Social impact assessment, social development programmes and social licence to operate: Tensions and contradictions in intent and practice in the extractive sector

Abstract

In the past decade, the extractive sector has embraced social responsibility. Despite this, broad-based support for many extractive projects and operations remains elusive. Community opposition to resource projects appears to be increasing, even where compliance-based social impact assessments (SIAs) and generous benefits are in place. In seeking to understand this, the authors explore unintended contradictions in the implementation of regulatory SIA and the social development programmes (SDPs) being pursued by many extractive companies. Communities continue to mistrust extractive companies in the face of escalating regulation and offsetting development agendas. The authors contend that trust can only be attained by mobilising a company's core competencies, achieving credibility through total transparency, and maintaining appropriate roles and responsibilities of companies, governments and communities. The article presents an alternative approach, centred on the trust-building necessary to a social licence to operate. Such an approach involves 'collaborative moderation', aligns with the 'creating shared value' concept advocated by Porter and Kramer, utilises best practice SIA and uses SDP only where appropriate. Show more