Maintaining legitimacy of a contested practice: How the minerals industry understands its ‘social licence to operate’

Abstract

Recent decades have witnessed growing concern among communities, governments and other stakeholders regarding the adverse social and environmental impacts of corporate activity. This concern has generated various interdiscursive notions, such as corporate social responsibility (CSR), corporate citizenship, the stakeholder concept, and sustainable development (SD), that purport to enable managers to manage business in a ‘responsible’ or ‘sustainable’ manner. This discursive landscape now commonly includes ‘social licence’ or ‘social licence to operate’, a term that has gained greatest currency in the minerals industry. Literature on social licence is sparse, but encapsulates a diversity of notions such as demands and expectations, legitimacy, credibility, and trust, and free, prior and informed consent. Perhaps most fundamentally, the concept of social licence suggests that stakeholders may threaten a company’s legitimacy and ability to operate through boycotts, picketing, or legal challenges. Yet this interpretation of legitimacy does not mean that stakeholders have the same capacity as regulators to grant or withhold an operation’s right to exist. How, then, do managers within companies under these pressures themselves understand social licence? We present findings of interviews with 16 managers in the minerals industry in Australia. We explore how these managers conceptualise social licence in relation to notions such as legitimacy, approval, and consent, how they interpret processes of social licence in practice, and how they differentiate it from concepts such as CSR. Managers’ conceptualisations can be categorised into four broad themes: legitimacy; localisation; process and continuum; and manageability. These findings suggest that, while social licence potentially represents a shift in power relations, this shift is constrained by discursive pressures to legitimise mining operations, to restrict social licence issues to the local level, to minimise regulatory impositions, to marginalise dissent, and to manage reputation. Opportunities for strengthening and adapting current understandings of social licence are considered.