Cairn aims to work with local communities wherever it operates. Through its operations globally, Cairn has demonstrated the ability to develop and manage complex exploration and drilling projects successfully, while striving to minimise the negative impact on local communities.
Public Consultation
Cairn continues to engage with local communities and respond appropriately. For example, Cairn has participated in public meetings to explain the 2011 exploration programme and to better understand the local communities' views.
As part of our plans for drilling offshore Greenland, we contract an independent company (ERM) supported by consultants based in Greenland to conduct a Social Impact Assessment (SIA). The SIA identifies issues of importance for the local population that might result from our activities, and identifies where possible changes to our plans could reflect these. (See a summary of social impacts and mitigation measures implemented for the Greenland operations in 2010.)
Following more than 20 meetings held in Nuuk, Sisimiut, Maniitsoq and Kangerlussuaq in January 2011, we held a six-week public hearing process during March and April 2011, which included a further four public meetings in Ilulissat, Nuuk, Kangerlussuaq and Aasiaat. These were attended by around 140 people, including representatives from the Bureau of Minerals and Petroleum (BMP), Greenpeace and the press, and were publicised on posters, in newspapers and on radio. To maximise transparency in advance of Cairn’s planned 2011 programme of activities, the EIA and SIA studies submitted to the BMP were made available online at the beginning of the public hearing period.
The SIA and consultation process has identified that increasing Greenlandic participation in the exploration activities is important to local people. It also recognised that the development of skills, employment, enterprise and infrastructure associated with the industry should be sustainable, even if oil and gas exploration offshore Greenland was ultimately unsuccessful.
During the 2010 exploration programme, Cairn and its contractors spent an estimated US $31 million (DKK170 million) in Greenland and around 50 positions for Greenlandic workers were associated with the exploration programme in Greenland.
Impact Benefit Agreement
As a result of the SIA process, Cairn entered into an Impact Benefit Agreement (IBA) with the Bureau of Minerals and Petroleum (BMP) and municipalities affected by the project. The agreement sets out the measures Cairn took to minimise the social impacts of the project and enhance the benefits. The IBA included a commitment from Cairn to:
- provide funds of US $250,000, which were used by a working group to develop and provide an offshore English course for 70 students;
- provide the airports with meteorological monitoring equipment to allow for 24-hour airport operations if required;
- hold a local suppliers seminar to educate attendees on opportunities and standards of the oil and gas industry;
- provide funding to environmental research associated with noise impacts of oil and gas activities;
- commit to use Greenlandic companies wherever they meet the commercial, HSE and technical requirements; and
- use Greenlandic workers wherever personnel with the required skills are available.
We have negotiated a second IBA for our 2011 exploration drilling programme, which will again be co-signed by Cairn, the BMP and local municipalities. We calculate the likely overall value of the benefits of our operational activities – economic, educational, employment related, social and environmental – to be US$160 million (DKK 800 million), up from US$100 million (DKK 505 million) in 2010.
Local Employment and Procurement
We understand the importance of employing local people, and working with our contractors we expect to increase the participation of Greenlanders in our activities from the 2010 figure of 7.7 %. We have also placed contracts with Greenlandic companies worth US$10 million (DKK 50 million) and are purchasing the majority of our fuel requirements locally, while our contractors seek a range of goods and services from Greenlandic companies. Our drilling contractor, Ocean Rig, offered six offshore training positions for 2011 to students at the Sisimiut School of Minerals and Petroleum, and Cairn added a trainee aviation coordinator position to our Greenland-based project teams in Nuuk and Aasiaat.
In some cases, contractors have also built relationships with local companies to transfer skills and build the local capabilities of Greenlandic enterprises. This has included training for Air Greenland pilots and work with Greenlandic consultancies to conduct environmental and social impact assessments and training for fire service personnel on the deployment of oil spill response equipment.
Education and Community Development
To develop competence and promote Greenlandic participation in oil and gas activities, Cairn has proposed to set up an Education Fund worth US$500,000 (DKK 2.5 million). This will enable experts to participate in placements at Greenland institutions, to facilitate knowledge transfer and to provide specialist teaching materials to the School of Minerals and Petroleum and other institutions running courses related to the oil and gas industry. In a similar vein, Cairn also ran a one-week introductory course in drilling awareness for 11 students at the School of Minerals and Petroleum.
Under a new initiative for 2011, Cairn has also proposed US$75,000 (DKK 380,000) to set up a Community Development Fund, which aims to help young people reach their potential and develop a positive attitude through cultural and sporting activities.