Due to their linear nature, pipeline projects affect a large number of stakeholders, which increases the likelihood of broad opposition and protests. Tribal opposition to projects in the United States sometimes reflects fundamental disagreements between the U.S. government and tribes about tribal rights. Many environmentalists believe that preventing pipeline projects decreases the risk of oil spills, increases the cost of energy produced with oil, and makes renewable energy more attractive. Protests against oil pipelines also reflects decreasing public trust that existing governmental pipeline approval processes will adequately prevent environmental harm. Due to these increasing concerns, companies are likely to find that legal compliance by itself is insufficient to secure a social license to operate.

Banks providing project finance to the Dakota Access Pipeline Project retained Foley Hoag LLP (“Foley Hoag”) to provide an independent report, using the pipeline as a case study, that considered international industry good practice (“IIGP”) for community engagement in the development of oil pipelines, with a particular focus on engagement with Indigenous Peoples. Foley Hoag was asked to review the U.S. legal framework on community engagement, tribal consultation, and security, and compare that framework to IIGP. Foley Hoag’s final report provided recommendations for the project sponsors on steps they can take beyond U.S. legal requirements, as well as more general industry good practice guidance. The full report is confidential, but the banks requested that Foley Hoag share some general findings and the general industry good practice guidance. This good practice guidance may help companies building future pipelines in the United States incorporate IIGP, and may assist banks when they evaluate those projects.