Chapter 4: Guidelines for Public Consultations and Stakeholder Engagement

Both the experience of development practitioners and the literature on economic development confirm that the participation of stakeholders in the development process leads to programs that better reflect national priorities and have a higher likelihood of success. MCC is committed to this principle of direct engagement through the requirement that each selected country undertakes a timely, participatory and meaningful process of consultations with key stakeholders who are likely to be affected by the development and implementation of proposed compact programs. This requirement reinforces MCC’s commitment to accountability throughout the development process, improves the design of compact programs, strengthens relationships between each selected country and key stakeholders who are essential to the success of project implementation, and improves the long-term sustainability of a compact program’s results.

Requirements for public consultations and stakeholder engagement

Throughout the compact development process, MCC must ensure that each selected country has engaged in a process of public consultation and stakeholder engagement that includes civil society organizations, the international and domestic private business community, and other international development agencies, among other stakeholders. MCC also must ensure that each selected country has gathered information about the poor, disadvantaged and marginalized populations – including women – and taken their perspectives into account in the development of its compact program.

These principles inform a series of policies and procedures that apply to compact development. The MCC Environmental Guidelines require that compact projects are developed and implemented in ways that conform to the International Finance Corporation (IFC) Performance Standards on Environmental and Social Sustainability. IFC Performance Standard 1: Assessment and Management of Environmental and Social Risks and Impacts defines standards by which selected countries must disclose relevant information, identify and engage stakeholders, allow meaningful opportunities to participate and express views, and document the results of consultations.

In addition, the MCC Gender Policy requires that consultations be designed and implemented to allow both women and men meaningful opportunities to participate, that selected countries utilize gender analysis in involving stakeholders, and that selected countries provide evidence of participation in consultations throughout the compact development process.

Defining a public consultation and stakeholder engagement process

Public consultation and stakeholder engagement can be any communication about the proposed compact program that takes place between the selected country and one or more stakeholders. To be part of a consultative process, however, such communications should be part of an ongoing, two-way dialogue that is strategically planned, organized, and implemented for the purpose of gathering and disseminating information. Selected countries should view stakeholder consultations as an opportunity to improve each stage in the compact development process, rather than a tool or procedure designed simply to validate or confirm particular positions.

This goal is accomplished through two types of communication. First, selected countries engage stakeholders to disclose and disseminate information about the compact development process, the findings of the preliminary analyses, the concepts or ideas under consideration, the proposed projects, and the agreed compact program in a way that is timely, relevant, transparent, objective and meaningful. This type of disclosure ensures that stakeholders are fully aware of opportunities to participate in the development process and have sufficient time to consider the issues and formulate views. In the initial stages of compact development, information can be made available through a variety of channels such as targeted meetings with key stakeholders, larger public gatherings, on the internet, in the local print media or over the radio or television. At later stages of compact development, direct meetings with individual or small groups of potential beneficiaries or project-affected persons also may be convened.

Second, a selected country consults stakeholders to expand the range of data and evidence at its disposal and ensure that its decisions are based on the best available information. By actively seeking opinions, ideas, and expertise from stakeholders, a selected country gains access to a wide range of empirical inputs. Some inputs may be dissenting or even critical, but the diversity of inputs allows the selected country to challenge its initial assumptions, detect unintended consequences or other weaknesses, identify alternative courses of action, and obtain a clearer understanding of the broad national interests at stake. These adjustments enhance the selected country’s ability to make assessments, understand or prioritize results, or formulate concepts or proposals at each critical decision point, thereby raising the quality of its work throughout the compact development process.

Through consultations of these types, each selected country can establish constructive relationships with a variety of external stakeholders and maintain those relationships over time. The active engagement of stakeholders increases their sense of ownership and commitment to key decisions and outcomes leading up to the agreement and implementation of a compact program.

Planning and capturing public consultations and stakeholder engagement

After the selected country appoints a Compact Development Team, one of its first actions should be to develop a clear, comprehensive Public Consultation and Stakeholder Engagement Plan. The plan should put forward a system for consulting and engaging stakeholders that makes sense in the unique social, political, and institutional context of the selected country. Among other details, it should lay out general principles of transparency and openness; identify key groups of stakeholders; indicate the timeline on which they will participate; explain the methodology by which the selected country will consult them; define a mechanism for sustained, ongoing consultation; and set a general expectation that the results of public consultations and stakeholder engagement will be captured and documented. Because the location of specific compact projects will not yet be known, the plan also should outline a strategy to identify additional, relevant stakeholders once the targeted areas are more clearly understood.

The nature and frequency of stakeholder engagement may vary depending on the phase in the compact development process and the nature of the proposed concepts or projects being discussed. Under any scenario, however, the plan should ensure that engagement includes all relevant stakeholders with an interest in the outcome of the compact development process. Such stakeholders may include international development partners, such as the World Bank and other multilateral donors, bilateral donors, and private philanthropic organizations; public entities, such as national ministries and agencies, academic institutions, think tanks, and local governments; private business organizations, such as chambers of commerce, small business associations, trade or industry groups, individual companies and labor unions; civil society organizations, such as advocacy organizations for government transparency or accountability, environmental protection organizations, organizations dedicated to economic development or regional development interests, consumer advocacy organizations, professional organizations, social welfare organizations, organizations that represent the interests of women, organizations that represent the interest of the poor or minority populations, religious associations, and other non-governmental organizations.

To meet MCC’s rigorous standards, stakeholder engagement must include both women and men and be accessible to disadvantaged social groups within the selected country. The Compact Development Team’s plan should pay particular attention to any norms, societal practices, or legal barriers that may impede meaningful participation by persons of either gender, should acknowledge any risks of gender discrimination or inequality, and should propose specific measures to ensure equality of opportunities to share experiences, access information and provide feedback. In some cases, such measures may include the need for a separate consultative process with women, the poor, or other disadvantaged groups.

MCC will review and approve each Public Consultation and Stakeholder Engagement Plan to help ensure the participation of a broad and diverse group of relevant stakeholders.

Consultations in the Preliminary Analysis phase

Effective consultation is a two-way process that should begin as early as possible. For that reason, MCC encourages each selected country to initiate a consultative process early in the Preliminary Analysis phase to raise awareness of the country’s selection to develop a compact program, to explain the standards and requirements of selection, and to manage expectations about the timing, size and potential impact of a compact program.

At the same time, the selected country should begin engaging key stakeholders to introduce the Compact Development Team, outline the compact development process, and explain how critical decisions about the compact program will be made. This will inform stakeholders so that they will know how and when they can participate and how decisions will be made.

Once the selected country has initiated its analysis of constraints to economic growth, it should consult various stakeholders to understand their perspectives on impediments that restrict access to economic opportunities, distort equitable sharing of economic benefits, or otherwise restrict economic growth. Such consultations should include academic experts; business leaders and small and medium business owners; various trade and industry groups; and women and men of different ages, social classes, ethnicity, religion, and other social differences. As results from the constraints analysis become available, the selected country should validate those results with groups of key stakeholders. Information gathered through such consultations should contribute directly to the selected country’s final identification and prioritization of obstacles and sectors for further assessment and potential intervention.

Public Consultations and Stakeholder Engagement in later phases of compact development

Each selected country should continue stakeholder engagement throughout the remainder of the compact development process, taking care to follow up consistently with stakeholders that it has previously engaged while continuously evaluating the need to engage additional stakeholders as the process moves forward. Tailoring consultations to each phase of compact development enables stakeholders to describe economic and social obstacles they experience; discuss potential solutions that would work in a local context; highlight flaws in previous efforts to address these challenges; debate the technical design and requirements of new proposals; and provide feedback about the impact of a compact project as it is implemented. It also provides the government with a forum in which to explain what decisions have been taken and why. Specific standards for each phase of the compact development process are discussed in the relevant portions of the chapters that follow.

In particular, in preparing its Concept Notes and Project Proposals, each selected country should explain how it gathered and assessed stakeholder inputs on its proposed concepts and proposed projects. MCC also may request that a selected country produce a written Stakeholder Engagement Report to provide an overview of its stakeholder engagement process, catalogue the type and number of stakeholders consulted, capture stakeholder inputs, and explain how those inputs were used to improve the quality of key decisions and documents in the compact development process.