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Social License to Operate : integration into mine planning and development

University of British Columbia

This thesis is a compilation and analyses of research into Social License to Operate as applied to the mining industry. Mining companies have increasingly been criticized for their conduct, primarily as a result of high profile environmental mishaps, the cyclicality of the business (boom & bust) and the resultant socio-economic impacts resulting from mine closures. The purpose of this thesis is to advance the understanding of social license to operate, as well as assist the understanding of how it is acquired and maintained. The key aspects of the research relate to understanding several key issues: what is a social license to operate; how mining companies earn and maintain it; who gives a social license to operate; why a social license to operate is important and why companies are eager to obtain it; and how social license to operate principles are placed into practice. The research was based on an extensive literature review of both published and unpublished documents, as well as qualitative data from field studies and data from a social license survey conducted in 2005/2006. This thesis presents key findings from an industry survey which was the starting point to identify what social license is, how it is earned, maintained and monitored at each phase of mine development. It also identified companies or projects recognized for being a role model for leading in the development of social license principles. The thesis reviews some of the identified companies in order to further elaborate on key aspects of social license. The thesis also explores Situational Analysis and its importance to social license to operate. A brief discussion also outlines the potential future use and benefits of social license as a Real Option to enhance project flexibility and assist in the decision making process with respect to the investment in a new mine. The research led to the following conclusions: 1. Stakeholders are increasingly demanding a more participatory role in decisions affecting their neighborhoods and environments. 2. Social license is vital to ensuring business continuity and success, and provides a significant competitive advantage to those companies who have earned it. 3. Many companies have learned that voluntary initiatives beyond regulatory compliance are a key element to earning a social license. 4. Industry is generally well aware of the changing value systems surrounding mining, and recognizes that project success is primarily based on stakeholder and economic approval. 5. Although there is a high level of awareness and a significant level of implementation with respect to social license, there is no real consensus with respect to the means and effectiveness of the implementation. 6. Project success appears to be based on building and maintaining sustainable relationships. A participatory approach with adaptive and co-management strategies appear to be fundamental to this success. The key projects or mines identified by survey respondents as being role models for and/or leading in the development of social license are large, world leaders and internationally diversified, with the experience and financial resources dedicated to earning a social license. However, the data showed that small companies do have an almost equal opportunity to earn a social license as well as their larger peers. Industry in general is becoming well aware of the need to earn community support to advance their projects. The use of situational analysis appears to be an effective tool to provide exploration and mining companies with the foundation from which to build a strategy for the acquisition of a social license. Social license forms the basis of 'Reputational Capital', thereby offering to reduce business risk and uncertainty, resulting in long-term stakeholder value. This thesis indicates that there are three recommended tasks for further research. One is to further derive and test methodologies for quantitative and/or qualitative evaluation of social license. The second is to test situational analysis methods with more field case studies, and adapt them as necessary towards developing a scorecard methodology. The third is to characterize the transferability of social license, for example, from the target company to the acquiring company, following a merger or acquisition.

Text

2011-02-25

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http://hdl.handle.net/2429/31783

Mining Engineering

University of British Columbia

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