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Appraising PPP Projects

414.2 The Process of Analyzing Social Impacts

The process of analyzing social impacts is regulated in many countries as part of the appraisal of infrastructure projects. The project team must therefore follow any applicable legal or regulatory rules. Several jurisdictions name the process of evaluating the social feasibility as a social impact assessment, sometimes integrated with the Environmental Impact Assessments, and sometimes separated as an independent evaluation.

As with the Environmental Impact Assessment, especially for large projects, it might not be possible to conclude all of the social impact assessment during the Appraisal Phase. However, it is very important that this exercise is significantly advanced before the green light decision is made, so the approval can be made with a reasonably clear view of the social impacts and all the possible mitigation strategies.

Whether integrated or not, the exercise typically includes the following steps[44].

The first step is a thorough identification of the people residing and/or working within a project’s area of influence, including the mapping of the communities and their social, economic, and cultural connection with the site in which the project will be implemented. This first step also includes the listing of the social issues to be considered (the list of questions presented in section 14.1 should be considered the minimum).

The second step is the establishment of a social baseline that indicates the status of the issues to be considered before the implementation of the project. All the issues identified in the first step should be incorporated in a social description of the communities affected. See box 4.12.

BOX 4.12: The Methods of Obtaining Data for the Social Baseline

Secondary data

Baseline studies normally begin with a review of secondary data. Secondary sources typically involve a desktop study using a number of sources: official data (such as topographic and thematic maps, censuses, and other government records), research reports, historical texts, and other available documentation on demographic trends and the history of the people and the area. The use of secondary sources is a good starting point; however, in any instance where significant social, economic, or cultural issues are likely to be a factor, the use of secondary material alone is insufficient. Field surveys must be undertaken to fully establish an appropriate social baseline and to update information that may no longer be current.

Public consultation

Public consultation is a process for managing two-way communication between the procuring authority and the public with the goal of improving decision-making and promoting understanding through the active engagement of individuals, groups, and organizations who have a stake in the project and its outcomes. Public consultation plays a critical role in raising awareness of a project's impacts and gaining agreement on management and technical approaches in order to maximize benefits and reduce negative consequences. For the procuring authority, consulting affected parties early and frequently throughout the development process makes good business sense, and in many cases it can lead to reduced financial risks and delays, a positive public image, and enhanced social benefits to local communities. Experience has shown that the process of engaging stakeholders as a means to build relationships is often as important as the analysis derived from that engagement.


Participatory techniques and stakeholder analysis

Participatory techniques, such as Participatory Rural Appraisal (PRA) and participatory land use planning, can be especially helpful at the initial scoping and planning stages. PRA techniques are a good means of establishing a constructive basis for dialogue with the community. This is good for the early identification of issues and for providing a basis for the joint formulation of mitigation or other development measures. Participatory methods can expose key issues for follow up during the baseline survey. PRA facilitates baseline researchers' awareness of local knowledge and perceptions, and it helps to adapt questionnaires to make them relevant to local people. It also emphasizes local participation in planning and feedback. Some examples of PRA tools include semi-structured interviews, participatory mapping, Venn diagrams, oral and life histories, and livelihood analysis.


Qualitative methods

Qualitative methods have to do with people's perceptions, that is, how they view themselves and the world around them. Qualitative interview techniques are used to provide insight into community social institutions and organizations, including local arrangements for decision-making and leadership. Qualitative surveys can be used to obtain descriptive information on topics such as household livelihood options, social differentiation, ethnic minorities, lines of solidarity and conflict, the role of women, key resource issues, local perceptions about the project, and more. They also serve to enhance and verify quantitative data.


Quantitative methods

Quantitative surveys serve to establish baseline measures for key social parameters that can be used later as indicators to measure social impacts. Quantitative methods are commonly used to generate data on: household assets; income streams and livelihood survival strategies; vulnerable individuals and households; the role of women and children in the division of labor; the degree of economic dependency on land and local resources; household composition and demography; health and educational characteristics; skills of the labour force, and so on.

The third step is to estimate the impacts of the project in the communities identified within the area of influence. This is done by projecting the existing baseline into the future with and without the PPP project, and comparing the issues that were identified as relevant for the specific project. Good practice suggests the need to classify each identified impact in terms of its relative importance, considering the number of people affected and the reach of the damage produced. This will allow for ordering, or prioritizing, the impacts in terms of their relative social significance.

Some projects generate particularly obvious adverse social impacts, which require the investigation of issues with extreme care. This is the case, for example, in projects that require land expropriation and forced relocation, especially of large communities and those that interfere with indigenous communities and their heritage sites. In these cases, the scope of the social impact analysis needs to highlight all the costs that these communities endure through a comprehensive approach.

The fourth step in the development of the SIA is the identification of the mitigation strategies for the adverse impacts identified in the previous steps. This leads to a social action plan, as a part of SIA. See box 4.13.

BOX 4.13: The Sequencing Strategy to Social Actions

The IFC’s Good Practice Note on Addressing the Social Dimensions of Private Sector Projects (2003) proposes a sequencing strategy to identify the action to be considered in the social action plan.

“The first step in the sequence gives priority to impact avoidance. Social impacts can often be avoided by ‘at source’ changes, such as the selection of an alternative site for the project or the modification of the design. The second step focuses on the reduction or minimization of impacts that cannot be avoided. The reduction of impacts is achieved through the implementation of customized measures, such as soundproofing houses within the noise footprint of an airport, regulation of construction traffic, use of dust suppression techniques, minimization of land requirements, etc. During the third step in the sequence, where adverse impacts are unavoidable, people affected by the project must receive adequate compensation (including covering replacement costs and livelihood restoration where appropriate).”

The plan should indicate the strategy recommended and a basic estimation of costs to implement it, as well as its distribution in time.

[44] One example of a similar process can be found in the Infrastructure Framework of the Australian State of Queensland, (2011).

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