bank, Citibank, ING, Natixis, RBS, and Standard Chartered.

Many of these banks have adopted the Equator Principles, which means that they have adopted a set of voluntary standards for determining, assessing and managing social and environmental risk in project financing and are based on the IFC Performance Standards.

It would be interesting to hear how far these Equator Banks applied their environmental and social due diligence (including some of the banks’ own sector/topic policies) to look at Perenco’s projects which will be financed from the proceeds of the reserve-based lending facility.

I also wonder if the involvement of Equator Banks along with a likely and probably sustained barrage of advocacy NGO complaints (targeted at the banks) ‘pump primed’ Perenco’s CSR reporting journey. A look at Talisman Energy http://www.talisman-energy.com/, a Canadian independent oil company with operations in Peru which had its CSR reporting 'wake up call' in Sudan many years ago, may show some of the steps ahead. An example of their recent activities is research comissioned by Talisman is “Implementing a Corporate Free, Prior, and Informed Consent Policy: Benefits and Challenges report,” which can be accessed here. Today, Talisman is generally viewed as fully engaged with a variety stakeholders and has been producing excellent CSR reports (using GRI framework at A+level) for many years (along with underlying good performance).

What do you think were the main drivers of Parenco’s first CSR report?

Mehrdad Nazari (MBA, MSc, LEAD Fellow) is a Senior ESIA, CSR & Sustainability Reporting Advisor at PRIZMA  www.prizmasolutions.comand blogger http://www.prizmablog.com

7 Comments to Perenco (Oil & Gas) Published First CSR Report –Why Now?

  1. elaine cohen says:

    Hi Mehrdad, now it is my turn to respond on YOUR blog :) A very insightful post offering a most interesting perspective around how, sooner or later, Companies are driven to respond to pressures towards accountability and transparency. In Perenco’s case, if your hypothesis is correct, it will be interesting if anyof the financiers regards this “report” as anything more than marketing propaganda. Thanks so much for providing this fascinating background. warm regards, elaine

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  3. Alex says:

    Hi Merhdad and Elaine
    Good to read your blogs as always.
    We are working on a first time report for a construction company – they are doing it as part of their aim to be leaders in energy efficient buildings systems – so very close to their core commercial strategy.
    All the best
    Alex

  4. Many thanks, Alex. First time reports are my favorite ones. Just finished a couple of sustainability reports for junior/mid tier miners. They helped the companies to take a step back and look at policy and procedures they have (and don’t have), what they do (don’t do), data they collect (and don’t collect) and how these activities could be harmonized and improved across operations/jurisdictions. Getting these issues also in an organized way in front of the CEOs and boards was also an interesting exercise…

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