Social licence in New Zealand—what is it?

ABSTRACT

As the term ‘social licence to operate’ gains more traction in New Zealand, a plethora of meanings and understandings have been attributed to it. Many of these meanings and understandings, however, only tell a partial story that is often only economically beneficial to a particular industry or industry actor. This article surveys academic, industry, government and media writing about social licence across industries in New Zealand over the past 5 years, distilling out key messages, meanings and understandings that are being created and delivered. The article further compares these meanings and understandings to the original intent of the term as well as the meanings being generated from the extensive research on social licence being carried out in Australia and elsewhere.

KEYWORDS:

• Community acceptance
• New Zealand
• sense-making
• social licence
• trust
• validity

Introduction

Currently in New Zealand, ‘social licence to operate’ (SLO) is emerging as a topic of discussion with increasing gravitas (Jamieson 2015). Sometimes called ‘licence to operate’ or ‘social licence’, SLO first appeared in New Zealand literature and media in 2012. It is, as Ruckstuhl et al. (2014) note, a relatively recent term and is increasingly being used in the mining, aquaculture, dairy and forest industries. With its introduction come a number of different terms, definitions, understandings and representations. Ministry of Primary Industries (MPI) (2014) reports that a number of New Zealand organisations use different terms, such as ‘social responsibility’, ‘how we do business’ and ‘community licence’. These different terms highlight the lack of clarity as to what the term SLO actually means and what its essential characteristics are.

In New Zealand, various industries, economic and business commentators, newspapers, organisations and government choose to use social licence in ways that best suit their interest(s). This phenomenon has been widely reported elsewhere in different industries and countries (c.f. Michell & McManus 2013; Moffat et al. 2015). The choice of meaning or approach to SLO does not always equate to the broad concept of SLO, nor does it often take into account the ongoing community engagement process that is needed to gain and maintain a SLO.

Social licence to operate is a term that emerged out of the mining industry in the mid-1990s. It was initially coined to refer to the industry’s need to recover its reputation after a series of highly publicised environmental disasters and the community conflict that followed (c.f. Edwards & Lacey 2014). The concept was originally aimed at individual mines to change overall industry culture and community acceptance one operation at a time (Thomson & Boutilier 2011). Since this time, SLO has been used by a wide range of other industries—forestry, pulp and paper, agriculture, aquaculture and unconventional gas (Graafland 2002; Gunningham et al. 2004; Wang 2005; Williams & Martin 2011).

Built on a foundation of corporate social responsibility (CSR), Hall & Jeanneret (2015) suggest that SLO provides a deeper extension of CSR. They further make the claim based on CSR literature that the corporation must identify which responsibilities and issues it wishes to address through CSR. This sounds rather similar to SLO; however, there is a pivotal difference between CSR and SLO—CSR is ‘top-down’ with issues identified by the company, while SLO is ‘bottom-up’ with issues identified by the community and stakeholders themselves (J Lacey, CSIRO, pers. comm. 2015).

A common theme around what it means to have a SLO in these industries is broad—ongoing local community and stakeholder approval or social acceptance of the activities of a corporation (Thomson & Boutilier 2011). Joyce & Thomson (2000, p. 52) argue ‘such acceptability must be achieved on many levels, but it must begin with, and be firmly grounded in, the social acceptance of the resource development by local communities’. No matter the nuances of different descriptions of SLO, the emerging importance of the concept demonstrates the concern that society has for how our resources are developed and used (c.f. Grant-Mackie 2015). Morrison (2014) describes how SLO does not mean any diminution of existing legal requirements, but is an additional step. Further, he brings in the implied element of risk, describing SLO in part as a negotiation of equitable benefits and impacts of an operation within the community (Morrison 2014). This is relevant for not only a single operation, but also industry-wide practice.

In other recent work based on analysis of corporate literature and interviews, Bice (2014) notes that definitions and language around SLO are constantly evolving, but found that many companies feel they can gain and maintain a social licence through sustainable development concepts and public displays of compliance with any number of voluntary initiatives. Bice (2014) further found that there are no definitions of licensing criteria, and it remains rather amorphous. Boutilier (2014), drawing on his previous work and that of Joyce & Thomson (2000), found that requirements of SLO include perceptions of legitimacy, credibility and trustworthiness. Other key components of SLO include trust, acceptance of a project, quality and quantity of contact with a company, perceived procedural fairness and impacts on social infrastructure (Boutilier 2014).

Owen & Kemp (2013) note that not all companies or industries use SLO in the same way, but that it can be seen as a tool for situations that require attention to social and community dimensions of resource development. Dare et al. (2014) note that SLO is granted when operations are deemed legitimate; when its operations, organisational values and processes meet community expectations. They also highlight that ‘traditional’ conceptions of SLO do not work in industries that are across large, socially diverse areas, with stakeholders at different scales (Dare et al. 2014).

Using extensive surveys about mining in Australian communities, Moffat & Zhang (2014) found the key elements of SLO in mining are procedural fairness, distributional fairness, good governance and trust. First, procedural fairness can be defined in part as communities feeling that they have a say in the decision-making around a project. Second, distributional fairness is where communities feel that the benefits of a particular project are distributed fairly to all actors. Finally, good governance is where communities understand that the company is well run and will follow through on long-term promises and will partake in meaningful engagement and knowledge sharing, allowing communities and industry to build mutual trust.

The SLO is an outcome that can both be tangible and intangible. Tangible because approval or opposition expressed by a community can be felt in significant ways and intangible in that SLO is not like a legal licence to undertake activities (Nelsen 2006). The nature of this outcome is dynamic and changing, reflecting an ongoing and evolving relationship between industrial actor and a community. Edwards & Lacey (2014) describe how a SLO can be seen as being constantly re-evaluated and renewed in line with evolving practice and societal expectations. Brown & Fraser (2006, p. 108) have argued that ‘business must have regard for evolving social attitudes and expectations if it is to maintain its “social licence”’. The intangibility, informality and constant potential evolution of SLO contributes to it being a rather more tenuous outcome than a legal licence (c.f. Michell & McManus 2013). Morrison (2014), however, has noted that SLO can range from informal (e.g. an implied social contract) to formal (e.g. a community benefit agreement).

What is clear is that regulatory approval for an activity does not necessarily equate to social approval of that activity. Regulation provides, at most, an indication of the minimum standard that a particular activity or operation must meet. Regulation and societal expectations operate quite independently of each other.

This article aims to examine the meanings and uses of SLO in New Zealand, and provide a coherent analysis of what it is, based on the broad internationally accepted meaning provided above. The article aims to educate New Zealand industry, media and government of the true intent behind the SLO concept and understand the myths that are emerging around the use of SLO in New Zealand. This article finally aims to establish a benchmark for the current state of knowledge and understanding of SLO in New Zealand. We recognise that this will open up as many or more questions than it answers; however, this provides a foundation for future research. This article is timely, given the questions that are being raised in some quarters about what really is a SLO.

Materials and methods

This article is not a detailed discourse analysis of the use of SLO in New Zealand, but more of a survey of the uses and multitude of understandings and misunderstandings of what the concept is in New Zealand. To collect the appropriate documents, a number of searches for publicly available documents produced in the past 5 years were undertaken. First, in order to find publicly available industry and government documents the following terms were searched in Google: ‘social licence to operate and New Zealand’; ‘licence to operate and New Zealand’; and ‘social licence and New Zealand’. In addition, the alternative spelling of ‘license’ was searched in Google and the databases below. While there were many documents using the alternative spelling, none pertained to New Zealand, and were therefore outside of the scope of this study. The same search terms were searched in Google Scholar, Factiva (an international news database) and FindNZ articles, a New Zealand based news database provided by the National Library. Searches in Factiva were limited to New Zealand newspapers and a date range between 1 January 2010 and 30 June 2015.

Only the past 5 years have been selected (from 2010 to 2015), as the majority of search results only go back as far as 2012. The data retrieved from these sources between 2010 and 2015 consist of qualitative data—quotes describing what SLO is and/or how it is achieved from a particular perspective. A Basic open coding process was undertaken, identifying key themes around who, what, how and the intent (c.f. Benaquisto 2008). Emerging out of the literature and the data, the following themes or categories appeared: ‘Speaker’; ‘Openness and transparency’; ‘Engagement and partnership’; ‘Scale’; ‘Trust’; ‘Procedural fairness’; ‘Distributional fairness’; and ‘Good governance’. The key information from the documents analysed is discussed in light of these themes, First, the documents were arranged into the ‘Speaker’ theme, incorporating scholarly literature, industry, government and media, based on the provenance of the documents found during the search.

Results

The results of this survey of three bodies of literature, scholarly literature, print media (newspapers, trade journals and magazines), government and industry publications (including websites, reports and trade publications) demonstrate two issues: first, the SLO concept is poorly understood; and, second, people attempt to create or perpetuate a myth around the potential benefits or constraints of SLO (e.g. that SLO is an industry-wide concept or that communities are involved in meaningful ways). Hughey (2015, p. 1) puts it very clearly: ‘The longer I continue in DOC [Department of Conservation], the more I hear the phrase [‘social licence to operate’], and the more I really do wonder if people know/understand the implications of what they are saying’. Grant-Mackie (2015, p. 21) provides quotes from Hort NZ: ‘In a way, just about everything we do here at Hort NZ is designed to protect horticulture’s social licence to operate  …  So Hort NZ works with government all the time to make sure they understand what growers do to earn this trust and keep their social licence’. These quotes indicate that SLO is seen as an industry-wide concept, and that they need to demonstrate to government, not communities, what they are doing.

Interestingly, non-governmental organisations (NGOs) did not mention SLO in their own publications; however, they did discuss SLO in the media. These media mentions were always in relation to a particular industry, most often the energy/unconventional gas industries. While there were no definitions per se, NGOs did add details that provided a more complete understanding of SLO than what industry provided. Thus, NGOs are brought into the results in the media section.

Table 1 provides an overview of the frequency of documents found about SLO and related to New Zealand.

Table 1. Frequency of SLO in documents analysed by industry.

	Aquaculture	Forestry	Quarrying/mining	Energy	Agriculture	Other
Media	8	0	2	35	3	0
Industry	1	3	2	3	4	1
Government	1	0	0	0	1	0
Academia	2	0	0	0	0	1

Scholarly literature

In the scholarly literature there were two peer-reviewed journal articles that discuss the concept of SLO as it may apply in New Zealand. Two further articles were found that touch on concepts that are inherent in potential misunderstandings around SLO. (As the related articles did not explicitly mention SLO, they have not been discussed.) A master’s thesis on aquaculture and collaboration in environmental policy and planning was also found. In the first scholarly article that deals directly with SLO, which appeared in 2015, Stevens & O’Callaghan (2015, p. 91) describe SLO as follows:

An SLO is granted based on communicating the knowledge, metrics and predictive basis for deciding if something is worthwhile. This requires trust. Trust is brought about by robust and understandable reporting; a sense that the system is fair, there is equitable sharing of benefits and that enough is known to make the decision.

The definition proposed by Stevens & O’Callaghan (2015) includes the themes of trust, openness and transparency, and distributional fairness.

In the second scholarly article, Ruckstuhl et al. (2014) describe the approach to Māori claims under the Treaty of Waitangi of partnership between Māori and the New Zealand government, where Māori are to be considered partners and able to exercise rangatiratanga or authority in decision-making. They note, as does the Sustainable Business Council (2013), that industry typically considers communities ‘stakeholders’ rather than partners. They further note that the practices used with Māori should be incorporated into mainstream SLO, describing the practice of using the Treaty of Waitangi as a vehicle that Māori can use to permit or withhold consent as very comparable to the idea of SLO (Ruckstuhl et al. 2014). The Treaty as a framework details that more than the minimum standards or requirements that companies are required to meet (through, for example, legislation or regulation) in order to undertake their activities; SLO dialogue/partnership aims to go beyond the legal minimum, as often communities want or need more than an arbitrary legal minimum (c.f. Moffat et al. 2015).

Berkett (2014, p. 10) describes SLO as a ‘broad acceptance of a company’s activities by wider society or a local community’. Berkett (2014) further notes (unsupported) that SLO can apply to a whole industry, and that failure to gain a SLO can result in consumer backlash, brand diminishment and a decline in sales. While an ‘overarching’ definition of SLO is provided, there is no mention of the core elements as determined by Moffat & Zhang (2014); however, Berkett (2014) does bring up the contested theme of scale, and hints at good governance from the industry’s perspective.

Industry

Depending on the industry sector, there are a number of divergent views on social licence. Meanings and understandings of SLO were found in the forest industry, aquaculture/fishing and mining/oil/gas industries, from government and industry perspectives. Additionally, there was one general industry paper by the Sustainable Business Council (2013). The Sustainable Business Council (2013, p. i) defines SLO as ‘the ability of an organization to carry on its business because society has confidence that it will behave in a legitimate, accountable and socially and environmentally acceptable way’. The definition of SLO here suggests openness and transparency, and hints at trust; being aware, however, that confidence is not trust. The results and subsequent discussions will be separated out by industry.

The most comprehensive definition and understanding of SLO comes from one segment of the forest sector—the forestry research institute, Scion. The chief executive of Scion describes the social licence as follows: ‘Social licence generally refers to a local community’s acceptance or approval of a company project or ongoing presence in an area’ (Parker 2015, p. 2). He goes further, noting that the SLO goes beyond formal, legal licensing:

Securing and maintaining a social licence occurs both outside of and as part of formal permitting or regulatory processes. Indeed, experience shows this work needs to be front-footed in good faith with communities and iwi before formal submissions are made, hearings occur or technologies are used in the field. (Parker 2015, p. 2)

Parker (2015, p. 2) concludes that: ‘Securing and keeping a social licence to operate takes dedicated effort and engagement with local communities, iwi and the wider public’. This suggests a proactive rather than a reactive approach. While the definition of SLO as provided by Parker (2015) is an overarching one, his further clarifications touch on the elements of engagement and partnership, and procedural fairness, as elements of SLO.

In another segment of the forest sector, Kagan et al. (2011) undertook a study of pulp mill managers in New Zealand (and other countries) and found that the consensus definition of SLO was ‘the pressures for responsible environmental performance that they felt from neighbours, employees, community groups, the news media and environmental advocacy groups’. Kagan et al. (2011) also found that pulp mill managers understood that SLO is different than a legal or regulatory licence to operate, but felt that there was significant interaction between the two—that regulations could be taken as a guide to the social and environmental expectations the company would have to meet, thus providing a benchmark for evaluation and critique of firms. Kagan et al. (2011) is relatively ‘old’ compared to the other definitions and discussions in New Zealand, and perhaps for this reason how they define SLO does not fit with the themes exposed in this study.

In a specific example of steepland forestry, Raymond (2015, p. 44) highlights, without going into much detail, questions around whether steepland forestry is actually doing enough to maintain a SLO, and notes that forestry in general remains under challenge over its SLO. In this example, Raymond (2015) on the one hand seems to assume that some elements of forestry already have a social licence, while on the other calls for further research so that steepland forestry can understand what is required to gain and maintain a social licence. Contributing to the contention of scale, Raymond (2015) presents thoughts around forestry in general, and a specific element of forestry, but one that is spread across diverse areas.

The agricultural sector has also weighed in on the social licence phenomenon. Crofoot (2015), in an opinion piece for Federated Farmers of New Zealand, states that farmers need to be able to tell their story, and if they don’t, someone else will tell it for them, relegating farmers to whatever role the ‘conflict industry’¹ creates for them. This statement from Crofoot (2015) indicates openness—having farmers be open about their stories and operations. Earlier, William Rolleston, president, Federated Farmers of New Zealand addressed a gathering at the National Field days on the subject of social licence. Rolleston (2015, para. 5, lines 2–3) describes social licence by saying: ‘In essence, a social licence to operate occurs where the values of the local community and the industry align’. Where values align suggests elements of trust (i.e. through mutual expectations). More specifically, while not defining SLO, Beef and Lamb New Zealand (2015) describes SLO (or social licence to farm) as being an integral part of overall sustainability, linking with Bice’s (2014) findings of links between SLO and sustainability. Hort NZ, while not defining SLO, does provide its take on three components of SLO—being good stewards of the land, biosecurity and food safety (Grant-Mackie 2015).

In New Zealand, some attention has been paid to social licence in the aquaculture industry. There are only limited details from industry, as reported in the media. The government, however, reiterated to the industry that the marine space (or it could be any space) is a place for all New Zealanders; as such, the building and maintaining of a social licence is crucial. Guy (2015) does highlight that government and industry are starting to work together to improve the aquaculture industry’s engagement with communities. Outside of media reporting on the annual aquaculture conference, SLO has not been found in materials prepared by the New Zealand aquaculture industry. Encouragement for aquaculture industry players to gain and maintain a SLO has been initiated primarily by the government (A Crosbie, MPI, pers. comm. 2015).

The Petroleum Exploration and Production Association of New Zealand (PEPANZ) describes its engagement with community to be ‘open, transparent, neighbourly and face to face’, and that: ‘Engaging communities is about gaining a social licence to operate, with the goal of becoming a part of the community you operate in’ (PEPANZ n.d.). PEPANZ’s conception of SLO incorporates several themes, including engagement and partnership, openness and transparency, and situates the scale of SLO at the local level. Todd Energy, however, has stated that it does not use the term social licence as it ‘has no commonly accepted definition, but is associated with a range of concepts and a myriad of activities undertaken by businesses … ’ (Harvey 2013, lines 19–21). It further states: ‘Our licences to operate come from compliance with the law and from permits and consents from local and central government’ (Harvey 2013, lines 22–23). Gundersen (2012) highlights SLO as a new take on corporate citizenship, defining it as becoming part of, and gaining the confidence of, the relevant community, and not simply by meeting statutory requirements.

Straterra (n.d., para. 13, lines 1–2), the collective voice of minerals exploration companies in New Zealand, states: ‘[M]inerals exploration and mining projects are more likely to succeed if there is local buy-in to what is proposed. A “social licence to operate” must be earned, and cannot be assumed’. Minter Ellison (2012) describes components of a SLO, including consultation with iwi and communities, environmental performance, and health and safety records. The mining industry here incorporates the elements of engagement and partnership.

Government

In a 2014 Information Paper, the MPI describes how New Zealand aquaculture industries can improve their social licence to operate. MPI (2014, p. 1) describes: ‘[A]nd it is anticipated by industry that improving the industry’s “social licence to operate” will be crucial to successful re-consenting outcomes’. Nathan Guy, Minister for Primary Industries has stated that his definition of SLO is ‘the ability to produce our products sustainably, bringing the community with us, and earning their respect and understanding’ (Grant-Mackie 2015, p. 20). Here, the government appears to see SLO as one of the social components of the legal licensing regime, in particular where the legal licence has a component requiring social (impact) assessment. There are also elements of engagement and partnership, along with hints of trust in the ‘respect and understanding’ statement.

In the MPI Primary Growth Partnership newsletter, Jamieson (2015, p. 1) notes that:

In a nutshell, if a company or organization has social licence to operate it means they have the support and trust of their customers and the public. It’s about gaining community and public acceptance for the work that you do.

He also states that:

With social licence to operate, transparency is no longer only an option. People want to know that they can trust a company or brand, and to do that they need to know what that company is doing to improve their social and environmental performance. They need to know ‘who’ the company is, and what they stand for. (Jamieson 2015, p. 1)

From a governmental department perspective, MPI incorporates trust, openness and transparency, and good governance.

Government has signalled the importance (without seeming to predetermine the direction) of SLO in other areas. This includes statements about SLO in the current National Science Challenges (NSCs), particularly those dealing with the New Zealand environment—Our Land and Water, Sustainable Seas, and Biological Heritage. However, SLO has not been defined, leaving the NSCs to determine definitions or context around SLO in their areas.

Media

In print and web-based media in New Zealand there has been limited mention of social licence in the past 5 years. In general, the media simply reported others’ understandings and use of SLO and did not provide their own understandings. The frequency of mentions of SLO in the media by industry can be found in Table 1. A number of the articles for each of the industries searched were syndicated to other papers, so in real terms there were a number of duplicate articles, but in different newspapers around New Zealand.

In relation to no specific industry, in the National Business Review, Malpass (2013) broadly defines SLO with an overarching definition as the ‘implied consent a company enjoys from the community to undertake its business’. However, throughout the article, he argues that a social licence is unnecessary in New Zealand because the rule of law is sufficient to ensure that business/industry do what New Zealanders expect.

In the aquaculture sector there appears to be some confusion as to whether the industry has or needs a SLO. Moore (2013a) reported in the Nelson Mail newspaper from an industry conference that the industry itself believes that it requires a social licence, and has discussed ways in which it can foster a better understanding between the industry and the public. The next day, Moore (2013b) reported that the Minister for Primary Industries, Nathan Guy, believes the aquaculture industry already has a social licence, and needs to build on this. No definition of what a social licence is was provided in these articles. One year on, a visiting expert believes that the New Zealand aquaculture industry still needs to gain a social licence, defining it broadly as ‘based on gaining the acceptance or approval of local communities and stakeholders for your business operations’ (McNicol 2014, p. B5) and introducing the contentious element of scale.

In the one article about quarrying, a quarry operator in Dunedin described how it maintains its social licence—recognising impacts, responding early, and being open to visits and the public (Aggregate and Quarry Association 2013). Related to this, Robinson (2012) reports on the community–mining nexus in the Coromandel, and that Newmont Waihi Gold (NWG) feels that it has gained a social licence through the NZ$1.6 million in support it has provided the community, and through its property and community investment policy. Despite these ‘initiatives’, many residents are not happy with the mine (Robinson 2012). This is not to diminish the fact that many in the community are satisfied with the engagement work that NWG has conducted, and the resulting property and community investment policy. In the current NWG community policy, the company pledges to engage in culturally appropriate stakeholder engagement, openness and transparency in all dealings, fair compensation to the community for impacts, development of long-term partnerships with the community and the creation of a community grievance process (Wilkes 2014). In each of these mining and quarrying examples, the use of SLO incorporates openness and transparency, engagement and partnership (including recognition of the need for better engagement), and scale.

Within the energy sector (which in this context in New Zealand includes non-conventional gas and offshore oil and gas; coal has been included in the mining sector), with respect to fracking, many of the articles did not provide a definition of social licence or indicate what it could mean. Where SLO was defined, there were a number of partial definitions. Moetzig (2012) noted that the energy sector needed to communicate better with the public, both formally and informally, in order to maintain its SLO. In a media release, the Environmental Defence Society (EDS) (2012, para. 3, line 2) claims that the industry needs to do much more to obtain a SLO, defining it as ‘acceptance from the broader community that it is following best practice’. Who is this broader community and what rights do they hold or what weight do their perceptions hold as compared to the local community that must live in immediate proximity to the risks? One might also question the EDS (2012) assertion that it is about best practice—what might be best practice in one context may not be so good in other contexts.

While some media articles detail generally what SLO is, those that simply mention social licence allow readers to create their own meanings or solidify those that particular industries, government or NGOs support. Two articles in particular highlight the differences between SLO and CSR. Harvey (2012) details a number of CSR responses—building a swimming pool or supporting community events such as arts festivals, rugby teams, museums or local schools—and stresses that these are not social licence. Robinson (2012) states that the mining company has put substantial monetary support into the community and has a policy that they follow; however, neither of these initiatives are community driven—they are top-down from the company, which is more indicative of CSR activities.

Despite its high profile, agricultural operations, and in particular dairy operations, have not featured prominently in the media. Fish and Game (2013) issued a press release calling on the New Zealand dairy industry to work towards earning a social licence in light of the impacts the industry has on freshwater resources. Two further letters to the editor syndicated in various national newspapers refuted these calls. Social licence was not defined in any of these instances (Table 2).

Table 2. Summary of specific users of SLO, the key characteristics of their use and their application of the term.

	Academia	Government	NGOs	Media	Agriculture	Aquaculture	Forestry	Mining	Gas/energy
Who		Central government	Environmental	Local and national media	Peak bodies; Environmental groups	Government; Environmental groups	Peak bodies	Individual mining and quarrying operations	Peak bodies; Individual corporations
Specific users	Planning and Māori context	Primary Industries Minister	EDS	Print media; Web media; News releases	Hort NZ; Fish and Game		Forest Owners Association; Professional organisations	Straterra	PEPANZ; Todd Energy
Key characteristics	Trust building lies at the heart of SLO; Partnership	Sustainable production; Respect and understanding of communities; Gaining support and trust of the public	Acceptance from the broader community; Best practice	None specific to media	Tacit acknowledgement of SLO	SLO is embedded in planning regulations;	Differentiated between operations;	None described	SLO is embedded in planning regulations
How is it applied?	Elaborating the meaning of SLO and putting it in a context that New Zealanders may better understand	Defining SLO in their vision; Informing industry they need an SLO; Linking SLO to economic development; Giving cognisance and legitimacy	Critique of (energy) company operations	Conveying others’ views of SLO	Risk management; Industry wide rather than single operation; Market access and brand protection	Environmental protection—New Zealand as a place for everyone—shared resource; Risk management; Market access and brand protection	Belief on some level that there is a SLO, but looking to discover what it really takes to gain and maintain a SLO	Engaging with stakeholders before things become a problem; Negotiating together to resolve issues; Recognises differences between operations and/or regions	Risk management; Compliance

Discussion and conclusions

The four key characteristics of a SLO, as determined in the Australian mining industry by Moffat & Zhang (2014), are: procedural fairness; distributional fairness; good governance; and trust. It is evident that trust lies at the heart of SLO. Additional themes around SLO that emerged from the literature include engagement and partnership, openness and transparency, and scale. Other characteristics of SLO, found by other authors, include communication (Stevens & O’Callaghan 2015), negotiation and a range of intangible to tangible ‘outputs’ (Morrison 2014), and is granted to a specific operation (c.f. Edwards & Lacey 2014). Further, SLO incorporates ideas of negotiation from the community’s perspective, and community acceptance of operations (c.f. Thomson & Boutilier 2011).

Moffat & Zhang (2014) note that trust is a key element of gaining a SLO. Stevens & O’Callaghan (2015) state that trust is built by robust and comprehensive reporting, but this is an incomplete and rather simplistic description of how trust is built. A component of building trust is through the provision of information, and not necessarily only information provided by the company. Citizens will turn to their own already trusted sources of information. In addition to the provision of information, the building of trust takes time as industry and communities both begin to meet each other’s positive expectations, and through engaging in ongoing dialogue.

With respect to engagement and partnership, it is not simply a case of the industry ‘telling our story’ (Crofoot 2015) or providing scientific data to demonstrate the industry’s sustainability credentials (Raymond 2015), but also about engaging with empowered communities, letting them initiate and drive much of the dialogue, rather than coming top-down from industry. While transparent reporting of an operation’s activities fits with Moffat & Zhang’s (2014) conception of governance as part of SLO, the latter idea is more akin to CSR. In Crofoot’s (2015) earlier reference to the ‘conflict industry’ as a negative influence, this is the role of lobby and pressure groups—to force operations or industries to examine aspects of their operations that make them uncomfortable.

Closely related to engagement and partnership is the idea of distributional fairness. Communities want to be certain that they will benefit in some way from industry’s operations rather than having to pay the costs often externalised by industry. The Sustainable Business Council (2013) found that New Zealanders do want economic growth, but not at all costs; and they are particularly concerned about protecting the environment. New Zealanders further share the concern that businesses here are focused only on profit rather than profit and society (Sustainable Business Council 2013). Oceana Gold, through its community policy, actually ensures that communities are compensated for impositions that the mining company places upon them (Wilkes 2014).

We see in Jamieson’s (2015) statement that people want to know who the company is and understand where they are coming from, through the element of openness and transparency; however, this idea that a major component of social licence should be reduced to public relations and the ability to protect one’s brand works to trivialise the idea of social licence. ‘Social licence to operate is critical to building and maintaining the reputation of a brand … ’ (Jamieson 2015, p. 1). Social licence can therefore be reduced to a marketing strategy to build or protect a brand. This strategy can be useful should the company or brand actually have a social licence to operate.

The element of scale is one that has been hotly contested in the literature and in the documents examined in this article. What Raymond (2015) and Crofoot (2015), among others, seem to highlight is that SLO can be given, maintained or taken away on an industry-wide scale, while some literature explains that it pertains to an individual operation or, at most, the industry players in a particular local community, particularly in distributed operations (as in forestry and agriculture) (c.f. Dare et al. 2014).

Straterra (n.d.) does recognise that there are differences in community acceptance of mining depending on the area—for instance, the West Coast of the South Island of New Zealand actively supports mining due to a continuous history of mining, while others, the Coromandel, for example, are much less supportive. This is close to the idea that individual operations require a SLO, rather than it being broadly applied to an industry. The idea of community support may be a contextual understanding of acceptance and as such align with the characteristics of SLO.

The EDS (2012) article highlights another concern, particularly around the legitimacy of social licence. One must ask the question: who or what is the community? Is it the local community in which the industry operates? Does it include a wider community, adding in the voices of occasional users of the area? Or does it include the entire country?

Rolleston (2015) describes it as an anathema that farming should even need to consider a social licence, given New Zealand’s farming heritage. He brings up the idea that a social licence used to centre around the local community, but now it involves the entire country. In a sense, he is correct—‘community’ today potentially reaches beyond the local; however, it is local communities that bear the brunt of any disruptions, impacts and distributional unfairness. They are perfectly capable of assimilating input from the wider community and involving that community in the ongoing dialogue to build trust where necessary. Social licence is still granted by the local community, where the majority of impacts will be felt. This is an area where researchers conducting robust research can contribute insights to help both industry and communities work towards the right balance of local and extended community, all the while ensuring the legitimacy of the process and outcomes from various angles.

From a governmental perspective, Guy (2015) puts an enormous amount of emphasis on the role that government regulations and international certification schemes play in the granting of a social licence. While certification schemes do include elements of SLO, they are not the same. Nor does this emphasis on governmental regulation meet the characteristics of SLO—SLO goes beyond governmental regulation. Notably, Guy (2015) highlights those elements that are positive towards industry and neglects to mention where industry should improve. There is no mention of a number of the four areas that Moffat & Zhang (2014) found to be crucial for the granting of a social licence.

Malpass (2013) makes the assertion that New Zealand already has a social licence made up of laws passed by parliament and that these laws provide an adequate ‘licence’ for resource intensive industries. The SLO–legislation nexus raises questions about the legitimacy of representational democracy versus participatory democracy (c.f. Korfmacher 2001; Ananda 2007). Laws are often modified through lobbying, with communities who bear the brunt of industry’s operations having the least power to lobby governments (M Kroger, University of Helsinki, pers. comm. 2015). Due to this lobbying, the New Zealand government has streamlined and simplified the ability to exploit resources or to disallow any citizen protest against these activities (Ruckstuhl et al. 2014). The statements by Malpass (2013, p. 12) about ‘law-abiding businesses, making investments in good faith, may find the rug pulled out from under them by social licence concerns … . ’ demonstrate his lack of understanding of social licence and how companies can go about obtaining one. Again, gaining a social licence comes back to companies engaging with communities, developing partnerships and mutual trust. Maintaining the social licence means ongoing engagement, partnership and mutual trust between companies and communities; when this occurs, there should not be any ‘rug-pulling’.

What this basic analysis has uncovered is that there are multiple understandings of SLO, sometimes based on industry context, but there is a general lack of consensus as to what SLO is in New Zealand. Perhaps a fundamental problem is that various industries, government members and commentators latch on to what MPI (2014) describes as possible specific methods or approaches that can contribute to a relationship and call this a social licence and not the outcome. These approaches can contribute to building a relationship with communities, of which the outcome of that relationship may be a social licence.

We have also found that there are some misconceptions between a SLO and CSR. Social licence is not an outcome achieved through a top-down approach by industry (CSR), instead the outcome is achieved through a community-initiated approach that engages with industry to ensure that expectations on all sides are being met positively. While CSR tools are certainly useful to businesses in engaging with communities over social licence, the bottom-up approach of listening to and engaging with communities, even going so far as to develop partnerships with communities, is necessary to gain and maintain a social licence.

There is a much clearer articulation in industry, government and media publications of what SLO is not, rather than what it is. Some of these articulations place perceived constraints on industry; however, many misconceptions come from lack of clarity, understanding what a social licence is and steps necessary to gain a social licence. Instead of looking at social licence as a negative, if businesses and industries looked at social licence and the process of dialogue with communities (including input from the wider regional/national communities) positively, then the trust, a core element of SLO, between industry and communities could be rebuilt.

This analysis has provided answers to some questions, but has raised further questions that provide opportunity for future research. Particularly, two questions that were raised in the EDS (2012) media release about the legitimacy of SLO and what is community. These two questions are closely related. The size or spread of a community may have an influence on the legitimacy of any SLO granted. Further, this analysis highlights the opportunity for research into what issues and expectations communities themselves have around resource development in their communities, not simply what industry feels may be an issue.

Acknowledgements

The authors would like to acknowledge the journal editor and two anonymous reviewers who have provided generous feedback to help us improve the manuscript.

Disclosure statement

No potential conflict of interest was reported by the authors.

ORCiD

P Edwards http://orcid.org/0000-0002-7025-4124

Notes

1. The ‘conflict industry’ in this article was described as activist groups that make a point of ensuring their perception of an industry or activity is widely heard, creating a conflict between the industry and public.