Law and self-regulation – Substitutes or complements in gaining social acceptance?

Abstract

Mining industry needs a social license to operate (SLO) on local, national and global levels. In this research we study six companies in three different countries in the Kolarctic Area. All except one company seem to focus on getting the social license at the local level with agreements with other land users and local communities. For new companies a local social license seems to be more difficult to earn, but the old ones have gained it with their earlier behavior. In Sweden and Finland companies also focus on global standards, mostly because of the pressure from financers. In the mining branch, endusers are not yet interested in social responsibility of the companies. Globally functioning multinationals have, however, been alerted to develop industrial standards under the pressure of NGOs. In some mining sectors such as gold mining, international standards already play a significant role. In gaining the social license, the involvement of NGOs, which now is rather modest, might be one way to develop global standards and improve reputation. Companies, which are successfully focusing on the local level, might also gain from NGO cooperation on the national level, where the reputation of the mining industry in Sweden and especially in Finland has suffered from sporadic bad performers. Russian companies have their own challenges because of the weak formal institutions of the country. There both good national relations with the power structures and a strong role in developing the surrounding areas are fundamental.