Summary Social licence to Operate (SLO) and related concepts
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Course
Social Impact Assessment (GEMSOCIMAS)
Institution
Rijksuniversiteit Groningen (RuG)
Summary of the Social Licence to Operate (SLO) and related concepts of Public participation, social impacts, community engagement, stakeholders and communities.
The Social licence to operate and related concepts
Content
The Social licence to operate .................................................................................................................. 1
Introduction of the term social licence to operate ............................................................................. 2
Conceptual models of SLO................................................................................................................... 4
Thomson & Boutilier (2011) and Jijelava & Vanclay (2017; 2018) .................................................. 4
Moffat & Zhang (2014) and Zhang et al. (2015) .............................................................................. 6
Prno & Slocombe (2014) ................................................................................................................. 8
Additional concepts related to SLO ................................................................................................... 10
Social impacts and social impact assessment ............................................................................... 10
Governance and governments ...................................................................................................... 11
Community engagement and public participation........................................................................ 11
Stakeholders, community and levels of SLO ................................................................................. 12
, Introduction of the term social licence to operate
In the late 1990s the term SLO emerged in the mining industry in order to cope with social-political risk
and risk of financial and reputational damage caused by conflict with local and societal communities
(Cooney, 2017). Cooney (2017) sees the SLO as a metaphor for the issue that not only legal licences
are needed for projects, but also ‘licences’ should be obtained from the local communities and broader
public.
The SLO is considered as a ‘critical success factor’ for developments within the mining industry (Nelsen
& Scoble, 2006). Academic interest with the concept of SLO also grew, especially in fields related to
extractive industries and natural resources (Bice, 2014; Joyce & Thomson, 2008; Kemp et al. 2011;
Lacey et al. 2017; Moffat & Zhang, 2014; Nelsen & Scoble, 2006; Owen & Kemp, 2013; Parsons et al.
2014; Prno, 2013; Prno & Slocombe, 2014; Richert et al. 2015; Smith & Richards, 2015; Thomson &
Boutilier, 2011; Zhang et al. 2015), but also some other industries, such as forestry (Dare et al. 2014;
Moffat et al. 2015), the paper industry (Gunningham et al. 2006), green initiatives and biodiversity
projects (Vanclay, 2017) and the growing industry of renewable energy production (Colton et al. 2016;
Corscadden et al. 2012; Corvellec, 2007; Hall & Jeanneret, 2015; Hall et al. 2015; Jijelava & Vanclay,
2018; Vanclay, 2017; Van de Biezenbos, 2018).
Although there are multiple definitions of the SLO, most contain similar re-occurring themes. Both
Cooney (2017) and Thomson and Boutilier (2011) see the SLO as community support for a company
and its’ local operations. Within SLOs Thomson and Boutilier (2011) distinguish four different levels:
withdrawal, where there is no SLO, acceptance, when most communities merely accept the project,
approval, when communities benefit from the project and have a good relationship with the
proponents, and psychological identification, when communities identify themselves with the project.
Further Gunningham et al. (2006) describe the concept of the SLO as the demands and expectations
that come from groups in the geographical vicinity of business activities and how these are met.
Similarly, Parsons & Moffat (2014) emphasize that SLOs encompass expectations from local
communities, concerning both the impacts of activities, as the conduct of the proponents, and how
these expectations match with the actual outcomes. Conversely other academics suggest that SLOs
should not be limited to local communities, but that they should also consider other stakeholders
(Jijelava and Vanclay, 2014; Joyce & Thomson, 2000; Prno & Slocombe, 2014), across different
geographical levels (Dare et al., 2014; Prno & Slocombe, 2014) and different groups (Dare et al. 2014).
Additionally, SLO is not considered a static licence that is only gained before a project. Rather it should
be considered as a dynamic and continuous concept (Boutilier, 2014; Hall et al. 2012; Parsons et al.
2014; Owen & Kemp, 2013; Thomson & Boutilier, 2011). These aspects can culminate in a definition of
SLOs as follows: A SLO is the acceptance or approval, from withdrawal to psychological identification,
of varying local communities and other stakeholders of a certain project, activity or development and
its proponents that is continuously granted.
The adoption of SLO is well established in extractive industries (Cooney, 2017; Franks & Cohen, 2012)
and is emerging in the renewable energy industry (Hall & Jeanneret, 2015; Hall et al. 2015). But what
are reasons for project proponents in wanting to obtain SLOs from communities? In extractive and
other heavy industry it is widely known that not gaining SLOs can result in significant financial loss
(Davis & Franks, 2011; Franks et al. 2014; Gunningham et al. 2004; Henisz et al. 2014), limited access
to resources (Thomson & Boutilier, 2011), loss in reputation and market value (Liroff et al., 2014) and
layoff of projects (Jijelava & Vanclay, 2018). SLOs thus effects overall business interest (Demuijnck &
Fasterling, 2016; Van de Beizenbos, 2018). This has also been identified within renewable energy
industry (Hall & Jeanneret, 2015). Obtaining SLOs can also make projects more resilient to socio-
political instability, because when broader acceptance of a project by different communities is already
obtained, likeliness that a project can continue under changing socio-political conditions increases
(Boutilier et al., 2012; Cooney, 2017). Additionally, pressures from NGOs and foreseeable tightening of
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