Weighing Benefits and Risks

Capacity Development

The Issue

The importance of capacity development for all parties involved in negotiating and implementing a BA, as well as the various development initiatives associated with the agreement cannot be overemphasized. This is particularly relevant considering the increasingly remote areas in extractive projects can occur and the lack of capacity associated with these remote locations (Sarkar et al., 2010, 32).

As Brereton, Owen and Kim (2011) state, “if project developers have limited experience in forming agreements with communities, it may negatively impact on outcomes – particularly if the company approach the process as if to approach commercial negotiation. The same is the case if communities are disorganized, and/or lack the knowledge, experience and resources to engage constructively and on an equal footing with developers. Governments that do not understand the process can likewise jeopardize the outcomes through inappropriate or poorly managed institutes (18).

Similarly, the US Department of Energy (2017) observes that BAs require a powerful coalition to be built at the community level, extensive research needs to be carried out, and negotiations must occur. Consequently, research, communications, and legal navigation capacities are critical, and community groups (and First Nations) without these often find themselves at a serious disadvantage because they lack a strategic understanding of numerous hurdles, outright oppositional forces, and/or the financial structure of a proposed deal. Some groups have strong research capacities but, unfortunately, are hindered by poor organization. To maximize the probability of success, a coalition should include members with experience in the abovementioned areas or access to such skills via partnerships and/or consultants (US DOE, 2017, 10).


In the implementation phase of a BA, capacity issues can also relate to a broad range of substantive issues such as environmental impact assessment, gender equity, employment and skills training. When designing a capacity development program, it is recommended that it be demand driven, take a systems view, promote action-based learning and participation, consider the local and historical context of the area, be creative, and ensure community ownership, in accordance with recognized best practice (World Bank, 2008).


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