Social licences to operate: for better not for worse; for richer not for poorer? The impacts of unplanned mining closure for “fence line” residential communities

Abstract

Establishing “social licences to operate” with communities has become a significant corporate social responsibility agenda. The complex dynamics of these relationships can compound the impacts for communities when these contracts are not upheld. This article documents reflections from a rapid rural appraisal conducted in the Shire of Ravensthorpe in remote Western Australia after the Ravensthorpe Nickel Operation was “mothballed” 9 months into a projected 25-year lifespan. It captures how communication about the project and its time frames created a sense of consistency, predictability, certainty and trust – enabling social licence. The raising of hope and the emergence of mistrust underpin social, environmental and financial impacts of this event for the local community. Embedded in the theoretical dimensions of social licences, this case study highlights the problematic of social licences that engage with non-contractual stakeholders as partners in “booms” but have no legal responsibility towards them in times of “bust”.

Keywords:

• mining
• social licence to operate
• corporate social responsibility
• mine closure
• Western Australia

Acknowledgements

A sincere thank you: to the people of Ravensthorpe, WA who generously gave up their time; for the helpful comments of the two reviewers and members of the LEC writing group; the Alcoa Foundation Conservation and Sustainability Fellowship Program; and my uncle and aunty whose house (in their absence) often became my writing retreat for the various iterations of this article.

Notes

The word “Shire” is used in Australia, particularly remote parts of WA, to denote an administrative region known as an LGA managed by local government councils. “The Shire of Ravensthorpe”, also known simply as “The Shire” by residents, reflects the administrative LGA and council regions of Ravensthorpe Ward, Hopetoun Ward and Rural Ward (including Jerdacuttup).

Australia has a three-tiered government system – local, state and federal governments who are variously responsible for service delivery and infrastructural development in remote regions.

It is recognised that cost overruns are a common feature of project development (Priemus et al. 2008).

BHP Billiton suspended operations at the RNO nearly a year until a decision was announced by the company as to its future and the site was offered for sale. The RNO was finally sold to First Quantum for US$ 430 million, and it is suggested that the RNO will re-open mid-2011 (Chambers 2009b). The reflections of the impacts for the community in this article are based on the research conducted in the year following the mines suspension, and prior to its sale to another resource company.

Flyvbjerg et al. (2003) describe in great detail alternative ways of dealing with risks involved with resource development. There are “choices” even when there appears to be none available – choices of transparency and effective communication, choices regarding levels of responsibility and accountability. Sensibly, they suggest that these choices provide much better corporate strategies for companies involved in such large resource developments (Flyvbjerg et al. 2003) than the negative publicity received when engaged in corporate practices such as that observed in the case study example.