BP Venezuela Indigenous Relations: Meeting the Challenge – Responsibly and Sustainably

The challenge, the new goal for the new century must be not only to supply the energy the world needs, but also to demonstrate that we can do so in ways which are acceptable and enhance the life of the community as a whole.

- John Browne, New York 17 November 1997

Indigenous Relations:

Meeting the Challenge – Responsibly and Sustainably

Prepared for: BP Venezuela March 14, 1998 Prepared by: Wayne Dunn & Associates

2457 Bakerview Rd Mill Bay, BC V0R 2P0 CANADA Tel: +1-250-743-7619 Fax: +1-250-743-7659 [email protected] www.waynedunn.com

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BP VENEZUELA March 1998 Indigenous Relations: Meeting the Challenge – Responsibly and Sustainably

i Foreword & Acknowledgments This report explores BP Venezuela’s relationship with Indigenous peoples. It is the result of two weeks of field research1 in Venezuela and draws upon the authors’ previous professional experiences in working with business and with Indigenous development. The authors would like to acknowledge the leadership of Mr. Ellis Armstrong and Mr. Mike Daly of BP Venezuela, for having the foresight to realize the importance of establishing sustainable, long term relationships with Indigenous peoples, and for having the courage to give us complete latitude to undertake our research. While everyone at BP Venezuela was very helpful and supportive, some deserve special mention. The leadership of Cinzia de Santis and the enthusiastic support received from her and her staff enabled the consultants to focus on their work without having to concentrate on support and logistical details. As well, the support and the personal information and insights provided by the environmental and health officers, Valentina Rodriguez, Jesús María Molina and William Espinoza contributed greatly to our efforts. Additionally the information on the Warao peoples, assembled by Walewska Miguel, was particularly useful. The authors also wish to acknowledge the value of previous research reports and information assembled through the efforts of BP Venezuela and other parties. Additionally, the collaboration of the many other organizations and individuals we met contributed greatly to our work. Finally, and perhaps most importantly, we would like to thank the Warao people for allowing us to visit their communities and for taking time from their daily routines to meet with us. - Wayne Dunn - Rodrigo Contreras

1 Appendix 1 contains a daily activity report covering the field research.

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Table of Contents i Foreword & Acknowledgments ........................................................................... i

1 Executive Summary ............................................................................................. 1

2 Introduction ......................................................................................................... 7

3 Background on Warao Peoples .......................................................................... 8 3.1 GENERAL AND HISTORIC ............................................................................................................. 8 3.2 LAND RIGHTS AND ISSUES .......................................................................................................... 9 3.3 CURRENT CONDITIONS OF THE WARAO .................................................................................... 10 3.4 WARAO AND OTHER INDIGENOUS ORGANISATIONS .................................................................. 11 3.5 INTERNATIONAL CONTEXT OF INDIGENOUS ISSUES .................................................................. 12 3.6 BP VENEZUELA’S INDIGENOUS RELATIONSHIPS TODAY ........................................................... 13

3.6.1 Current Strategy .............................................................................................................. 14

4 General Challenges ............................................................................................ 15

5 Development Technology .................................................................................. 16 5.1 WHAT IS DEVELOPMENT TECHNOLOGY? .................................................................................. 16

5.1.1 Analytical Framework ..................................................................................................... 16 5.1.2 Strategy ............................................................................................................................ 17

5.2 CORPORATE ETHOS: THE DEVELOPMENT TECHNOLOGY FOUNDATION .................................... 17 5.3 DEVELOPMENT TECHNOLOGY TOOLS: ...................................................................................... 18

5.3.1 Humanitarian Assistance/Direct Grants ......................................................................... 18 5.3.2 Leverage/Influence with Third Parties ............................................................................ 19 5.3.3 Training & Education ...................................................................................................... 20 5.3.4 Employment ..................................................................................................................... 20 5.3.5 Procurement .................................................................................................................... 21 5.3.6 Other Tools ...................................................................................................................... 23 5.3.7 Comparing the Tools ....................................................................................................... 23

5.4 DEVELOPMENT TECHNOLOGY RESULTS: MEASURING THE IMPACT ......................................... 26

6 Issues, Strategy & Recommendations .............................................................. 27 6.1 STRATEGY ................................................................................................................................. 27 6.2 ENHANCING THE CORPORATE ETHOS ........................................................................................ 28 6.3 DEPLOYING THE TOOLS............................................................................................................. 35

6.3.1 Humanitarian Assistance/Direct Grants ......................................................................... 35 6.3.2 Leverage/Influence with Third Parties ............................................................................ 37 6.3.3 Training and Education ................................................................................................... 40 6.3.4 Employment ..................................................................................................................... 44 6.3.5 Procurement .................................................................................................................... 46 6.3.6 Other Tools ...................................................................................................................... 48

6.4 SETTING TARGETS AND MONITORING RESULTS ........................................................................ 53 6.5 ADMINISTRATIVE ...................................................................................................................... 56 6.6 LIST OF ALL ISSUES ................................................................................................................... 58 6.7 IMPLEMENTATION FRAMEWORK MATRIX ................................................................................. 60

7 Short Term Action Plan .................................................................................... 61

8 Conclusion .......................................................................................................... 63

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Tables Table 1 A Comparison of Development Technology Tools ............................................... 25 Table 2 Implementation Schedule ....................................................................................... 60 Appendices (included in hard copy only) 1. Preliminary Report 2. ILO Convention 169 3. Reference Documents and Information Sources 4. BP Venezuela Draft Indigenous Policy (Spanish) 5. List of Documents Contained in Accompanying Document: Selected Articles,

Reports, Declarations and Findings on Indigenous peoples rights and economic development interests and initiatives

Accompanying Documents2 1. Selected Articles, Reports, Declarations and Findings on Indigenous peoples rights

and economic development interests and initiatives.

2 This is a selection of articles, reports, declarations and findings on Indigenous peoples rights and economic development initiatives compiled by Wayne Dunn & Associates to provide BP Venezuela with immediate access to additional background information.

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1 EXECUTIVE SUMMARY Introduction BP Venezuela, as the operator in a joint venture with the Venezuelan State oil company PDVSA, was recently awarded an exploration concession in the Delta-Amacuro state in Venezuela. The concession is on lands traditionally occupied by the Warao, a severely marginalized Indigenous people. BP wants to establish sustainable and mutually beneficial relationships with the Warao peoples and communities, and has initiated a number of activities and projects towards this end. Wayne Dunn & Associates, an international consulting firm, was contracted to review the Warao relationship and identify strategies and opportunities to further develop the relationship. This report is a result of that engagement. Background The Warao Indigenous Peoples are the second largest Indigenous group in Venezuela, numbering about 20,000. They inhabit small settlements throughout the Orinoco Delta and, as a result of centuries of neglect and exploitation, are living under extreme pressures. Some of the more alarming statistics are:

• The Warao have an average life expectancy of 34 years • The Warao have a human development index of .2 • 99% of the Warao people are effectively illiterate • 30% of Warao infants die before they reach one year of age • 71% of Warao infants die before reaching 5 years of age (according to the

mothers, 48% of these deaths are from diarrhea) • 100% of the Warao communities lack sewer and water services and most have no

access to potable water. (The Warao in the BP area have no access to fresh water due to previous oil industry (non BP) activity which caused salt water to flood into the delta channels approximately 30 years ago.)

• 97% of Warao adults do not have a fixed income Although the Warao have almost no institutional capacity of their own, they are represented on the Executive of Consejo Nacional Indigena de Venezuela (CONIVE), the National Indigenous Council of Venezuela. Through CONIVE they are connected to other international Indigenous organizations that participate actively in the growing international Indigenous agenda. International interest in Indigenous issues has grown rapidly within the past twenty years. Multi-lateral and international organizations are beginning to address the issue in a number of ways. The International Labour Organization (ILO) has adopted Convention 1693, the United Nations

3 See Appendix 2 for a copy of ILO Convention 169

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has Declared 1994 to 2004 as the International Decade of the World’s Indigenous people and the World Bank and many other bodies have adopted policies, directives and other mechanisms to help them deal with the growing focus on Indigenous peoples. As well, Indigenous organizations themselves are capably representing their issues and concerns at national and international forums throughout the world. Recently, due to pressures from Indigenous peoples, the scope of Indigenous issues has broadened and now regularly includes business, economic development and trade concerns and opportunities. Despite the fact that previous interactions between Indigenous peoples and business tended to be antagonistic, there are emerging examples that demonstrate mutually beneficial collaboration between the two groups. BP’s Relationship with the Warao From the very beginning of its operations in the Delta-Amacuro, BP has pro-actively worked to establish mutually beneficial and sustainable relationships with the Warao peoples. Numerous studies were commissioned and humanitarian programs in health and water delivery have been implemented. Other programs and activities are underway to enhance the relationship, including internal policy and strategy development and actively sharing information with other BP assets. From senior executives to the field staff, a sincere desire to ‘do the right thing’ in BP-Warao relations, is evident. Despite having a positive and pro-active beginning to the relationship, there are still some challenges that BP will have to overcome to achieve its goal of a long term, mutually beneficial and sustainable relationship. BP will need to find a cost effective way to move beyond their current approach and provide the Warao with opportunities for productive participation (employment, procurement, etc.) in the exploration and production activities. Given the current educational and experience level of the Warao this is a significant challenge. BP should begin taking immediate steps to meet this challenge. If not, BP could easily find itself several years and tens of millions of dollars into the project and having to explain why the impoverished Warao have not received any of the employment and business opportunities from the development of oil reserves on their traditional homelands. BP Venezuela has already articulated a strategy and begun to put in place activities that will help it to meet the challenges outlined above. This report will recommend enhancements and additional initiatives to build upon the leadership BP has already demonstrated. Development Technology Resource companies such as BP are facing new challenges in their quest to develop resources efficiently and responsibly. They must learn to collaborate across diverse cultural and geographical dimensions, while at the same time balancing social and environmental responsibility with short term profitability and long term growth. And they must do this under increasing public scrutiny and with constantly shifting commodity prices.

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This report uses Development Technology, an analytical framework and a three pronged strategy developed by Wayne Dunn & Associates, to suggest how BP can meet these new challenges in a rational and cost-effective manner. The three key elements of a Development Technology strategy are:

1. Developing a corporate ethos that facilitates working effectively across diverse cultures

2. Understanding and deploying a set of tools to enhance local relationships by cost effectively and sustainably increasing benefits accruing to local interests. These tools are:

a) Humanitarian Assistance/Direct Grants b) Leverage/Influence with Third Parties c) Training & Education d) Employment e) Procurement

3. Measuring and monitoring the impact that operations and activities have on the community and then using the information to implement a continuous improvement process.

Our analysis revealed that, while BP has made a progressive start, there are significant opportunities to cost-effectively enhance and improve long term relationships with the Warao peoples through the implementation of a comprehensive Development Technology strategy. The implementation of this strategy will focus increasing efforts on training and education, employment and procurement while helping develop Warao capacity and collaborating more effectively with Indigenous organizations and others involved in Warao development. Strategy The recommended strategy is:

To cost effectively and efficiently organize exploration activities so that they support BP’s social responsibility objectives of contributing to the development of civil society, environmental responsibility and maximizing the sustainable benefits received by local interests.

The following recommendations outline the basic elements of the implementation of the strategy.

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Summary of Recommendations We have identified 21 distinct issues that need to be addressed and have formulated 21 inter-related recommendations to address the issues and support the implementation of the strategy articulated above. The issues and recommendations along with individual implementation strategies are detailed in Section 6. They can be summarized in four key points.

1. In order to effectively manage and maintain mutually beneficial relationships with the Warao, it is critical that the entire BP Venezuela organization have an enhanced ability to work effectively across diverse cultural dimensions. Additionally, while BP has an impressive level of internal information on Indigenous issues, it is necessary to consolidate that information in order to better socialize it throughout the organization. As well, ongoing initiatives to continue building and maintaining the information base are recommended.

2. BP should utilize its leverage with third parties in order to support its efforts with

the Warao. Additionally, various training, education, employment and procurment initiatives should be developed and launched in order to maximize opportunities for Warao to participate productively in BP’s activities. Some resource companies in other areas have been particularly successful at this and we are recommending BP personnel undertake a visit to see their operations first-hand.

3. BP needs to establish direct relationships with representative Indigenous

organizations and motivate the establishment of a coordinating mechanism to facilitate increased collaboration on Warao issues across a range of organizations and institutions (including direct Indigenous participation)

4. Finally, in order to successfully execute the recommendations and objectives

outlined above, BP should establish quantifiable targets and objectives and systematically monitor progress towards them.

Short Term Action Plan The preceding strategy and recommendations form a comprehensive and integrated program. It is important that the appropriate executives and staff review the analysis, strategy and recommendations, amend them as necessary and arrive at a consensus regarding their implementation. Many of the recommendations demand immediate attention and will need active support from many quarters in order to be implemented effectively. We recommend execution of the following 5 point short term work plan in order to facilitate implementation in a timely, effective and coordinated manner.

1. In a one day, off-site workshop with key staff, consultants and a facilitator, review the report and recommendations and develop a consensus on the implementation.

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2. Revise/amend recommendations as necessary

3. Engage a consulting firm to assist with the implementation plan. In addition to assisting with overall implementation, the firm should assume primary responsibility for4: a) Cross cultural communications and sensitization program (design, develop,

train in-house delivery capacity, assist with delivery of initial sessions and enhance as appropriate)

b) Facilitate the establishment of a direct relationship with CONIVE c) Assist with identification of gaps in the internal Indigenous knowledge and

information base d) Assist with supplementing the internal knowledge base as necessary e) Assist with coordinating an observation visit to Cameco’s Canadian

operations f) Assist with the identification of multi-lateral/international development

partners and collaborators g) Assist with motivating the establishment of a coordinating mechanism h) Provide ongoing review of emerging issues and challenges surrounding

BP’s Indigenous relationships and initiatives i) Provide other assistance and support as required.

4. Proceed as quickly as possible with the following activities (or as revised in the

step 1 workshop):

a) develop and deliver cross cultural communications and sensitization workshops

b) establish a direct relationship with CONIVE c) motivate a community clean-up campaign d) enhance and adopt BP’s Indigenous policy e) visit Cameco’s Canadian operations to determine the applicability of

their experience f) consolidate and enhance internal information and knowledge base g) develop and implement a communications strategy (initial step is the

announcement of the program by the BP Venezuela President to give it profile)

h) initiate an ongoing review of emerging issues and challenges related to BP’s Indigenous relationships and initiatives

5. Implement the remaining recommendations as outlined in their respective

implementation strategies.

4 This may change depending of the specifics of the implementation plan adopted in item 1

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Summary Benefits must accrue to the Warao through normal, ongoing operations and activities. Donations and humanitarian relief on their own, while important initially, will not produce the results BP requires. Warao people need the opportunity to become productively involved at all levels of BP’s operations in Pedernales/Guarapiche. But, the reality of the situation is such that, without focused effort and commitment, few Warao people will secure employment, training, or business opportunities from BP’s operations. In addition to other considerations, BP cannot risk being several years into the project and having extracted millions of dollars worth of oil without the Warao people participating in the business and employment opportunities. For a public company with BP’s profile and commitment to transparency and corporate social responsibility, this may be an indefensible position. Organizing activities and operations to facilitate productive Warao involvement in BP’s operations represents a major challenge. To meet this challenge responsibly and sustainably will require pan organization goal alignment around a comprehensive and integrated strategy that is both far-reaching and cost-effective.

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2 INTRODUCTION In order to better understand how it can enhance its relationship with the Warao peoples, BP Venezuela contracted the international consulting firm of Wayne Dunn & Associates to review the BP/Warao relationship and identify strategies and opportunities to further develop the relationship along sustainable and mutually beneficial lines. In order to fulfill this mandate two consultants, Wayne Dunn and Rodrigo Contreras, spent two weeks (Feb. 1-14) in Venezuela conducting numerous interviews in both English and Spanish, in order to research and evaluate the relationship. The consultants met with and interviewed; BP staff and executives in Caracas, Maturin and Pedernales, spent several days visiting Warao communities and territories, interviewed and met with numerous third parties including, SOCSAL, Indigenous Parliament, Canadian Embassy, CONIVE, Inter-American Foundation, Municipality of Pedernales, Indigenous Directorate of the Department of Education, Government of Venezuela and PDVSA-the Venezuelan state oil company (a detailed work and activity report is contained in Appendix 1). As a result of this field research a number of observations were made and preliminary findings and insights were noted5. A report BP and Indigenous Peoples in Venezuela: Preliminary (Debriefing) Report, was prepared and presented to BP Venezuela executives at a debriefing session in BP’s Caracas offices on February 13, 1998. This report is attached as Appendix 1. Following the field research in Venezuela, the consultants returned to their Canadian offices where they have reviewed and analyzed the research, identified key issues and formulated a number of strategic and operational recommendations designed to further enhance BP’s relationship with the Warao peoples. The following sections summarize the research, discuss the analysis and outline the recommendations and their implementation strategy.

5 The observations and findings and insights are also contained in the above noted report.

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3 BACKGROUND ON WARAO PEOPLES The following description of the Warao people of Venezuela, outlines the conditions in which they live and gives an overview of BP Venezuela’s interactions with them. As well, it provides a brief summary of pertinent international issues and developments that relate to BP’s Indigenous relationships. The information was obtained from various reports commissioned by BP Venezuela and others, and from various additional documents and information sources. A full listing of documents and information sources is contained in Appendix 3. Additionally, a number key reports, findings and documents have been compiled into an accompanying document6, copies of which were submitted along with this report. The following information is essential as it presents the setting in which BP and others must work and develop positive relationships with the Warao peoples.

3.1 General and Historic The Warao people are the original inhabitants of the Delta-Amacuro State in Venezuela. They are believed to have arrived during the early waves of South American immigration at least 10,000 years ago. There are approximately 20,000 Warao, occupying the shores of the Orinoco Delta and living in settlements of fifty to three hundred people. The Warao are the second largest indigenous population in Venezuela after the Wayuu people who live in the State of Zulia. The Warao, like other traditional peoples, have depended for their livelihood on fishing, hunting and gathering. They have historically maintained trade relations with their neighbors, including the European settlers who came to dominate the surrounding land after European ‘discovery’ and colonization. As long as the Warao could retreat into impenetrable and undesirable swamplands of the Orinoco Delta, the structure of their society was not fundamentally altered. However, with the growing impact of colonization and the discovery of oil on their traditional lands they no longer have anywhere to retreat and today are generally living in sedentary communities. These sedentary conditions and the direct and constant interaction with various actors, (missionaries, anthropologists, government authorities, traders and businesses) is having a severe negative impact on the Warao. Nearly always these interactions are top-down relationships with the Warao receiving, at best, less than fair value for their contributions. The Warao tradition simply does not prepare them to operate effectively in an institutionalized, monetary based economy and they appear to have minimal understanding of government and other administrative procedures. This situation is compounded by ongoing discriminatory practices, which preclude the Warao from effective involvement in decisions affecting their lands and communities. Today, after 10,000 years of successful existence in the Orinoco Delta, the Warao face a complex set of pressures that threaten their very survival. On the one hand they have traditional responsibilities such as the provision of social and economic support to family, the maintenance of community structures, cultural continuity, and basic survival. On the other hand they are faced with economic, academic and religious prospectors seeking resources, knowledge and their soul.

6 See Attachment 5 for a complete list

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In addition, the Warao must contend with the local, state, federal and international authorities’ relative lack of interest in their development. A further complication and pressure on Warao people comes from the Narco-traffic that is prevalent in the region. The Orinoco River provides a transportation corridor that takes narcotic traffic, destined for the world market, directly past Warao villages and settlements. The above discussion briefly illustrates the increasing economic and social pressures facing the Warao people today and should be understood by all BP staff in order to develop sustainable collaborative relationships.

3.2 Land Rights and Issues Although many, including BP, refer to the land as ‘Warao territory’, the issue of Warao land ownership or even their right to the use and occupation of the land is, at best, unclear. While it is generally assumed that the region belongs to the Warao people on a symbolic basis, this does not seem to give the Warao any specific land rights. It does not appear that they were even consulted prior to the awarding of oil exploration concessions. Article 77 of the present Venezuelan Constitution concedes land for Warao use or occupation without legalizing any title. This article mandates the government to improve the conditions of peasants with special provisions, where appropriate, to protect indigenous peoples and to permit their progressive incorporation to the life of the State. In specific reference to the Warao people, the Venezuelan Government upholds the Guarapiche decree whose basic objective is the establishment of a Forest Reserve Plan and the maintenance and protection of the indigenous Warao and Kariña, including their occupation and usage of the area. ILO Convention 1077 (1957), which was ratified by Venezuela in 1983, contributes to the protection of indigenous land by recognizing the common or individual right of land ownership for the land traditionally occupied by them (Article 11). Article 12 of Convention 107 goes further by stating that it is not possible to transfer local populations without their approval. The Venezuelan Presidential Decree 250 (1951) regulates access to Indigenous areas. According to this decree, all non-Indigenous persons or institutions wishing to visit Indigenous lands must obtain special permits from the department of Indigenous Affairs (which is presently under the authority of the Ministry of Education). However, this decree is rarely applied, allowing outsiders unfettered access to the Warao people and territory. According to the last census in 1992, 72% of Venezuelan indigenous communities do not claim to possess any land title whatsoever. Those claiming to have titles generally do not understand what level of legal ownership they may have. The percentage of legal land ownership in Warao communities is even lower than it is in the general Venezuelan Indigenous population.

7 ILO Convention 107 has been superseded by ILO Convention 169 – see Section 3.5 for additional discussion on Convention 169

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3.3 Current Conditions of the Warao In addition to documenting Warao people’s cultural characteristics and their historically unequal relationships with the dominant society, the plethora of reports all comment on the deplorable and unacceptable economic and social conditions in which the Warao exist today. Some of the more alarming statistics contained in these reports and articles include:

• The Warao have an average life expectancy of 34 years

• The Warao have a human development index of .2

• 84% of the Warao people have no formal education

• 99% of the Warao people are effectively illiterate

• 30% of Warao infants die before they reach one year of age

• 71% of Warao infants die before reaching 5 years of age (according to the mothers 48% of these deaths are from diarrhea)

• 100% of the Warao communities lack sewer and water services and most have no access to potable water. (The Warao in the BP area have no access to fresh water due to previous oil industry (non BP) activity which caused salt water to flood into the delta channels approximately 30 years ago.)

• Virtually all Warao people exist in a subsistence economy and are heavily exploitated by outsiders

• 97% of Warao adults do not have a fixed income These conditions demand urgent action from all actors involved in the development of the region. Governments, international agencies, non-governmental organizations (NGOs), resource companies, local authorities and, most importantly, the people themselves must be involved in changing this situation. Sanitation, education and training, health, nutrition, water supply, economic development capacity, environmental protection, income generation, business opportunities and sustainable development are just a few of the areas needing immediate attention. The reports and information noted above are common knowledge and are of great concern to all actors in the region. There is movement towards the initiation of action to begin to alleviate these conditions. BP launched several specific programs focusing on enhancing health, ensuring water supply and establishing medical facilities and treatment programs. These initiatives are seen as positive steps, especially given the short time BP has been active in the area. But, more needs to be done if BP is to meet the challenge of profitably developing the oil reserves, while maintaining mutually beneficial and collaborative relationships with Warao people and their communities. If BP Venezuela is not involved in successful efforts to alleviate the condition of Warao people, it will leave itself very vulnerable to public criticism, especially from those groups and individuals that are intent on terminating oil development in the area. An additional concern for BP is the

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possibility that adverse publicity on the BP/Warao situation could erode the goodwill generated through BP’s progressive stance on environmental responsibility.

3.4 Warao and other Indigenous Organisations Warao people and communities interact and conduct communication through an ad-hoc system based on traditional practices and encounters. There is not a formally established Warao network or institutional structure and community representation is basically on an individual basis, with little institutional structure. There is an incipient effort to establish networking and coordinating capacity through a union of Warao communities. This effort, called the Warao Union, attempts to express the views and concerns of the Warao to CONIVE, the National Council of Indigenous Peoples of Venezuela. CONIVE was established in 1990 to support the aspirations of Indigenous peoples in Venezuela and to promote Indigenous unity. CONIVE addresses issues such as land tenure, human rights, environmental management, economic development and resource development. A key objective is the effective participation of Indigenous peoples in all affairs of Venezuelan society. CONIVE operates with an executive body and with representation from regional Indigenous organizations such as the Warao Union. They hold membership in the Coordinating Body of the Amazon Basin (COICA) and maintain close working relations with the World Council of Indigenous Peoples (WCIP). Both COICA and WCIP are active participants in international Indigenous processes and activities (see next section for detailed discussion of these activities). CONIVE has followed the United Nations and other international Indigenous processes and activities closely, but its active participation has been sporadic, largely due to lack of financial and technical capacity. CONIVE has, at best, only minimal core financing, which limits its capacity to carry out its objectives. Although recent progress has been made, we find there are few examples of collaborative efforts between private industry and Indigenous organizations such as CONIVE. In fact, in many cases, past relationships have been antagonistic. Despite these difficulties, Indigenous organizations are seeking innovative relationships with industry8, where their concerns can be fully taken into account. CONIVE has indicated a willingness to enter into dialogue with BP and other firms, to explore opportunities for meaningful participation in the oil industry. This is a significant development and represents a valuable opportunity for BP to establish direct relationships with CONIVE.

8 For many years international attention on Indigenous issues has focused on Human rights, culture, environment and other related areas, while paying little attention to income generation and business development. However, in recent years, Indigenous peoples throughout the world have been expressing growing interest in business and economic opportunities. The accompanying document, Selected Articles, Reports, Declarations and Findings on Indigenous peoples rights and economic development interests and initiatives contains a number of reports and articles related to Indigenous peoples business and economic development. Perhaps José Oritz of Costa Rica, speaking in Copenhagen, Denmark at the Nordic Council of Minister’s Seminar on Indigenous Production and Trade (1995) said it best, “A culture that cannot be financially self sufficient will die”.

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3.5 International Context of Indigenous Issues The past twenty years (and particularly the last ten) have seen a remarkable amount of interest in Indigenous peoples and their concerns and issues. This has been translated into policy and action by multi-lateral and international development agencies, NGOs and to a lesser degree by nation states9 and private businesses. In June 1989 the International Labour Organization (ILO) adopted Convention 169 Indigenous and Tribal Peoples Convention. To date, this is known as the only international instrument that addresses Indigenous human rights and their economic, social and cultural concerns. The United Nations (UN) and the Organization of American States (OAS) are in a process of discussions for possible adoption of their respective declarations on the rights of Indigenous peoples. Multi-lateral agencies such as the World Bank, the Inter-American Development Bank (IADB), the United Nations Development Programme (UNDP), the World Health Organization (WHO), the Pan American Health Organization (PAHO) and the United Nations Children’s Fund (UNICEF) have also issued policy guidelines and directives that attempt to respond to the needs and concerns of Indigenous peoples. As well, there have been numerous conferences, workshops and speeches calling for the establishment of a permanent UN Forum for Indigenous peoples. The United Nation’s proclamation of the International Year of the World’s Indigenous People in 1993 and the subsequent proclamation of the International Decade of the World’s Indigenous People (1994-2004) also illustrate growing international interest in Indigenous issues. Additionally, the international attention focused on environmental concerns often includes Indigenous issues as well. The Rio process (United Nations Conference on Environment and Development [UNCED]) culminated in agreements such as Agenda 21, Chapter 26 & 37 which deal with Indigenous issues and capacity building. As well the United Nations Environment Programme’s Convention of Biological Diversity produced an agreement in which two articles 8(J) and 10(C, D & E) deal specifically with Indigenous peoples issues. The protection of Indigenous lands and territories, the use of traditional knowledge, the need for sustainable development and for Indigenous participation in the resources on their lands are dealt with in these articles10. In addition to the above, nation states are coming under increasing pressure to deal with Indigenous land rights and other Indigenous matters. Also, a growing commitment to social responsibility is motivating some businesses to take increased interest in Indigenous issues and concerns. The environmental review process and the increasing public scrutiny of resource projects are forcing many other businesses to come to terms with Indigenous peoples’ concerns.

9 For the multi-lateral documents noted in this section the authors acknowledge relying on the analysis contained in The Rights of Indigenous Peoples Under International Law: Selected Issues, a paper prepared by Fergus MacKay. This paper is reproduced in the accompanying document, Selected Articles, Reports, Declarations and Findings on Indigenous peoples rights and economic development interests and initiatives. 10 Copies of above referenced documents and reports are contained in the accompanying document, Selected Articles, Reports, Declarations and Findings on Indigenous peoples rights and economic development interests and initiatives.

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Indigenous peoples themselves are becoming increasingly proactive in defining their own future. Where previously, Indigenous issues were often limited to human rights and environmental dimensions, a new generation of well educated and articulate leaders are defining Indigenous issues in the broadest possible terms. Today you will find Indigenous peoples involving themselves across the full range of human endeavors. As noted previously, there is also a growing interest in Indigenous business and economic development. There have been a number of recent international events focusing on this arena. Reports and recommendations from many of these are contained in the accompanying document. These issues and developments are generating a global climate where companies operating on Indigenous lands or in proximity to Indigenous peoples must learn to collaborate efficiently and effectively. Resource companies must learn how to organize their activities so that Indigenous peoples are partners in the process and receive real and meaningful benefits. Companies that fail to learn how to do this effectively will find themselves under increasing pressure from all quarters.

3.6 BP Venezuela’s Indigenous Relationships Today The recent opening of petroleum exploration concessions in Venezuela has allowed BP to establish an exploration presence on traditional Warao territory in the Delta-Amacuro area. The company has commissioned research to enable better understanding of the Warao and has made effective efforts to establish meaningful relationships with them. As BP came to understand the dire conditions of the Warao, it moved very quickly to provide emergency humanitarian services through programs to assist nearby communities. These included; direct delivery of water, provision of medical and health services and construction of medical facilities. As well, BP is supporting NGOs such as SOCSAL that are attempting to facilitate education, health and economic diversification initiatives for Warao people and communities. BP has taken the additional steps of consulting with other BP operations that work on Indigenous lands, in order to learn from their experience. BP’s operations in Alaska and in Papua New Guinea have strongly recommended that actions be based on a consultative process with local peoples. We also note that BP has established a staff position to coordinate Indigenous programs and has enabled this person to attend various national and international conferences and workshops to gather information. Another progressive action by BP is the development of a draft policy statement on Indigenous Policy11. We also noted strong goal alignment within the BP Venezuela organization around “doing the right thing with respect to the Warao people”. This sentiment, which was originally expressed to us by BP Venezuela President Ellis Armstrong, was evident in all discussions with BP personnel. This is exemplified by BP’s actions, which demonstrate a forward-looking approach and committed efforts to respond respectfully to a delicate situation.

11 See Appendix 4 for a copy of this policy.

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3.6.1 Current Strategy BP Venezuela recently articulated a three point strategy for its relationship with the Warao. The strategy involves:

1. Gaining community trust by operating in a consultative and transparent manner while continuing with the ongoing implementation of high impact water and health programs

2. Create favourable public opinion by obtaining third party endorsements, developing strategic alliances and undertaking a communications and public relations program

3. Promote sustainable development through the development of a fisheries programme and ongoing evaluation of other economic opportunities.

Additionally, BP has identified the need to:

(a) continue pro-actively developing its relationships with local communities, (b) continue developing a deep understanding of Warao people (c) improve the management and measurement of social programme performance in

the same way as Health Safety and Environment are currently managed and measured

(d) strengthen NGO alliances. Success has been defined by BP as: “BP being wanted by the community”. We note that BP Venezuela’s progressive actions to establish sustainable relationships with the Warao peoples are echoed by Group Chief Executive, John Browne in an October 1997 presentation on Corporate Responsibility in an International Context

“Everywhere we work we try to contribute to the development of civil society . . . ensuring that the whole of the local community benefits from our presence, and bringing some positive energy to the development of the community and its institutions.”

The recommendations presented later in this document are designed to enhance and build on BP’s current strategy and activities.

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4 GENERAL CHALLENGES BP will face many challenges as it strives to develop a long-term, mutually beneficial and interactive relationship with the Warao people. Some key challenges that BP should be aware of include:

• Developing a workforce (including contractors and staff) that is able to work effectively across diverse cultural dimensions and that fully understands the importance of good relations with the Warao people and communities

• Overcoming the distrust created by centuries of exploitation that the Warao have suffered at the hands of state, religious, business and other outside interests.

• Managing the expectations of the Warao people.

• Overcoming the Waroa peoples’ low levels of literacy and their lack of organizational and institutional capacity, in order to develop a truly inter-active dialogue and mutually beneficial relationship with them.

• Overcoming Union agreements, Warao education and skill levels, and other obstacles in order to offer Warao peoples real opportunities for meaningful involvement in all aspects of BP’s operations.

• Collaborating effectively with NGOs, government agencies, international actors and others involved in the development of the Warao area

• Maintaining a positive public image for its relationship with the Warao and avoiding international criticism. The deplorable situation of the Warao people will not change overnight, regardless of what BP does. BP is not responsible for the current condition of the Warao, yet there is always a risk that the media and other interests will try to make that connection.

• Doing all of the above in a cost effective and efficient manner

The way forward will not be easy for BP as it strives to overcome historical issues, and organize its activities to enable the Warao to be willing beneficiaries of BP’s presence in the region.

“The cutting edge of the issue of corporate responsibility comes from the fact that circumstances don’t always make it easy for companies to operate as they would wish.”

- John Browne, Oct-97 While we understand that the challenges are immense, we do believe that building on BP’s current efforts and adopting the approach outlined in Section 6 will make the challenges surmountable.

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5 DEVELOPMENT TECHNOLOGY Resource companies such as BP are facing new challenges in their quest to harvest resources efficiently and responsibly. They must learn to collaborate across diverse cultural and geographical dimensions, while at the same time balancing social and environmental responsibility with short term profitability and long term growth. And they must do this under increasing public scrutiny and with constantly shifting commodity prices. Wayne Dunn & Associates has constructed an analytical framework called Development Technology, to support resource companies’ efforts to meet these new challenges.

5.1 What is Development Technology? Development Technology is an analytical framework and a three pronged strategy developed by Wayne Dunn & Associates to assist resource companies to meet these new challenges in a rational and cost-effective manner. 5.1.1 Analytical Framework The key elements of a Development Technology analytical framework are outlined below. Additional information on the elements, and a discussion on their applicability to BP’s relationship with the Warao peoples, is included in the following sub-sections.

1. Does the corporate ethos facilitate working effectively across diverse cultures

2. Does the company organize normal ongoing activities and operations in a way that provides meaningful benefits to local people and communities in an efficient and cost effective manner. The analysis involves sifting contracting, purchasing, hiring and other activities through a screen of questions such as:

• How much local hiring is done and how can it be increased? • What, if anything, needs to be done (i.e. health, education, union

agreements, hiring processes, etc.) to eliminate barriers which prevent local people from becoming productively involved in the project?

• Can others (governments, development agencies, etc.) be influenced to collaborate in maximizing local benefits, or influenced to undertake supportive development activities on their own?

• Given the timeframe of the development, what sorts of education and training initiatives will best enable local people to be productively involved in the project?

• Can local suppliers be developed for the goods and services the project will need?

• Can contracts and subcontracts be organized to provide more local benefits and more opportunities for productive local involvement?

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3. Does the current process of measuring and monitoring the impact that operations and activities have on the community effectively support the corporation’s community relations objectives.

5.1.2 Strategy The three key elements of a Development Technology strategy are outlined below.

1. Developing a corporate ethos that facilitates working effectively across diverse cultures

2. Understanding and deploying a set of tools to enhance local relationships by cost effectively and sustainably increasing benefits accruing to local interests. These tools are: a) Humanitarian Assistance/Direct Grants b) Leverage/Influence with Third Parties c) Training & Education d) Employment e) Procurement

3. Measuring and monitoring the impact that operations and activities have on the community and using the information to implement a continuous improvement process.

An analysis based on the Development Technology analytical framework is contained in the following subsections and the resulting strategy and implementation plan is outlined in Section 6.

5.2 Corporate Ethos: The Development Technology Foundation Companies wishing to prosper in today’s global village economy must have the ability to work effectively in diverse cultural settings. This is especially true for resource companies operating on lands where the traditional Indigenous inhabitants are severely marginalized and suffer from a history of exploitation. Companies in this situation, even those with the best of intentions, are often unable to develop effective relationships with local peoples. Many corporations and their personnel are prone to making broad cultural generalizations on the basis of their own educational and experiential background. These generalizations are often made with the best of intentions, and are the result of a limited scope and understanding of other cultures and perspectives. Should these generalizations continue unchecked they will reflect poorly on the company and impair chances for maintaining sustainable, mutually beneficial relationships. For a company such as BP to work effectively in an area like the Orinoco Delta it is imperative that all personnel (including sub-contract staff) have an understanding of cross cultural issues and an understanding of the importance of maintaining good relationships with the

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Warao peoples. In order to have the pan-operation goal alignment that is necessary to maintain good Warao relationships, every employee should receive exposure to cross cultural training and understand the importance of Indigenous relationships, much the same as every BP employee now receives some level of environmental education and security awareness. Good local relationships are the result of all departments and units understanding and contributing to the process. The effectiveness of any development technology tool depends greatly on the attitude and approach that is used when implementing it. If people who are well versed in cross cultural communications practices, use the tools with a genuine attitude of mutual respect and collaboration, they will tend to be effective. However, if they are deployed with a sense of pity and guilt, by people who see themselves ‘saving’ the poor Indigenous peoples, the tools will have little long term positive impact.

5.3 Development Technology Tools: The following sub-sections will look at the various development technology tools available to resource companies and discuss their appropriateness for use by BP in its relationship with the Warao peoples. A summary Table at the conclusion of this section will compare the tools along key performance dimensions. It is worth reiterating that the tools are externally focused and will achieve sub-optimal results unless they are based on a strong corporate foundation of cross cultural sensitivity. Detailed recommendations on the utilization of the tools are contained in Section 6. 5.3.1 Humanitarian Assistance/Direct Grants Often companies see humanitarian aid (financial donations, health programs, supporting community charities, etc.) as the key tool that can provide benefits to severely marginalized communities. While humanitarian aid and direct grants are often necessary to resolve immediate concerns, the impact is generally temporary and unsustainable. On their own, humanitarian aid and grants will not develop the mutually beneficial, interactive collaboration that BP is seeking to develop with Warao people and communities. While humanitarian aid is often a necessary starting point, by its very nature it is unsustainable and demeaning to its recipients. Programs are often delivered with a paternalistic approach that fosters further dependency and endless expectations. A primary aim of humanitarian assistance should be to support efforts to enable improved application of the other, more sustainable tools. Carrying out humanitarian and charitable programs, without providing local people with opportunities to be productively involved (i.e. employed or supplying goods and services) is demeaning, unsustainable and, in the long term, will foster resentment and ill will. No one, regardless of cultural background, wants to simply receive charity. Minimizing or dismissing the use of the other tools (employment, training, procurement) deprives both the company and the communities of the more sustainable (and cost effective) benefits that they can provide12. 12 This is not to say that humanitarian and charitable programs should not be used – only that one must be aware that other tools can better produce sustainable long-term benefits.

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The health and water delivery projects that BP has initiated can begin to create a foundation from which other, more sustainable activities can be developed. However, BP must begin immediately to develop mechanisms that will ensure that those Warao who want to be productively involved in BP’s operations will have every opportunity to do so. Program Delivery by Third Parties In some cases third parties such as NGOs can provide the most effective mechanism for the delivery of humanitarian and charitable programs. Another approach is to cost share the program with a government or other agency that has effective delivery capacity. While there is nothing inherently problematic with third party delivery, and it sometimes offers the most effective program delivery mechanism, corporations must understand the danger of relying on third parties for all programs. Considerations for Third Party Delivery Although Indigenous issues have often surfaced through environmental considerations, there is a significant difference between the two issues. BP should ensure that any third party delivery agents it collaborates with on Indigenous issues have the requisite knowledge and experience in delivering Indigenous development programs. Potential collaborators should be cognizant and comfortable with the full range of Development Technology tools. It is important that companies like BP interact directly with Warao people and communities. This is beneficial for BP’s image and it also provides a valuable source of direct information that will help BP remain knowledgeable about Warao communities and peoples. 5.3.2 Leverage/Influence with Third Parties As John Browne noted in his November 1997 presentation to the Council on Foreign Relations in New York, corporations have a responsibility to ensure that resource development provides discernible advantages for local communities. But, the reality is that corporations do not have primary responsibility for the well being of Indigenous and other marginalized peoples and communities. While there is no doubt that corporations do have responsibilities, the primary responsibility rests with the people themselves and with various levels of government. However, as noted in the background information, often local peoples have been marginalized for so long that they lack the institutions and capacity to exercise their responsibility effectively. And, often international organizations and national, state, municipal and other governments have not taken the steps necessary to allow Indigenous peoples to be full partners in society. Corporations such as BP are in a position of influence with governments and other parties who have responsibilities for Indigenous peoples. BP’s collaboration with various governmental and international health programs is an example of how this leverage and influence can be used effectively. BP has a number of other opportunities to utilize its influence to assist the Warao in their development efforts. Of significant importance is BP’s ability to require its contractors and agents to develop an understanding of the Warao peoples and to organize their activities in ways that can produce tangible benefits for the Warao peoples.

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5.3.3 Training & Education

We will only have true development and full human rights when individuals have freedom from poverty and the freedom to develop their skills, as well as the freedom to express their views.

- John Browne, Oct-97 Training and Education provide the capacity that enables that freedom. Illiteracy and lack of educational opportunities are characteristic of the Warao people and communities. In community after community few children attend school for longer than two or three years and the effective illiteracy rate is close to 100%. Corporations that are working to establish mutually beneficial relationships with these communities must support education and training for all ages. Education and training are absolutely necessary to support long term capacity development. Education and training initiatives, especially in the case of the Warao, should occur along a range of dimensions. Working in cooperation with existing educational institutions, the facilities and resources to support and encourage the basic education of Warao must be put in place. This is an excellent example of where BP can use its leverage and influence with others (governments, development agencies and donor countries and NGOs) to supplement BP’s own resources. Education and training initiatives that will assist the Warao peoples in their daily activities should be encouraged and supported. As well, BP must develop and implement training initiatives that will ensure that those Warao who want to be productively involved in BP’s activities, will have an opportunity to acquire the capacity that will allow them to do so. Additionally, as BP begins to have more local people productively involved in its activities, it should consider providing them with ongoing training and educational opportunities such as offering adult basic education at the jobsite. Currently, due to a number of factors including lack of financial support, almost no Warao go on to take advanced education and training. If there is to be a sustainable, long term change in the situation of the Warao peoples, they will require well educated leaders. BP could facilitate this process through a scholarship program targeted at encouraging Warao people to pursue advanced studies and training. 5.3.4 Employment Hiring of local people must be a key tool in any corporation’s community relations strategy. Unfortunately, especially in the case of remote Indigenous communities, hiring is often overlooked or deliberately discouraged. It is often assumed (many times on the basis of casual conversations and anecdotal information) that Indigenous peoples just want to continue their traditional lifestyles and are not interested in employment. This is a risky and expensive assumption that has been proven wrong many times. While it is true that many Indigenous people will want to continue traditional lifestyles, there will be some who will want to be productively employed in the industry. And, as has been demonstrated over and over again in Canada and elsewhere, resource industry employment and traditional Indigenous lifestyles are not mutually exclusive.

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Hiring and recruitment efforts are also a very cost effective and sustainable way to provide local benefits (see Table 1 Section 5.3.7 for a detailed comparison of the tools). Unlike humanitarian aid, where benefits are generally unsustainable and on a one to one ratio with expenditures (i.e. every dollar spent on the program produces a dollar of community benefit) local hiring programs are incremental in nature, producing benefits that outlast and greatly exceed program expenditures. A local employment strategy will not produce overnight results, but it will produce sustainable, long term results. This is precisely why it should begin in the early stages of a project and have measurable objectives. Pre-Employment Training Programs Pre-employment training programs have proven to be an effective strategy to bring prospective employees up to required educational standards and provide corporations with a qualified pool from which to draw new recruits. Additionally these programs provide a pre-screening mechanism to ensure that investments in employee training are directed at those people most likely to continue working with the company over time. Often resource companies operating in remote regions will be providing people with their first-ever salaried employment. A pre-employment training program helps potential recruits achieve a position where they are prepared to begin employment. Potential employees are brought together in a situation that is as similar as possible to the real work environment. While together they undertake necessary training, upgrading and orientation. Pre-orientation training program elements often include:

• Adult Basic Education • Life Skills Training • First Aid and Safety Training • Visits to appropriate worksites • Family awareness (bringing other family members to orient them on the realities of

having a family member involved in salaried employment) Some companies have found that pre-employment training programs have more than doubled their ability to hire people from local, marginalized communities. As well, they have found that the turnover rate for employees regularly drops by more than 50%, because prospective employees have an opportunity to learn more about the reality of the work situation and many who would not remain employed self-select out of the program. 5.3.5 Procurement Developing local suppliers of goods and services in remote, marginalized and under-developed communities is generally very difficult. But, it is a necessary and vitally important component of any development technology strategy. Resource companies regularly procure millions of dollars worth of goods and services for the development and operation of a project. These purchases have the potential to produce an immediate impact on local economies. And, over the longer term they can help the local

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economy develop the capacity to capitalize on the roads, airports and other local infrastructure improvements that often accompany resource development. For example, an improved airport and increased local activity may create opportunities to develop tourism businesses. However, if the local economy does not have sufficient business capacity, it is unlikely that a local interest will be able to capitalize on opportunities like this. A local procurement strategy can, over time, create the capacity in the local economy to develop new business opportunities that are not directly dependent on the resource industry. Unfortunately, many companies overlook or discount the potential to develop local suppliers of goods and services. Often local communities, like the Warao, are marginalized and have no immediately evident capacity to supply goods and services. Seldom are the people involved in procurement activities given the tools or the encouragement to develop local suppliers. As well, in the short run it may well be easier and less expensive to procure goods and services from traditional sources. Additionally, as with employment, the assumption is often made that Indigenous peoples would sooner maintain their traditional lifestyles and are generally not interested in supplying goods and services to resource industries. This assumption is risky, expensive and false. A strategy of increasing local procurement will pay off, regardless of the local people’s initial capacity to supply goods and services. A Local Procurement Success Story Cameco, a gold and uranium mining company, was able to move from zero to approximately $75 million in local procurement over a ten year period. Ten years ago, Cameco’s was purchasing almost no goods and services from local suppliers for its operations in northern Saskatchewan, Canada. There were minimal local business capacity and high rates of illiteracy in the isolated local Indigenous communities. But, with a focused effort and a long term strategy, Cameco is now purchasing close to $75 million in goods and services from northern Saskatchewan’s 33,000 inhabitants (75% of whom are Indigenous). At the same time, Cameco has increased its local hiring to the point where 86% of new employees are local residents. The company employs over 500 local Indigenous people, paying them over $20 million/year in salaries. All this was accomplished in a remote, isolated area where, initially, the people were largely untrained and unskilled and living traditional lifestyles. We will recommend that BP arrange a visit to Cameco’s Saskatchewan operations to identify specific elements of Cameco’s programs that could be applicable to BP’s operations in Venezuela and elsewhere. Admittedly, there are many differences between the Cree and Dené of northern Saskatchewan and the Warao of the Orinoco Delta. But, there are also many similarities. Indigenous peoples in both places have experienced exploitation and marginalization over long periods of time. By accepted measurements their development was far below that of the surrounding non-Indigenous community. Both peoples had almost no previous positive experience with business or industry. Cameco realized that investing in local procurement and employment programs was a cost effective deployment of community relations spending. Dollar for dollar, spending to increase local procurement and employment can have a much larger and longer term impact on local economies than humanitarian and charitable spending. Local procurement and joint-ventures Joint venturing with partners who have the necessary capacity and operational expertise has proven to be an effective way for some Indigenous peoples to provide goods and services to resource projects. Cameco has promoted the use of this strategy effectively, helping to bring the

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partners together and facilitate arrangements. This has allowed them to award multi-million dollar underground mining, catering, transportation and other contracts to Indigenous businesses that had little previous experience in these sectors. The current level of Warao institutional and organizational capacity will be a limiting factor in allowing near term development of joint ventures. However, by focusing on opportunities rather than constraints, it may be possible to identify an opportunity whereby a joint venture approach could assist in developing a Warao supplier. Given the Warao peoples’ proven expertise in living effectively in the region, BP may want to examine its environmental monitoring and management activities to determine if there is an opportunity to allow for direct Warao involvement. If companies such as BP are to ensure that resource development occurs in a mutually beneficial manner, increasing local procurement is both necessary and cost effective. Furthermore, five or ten years into the development of the field it would be very difficult to justify why local Warao peoples were not involved in providing goods and services. 5.3.6 Other Tools In addition to the tools listed previously, there are a number of additional activities and strategies that will help local resource projects to produce long term, sustainable benefits for local communities and people. We will be recommending that BP utilize some of the following tools to enhance its relationship with the Warao peoples. Capacity Building Increasing local organizational and institutional capacity is absolutely necessary in order to have a long term, interactive relationship with local Warao communities. Mechanism(s) to facilitate local involvement and benefits Ensuring that resource projects produce local benefits is the responsibility of many parties, not just the resource company. There needs to be a mechanism(s) to facilitate communication and collaboration between the various actors. (Note that in order for this mechanism to be effective the participants must have a basic level of organizational and institutional capacity). These mechanisms can take various forms and can include a range of actors. For instance, Cameco, in its operations in the Athabasca region of Saskatchewan’s far north (which is one of the most marginalized areas in Canada), facilitated the creation of the Athabasca Working Group. This group brings together industry, government, community leaders and other interested parties. Its overall objective is utilizing the mining industry to improve13 life in the communities. Among other results, in the 3 years since the group was formed there has been a 60% increase in local employment. 5.3.7 Comparing the Tools There is an appropriate time and situation for each of the Development Technology tools discussed previously. Often the impact can be increased, by utilizing the tools together, or by

13 The communities themselves are the only ones that can legitimately define what improvement means.

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using one to build the capacity to enable the effective use of others (i.e. supporting basic health and education to increase the impact of later training, hiring and procurement efforts). What is important is to understand the impact of the tools along several key dimensions. The following chart will illustrate the aspects of the various dimensions. Table 1, a matrix that compares the development technology tools across the impact dimensions follows this chart. Self Sustaining: Will the initiative generated by the tool eventually be self-sustaining,

or will it require ongoing investment from the company or others?

Enhances Self Esteem: Will the impact created by the use of the tool enhance individual and community self esteem?

Builds Capacity: Does the tool help to build sustainable long term capacity

Builds Partnership: Is the initiative inter-active enough that it creates a sense of partnership with the local people and community?

Return on Investment: What is the value of community benefits per dollar invested?

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Table 1 A Comparison of Development Technology Tools

Self Sustaining Enhances Self Esteem Builds Capacity Builds Partnership Return on Investment Humanitarian aid and Direct Grants

No, but often necessary initially in order to create a foundation for the successful implementation of other tools

In the short term it can in some situations, but often it will foster long term dependency

In the short term perhaps, but not long term sustainable capacity. Also it has a tendency to foster dependency

Can build initial sense of partnership and trust if designed and implemented appropriately

Low, with little or no leverage. Return usually ceases when contribution finishes

Leverage/Influence with Third Parties

Can be if the influence causes third parties to adopt and implement sustainable long term approaches

Can if appropriate activities are undertaken (i.e. legislation, development actions, etc.)

Can if activities of third parties are appropriate

Can, if leverage is done collaboratively with local people and based on community priorities

Can be high if influence results in third party investment in new activities that provide ongoing community benefits

Training No, but when trained people can go on to other self sustaining activities

Yes Yes Can, especially if development and selection is undertaken with community collaboration.

High. Small investment in training can produce ongoing return through continued employment

Hiring Yes Yes Yes Yes High – small investment to increase local hiring can produce ongoing salary revenues into community economy

Procurement Yes Yes Yes – especially if procurement activities are designed to increase local business capacity

Yes Very high

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5.4 Development Technology Results: Measuring the Impact

“(W)hat gets measured gets done” - John Browne, 17-Nov-97, New York

In the past 15 years resource companies have made great strides in their ability to measure, monitor and mitigate their impact on the environment. Companies have accepted that their activities will impact the natural environment and that there is a responsibility to mitigate any negative impacts. In order to effectively manage this responsibility it has been necessary to develop new technologies to enable more effective measurement of environmental impacts. Resource companies routinely accept that they must file environmental impact assessments that predict, in minute detail, what impact their extraction operations will have on the surrounding natural environment. Yet, these same companies are often unable to produce quantitative estimates of the impact their operations will have on surrounding communities and people. Many don’t even keep records of local hiring and purchases. If BP is to successfully meet the challenge of producing energy in ways that enhance the life of the community as a whole, community impacts must be monitored and measured with the same focus as environmental impacts. BP and its contractors and agents must be prepared to quantitatively answer questions dealing with changes to community health, employment, business, etc. that emanate from resource exploration and extraction. This will mean the collection of baseline data on communities prior to the onset of activity, much the same way that baseline data is now collected on the environment. It may well be necessary to develop new measuring and monitoring technologies. Targets will have to be set in various community impact areas (health, education, employment, training, procurement, etc.) and progress towards those targets monitored and evaluated. Managers and sub-contractors will have to be judged on their community impact as well as along financial, environmental, safety and other dimensions. If BP wishes to maximize the impact of its investment in community relations it must develop and implement a comprehensive program that will set community impact targets and regularly monitor and reward progress towards those targets.

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6 ISSUES, STRATEGY & RECOMMENDATIONS

6.1 Strategy Based on the research and analysis carried out, we recommend adoption of the following strategy to enable BP Venezuela to achieve its objective of developing sustainable and mutually beneficial relations with the Warao peoples in an efficient and cost effective manner.

To cost effectively and efficiently organize exploration activities so that they support BP’s social responsibility objectives of contributing to the development of civil society, environmental responsibility and maximizing the sustainable benefits received by local interests.

The following recommendations build upon the progressive work already undertaken by BP and constitute an implementation program for the strategy articulated previously. An implementation matrix following the recommendations provides summary information on recommendations and implementation. There is a high degree of inter-connectivity between the various recommendations and individual tasks are sometimes related to more than one recommendation. Section 7 outlines a short term work plan that identifies tasks necessary to begin implementation of the various recommendations. The recommendations are organized along the Development Technology analytical framework discussed in the previous section. All recommendations are organized with a specific recommendation, rationale, implementation strategy and a time frame. The time frame is based on the following parameters

• Short Term less than 1 year • Medium Term 1-3 years • Long Term more than 3 years

Where appropriate, special considerations have been noted for each recommendation.

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6.2 Enhancing the Corporate Ethos Issue 1: BP requires that all Personnel are able to work effectively in sensitive

Cross Cultural situations Recommendation Develop and implement an ongoing Cross Cultural Communications

and Sensitivity training program

Rationale Many corporations and their personnel are prone to making broad cultural generalizations on the basis of their own educational and experiential background. These generalizations are often made with the best of intentions, and are the result of a limited scope and understanding of other cultures and perspectives. Should these generalizations continue unchecked they can reflect poorly on the company and inhibit its ability to work effectively across diverse cultural dimensions. Personnel at all levels must have a basic cross cultural sensitivity in order for companies to work effectively in diverse cultural settings

Implementation Strategy

1. Engage a cross-cultural consultancy firm to assist with the design, development and implementation of a comprehensive Cross-Cultural Training and Sensitization program with the following characteristics: • The program should be designed in a modular fashion in order to

accommodate the specific requirements of the various users and permit easy adaptation for other Indigenous peoples in other BP operations

• It should be designed so that BP personnel can be trained to deliver it on a regular basis.

• It should be scalable so it is effective for personnel with varying levels of cross cultural interaction (i.e. someone working in the field directly with Indigenous peoples will need a different level of training than someone in corporate finance or someone who is only going to have short term inter-actions)

• It should have components and materials that can be utilized as part of regular briefing processes

• There should be a package of materials that is designed to complement the modular and scaleable program

• It should utilize local Indigenous peoples to enhance the delivery

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2. When developed it should be mandatory for all personnel, including

contractors and their staff, to take the appropriate level briefing.

Timeframe 1. Begin program development as soon as possible.

2. When a basic program is developed begin training BP trainers and delivering the program to appropriate personnel.

3. With feedback from the initial delivery refine and enhance various modules as appropriate

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Issue 2: BP has a considerable internal knowledge base on Indigenous

information, but the information is not coordinated and requires ongoing enhancement and updating

Recommendation BP should consolidate its existing internal knowledge base on

Indigenous issues and continue expanding and enhancing it.

Rationale A current and comprehensive knowledge base on Indigenous issues and developments, both in Venezuela and throughout the world, is necessary for an organization that wants to work effectively with Indigenous peoples. Indigenous issues are complex and have multiple historic roots. Currently, BP has a good internal information and knowledge base, but the information does not permeate the organization and it requires enhancement in key areas. (the communications strategy [Recommendation 3] will deal with socializing Indigenous information throughout the organization)


1. Identify key persons in each unit dealing directly with Indigenous issues and ensure that they are aware of all Indigenous information and that information is actively shared across units.

2. Continue building and enhancing the knowledge base through regular interaction with Indigenous peoples and organizations.

3. Develop an online directory that catalogs various documents and reports on Indigenous peoples and issues and indicates how to access them

4. Encourage regular information sharing with other BP Assets that deal with Indigenous Peoples

5. Contract a third party to provide regular briefings on international Indigenous issues and activities, including policies and actions of multi-lateral and international organizations (this will be much more cost effective than attempting to remain up to date on these activities internally and will significantly extend the scope of BP’s information gathering capacity)

6. Attend pertinent conferences, meetings and other sessions on or relating to Indigenous issues. The contractor in Item 5 above, can help to identify appropriate events to attend, and if necessary, could attend them directly and then brief appropriate BP Personnel. Also, it may be worthwhile to attend some meetings, such as the UN Working Group on Indigenous Affairs, with the contractor or someone who has contacts and experience in these forums.

Time Frame Short term and ongoing

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Issue 3: Knowledge of Indigenous issues and awareness of their importance

does not permeate BP’s operations. Recommendation Develop and Implement ongoing Communication Strategy to socialize

information on Indigenous issues and developments throughout the organization.

Rationale In order for BP to operate effectively on Indigenous lands it is imperative that a basic knowledge of Indigenous issues and their importance permeate the entire organization, much the same way that basic knowledge of environmental and safety issues currently does. Additionally, many in the organization will need additional levels of knowledge and information.


1. The success of this initiative will, to a large extent, be dependent upon the level of cross cultural awareness within the organization and the development of a comprehensive knowledge and information base on Indigenous issues and developments. [see Recommendation 2]

2. Begin the program with a direct message from the President of BP Venezuela to communicate the importance of Indigenous issues.

3. Work with Warao and other Indigenous peoples where possible to develop a range of communication materials that will facilitate information dissemination (use print, video, electronic and other media as appropriate). Recommendation 4 will suggest the creation of an Indigenous Decade communications initiative. Obviously these two should be coordinated. Where possible utilize materials from the cross cultural training programs.

4. Ensure that approriate Indigenous information is included in all staff and personnel orientation briefings. [materials to be developed in Recommendation 1]

5. Utilize the International Day of the World’s Indigenous Peoples, August 9, to undertake special activities to promote and share Indigenous information

6. Create other strategies and activities to ensure the permeation of Indigenous information throughout the organization.

7. Note that item 3 above may represent an opportunity to hire or contract Indigenous peoples

Time Frame Short to Medium Term and ongoing. As noted, it should follow the cross cultural training.

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Issue 4: The International Decade of the World’s Indigenous Peoples provides

an opportunity to support a number of BP’s Indigenous objectives. Recommendation Develop an Indigenous Decade Communications Initiative involving the

Warao and other Indigenous peoples.

Rationale The United Nations has declared an Indigenous decade that commenced on December 10, 1994 and encouraged agencies and organizations, including business, to undertake activities with and in support of Indigenous peoples. The development of a corporate-wide BP Indigenous Decade Communications Initiative would be supportive of a number of other BP objectives (including the preceding and following recommendations) and would connect BP directly with the United Nations program of activities for the Indigenous Decade. The initiative would facilitate increased interaction between BP and Indigenous peoples and would highlight BP’s global leadership role on corporate/Indigenous issues.


1. Develop an initial draft terms of reference. Some issues to consider: • include Warao and other Indigenous peoples in the process • other potential collaborators • develop strategic themes (Indigenous success stories and

other positive themes should be included) • aim at Indigenous and non Indigenous audiences • ensure that, at least some, material is accessible to all

Indigenous peoples including those that are illiterate 2. Share the information with other BP operations, including London, to

get as broad a buy in as possible. 3. Make a decision as to the scope and mandate of the initiative 4. Consider having the BP Group Chief Executive announce the initiative

at an appropriate United Nations function or event. 5. Implement and monitor according to plans developed

continued on next page

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Time Frame Initial planning can take place in the short term leading to a possible

announcement in the medium term

Considerations This will heighten public scrutiny of BP’s relationship with Indigenous peoples much the same as BP’s leadership role on environmental issues has heightened the attention focused on BP’s environmental performance

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Issue 5: Share Information and Experiences with Other Companies Recommendation Pro-actively exchange and share information on best practices in

corporate/Indigenous relations with other corporations and organizations.

Rationale BP, as a leading global corporation, has a responsibility to share best practices on Indigenous relations with other corporations to encourage overall improvement in corporate/Indigenous relations. Additionally, this process will provide BP with the opportunity to learn from the experience of other businesses and will provide better information flow for the internal knowledge base on Indigenous issues.


1. Arrange for BP personnel to visit Cameco’s operations in Canada to identify experiences that may be applicable for BP’s operations.

2. Identify other corporations that are working with Indigenous peoples and initiate information sharing and exchanges

3. Consider motivating, along with other corporate and institutional interests (including Indigenous peoples) a global forum on corporate/Indigenous relations (this could also be considered an Indigenous Decade activity)

Time Frame Step 1 and 2 can be completed in the short term and initial planning undertaken for step 3, which could be implemented in the medium term.

Considerations for Step 3

The global history of corporate/Indigenous relations has been one of extensive exploitation of Indigenous peoples by corporate interests. As noted in the background, Indigenous interest in collaborating with the corporate world is relatively new. It should be expected that there would be some participants at the event who will wish to revisit past exploitative actions. At the same time, it must be understood that ignoring these past actions will not make them go away and that a forum such as this may speed the development of a more collaborative relationship between Indigenous peoples and business.

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6.3 Deploying the Tools 6.3.1 Humanitarian Assistance/Direct Grants Issue 6: Continue with Current Medical and Water Programs Recommendation BP should continue with its current health, water delivery and other

urgent humanitarian programs and begin to consolidate the monitoring of their impacts [see Recommendation 18]

Rationale The current condition of the Warao is simply unacceptable by any standards. While BP is not responsible for these conditions, as the leading economic force in the region, it must continue working to alleviate the worst conditions. As noted in other recommendations, it is important that BP begin measuring the impact it is having on the communities. That measurement should begin immediately with existing programs


1. Continue implementing existing programs 2. Set up a comprehensive monitoring procedure to ensure collection of

appropriate data [see Recommendation 18]

Time Frame Immediate

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Issue 7: Some Warao communities have unacceptable sanitary conditions Recommendation Immediately motivate community clean up campaigns in communities

where garbage and debris problems are acute

Rationale The sanitary conditions in some of the communities are unacceptable. The degree of trash and garbage creates a severe health hazard for community residents and for personnel from BP, SOCSAL and other organizations who visit the community.


1. On an urgent basis meet with SOCSAL and other relevant interests to develop a strategy to maximize community involvement in the clean up.

2. Motivate the immediate clean up of garbage in the communities according to the strategy developed in step 1.

3. Undertake educational activities on health and sanitation to reduce the need for future emergency clean-up campaigns

Time Frame Immediate

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6.3.2 Leverage/Influence with Third Parties Issue 8: Working with Multi-Lateral/International Development Partners Recommendation Identify one or two key multi-lateral or international partners to

collaborate with on select initiatives.

Rationale Expectations and attitudes are such that BP will always be subject to criticism, regardless of how it manages its relationships with Indigenous peoples (This is almost identical to the situation with environmental issues). In order to mitigate the risk exposure, BP should, on select initiatives, work with reputable agencies such as the United Nations Development Program, the International Labour Organization, Pan American Health Organization14, Inter-American Foundation15 (IAF) and other similar bodies.


1. Utilizing the knowledge base developed in preceding recommendations, identify appropriate bodies to collaborate with.

2. Identify appropriate collaboration opportunities (programs to increase local hiring and procurement, health programs and initiatives such as a global forum on corporate/Indigenous relations represent potential opportunities for collaboration)

3. Identify the optimal parameters of collaboration.

4. Approach desired partners to determine their interest (BP may want to utilize external resources to assist it to identify and approach the appropriate partners)

Time Frame Medium to long term

14 There has been previous collaboration between BP and the Pan American Health Organization 15 Mobil is collaborating with IAF on an initiative in its exploration area

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Issue 9: Contractors and other suppliers need to understand and support BP’s Indigenous strategy.

Recommendation Encourage Contractors and Other Suppliers to Support Warao

Development

Rationale BP is in a position to compel its suppliers and contractors to address the issue of Warao development. These parties can contribute substantially to the overall benefits that the Warao can realize from oil development in the region. Note: Initially at least, many contractors and suppliers will be able to

identify few if any direct Warao benefits accruing from their activities. That is fine. The intent of the process is to make them aware of the importance of Warao benefits and ensure that it is addressed on all activities. Over time, as results are realized from the education, capacity building and other programs, more Warao will be in a position to benefit from ongoing activities. Implementation of this recommendation will also provide information for measuring the impact BP’s operations is having on Warao peoples.


Note: To facilitate buy-in, BP managers who will be involved in the process below should be among the first to take cross cultural training and they should be actively involved in the design and development of relevant policies. They should be briefed on the need to develop and implement this program prior to attending the training so that they can gain maximum practical advantage from the training.

1. Institute a policy whereby every new contract or contract extension must address the issue of Indigenous involvement and, during execution, provide ongoing status reports detailing their impact on the Indigenous peoples.

2. Where possible, require contractors and suppliers to undertake cross cultural training.

3. Require contractors and suppliers to agree to train and employ Indigenous peoples and utilize them as sub-contractors and suppliers. (recognizing that this is a long term process)

4. Require that all proposals identify and quantify what, if any, benefits Indigenous peoples will receive from the proposed activities


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5. Require all existing suppliers to provide regular reports identifying and

quantifying Indigenous benefits that result from their activities. (even if there are no identifiable Indigenous benefits, this will increase awareness of their importance)

6. Work with contractors and suppliers to identify opportunities for productive Indigenous involvement in their activities.

7. Monitor suppliers and contractors to determine compliance with items 1 and 2.

Time Frame It should begin after the appropriate personnel have been exposed to cross cultural training programs.

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6.3.3 Training and Education Issue 10: Warao people have low levels of formal training and education Recommendation Develop and Implement a Comprehensive Warao Training Initiative

Rationale The Warao people have little formal training and education and this is a severe impediment to their being able to be productively involved in BP’s activities and to their overall development.


1. Motivate a meeting with government officials, SOCSAL and other development actors in the region, including Indigenous peoples themselves, to develop a collaborative plan to improve education and training opportunities for Warao people. Note that this activity could be utilized to facilitate the founding of the Coordination Mechanism for Warao Development. (Recommendation 16)

2. Issues that need to be addressed in an education and training initiative

include:

• Enhancement and usage of educational facilities • Adult Basic Education • Scholarship program • Basic Skills Development (connect with employment opportunities

and lifestyle activities as appropriate) • Lifeskills, health and sanitation programs • Pre-Employment Training (Recommendation 11) • Economic support for adults who take the training and education

programs (This may present an opportunity for local business development. Trainees will be taken from regular fishing and other subsistence activities. They will need economic support. A training allowance will allow them to purchase fish and other food items from those people who are not taking the training)


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3. Look for opportunities to increase Warao involvement in the process of

planning, developing and delivering all of the training. This will support other efforts at increasing organizational and institutional capacity.

4. BP should immediately initiate a scholarship program to support any

Warao person wanting to undertake advanced education (Advanced could likely be defined as having to leave the community for the training)

5. Motivate the involvement and collaboration of additional actors who are

involved in development in the region

Time Frame Begin planning the program with SOCSAL and others in the short term with a goal of beginning implementation early in the medium term. Look for opportunities for direct Indigenous involvement in the planning. BP should immediately offer to provide financial support to any Warao person who is going on to take advanced education or training

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Issue 11: Special support is needed to enable the Warao people to be

productively employed in BP’s activities. Recommendation Develop and implement a pre-employment training program

Rationale Most Warao will require training and orientation to bring them to a level where they can be considered for gainful employment in BP’s activities.


1. Obtain detailed information on other experiences with pre-employment training through the inter-business sharing of information (Recommendation 5)

2. Ensure that relevant managers and other implementing personnel have taken the cross cultural training programs

3. Have 2-3 key managers visit Cameco or another resource operation where pre-employment training programs have been successfully utilized.

4. Involve relevant managers and other implementing personnel in the design and development of the program (see Section 5.3.4 for additional information on program elements).

5. Consider giving people who have successfully completed the pre-enrollment program priority acceptance into Adult Basic Education and other training programs so they have the highest possible level of training when BP has an opportunity to employ them.

6. Roll out the program.

Time Frame Begin development in the short term with roll-out in the first year of the medium term

Considerations

BP must implement the program in a way that does not raise undue expectations. Candidates, and their communities, must understand that completion of the pre-employment program does not guarantee employment. In fact, few if any will receive immediate employment. They will go into a pool from which new hires will be drawn. As well, existing Union agreements have restrictions that create barriers for Warao employment. However, ILO Convention 169 has provisions that can be used to encourage the opening of opportunities for Indigenous peoples.

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Issue 12: Even if Warao people are hired, they will be restricted to low level positions because of their lack of formal education and training.

Recommendation Establish mechanisms to facilitate continual education and training for

Indigenous employees

Rationale Indigenous peoples will generally be entering BP’s workforce in low skill positions because of their lack of education, experience and relevant training. Special efforts will be required to ensure that Indigenous peoples are in a position to advance to higher skilled, higher paying opportunities.


1. Establish on site learning centres where employees have access to Adult Basic Education and other relevant skills training (The planned visit to Cameco and other Canadian mining operations will provide an opportunity to see this type of program in action.)

2. Work with Unions and other appropriate bodies to enable priority

opportunities for qualified Indigenous people to enter into trades and professions.

Time Frame Medium to long term

Considerations

1. Cannot be implemented until Indigenous peoples have been hired and are working on-site.

2. It may be seen as too much special treatment for Indigenous peoples and create resentment in other workers.

3. Consider establishing an on-site learning centre that will provide education and training opportunities for all employees.

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6.3.4 Employment Issue 13: Over time there is a need to increase the number of Warao working in

all levels of BP’s operations Recommendation Pro-Actively Recruit Warao for all Levels of Operation

Rationale BP hopes for a 40 year operating life from the Pedernales/Guarapiche field and has expressed a sincere desire to see that Warao peoples benefit from this development. Providing employment opportunities for Warao peoples is a cost-effective way of providing benefits. As well, if BP is several years into the life of the field without having created employment for Warao people it could be a serious public relations problem. It will take ongoing effort over an extended period of time to enable effective Warao participation in BP’s workforce.


1. Develop and implement the pre-employment training program (Recommendation 11)

2. Using the International Labour Organization’s Convention 16916 as a starting point, work with the Unions to identify practical opportunities to integrate Warao people into the labour force.

3. Require contractors and suppliers to set Warao employment targets and encourage them to use the pre-employment program to identify qualified applicants

4. Require all persons involved in hiring and training to complete appropriate levels of cross cultural training

5. In consultation with the Warao people and communities, set stretch targets for Warao employment


16 See Appendix 2

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6. Utilize the Coordinating Mechanism, and monitoring program, to assist

with meeting targets. (Recommendations 16 & 19) 7. Establish a hiring centre in Pedernales (it can be used with the pre-

employment training as well) 8. Evaluate responsible managers throughout the organization on meeting

Warao employment targets in the same way as they are now evaluated on meeting Environment and Safety targets

Time Frame Short Term: Develop and implement pre-employment training program and begin working with Unions to find a way to facilitate Warao employment. Advise contractors of plans to facilitate Warao employment

Medium Term: Undertake the remainder of the implementation

strategy.

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6.3.5 Procurement Issue 14: Without special efforts it is unlikely that Warao will become

productively involved in the supply of goods and services to BP’s operations.

Recommendation Pro-actively develop Warao suppliers of goods and services for BP’s

operations in Pedernales/Guarapiche

Rationale BP hopes for a 40 year operating life from the Pedernales/Guarapiche field and has expressed a sincere desire to see that Warao peoples benefit from this development. Purchasing goods and services from Warao people and businesses is a cost-effective way of providing benefits. As well, if BP is several years into the life of the field without developing any local Warao suppliers of goods and services it could represent a serious public relations problem. It will take ongoing effort over an extended period of time to enable effective Warao participation in BP’s procurement.


1. Require all personnel involved in procurement to undertake cross cultural sensitization training

2. Have local procurement functions in the Pedernales office (this should be coordinated with the local employment function and initially it may be advisable to have one person perform both functions)

3. In association with Warao organizations and communities, review procurement & contracting requirements to identify possible opportunities for Warao supply of goods and services (keeping in mind any potential to utilize a joint venture to facilitate Warao involvement. see 5.3.5 for examples)

4. Require all contract bids and proposals to identify opportunities for local supply of goods and services.

5. Advise Warao communities and organizations of any opportunities identified and work with them and/or local Warao entrepreneurs to assist them to take advantage of the opportunity.


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Time Frame Medium to Long Term

Considerations

This is initiative will not produce any immediate Warao suppliers. It may be several years before the first significant contract is negotiated with a Warao (or Warao joint venture) supplier. BP and Warao expectations should be managed accordingly. Even though this initiative is not expected to produce tangible results in its early years, it should be initiated and monitored.

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6.3.6 Other Tools Issue 15: BP Venezuela does not currently have direct relationships with any

representative Indigenous organizations. Recommendation Establish direct relationship with representative Indigenous

organizations

Rationale Indigenous peoples have established systems of organization and representation. Although, in the Warao case, this organization is, at best, in the incipient stages, it is still vitally important that BP maintain a direct relationship. In addition to the Warao organization, Venezuela has a national Indigenous organization, CONIVE, which includes the Warao Union as a member. CONIVE is at a more advanced stage of organizational development and, initially, could be the conduit for establishing relationships with a representative Warao organization. Additionally, CONIVE has expressed interest in developing a relationship with BP and the oil industry


1. Contact CONIVE Executive and invite them to a ‘get acquainted’ meeting to talk about establishing an ongoing relationship. • As noted, past relationships between Indigenous peoples and

industry have often been antagonistic. Extra care must be taken to establish trust and respect.

• BP should consider engaging a third party, who is known and respected by both CONIVE and BP, to facilitate the initial stages of dialogue and relationship building.

• At a minimum, to indicate respect and seriousness, a senior BP Executive should participate in the initial meeting.

2. Identify opportunities for collaboration between BP and CONIVE. Possible areas include: • Work collaboratively to identify opportunities for increased

Indigenous involvement in the oil industry continued on next page

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• Assist BP with staff briefings and orientations (this could be on a contract basis and could be BP’s first Indigenous contractor)

• Regular meetings to brief each other on activities and concerns • Work collaboratively to identify ways to support organizational and

institutional capacity development for Warao organizations and communities

• BP could facilitate collaboration between CONIVE and SOCSAL • Development of an Indigenous scholarship program • Development of an activity/event for International Indigenous day

Aug. 9. (see Recommendation 3) This would heighten internal profile for the importance of Indigenous issues and help with the socializing of Indigenous information and awareness throughout the organization.

• Attendance at UN Working Group on Indigenous Populations meetings. (Every summer this group meets in Geneva. Indigenous peoples and organizations from throughout the world attend and voice their concerns. CONIVE has attended in the past, as finances permitted, and would likely welcome BP support towards attending upcoming sessions. BP may want to work with CONIVE to facilitate a Warao person attending as well.)

3. Continue meeting and interacting in as open a manner as possible

Time Frame Short term/immediate and ongoing

Considerations • This relationship must be handled delicately and responsibly, without being condescending. The opportunity exists to build a good working relationship. However, there is a history of difficult relationships between Indigenous peoples and business that will need to be overcome in order to build trust and mutual respect. As noted in the implementation strategy, BP should consider engaging a facilitator during the initial stages of developing this relationship.

• CONIVE itself has not yet developed a high level of administrative capacity. This must be recognized and BP’s expectations of the relationship managed accordingly.

• BP can support CONIVE’s organizational and institutional capacity development (Recommendation 17)

• BP must allow Indigenous peoples and organizations to define representation on their own terms, while ensuring that they are working with organizations that have a definable constituency and some degree of representative practices.

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Issue 16: There is no infrastructure to facilitate coordination of Warao

development activities. Recommendation Motivate the Establishment of a Coordinating Mechanism for Warao

Development

Rationale There are many actors with an interest in Warao development. National, state and local governments, BP and other oil industry interests, SOCSAL and other NGOS, CONIVE and other Indigenous organizations, other development agencies and organizations (including other nation state development organizations) are some of the key ones. Currently any coordination or sharing of information between these various interests is sporadic and ad-hoc. This results in much duplication and inefficiency and a situation in which consensus is difficult to obtain on any issue. A coordinating mechanism would provide a forum for the sharing of information and the facilitation of collaboration and consensus. As well, it would provide a body where ideas could be tested and it could help deflect criticism. PDVSA has already indicated that it would welcome a more pro-active coordinating approach to Indigenous issues.


1. Meet with PDVSA and other parties, including CONIVE, to begin development of a consensus on the need to establish a coordinating mechanism.

2. Work with the above interests to identify additional parties that may be interested in participating in the mechanism, and meet/follow up as necessary to develop a terms of reference and begin operation.

3. Keep in mind that similar bodies have worked extremely well in similar situations in other jurisdictions (Cameco/Athabasca Working Group in Canada) and liaison with these bodies as appropriate. (On the proposed visit to Cameco’s operations it will be possible to learn more about this committee)


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4. Items to be considered for inclusion in the terms of reference for the

body include: • sharing of information on programs and initiatives • coordination (where appropriate) of above programs • identification of opportunities for joint action

• August 9 is International Indigenous Day – coordinate activities on that issue

• International Indigenous Decade activities • discussion on issues of mutual concern - possible issues are:

• the present discussions of the Venezuelan proposed Indigenous laws

• Hiring and employment targets • ILO Convention 169

Time Frame Short term and ongoing

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Issue 17: The Warao are almost totally without institutional and organizational

capacity Recommendation Support the development of Warao organizational and institutional

capacity

Rationale Warao communities and organizations currently have only incipient levels of organizational and institutional capacity. This increases the difficulties BP and other institutions face in trying to work collaboratively with the Warao. Additionally, lack of capacity often prevents the Warao from taking advantage of development opportunities and from being protagonists of their own destiny.


1. Work with CONIVE to facilitate active Warao participation in CONIVE

2. Implement education and training recommendations

3. When appropriate, provide financial and logistical support to the Warao Union or other Pan-Warao representative organization (initial support may be directed at facilitating their active involvement in CONIVE)

4. Work with SOCSAL and other development partners (Recommendation 16) to motivate, encourage and support Warao capacity development.

5. Encourage SOCSAL and other third party delivery agencies to formulate a plan and timetable for Warao involvement on their Board of Directors and in active program planning and development

Time Frame Short term start but a long term project

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6.4 Setting Targets and Monitoring Results Issue 18: There is not an organized effort to monitor and manage community

impacts. Recommendation Develop and Implement a Community Impact Monitoring Program

which includes: • collection and verification of baseline data • measurement of impact along a number of dimensions including:

• health statistics • employment (by BP and its suppliers and contractors) • procurement and other business impact • education and training (including literacy and other training levels) • traditional activities (fishing, harvesting, crafts, etc.)

• Establishment of targets (i.e. jobs and employment income, training, procurement, health statistics, etc.)

• Evaluate managers on their community impact performance

Rationale There needs to be quantifiable indications of the impact BP’s operations are having on the Warao communities. This provides focus and allows for the establishment of targets and monitoring of their achievement. As well it will identify negative impacts in order for corrective action to be taken. Over the past decades, resource industries have developed a remarkable capacity to quantifiably predict what impact their operations will have on the environment, to monitor that impact, and to take remedial action as necessary. Community impact monitoring should be seen as every bit as important as environmental impact monitoring.


1. Identify a position/person that is responsible for coordinating this recommendation and give the person the authority to secure collaboration from other departments as necessary

2. Identify what impacts are now being measured and monitored.


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3. Begin systematically measuring and monitoring impacts along other

dimensions as noted above. Measurement of employment (number of Warao inquiring about employment, number of Warao hired, salary and work level, salaries paid, etc. broken out by direct BP and by contractors) procurement and training should be early priorities.

4. Working with appropriate managers (and with input from CONIVE and others) establish stretch targets for each area

5. Involve all aspects of the company in this process, similar to the way in which all aspects of the company are involved in environmental issues.

6. Monitor progress towards targets and evaluate managers on community impact numbers similar to the way they are now evaluated on safety and environmental targets and issues.

7. Regularly evaluate the dimensions of the community impact monitoring program and refine as appropriate.

Time Frame Immediate and ongoing. Add more dimensions as required

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Issue 19 BP’s Indigenous relationships will produce ongoing opportunities,

issues and challenges that will need to be responded to in a timely manner.

Recommendation Monitor Issues and Challenges of BP’s Indigenous Relationships

Rationale Both BP Venezuela and the Indigenous institutions are new to collaborative, interactive corporate/Indigenous relationships. As noted earlier, there are historical barriers that must be overcome in order to establish sufficient levels of mutual trust and respect. Ongoing interaction between BP and Indigenous peoples and their institutions will generate issues, concerns and challenges (the same as ongoing interaction with any other institution or people would generate challenges). These challenges will be compounded by lack of Indigenous organizational capacity, especially during the initial stages when mutual trust is being developed and both sides are learning to work together. It is important that BP remains aware of opportunities and problems as early as possible in the relationship so it is able to take advantage of opportunities and deal with problems in a timely manner.


1. Retain a third party that understands the situation and is trusted and respected by both parties, to facilitate and, as necessary, mediate BP’s relationship with the Warao and other Indigenous peoples in Venezuela This facilitator would pro-actively identify key issues, problems and opportunities and work with both parties to facilitate a productive working relationship.

2. BP should internalize this capacity over time. The contract for this

relationship support service could be combined with the recommended contract to facilitate the establishment of direct relationships between BP and CONIVE. (Recommendation 15)

3. The facilitator should regularly communicate with various indigenous

institutions, organizations and individuals in order to identify opportunities and potential ‘hot spots’ and report these to BP as appropriate.

Time Frame Short term and ongoing (internalize over time)

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6.5 Administrative Issue 20: BP’s draft Indigenous policy requires enhancement and adoption Recommendation Enhance BP’s draft policy statement on Indigenous peoples17 in

accordance with national and international standards

Rationale BP has a progressive draft of an Indigenous Policy that needs to be enhanced in key areas and then adopted. This will provide a policy basis for on-going Indigenous relations. The items below refer to corresponding implementation points. Note that the current draft is in Spanish. 1. Referring to Indigenous peoples as problems is inconsistent with BP’s

goal of establishing positive relationships 2. This provides a foundation from which to base and evaluate BP’s

actions vis a vis Indigenous peoples 3. This is consistent with the United Nations program of for activities of

the Indigenous Decade as adopted by the General Assembly in Resolution 50/157 of 21st December 1995. As well, meaningful participation is absolutely critical to harmonious relations and is necessary for capacity development


1. Amend existing draft policy as follows • Paragraph one – delete the term “problem of the state” and replace

with “issue of the state” • Paragraph two – add “promote and support Indigenous peoples

rights in accordance with provisions adopted by the international community”

• Include a principle to promote the meaningful participation of Indigenous peoples, at all levels of decision making in matters which affect their rights, lives and destinies, through representatives chosen by themselves, in accordance with their own procedures.

2. Adopt the revised policy in Venezuela and motivate broader adoption within BP'’ global organization.

Time Frame Short Term 17 See Appendix 4

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Issue 21 There is not consistent language used by BP to refer to Indigenous

Peoples Recommendation Promote consistent usage of the term Indigenous peoples in all

corporate communications

Rationale Usage of this term is in accordance with ILO Convention 169 Article 1 Paragraph 3. This is known as the only international instrument concerned with Indigenous human rights and their economic, social and cultural concerns. It is important for BP to align with the few existing international standards on Indigenous issues and rights when possible. At present there does not seem to be consistent language used to refer to Indigenous peoples.


1. Review and amend documents as necessary

2. Advise staff of the importance of using this wording and request that they use it in future communications

3. Advise BP Headquarters and other operating units of the importance of using consistent language and ask them to consider adopting the usage of Indigenous Peoples to maintain corporate consistency.

Time Frame Short Term

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6.6 List of all Issues The following is a list of all the issues in the order in which they are presented. An implementation timetable matrix is contained in the next sub-section and a short term workplan, which takes into account the inter-relationship between the issues and recommendations, is in Section 7. Issue 1: BP requires that all Personnel are able to work effectively in sensitive

Cross Cultural situations Issue 2: BP has a considerable internal knowledge base on Indigenous

information, but the information is not coordinated and requires ongoing enhancement and updating

Issue 3: Knowledge of Indigenous issues and awareness of their importance

does not permeate BP’s operations. Issue 4: The International Decade of the World’s Indigenous Peoples provides

an opportunity to support a number of BP’s Indigenous objectives. Issue 5: Share Information and Experiences with Other Companies Issue 6: Continue with Current Medical and Water Programs Issue 7: Some Warao communities have unacceptable sanitary conditions Issue 8: Working with Multi-Lateral/International Development Partners Issue 9: Contractors and other suppliers need to understand and support BP’s

Indigenous strategy. Issue 10: Warao people have low levels of formal training and education Issue 11: Special support is needed to enable the Warao people to be

productively employed in BP’s activities.

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Issue 12: Even if Warao people are hired, they will be restricted to low level positions because of their lack of formal education and training.

Issue 13: Over time there is a need to increase the number of Warao working in

all levels of BP’s operations Issue 14: Without special efforts it is unlikely that Warao will become

productively involved in the supply of goods and services to BP’s operations.

Issue 15: BP Venezuela does not currently have direct relationships with any

representative Indigenous organizations. Issue 16: There is no infrastructure to facilitate coordination of Warao

development activities. Issue 17: The Warao are almost totally without institutional and organizational

capacity Issue 18: There is not an organized effort to monitor and manage community

impacts. Issue 19 BP’s Indigenous relationships will produce ongoing opportunities,

issues and challenges that will need to be responded to in a timely manner.

Issue 20: BP’s draft Indigenous policy requires enhancement and adoption Issue 21 There is not consistent language used by BP to refer to Indigenous

Peoples The following Implementation Framework Matrix provides a visual overview of the implementation timeframes detailed in the preceding recommendations

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6.7 Implementation Framework Matrix

Table 2 Implementation Schedule

Short Term Medium Term Long Term Recommendation (less than 1 yr.) (1 to 3 yrs) (more than 3 yrs) 1. Improve Cross Cultural Communications and Awareness *********************************************************** 2. Consolidate and Enhance Internal Knowledge of Indigenous Issues **************************************************** 3. Develop and Implement ongoing Communication Strategy ********************************************** 4. Develop an Indigenous Decade Communications Initiative *************************************** 5. Share Information and Experiences with Other Companies *********************************************************** 6. Continue with Current Medical and Water Programs *********************************************************** 7. Initiate a Community Clean-up Campaign ***** 8. Work with Multi-Lateral/International Development Partners *************************************** 9. Encourage Contractors and Other

Suppliers to Support Warao Development ********************************************** 10. Develop and Implement a Comprehensive Warao Training Initiative ********************************************** 11. Develop a Pre-Employment Training Program ********************************************** 12. Develop a Warao Post Employment Training & Development Program ********************************* 13. Pro-Actively Recruit Warao for all Levels of Operation *************************************** 14. Pro-Actively Develop Warao Suppliers of Goods and Services ********************************* 15. Establish Direct Relationships with Representative

Indigenous Organizations *********************************************************** 16. Motivate the Establishment of a Coordinating

Mechanism for Warao Development **************************************************** 17. Facilitate Enhancement of Warao Organizational

and Institutional Capacity Development ********************************************* 18. Develop and Implement a Community Impact Monitoring Program ********************************************************** 19. Monitor Issues and Challenges of BP’s Indigenous Relationships ********************************************************** 20. Enhance and Adopt BP’s Indigenous Policy ***** 21. Promote Consistent Usage of the Term Indigenous Peoples

in all Corporate Communications **********************************************************

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7 SHORT TERM ACTION PLAN The preceding strategy and recommendations form a comprehensive program. It is important that the appropriate executives and staff review, amend as necessary and arrive at a consensus concerning implementation. Several of the recommendations demand immediate attention and will need active support from many quarters in order to be implemented effectively. We recommend execution of the following short term action plan in order to facilitate implementation in a timely, effective and coordinated manner. 1. In a one day, off-site workshop with key staff, consultants and a facilitator, review

the report and recommendations and develop a consensus on implementation

2. Revise/amend strategy and recommendations as necessary

3. Engage a consulting firm to assist with the implementation of the adopted recommendations. In addition to assisting with overall implementation, the firm should assume primary responsibility for:

a) Cross cultural communications and sensitization program (design, development, training in-house delivery capacity, assisting with delivery of the initial sessions)

b) Facilitate the establishment of a direct relationship with CONIVE c) Assist with identification of gaps in Indigenous knowledge and information

base d) Assist with supplementing internal knowledge base as necessary e) Assist with coordinating observation visit to Cameco’s Canadian operations f) Assist with identification of multi-lateral/international development partners

and collaborators g) Assist with motivating the establishment of a coordinating mechanism h) Provide an ongoing review of emerging issues and challenges surrounding

BP’s Indigenous relationships and initiatives i) Provide other assistance and support as required.

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4. Proceed as quickly as possible with the following activities (or as amended in step 1

workshop):

a) develop and deliver cross cultural communications and sensitization workshops

b) establish a direct relationship with CONIVE c) motivate a community clean-up campaign d) enhance and adopt BP’s Indigenous policy e) visit Cameco’s Canadian operations to determine the applicability of their

experience f) consolidate and enhance internal knowledge and information base g) develop and implement a communications strategy (initial step –

announcement of program by the BP Venezuela President h) initiate ongoing review of emerging issues and challenges related to BP’s

Indigenous relationships and initiatives 5. Implement the remaining recommendations as outlined in their respective

implementation strategies.

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8 CONCLUSION Arguably, as a private business, BP does not have primary responsibility for Warao welfare, nor does it have unlimited resources with which to produce benefits for Warao people and communities. However, BP simply cannot afford to be 5-10 years into development of the Pedernales/Guarapiche oil field without having provided real, meaningful and sustainable benefits for the severely impoverished Warao people who live in the area. To be in such a position could be a public relations disaster for a company that prides itself on being a responsible corporate citizen.

In order to be sustainable, benefits must accrue to the Warao through normal, ongoing operations and activities. While they are important at this early stage of operations, donations and humanitarian relief, on their own will, not produce the results BP requires. Warao peoples need the opportunity to become productively involved at all levels of BP’s operations in Pedernales/Guarapiche. But, the reality of the situation is such that, without focused effort and commitment, few Warao people will secure employment, training, or business opportunities from BP’s operations. In addition to other considerations, BP cannot risk being several years into the project and having extracted millions of dollars worth of oil without employing Warao people. For a public company with BP’s profile and commitment to corporate social responsibility, this would be an indefensible position.

Organizing activities and operations to facilitate productive Warao involvement will not be an easy task. It will require a comprehensive and integrated strategy that is both far reaching and cost-effective. This report has outlined such a strategy along with an implementation program designed to allow BP to meet its objectives in a practical and effective manner.

Wayne Dunn, President Wayne Dunn & Associates March 14, 1998

Business

BP Venezuela Indigenous Relations: Meeting the Challenge – Responsibly and Sustainably