Companies, Communities & Responsible Engagement: What Palm Oil and Salmon Tell Us About Constructive Change in Latin America

At CBI, we’ve recently found ourselves spending significant time in the muggy heat of the palm oil-growing regions of Guatemala and the Peruvian Amazon, as well as the much cooler latitudes of Chile’s southern coastline, where nearly $5 billion of salmon is farmed each year.

Palm oil and salmon, while different in many ways, both offer lessons on the steps needed to shift behavior and attitudes in Latin America towards more sustainable practices. From CBI’s perspective, we’re particularly interested in how different actors can work collaboratively to redefine expectations and come to grips with powerful legacy issues. We also are increasingly focused on the work that needs to go on inside companies and other organizations before transformational change can happen on the ground. CBI senior mediators David Plumb and Merrick Hoben sat down recently and compared notes on CBI’s salmon and palm oil work. Three insights surfaced.

Connecting pressure from the outside to strengthening change on the inside

Merrick: In both sectors, we’ve seen a critical role for advocacy and international market pressure to drive improvements in practice, whether regarding human rights, environmental management, or other impacts. It used to be that CBI was only asked to come in once conflict was aflame. This is changing. In the case of Guatemala, a large palm operator had been called out for credible allegations of human rights and environmental transgressions. At first, it wasn’t clear whether the company was committed to change, and we had to be explicit that we could only work with them if they were. Once real commitment was on the table, the hard part came: how to help the company walk a transformative path. Working with The Forest Trust, we designed capacity building efforts that connected the company leaders’ new commitments to the realities of operational production. Most important, we found that putting new conflict management practices into operating systems, such as the company grievance mechanism, is where real work happens.

David: Our work around salmon farming in Chile began in the context of international players promoting higher environmental and social performance standards through certification. A year and a half ago we started collaborating with Rabobank, a major lender to the industry, and the global conservation organization WWF to develop a toolkit and guidance for responsible community engagement, in line with the Aquaculture Stewardship Council’s (ASC) social standards. The ASC standards are a benchmark for responsible performance that organizations like WWF use as a tool to drive better practices. We built the toolkit from the ground up, talking with communities, companies and other actors. As you mention, Merrick, now we’re entering into the “hard part,” facilitating a working group of nine large salmon producers who seek to work pre-competitively to improve their social performance, using the toolkit as a guide. We’re also starting to develop a version of the toolkit geared specifically to community leaders and local officials.

Threading leadership on sustainability across the business

Merrick: Even when we have seen company leadership committed to sustainability, there’s still a challenge of threading that commitment across the different areas of the business. Too often responsibility for social performance remains in the silo of a Corporate Social Responsibility Director with no operational authority and/or community engagement teams made up mostly of junior staff. This is when things typically go awry, as coherence with respect to social and environmental commitments can quickly dilute within other areas, such as security, legal, and interaction with farm workers. In a recent visit to vast palm operations in the Amazon, hundreds of miles from headquarters, this issue came into stark relief when we found meaningful dissonance between how senior management viewed specific community engagement challenges, and the more nuanced understanding of the farm-level production team. What seems to make a big difference is having the senior leadership ready and able to visit ground operations with open ears, striking a balance between empowering those on the frontlines to figure out the way forward, while keeping the performance bar high.

David: Indeed, the salmon working group is comprised of sustainability managers, human resource staff, and professionals in charge of certifications. In addition to the challenge of spreading practices across their organizations, they also have strategized about how to pull their CEOs into the process in key moments to ensure the highest levels of decision-making are aligned with the new thinking.

Acknowledging the past to move forward

Merrick: Finally, we’ve noticed just how important it is for companies that seek to make progress on social and environmental performance to proactively acknowledge past missteps and harms. Owning up to what hasn’t gone well matters a great deal in terms of strengthening relationships with impacted parties over time. And yet, acknowledgement on its own is not enough. The reality is that predictable, systematic and effective management of new challenges in evolving contexts, along with sustained, open communication with impacted parties, are the keys to building trust. And while humility matters, don’t expect quick recognition of mea culpas. Better to set the aim of being a better private sector partner in social transformation, with stepwise effort.

David: This is one area where our experiences in palm oil and salmon differ, perhaps because the different nature and intensity of the conflicts. You don’t hear a lot of mea culpas coming from the salmon industry around past missteps. Perhaps this is something the working group can take up.