Don't lose your social licence to operate

Richard Harris 30 Nov 2016
3 mins
A social licence to operate

The social licence to operate is the most important ‘permit’ your project can secure, writes Richard Harris — but is the hardest to gain and easiest to lose.

Getting a permit to build and operate a project – be it a mine, gas well, industrial plant or even a wind farm – is not just about submitting a completed form to the regulator or local council and expecting it to be ticked off.

It is so much more than just complying with environmental rules and planning guidelines.

Regulators and governments – at the local, State and national level – now require that the proponent obtains a “social licence” to develop and operate the project.  And they are expecting companies to do this at the earliest possible stage.

This is a reflection of communities becoming more discerning about what are the benefits (if any) for them in projects locating close by and becoming their new neighbours. And they also want to know that developers will take note of their concerns and make adjustments to project design where there is flexibility (which there usually is) and it is feasible.

Governments and regulators have listened to these stakeholders and communities – influenced through their elected representatives – and now want to know that the proponent has met with and listened to any concerns of the locals, has addressed those concerns and is offering tangible benefits.

These benefits can be local jobs in construction and operations, or increased opportunities for local businesses, guided community investments or broader environmental benefits.

Senior company representatives supported by experienced professionals reaching out to brief influential stakeholders can deliver an important critical mass of project awareness and is usually the first step in well thought-out process.  Surprisingly (particularly to practitioners) some companies still take a view that there is no real benefit, it’s too expensive or takes too long and that as long as they comply with regulations, this is sufficient.  Recent clear evidence in WA shows that this approach doesn’t work anymore and regulators will take a dim view of that approach.

Regulators themselves are now becoming more proactive and working closely with developers to make sure that community engagement is linked to approvals processes. The Department of Mines and Petroleum for example is keen to make sure that aspiring explorers and producers demonstrate understanding of the community dynamics around their proposal and have a plan to effectively work towards obtaining a social licence.

The Minerals Council of Australia’s Enduring Value Framework which guides sustainable development in the sector, also requires companies to operate in a manner that is attuned to the expectations of the community.  This can require a highly sophisticated level of planning and execution, along with appropriate skillsets within the team to do well.

What makes a good community engagement strategy?

Listening to the community and government is just as important as communicating the benefits of your project.

At the early stage of development, most projects have flexibility in their design parameters. For example, this can be in regard to the physical “footprint” or even the operational aspects. Regulators themselves often require changes to project proposals to make them acceptable in complying with regulations but also they take into account input from stakeholders and community members.

It is better that proponents proactively engage with the community to understand legitimate concerns and if possible modify the design of the project to accommodate those concerns to build social licence ‘equity’, rather than deal with these through formal public comment periods which can burden both the regulator and the proponent (in terms of time).

By doing this, it makes the job easier for regulators to approve the project, but it also gives the community a buy-in and a sense of being listened to. It is earning a social licence to operate.

Cannings Purple has a highly skilled team of community engagement practitioners with hands-on experience in working with stakeholders, local communities and regulators. Our team is there to help you obtain and maintain your company’s social licence.

Richard Harris is the chairperson of the Independent Power Association, spokesperson for DomGas Alliance and Special Counsel at Cannings Purple, specialising in energy and resources and government relations. Contact Richard.

Richard Harris More from author

Richard has several decades of experience in WA’s energy and resources sectors at strategic project and policy development level, in both the private and public sectors. Richard worked for more than 20 years in senior levels of government in both the federal and state jurisdictions, and has an extensive network with senior bureaucrats and politicians.

Richard’s roles in the private sector have included WA Director of ERM Power and Managing Director of Mid West Energy. Richard also chairs the WA Independent Power Association.

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