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Social LicenseHow people can stop projects
Mary-Lou LauriaJune 2016
Large resource developments have created a paradox – people want investment in their communities, however, there is uncertainty around long-term environmental and social effects.
Uncertainty can stop a project in its tracks
The Environmental Assessment (EA) process was developed to identify and predict effects on
environment and society to reduce uncertainty.
Effects can result from the core activities of a project, activities outside the footprint, and
interaction with other projects (cumulative effects).
So, what’s the fuss?
Non-technical(e.g. political or stakeholder related)
Commercial(e.g. cost or contract related)
Technical
A study of the Top 190 oil and gas projects around the world revealed there was an average delay of 12 months for non-producing fields.
Source: From Shell presentation “Managing Non-Technical Risk at the Project Level” at Social and Environmental Risk Management Conference, 2011; adapted from Goldman Sachs Investment Research “The Top 190 Projects to Change the World”, 2008.
Reporting frequency by Type of Delay (%)
Type
of D
elay
Rep
orte
d
73% of sample Top 190
63% of sample Top 190
21% of sample Top 190
Community tension and conflict can be costly…
$10,000 per dayduring initial exploration
$50,000 per dayduring advanced exploration
$20 million per weekduring operations
Source: www.csrm.uq.edu.au/conflict-costs
The cost of conflict in the extractive sector can result in up to…
As a result, project developers need to manage expectations and proceed
with open engagement
Root causes of community tension can be because of:
Environmental and community health and safetyCompetition for resources and prevention of traditional
lifewaysConsent and land accessDistribution of benefits
LabourConsultation and communication
The community response to a development can be:
Lobby groups and coordinated grass roots movementsNetworking and developing alliances
Organizing media campaignsGaining high-profile support
Scientific knowledge and methodologies to better assess effects
Environmental Impact Assessment (EIA)
It’s not just a tick in the box
An EIA includes:Project descriptionValued components – what is important to all stakeholdersGood scienceEffects assessmentMitigation and managementConsultation
All the components of an EIA have the opportunity for interaction with
communities
There should be meaningful engagement when:
Setting terms of referenceConsidering project alternatives
Identifying early and long-term job opportunities
An EIA alone is not enough to obtain social license – but it can form a strong
foundation of trust
The path to approval and social license isn’t systematic or straight forward
Approval
Stakeholders
First Nations
Cumulative
Effects
Permits
EIA
Chan
ging
Regu
latio
n
It takes time…
It has to be embedded into the project lifecycle at the early stages
What can we do to obtain community
acceptance?
Realize that obtaining social license is about realizing value for the future
Shared ValueShared Value is defined as policies and activities that measurably improve socio-economic outcomes and improve related core business performance (Kramer and Porter, Harvard Business Review 2011).
OLD VIEW EMERGING VIEW
Business makes profits
Supports employment
Provides wages / income
Taxes / royalties
Enhance business competitiveness
Simultaneously advance socio-economic conditions
Local cluster development - Establishing an enabling environment for your project.
Sharing technologyAdvice, support Fair prices / paymentLocal contracting arrangements
Logistical efficiencyFlexibilityInnovation Reliable workforceCommunity relationshipsImproved land access
Shared Value
Company Grows
Jobs createdNew companies
seededDemand for ancillary
services rise
Inputs Outputs
Creating economic value in a way that ALSO creates value for society.
Communities are more likely to support projects if there is a solid base of trust.
Shared Value
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