A cost-effective, skilled and productive workforce is necessary for the competitive delivery of large-scale mining and oil and gas resource sector projects with labour representing 20 to 40 percent of the capital and operating cost. Companies therefore put considerable planning into jobs decision-making during the project design and approvals phases to optimise the workforce model. Less is known, however, about how consideration of the social context informs this process, especially in developing economies where the imperative for job creation is most pressing. As used here, the term ‘social context’ refers to the location of the resource project and associated infrastructure and the social, cultural, economic, and political characteristics of the nearby localities and regions.
The thesis addresses the following question: what weighting is currently given to the social context in jobs decision-making for large-scale resource projects and why and how should resource companies institutionalise its fuller consideration? The study uses a grounded theory methodology, drawing on analysis of data from semi-structured interviews and a case study of a large-scale gas project in Papua New Guinea. The research culminates in a series of propositions, informed by institutional theory that provides new insights on why companies should give fuller consideration to the social context in jobs decision-making. The propositions connect jobs decision-making and the social context to the project business case, the regulatory approval process, and the attainment of a ‘social licence to operate’.
Analysis of the interview data confirms that jobs decision-making is mostly seen by companies as a technical process. The embedding of personnel with social expertise in jobs decision-making processes is often dependent on the relationship with the project team. This situation can constrain how companies consider the social context. Executives increasingly recognise the need for improved practice, but it continues to be difficult to integrate this expectation into project delivery. Being able to demonstrate a favourable business case is typically the priority for companies, followed by meeting project financier and regulatory requirements. Local and community expectations are next in importance. The research indicates that in the absence of regulatory requirements, and where companies have assessed that conflict is unlikely to impact on the project, there will be less emphasis placed on meeting local and community expectations.
The five interconnected themes of business factors, communities of interest, socio-economic considerations, service delivery enablers, and broad-based development define how the social context can impact on and inform jobs decision-making. Feedback from interviewees and a case study of the Papua New Guinea Liquefied Natural Gas Project confirms the practical relevance of these themes, especially in a third world, developing economy context. The research also identifies that the social impact assessment (SIA) is not an appropriate mechanism for the more commercially-sensitive thematic analysis required to draw out these issues to inform jobs decision-making. Social analysis should be separate from the SIA and excluded from public documentation in order to provide the maximum potential for the social context to guide jobs decision-making.
The thesis concludes that fuller consideration of the social context in jobs decision-making through the alignment of internal cultural-cognitive, normative and regulative elements will result in better company and community outcomes and a greater capacity to demonstrate a mutual enduring benefit (‘shared value’). A ‘Towards Best Practice’ jobs decision-making tool shows how companies can institutionalise fuller consideration of the social context in practice by strengthening internal leadership and business processes.