Leveraging stakeholder relationships

Most of us have heard the saying, “who you know is as important as what you know.”  This holds true for businesses subject to complex environmental laws and regulations.  Proactively nurturing relationships with environmental stakeholders often benefits the regulated entity.  Why?  Because resolving an environmental issue is easier if you know the person across the table, understand their motivations, and have developed a basic level of trust.  Also, one can never be sure when an environmental regulatory issue may arise.  The time to meet stakeholders is before a facility has an incident or a major compliance issue.  

But what about the risks?  Won’t getting to know regulators and other stakeholders just make me a target for more aggressive enforcement?  In our experience, that is rarely the case.  Working through issues with stakeholders who understand a company’s industry and facility is easier than with stakeholders who do not.  Developing relationships is most advantageous with individuals that a company will need to work with on a repeat basis: plant inspectors, permit writers, key program staff at regional offices of environmental agencies, local government officials, and leaders of community groups.  For less common but potentially serious matters, such as criminal investigations brought under environmental laws or other litigation, companies should be circumspect in how they deal with government officials and other stakeholders.  When in doubt, companies should discuss questions about interactions with stakeholders with an experienced attorney.

So how does one build effective relationships with environmental stakeholders?  

  1. Be honest.  This does not mean that a regulated entity cannot protect confidential information or must be an open book.  But it does mean that information that is shared with stakeholders must be correct.  This entails avoiding speculation and confirming the accuracy of facts and data before communicating those to stakeholders.  “I don’t know” or “we are reviewing” are perfectly acceptable responses, and are preferable to providing potentially incomplete or inaccurate information.

 

  1. If you say that you are going to do something, do it.  When resolving enforcement actions, obtaining permits, and completing environmental audits, regulated businesses are asked to make commitments.  One of the fastest ways to undermine credibility is to fail to do something that was promised.

 

  1. Don’t miss deadlines and clearly communicate on timing issues.  Some deadlines are statutory or regulatory.  These must be met.  But for other deadlines regulators have the discretion to grant an extension.  Extension requests made well in advance of the deadline and with an explanation for why additional time is needed are usually granted.  

 

Introduce yourself, preferably in a context outside of an official interaction.  This can be as simple as an introductory phone call, scheduling a meeting, or networking at conferences or community activities.  Stakeholders that are particularly important: enforcement staff and inspectors in the regional office of the state and federal environmental agencies, local government first responders, and environmental and community groups in the immediate area.

  1. Take environmental compliance seriously.  This does not mean that a facility must never have environmental compliance issues.  But it does mean that when such issues do arise, they are promptly corrected and disclosed in accordance with applicable reporting requirements.  Having the same type of violation occur repeatedly, or failing to report a violation, damages a company’s credibility and sends the message that compliance is not a priority.  This will make the company a target for enforcement.
     
  2. Be respectful.  Understand that regulators and environmental groups have a job to do. Professional courtesy goes a long way.  
     
  3. Elevate disputes through the proper chain of command.  Sometimes raising an issue to agency management is necessary.  Improperly going over a lower-level staffer’s head is a great way to cause agency management to be defensive and reduces the chance of obtaining the desired outcome.
     
  4. Offer to educate.  Regulators are tasked with enforcing environmental laws for a wide array of industries but may lack a good understanding of your specific industry or facility.  One way to build goodwill is to offer an educational tour of a facility to regulators for training purposes.
     
  5. Use trade and industry groups to help make introductions.  These organizations usually know key policy personnel at regulatory agencies and should be willing to help their member companies network.
     
  6. Hire counsel and consultants that understand the importance of relationships.  For professional service providers, credibility is currency.  When selecting lawyers and environmental consultants, ask how they approach relationships with environmental stakeholders.

While these tips will not prevent disputes under environmental laws, successful development of relationships with stakeholders can help a company more effectively resolve issues that arise.

Chris Smith