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Social License to Operate: an industry survey

Conference Paper · May 2006

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 A UBC SURVEY IDENTIFIES THE KEYS TO MINING DEVELOPMENT SUCCESS FOR THE INDUSTRY AND THE COMMUNITY

ABSTRACT
Social License to Operate, within the context of corporate responsibility, competitive advantage and growth, is a new
and emerging paradigm within the mining industry. It is a means to earn corporate accountability, credibility and
capacity, hence the right to enter a region and extract its resources responsibly. The focus of this paper is to report
on research conducted through a Social License to Operate survey distributed in 2005 to members of BCYCM,
SME, INFOMINE, PDAC, MEG, CIM, and MABC. The survey aimed to form the basis from which to benchmark the
awareness, level of interest and importance given to Social License to Operate by stakeholders. It also sought to clarify
stakeholder perceptions of what a Social License is, and how it is earned, maintained and monitored at each phase
Tire Tracks Copyright: iStockphoto
of exploration and mine development. It also identifies companies and/or projects that have a Social License; hence ‘the way forward’ to
developing metrics in which Social License guidelines could aid companies in its acquisition. One such project based on collaboration
between Placer Dome Inc and UBC, involves the development of an ‘Exploration Social License Guideline’ that aims to provide practical
assistance to geologists in conducting situational analysis and community engagement at the early phase of exploration. This is becoming
a critical need, for example, in governing the current revitalization of the B.C. mining industry, with its impending development of several new
mining projects ($3.4B over the next 5 years).

>> SOCIAL LICENSE TO OPERATE (SLO) >> SITUATIONAL ANALYSIS

Within the context of corporate responsibility, competitive advantage and growth, is a new and emerging As illustrated by the survey respondent’s detailed
paradigm within the mining industry. It is a means to earn corporate accountability, credibility and capacity. POST-CLOSURE answers on how to acquire a SLO, a mining company
It relates to gaining the consent from the communities in a region to explore, develop and extract its needs to have a planning process that enables an early,
resources responsibly. SLO comprises a set of concepts, values, tools and practices that represent a way integrated and comprehensive analysis of the political,
of viewing reality for the communities. It not only forms the foundation of the mine life cycle, it also permeates economic, social and technological (PEST) factors that
each and every phase from discovery to reclamation, are likely to affect the potential project (Nelsen 2005). A
see SLO flow chart. Professional geologists are RECLAMATION useful tool to focus on these factors is Situational
normally the first agents of contact with a community Analysis because it characterizes the ‘situation’ in which
and hence must be well versed in SLO and its acquisition. a potential mine would likely operate (Nelsen 2005).
If it is not gained by the onset of development, then When incorporated into the mine planning process, it can
the project is unlikely to proceed or progress. help to formulate a strategy for gaining a Social License Situational Analysis Flow Chart.
suited to the particular situation. It provides us with the Photo: Open Pit Copyright: iStockphoto
At the Association for Mineral Exploration BC PRODUCTION tools whereby the ‘situation’ becomes the focus of analysis.
(formerly the BC & Yukon Chamber of Mines) 2003 S.L Star (1989) states, “Scientific theories begin with situations….Theories are responses to the contingencies
Mineral Exploration Roundup, Pierre Lassonde of these situations-courses of actions articulated with yet more courses of action. The theories that
described social license as: scientists form about nature are the actions that both meet specific contingencies and frame future solution”.
Situational analysis is a process of examining and mapping a situation, its elements, and their relations,
“…the acceptance and belief by society, and in order to acquire knowledge and understanding, as well as the evaluation of the Strengths,
specifically our local communities, in the value Photo: Porgera – Papua New Guinea DEVELOPMENT Weaknesses, Opportunities, and Threats (SWOT) of a potential mining project. The use of tools such as
creation of our activities, such as we are allowed to Photograph: Glenn Creed PEST Analysis and SWOT Analysis, along with research through literature and mass media reviews,
access and extract mineral resources. … You don’t get your social licence by going to a government direct field observations and interviews, ensure the obtainment of locally situated knowledge on regions
ministry and making an application or simply paying a fee. … It requires far more than money to truly in which you want to operate. Overall, situational analysis draws upon the micro- and macro-environment
become part of the communities in which you operate”. to develop a strategic direction for managing risk and making appropriate adjustments in planning decisions
and actions, as well as interpret potential social-cultural changes resulting from its development.
DISCOVERY Situational Analysis is ‘the full situation of inquiry’, whereby we go beyond just ‘knowing the subject’, to
SURVEY RESULTS being fully situated (Clarke 2005).

In order to gain an understanding of the perceptions of

SLO by industry stakeholders and First Nations, a survey
was conducted in 2005. Members of the AME BC, SME,
WHO ARE THE INDUSTRY ROLE
InfoMine, PDAC, MEG, CIM, and MABC completed the EXPLORATION MODELS IN THE DEVELOPMENT
survey, aimed at clarifying the industry perceptions of a AND APPLICATION OF SLO?
SLO and how it is earned, maintained and monitored.
The study also aimed to identify opinions on companies
The top 10 industry role models in the development and
and/or projects that are considered to have gained a
application of SLO were identified in the UBC survey as
SLO and can point the way forward in developing metrics
Diamond Drill Bit Placer Dome Inc., BHP Billiton, teckcominco, Rio Tinto,
and guidelines. Copyright: iStockphoto GEOSCIENCES Newmont Mining Corporation, Diavik Diamond Mines Inc.,
Stikine Gold Corporation, Falconbridge Ltd., Nova Gold
CERRO QUILISH, PERU Resources Inc. and Shell Canada.These role models are examples in which situational analysis tools could be
used to decipher SLO metrics in order to build guidelines that would aid in its acquisition.
A recent example of a mining project halted by the failure to gain a Social License to Operate is Newmont
Mining Corporation’s Cerro Quilish project in Peru. In 2004, after two weeks of protesting by community BUILDING SOCIAL LICENSE WITHIN EXPLORATION
members from the region, Newmont decided not to proceed with the 3.7 Million ounce development. Larry SOCIAL LICENSE
Kurlander (former Newmont Executive VP) states, TO OPERATE Since the exploration phase is the first point of contact with communities, as
well as an early phase of gaining a Social License, it is important to minimize
“There is a Social License, that in my opinion, it is far more important than a Government License. It is
the ‘footprint’ left in terms of trust and expectations. A practical 138 page
renewable everyday! Without building a trust with the people that live there and work there and have lived
multifaceted guideline that focused on ‘how’ to engage with cultures found
there for centuries, you are going to have trouble and indeed they [Newmont] have” (Bergman 2005).
worldwide was developed. It involved extensive case study analysis, consultation
with geologists and field studies. It consists of 7 modules providing practical
tools to assist or guide the user through the acquisition of a SLO at the
exploration phase:
By Jacqueline Nelsen Reclamation Regrowth Diamond Rig,
Papua New Guinea
• Situational Analysis: Prior to contact community/stakeholder research
Copyright: iStockphoto • Research Sites: For literature review research
M.A. Sc. Candidate Photograph: iStockphoto • Development of Exploration Team and Strategy
Department of Mining Engineering, • NGO Selection

University of British Columbia >>WHAT IS A SOCIAL LICENSE TO OPERATE? •

•
Community Resiliency
Consultation: Contact with Community
• Negative Community Indicators
Ninety percent of survey respondents defined Social License to Operate as being intangible (not a piece of paper) More details of this work can be found at: http:www.ubc.mining.ca/SocialLicense.html
and a non-permanent (implying standards and renewal) measure of ongoing community acceptance of a company’s
activities (Nelsen 2005).
Photo: Jacqueline Nelsen Photograph: Olav Langelaar
MUSSELWHITE MINE, CANADA

REFERENCES HOW DO YOU ACQUIRE A SOCIAL LICENSE TO One such project is Placer Domes’ (Barrick) Musselwhite mine. It is recognized by
Photos on Heading: Copyright IStockphoto. OPERATE? survey respondents as being a role model for SLO because of the company’s
Bergman, Lowell, “The Curse of the Inca Gold,” PBS Documentary Frontline/World, early success in building a relationship and agreement with local First Nations.
According to the survey respondents, the top 10 answers on how to acquire Overall, it is seen as a model of modern relationship-building between the mining
2005. a Social License to Operate were (Nelsen 2005):
Kramer, Pat, (2004) Totem Poles: An Exploration. Altitude Publ. Can. Ltd., industry and First Nation communities.
Canmore, AB., ISBN 1-55153-639-0. • understanding culture, language and history;
Clarke, Adele E., (2005) Situational Analysis: Grounded Theory After the • educating local stakeholders and First Nations about the project,
Postmodern Turn. Thousand Oaks, CA: Sage Publications. e.g. mining processes, environment impacts; THE WAY FORWARD
Lassonde, Pierre, “How To Earn Your Social Licence,” Mining Review, Summer • ensuring open communication amongst all stakeholders and SLO is fundamentally changing the
2003, pp. 7-13. First Nations; manner in which mining companies
Nelsen, Jacqueline, (2005). “Social License to Operate Survey” Found at: • maintaining a sound track record and a positive corporate do business. It is a critical success
http://www.mining.ubc.ca/Social License.html. reputation; factor in mine development. Seventy
Nelsen, Jacqueline, and Malcolm Scoble, “Social License to Operate: an Industry • training the workforce; percent of the UBC survey respondents
Survey,” AME BC Mineral Exploration Magazine, Spring 2006, pp. 13-15. • creating a business partnership with communities for think that a company and/or a community
Nelsen, Jacqueline, and Malcolm Scoble, (2005). “Social License to Operate economic development; could bene-fit from a Social License
Mines: Issues of Situational Analysis and Process.” Mine Planning and Equipment • employing innovation and technology to avoid undue impacts; scorecard, identifying a need for
Selection Conference, Banff. pp. 6. • seeking community support and capacity building; quantifiable metrics to identify and
Star, S. L. (1989) Regions of the Mind: Brain research and the Quest for Scientific • enabling corporate transparency; and confirm SLO. Future UBC work will
Certainty. Stanford, CA: Stanford University Press. • collaborating with communities to help meet their involve a new SLO industry survey to
Photo: Agriculture & Reclamation;
infrastructure needs Photograph: Glenn Creed be distributed in 2007; research and
Photo: Excavator; Photograph: iStockphoto
ACKNOWLEDGEMENTS field studies on projects deemed as
role models by industry survey respondents; and the creation of a framework that
Prof. Malcolm Scoble, Department of Mining Engineering, University of British HOW DO YOU KNOW YOU HAVE A SOCIAL LICENSE TO OPERATE? would assist in the development, maintenance and monitoring of SLO. One such
Columbia
Mr. Olav Langelaar, Amperage Resources Inc. project based on collaboration between Placer Dome Inc. (Barrick) and UBC
The majority of survey respondents stated that the results from a community consultation program, a community involved the development of an ‘Exploration Social License Guideline’ that aims to
Mr. Glenn Creed, Placer Dome Inc. survey and a letter of support from the community would be the main indicators of SLO acquisition. The majority
Ms. Marlene Mathinson, Polaris Minerals Inc/ former AME BC. provide practical assistance to geologists in conducting situational analysis and
also stated that the company and community are the main determinants governing whether or not a SLO has been community engagement at the early phase of exploration.
M.A. Sc. Graduate Committee, UBC Mining Engineering Graduate Students obtained, hence underlining the importance of partnerships in resource extraction and management.
Naomi Topuzoglu
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