Development, Economics and finance, Government and governance, Trade and industry | Australia, Asia, The World

21 July 2022

Assessing the social impacts of major infrastructure projects is crucial for local communities, climate action, and sound investment, Sara Bice writes.

Massive infrastructure projects are getting underway across the Asia-Pacific region and the globe.

The scale and need for these developments is gargantuan. The G20 Global Infrastructure Hub estimates a $94 trillion investment is required to meet global infrastructure needs to 2040, across both developed and developing economies. Infrastructure is also being widely used for economic stimulus in many countries’ post-pandemic recovery.

Projects include all forms of transport, health and social infrastructure, housing and hospitals, schools and community centres, water sanitation, access and sewerage, renewable electricity generation, storage, and transmission, telecommunications, and residential and commercial buildings.

While infrastructure is commonly thought of as a technical exercise, it inevitably involves major socio-environmental impacts on large numbers of people. Indeed, it is everyday people for whom most major projects are built.

But the human side of infrastructure development is often marginalised in planning, approvals, and delivery processes, with regulatory and policy attention focusing primarily on technical, safety and environmental aspects.

While such a focus is understandable, given the complexity and nature of infrastructure builds, preparation for a project is incomplete without active assessment of its social impacts, which are just as important as good design and quality builds.

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Stakeholder and community pressure are an influential reason for costly project delays, which often create even more pain in the community. This is especially problematic when infrastructure projects are funded either directly by governments or with public-private partnership models, as the burden falls further on the taxpayer.

Such stakeholder and community concerns incorporate a wide-range of important matters, including Indigenous and First Nations’ People’s rights, cultural heritage protection, land access and acquisition, resettlement and commitments to sustainable infrastructure to meet climate needs.

In many jurisdictions, social impact assessment provides the main and sometimes only formal consideration of these types of concerns in project approvals and delivery.

Many major infrastructure projects are international in scope, whether due to intergovernmental funding model agreements or physical connection via infrastructure, such as the controversial Belt and Road Initiative, which involves projects in developing countries where local capacity and regulations might make impact assessment difficult.

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Active management of the social impact of projects like this is crucial for their success.

Several complex and important factors are coalescing in global infrastructure space right now.

Countries worldwide are rolling out new infrastructure at a heady pace, in the face of growing populations, climate change impacts, infrastructure shortages and dilapidation.

Infrastructure investment is also being used key economic stimulus for post-pandemic recovery, in addition to meeting local needs.

In light of this, the World Bank recently convened the first international Symposium on Social Impact Assessment in East Asia and the Pacific.

With over 900 registrants from 73 countries, the World Bank Symposium demonstrates that investor, developer and government concern for the social impacts of major projects is real and widespread. The event was the largest ever in the World Bank’s history of environmental, social, and governance (ESG)-focused symposia.

Above all, the scale of this event signals an appetite and a need for greater attention to the ESG components of major infrastructure selection, planning and delivery in an era of accelerating infrastructure investment.

It also shows how major infrastructure endeavours are becoming more connected internationally, and the need for multilateral bodies and governments to work collaboratively with leaders in the field to meet the planet’s critical infrastructure needs.

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