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2016 | OriginalPaper | Chapter

9. Stakeholder Opposition Risk

Author : George Nwangwu

Published in: Public Private Partnerships in Nigeria

Publisher: Palgrave Macmillan UK

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Abstract

This chapter discusses stakeholder opposition risk. It commences with an analysis of the different definitions of “stakeholders” available in extant literature. The subsequent sections examine the theoretical basis for stakeholder engagement in projects, which is stakeholder theory and, by extension, stakeholder accountability theory both of which are employed to analyse stakeholder opposition risk. In the concluding sections, a case study of the Lekki toll road concession is carried out and recommendations are offered on how better to manage stakeholder opposition risks in Nigeria.

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See, however, the following, where brief mention has been made: Michael F. Farrel (2003) “Principal-Agency Risk in Project Finance”, International Journal of Project Management, 21(8): 547–561; Elmar Kutsch and Mark Hall (2005) “Intervening Conditions on the Management of Project Risk: Dealing with Uncertainty in Information Technology Projects”,International Journal of Project Management, 23(8): 591–599; L.-Y. Shen, (2006) “Role of Public Private Partnerships to Manage Risks in Public Sector Projects in Hong Kong”,International Journal of Project Management, 24(7): 587–594; K.T. Yeo, and Robert L.K. Tiong (2000) “Positive Management of Differences for Risk Reduction in BOT Projects”,International Journal of Project Management, 18(4): 257–265.

See the following, where this has been mentioned as one of the PPP project risks: Nur A. Karim (2011) “Risk Allocation in Public-Private Partnership (PPP) Project: A Review on Risk Factors”, International Journal of Sustainable Construction Engineering & Technology, 2(2): 8–16.

Krisi Aaltonen, “Stakeholder Management in International Projects”, PhD Thesis, Aalto University School of Science and Technology Department of Industrial Engineering and Management, available at http://lib.tkk.fi/Diss/2010/isbn9789526033440/isbn9789526033440.pdf (last accessed 13 October 2015).

G.F. Jergeas, P. Eng, E. Williamson, G.J. Skulmoski and J.L. Thomas (2000) “Stakeholder Management on Construction Projects”, AACE International Transaction, pp. 12.1–12.5; PMI (1996) Project Management Body of Knowledge, Newton Square, PMI PA.

Jim Smith, Peter E. O. Love and Ray Wright (2001) “To Build or Not to Build? Assessing the Strategic Needs of Construction Industry Clients and their Stakeholders”,Structural Survey, 19(2): 121–132.

Rodney J. Turner (1999). The Handbook of Project-Based Management: Improving the Processes for Achieving Strategic Objectives, 2nd edn., London: McGraw-Hill; K. Moodley (1999) “Project Performance Enhancement-improving Relations with Community Stakeholders” in Stephen Ogunlana, (ed.), Profitable Partnering in Construction Procurement, London: E&F Spon.

Roshana Takim (2009) “The Management of Stakeholders’ Needs and Expectations in the Development of Construction Projects in Malaysia”, Modern Applied Science, 3(5): 167–175.

Mark Starik (1995) “Should Trees have Managerial Standing? Towards Stakeholder Status for Non-Human Nature”, Journal of Business Ethics, 14: 207–217; E. Orts and A. Strudler (2002) “The Ethical and Environmental Limits of Stakeholder Theory Business”, Ethics Quarterly, 12: 215–233.

Graham M. Winch (2002) Managing Construction Projects: An Information Processing Approach, Oxford: Blackwell Science Ltd.

See also Charles Eesley and Michael J. Lenox (2006) “Firm Responses to Secondary Stakeholder Action”,Strategic Management Journal, 27(8): 765–781.

Aaltonen, Krisi, PhD Thesis, available at http://lib.tkk.fi/Diss/2010/isbn9789526033440/isbn9789526033440.pdf.

BeRnard Cova, Pervez Ghauri and Robert Salle (2002) Project Marketing: Beyond Competitive Bidding, Chichester, UK: John Wiley & Sons Ltd., p. 179.

Max B.E. Clarkson (1995) “A Stakeholder Framework for Analyzing and Evaluating Corporate Social Performance”,Academy of Management Review, 20(1): 92–117.

Archie B. Carroll and. Ann K. Bucholtz (1993) Business & Society: Ethics & Stakeholder Management, Cincinnati, OH: Western Publishing; Kevin Gibson (2000) “The Moral Basis of Stakeholder Theory”, Journal of Business Ethics, 26: 254–257.

Grant T. Savage, T.W. Nix, C. Whitehead and J.D. Blair (1991) “Strategies for Assessing and Managing Stakeholders”, Academy of Management Executives, 5(2): 61–75.

Jeff Frooman (1999) “Stakeholder Influence Strategies”, Academy of Management Review, 24(2): 191–205.

See, for example, the empirical study undertaken by Jan T. Karlsen (2002) “Project Stakeholder Management”, Engineering Management Journal, 14(4), December: 14(4): 19–24. This study determined that a client’s end-users are the most important stakeholders.

See, for example, G.F. Jergeas, P. Eng, E. Williamson, G.J. Skulmoski and J.L. Thomas (2000); see also Marjolein C. Achterkamp and Janita F.J. Vos (2008) “Investigating the Use of the Stakeholder Notion in Project Management Literature:A Meta-analysis”, International Journal of Project Management, 26: 749–757.

Roshana Takim (2009); Jack R. Meredith and Samuel J. Mantel (2003) “Project Management: A Managerial Approach”, 5th edn., New York: John Wiley, p. 34.

Ken Black (1996) “Causes of Project Failure: A Survey of Professional Engineers”, PM Network, 10(11), November: 21–24.

Kevin Gibson (2000).

Ibid.

Alexei Marcoux, “A Fiduciary Argument against Stakeholder Theory” (2003) Business Ethics Quarterly, 13(1): 1–24,also available at http://www.jstor.org/stable/3857856; R.E. Freeman (1984) Strategic Management: A Stakeholder Approach, Englewood Cliffs, NJ: Prentice Hall, p. 8.

R.E. Freeman (1984).

Freeman notes that Dill was the first to extend the stakeholder concept beyond such groups as shareholders and customers. See William R. Dill (1975) “Public Participation in Corporate Planning: Strategic Management in a Kibitzer’s World”, Long Range Planning, 8(1): 57–63.

Rogene A. Buchlolz and Sandra B. Rosenthal (2005) “Towards a Contemporary Conceptual Framework for Stakeholder Theory”,Promoting Business Ethics, Journal of Business Ethics, 58(1/3), April–May: 137–148.

Thomas Donaldson and Lee E. Preston (1995) “The Stakeholder Theory of the Corporation: Concepts, Evidence and Implications”, Academy of Management Review, 20(1): 65–91.

Ibid.

Kevin Gibson (2000); Thomas Donaldson and Lee E. Preston (1995); J. Kaler (2003) “Differentiating Stakeholder Theories”,Journal of Business Ethics, 46(1): 71–83.

Thomas Donaldson and Lee E. Preston (1995).

This is disputed by the convergent theory; see also R.E. Freeman (1984).

Thomas M. Jones and Andrew C. Wicks (1999) “Convergent Stakeholder Theory”,Academy of Management Review, 24(2): 206–221.

Thomas Donaldson (1999) “Response: Making Stakeholder Theory Whole”, Academy of Management Review, 24(2): 237–241; Dennis Gioia (1999) “Response: Practicability; Paradigms and Problems in Stakeholder Theorizing”,Academy of Management Review,24(2): 228–233; Edward R. Freeman (1999) “Response: Divergent Stakeholder Theory”, Academy of Management Review, 24(2): 233–236.

For extensive discussions and replies to the various criticisms, see the following: R.E. Freeman, J.S. Harrison, A.C. Wicks, B.L. Parmar and S. de Colle (2010) Stakeholder Theory: The State of the Art, Cambridge, UK: Cambridge University Press.

R.E. Freeman, J.S. Harrison, A.C. Wicks, B.L. Parmar and S. de Colle (2010).

Ibid.

Ibid; R.E. Freeman and Robert A. Phillips (2002) “Stakeholder Theory: A Libertarian Defense”, Business Ethics Quarterly, 12(3): 331–349.

Ibid; R.E. Freeman, J.S. Harrison, A.C. Wicks, B.L. Parmar and S. de Colle (2010).

Richard Marens and Andrew Wicks (1999) “Getting Real: Stakeholder Theory, Managerial Practice & the General Irrelevance of Fiduciary Duties Owed to Shareholders”, Business Ethics Quarterly, 9(2): 272–293.

Social contract theory is based on the fact that government only exists to serve the will of the people and that the people are the source of all political power enjoyed by the government. The origin of social contract theory can be traced from the writings of Plato, Thomas Hobbes, Jean Jacques Rousseau, John Locke, John Rawls and, more recently, David Gauthier.

Stakeholder accountability theory can also be explained using agency theory.

Stefan Olander and Anne Landin (2005) “Evaluation of Stakeholder Influence in the Implementation of Construction Projects”, International Journal of Project Management, 23: 321–328.

Roshana Takim (2009).

United Nations General Assembly (2010) Report of the Special Representative of the Secretary-General on Issues of Human Rights and Transnational Corporations and Other Business Enterprises, John Ruggie, “Business and Human Rights: Further Steps Towards the Operationalization of ‘Protect, Respect and Remedy’ Framework”, A/HRC/14/27, April 2010.

John Forrer, James Edwin Kee, Kathryn E. Newcomer and Eric Boyer (2010) “Public Private Partnerships and the Public Accountability Question”, Public Administration Review, May/June: 475–485.

Albert P.C. Chan, John F.Y. Yeung, Calvin C.P. Yu, ShouQing Wang and Yongjian Ke (2011) “Empirical Study of Risk Assessment and Allocation of Public-Private Partnership Projects in China”, Journal of Management Engineering, 27(3), July: 137, available at http://www.meng-pm.org/wsq/Paper/AlbertChang-RiskAssessAndAllocationOfChinaPPPrisk.pdf (last accessed 13 October, 2015).

Li Bing, A. Akintoye, P.J. Edwards and C. Hardcastle (2005) “The Allocation of Risk in PPP/PFI Construction Projects in the UK”,International Journal of Project Management, 23(1): 25–35.

Ahmed D. Ibrahim, Andrew F. Price and Andrew J. Dainty (2006) “The Analysis and Allocation of Risks in Public Private Partnerships in Infrastructure Projects in Nigeria”,Journal of Financial Management of Property and Construction, 11(3): 149–163.

“Support and Opposition of Public-Private Partnerships”, The Encyclopedia of Earth, (online), available at: http://www.eoearth.org/article/Support_and_opposition_of_public-private_partnerships#gen15 (last accessed 13 October 2015).

Ibid.

Campbell W. Oliver and Bhatia Anita (1998) Privatization in Africa. Directions in Development Series, World Bank, Washington, DC, (online), available at http://siteresources.worldbank.org/INTFINDINGS/685507-1161268713892/21098649/find132.htm (last accessed on 13 October 2015).

Daniele Calabrese (2002) “Public Communication Programs for Privatization Projects: A Toolkit for Task Team Leaders and Clients”, World Bank, Washington, DC.

This law was repealed by the Lagos State Roads (Private Sector Participation) Authority Law (2007) which, in turn, was repealed by the Lagos State Public Private Partnership Law (2011).

The Director General of the Lagos State Public–Private Partnership Office, Mr. Ayo Gbeleyi, said that the suspension was to enable the State government to engage with the Concessionaire and other stakeholders.

Stake Holder Forum (comprising indigenes, businesses and residents of the Lekki Ajah axis of Lagos State and the Etiosa Heritage Group.

For example, a Lagos based lawyer and resident of the area, Ebun Olu Adegboruwa, went to court alleging fraud and challenging the government’s right to toll the road, as he considered the toll an infringement of his constitutional right to free movement. He also insisted that the government should make available the provisions of the contract for everyone to see and read. See D. Benson (2011) “Lekki/Epe Expressway Toll Plaza: Lagos Govt Violated our Fundamental Right to Protest—Adegboruwa”, Vanguard newspaper, 22 December, p. 8.

This assertion was made by the Governor while presenting the 2012 budget. See This Day newspaper, 11 December 2012.

Tagged “Occupy Lekki”. See Sahara Reporters, “Occupy Lekki: Lagos Protests Against Lekki Toll Gate”, available at http//www.saharareporters.com/news-page/occupy-lekki-lagos-protests-against-lekki-toll-gate (last accessed 13 October 2015).

E. Pedro (2012) “Nigerian Stars Support Lekki Protest”, Daily Times newspaper, 18 December: p. 15; C. Iremeka (2012) “Anxiety Mounts Over Second Toll Gate” The Guardian newspaper, 17 December: 2.

S. Okoruwa and O. Olabulo (2011) “1 Killed, Many injured in Lekki Tollgate Protests”, Nigerian Tribune Newspaper, 18 December: 4.

“PDP Calls for Fashola’s Impeachment Over Lekki Toll Plaza”, Nigerian Compass newspaper, 16 December 2011, p. 12.

Akinpeli Dada and Rasheed Bisiriyu, “Lagos Cancels Lekki–Epe Expressway Concession”, Punch newspaper, 28 August 2013; G. Akinsanmi. “Lekki-Epe Road: Lagos to Raise NGN 87.5 bn to Acquire Concession Rights”, This Day newspaper, 29 August 2013.

See, for example, Defender newspaper (2013) “Lekki-Epe Expressway Cancellation: I won’t withdraw suit against Lagos, lawyer says”, 28 August, available at http://www.osundefender.org/?p=118622 (last accessed on 13 October 2015).

Akinpeli Dada and Rasheed Bisiriyu (2013).

G. Akinsanmi (2013).

On 5 July 2011, there was a protest staged by residents of the area where some contractors working for the concessionaires were beaten up by an angry mob. Flooding experienced in the homes of a number of residents caused the protests. The residents alleged that the flooding was as a result of the ongoing construction work. The concessionaire later issued a statement to the effect that it was not responsible for any of the flooding in the area.

See also Mark R. Hayller (2010) “Public-Private Partnerships in Hong Kong: Good Governance—The Essential Missing Ingredient”, Australian Journal of Public Administration, 69, March: 99–119.

Jan T. Karlsen (2002).

Ezekiel A. Chinyio and Akintola Akintoye (2008) “Practical Approaches for Engaging Stakeholders: Findings from the UK”, Construction Management and Economics, 26 (6): 591–599.

Jan T. Karlesen (2002).

Jan T. Karlesen (2002); Arun A. Elias and Robert Y. Cavana and Laurie S. Jackson (2002) “Stakeholder Analysis for R&D Project Management”,R&D Management, 34(2): 301–310; Trevor L. Young (2006) Successful Project Management, 2nd edn., London and Philadelphia: Kogan Page; Lydia Bourne and Derek H.T. Walker (2006) “Visualizing Stakeholder Influence—Two Australian Examples”,, Project Management Journal, 37(1): 5–22; Derek H.T. Walker, Lynda Bourne and Steve Rowlinson (2008) “Stakeholder and the Supply Chain”, in Derek H.T. Walker and Steve Rowlinson (eds.), Procurement Systems: A Cross-industry Project Management Perspective, Abingdon, UK: Taylor & Francis, pp. 70–100.

Anna L. Jepsen and Pernille Eskerod (2009) “Stakeholder Analysis in Projects: Challenges in Using Current Guidelines in the Real World”, International Journal of Project Management, 27: 335–343.

Ibid.

Jing Yang, Geoffery Q. Shen, Derek S. Drew, Manfong Ho and Xiaolong Xue (2011) “Stakeholder Management in Construction: An Empirical Study to address Research Gaps in Previous Studies”, International Journal of Project Management, 29: 900–910.

Jing Yang, Geoffery Q. Shen, Derek S. Drew, Manfong Ho and Xiaolong Xue (2011); Lydia Bourne and Derek H.T. Walker (2006).

G.F. Jergeas, G.F. Jergeas, P. Eng, E. Williamson, G.J. Skulmoski and J.L. Thomas (2000).

Stefan Olander and Anne Landin (2008) “A Comparative Study of Factors affecting the External Stakeholder Management Process”, Construction Management and Economics, 26(6): 553–561.

Anna L. Jepsen and Pernille Eskerod (2009).

Jing Yang, Geoffrey Q. Shen, Derek S. Drew and Manfong Ho (2010) “Critical Success Factors for Stakeholder Management: Construction Practitioners’ Perspectives”,Journal of Construction. Engineering Management, 136(7): 778–786; Jing Yang, Geoffrey Q. Shen, Manfong Ho, Derek S. Drew and Albert P.C. Chan (2009)“Exploring Critical Success Factors for Stakeholder Management in Construction Projects”, Journal of Civil. Engineering Management, 15(4): 337–348; Jing Yang, Geoffrey Q. Shen, Manfong Ho, Derek S. Drew, Xiaolong Xue (2011).

Wim Bakens, Greg Foliente and Mansi Jasuja (2005) “Engaging Stakeholders in Performance- based Building: Lessons from the Performance-Based Building (PeBBu) Network”, Building Research & Information, 33(2), 149–158; G.F. Jergeas, P. Eng, E. Williamson, G.J. Skulmoski and J.L. Thomas (2000); Stefan Olander and Anne Landin (2008).

Donald P. Moynihan (2003) “Normative and Instrumental Perspectives on Public Participation: Citizen Summits in Washington, D.C.”, American Review of Public Administration, 33: 164–188; Mary G. Kweit and Robert W. Kweit (2007) “Participation, Perception of Participation, and Citizen Support”, American Politics Research, 35: 407–25.

Robert J. Bies and Debra L. Shapiro (1988) “Voice and Justification: Their Influence on Procedural Fairness Judgments”, Academy of Management Journal, 31(3): 676–685; Tom R. Tyler and Peter Degoey (1995) “Collective Restraint in Social Dilemmas: Procedural Justice and Social Identification Effects on Support for Authorities”, Journal of Personality and Social Psychology, 69(3): 482–97. Patrick D. Smith and Maureen H. McDonough (2001) “Beyond Public Participation: Fairness in Natural Resource Decision Making”, Society & Natural Resources, 14(3): 239–249.

Ibid.

Mark R. Hayllar (2010).

OECD (Organisation for Economic Cooperation and Development) (2007) OECD Principles for Private Sector Participation in Infrastructure.

John Forrer, James Edwin Kee, Kathryn E. Newcomer and Eric Boyer (2010).

OECD (2007) “OECD Principles for Private Sector Participation in Infrastructure”, available at: http//www.oecd/investment/investmentpolicy/38309896.pdf (last accessed on 13 October 2015).

This is limited by the fact that PPP contracts are usually very complex and difficult to understand, and that the private sector might insist that certain aspects of the contract remain confidential, which therefore limits the amount of information that may be available in the public domain.

The Guidebook on Promoting Good Governance in Public Private Partnerships, supra.

OECD principles for Private Sector Participation in Infrastructure, supra.

Preamble to the OECD principles for Private Sector Participation in Infrastructure, supra.

Ibid.

OECD 92007) “OECD Principles for Private Sector Participation in Infrastructure” available at http//www.oecd/investment/investmentpolicy/38309896.pdf [Last accessed on 13 October, 2015].

Ibid. This explains some of the reasons for public revolt to the Lekki toll road concession.

Ibid.

100

National Policy on Public Private Partnership, 2009.

101

These clauses are risk management devises used to stabilise the expectations of investors for instance preventing changes in the laws from adversely affecting the investment contract during the term of the investment. Depending on which side you are, stabilisation clauses are either an absolute necessity or out rightly dubious.

102

Some PPP contracts prevent the building or improvement of competing infrastructure in order to leave no alternative but using the private sector’s infrastructure and thus guaranteeing its revenues. See generally Ellen Dannin, (2009) “Infrastructure Privatization Contracts and Their Effect on Governance”, The Pennsylvania State University, The Dickson School of Law, Legal Studies Research Paper No. 19–2009 @, p. 9.

103

United Nations Economic Commission for Europe (2008) Guidebook on Promoting Good Governance in Public-Private Partnerships, New York and Geneva: UNECE.

104

Shafiul A. Ahmed and Syed M. Ali (2006) “People as Partners: Facilitating People’s Participation in Public Private Partnerships for Solid Waste Management”, Habitat International, 30: 781–796.

Title: Stakeholder Opposition Risk
Author: George Nwangwu
Publisher: Palgrave Macmillan UK
Book: Public Private Partnerships in Nigeria
Print ISBN: 978-1-137-54241-0

Electronic ISBN: 978-1-137-54242-7

Copyright Year: 2016
DOI: https://doi.org/10.1057/978-1-137-54242-7_9

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