The three LNG plants under construction on Curtis Island off the coast of Gladstone, Australia, represent the greatest concentration of Bechtel projects anywhere in the world. These projects will help Australia meet the world’s growing demand for low-carbon fuels to power homes, transportation, industries, and cities. Yet, the potential economic, social, and environmental effects of these massive projects on the small coastal city of Gladstone have been significant. A “trust deficit” with its nearly 35,000 residents—which could potentially impact the projects’ certainty of delivery, staying on budget, and reputation—required us to rethink our stakeholder engagement approach. Bechtel worked with our customers and partners to shift from a transactional model of stakeholder engagement to a transformational model of stakeholder trust.
Challenge
Bechtel first arrived in the Gladstone community for the construction of the Boyne smelter in the 1970s. For more than 35 years, we have remained in the community, building or expanding many of Gladstone’s industrial icons. Generations of the community’s residents are familiar with Bechtel and our ongoing presence in the region.
However, when Bechtel’s award for the simultaneous construction of three LNG facilities was announced in 2010, we faced a confluence of new issues related to the community and the indigenous population. The community was experiencing “consultation fatigue” based on decades of industry presence and development in the area, so there was little to no understanding of the potential impacts of the construction on local businesses, marine habitats, or local housing prices. The standard practice of community consultation was not enough to overcome the heightened mistrust of the LNG industry in general or of Bechtel’s ability to manage the construction of three large projects at the same time in a small community.
There were internal challenges as well. In a typical project setting, a Bechtel team works directly with the customer to deliver the project. With three LNG facilities constructed by the same contractor, we had to change the way we deliver projects to retain our execution team structure while optimizing synergies across the projects. One of the key areas identified was stakeholder engagement.
Solution
Given the long duration of the construction and operational phases of the projects, we could not simply just engage with the residents when issues and grievances turned up, and then disengage. This approach would do little to address the community’s trust deficit in the projects. Because the projects’ delivery is directly linked to its effect on Gladstone residents, we had to develop the residents’ emotional and technical connections to the projects. That is, the people of Gladstone needed to become the promoters and advocates of the successful completion of the projects, from construction to operations.
We established a new, multifaceted organization within the impacted community called the Centralized Services Organization (CSO). Its dedication to advancing stakeholder trust was central to project execution and served as its organizing principle. In this way, some of the CSO attributes are similar to another commonly used CSO: civil society organization. In both cases there is an underlying focus on bridging the transparency and trust gap between the community and the projects.
The CSO helped established a number of committees comprising local police, industry managers, customers, community representatives, indigenous leaders, and small business owners to address concerns ranging from health and safety to the influx of workers. For instance, escalating rent and its impact on the Gladstone economy was a significant issue of concern. We worked with local housing organizations to base our rental prices on a monthly market analysis and capped it at a median rate to minimize adverse effects on the community.
In addition, the CSO supported a workforce investment plan to engage local charities and organizations. What is unique here is that individual workers from the project were empowered to engage their respective neighborhoods, assess priority issues, and use a participatory process to allocate technical and financial resources. This approach enabled our workers to serve as advocates for their communities and foster local ownership of the projects’ sustainable outcomes. Our colleagues also joined their families and neighbors in regular discussions in shopping centers and at community events, as well as during boat tours and “family open days” around the LNG facilities, to experience and connect with the projects.
It was important for us to minimize “boom and bust” issues commonly associated with project entry and demobilization. In advance of commencing the construction of the plants, we started a training and employment program with the indigenous and local community to transition the workforce from an earlier Bechtel project in the region. We also organized business workshops to help entrepreneurs and small firms prepare for the economic impacts of demobilization, such as leasing instead of buying equipment and diversifying their businesses beyond the LNG contracts.
Outcomes and Learnings
Based on Bechtel-conducted surveys of 45 community leaders (with an annual response rate of 95 percent), community perceptions of Bechtel and the projects improved since the CSO became operational in 2012. By giving the community an opportunity to experience the projects firsthand, and by addressing sensitive issues quickly and consistently, we have helped foster a deeper appreciation of the LNG projects and their social, environmental, and economic benefits. This effort is leading to a positive, more sustainable handover of the LNG projects to our customers and to the communities.
More than $1.5 billion in local wages have been paid, more than $900 million in local purchase orders and contracts spent, and 20,000 contracts awarded since construction started. In addition, more than 10,000 local people gained employment on the Curtis Island projects, including 436 trained adult apprentices—the largest apprenticeship intake in the country’s history—and more than 500 indigenous people. Bechtel has since handed over operational control of Queensland Curtis LNG, one of the three projects, to the customer. All three projects are now shipping their products to the world market.
Bechtel is not new to big projects and the effects they can have on communities and the environment. But every community is unique and every encounter is different. For these LNG facilities and their specific context, one of the key learnings for us is that we cannot control when we come into a project; so early engagement with affected communities is not always possible. Next, gaining trust takes time, and who arrives in the community first—and how they arrive—can greatly affect the level of trust in Bechtel and the project. Getting the right people and structure in place was essential, especially since local uncertainty and insecurity about the potential impacts were already pervasive in Gladstone. Against this backdrop, the scale, scope, and complexity of the LNG projects needed more than the usual community engagement team. It required a specialized organization, embedded in the community, that would promote collaborative learnings and solutions with locals to determine how the projects could deliver sustainable outcomes. And for the next phase of the projects, the benefits of this trust are handed over to our customers and to the communities when we complete our work and leave.