Building trust with the local community

To analyze the process of building trust between company and local community we need to briefly discuss the specifics of the latter. The company is located in the city of Podporozhye, and while some of its production sites are also there, others are located in the Podporozhye region. Historically speaking, most of them were once located in the village of Vazhini.

At the time the research was being conducted, the situation with Vazhini changed, but the district was still considered to be a traditional site for the Metsaliitto Podporozhye company’s social responsibility. In addition, at the time of the study most of the logging directed by the company was being undertaken in the area of the Vazhinskiy rural settlement (A rural administrative unit, which can include several villages located in the neighborhood), and hence the interests of the inhabitants of the villages continued to be affected. Another specific feature of the local community has been the presence of the Grishino ecovillage in the Vazhinskiy rural settlement.

The Grishino ecovillage represents, firstly, its small local community consisting of several families. At the same time, they are formally organized as an NGO «non-profit partnership, the «Ecovillage Grishino». The specific feature of this village is that it is connected to a large social network whose members do not live permanently in the ecovillage but come there periodically to volunteer and to participate in seminars and other events. Thus, these create a broad supporting network living in different cities, primarily in Moscow and St. Petersburg. The main idea of any ecovillage is the establishment of an environmentally friendly lifestyle and the conservation of nature [16]. In consequence, the inhabitants of the Grishino ecovillage and those who support them were very interested in conservation of the forests around the ecosettlements, and hence they were one of the most important stakeholders in the process of forest certification.

Before the start of the pilot PEFC certification project, interaction was built up mainly between the local community, represented by the local administrations and social institutions of the city of Podporozhye and the village of Vazhini, and the enterprise itself. In interviews, emphasis was placed on the positive role played by the director of the company as a mediator between the Finnish company and the local community [8, 15]. Partly as a result of his efforts, a good relationship of trust emerged between the local and regional administrations and the enterprise. The administration and the people receiving benefits from the company regarded the company as socially responsible. However, manifestations of the company’s social responsibility as a voluntary step went against their own direct economic interests. So by the time of the study the company had agreed to pay about 3.5 million rubles into the district budget, which represented 10 per cent of the rent, or about 12 rubles per harvested cubic meter of wood [8].

It is notable that, to begin with, these sums were defined as mandatory payments under the lease agreement, which was a requirement of the state. But after the remission of this requirement, the company continued to support the district budget at the same level. As we have noted, it was the director of the company who took the active position in this case. He became a ’spokesperson’ for local interests. These payments were considered by the Metsaliitto concern to be compensation for the use of local resources and the restoration of justice in the distribution of benefits. The company also periodically provided social assistance for the Vazhini community, such as partially funding the celebration of the 450th anniversary of the village. This kind of behavior on the part of the company confirms the notion that one of the indicators of trust is the company’s ability to meet the interests of the local community, even in situations requiring the direct payment of costs.

Another situation affecting trust was observed in some of the small villages and hamlets, including the Grishino ecovillage, located near the logging area of the Metsaliitto Podporozhye company. The villagers were disturbed by the logging. Several logging companies were operating in the area, but Metsaliitto Podporozhye was the largest and best known. The local population did not distinguish between the loggers and did not know exactly which forest had been leased by whom. They believed that Metsaliitto Podporozhye was responsible for a major part of the forest, and they expressed their concern in the following statement: «Finnish loggers are cutting down our forests and taking them away to their country, leaving us with nothing» [5].

Thus in these villages it can be stated that the population felt a high level of distrust in the company. Before certification, Metsaliitto Podporozhye was unworried by such a situation since they had no formal basis or need to construct a dialogue with the local population. Hence, they undertook no initiative for interaction with these sparsely-populated villages and were scarcely conscious of the existence of the problem. The local population, in turn, were sure that they themselves could not alter the situation. In fact, the company and the local residents had no objective reason to engage in constructive dialogue.

Once, however, the decision had been taken by the Metsaliitto concern to initiate its first pilot (in Russia) PEFC certification at Metsaliitto Podporozhye, which was to become a model certification, the enterprise was obliged to take steps to inform the public and to create an image of an environmentally responsible company. For this purpose, Metsaliitto Podporozhye conducted a series of workshops at regional and district levels, with the participation of representatives of environmental and social NGOs from the national, regional, and district levels.

These events contributed a lot to the creation of a new image of Metsaliitto Podporozhye as a more open company whose activities now became clearer and more transparent. In addition, during the process of certification the company started more actively developing new and sustainable forest management practices. This led to new co-operation with NGOs, as they now shared common goals, which is one of the indicators of the process trust-building. Experts from the NGOs and universities became involved in the selection of rare and Red-List species and ecosystems. Participants at their seminars were also informed in detail about these activities. Hamlets such as the Grishino ecovillage were, however, not yet involved in the process at this initial stage [14].

The particular role of informing the local population was played by social experts from NGOs. As both a part of the social network of the Grishino ecovillage and also experts on the social issues involved in the forest certification, they conducted a focus-group for participants from the ecovillage. The experts informed them about the corporate policy practiced by Metsaliitto Podporozhye, and discussed the opportunities for interaction with the company which would be provided by the standard of certification, including ways for the ecovillages to influence the company’s decisions. This mediation was important and quite efficient, since the experts enjoyed credibility in the community, not only as members of their network and of the company but also as experts in the field of social interaction within the framework of voluntary certification.

In light of the work conducted by these experts, the residents of the Grishino ecovillage changed their minds about Metsaliitto Podporozhye and decided to enter into dialogue with the company within the framework of PEFC certification. Here again we can observe an indicator of common goals and values. The activists of the community realized that they shared certain common objectives with the company, and hence there was a basis for building up a degree of mutual interaction. It should also be noted that the company actually demonstrated its declared openness and readiness to interact. Thus, the residents of the ecovillage, as stakeholders, were provided with maps of the leased forest areas and other necessary information related to logging.

The ecovillages and the company had found their common goals and values. According to the certification requirements and corporate policy, the Metsaliitto Podporozhye company was developing sustainable forest management practices, and the ecovillages were also interested in this. The company was involving seasonal workers fin reforestation and it invited ecovillages to participate in the forest-planting. Ecovillage representatives were included in the list of stakeholders, and so they started receiving comprehensive information about the company’s public events. This resulted in an improved attitude to the company, which was no longer perceived as impersonal «Finnish people who take out resources» [10]. The local communities could now see in them a company with which they could interact. This marked the beginning of trust-building between company and communities.

The next stage in closer interaction and trust-building was related to the participation of the ecovillage and volunteers involved in the ecovillage in the reforestation work organized by Metsaliitto Podporozhye on plots located near the ecovillage. The work lasted one month, and some of the volunteers worked even without being paid, because they believed the action to be useful. As a result, the relation ship between the two parties became even better. The ecovillages stopped considering the company as the alien threatening their forests. The company also started regarding the ecovillages as their colleagues. In addition, the local state forest agency, controlled the planted plots, paid attention to the fact that the quality of the plantations made by the ecovillages was much higher than that produced by the usual seasonal workers. Thus, a strong relationship of trust came to be formed between the ecovillage and the company, based not simply on the interaction but also on the good results of a particular job.

A new stage of interaction between the ecovillage, the old villages, and the enterprise which tested the new-found trust was an initiative of the ecovillages and local residents concerning the conservation of their socially valuable forests. The local population were concerned by intensive deforestation around the ecovillage since the nearby forests were a traditional area of recreation and used for gathering mushrooms and berries. The ecovillages created an ’eco-ethno-path’ in the forests that could be destroyed by logging. They were concerned even more by the state of the local forest and river ecosystems. People noted that fewer animals came into the woods, and the River Vazhinka was growing increasingly shallow.

They saw the cause of these processes in the clear-cutting system, where the clear-cutting was carried out, for instance, in an area of 50 hectares and then, within only a few years, nearby plots were cut again. To oppose these practices and to conserve their socially valuable forests, the ecovillages proposed the idea of a 10 km zone of sustainable forest management around the EV Grishino and the nearest village of Soginitci. This initiative was supported by the small populations of the villages of Grishino and Soginitci, as well as by the local authorities of the Vazhinskiy rural settlement.

The residents’ initiative group requested a halt to any logging within a 4 kilometer zone around the settlement, since within this zone most of the forests had already been cut down, and the remainder was necessary for the everyday needs of the local people. Within a 10 kilometer zone they also proposed only selective logging. They addressed this proposal to the company, the local authorities, and the public, suggesting that they «eliminate clear-cutting within a 10 km area located around their villages, replacing them by selective logging. They explained that in the case of selective logging, the forest could conserve all its functions and properties, including climate-forming and hydrological functions, so that springs and rivers do not suffer; the habitat of the forest community: animals, birds, etc.; the habitats of various plants, including rare species; an area for gathering mushrooms and berries; the recreational function - as a place of recreation and as a vital environment for the growing ecovillage population» [4]. The address was in line with the environmental and social corporate policies of Metsaliitto and the certification requirements.

The initiative group addressed this proposal to Metsaliitto and to another logging company operating near Grishino. Metsaliitto Podporozhye immediately entered into a constructive dialogue with the residents. In my opinion, such a quick and positive response was caused, on the one hand, by the ongoing process of certification with its focus on the corporate policy concerning sustainable forest management, and on the other hand, by the already established relationships of trust. Both parties realized that to obtain formal permission to create a 10 kilometer area with no clear-cutting, they would have to approach the regional authority, which would take a long time. In consequence, Metsaliitto Podporozhye displayed its willingness to compromise and so, as a first step, agreed on a moratorium on logging in the forests that were of greatest important for the local people. This decision could also be regarded as fulfillment of the certification requirement concerned with the conservation of socially valuable areas of forest, and hence both parties had in this case a common objective, a factor that normally creates and strengthens trust. A short time later, in response to the proposal made by the Grishino ecovillage, the Metsaliitto Podporozhye company suspended logging within the proposed 10 kilometer area surrounding the village until comprehensive approval had been received from all stakeholders on the management of the forest, which would also require the agreement of the regional bodies governing forest management. The forests located in this area were subsequently excluded from the forest declarations of 2009 and 2010, i.e. they were not included in the plans put forward for logging [22].

In the course of interaction with the company on the issue of conservation of the 10 kilometer area of the forest the initiative group demonstrated their flexibility and constructive approach. They did not simply put forward a demand that logging be prohibited, but were searching for a mutually acceptable compromise. They participated in extensive consultations with experts, both from the company and from other organizations. For example, in the course of the negotiations and consultations they discovered that in wet spruce forests selective logging would not result in the preservation of the natural environment, so the decision was made to move over to clear-cutting, and both parties defined their volume as 4 hectares (the authorized area had been 50 hectares) [13].

The parties also corrected other parameters of the clear-cutting, in addition, the company decided that all such logging would be agreed with the ecovillage, and the subsequent amendments would be entered in the documents defining the forest utilization. Given the desire of the Grishino ecovillage to develop sustainable forest utilization in areas adjacent to the village territory, the Metsaliitto Podporozhye company proposed cooperation with the ecovillage in the area of reforestation, the carding of stands, conducting environmentally-oriented selective cutting, the development of demonstration forest sites, etc.

Dialogue between the initiative group and the loggers was conducted with the participation of the regional authorities and the Public Council affiliated with the regional Committee of Natural Resources. The three-year dialogue resulted in a mutually acceptable solution. The relationships of trust between the company and the residents strengthened in the course of this interaction. In this case, therefore, we can see the manifestation of all four indicators of trust -similarity of objectives and values, commitment to a dialogue and compromises on the part of the company, willingness to conduct a constructive dialogue and to reach compromises on the part of the community, and the formation of «human relationships», i.e., personal trust between residents of the Grishino ecovillage and the managers of Metsaliitto Podporozhye.

I will present one further illustration of trust-building between the company and local activists that demonstrates shows how private trust is formed. After Metsaliitto Podporozhye received its PEFC certificate, the company held a workshop for stakeholders from the various structures at which they informed the participants about their practice of sustainable forest management. Representatives of the Metsaliitto company international office were also present at the seminar, and representatives of the Grishino ecovillage were also invited to the workshop as participants and speakers.

They were expected to talk about how they had interacted with the company as local stakeholders. After many positive speeches by the company and by experts about the successes achieved by the company, the ecovillage activists criticized the logging that had been done by Metsaliitto Podporozhye. On the one hand, they recognized the value of their constructive cooperation with the company, but on the other hand they showed photographs illustrating the former forest and the same plot after large-scale clear-cutting. The photographs and declarations of the ecovillages made a strong impression on the participants and caused some confusion. The ecovillage residents used this moment to put forward a proposal for the creation of a 10 kilometer area of sustainable forest management around their village (this event occurred before any final decision on this issue had been reached) [21].

Thus, they were able to use this event to spread the word to a wider audience of stakeholders and also to the top management of the Metsaliitto company. It is notable that this incident has not worsened the trust between the ecovillages and the company. The relationship of trust, including personal trust, established during the continuous interaction turned out to be strong enough to face this confrontation. As a result, the declaration made by the ecovillages has persuaded the company to move toward making the right decisions.

 

Conclusions

The analysis in this case study demonstrates how trust between a subsidiary of an international company and a local community in Russia can be built up. The framework for trust-building is the company’s corporate policy, which is implemented in all of the enterprises run by this international company operating in numerous countries, and also by international systems of social and environmental responsibility adopted by companies, including, in the present case, the PEFC voluntary forest certification system.

Internal corporate policies become factors that help to build up trust between a company and its employees in cases where goals and values declared in the corporate policy coincide with similar ideas, goals, and values promoted by employees in the course of their implementation (the first indicator of trust-building). The case examined the present study shows that if the leaders of the subsidiary are able to find this link and adapt the company’s international policies to the expectations and perceptions of its employees, then it will build trust between them.

With regard to trust-building with local communities, international corporate policies have a considerably small impact in this area. Instead, a voluntary certification system will play a larger role here and will move to the forefront of negotiations. There are numerous examples of the beneficial influence of the FSC certification system in building relationships of trust between a certified company and a local population.

Our particular case shows that PEFC certification, which is often criticized for the weakness of its social component, has nevertheless had a decisive influence in the construction of relationships of trust with a local community. This is probably due to the fact that the Russian national PEFC standard was developed on the basis of the FSC system, as noted above. In addition, the active involvement of social and environmental experts and the presence of an active, competent ecovillage community focused on sustainable development and sustainable forest management also strengthened the potential of the impact of certification on building relations of trust between the community and the company.

The lack of trust between the company and the local community that existed at the start of the present research, caused by a generally negative attitude to clear-cutting and to a foreign (Finnish) company, was gradually overcome by the company’s openness and by a constructive dialogue, cooperation, and mutual compromise between the community and the company. The Metsaliitto brand as that of a Finnish company which was initially perceived negatively, as a company exporting resources away from the local community, later became a synonym for an environmentally and socially responsible company, especially if compared to other local businesses.

The indicators of trust proposed by the author became evident in the course of the case study. The similarity between the goals and values of the company and the local community, including company employees, became the basis for trust-building. The second and third indicators, namely, an openness and willingness to enter into dialogue and constructive intercommunication, on the part of both the company and the community, played a key role in the process. In particular, the subsequent practices of the company and local community contributed a lot to the building up of trust: seminars, workshops, and roundtables on certification conducted by the company for all of its stakeholders, consultations with the local community conducted before and during the certification audit, the active stance of the Grishino ecovillage residents, their suggestions and work with the company and the authorities concerning the change in forest utilization practices in the 10 kilometer zone around ecovillage, the transition to sustainable forest management in selected territories, and the participation of the local people in reforestation work.

Finally, the agreement on changing the practices of forest utilization in the 10 kilometer zone around the ecovillage and nearby villages consolidated the trust. The fourth indicator, namely, the forming of «human relationships» between the activists in the local community and representatives of the company also turned out to be very important. It characterizes the relationship of personal trust. This kind of relationship between the managers of businesses and activists helped to overcome acute situations arising in the course of interaction.

 

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