What does it mean to have social licence?

One segment found along the controversial Line 9b project. (Photo by Ruby Pajares)

Co-written by Mark Mattson and Tristan Willis.

The idea of “social licence” is often evoked but rarely defined. The term is used so much these days that you could be excused for thinking that it has a precise definition or legal significance. 

It doesn’t. Social licence remains a concept – one that means different things to different people. 

The term itself is relatively new. It was coined by a Canadian mining executive, Jim Cooney, in the later 1990s. According to Mr. Cooney, social licence referred to a ‘subtle approval process’ that ran parallel to the government regulatory process. For example, how a community responded to a proposed project. 
 
From the perspective of the mining industry, a social licence held interest because it could act as a ‘mechanism for risk mitigation.’ It could avoid delays, save on court fees and decrease the likelihood that a change in government would threaten a project’s viability. 

As the idea of social licence gained traction in the resource extraction industry, there was a surge in the use of consulting services. These services were, in theory, designed to help companies understand and overcome community concerns, thereby gaining a social licence to operate. Yet this didn’t always happen. 

Community opposition groups and activists caught on to the language of social licence and began to give it their own meaning. Lack of social licence became an understandable and legitimate reason for opposing a project. This put industry in a tricky position since they were the ones who promoted the term in the first place. 

These days, the importance of social licence seems to be one point that both proponents and opponents can agree upon. The Canadian Energy Pipeline Association has a section of their website that explains the importance of social licence, and what pipeline companies are doing to achieve it. At the same time – many communities near proposed or existing pipelines have made it quite clear that they do not want a pipeline. There is no social licence. 

Yet the question remains – what is social licence? When is it ‘achieved?’ One-hundred percent support seems like an impossible standard. But saying that social licence can be gained through majority approval is also questionable. 

If a project divides a community and is supported by a slim majority (many of whom may stand to benefit economically) it seems unlikely to constitute a ‘social licence.’ Even the industry language of ’risk mitigation’ wouldn't be satisfied: a frustrated, sizeable minority would certainly have the potential to introduce complications that could lead to delay. 

Defining social licence precisely and inclusively may simply not be possible. 

What percentage of support is needed? How do community members express their position? Must there be a vote before claims about social licence can be made reliably? And what constitutes ‘the community?’ If a dam is constructed is social licence only required from those living near the construction site? Or is social licence required from all the communities on the watershed that will be affected in one way or another? 

These are difficult questions, which even like-minded people may disagree on. 

The idea of social licence came about because companies acknowledged that, whether they liked it or not, how communities respond to projects mattered. Mr. Cooney described a community response as a process unfolding ‘in parallel’ to the regulatory one. Implicit in this perspective is an assumption that the regulatory process fails to fully address the concerns and interests of the community. This raises questions about the government’s responsibility when it comes to social licence. 

Governments make policy choices about resource development, and in some instances fund or otherwise support particular projects. Is government responsible for crafting regulatory processes that are more responsive to community concerns?

Perhaps the usefulness of social licence is its ability to draw attention to problems in the current approach to project approval. Proponents complain about delay. They want regulatory approval to guarantee that a project will move forward. On the other hand – those who oppose projects often feel excluded or marginalized. They might have concerns about evidence testing, thoroughness, or a lack of procedural fairness. 

Rollbacks of Canada’s environmental laws, particularly to environmental assessment, have only served to make matters worse. 

Responding to this regulatory omission by trying to craft a process that is more responsive to community concerns may provide a potential path forward. For proponents, it could help mitigate the risks of down-the-road surprises. For communities, it could provide a forum for consultation, information sharing, informed risk assessment  and accommodation. And for government, it could help promote a sense of fairness and trust in the regulatory system, while potentially saving down the road costs.