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“Today, it’s almost impossible to imagine that not so long ago workers were injured regularly, bonded labour was used, or a community could oppose a mining project without having an impact on its approval.
Working as a journalist 25 years ago, I observed a yawning chasm between what was acceptable to companies and governments, and what the public-at-large thought. I was intrigued by this chasm and its consequences for organisations. When the gaps were significant, consequences were costly; in legal bills, failed developments, destroyed companies and governments; or in personal, career and health metrics. Perhaps James Hardie and CSR’s approach to asbestos is the stand-out of my generation. Here, business decisions led to the death knell for asbestos in Australia, a significant human toll and ongoing reputation implications. But there were many examples of note that I observed.
For almost two decades working in resource development, post-journalism, I explored the chasms and what can be done to close them. A key reasons for the chasms is that organisations aren’t set-up to recognise the difference between passing fads and world-changing trends.
While business can respond to community and stakeholder dissent, it often stops short of developing the capability, systems and skills that could win back community confidence – even after a disaster. Traditional stakeholder engagement or corporate relations strategies often exclude societal, political or regulatory foresight – key elements in managing a business.
Many executives believe that public angst is ‘the new normal’. Easy and cheap access to mobile and other communications channels has allowed once micro and local issues to take on national and global significance. However, organisations can also use these same channels to monitor, engage, respond or open dialogue.
Governments are becoming increasingly reactive to public outrage; reversing approvals or ending long-standing industry practice, sometimes overnight, despite extended lobbying by business. There is no policy certainty when societal expectations norm beyond industry behaviour. Rigorously following regulations, approvals procedures, political lobbying and other protocols is not enough to guarantee the smooth passage of a project from scope to delivery. To ensure a project is safe from uncertainty, so shareholders and investors are protected, a business needs a social licence to operate.
Recently, I spoke with an executive who opined: ‘With the grassroots movements all over the world against mining, we simply have to give-up on ever achieving a social licence to operate’. Unfortunately, he is overwhelmed by the task because his organisation has not set him up for success. He cannot escalate issues to the required level in his organisation in order to effectively inoculate his company from the impacts, or help it succeed in the new environment. Corporate leaders giving-up on consensus-building can only make resolving their issues and society’s complex sustainable development challenges even more difficult.
Today, the old approaches of government and public relations produce diminishing returns; and risk mitigation strategies must take into account the impact of a public backlash. However, more importantly, there is the opportunity to get ahead of outrage and activism and create positive, effective stakeholder relationships. Methodologies exist to marry the ‘soft’ tactics of community engagement, public relations and corporate affairs into a rigorous organisation-wide approach to deal with societal change.
It is possible to have broad community support, even encouragement and to align business objectives with public expectations. Companies that understand how their social impact affects their reputation, political influence, profitability – even viability – see the imperative in embracing our Social Licence to Operate model.”
Managing Director of Futureye