The national conversation over natural resource development often seems dominated by the concept of social licence, the notion that industry needs public support before it can get down to the business of extraction. To some, social licence is considered a new test, an additional hurdle for industry to overcome. But history and experience tell us that it is not new. The label might be new, but the need for it is not.
Requiring a social licence to operate has been embedded in the public debate surrounding major economic development projects for decades. Think of the Mackenzie Valley pipeline project. A three-year public inquiry headed by Justice Thomas Berger in the mid-1970s produced more than 40,000 pages of testimony and imposed a 10-year moratorium on the project. Forty years later, and after several failed attempts, the pipeline remains a project lost in part to the fog of an elusive social licence.
However, while the need to secure a social licence is not new, the concept has changed over time. The meaning, implications and complexities of social licence are fundamentally different from what they were only a decade ago. This new reality is having profound implications, particularly for industry, as it struggles to build sufficient public support for projects, but also for governments, which must balance public and private interests. Governments now find themselves facing a far more intense public atmosphere, with deeply vested and conflicting interests waging their struggle in a hyper media environment. The quest for social licence is shaped by opinion and interests ranging from local grassroots activists to global organizations, amplified by social media, which has the power to mobilize people who believe they have a personal stake in what’s being proposed.
Today, we see the examples of the Northern Gateway Pipeline (NGP) proposal in Canada and the Keystone XL (KXL) project in the US, both grinding their way through punishing regulatory and political battles, both shrouded in uncertain outcomes. A two-year regulatory review of the NGP by the Canadian National Energy Board is nearing completion. But few believe it will be the final hurdle, with fundamental questions relating to Aboriginal peoples still to be resolved.
In the US, two exhaustive State Department reviews that found no significant negative environmental impacts from the KXL proposal have not defused or diminished the political gridlock preventing a decision. A corporate executive who is deeply involved in the KXL project noted that the majority of the focus to build social licence for the controversial pipeline has shifted to the local level to deal with the engagement of people mobilized through social media.
The lesson learned from the deepening struggles over securing a social licence is that we need to rethink how both industry proponents and government deal with the challenge. Clearly, a process that involves engagement of the full range of opinion right from the beginning would help create a foundation for a durable social licence to support the ultimate political decision.
The reality today is that industry faces a triple licensing hurdle: a commercial licence, a policy/regulatory licence and a social licence. While the three hurdles are interconnected, the expectation is that each must be addressed separately. This requires arriving at some form of public-private consensus as to what is considered a social licence, then agreeing on how to achieve and maintain it. And to get there, government must adapt its ways to play the necessary role and facilitate that process.
This is a challenging proposition. For one thing, defining social licence is, at least in part, an exercise in subjectivity. It reaches beyond regulatory approval to the domain of public opinion, public perception and, inevitably, public relations. It is linked to the private sector’s commitment to address social and environmental impacts of proposed development not just today, but potentially for decades to come. It is about finding the balance among economic growth and environmental protection, respect for Aboriginal peoples, human rights and even the right of free speech and the ability to have your voice heard. The need to meet the Supreme-Court-mandated “duty to consult” with Aboriginal peoples has added a formal legal dimension to the concept of social licence.
Social licence is at the intersection of politics and public policy. It is the bridge from the legal right to proceed in a regulatory sense, to the moral right that comes with public consent. It does not, and it should not, override the democratic authority of government to act in controversial circumstances. Ultimately, elected officials must define public interest and make decisions. But a robust and fair effort to secure social licence can add to government’s moral authority to withstand the voices of critics.
Ignoring those who disagree creates stronger foes who will denounce the process as illegitimate.
The questions for government are about the role the policy process should play in facilitating a social licence for industry. Does the public policy imperative end with regulatory review, or does the obligation today extend deeper into public engagement and consultations?
The short answer is most certainly yes.
At stake is the issue of public trust and, with it, the credibility of government. The traditional approach, where competing and clashing opinions are brokered at the political level, after which policy-makers simply implement the political choice, is no longer sufficient. Public policy and social licence cannot be viewed in isolation. The public policy process must be engineered in a way to facilitate the pursuit of social licence, and government must be seen as actively engaged in the public dialogue, reflecting and balancing the broader social and economic interests.
What’s required is a fundamental change in the mindset of policy-makers. In practice, that means two things. First, it means breaking down the silos within government to recognize the crosscutting nature of issues that are part of the policy debate. Second, governments must engage, at the policy level, in more active, robust stakeholder consultations across the spectrum of opinions.
In policy-making today, the tradition of departments operating in their exclusive domains is deeply rooted. Bureaucrats are immersed in the issues relating to their portfolios and have the policy expertise to show for it. But as a result, in spite of the best efforts of central agencies like the Privy Council Office, Finance and Treasury Board, there is often a lack of horizontal integration. The bureaucracy is a compartmentalized world where public servants stay in their lanes, deal with only their well-defined stakeholders and seldom tread into territory deemed the turfs of others. As a result, they are frequently unable to adequately address issues that cut across artificial departmental policy boundaries, which weakens the pursuit of social licence.
Ottawa has tried, with limited success, to adopt a more holistic approach to policy-making. The current government created the Major Projects Management Office, which operates under Natural Resources Canada. In many respects, it is a mini central agency that brings together Natural Resources, Environment, Fisheries and Oceans, Transport, the Environment Assessment Agency, the National Energy Board, the Privy Council Office and others as a model of collaboration on crosscutting issues relating to major resource development.
But breaking out of bureaucratic policy silos is only the first step. The challenges of social licence today require policy-makers to recognize that engagement and two-way communications are crucial to building policy legitimacy. This is simply far too important to be left exclusively to the political level, with public servants dutifully doing their work in the bowels of bureaucracy.
Government must be seen as an honest broker among competing interests, not simply an advocate for project proponents. This involves consultation that engages the full spectrum of opinion as part of policy deliberation and development. It means hearing first-hand not only from your natural constituents, but also from all those who believe they have a stake in the outcome of a policy decision. There have been sporadic efforts in this direction when, for example, deputy ministers fan out to meet with stakeholders. But, unfortunately, too often this outreach has occurred only once an issue has become deeply mired in the morass of a social licence debate, with the conflicting positions of the stakeholders deeply entrenched. The openness is seen as too little, too late.
Inevitably, government is perceived as trying to recover its lost credibility in the context of strong public opposition. Faced with the US administration’s demand for some positive environmental signals from Canada in order to calm the hostility to Keystone, Ottawa has tried to engineer a late-game shift in its messaging to convince critics and doubters that it does have concern for the environment. This has been dismissively labelled “greenwashing” by critics, who see it as a disingenuous attempt by the government to recover legitimacy. The result has been that the goal of social licence has receded further.
There is a better way. It’s called engagement with critics. Rather than being ignored or dismissed, critics need to be heard from at the front end and throughout the process. That doesn’t necessarily mean they will be won over; far from it. But demonstrating a willingness to listen, debate and ultimately disagree provides the argument over policy that is essential in a process to determine social licence. Admittedly, this is uncertain and new ground for public servants, who instinctively want to avoid being drawn onto what can be politically charged terrain that is better left to politicians. But there are parameters that protect the nonpartisanship of public servants. Broader engagement to inform policy advice need not be considered off limits.
Ultimately, social licence is about building consensus, not agreement. There will always be groups and individuals who take a hardline position and will not accept any decision other than one that reflects their views. But legitimacy is still attainable if those who offer policy advice make their best efforts to more fully engage in a dialogue with stakeholders. If they are seen as proactively working to understand all dimensions of difficult policy choices, achieving social licence can become less daunting than it appears today. What is clear is that ignoring or waging war on those who disagree not only deepens opponents’ resistance but also creates even stronger foes who will denounce the process as illegitimate and make the social licence more elusive than ever.