How to listen: The Importance of Inclusion to Stakeholder Engagement

By Ana Dilaverakis

Transport is key to economic development. It provides physical networks that enable the movement of people and goods, and it triggers trade and tourism. But a new road or even a metro line can also shake up people’s lives with neighbourhoods, workplaces and homes disturbed by new infrastructure.

Stakeholder engagement ensures that the benefits of transport projects are not achieved at significant environment and social costs. It is a continuous process that is most effective when initiated at an early stage of the project. It is an integral part of the assessment, management and monitoring of environmental and social risks and impacts of the project.

At the European Investment Bank, stakeholder engagement identifies people and communities that are or could be affected by a project as well as other interested parties, ensuring that they’re appropriately engaged. Stakeholders might include:

NGOs
Customers
Affected communities
Employees
Government agencies.

Stakeholder engagement is a very challenging task. Understanding the problem—where the affected persons come from, their culture, their fears and their needs—and finding adequate solutions. All this is key to effective engagement and thus an effective completion of the project.

The European Investment Bank sets a policy context for the promotion of sustainable development through the environmental and social standards, which are grouped across 10 thematic areas. The standards aim to achieve the Bank’s sustainability objectives and outline the borrower’s responsibilities in applying the standards to EIB projects.

It’s also important to note that some individuals or groups may be less resilient to the adverse impacts of a project. People who have been subject to discrimination, financial, cultural and/or gender inequalities might be more dependent on their environment or have limited (perhaps even no) access to justice and decision-making. That creates a weaker adaptive capacity for coping with project risks and recovering from project impacts. These groups of people are often referred to as vulnerable groups.

Within the vulnerable groups we often find indigenous peoples. Indigenous people have identities and aspirations that are distinct from mainstream groups in national societies and often are disadvantaged by traditional models of development.

Indigenous people are stakeholders in Honduras

In Honduras, the government made improving the quality and safety of the road network a high priority as part of its development plan for the next two decades.

The modernisation and rehabilitation of the Western Corridor was particularly important, as it connects San Pedro Sula, the second-biggest city and the country’s industrial capital, with Guatemala and El Salvador. The benefits were expected to be significant. It would promote tourism and enhance economic activity, as well as improving living conditions of the local communities in one of the poorest and most deprived regions in Honduras. That’s why the European Investment Bank made a €79.5 million loan and brought €3 million in technical assistance to the project.

Nevertheless, the project affected an estimated 740 households, including some 180 families that would be physically displaced or economically affected. Moreover, the area where the project takes place is home to about 40 000 indigenous Ch’ortí people. The Ch’ortí are primarily dependent on agriculture and provide seasonal labour for large coffee estates and the tourism trade. Women also contribute to the economic activity through craftwork and artisanal products.

Most of the Ch’ortí people live in extreme poverty and have a lower literacy than average in Honduras. Nearly 50% are unemployed and in general, they have poor healthcare access.

The Ch’ortí are descendants of the ancient Mayan empire of Copan and, according to the United Nations Declaration on the Rights of Indigenous Peoples, they are considered vulnerable. Although most of those affected by the road construction were not indigenous, the project area was regarded as a vulnerable socio-economic region. The Ch’ortís are represented by two legally recognised organisations—The National Indigenous Council for Honduran Ch’ortí and the National Coordinator for Maya-Ch’orti Rights.

When they first heard of the planned work, the Ch’ortí leaders were worried it would mean expropriation of their land. Indigenous populations had previously experienced difficult situations with projects in which they had not been consulted.

The UN Declaration on the Rights of Indigenous Peoples recognises the need to respect and promote the inherent rights of indigenous people. Article 26 of the declaration gives indigenous people the right to the land and resources they have traditionally owned, occupied, used or acquired. Moreover, the European Investment Bank’s environmental and social standard number 10 requires borrowers to uphold an open, transparent and accountable dialogue with all project-affected communities and relevant stakeholders in an effective and appropriate manner. Number 7 protects the rights and interests of vulnerable groups.

“A satisfactory stakeholder engagement plan had to be designed and implemented before any EIB funds could be made available,” says David Lopez, the senior European Investment Bank engineer on the project.

In line with the UN Declaration and the environmental and social standards, when the European Investment Bank decided to co-finance the project, it made clear to the government’s Secretariat for Infrastructure and Public Services, which is responsible for the construction of the roads, that stricter safeguard requirements would be a condition for its involvement.

“The vulnerability of the Ch’ortí settlements led the Bank to require more attention be given to protecting the rights and interest of the indigenous peoples,” adds Joana Pedro, the European Investment Bank’s social development specialist on the project.

To support this, an EU-funded technical assistance grant was made available to the project and, in view of the sensitivity of the indigenous people, it was agreed to recruit an experienced consultant responsible for relations with indigenous people. With the help of the consultant, a very proactive consultation took place, which informed the Ch’ortis of the details of the project. The Ch’ortí soon expressed a rather positive view of the project and recognised that the road project would bring them significant benefits.

This led to the preparation of the Indigenous People Development Plan, setting out mitigation and benefit-sharing measures. These included the upgrading of 56 kilometres of rural roads, so that the Ch’ortí communities have:

improved, climate-resilient access through the main road network to public services and economic centres
agricultural support for the indigenous communities
support for women artisans and preferential hiring of Ch’ortís as labourers for the construction of the roads.

The results were rather good. A large number of Ch’ortí were hired to work on the roads at a good salary, raising the average household income, and thus increasing the quality of life. The Secretariat for Infrastructure and Public Services also agreed to provide agricultural support through advice and provision of seeds. A year-round irrigation system was also set in place and contributed to food security.

The plan included the organisation of workshops to advise on and help Ch’ortí women artisans in their business activities and facilitate access to markets. The artisans created new collections and were able to sell their products at different events and shops.

These changes were reflected in an increase in children’s attendance at schools, thanks to improved household economies. In addition, improved year-round accessibility facilitated the commute to school, particularly during the rainy season.

The construction of the roads improved accessibility to the Ruinas del Copan, an archaeological site of the Maya civilisation that is declared a UNESCO World Heritage Site.

Further to the Indigenous People Development Plan, a broader consultation took place. This included a Resettlement Action Plan that was produced in consultation with all the affected people (including the non-indigenous). This plan set out a $4.1 million programme to finance the resettlement of families and cash compensation. It also provided for the accompanying measures to support most vulnerable affected people. Road safety measures were also taken into consideration, including road safety trainings delivered in the schools and municipalities.

A wider community with stakeholder engagement

Stakeholder engagement goes beyond transparency obligations. It includes civil society and the wider stakeholder community, allowing them to analyse the projects, the governance and decision-making processes. It increases trust in everything we do.

Ana Dilaverakis works in the Strategic Roads division of the European Investment Bank

6 February 2023

Development Solutions: How to listen

Indigenous people are stakeholders in Honduras

A wider community with stakeholder engagement

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