Social licence and the challenge of finding ‘the overlap’

Speaking at the Copper to the World conference in Adelaide this week, I was struck by just how vital social licence has become to any new project in this country.

The term “social licence” was only coined a little more than 20 years ago, but it’s pretty much become ubiquitous, as companies and businesses work to earn the trust and acceptance of society. Even those who don’t use the term are likely have an appreciation for what it means.

The conference discussed the potential to develop a copper smelter, most likely in the Upper Spencer Gulf, where it would provide benefits to – but potentially also hold some concerns for – the communities of Port Pirie, Whyalla and Augusta.

Any proponent of a copper smelter in SA would be wise to look north to the challenges surrounding Adani’s Carmichael coal mine in Queensland and reflect on the importance of earning the trust and acceptance of society.

When corporate behaviour doesn’t live up to society’s expectations, the sustainability of that corporation is at risk.

The lesson from Adani is that local trust and acceptance are not only necessary, but can be hugely influential in overcoming other obstacles.

Thanks to some ground-breaking research conducted in Australia by the CSIRO, we now have a much better and empirical understanding of the factors driving local trust and acceptance.

Their research shows two things have the biggest impact:

1. Quality of contact: how genuine and positive community members perceive contact with company representatives to be. Importantly the CSIRO research shows no significant relationship between contact quantity and trust.
2. Procedural fairness: whether community members feel they have a reasonable voice in the decision-making process. This does not mean a proponent doing everything that is asked, but rather demonstrating that the views of local community are considered in decisions being made.What does this mean in practice, for a potential South Australian smelter, or any project, for that matter)?

It will be crucial for any proponent to engage early with representative stakeholders from the community. These should include, at the very least, local government, community members, traditional owners and local business.

Where possible, this contact should be conducted by senior operational leaders, because they have the greatest ability to influence business decisions – and are the most inherently trusted company representatives.

Simon Corrigan speaks at the Copper to the World conference.

The local community needs to be the starting point because, despite the global context of the project, trust starts – and can be ended –  at home.

Proponents should openly and transparently describe what is being considered and the potential community impacts, both positive and negative, while also being transparent about the business drivers that will determine the viability of the project. Most importantly proponents should listen to the views of community members.

This will determine what the most pressing issues for the community are. To the greatest possible extent, these should be included in the project design and operational plans; if not, then the reason why not should be conveyed back to the community.

This is procedural fairness in action.

I will not presume to speak for Upper Spencer Gulf communities – they are more than capable of speaking for themselves – but some of the issues that a proponent might expect to be raised are:

• Economic. This is an area with a strong industrial base, that has done it tough in recent years. Opportunities for local employment and broader economic development will be important to the region.
• Environmental. This region has and is dealing with a legacy of historical industrial development that was not subject to modern environmental controls. For example, lead emissions in Port Pirie and fly ash plumes in Port Augusta. A proponent may need to work harder to demonstrate that a new smelter won’t leave similar environmental legacies .
• Social. Any new development has the potential to impact on social infrastructure, and communities will be rightly concerned to maximise positive and minimise negative impacts.

Of course, a proponent will also have a whole range of other requirements – not least ensuring its own economic viability.

It would be a mistake to think of these as competing priorities.

Instead the challenge will be to find the overlap – to design and operate a smelter that makes a good product, makes money and continually earns the trust and acceptance of society.

This is the contemporary minimum template that all businesses should expect to follow if they are to win their social licence to operate.

Simon Corrigan is a Director in Purple’s Corporate Affairs team and an expert in community stakeholder engagement and social licence issues. Prior to joining Purple he was BHP’s Head of Community and Indigenous Affairs. Contact Simon.

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