February 2019

Social licence to operate: regaining community trust

  • By Stephen Hancock FAusIMM(CP), Retired Geologist and Environmental Planner

The modern resources industry values sustainability and community wellbeing within their paradigms, but this commitment has not necessarily been well communicated – particularly to those outside the sector

We need SLTO for new projects to proceed

AusIMM has published many articles addressing the difficulties in obtaining a social licence to operate (SLTO) for new projects, as well as social licence to close or cease mining. There has also been serious discussion about the absence (either real or perceived) of demonstrable sustainability. Speakers at AusIMM’s 2018 ‘Thought Leadership Series’ also addressed the many facets of social licence.

The professionals who underpin the mining industry are responsible for both the advances the industry displays – as well as the areas that need improvement. The latter particularly reflects upon our professionalism. We need to remember the words of Paul Anderson (then CEO of BHP) who said ‘no mining project should be embarked upon until we know how to close it down’.

Well-considered mining projects are always welcomed by politicians, but a desire for the inclusion of sustainability principles in mining is apparent within Australia and communities worldwide. The perception of many outside the sector is that mining impacts threaten social cohesion, existing land uses and the resources that maintain long-term land productivity (Abrahamsson, 2016).

How and why have community attitudes towards mining changed?

Growing affluence appears to contribute to a loss of support for new mining projects. This attitudinal change is fed by a belief that all industry should pursue business value propositions that are transparently, inclusively and cooperatively developed, with benefit for all, in a sustainable manner.

In Australia, where most present-day mining is in remote areas, reports of unmediated mine sites, acid mine drainage and contamination through erosion of tailings and waste rock reinforces negative messages to the communities we operate in and, in many ways, is the antithesis of sustainability. Where mining involves continuing operations (eg Western Australia), social attitudes are less adverse, but negative attitudes are still heard.

The industry and we professionals in AusIMM are by association ‘tarred with the same brush’ when NGOs state that resource development is not sustainable, but we need to admit that some exemplars give validity to their opinions. We need a definition of Sustainable Mining that is consistent with the internationally agreed definition of Sustainable Development that emerged from Brundtland (1987), which states ‘sustainable development is that development that provides for the needs of the present while not constraining the ability of future generations to provide for their needs’. Without such a definition our performance as professionals is subject to criticism as our detractors measure our performance against standards defined by their perceptions of what sustainability means.

The industry is working to convince the community that mining warrants their support, but much of this is reactive rather than comprehensively proactive. Dr Ken Henry commented in the Financial Review in March 2018 that ‘If we in business are going to be taken seriously in these debates, we will have to demonstrate that we are engaging not out of self-interest, but because we share a mission to improve the wellbeing of the Australian people’.

What can the resources industry do to improve its image?

With a decline in image, mining is not welcomed as a neighbour. This has direct implications for the industry, especially in financing and sourcing talented professionals to drive efficiency and technological enhancements that provide a competitive edge.

Mining does inherently exploit finite, non-renewable resources in magnitude and grade. With changes in market conditions and technology, the limits on mining will vary. Similarly, sensitive mine management can optimise production costs and maintain production margins, allowing mine life extension.

However, the wider community does not necessarily have full awareness or appreciation of the work that goes into determining how a mine can be feasible and operated to best advantage, nor that expertise is available to resolve the diverse issues that may concern them.

This is largely because projects are founded within statutory licence conditions, which frequently have not been developed through effective engagement with the community to comprehensively outline the benefits and solutions the industry can bring to resolve issues of discontent. Relationships of trust and understanding are difficult to develop and require engagements based on transparency and partnerships of value to all parties.

The decline in mining project acceptability has stimulated creative work on how new projects can be better understood. Porritt (2005) and Bremerton and Pattendon (2007) developed the hypothetical ‘Five Capitals Model of Sustainable Development’. This model monetises wealth (capital) benefit flows essential to human wellbeing. The five capital pillars are:

  • economic – ie income and financial resources
  • built – ie physical infrastructure
  • human – ie skills, knowledge and health enabling people to work and earn a living
  • social – ie network and relationships of trust enabling people to cooperate
  • natural – ie access to key resources such as water, land, clean air, forests, fisheries, etc.

This variation on Triple Bottom Line Risk Management (Bowden, Lane and Martin, 2001) makes projects more definable and comparable in economic terms, but offers no guidance in resolving issues that exacerbate some facets of support for SLTO and appears weak on some social intangibles. For example, project advocacy needs to be conscious of the aesthetic sensitivities that influence community attitudes and make commitments that address these.

The negative issues that have a factual basis need to be admitted and mitigated. Other issues may be addressed by explaining their context. But no approach will be convincing unless industry is seen to be committed to working in partnership with affected people to resolve issues arising from mining proposals.

The skills and technology within the mining industry are diverse and have the capacity to devise practical solutions to most adverse mining impacts. If practical solutions cannot be found, then they have the potential to become ‘Modifying Factors’ within JORC evaluations in determining the feasibility of any new venture.

To simplify decisions on the viability of mining ventures, industry and professional institutions should generically define ‘mining sustainability’ in terms relevant to community wellbeing. With a definition agreed, industry could proactively promote commitments that encompass the definition within concepts such as those proposed by Edgeman in his ’Sustainable Enterprise Excellence’ (2013).

The maxim ‘actions speak louder than words’ needs to be recognised. New mining projects must demonstrate transparency and sensitivity to attitudes expressed about project impacts, including cherished environments, that the resources communities depend upon for productive futures. Societal dividend must be at the forefront of project justification and commitments.

Statutory environmental impact statements demanded by regulators, although well intentioned, have become time consuming, confusing, frustrating and seldom educative for directly affected stakeholders. They provide adversaries access to material that they may distort selectively in releases to social and print media, stimulating community polarisation. Such outcomes are negative socially and can impact project feasibility.

Simply meeting minimum regulatory standards set by government agencies is no longer sufficient for obtaining SLTO, since regulators are rarely more respected by the community than project proponents. What gains respect is demonstrated commitment to and pursuit of developmental and rehabilitation undertakings, including acting to maintain (insofar as is practicable) the land and environment in a productive and stable condition both during and after the cessation of the project.

Industry needs to demonstrate through its professionals that they will be ‘good neighbours’ who share the same long-term concerns about community wellbeing. This should start through the development of strong trust relationships during exploration, and continue through all stages of project design.

Can government agencies assist?

With social attitudes towards mining in decline, it is conceivable that governmental policies may sympathise and introduce increasingly restrictive regulations on new mining ventures.

Industry and government agencies need to commit to action to redress specific concerns. A definition of mining sustainability would greatly assist and would see the industry being proactive on sustainability concerns.

Conclusion

Mining has a perception among many for being excessively focused on core business and inadequately responsive to stakeholders seeking the assurances of sustainability and community wellbeing. This perception has the potential to curtail the future of the sector.

The modern resources industry does value sustainability and community wellbeing within their paradigms, but this commitment has not been emphasised – particularly to those outside the sector – in part because no agreed definition of mining sustainability exists. In this vacuum, critics present the industry as exploitive, uncaring and out of touch with community values.

Redressing a negative image of mining is now a critical necessity. This should start with professionals recognising what the community rationally expects of us, followed by determining commitments to achieve common acceptable goals.

Industry and the professional institutes should collaborate on a strategy to address rational stakeholder concerns. This can then be proactively promoted through strong, defendable and understandable commitments to partnerships and policy.

Industry professionals need to learn how to best engage the community in the benefits and capabilities the industry can bring.

Share This Article