What procedures matter to social acceptance of mining? A conjoint experiment in Peru

Abstract

Accumulated literature on the social license to operate (SLO) of mining has called attention to procedural fairness, which assumes that fair treatments enhance acceptance from people involved in mining projects. However, what procedural improvement means is theoretically underdeveloped, especially in two critical aspects. First, previous studies on SLO have always modeled procedural fairness separately from its outcomes, such as benefit and cost distribution, and failed to spot the separability in the context of acute socioeconomic needs. Under such unclarity, mining companies are less open to participatory opportunities in fear of inflated social demands. Second, institutional inventions in the last decades that attempt to enhance people's participation in the decision-making of mining projects, such as popular consultation, free, prior, and informed consent to indigenous peoples, and public hearings in environmental impact assessments, are overlooked in the SLO literature. This paper tests the causal effect of procedural and outcome factors on people's acceptance with a conjoint experiment that portrays hypothetical mining projects. Participants are recruited by an original household survey in four Peruvian regions where mining is a lively experience. The findings report that procedures are viewed separately from material benefits but not separately from reported environmental risks. Prior consultation with voting increases the acceptability of a mining project to some degree. The result suggests the participatory assessment of environmental risk will benefit all stakeholders, and mining companies have no reason to shy away from listening to and respecting local opinions due to a suspected increase in benefit demands.