What is the social licence to operate? Local perceptions of oil and gas projects in Russia's Komi Republic and Sakhalin Island

Abstract

Oil and gas companies are increasingly aware of the need to earn the trust of local communities and secure a 'social licence to operate' in addition to formal legal licenses and permits. By comparing two case studies from the Russian North and Far East, the aim of this paper is to explore local perspectives on what constitutes a social licence and to better understand how a social licence is established in a particular local context. The paper concludes that the success of efforts to establish a social licence that benefits all parties depends on local expectations and historical experience in particular socio-cultural and political contexts. It depends on the willingness of all parties, including government, to engage in constructive dialogue; the ability of industry proponents to understand local needs and culture; and the ability of local stakeholders to actively shape relations and outcomes to reflect their own values and expectations. The case studies also demonstrate that a social licence may be in place where trust relations do not exist between industry, government and society, suggesting that the term 'social licence' may be only partially useful as an analytical concept for understanding and defining the responsibilities of business towards society.