The social licence to operate: A critical review

Abstract

Changing societal expectations have influenced the way industries involved in the development or extraction of natural resources conduct their operations around the world. Increasingly, communities are demanding more involvement in decision-making around such operations, have expectations of receiving a greater share of the benefits from these operations and require assurances that the industries involved are appropriately regulated. The combination of increasing pressures on industry performance and the associated societal acceptance of such operations has been described as the 'social licence to operate'. In many ways, the social licence reflects the evolving nature of the relationships between industries and their communities and other stakeholders. Originally used to describe the social acceptability of mining operations, the term has since been applied to explore the broad acceptance that communities and other stakeholders provide to the activities of the forest, agriculture and energy sectors. This article presents a critical review of the emergence of the concept in industry practice over the last two decades. Recent applied research to measure and model the social licence is also examined to demonstrate how the roles of trust, fairness and governance may underpin the development of more sustainable, trust-based relationships between industry and society.