Social licence to operate model: Critical factors of social acceptance of mining in the Brazilian Amazon

Abstract

The Social Licence to Operate (SLO) has been identified as one of the main risks to the mining business and is a growing topic in academic publications. Quantitative studies have modelled and measured the critical elements of SLO, but most of this research is concentrated on developed countries, indicating the importance of extending studies into the distinct reality of developing countries. The objective of this research was to propose a model for measuring the critical factors of Social Acceptance to evaluate SLO, to test it on a Brazilian mining operation, and critically discuss its results within the context of the high social vulnerability of local communities. The Social Acceptance measurement model was tested with a questionnaire applied to communities in the municipality of Parauapebas/PA, in the Brazilian Amazon, where one of the largest mining reserves in the world is found. The results confirmed that Procedural Fairness, Distributional Fairness, Relationship, and Environmental Protection affect Trust, which in turn has a positive relationship with the Social Acceptance of the mining company in the Brazilian context. The most significant variable in the model was Environmental Protection, which was included due to the territory being located in the Amazon region, and on account of the recent environmental catastrophes involving mining in Brazil. However, even when considering the validity of the proposed model, a contextual analysis of the results obtained indicates the importance of understanding the influence of local vulnerability on the results achieved. The low level of trust and of other constructs, associated with the perception of high wealth generation and low welfare, may, at any moment, turn into community dissatisfaction, and increase the risks to the business in this specific case.