Overview of the Company Approach to Corporate Social Responsibility (CSR)

Yemen LNG aims to be a responsible company locally, nationally and internationally and is making significant efforts in terms of its social and environmental responsibilities.  The Company aims to create value for all of its stakeholders, namely the relevant Yemeni authorities and the local communities, in the vicinity of its operations.

The Company is committed to complying with international standards and has, to this effect, produced a world-class Environment and Social Impact Assessment (ESIA) to identify and assess potential impacts, followed by a holistic and comprehensive  Environmental and Social Management Plan (ESMP) which details the actions to be implemented in order to mitigate these impacts. The ESMP (which was originally drafted in June 2007 for the construction phase and which was revised in March 2009 for the operational phase) identifies a full suite of mitigation measures which are designed to reduce any potential effects as well as outlining Yemen LNG’s sustainable development programme which aims to leave a positive legacy both in its operating locality and in the country as a whole.

Implementing a Robust Environmental and Social Strategy

Yemen LNG has implemented a sustainable development and environmental (SDE) strategy which comprises three distinct levels of action, undertaken in close consultation with concerned stakeholders:

1. To minimise and mitigate any possible harm or damage, whether to populations, wildlife or the environment, ensuring the residual impact is either nil, negligible or moderate at most
2. To provide proper offset or compensation to international standards where impact cannot be fully redressed
3. To establish a positive and enduring legacy in Yemen

As the starting point to minimise any possible social, environmental and economic effects of such a major project the Company, following a thorough review of alternatives, selected a plant location and a pipeline route which presented the least possible adverse impacts on both people and the environment. The selected site at Balhaf, located on the Gulf of Aden, was an uninhabited location which local fishermen used to land fish during the Summer monsoon period. However, the construction of the LNG plant at Balhaf resulted in the economic displacement of some of the traditional fishing activities of the fishermen using Balhaf bay. As such, a suite of measures were put in place to offset this economic displacement and these have been successful to the point that by 2010, the economic sustainability of fishing in this area was stronger than prior to the commencement of construction in September 2005.

Similarly, the pipeline route crosses mainly through deserts and sparsely populated regions. The route was chosen to minimise any adverse impacts on population and very few people have been directly impacted, indeed not a single person was physically resettled during construction of this project. 

Prior to the final selection of the pipeline route and plant site, various alternative options were screened by Yemen LNG. The Balhaf plant site was selected from a shortlist of sites as it proved to be the best technical and environmental option with minimal dredging and no breakwater requirement, and it was associated with the shortest pipeline route which had the least impact on people.  Balhaf therefore represented the optimum environmental and socio-economic option when considering the plant location and pipeline route as a whole. Four alternative routes for the main pipeline were evaluated by Yemen LNG and none of the alternative routes were considered to be environmentally superior to the one which was ultimately selected. Overall, a key factor in the selection of the plant location and pipeline route was the goal to minimise the likely impact on the environment and local communities.

Skills Development and Job Creation

The Yemen LNG project was a significant factor in creating job opportunities and in developing skills in a region which traditionally was not well served in this respect. At the peak of construction, over 12,000 jobs were created, and training and development programmes were set up to improve both core skills (for example in health, safety and environmental awareness) and in specific technical skills (for example welding, scaffolding, concrete construction etc). A dedicated Operator training and development programme was set up to train a cadre of Yemeni plant operators who would be able to support plant operations throughout the planned 25 years lifespan. A similar programme was developed for the Crew of the four dedicated LNG carriers which transport LNG from Balhaf to the international LNG markets. In all during the five years of construction, many hundreds of thousands of man-hours were dedicated to improving the skills and capabilities of workers, a high proportion of whom were Yemeni. This enabled people who might previously have had no such skills to acquire portable skills which they could take into future employment.

During the 25 years of the operational phase (which commenced with the first shipment of LNG in November 2009) a core workforce of over 1000 staff will man the plant. Specific training programmes have been set up to transfer the necessary skills to Yemeni citizens to enable them to participate significantly in the project, whilst maintaining a performance which is in line with internationally accepted quality and standards in the LNG industry. The Yemenisation programme has specific objectives, and progress towards these objectives is reviewed annually. Yemeni companies are providing a wide variety of technical and support services to the plant, thereby contributing to the further development of local industry.

Corporate Social Responsibility to International Standards

From the outset, Yemen LNG has aspired to be a best in class performer in Corporate Social Responsibility (CSR). This commenced with the publication of a World Bank compliant Environmental and Social Impact Assessment (ESIA) in February 2006. This provided all stakeholders in the project (eg the Yemeni authorities such as the Ministry of Water & Environment MWE and the Environmental Protection Authority EPA who have joint responsibility for these matters) and the Lending Institutions with a full description of the environmental and socio-economic impacts of the Yemen LNG project and the mitigation measures which would subsequently be implemented to avoid or, where avoidance was not possible, to minimise these impacts.

The ESIA addressed the key environmental and social issues resulting from the Yemen LNG project as required by Yemeni regulations (Environment Protection Law no. 26 of 1995) and it was prepared in accordance with World Bank/International Finance Corporation (IFC) operational policy guidelines. It included a large amount of additional data collected by Yemen LNG through the commissioning of various studies and surveys on demographics, biodiversity, fishing activities etc. The ESIA study, and the subsequent Environmental and Social Management Plans (ESMP) which implemented the necessary mitigation measures, were compiled with input from local stakeholders, local communities, local organisations, as well as the regional and national authorities who have, through individual meetings or through public consultation forums, provided their valuable input into the project. The ESIA established the environmental and socio-economic baseline conditions and described how these conditions could alter during the construction and operational phases of the project. The Environmental and Social Management Plan (ESMP) in both its construction and operational iterations, carried forward the plans and processes which were, and which remain, necessary to both mitigate impacts on environmental and social receptors, and which provide an enduring legacy to sustain the livelihoods of local people and communities.

The ESMP provides a consistent set of management tools to enable Yemen LNG to systematically implement practical measures to respond to, monitor and control environmental and social performance. In order to achieve this objective, a series of monitoring programmes are being implemented in order to measure and assess whether Yemen LNG’s environmental and social commitments continue to be met. These programmes also provide data for auditing purposes. In addition, environmental and social auditing is being conducted on a periodic basis to evaluate the operational observance of the procedures, regulations and objectives represented by the ESMP. An environmental and social management organisation has been established to effectively implement the managerial tools of the ESMP.

Yemen LNG has also sought to meet international standards with respect to consultation and disclosure involving several interested stakeholders inside and outside Yemen, ranging from local to international NGOs, Yemeni authorities both at ministerial and local levels and locally affected communities. This approach is fully explained in Yemen LNG’s Public Consultation and Disclosure Plan (PCDP).

Public Consultation and Participation

A dedicated team within the Community Relations & Sustainable Development Department (CRSD) has undertaken extensive public consultations with local and national stakeholders which includes cooperating with NGOs and local development agencies to develop and implement its various action plans. A comprehensive Public Consultation & Disclosure Plan (PCDP) was published in October 2006 and this has been refreshed and updated several times since then, to ensure currency and efficacy. The most recent version was issued in November 2010.

Managing Resettlement and Economic Displacement

One of the most important aspects of any major project, particularly one taking place in a developing country, is to minimise any adverse effects on local populations. In this respect, Yemen LNG developed a Resettlement Action Plan (RAP) in full compliance with World Bank and IFC policies and guidelines. This was originally published in June 2007 to manage impacts during the construction phase. A RAP Completion Report is currently (August 2011) being produced to review the effectiveness and efficiency of the measures which were implemented and to take the strategy forward into the future.

As a measure of success of the Company’s resettlement strategy, during the 5 years of construction of this major project, not a single person was physically resettled. There was a limited amount of short term economic loss (STEL) to both land users and to fishermen which was compensated by the means most appropriate to the impact. This approach is discussed in more detail in the Social and Environmental FAQs part of this website. A system of land compensation (for permanent loss of access to habitable and cultivatable land) was also put in place in conjunction with the Yemeni Government.

Ensuring a Sustainable Legacy

One of the main pillars of Yemen LNG’s environmental & social strategy has been to ensure a sustainable legacy in order that the livelihoods of affected populations would either be equivalent to, or better than, the pre-project situation. A number of important and progressive steps have been put in place to achieve this, primarily through community support and implementing sustainable development projects.

In the early phase of the project (September 2005 to July 2008) the challenge was to put in place measures which would have a rapid positive impact, but which were not necessarily designed to be sustainably interlinked. Examples of this approach included; equipment for local fishermen, local water projects, educational support projects, an electricity generator for a local town, ration cards for vulnerable people etc.

The second phase (August 2008 to December 2013) saw the development and implementation of a 5-year integrated sustainable development strategy which, as a well resourced and Company Board supported strategy, was designed (see diagram) to structure the implementation of community development in the project affected areas and to enable Yemen LNG to address three primary areas of sustainability; Economic sustainability, social sustainability and vulnerability alleviation.

Projects were arranged in eight focus areas in order to address particular community needs. The main beneficiaries for Yemen LNG’s SD Strategy have been the immediate project neighbours around Balhaf and along the pipeline. This represents approximately 17,000 individuals. However, in various projects the target areas have either been increased or the project receptor (e.g. dams) designed to support households from both the affected areas and areas further away from the pipeline, which therefore increases the number of beneficiaries. Interventions involve a large component of capacity building in the form of training and awareness creation that can be easily transferred from target communities and households to wider areas. This ensures that Yemen LNG works in partnership with communities and does not create a “corridor of wealth” around the project locus. Where an intervention is focused only on the communities closest to the project, Yemen LNG endeavours to work with development partners to expand the intervention to communities further away from the project.

Yemen LNG also acknowledges the skills in the area of human development which exist in Yemen through local and international NGOs and other development agencies. Also important is the fact that the various related Ministries and Departments have existing systems and networks in place that are beneficial to implementing the SD Strategy and partnerships and cooperation with these institutions are important for the success of this Strategy. Yemen LNG therefore interacts with as many local implementing partners as possible and coordinates the suggested activities with relevant Government infrastructure. Successful interventions allow us to approach potential financial partners to expand projects in the affected Governorates.

Summary and Conclusion

It is Yemen LNG’s belief that the approach which has guided us so far is both holistic and appropriate, and it is in full compliance with the policies and guidelines of the IFC and the World Bank Group. The Lenders and Shareholders of Yemen LNG have supported this approach and it is the belief that this approach is valid now and will remain valid throughout the project life cycle and into the later stages of the operational phase.