enodo-global-first-03Executives have a responsibility to maximize shareholder value. In today’s operating environment, communities have the ability to decrease corporate profits through litigation, agitation, protests and violence. A 2009 Harvard study, The Costs of Conflict with Local Communities in the Extractive Industry, identified these costs and their cascading effects across industries and sectors. Increased costs are generally attributable to three main areas: lost productivity from work delays, diversion of management time to deal with conflicts, and the suspension or abandonment of projects.

Lost Productivity: The Harvard study estimates a world-class mining project with capital expenditures of $3-5 billion will lose approximately $20 million per week due to lost sales from conflict-related production delays. One participant estimated a $2 million per day loss primarily due to the delay of revenue.

Diversion of Management Time: A former senior-level manager estimated spending only one-third of his time performing his primary duties, while the rest was spent managing internal and external community issues arising from conflict.

Suspension of Projects: Community conflicts shut down key power lines for a project, forcing the company to suspend operations at a cost of $750,000 per day.  A mine project in southern Peru was suspended following community conflict after companies had spent in excess of $1.5 billion on the project.

ENODO delivers its population centric analysis to extractive, oil and gas, mineral, and mining industries. Our community-based risk analysis and mitigation services deliver strategies to not only predict, but also mitigate risks and the costs incurred from disruptions to operations. Our methodology goes beyond traditional polling, surveys, and focus groups, avoiding the pitfalls of development initiatives and physical security measures. We anticipate issues and forecast risks that emanate from communities to advise our clients on potential threats. We then design and implement programs that create utility for communities without dependency on the company. With programs in place, we monitor activities and make recommendations to ensure their success.

Our clients increase their profitability and benefit communities where they operate. ENODO solves the complex social problems companies encounter so they can focus on the business of doing business. With the majority of threats emanating from local communities, ENODO’s capability is not only beneficial, but required.