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« Environmental regulators trashing the environment | Main | Thoughts on aerosols »
Monday
Aug102015

Social licences

A few weeks ago I chanced across an oil company executive who was expounding earnestly on his company's "social licence to operate". I raised an eyebrow at the time because it struck me as a case of big oil adopting the language of the environmentalists.

Interestingly though, it turns out that the whole concept of a social licence was introduced by a mining company executive:

[Jim] Cooney was racking his brain for a concept to describe why projects from Peru to Angola were getting delayed and shut down by protests. The companies lacked “social license,” he told the audience.

Not that this changes my views on the idea. In my opinion it's a trap for the extractive industries - one that will only add to the delays and lead to more projects being shut down by protests. In the face of a concerted campaign of disinformation from environmentalists and their supporters in the mainstream media, what business can ever hope to win over public opinion? The only way to do this is to start operating and show that it is safe and clean or whatever. That it has become impossible to do so is worrying. As so many small government types have pointed out over the years, the kind of regulation that prevents someone engaging in their chosen business simply because somebody else doesn't like it is the start of the road to serfdom. In a free country, you should be able to get on with a harmless business regardless of public opinion.

The extractive industries don't seem to have grasped that the environmentalists don't want them to operate in a clean manner or a transparent manner or a socially responsible manner. They don't want them to operate at all.

Still, at least it looks as if the current incumbents in Westminster are going to ignore (£) concerns about social licences as regards the development of a domestic shale gas industry. Sometimes there's a bigger picture.

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Reader Comments (31)

Social License makes sense. Government permits cover the wider costs and benefits. But the local costs and benefits need to be considered.

In an extreme example, consider the needs of the indigenous Ogoni people in Nigeria. The nation (which they barely recognised) needed money. Shell needed oil. The weak were treated as serfs. They weren't on the road. They had arrived.
And the protests were not profitable for Shell in the long run.

Everywhere, everyone wants to avoid that fate. There will always be legitimate protests if the costs are local and the benefits go elsewhere. Social License recognises that there are legitimate objections to the activities of extractive industries.

This does not mean all objections are well-founded or well-balanced.
But to ignore anything except the rights of the landowner and the Government is a Robber Baron License.

Aug 10, 2015 at 11:01 AM | Registered CommenterM Courtney

Faux outrage serves an agenda. Always. Acting within the law requires no *defence against it.

*Well, perhaps water cannon.

Aug 10, 2015 at 11:14 AM | Unregistered Commenterssat

What if the environmentalist organisations were required to get a social license before they could campaign to keep most of the world in poverty?

Aug 10, 2015 at 11:34 AM | Unregistered CommenterBloke down the pub

Do the Greens have Anti Social Behaviour Licences? They seem to get away with it all the time. Condemning whole communities and countries to guaranteed social deprivation, only terminated by premature death.

Aug 10, 2015 at 11:39 AM | Unregistered Commentergolf charlie

I think it’s hugely damaging to the dirty industries to try and clothe themselves in green wash or anything similar. I use the word dirty because in many respects that’s exactly what they are. Trying to pretend otherwise is deception and sets the level of any credibility. However being dirty is not the same as irresponsible or unessential or polluting. One of the few tactics I’ve never seen from this type of company is treating the public like adults. I’d rather hear –

“People, we need fossil fuels. Those who say that renewables are currently in a position to replace them as our main energy sources are out and out lying to you. So if we want energy we have two options. One, we can turn a blind eye to how and where fuels are extracted, no matter how politically or socially stable they are. Two we can extract them here, where we can set the standards of safety and environmental protection. No matter how diligent the company, the risk of pollution is never absolute zero but the likelihood falls dramatically the more the local authorities take the environmental, health and safety. The UK has some of the most stringent regulations in the world and boasts very high standards of inspection and monitoring. The environmental awareness and training levels of the workers are also important factors. Again, few countries in the World can compete with the UK. It’s up to you if you want the fuels you use here to come with a very low health and environmental risk to UK citizens or a much higher risk to a bunch of poor foreigners. Your call.”

The only wrinkle to this argument is that a lot of people would still vote NIMBY.

Aug 10, 2015 at 11:41 AM | Unregistered CommenterTinyCO2

"The extractive industries don't seem to have grasped that the environmentalists don't want them to operate in a clean manner or a transparent manner or a socially responsible manner. They don't want them to operate at all."

Yet they continue to use resources, extracted from elsewhere. They buy food farmed using hydrocarbon fuelled tractors, transported to the shops by hydrocarbon fuelled vehicles. They build, install and use diesel generators in hospitals. They fly to conferences in hydrocarbon fuelled flights. All the previously mentioned machinery required extractive industry to mine the minerals to make the steel, copper, aluminium, silica, potash, titanium, cement, glass, bricks, plastics, sulphur, etc, etc:
http://www.nma.org/index.php/minerals-publications/40-common-minerals-and-their-uses

There is no 'resilient', 'sustainable' plan. They are picking away, bit by bit, until we return to the Stone Age, and even they will not be satisfied:

Flint mining will have to be eliminated to save the planet!

Perhaps the problem is a lack of confidence in the regulators. They don't appear to to have been very good in banking, the NHS, Social Services, Border Control, the Environment Agency, child protection within the BBC, or International Aid.

Aug 10, 2015 at 11:51 AM | Registered CommenterRobert Christopher

A "social licence to operate" is no different to a bribe.

The Faux Outrage nothing more than a negotiating ploy to increase the bribe.

Governments get elected by promising the earth.

Aug 10, 2015 at 11:57 AM | Unregistered CommenterJoe Public

Faux outrage can be employed by the trick of deliberately poor reading comprehension. It does not have to have a basis in reality.

Aug 10, 2015 at 12:16 PM | Unregistered Commenterssat

'Fracking is poised for an explosive expansion' isn't the best chosen headline.

Aug 10, 2015 at 12:30 PM | Unregistered CommenterJamesG

Troll comments and follow ups removed. Please DNFTT

Aug 10, 2015 at 12:42 PM | Registered CommenterBishop Hill

We don't hear so much about, say, estate agents "social licence to operate". We live in an anti-industrial culture. It's another extension of the so called "precautionary principle", the Luddite tendency that "You mustn't do that. Something bad might happen."

Aug 10, 2015 at 12:52 PM | Unregistered Commentermichael hart

Stacey, my comment above Aug 10, 2015 at 12:16 PM

Trolls just waste time. They have no contribution to make.

Aug 10, 2015 at 1:30 PM | Unregistered Commenterssat

Another example of pandering to ignorance and sweeping technophobia denying a "social licence to operate":
"Scotland to ban GM crop growing."

"Huw Jones, professor of molecular genetics at agricultural science group Rothamsted Research, said the announcement was a "sad day for science and a sad day for Scotland." The most positive note is that the BBC are probably less anti-GM than they used to be. Perhaps some of them have travelled to foreign lands and survived eating GM crops.

Aug 10, 2015 at 1:40 PM | Unregistered Commentermichael hart

Like the Bish said, DNFTT

Aug 10, 2015 at 2:08 PM | Registered CommenterMartin A

And the same troll comments and follow-ups removed again, please DNFTT

Aug 10, 2015 at 2:20 PM | Registered CommenterBishop Hill

@M Courtney, You use the Ogoni tribe as a group of people who would be ridden rough shod by oil companies and their own government and say that a social license is important to protect them. I might come across as cold and heartless but I say "so what". Let them get kicked out from their tribal lands and move to the cities where they will be forced to get jobs to survive in nasty factories working long hours. They will still be better off in the long term with better health, shorter working hours, more facilities than if they were left alone on their subsistence farms living hand to mouth and needing aid the moment the weather turns slightly bad.

As an example of how that has worked in the past just look at our own history. We used to have over 40% of the population living hand to mouth in small farms working long hours to produce food for the whole country. Now we have only a few percent in the agricultural industry (and that includes associated businesses not just farms themselves) producing food for everyone and exporting too. All those kicked off the farms and forced to work in the mills were better off (even though compared to modern standards it was hard). And their descendants (us) have done extremely well out of the sacrifices of our ancestors. We now have 10% of the population involved in the health industry and many others working in a huge diversity of jobs - all due to the fact that we gave up subsistence farming. Would we be able to have the NHS if a huge number of the population worked on farms.

Have we given up our tribal lands? Yes. Have we given up our history? Not really, we still celebrate Morris Dancing and many other things. Did our ancestors worry about the future for their descendants? Not really, everything was progress. If you want to blame someone for our current state of affairs relaxing on sofas in central heated homes travelling around in metal boxes, blame the cotton & wool barons who rode rough shod over their employees.

Aug 10, 2015 at 2:52 PM | Unregistered CommenterSadButMadLad

@ michael hart: "Perhaps some of them have travelled to foreign lands and survived eating GM crops."

Indeed, and what they all choose to misremember is that EVERYTHING they eat (and their pet dogs) has been, at some time been genetically modified. In the real world it is called plant or animal breeding.

Aug 10, 2015 at 2:53 PM | Registered Commenterdavidchappell

SadButMadLad, I happen to agree that urbanisation, civilisation and economic development are better for those who develop.

But I disagree that no-one can be permitted to make a different choice.

They should not be mere serfs - ordered off their land and their culture crushed. But that is what happens when Governments and Corporations combine with no respect for the people. That is what has happened.

Yes, I am a lefty standing against tyrants even though... Yes, sometimes the tyrants can be right.
But I still think the weak should be given a voice.

Er. Am I the troll again, now?

Aug 10, 2015 at 3:29 PM | Registered CommenterM Courtney

The whole 'social license' thing is nothing new.

In the US public revulsion over the policies of monopolist grain-elevator operators and oligopolist railroads inspired the creation of the modern regulatory state.

Of course, when you have an appropriate sort of propagandist manipulation, 'social license' also brings you witch-burnings and the guillotine.

Aug 10, 2015 at 3:57 PM | Unregistered CommenterJEM

"Social Llicence" isn't a term I'd come across before - but getting on with your neighbors / the local community gets dealt with in a spectrum of ways by the extractive industries - depending on local conditions. I think it important to state here that Shell Nigeria is majority Nigerian government owned - they are the usual bogeyman when stuff like this pops up.

The woeful ineptness of the UK shale exploration / production crew in this area has been simply staggering.

Over the years I've had some doings with BHP-Billiton and seen the way they manage their projects - which has provided me some considerable entertainment.

They had a mining operation in Madagascar and the NGO gap year useful idjits were piling in accusing all sorts of things - trouble was the cut and cover mining was working well (company and independent surveys showed little to choose between before and after) - the health and education of the local population had improved - and the locals were resistant to the proselytizing lefty 20 somethings from arts backgrounds in dirty Che Guevara T-shirts telling them to rise up. Tiresome 'pon occasion when the only people who would talk to them were the expats working for the mining company - gratifying though - to see their despondency in the face of reality as they resigned to head home to make a nuisance of themselves there.....

It is not all rosy but deliberately laying waste to the countryside is generally not high on most company agendas - and the most egregious examples I have seen have *all * been forced on the operators by the local authorities.

As to the weak having a voice - that usually depends on LOCAL issues and politics - which is where the lefty NGO anti capitalist crew usually have severe episodes of blindness and deafness.

Aug 10, 2015 at 4:18 PM | Registered Commentertomo

M Courtney, you are not a troll!

I would agree that the industrial revolution was brilliant, but did not change everyhing for the better. The anti pollution/environmental groups did do a great job in the UK and elsewhere for employees aswell as the environment, and this did hit excess profits.

It is now far cheaper to manufacture abroad where no protective legislation exists, and growth has been rapid in India and China for example, with the consequent loss of British manufacturing jobs. Some multinationals do take outrageous liberties with non existent anti pollution laws overseas.

Encouraged by their earlier success, environmental groups are now trying to prevent all industrial development, around the entire world. As responsible industrialists have developed, so irresponsible environmentalists have assumed fresh responsibilities for ensuring no development.

I do remain concerned that the consequent demolition of Green mantra, will lead to a return to the bad old days

Aug 10, 2015 at 5:04 PM | Unregistered Commentergolf charlie

Speaking as an (ex) safety manager in a major oil company, i can tell you we recognised years ago we had to "do fhe right thing" in respect of process safety. The prevention of major incidents was recognised as part of our "license to operate" - these are words we used on a regular basis and were said in all seriousness.

Aug 10, 2015 at 8:40 PM | Unregistered CommenterHysteria

I could not find the KEY point in any of the comments above:

what IS the definition of a "social licence" ? What does it mean ?

Plenty of "look at me" comments but no one wants to define what it is they feel so boastful about

Aug 11, 2015 at 12:26 AM | Unregistered Commenterianl8888

@Bishop Hill Aug 10, 2015 at 2:20 PM

And the same troll comments and follow-ups removed again, please DNFTT

Bishop, please do not delete troll comments. It makes this site same as The Guardian and other sites who delete those who disagree.

Others: DNFTT - ignore their posts, do not reply.

Aug 11, 2015 at 1:05 AM | Unregistered CommenterPcar

"Faux outrage can be employed by the trick of deliberately poor reading comprehension"

"It is impossible to speak in such a way that you cannot be misunderstood."
- Karl Popper

Aug 11, 2015 at 2:15 AM | Unregistered CommenterPiperPaul

The really big resources companies think that all this greentape is one of their competitive advantages. The big boys can afford to carry a project through 10 or 20 years of regulatory approvals and endless consultations. They can buy off the green groups in all sorts of ways. But they really should bear in mind that once you pay the Danegeld, you never get rid of the Dane. The green groups will only keep making more outrageous demands, and any support (financial or otherwise) they get from resources companies increases their ability to do damage. As the Bish says, their ultimate aim is to shut down extractive industries entirely, and they never lose sight of that guiding star.

Aug 11, 2015 at 2:34 AM | Unregistered Commenterrubberduck

Aug 10, 2015 at 11:51 AM | Robert Christopher
Agree, I was going to post something similar

Aug 11, 2015 at 8:19 AM | Unregistered CommenterSandyS

M Courtney, I don't regard you as a troll either. I was impressed by some of your comments v David Appell over at WUWT recently.

Aug 11, 2015 at 8:21 AM | Unregistered CommenterSandyS

The extractive industries don't seem to have grasped that the environmentalists don't want them to operate in a clean manner or a transparent manner or a socially responsible manner. They don't want them to operate at all.

My impression exactly.

Next time you are being harangued by someone against "fracking" or some specific operation that they've recently heard of and become outraged about, ask them just what gas well, what oil well, what mine, what extraction method do they approve of? Just name one.

Aug 11, 2015 at 9:08 AM | Unregistered Commenterkellydown

M Courtney
Add me to the list of those who do not see you as a troll. I'm not sure what sparked this line of thought but I'm sure there must be a misunderstanding.

Pcar
Andrew does not delete troll comments as a matter of course. There are occasions when we wish he would!
The troll we are referring to has been serially banned and has serially found a way round that ban. It has nothing of value to contribute to this or any other blog (on the evidence of its contributions). Most others at least appear to have some interest in discussion (even if it's fairly quickly proved to be fake); this one not at all. Abuse is all it's about.

Aug 11, 2015 at 10:17 AM | Registered CommenterMike Jackson

Mike Jackson, I didn't see the comments by the troll who were removed. But I am at odds with the free-market, laissez faire attitude of many of the commenters here.
In fact, I had the very first comment - in which I compared our host's attitude to a Robber Baron.

With all the talk of DNFTT and the like it was easy to see how I could be concerned that I had stepped beyond the polite tone of this blog.
The polite tone that I find quite refreshing for the internet, actually. The polite tone that I did want to preserve whilst dissenting. So I was wary.

Aug 11, 2015 at 3:22 PM | Registered CommenterM Courtney

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