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Using the impact assessment tools to address bribery and compensation;the real estate developer's perspective

Written by Posted On Friday, 14 July 2017 23:50

I staunchly agree with socially responsible real estate developers’ no-bribes policy. This is because a no-bribes policy will allot a real estate developer the opportunity to form a cordial sustainable long term relationship with all relevant stakeholders of the real estate development when the impact assessment tools are used effectively. This is possible mainly as a result of the transparent nature of negotiations with relevant stakeholders. Transparency enhances trust and legitimacy. It is no doubt that socially responsible real estate developers can lose some projects for not giving bribes in some cases but in the long term, a no-bribes policy will give the real estate developer a good reputation which will help in building a strong brand for the real estate developer. The giving of brides by a real estate developer defeats the whole purpose of being a socially responsible real estate developer.

There are a couple of key difference between bribes and the payment of compensation when using the impact assessment tools. One striking difference between bribes and the payment of compensation is transparency. Brides are considered to be illegal so it is done in secrecy. Negotiations involving bribes are not transparent but the payment of compensation is transparent. Assessors and technical experts give a detailed account of the adverse effects of the real estate development on the social and environmental community. This assessment precedes the payment of compensation.

A real estate developer should be willing to pay compensation when the adverse effects of the real estate development on the social and environmental community cannot be mitigated. A classic example is when a real estate development will dislocate a group of people who settle on the land. If the design of the project cannot be altered in such a way that provisions will be created for this group of people to continue settling on the land then the developer will have to pay compensation.

The appropriate amount will be determined by assessors and technical experts in conjunction with representatives of all relevant sub-groups in a problem-solving process in such a way that the interest of all stakeholders will be fairly represented. This arrangement will include a facilitator who will ensure that all interests of stakeholders are fairly represented.

Socially-responsible developers can work to create value for the community by carrying out social impact assessment and environmental impact assessment in conjunction with representatives of all relevant stakeholders. The key to creating value for the community is the ability of the developer to understand stakeholder interest and be willing to find ways to meet these interests.

The creation of value is different from bribes and compensation. The creation of value fosters an unwavering trust between the developer and all relevant stakeholders. The creation of value unlike bribes and payment of compensation enhances the developer’s reputation, saves money, increases public support for the project and promotes a sustainable long-term relationship between the developer and all relevant stakeholders.

Credit: Urban and Environmental Planning, Massachusetts Institute of Technology

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Alexander Ayertey Odonkor

Alexander Ayertey Odonkor is a chartered economist and a chartered financial analyst with expertise in real estate finance and investment . Alexander completed a professional education in electronic trading in financial markets from the New York Institute of Finance. He holds a postgraduate certificate in real estate development from the Massachusetts Institute of Technology. He is a fellow of the Global Academy of Finance and Management. He has a stellar international experience in financial programming and policies from the International Monetary Fund.

www.alexanderayerteyodonkor.com

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