Does mining company-sponsored community development influence social licence to operate? Evidence from private and state-owned companies in Chile

Abstract

This research compares corporate-sponsored community development (CD) and social legitimacy at two co-located mining operations in Chile (one private and one state owned) to explore the contribution of CD to social licence to operate. The research identifies that varied approaches to corporate-sponsored CD and its outcomes have the potential to either enhance or undermine social licence to operate, but that the relationship between the mine and community, the presence of negative environmental and social impacts, and social development associated with the core activities of the mining project are more significant factors affecting legitimacy. The research used a methodology that consisted of a review of corporate sustainability reports and corporate policies, and qualitative interviews with community leaders, local government and corporate community relations professionals (n = 38). The research found that the approaches to CD undertaken by the private and the state-owned company differed. Pre-selection of community investment parameters and the absence of participatory spaces were found to limit local community co-ownership of projects and positive attitudes towards the corporation. Our findings indicate that community representatives expect the negative social and environmental impacts of development to be addressed before investing in other areas of development. The presence of social development outcomes from mining projects was found to be a necessary, but insufficient factor in achieving community legitimacy and social licence to operate. © 2014 © 2014 IAIA.