Social impact assessment, social development programmes and social licence to operate: tensions and contradictions in intent and practice in the extractive sector

Abstract

In the past decade, the extractive sector has embraced social responsibility. Despite this, broad-based support for many extractive projects and operations remains elusive. Community opposition to resource projects appears to be increasing, even where compliance-based social impact assessments (SIAs) and generous benefits are in place. In seeking to understand this, the authors explore unintended contradictions in the implementation of regulatory SIA and the social development programmes (SDPs) being pursued by many extractive companies. Communities continue to mistrust extractive companies in the face of escalating regulation and offsetting development agendas. The authors contend that trust can only be attained by mobilising a company's core competencies, achieving credibility through total transparency, and maintaining appropriate roles and responsibilities of companies, governments and communities. The article presents an alternative approach, centred on the trust-building necessary to a social licence to operate. Such an approach involves 'collaborative moderation', aligns with the 'creating shared value' concept advocated by Porter and Kramer, utilises best practice SIA and uses SDP only where appropriate.

Social licence to operate and impact assessment

“…While this particular opportunity requires much work, recent research demonstrates strong linkages between project impacts and the state of relationships between companies and communities (Moffat & Zhang 2014). If SLO is collaboratively constructed by corporations and community members (Harvey & Bice 2014), with clear understanding of definitions, criteria, brokerage processes and data transparency, then an integrated SLO -IA system may be possible. In other words, IA results and ongoing collection of impact community perception data -accessible to all relevant parties -could provide an agreed basis for monitoring a proponent's compliance against their SLO.…”

“…Finally, Harvey and Bice (2014) complete the issue with an exploration of the tensions and contradictions in intent and practice that are inherent in the way that the extractive sector conducts its business. They draw out the unintended contradictions between increasing standards regarding formal engagement of communities through SIA and increasingly generous and sophisticated benefits and social development programmes.…”

Corporate Social Responsibility as Institution: A Social Mechanisms Framework

“…Carroll and Shabana 2010;Cowe and Hopkins 2008). Indeed, many firms regularly invest considerable funds in CSR-related programmes, and communities increasingly expect them to do so (Harvey and Bice 2014). In the mining and extractives industry-from which this article takes its examples-it is common for the world's leading miners to allocate 1 % of pre-tax profits to community investment programmes, a figure which can stretch into the tens of millions (Bice 2013).…”

Social impact assessment, social justice and scales of knowledge: exploring the emerging mining industry in Solomon Islands

“…This paradigm views impacts as real and objective, and assumes that with sufficient data, accurate predictions can be made by those trained in the social science of impact assessment (Aledo-Tur and Dominguez- Gomez, 2017). Craig (1990) (Esteves et al, 2012;de Rijke, 2013;Wong and Ho, 2015) and the role of SIA in organisational settings as a tool for enhancing social performance of corporations and their reputations (Esteves, 2008;Kemp, 2009;Harvey and Bice, 2014). According to Vanclay (2003), SIA practitioners refer to people who "practice the methodology of SIA and undertake associated social and environmental research to inform the practice of SIA" (p. 2).…”

“…While the introduction of SIA has reduced negative impacts for local communities affected by new mining projects, debate of their quality and scope are common (notable works include: Harvey and Bice, 2014;O'Faircheallaigh, 2015a;Aledo-Tur and Dominguez-Gomez, 2017;Lawrence and Larsen, 2017), with some scholars suggesting that SIA has not achieved its full potential as applied in the mining industry (O'Faircheallaigh, 1999;Lockie, 2001;Howitt, 2005;Walker, 2010). This, coupled with ongoing reporting of social impacts across the minerals sector in Melanesia, raises important questions about the role of various stakeholders 7 in negotiating and contextualising social impacts across international, national, provincial and local scales.…”