Licence to build: unpacking the meaning of ‘social licence’

No, it doesn’t mean needing a licence to use social media, although that might be a good idea given what you see on Twitter these days.

No, it doesn’t mean needing a licence to use social media, although that might be a good idea given what you see on Twitter these days.

In fact, there is no official definition of the term. There is no Department of Social Licence upstairs from the driver’s licence office.

The phrase is said to have been coined by Canadian mining executive Jim Cooney about 20 years ago. It refers to whether something, usually a major resource extraction project, has broad support from stakeholders in affected communities. For the talking heads appearing on news shows, it sounds more authoritative to say a fancy phrase like “social licence” rather than that a project isn’t popular with some groups.

After Cooney started using the term, it quickly became trendy in debates about resource projects.

Perhaps “trendy” is a stretch. While it has provoked fiery debates among policy wonks, in only three weeks of the last five years has it been googled more often than other rare googles such as “Maple Leafs Stanley Cup.”

People of different sides of the debate quickly began stretching the definition to suit their purposes. Ayn Rand enthusiasts in conservative think tanks point out that social licence doesn’t actually exist in law. If a mine or a pipeline gets its permits from regulatory bodies set up by democratically elected legislatures, they say, then it doesn’t need to be popular with the general public or even its neighbours. If projects are required to meet an additional, ill-defined hurdle to proceed then we will have fewer projects, fewer jobs and lower national income.

Hard-core environmentalists, meanwhile, have tried to elevate the term in their campaigns to suggest that approval by official regulators and elected politicians is not enough. They claim no project can be legitimate without all affected stakeholders supporting the project. As these activists know, this means it is practically impossible to build a major project.

It’s hard to imagine our country’s big nation-building projects such as the St. Lawrence Seaway or Alaska Highway proceeding if they had been held to an expansive notion of social licence, especially now that opponents can use social media to organize bigger and noisier protest campaigns than in the past.

In many ways, it is a debate about representative democracy. If we elect a parliament, and it votes to set up an expert regulatory body, do we as citizens get to second guess the regulatory body’s decisions?

Attitudes in Canada have clearly changed on this topic. Fifty years ago, proponents built ambitious power lines, railways, mines and pipelines. Often this was done with minimal input from citizens, neighbours, First Nations and other affected groups.

Some of these projects turned out to have big negative effects, and this undermined trust in governments in general and experts in particular. Some Yukoners believe the Aishihik dam was a mistake, despite all the cheap power it generates, and many more are appalled by the Faro mine debacle and its multi-century cleanup plan.

As a result, we find ourselves in a grey area. Our traditional expert regulatory systems don’t seem to be enough to satisfy citzens. But we don’t have a systematic process of collecting citizen votes on a project-by-project basis or, for that matter, any official system to determine if key stakeholders such as labour, business, local residents, environmentalists or First Nations support a project.

So what does this confused situation mean for Yukoners? If big mining projects like Casino or Selwyn go ahead, or major gas production is proposed up the Dempster, we will have to figure out how to deal with these issues.

For resource proponents, the smart thing is to accept the concept of social licence, whatever it is, and build it into your project plan. It’s no longer enough to have smart engineers and a business case with a positive net present value. You need to talk to a variety of Yukoners, figure out what worries them about your project, and get creative in addressing their concerns.

You may not be able to solve all the problems, and you definitely won’t convince everyone, but being seen to care and make an effort is important. It’s also something you should start right at the beginning of your project. If you let your opponents and the rumour mill define your project in everyone’s mind, you may be too late no matter how much you spend on nicely produced television ads later on.

All of this will cost you time and money. But your shareholders won’t thank you if you have to tell them your project is a no-go because public and First Nation opposition spooked the Yukon cabinet into icing your project.

For hard-core environmentalists who want to finish off the mining and gas industries in the Yukon, social licence is an opportunity. Defined expansively enough, no project can achieve it, so it makes a handy campaign slogan.

For other environmentalists and community activists who are willing to support well-managed resource projects, social licence is also an opportunity. Companies will be more willing than ever before to meet, listen, and collaborate in adapting their projects to local concerns.

Social licence also has implications for the Yukon and First Nations governments. If these governments want the jobs and tax revenues that resource projects create, then they will need to make sure citizens see their decision-making processes as transparent and sensible.

This will require ministers and senior officials to deliver a level of process discipline that some Yukon government departments have struggled to achieve in the past.

Whether you like the term “social licence” or not, increased scrutiny and stakeholder involvement is now a fact of life for resource projects on public land. Successful corporate executives, environmental campaigners and government officials will need to adapt to today’s concept of social licence, and whatever it evolves into in the future.

Keith Halliday is a Yukon economist and author of the MacBride Museum’s Aurore of the Yukon series of historical children’s adventure novels. He won last year’s Ma Murray award for best columnist.

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