Stakeholder trust in the Queensland CSG industry

Abstract

Stakeholder trust is pivotal to the social licence to operate and a source of competitive advantage for firms. While managing trust with stakeholders is recognised as a critical management competency and central to delivering coal seam gas (CSG) strategy, to date there has been little examination of stakeholder trust. This research examined the drivers and levels of trust in the CSG companies and industry from the perspective of core CSG stakeholder groups, and identified what stakeholders perceive to be critical for building and maintaining trust in the CSG industry. With the support of four major CSG companies and the University of Queensland (UQ) Centre for Coal Seam Gas, in-depth interviews were conducted with 145 participants representing five stakeholder groups: landholders, community members, regional leaders, regulators, and employees. An online survey was subsequently developed and completed by 561 CSG stakeholders. Analysis of the interview data revealed 11 key drivers of stakeholder trust and distrust. Seven drivers focused on how the CSG companies were perceived to operate in regard to: (1) integrity and transparency, (2) communication and interaction, (3) competence and efficiency, (4) community impact and contribution, (5) coexistence with landholders and the community, and having (6) a shared versus divergent identity, and (7) a positive versus negative comparative reputation. Four drivers focused on the broader CSG industry: (8) environmental concerns, (9) governance and regulation, (10) uncertainty and unpredictability of the industry, and (11) the power differential between CSG companies and stakeholders. Analysis of the survey data revealed significant differences between stakeholder groups in the level and drivers of trust. On average, CSG employees reported high trust, regulators, community and regional leaders reported moderate trust, and landholders reported low trust. In contrast to a minority of employees, the majority of external stakeholders reported concerns over the environmental impacts of CSG and the effectiveness of governance and regulation, and perceived the industry to be unpredictable and too focused on the short term. Stakeholder recommendations for enhancing trust and strategies for establishing a more resilient and trustworthy industry reputation are identified. Priority areas include: (1) building trust with landholders, (2) increasing the transparency with which companies share information, plans and regulatory compliance, (3) improving the effectiveness of CSG governance and regulation, and (4) addressing environmental concerns.

Economic Synergies from Tighter Agri-Business and Coal Seam Gas Integration

“…As CSG developments are often located on prime agricultural land, land use conflict and stakeholder trust is a concern for gas operators [93]. A lack of trust in the CSG operator is quite often the most significant social issue which underpins many of the other concerns affecting the progress of promoting coexistence between agribased industries and CSG industry [91]. Land access agreements and their associated 'confidentiality clauses' can contribute to the distrust with CSG operators and regulatory bodies.…”

“…However, the progress of amalgamating agricultural industries with the CSG industry has been slow [9]. There is cumulative effect of coexisting CSG developments in close proximity to agricultural developments that are complicated by community attitudes, local industries, environmental assets, and regulations [91,92].…”

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

“…In Australia and internationally, research points to trust between a company and its stakeholders being at the heart of the social licence process (Gillespie et al, 2016;Warhurst, 2001;Williams & Walton, 2013;Zhang et al, 2015). That trust acts as a driver of social acceptance has been established in many contexts, including carbon capture and storage, wind farms, onshore and offshore mining, CSG development, gene technologies, food technologies, nuclear power, and recycled water (e.g., Eiser, Miles, & Frewer, 2002;Greenberg, 2014;Hall, Ashworth, & DevineWright, 2013;Mason et al, 2014;Ross et al, 2014;Siegrist, 2000).…”

“…Gillespie, Bond, Downs, and Staggs (2016), in a study of the Queensland coal seam gas (CSG) industry involving 145 interviews and 561 surveys with stakeholders, stated that " [stakeholder] trust is pivotal to the social licence to operate" (p. 1). Similarly, in large-scale studies on SLO focusing on the acceptance of mining at national levels across Australia, Chile, and China, Zhang et al (2015) found trust, in every country, to be a critical driver of social acceptance.…”

“…found that, in the context of a CSG development, the quality of contact among communities and companies was a driver of trust, and thus, acceptance. Gillespie et al (2016) To build on the scope of currently recorded evidence, we sought to document the outcomes that dialogue might achieve in the context of attempts to gain a social licence, as seen by community engagement practitioners. These practitioners are responsible for the design, implementation, and evaluation of stakeholder engagement strategies, and they hold a wealth of tacit knowledge.…”