The unwritten license: The societal SLO in Latin America’s extractive sector

Abstract

The Latin America and the Caribbean region has benefited significantly from economic growth driven by the extractive sector. At the same time, the region has experienced high levels of conflicts related to this sector. This paper presents an overview of citizens’ perceptions of the extractive industries in Bolivia, Colombia, Ecuador, Peru, and Venezuela. Using a representative sample for each country, we identify regional and country-specific determinants of the societal social license to operate (SLO). The societal SLO is an unwritten license of social approval accorded to extractive projects by citizens at large. This paper investigates social acceptability, capturing public sentiment toward the mining and the oil and gas sectors. We analyze 6,806 responses from a telephone survey conducted during the first quarter of 2021 employing a Random Digit Dialing (RDD) strategy to contact citizens. While our findings confirm that perceptions vary across countries, we show that governance is the strongest predictor of societal SLO, consistent with the literature’s evidence. In addition, procedural justice, distributive justice, and nationalism play essential roles in shaping individuals’ attitudes. We corroborate regressions’ results with non-parametric tests. These findings suggest that strengthening government institutions and their perception could contribute to preventing conflict around extractive industries.