Abstract
Issues related to company-community relations and the social license to operate have emerged as strategic business issues. This paper aims to contribute to the growing body of research on long-term company-community relations. An analysis of the relationship between Alcan (Aluminum of Canada, Montréal, Canada part of Rio Tinto since 2007) with the Cheslatta Carrier First Nation in the Kemano-Kitimat area of northern British Columbia, Canada, provides three contributions. The first is related to the notion of relational legacy, which refers to the sedimentation of unresolved issues that have the potential to impede the realization of corporate activities and the reproduction of low levels of social license to operate. The second concerns stakeholder management. While the literature suggests that stakeholders should be managed by companies according to the degree of salience, this analysis suggests that researchers and managers should consider the evolution of the environmental context in their analyses. Third, the analysis suggests that small or marginalized groups, depicted by the stakeholder management literature as dormant stakeholders, should not be underestimated.
Highlights
In recent years, issues related to company-community relations have emerged as major business and strategic issues, especially in extractive industries [1]
Goldman Sachs [3] found that the time required to complete projects has almost doubled during the last decade due, to a large extent, to the increase of ―non-technical risks‖, such as conflict, sabotage and so on [2], and risks related to stakeholder management accounted for the single largest category of risk [4]
Kemano Hydroelectric Project is one of Canada‘s most ambitious projects undertaken in the 20th century; (2) several stakeholders with different interests were involved in the project; and (3) the case illustrates the challenges of community relations and the process of the construction of the social license to operate (SLO)
Summary
Issues related to company-community relations have emerged as major business and strategic issues, especially in extractive industries [1]. Ernst and Young‘s identifies that at the global level, four of the ten most significant business risks concern relations with local communities [5]. The context of sustainable development requires companies to act as citizens, that is to say, they must assume both their rights and their responsibilities [7]. This requires significant and continuous efforts from businesses to acquire and maintain their social legitimacy; the erosion or loss of local legitimacy may lead to conflicts between companies and local communities and stakeholders, as well as severe disruption in operations. Community relations is crucial for organizations [8,9,10]
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