When an infrastructure project structures its environmental and social function, the question of organisation rarely arises with the clarity it deserves. It is often resolved by default, according to the circumstances of start-up: an E&S consultant has produced the ESIA, they remain in the loop. A project manager has a cousin who is HSE manager in another company, they are mobilised. A lender imposes a one-off requirement, an ad hoc consultant handles it.
This approach produces fragmented systems, without overall coherence, which end up costing more in subsequent adjustments than an explicit organisational choice upstream. The IFC Performance Standards (PS1 paragraphs 21 to 23 on organisational capacity), the AfDB OS and World Bank ESS formulate this requirement: E&S capacity must be identified, proportionate to risks, endowed with adequate resources and appropriate competencies.
This article presents the distinct roles of the external consultant and the internal E&S directorate, the organisational models that coexist in DFI projects, the criteria that guide the choice, and the errors to avoid from the structuring phase.
What Each Model Brings, and What It Cannot Bring
The external consultant brings three things that an internal directorate will struggle to match without years of investment.
Leading-edge expertise on specialised topics. A consultancy whose business is biodiversity, GBV or climate modelling accumulates a depth of experience that an internal generalist team cannot replicate across all topics simultaneously.
Methodological perspective. A consultant who has conducted dozens of ESIAs on comparable projects quickly detects the blind spots in a file, the classic errors, the subjects to anticipate. This cumulative experience directly feeds the quality of deliverables.
External status. A consultant is perceived, rightly or wrongly, as more independent from the project's commercial pressure than internal teams. This perception facilitates certain dialogues with lenders and critical stakeholders.
The external consultant does not bring, however, what pertains to continuity: the detailed knowledge of the project's internal dynamics, the capacity to follow commitments over time in a coherent manner, the integration into corporate culture.
The internal E&S directorate symmetrically brings three things that the consultant cannot provide.
Permanence. An internal E&S manager experiences the successive phases of the project (studies, construction, operation) and ensures the continuity of decisions, commitments, and the relationship with stakeholders. This continuity is essential over long cycles.
Managerial integration. The internal E&S directorate participates in the project's strategic decisions, influences investment choices, contributes to technical decisions. A consultant, however high-quality, remains a service provider called upon occasionally.
Reactivity. When an incident occurs at 22:00 on a Friday evening, it is the internal E&S directorate that responds. A consultant contract, however well-dimensioned, has practical limits that only internal staff can overcome.
The internal E&S directorate cannot bring, however, leading-edge expertise on all topics simultaneously nor the methodological perspective accumulated over dozens of projects.
Four Organisational Models Observed in Practice
On DFI infrastructure projects, four models coexist and respond to different rationales.
The fully external model. The project has no dedicated internal E&S directorate, one or more consultants cover all needs. This model is found on short projects, ad hoc structures without subsequent portfolio, or in very early phases where the investment decision has not been taken. It is rarely viable on a complete infrastructure project financed by a DFI: lenders require an identifiable and accountable internal capacity.
The E&S directorate reinforced by consultants model. The project has an internal E&S directorate, with a senior manager and a few staff members according to the size of the operation. Consultants are mobilised for specialised expertise (biodiversity, advanced social, technical studies), formal deliverables (ESIA, RAP), and leading-edge missions. This is the dominant model on mature DFI infrastructure projects.
The integrated directorate model. The project integrates E&S technical expertise directly into its directorate, with sufficient staff to cover the main fields in-house (environment, social, health and safety, climate). Consultants are mobilised for one-off missions or for independent counter-expertise. This model is found among large infrastructure operators (mining companies, energy companies, major national project sponsors) who manage a portfolio of projects.
The hybrid model supported by a dedicated E&S office. The project owner has a restricted E&S directorate at strategic level and contracts a dedicated E&S office (different from one-off consultants) which carries the operational function for the entire project duration. This model combines the permanence of the office with the strategic integration of the directorate. It requires solid contractualisation to avoid scope frictions.
Selection Criteria
Five criteria structure the choice between models.
Project size and duration. A long-cycle infrastructure project (5 to 10 years between studies and operation) justifies a strong internal E&S directorate. A one-off or short-duration project can be satisfied with an outsourced function.
The project owner's portfolio. A company that manages a portfolio of similar operations capitalises on a centralised E&S directorate. A company that builds a single project finances an internal directorate for one operation, which is often prohibitive.
Risk level. A category A or high-risk project requires more substantial internal capacity than a category B project. On projects with specific issues (significant displacement, indigenous peoples, critical habitat), internalisation of key competencies becomes critical.
Maturity of the local consulting market. In markets where high-level E&S consultants exist and are easily mobilised, the outsourced model gains attractiveness. In markets where this supply is rare or of variable quality, internalisation becomes necessary to secure deliverables.
Level of lender requirement. Certain lenders accept more readily than others an organisation that is predominantly outsourced, provided that responsibility is clearly identified. Others explicitly require substantial internal capacity. This requirement must be made explicit early in structuring discussions.
The Pitfalls of Consultant Contractualisation
When the choice falls, in whole or in part, on the use of consultants, the quality of contractualisation makes a considerable difference.
Final responsibility. A consultant contract must explicitly specify who bears the final responsibility for the deliverable (the consultant or the client) and what professional liability regimes apply. Without this clarification, disputes in case of non-compliance become bogged down.
Independence. Consultants mobilised for critical missions (independent reviews, counter-expertise) must be selected according to criteria that preserve their real or perceived independence. A consultant who has worked on a project for years may, at the margin, lose the perspective necessary for certain missions.
Team continuity. A contract that does not specify the key persons mobilised leaves the door open to team changes during the mission, with the time losses and incoherence that this entails. Key person clauses are a standard protection.
Skills transfer. A serious contract provides for transfer mechanisms to the client: systematic documentation, training of internal teams, capitalisation workshops. Without this dimension, the project becomes dependent on the consultant at each iteration.
Intellectual property. The deliverables produced, the data collected, the methodologies developed must be clearly attributed. International practice grants the client ownership of deliverables and data, with a right of use for the consultant for their general experience.
The Architecture That Holds Over Time
Whatever combination is chosen, four elements structure an architecture that holds over time.
An internal E&S manager identified by name, with a sufficiently senior reporting line to weigh in on decisions, and explicit authority on E&S matters. Even in a predominantly outsourced model, this internal position is indispensable.
A documented allocation of roles, formalised in a governance document, which specifies who does what, who decides what, who validates what. Vagueness produces conflicts in case of incidents.
An independent external review mechanism, periodic, by a third party different from the operational consultants, which gives the project owner and the lender a calibrated view of the actual performance of the system.
A multi-year E&S budget, formalised and ring-fenced, which covers the internal directorate, consultants, studies, training, audits. This budget must withstand unfavourable budgetary decisions which, invariably, arise during the life of a project.
The choice between E&S consultant and internal E&S directorate is not an ideological choice, it is a choice of organisational architecture. The two approaches complement each other more than they oppose each other, and the best-structured projects articulate them carefully.
For a project owner structuring their E&S function, the right question is not "consultant or internal?" but "what allocation between the two, formalised how, with what coordination and control mechanisms?". This initial formalisation saves years of subsequent adjustments and builds the lasting credibility of the system.
Comments
Be the first to react to this article.