Social licence – the theory

Social licence or social licence to operate (SLO) describes a community’s acceptance and approval of a project, company or industry.

A social licence to operate is the process of gaining and maintaining community support for an industry and its activities. Social licence is an ongoing activity; it may be withdrawn and challenged at any stage. A social licence therefore differs from other licences. For example, a driver’s licence is granted by passing a driving test and is a physical card which designates that a person is a safe driver. A driver’s licence can be revoked if the licence holder drives dangerously and causes potential harm to the community. A social licence is intangible; there is no test involved or document of accomplishment. Rather, a social licence is the ongoing process of engagement and communication with a community and the level of trust a community has in a project, industry or idea.

While social licence involves gaining trust and acceptance, that doesn’t mean that 100% of a community is supportive. It just means that there is, as a minimum, broad acceptance or tolerance of an activity or industry. An industry or project can also achieve varying levels or strengths of social licence.

The different stages of social licence

_{© Deakin University. Adapted from Thomson& Boutilier}

Boutilier and Thompson’s pyramid model of social licence is helpful to understand the different stages of building social licence and the varying strengths of social licence, where:

• Something fails to achieve legitimacy = community withdraws/rejects social licence
• Something is seen as legitimate = community accepts and grants weak social licence
• Something is seen as credible = community approves and grants strong social licence
• Something is co-owned = community identifies something as part of the fabric of society.

What does social licence look like?

In the video below, Australian Hydrogen Council (AHC) CEO Fiona Simon explains the AHC policy framework and how it is a useful tool to understand where stakeholders are coming from, to manage the complexity and nuance of hydrogen and to think about hydrogen projects holistically from multiple stakeholder perspectives.

• community rallies opposing an industry,
• an industry unable to undertake operations at a location,
• an industry unable to undertake their operations.

• A community supporting a project,
• A community discussing the benefit of a project or industry,
• A community seeing an industry as valuable to them.

Licences to operate

The Australian Hydrogen Council developed a 3-part framework that is useful to help us understand how a social licence fits with other licences and how all are needed to have a functioning and successful industry.

The three licences in the framework are:

• Economic licence – the financial sustainability of a project, industry, or idea.
• Regulatory licence – the adherence to rules, regulations and standards for stable, safe and efficient implementation.
• Social licence – a community’s awareness and acceptance of an industry.

_{©Australian Hydrogen Council. Used with permission.}

[The framework] makes sure that if we get too caught up in one of the licences to operate we don’t forget the another ones. – Fiona Simon, AHC

Your task

Reflect on what achieving or not achieving social licence may look like. Can you think of any examples? Discuss in the comments below.

References

_{Shinglespit Consultants (2020) The Social License To Operate}

_{Moffat, K. & Zhang, A. (2014). The paths to social licence to operate: An integrative model explaining community acceptance of mining. Resources Policy, 39, pp. 61–70.}

_{Thomson, I. & Boutilier, R. G. (2011). Social license to operate. In P.Darling (Ed.), SME Mining Engineering Handbook (pp. 1779-1796). Littleton, CO: Society for Mining, Metallurgy and Exploration.}