Lessons Learned from Adopting Sustainability Aspects for Gas Development Project

Abstract

Oil and gas industry have started integrating sustainability approaches into their oil and operations mainly aiming to manage risks particularly in Environment and Social (E&S) aspects. It is also seen to be aligned with Sustainable Development Goals (SDGs) where its main principles of sustainability have actually been adopted in the oil and gas activities. One of set of requirements that addresses sustainability aspects in a project is that Performance Standards (PS) developed by IFC (International Finance Corporation). IFC PS provides comprehensive standard of E&S practices which encourages transparency and positive contribution to environment and community. It has 8 elements, i.e. managing E&S risks and impacts (PS1), promoting safety and fair treatment of workers (PS2), avoiding pollution from project activities (PS3), managing risks to local communities (PS4), improving livelihoods of displaced persons (PS5), managing living natural resources sustainably (PS6), and protecting the indigenous peoples (PS7) and cultural heritage (PS8). Adopting IFC PS has been mostly becoming compulsory nowadays when dealing with financial institutions to support a project financing. This is also known as green financing where a project must adhere with a set of E&S requirements in managing project risks especially in E&S sides. Implementing IFC PS is such a challenging thing when the project has unique characteristics, e.g. located in post-conflict area, no major project in the past decade, and some unpleasant images perceived by the communities from the former operator. This paper will discuss lessons learned from implementing IFC PS in a gas development project and developing management system adopted from them, e.g. stakeholder engagement, grievance mechanism, livelihood restoration and environment management. It will also investigate the gaps between aspects in IFC PS and Government regulation, and finally bridge them accordingly. As a result, implementation of management system has helped manage the risks and improve project's performance and outcomes.