Industry influence with authorities vital to business
One of the lesser-known and less-understood functions in the local energy sector is the role of government — or more broadly, external relations. In fact, and I say this from personal experience, the government’s role is met with a mixture of quiet curiosity or deep suspicion by some of our local energy companies.
In researching the best way to approach a localised discussion on government relations, I canvassed views from some who have been or who are currently involved in government relations.
Specifically on the perception of the government’s role at the local level, one of my colleagues offered a view that I think best captures the challenge: “While a lot of the work requires table-top strategising, lobbying and data analysis, much of it also requires … underlying chess movements that demand requisite attendance on the cocktail circuit, being the spin doctor, navigating behind closed doors with key influencers and even media on occasion.”
It is because of this mix of “science” and “art” that the practice of government relations at the local level is akin to the practice of a "dark art."
The government’s lower-profile role in energy issues likely contributes to the lack of awareness of its role. Yet its role in this industry is clear — more than in most sectors, the government sets the parameters in which energy companies can operate.
The energy industry is heavily regulated, is a significant part of the economy and owes its legal license to operate to a direct contractual agreement with the government.
Additionally, given the scale of the energy business, small changes in fiscal or general business-related policy (such as local content, mandatory CSR, HSE changes) can have a major impact on both business value and delivery of the energy players.
Government relations is therefore a critical business enabler and an important function for operators.
So what exactly does a government relations person do in Trinidad and Tobago? Well, to put it simply, a good government relations professional provides access and influence.
Access refers to the ability to appropriately connect with the political and technocratic decision makers and policy makers and to those who influence such actors. It is no coincidence that many retired public servants continue their careers in roles such as these primarily because of their ability to use their contacts and experience to leverage access.
In a small and relatively informal country such as ours, access is less of an issue than in some larger societies.
The social distance between Joe Public and our political elite is not that substantial — we all know “someone who knows someone who knows the Minister.”
The bigger challenge for this role, however, is that of influence.
Influence is based on a number of factors, the most important of which is shared interest of the parties involved and the level of trust between them.
In that regard, influence is gained through much more deliberate effort and work.
It requires an understanding of the needs and drivers of the other party, an ongoing system of engagement focused on building trust and connectivity and a thorough review of the business agenda of the firm in order to “find the join" the area of confluence or aligned interest that will allow a politician, technocrat or regulator to relate to the issue and connect with stakeholders.
From my experience, there is also an important part of the "how" in the local context that can create challenges for expatriate leadership.
Culturally, we tend to enter such business conversations with a sort of "connectivity" phase — a few minutes at the start of the meeting that might include general chat about topical issues that might seem irrelevant to the topic at hand, but the banter can be critical to setting the right tone and even the context for the ensuing conversation.
These skills cannot be acquired in classrooms or in training rooms. They are often innate or learnt with practice.
It is this kind of adeptness that makes a good government relations operative invaluable to foreign companies and their representatives.
Does this have any relevance to the energy sector outside of multinational corporations and to policy more generally?
First, I would suggest that as the local service sector companies begin to look to international markets, this is a critical skill to support expansion.
The ability for the local CEO to connect to the Minister and to trigger the “ole boys” (and girls) network to access decision makers suddenly disappears in the international context.
Connectivity will depend on the hard graft (this word is being used deliberately) of building relationships in an appropriate — and legal — manner. It means that a government relations perspective should be integrated into any new market entry strategy.
While we live our own reality here in the Caribbean, it is also clear that anti-bribery and anti-corruption policies from many of the multinationals are impacting the way they contract with third-party contractors and suppliers.
In that regard, it becomes more important to ensure that companies — especially small local suppliers — learn how to gain influence through legitimate means.
In this regard, a government relations capability can be considered a business risk management strategy — a demonstration of a firm’s commitment to fair practice — and possibly a positive competitive differentiator.
The relevant policy area that needs to be improved pertains to the transparency of interactions conducted for the purpose of lobbying.
In the UK, public officials and legislators are required to publish their meetings and contacts with private companies, including energy companies.
This to me would help add confidence that firms’ lobbying of politicians and technocrats is conducted in a transparent manner.
For instance, it will allow the population to better understand the motives behind questions asked in Parliament by MPs: Are these delivered following lobbying from special interests or companies? Or do we even understand the corporate drivers — if any — behind policy changes?
It is a logical evolution of our democratic and legislative processes to have such lobbying interactions made more visible and open to public scrutiny.
There is no doubt that our industry’s context is different. However, the multinational energy companies that operate in the local energy sector have always understood that as “guests” in the country, they must make an effort to both understand and connect to the local decision-making structures.
I think it is time we begin to bring light to this “dark art” and ensure that the “science” and “art” of government relations is acknowledged and incorporated as our energy service sector begins to internationalise.