Community Levers for Benefit Sharing

Abstract

Conflicts between state and local governments over development activities with intense local effects, such as hydraulic fracturing, often center on whether state authority preempts local ordinances. Local governments can use their regulatory authority to pressure industry to enter into benefit-sharing arrangements. Local regulation, however, is not the only source of community leverage. This paper explores various sources of community leverage, including tort actions brought by local governments and individuals, as well as extralegal mechanisms. A community’s understanding of its sources of leverage will enable the community to better appreciate its bargaining power, which in turn can lead to more equitable sharing of benefits from development projects. While sharing of substantive benefits can be a critical component of corporate social responsibility (CSR), procedures for public participation and community engagement are also important.