NEGOTIATE AND RESOLVE CONFLICT

Case Scenario - Known to other parties

Mangrove Bay Development (MBD) is planning construction of a hotel with adjacent mixed retail/commercial development in Abu Dhabi overlooking an area of mangroves, a sensitive ecological site. Locals are concerned about the project and have formed the UAE Coastal Preservation Society (CPS) to advocate for sustainable development. Typically, local community groups have little sway over government or developers.

MBD has sufficient capital to independently finance the development however is looking to offset risk through partial financing from MHT Bank. MBD has close ties to the government who support the development. MHT Bank anticipates solid returns from its first property investment in the UAE but insists on environmental sustainability being met in its investments.

Mangrove Bay Development (MBD)

MBD's primary interest is to ensure a profitable investment. Overly burdensome restrictions to the development because of environmental or social regulation will impact the bottom line so MBD seeks to minimise regulatory overheads, construction delays, or changes to the construction plans.

Scale will be critical to ensuring profitability and the sale and leasing of retail spaces will be the most profitable aspect of the development. To support increased traffic flow, a new access road will need to be built, this will require the limited removal of some mangrove trees.

Hotel guests will enjoy exclusive access to the mangroves in the area immediately surrounding the hotel and a boardwalk through the mangroves will increase access for guests.

The government has approved the development as it meets local environmental protection requirements.

UAE Coastal Preservation Society (UCPS)

Mangroves are intertidal, coastal forests that are essential in shielding coastlines from storms and flooding. By absorbing more than four times as much carbon as tropical forests, they also serve as a habitat for species and control climate change.

With the government's support to protect the mangroves, it would be counterintuitive to encroach into them with a construction project which will only cause more damage to the area. Despite being one of Abu Dhabi's most valuable natural resources, mangroves are in danger from already existing dredging projects and now with the impending offshore development, it only exacerbates the issue.

Kilometres of devastated coastline are being restored by the Environment Agency - Abu Dhabi (EAD), which is attempting to stem erosion in some locations. To make up for the damage, the environment agency and some developers are also planting hundreds of thousands of mangroves as a way of compensation. Mangrove replanting requirements in Abu Dhabi state that any developer who removes mangroves must replace them with an area twice as large as what was taken away.

MHT Bank

MHT Bank is a global bank partnering heavily with investors across the Gulf and Middle East, and the industry leader for high-value sustainable property development meeting key ESG criteria that are increasingly important for international investors and regulatory requirements.

In the UAE, MHT Bank is the number 1 consumer bank, but lacking a foothold in property development, it is seeking to build long-term partnerships with high-end commercial property developers. Its interest is to secure its share of this lucrative opportunity, however, it is also keen to avoid any perception of investment at the expense of the local community it already serves, or at the expense of the environment. MHT Bank believes the local developer underestimates the importance of these topics in today's economy and their value for sustainable long-term business growth.

Q1. You should then analyze your collective debrief of the negotiation.

Q2. Analyze from the perspective of Relationship and Culture