Social licence to operate

Abstract

Purpose -The purpose of this study is to investigate how the social licence to operate (SLO) concept is currently perceived and communicated during stakeholder engagement, as an extension of corporate social responsibility (CSR). To ensure an applied exploration of SLO, this paper focused on the wind industry. Design/methodology/approach -Telephone interviews were conducted with 18 wind industry representatives responsible for stakeholder engagement in Australia. Questions focused upon understanding of consultation and SLO, perceptions of SLO in practice, and experiences regarding community engagement. Findings -SLO is broadly understood by the case study wind industry representatives as majority acceptance held by community and other stakeholders, although no common definition was expressed. This indicates that the concept has not transferred clearly or directly to the wind industry. Despite this, the benefits of seeking an SLO through consultative and ongoing communication practices were recognised across the wind industry as a positive risk mitigation strategy. Research limitations/implications -Future research could examine the understanding and communication approaches of SLO in other industries, cultures and geographic locations. Practical implications -It appears the wind industry intends to seek an SLO more broadly from the Australian public, beyond specific projects. This is likely to occur within the context of increased scrutiny on the performance of many industries and by the changing expectations and demands of communities. Social implications -Some wind corporations were considered to have previously conducted poor or shallow consultation, and this was perceived to have negatively affected the reputation of the wider industry. Mismanagement of expectations prior to the development phase was of particular concern to interviewees. Given this, an SLO could be put at risk by the poor or insufficient engagement and communication processes and reputation of their predecessors. Originality/value -The key contribution of this study is to inform CSR practices that seek to engage and maintain high stakeholder support through an SLO approach, where corporate communication is vital.

The role of dialogue in social licence to operate in the extractives sector

“…Stakeholder "engagement is critical to achieve a social licence to operate, but its capacity to influence social licence is not well understood" (Dare, Schirmer, & Vanclay, 2014, p. 188). Failure to engage communities in a meaningful way in the SLO process is seen to be the predominant cause of social conflict in resource management (Hall & Jeanneret, 2015;Hindmarsh, 2010;Lloyd, Luke, & Boyd, 2014;Pullin & Knight, 2003). The process of meaningful stakeholder engagement is also central to overcoming such conflict, but it is a high-risk, high-cost issue in resource management.…”

“…suggest that dissenting communities often unite around these perceived negative impacts, and this dissent often arises from a claimed lack of communication. It has been argued that this contention can be avoided, or more effectively managed, by engaging stakeholders in an ongoing dialogue (Hall & Jeanneret, 2015;.…”

“…Communication approaches are core to fostering social acceptance; maintaining this acceptance in the context of SLO requires ongoing, active, and open communication (Basu, Hicks, Krivokapic-Skoko, & Sherley, 2015;Corvellec, 2007;Hall & Jeanneret, 2015). Failure to engage in effective communication with stakeholders can lead to perceptions of illegitimacy and distrust in SLO negotiations (Lloyd et al, 2014).…”

“…Thus, the notion of social licence to operate (SLO) evolved in the late 1990s, drawing on concepts from corporate social responsibility (CSR), business ethics, legitmacy theory, and stalkeholder theory . Mining companies sought to recover positive reputations by publicly acknowledging the need, and their intent, to increase stakeholder engagement with, and social acceptance of, project development processes (Hall & Jeanneret, 2015;. The concept of SLO has spread across various natural resource management (NRM) contexts and beyond, gaining importance -a recent report outlined the business risks faced by the extractives industries, ranking the need to attain a social licence as third on a list of the top 10 industry challenges (Ernst & Young, 2015;International Council on Mining and Metals, 2015b).…”

“…It has become a buzzword with the rise in interest in social accountability for resource development projects, such as mining or oil and gas projects. Failure to engage stakeholders in meaningful ways is seen to be the predominant cause of social conflict in resource extraction, with the costs of such conflict running high Hall & Jeanneret, 2015;Hindmarsh, 2010;Lloyd et al, 2014;Pullin & Knight, 2003 These two examples underline the importance of exploring how different stakeholder groups understand the engagement processes in which they are involved, and they illuminate the importance of the expectations attached to those understandings. In both cases, dialogue was seen to be an engagement mechanism central to the attainment of a social licence.…”