Stakeholder Relationship Improvement Action Plan

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BU111 Fortis Inc. and the Chalillo Dam Project Andreea Fatu Student ID B19 TA Name Nov 5, 2012

[STAKEHOLDER RELATIONSHIP IMPROVEMENT ACTION PLAN] A number of initiatives Fortis Inc. could have implemented in the planning and developmental stages of the Chalillo Dam Project to improve stakeholder management and maintain them as supportive & mixed blessing stakeholders.

Stakeholder Relationship Improvement Action Plan Andreea Fatu

Memo To: Mr. H. Stanley Marshall & Mr. John Evans From: Andreea Fatu Date: August 15, 2003 Re: Suggestions on how the Chalillo Dam Project could have been handled in order to achieve a better relationship with stakeholders The decision of whether or not to proceed with the Chalillo Dam caused massive outcry on the part of stakeholders, with the primary problem being the dam’s impact on the external environment (Belize Fortis Campaign, pp 13-20). Taking this into account, it was possible for the Chalillo Dam to be built and stakeholder concerns to be assuaged if Fortis had taken the approach of pinpointing where the biggest stakeholder issues arose (the primary problem) and then addressed those issues individually. Specific initiatives would have then helped turn non-supportive stakeholders into supportive and mixed-blessing ones. Some of these targeted initiatives should have been: 

Disclosing CIDA, AMEC, and other reports on the dam to the public (increase transparency)



Entertaining one hour public interviews at scheduled increments during the planning and building phase to answer any of the public and media’s questions concerning the project (increase transparency and flow of information, beneficial to concerned stakeholders)



Emphasizing the environmental initiatives Fortis has contributed to (strengthen reputation for ethical leadership)



Surveying the Belizean people, public outcry groups, and government on what they see as their main issues, and then targeting them o Destroying Mayan ruins accusation –research and disclose findings o Threatening endangered species -donate money to/help with conservation efforts aimed at those specific fauna & flora o Reduced water quality concern –follow the Natural History Museum’s recommendation of oxygenating water before releasing downstream o Biased CIDA report –involve a second independent research group to analyze/re-affirm findings

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Stakeholder Relationship Improvement Action Plan Andreea Fatu

To screen this action plan for its efficacy, five decision criteria were used: 1. Mitigating Environmental Impact 2. Increasing Public and Stakeholder Input on the Project 3. Maintaining or Increasing the Positive Image of Fortis Inc. 4. Benefitting the Belizean People 5. Economical in Nature Along with this course of action, three other alternatives also existed: 

Focusing on the benefit of a water dam as opposed to other sources of energy, and establishing that as the main platform for the project



Adding activist group representatives onto the Board of Directors in hopes of collaboration



Targeting current economic objections to the project and offering financial incentives to the Belizean people in an effort to entice them into supporting the project

Nevertheless, these alternatives all perform worse than the recommended action plan because of their failure to meet two or more of the decision criteria. As the criteria were formed with a well-rounded solution in mind, the alternatives’ focus on one particular stakeholder and/or concern leads them to ignore other pressing issues. Because of its focus on the external environment as a whole, the recommended action plan addresses many more stakeholders and concerns. See Exhibit 1 for an overview of how each of the four courses of action address the five decision criteria. Mitigating Environmental Impact Satisfies Environmentally-Focused Stakeholders by ensuring that all recommendations offered by the Natural History Museum (Sexty, 2011) were followed, and by implementing conservational efforts for the endangered species living within the Chalillo Dam’s parameters. Re-oxygenating the water prior to release ensured water quality and maintained the necessary oxygen levels for the ecosystem (Sexty, 2011). Investigating the Mayan ruins situation also displayed the commitment of Fortis to maintaining the integrity of the environment and exploring all possible impacts they may have on it. Unlike the others, this 2|Page

Stakeholder Relationship Improvement Action Plan Andreea Fatu

alternative is the only one to take direct steps towards environmental damage prevention –alternatives one and three do not– and to consider several areas of environmental impact –which none of the other alternatives do. Increasing Public and Stakeholder Input on the Project Better Addresses External Concerns by surveying the Belizean people, public outcry groups, and government on their views, and entertaining the one hour interviews with those interested. These were all in an effort to show that Fortis is committed to meeting customer needs –a critical success factor (Hagarty, 2012)– whatever they may be. It shows that Fortis cares about the opinions of its stakeholders, and gives it opportunities to become aware of new concerns, needs, and opinions. The other three alternatives either don’t consider external input (first and third alternative), or focus on only select sources for it (second alternative). Maintaining or Increasing the Positive Image of Fortis Inc. Improves External Acceptance of Project through the persistent efforts of Fortis to involve stakeholders in the decision process for the Chalillo Dam project. The many initiatives taken would have displayed the company’s efforts to collaborate with mixed blessing stakeholders, and the particular campaign of advertising Fortis’s previous environmental and social contributions would have increased perceived trust, credibility, and awareness of Fortis’s dedication to corporate social responsibility. While all three alternatives address this criteria, this action plan is the most involved and assertive method, highlighting both Fortis’s adherence to its mission and values, as well as their willingness to collaborate with all stakeholders. Benefitting the Belizean People Creates the External Justification for the Project is the purpose of the Chalillo Dam project, so the dam’s part in increasing electrical output, preventing floods, increasing Belize’s selfsufficiency and productivity of the Mollejon plant, and reducing reliance on petroleum-based fuel (thereby reducing greenhouse gases) should have been emphasized (Sexty, 2011). The many interactive initiatives Fortis could have implemented would have increased public awareness of the quality and value of the project (another critical success factor (Hagarty, 2012)). Conversely, alternatives two and three would have either jeopardized perceived benefit (through activist objections) or monetized it (through implied bribery).

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Stakeholder Relationship Improvement Action Plan Andreea Fatu

Economical in Nature Maintains Fortis’ Ability to Deal with Future External Environment Issues –though initiative costs added on to the dam’s own are not minimal in the short term, long term rewards from this action plan far outweigh any extra costs incurred at the start. Costs would have been covered once the dam was operating, and Fortis would have been repeatedly rewarded through the continued support of stakeholders and potential for future investment, due to their expert handling of a precarious situation. Conversely, alternative one requires advertising funds and does not look to secure future stakeholder support, alternative two increases the likelihood of inaction (which is costly), and alternative three is not only expensive, but a continuous cost at that. The Steps to Implementation, and What Actions to Take If Complications Arise Table 1: Steps to Implementation Short Term Medium Term  Created an “Environmental  Conducted the scheduled public Relations” team interviews  Looked into endangered  Conducted additional research wildlife conservation efforts requested by stakeholders (found through the survey)  Conducted and analyzed the aforementioned public  Implemented wildlife conservation surveys efforts previously researched  Disclosed any reports  Investigated additional received so far environmental and social initiatives that could have been  Scheduled the first public carried out to mitigate any interview/ Q&A sessions negative effects/ address with project managers stakeholder concerns  Begun advertising Fortis’ previous environmental and social contributions

Long Term  Maintained open communication with stakeholders  Implemented Natural History Museum’s environmental recommendations and continued with your own once the dam was operational (oxygenating water, wildlife initiatives, etc.)  Periodically reviewed public opinion of the dam

Table 2: Contingency Plan Problem Mayan ruins found at Chalillo Dam location.

Course of Action Offered funding to historical initiatives in the country. Organized excavation of area during construction. Stakeholders continued to protest construction of Acknowledged their concern and created a contest the dam. that allows stakeholders to suggest solutions for ongoing issues. This is a way to promote innovation and creativity –another critical success factor (Hagarty, 2012). Implementation of initiatives became too costly. Reviewed which initiatives have had the best results, and focus efforts on maintaining them. Report gave negative opinion on dam (should still Released the report and addressed the stated release to the public?). concerns by adding Fortis’ solutions to them when disclosing. 4|Page

Stakeholder Relationship Improvement Action Plan Andreea Fatu

Appendix Exhibit 1 –Overview of All Possible Alternatives and their Fulfillment of the Decision Criteria Alternatives Decision Criteria *(TS = Total Mitigates Input on Positive Fortis Benefit Belize Economical Score) Environmental Project Image People Impact 1. Focus on  Yes  High;  Yes  Yes  Medium;  Re-oxygenate  Surveys  Transparency &  Increased  Costlier External water collaborative electricity initiatives, with  Q&A Impacts of initiatives help increased  Wildlife sessions  Floods prevented Dam and restore trust rewards later conservation for those living  Reports Implement on  CSR campaign downhill  Decrease Initiatives increases regard for Fortis

greenhouse gases

TS*: 18 pts 2. Add Activist Rep. to BOD for project

TS: 15 pts. 3. Offer Financial Incentives to Stakeholders TS: 9 pts. 4. Highlight Benefit of Dam Over Alternative Sources of Energy TS: 8 pts.

 Self-sufficiency

 Increased source of revenue later on (from stakeholder support/lack of obstruction)

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4

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2

 Enforces awareness of environmental impacts  Does not provide any answers on how to feasibly address them

 Medium  Cannot appoint members from all concerned groups, therefore not all views represented, fairness of appointment questioned

 50/50  Yes in that Fortis listened to opposition  No if demands from activist are not/cannot be satisfied  No if BOD cannot agree on solutions

 Possibly  Brings awareness to some concerns – not all as not all groups can be represented /addressed

 Yes  Most likely do not have to pay activist

3  Does not address environmental concerns

1  No  Justifies dam without proactively seeking solutions to current problems

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3  Small  Effective incentives explored through surveys

3  50/50  Helps relieve high costs for Belize people  May be seen as bribery

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 None  Forces “Dam is Best” campaign that can alienate stakeholders

 Perhaps  If can highlight positives in a non-aggressive, effective way – can lead to stakeholder acceptance

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1

2  Somewhat  Gives financial subsidy/aid to consumers  Doesn’t address other issues

3  50/50  Emphasize dam’s positive impact  Doesn’t ask for their input on changes

1

4  No  Subsidies and promotion of incentive would come out of funding

1  Quite  No additional costs other than marketing (can decide how much)

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Stakeholder Relationship Improvement Action Plan Andreea Fatu

Exhibit 2 –Stakeholder Analysis & Categorization Stakeholder Potential for Threat

Potential for Cooperation

Categorization & Approach Non-Supportive Defended Against: Responded to their accusations, minimized their presence in the process.

Activist Groups

High  Lobbying  Target consumers  Hype up media

Low  Very black and white view of morality  Passionate and steadfast towards negative opinion

ENGOs

High  Lobbying  Target consumers  Hype up media

High  More willing to work with organizations to achieve common goals  More professional an diplomatic approach to addressing issues

Mixed Blessing Collaborated: Worked with and consulted them on environmental initiatives.

Media

High  Sensationalism  Increase profits through exaggerated news stories

Low  Always want stories  Generally focus on negatives

Government

Low  Gave approval to project already  Only 5% ownership of BECOL

High  Gave approval  Good relationship with Fortis Inc.

Non-Supportive Defended Against: Responded to their accusations, but did not allow them to control your communication with external stakeholders. Supportive Involved: Actively shared your possible solutions on how to deal with the Belizean people.

Consumers

Medium  Can rally, riot against Fortis  Cannot really refuse to use electricity or find a substitute supplier High  They can withdraw their financial support from the project or Fortis Inc.

Medium  Have a positive image of the company  Cannot really consume more electricity

Mixed Blessing Collaborated: Gathered their input and informed them throughout the project.

High  They have already invested in the company, therefore they have a vested interest  Can continue or increase provided capital

Mixed Blessing Collaborated: Should have continuously involved in process and asked for opinions.

Foreign Investors

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Stakeholder Relationship Improvement Action Plan Andreea Fatu

Exhibit 3 –Pearson Comments and Corresponding Changes The main comments from Pearson on my report were regarding:  

Presentation and analysis of alternatives Organization of the report –specifically, the use of unnecessary headings and the lack of necessary ones

The largest area of concern was my explanation of alternatives. The Pearson tutor highlighted the fact that my business report’s purpose is to convince Fortis Inc. of the merits of my recommendation over the alternatives. Unfortunately, my approach to it only passingly mentioned alternatives in the body, and focused on them more in exhibit 1. I was therefore not reinforcing the superiority of my recommendation throughout the report. To correct this, I wrote an additional paragraph below my alternatives summarizing their overall reason for ineffectiveness, and I added at the end of each “decision criteria/recommendation analysis” paragraph a sentence that highlighted the alternatives’ failure to meet it or adverse effects as a result of their implementation. Due to page count limitations, I chose to maintain some of my analysis as an exhibit. The second area needing improvement was my headings. I had not read the instructions as closely as I should have, and thus added in extra headings based on how I personally prefer reports. The tutor pointed this out, and so I removed the unnecessary “introduction” and decision criteria headings. The tutor also said to add in headings for each alternative; however I grouped my alternatives together and incorporated my analysis throughout the document. Thus I chose to not add any additional headings. I did however adjust my headings to be more “high-information” ones.

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Stakeholder Relationship Improvement Action Plan Andreea Fatu

References Belize Fortis Campaign, pp 13-20. (n.d.). Retrieved from Probe International: http://www.probeinternational.org/fortis-belize/news_and_opinion. pp 13-20. Hagarty, L. (2012). BU111 Lecture 1. Waterloo: Wilfrid Laurier University. Slide 5. Sexty, R. (2011). Fortis Inc. and the Chalillo Dam. London: Richard Ivey School of Business Foundation.

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