Conceptualizing Company Response to Community Protest: Principles to Achieve a Social License to Operate

Abstract

To gain a social license to operate and grow, companies should have effective community engagement activities, social impact assessment processes, environmental and social impact management procedures, and human rights-compatible grievance redress mechanisms in place. In this way, environmental impacts and social impacts would likely be identified and addressed before issues escalate and social risk amplifies. Companies also need to treat communities with respect and be mindful of local culture. Where these things are not done, there will be no social license to operate. Protests are mechanisms by which affected communities express their concerns and signal there is no social license. As argued in our previous work on conceptualizing social protests, protests are warning signs, as well as opportunities for companies to improve. Rather than let protest actions escalate, leading to violent confrontation and considerable cost and harm, companies should engage in meaningful dialogue with protesters. Unfortunately, company response is often inadequate or inappropriate. In this paper, we identify around 175 actions companies might take in relation to community protest, and we discuss how these actions variously have the potential to escalate or de-escalate conflict, depending on whether the company engages in appropriate and genuine interaction with protesters or if repressive measures are used. While effective engagement will likely de-escalate conflict, ignoring or repressing protests tends to provoke stronger reactions from groups seeking to have their concerns heard. When companies address community concerns early, their social license to operate is enhanced. We also outline the primary international standards companies are expected to comply with, and we identify the key environmental, social, and governance issues (ESG principles) that should be respected.proactively undertake actions to address the issues of concern and reduce the likelihood of protest. In this paper, we examine the wide range of reactive and proactive actions companies might take in relation to community protest, and we reflect on how these actions might affect the level of conflict with their host communities and the company's and project's social license to operate.Companies need to consider their actions and reactions carefully. If company reaction leads to escalation, this increases the amount of community protest and/or changes the type of protest action, which could lead to harmful outcomes to the company and community. Furthermore, communities and individuals have rights, and should companies use repressive actions, companies run the risk of violating the rights of local people, which could lead to reputational harm and legal action against the company well into the future [5][6][7]. The many legal actions the oil company, Shell, has had to face because of its actions (and inaction) in Nigeria in the 1990s is proof of this [8]. The negative publicity surrounding conflict can be harmful to the company's reputation and social license to op...

Challenges to Implementing Socially-Sustainable Community Development in Oil Palm and Forestry Operations in Indonesia

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“…Key ideas that underpin CSR are that: companies should act responsibly towards affected communities and the environments in which they operate; they should not focus solely on creating value for the company but should benefit the community as well as the company; and companies need to obtain a social license to operate from local communities, in other words, acceptance if not approval of company operations [11,21]. Corporations are increasingly under pressure to be more open and accountable for their actions and to publicly report on their social and environmental performance, in particular regarding their engagement with host and neighboring communities [22][23][24][25][26]. Companies are increasingly playing a role as a development agent by fulfilling community needs through social programs, such as health and education projects [27][28][29].…”

“…In that way, a company can contribute to solving societal challenges while also gaining a social license to operate and greater profitability [31]. Thus, companies often contribute to community development (CD) through their CSR programs [32], usually motivated by the need to gain a social license from communities and improve their reputation and legitimacy, especially in the face of opposition and resistance from local communities [23,24,26]. Companies typically contribute to various social investment initiatives such as health care, education, economic welfare, infrastructure development, and environmental protection [20].…”

Reflections on Social Impact Assessment in the 21st century

“…This meant there was a shift in SIA from being a regulatory tool to primarily being a management tool for the project proponent and project financier (Vanclay 2014). SIA is now universally required because it is demanded by all international financial institutions and Equator Principles banks (Vanclay and Hanna 2019).…”

“…While traditional regulatory EIA still exists, within industry circles EIA has largely been replaced by Environmental and Social Impact Assessment (ESIA), and sometimes by Environmental, Social and Health Impact Assessment (ESHIA) (Hanna et al 2014;Dendena and Corsi 2015). Even if still not adequately done, by the beginning of the 21 st century, assessing social issues has become mainstreamed within industry , although with some resistance and variation across sectors (Kemp and Owen 2018;Vanclay and Hanna 2019). In the present (the last decade or so)…”