MEASURING THE SOCIAL LICENSE TO OPERATE - ACCSR

MEASURING THE SOCIAL LICENSE
TO OPERATE
Social License to Operate Conference
Brisbane, November 8 th 2010
Dr Leeora D Black
Managing Director
Australian Centre for Corporate Social Responsibility
www.accsr.com.au

ABOUT ACCSR
• Established 2003
• Consulting and training company wholly dedicated to
building competitive advantage and stakeholder
wealth through corporate social responsibility
• Partnership with La Trobe University Graduate School
of Management since 2008
• Accredited GRI trainer
• Publishes annual State of CSR in Australia

WHAT THIS PRESENTATION COVERS
• Defining social license to operate
• Method for measuring
• Case study
• Pitfalls to avoid
Acknowledgement:
Dr Robert Boutilier, ACCSR Senior International Associate and Center for
Sustainable Community Development, Simon Fraser University, Vancouver,
Canada, and
Dr Ian Thomson, Principal, On Common Ground Consultants Inc, Vancouver,
Canada

DEFINING SLO
• A perception based on the legitimacy of a mine,
company or industry
• Entails acceptance (the basic level) and approval (a higher
level)
• On occasions can
transcend approval to a sense
of ownership or be with-held
• Will vary over the life
of a project and by
stakeholder group.
The Ups and Downs of Social Capital at San Cristobal
Boutilier & Thomson 2008

MODEL OF SLO
Co-ownership - The community has very high
trust in the company and sees itself as sharing
responsibility for the company’s success.
Stakeholders will advocate for the company
when necessary.
Approval - The company has established both
legitimacy and credibility, and the community
approves of the company.
Acceptance - The community listens to the
company and considers its proposals. If, by
their own standards, they have no reason to
doubt the company’s credibility, they may allow
a project to tentatively proceed.
© 2009 Boutilier & Thomson
Withholding/withdrawal - The rejection
level of a social licence is the worst case
scenario. This can manifest in complaints,
blockades and public action against individual
sites, companies or the industry as a whole.

SOCIAL LICENSE TO OPERATE- DEFINITION
AND MEASURE
Definition
The concept of the social license to operate derives from notions of sociopolitical
risk in the stakeholder environment.
“honest communication”,
(transparent, honest
and shared of
information)
“respect and norms”
(fairness ethics and
respect of stakeholders’
waits and norms)
“pragmatic”
(advantages for the
stakeholders to collaborate
with the mine).
Measurement
Measure of Perceptions - List of statements rated by respondents from
“strongly disagree” to “strongly agree”

SLO AS A MULTI-DIMENSIONAL CONSTRUCT
Markers of
Boundary
Criteria
Xcorp is a
legitimate
organisation
Xcorp is a
credible
organisation
Xcorp is a
trustworthy
organisation
Pragmatic
motivation to
relate
Recognise
benefits
Agree and cooperate
with one
another
Improves our
situation
Respect for
people and
norms
Respects local
ways, ethical
conduct
Consistent,
accurate &
inclusive
decision-making
Fairness
Honest,
transparent
communication
Openness
Information
quality &
quantity
Believable

PITFALLS TO AVOID
• Inadequate investment in relationship-building
• Selective engagement
• Failing to deliver on promises
• Failing to understand internal structure of the community
• Failing to listen and respect with over-reliance on legal
permits
• Failing to maintain close contact when there are changes
of personnel in the company
• Over-estimating the quality of the relationship

RELATIONSHIP STRENGTHENING ACTIVITIES
• Respect and inclusiveness
• Transparency and honesty
• Listening and empathy
• Responsiveness and promise-keeping
• Good Will/Care - Protecting the interests of the other
• Clear rules and principled actions
• Developing and working towards shared goals

CONCLUSION
• SLO is a perception
– Varies in time and among groups
• Hard to earn, easy to lose
• Once lost, very hard to recover previous levels
• Highly valuable intangible asset
• Key driver of SLO is relationships
• ACCSR’s best advice to you:
– WORK ON STAKEHOLDER RELATIONSHIPS!
Thank you and good luck!