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.
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?