tag:theconversation.com,2011:/ca/topics/social-licence-to-operate-4470/articlesSocial licence to operate – The Conversation2020-09-17T19:48:57Ztag:theconversation.com,2011:article/1462942020-09-17T19:48:57Z2020-09-17T19:48:57ZVital Signs: 50 years ago Milton Friedman told us greed was good. He was half right<figure><img src="https://images.theconversation.com/files/358537/original/file-20200917-24-1rbg63k.jpg?ixlib=rb-1.1.0&rect=427%2C122%2C1909%2C1019&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://miltonfriedman.hoover.org/collections">Hoover Institution</a></span></figcaption></figure><p><em>The point is, ladies and gentleman, that greed – for lack of a better word – is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms – greed for life, for money, for love, knowledge – has marked the upward surge of mankind.</em></p>
<p>– Gordon Gekko, <a href="https://www.americanrhetoric.com/MovieSpeeches/moviespeechwallstreet.html">Wall Street</a> 1987</p>
<p>Fifty years ago, well before the movie Wall Street, Chicago economist Milton Friedman set down what for many was the essence of the famous speech in Wall Street in an article for the New York times magazine entitled “<a href="https://www.nytimes.com/1970/09/13/archives/a-friedman-doctrine-the-social-responsibility-of-business-is-to.html">The Social Responsibility of Business is to Increase its Profits</a>”.</p>
<p>His point, which along with his other contributions was recognised when he was awarded the <a href="https://www.nobelprize.org/prizes/economic-sciences/1976/summary/">Nobel Memorial Prize in Economic Sciences</a> in 1976, was that businesses serve society best when they abandon talk of “social responsibilities” and solely maximise returns for shareholders.</p>
<p>Incredibly influential (the past week has seen <a href="https://fund-shack.com/podcast/the-milton-friedman-new-york-times-csr-debate/">special conferences</a> and <a href="https://www.nytimes.com/2020/09/11/business/dealbook/milton-friedman-doctrine-social-responsibility-of-business.html">anniversary analyses</a>), the essay has been credited with ushering in the doctrine of “<a href="https://corporatefinanceinstitute.com/resources/knowledge/other/what-is-shareholder-primacy/">shareholder primacy</a>,” and with it short-termism, hostile takeovers, <a href="https://www.investopedia.com/updates/enron-scandal-summary/">colossal frauds</a> and savage job cuts.</p>
<p>It’s a doctrine not seriously challenged until the 2008-2009 global financial crisis.</p>
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<a href="https://images.theconversation.com/files/358521/original/file-20200917-20-s8k87t.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/358521/original/file-20200917-20-s8k87t.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/358521/original/file-20200917-20-s8k87t.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=971&fit=crop&dpr=1 600w, https://images.theconversation.com/files/358521/original/file-20200917-20-s8k87t.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=971&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/358521/original/file-20200917-20-s8k87t.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=971&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/358521/original/file-20200917-20-s8k87t.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1220&fit=crop&dpr=1 754w, https://images.theconversation.com/files/358521/original/file-20200917-20-s8k87t.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1220&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/358521/original/file-20200917-20-s8k87t.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1220&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">The essay that sparked a revolution, 50 years ago this week.</span>
<span class="attribution"><a class="source" href="https://www.nytimes.com/1970/09/13/archives/a-friedman-doctrine-the-social-responsibility-of-business-is-to.html">New York Times</a></span>
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<p>But in an important respect it was misread.</p>
<p>Although not clear from the <a href="https://www.nytimes.com/1970/09/13/archives/a-friedman-doctrine-the-social-responsibility-of-business-is-to.html">title of the essay</a>, Friedman himself was quite concerned with broader social aims. </p>
<p>His essay was about how best to achieve them.</p>
<p>His point was that if companies made as much money as they could for their shareholders, those shareholders could spend it on social goals, “if they wished to do so”. </p>
<p>For the company to attempt to guess what goals its shareholders would want to support and to support them itself would be for the company to do its main job badly.</p>
<p>Although it made a certain sort of sense, the Friedman doctrine has turned out to be incomplete.</p>
<p>As Harvard University’s Oliver Hart (who also won the Nobel Prize for Economics) has pointed out, corporations are often <a href="https://promarket.org/2020/09/14/shareholders-dont-always-want-to-maximize-shareholder-value/">much better</a> than their shareholders at achieving the goals their shareholders care about.</p>
<h2>Corporations can achieve more than individuals</h2>
<p>Individual shareholders can’t do much to avert climate change, but the corporations they own can.</p>
<p>A mining company could either stop operating an environmentally-damaging mine or run the mine, make a bunch of money and pay it to shareholders who could use the money to mitigate the damage “if they wished to do so”. </p>
<p>Its hard to argue that, if shareholders do indeed “wish to do so”, the first option isn’t better.</p>
<p>To cite a recent instance, is hard to “un-blow-up” <a href="https://theconversation.com/corporate-dysfunction-on-indigenous-affairs-why-heads-rolled-at-rio-tinto-146001">46,000 years of Indigenous heritage</a>.</p>
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Read more:
<a href="https://theconversation.com/corporate-dysfunction-on-indigenous-affairs-why-heads-rolled-at-rio-tinto-146001">Corporate dysfunction on Indigenous affairs: Why heads rolled at Rio Tinto</a>
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<p>In contrast, Friedman was almost surely right about corporate charitable contributions, which was in many ways the impetus for the article.</p>
<p>In what way are corporations better at giving money to charities (and political parties) than individuals? In none that are obvious (and not potentially corrupt).</p>
<p>So where do we draw the line about what corporations do and don’t do?</p>
<p>Proponents of the “stakeholder view” now endorsed by an <a href="https://theconversation.com/super-funds-are-feeling-the-financial-heat-from-climate-change-146191">increasing number of superannuation funds</a> think corporations should have a composite objective that takes into account the interests of shareholders, bondholders, workers, suppliers, the environment, and more. </p>
<h2>Yet a point in every direction…</h2>
<p>The problem with this, as recognised by the arrow-covered pointless man in the animated Harry Nilsson film <a href="https://brightlightsfilm.com/whats-the-point-the-legendary-1971-animated-feature-on-dvd/">What’s The Point?</a> is that “a point in every direction is the same as no point at all”.</p>
<p>As Friedman put it, composite objectives suffer from “looseness and lack of rigour”.</p>
<p>Others, such as Hart and University of Chicago professor Luigi Zingales think firms should find out what shareholders most want, and “<a href="https://promarket.org/2020/09/14/shareholders-dont-always-want-to-maximize-shareholder-value/">pursue that goal</a>.”</p>
<p>This has the virtue of permitting a social objective while creating a concrete, measurable goal.</p>
<p>It’s a way of giving shareholders (and super fund members) a voice that is more direct than simply electing directors every few years.</p>
<p>Friedman helped start an important discussion. Fifty years on, it isn’t finished.</p><img src="https://counter.theconversation.com/content/146294/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Richard Holden does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Firms should attempt to maximise profits, but if shareholders want it, there’s no reason why they can’t have other goals.Richard Holden, Professor of Economics, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1128402019-03-03T19:13:15Z2019-03-03T19:13:15ZThe ASX abandons push to require companies to have a social licence to operate. Was it only ever ‘politically correct nonsense’?<figure><img src="https://images.theconversation.com/files/261764/original/file-20190303-110134-12pxa57.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The concept of a social licence is real, but proved too much for the Australian Securities Exchange.</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>After months of debate, the Australian Securities Exchange last week dumped a proposal to include reference to a “<a href="https://probonoaustralia.com.au/news/2018/10/asx-social-licence-operate/">social licence to operate</a>” in its updated Corporate Governance Guidelines.</p>
<p>It was wrong to do so.</p>
<p>The new guidelines, <a href="https://www.asx.com.au/regulation/corporate-governance-council.htm">released on Wednesday</a>, replace “social licence to operate” with terms such as “reputation” and “standing in the community”.</p>
<p>The chair of ASX Corporate Governance Council chair Elizabeth Johnstone says they are “<a href="https://www.afr.com/leadership/management/asx-governance-council-dumps-social-licence-to-operate-from-guidance-20190225-h1bp43">more likely to be better understood</a>”.</p>
<p>But in practice they don’t mean the same thing. </p>
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<a href="https://images.theconversation.com/files/261766/original/file-20190303-110107-q7uayd.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/261766/original/file-20190303-110107-q7uayd.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/261766/original/file-20190303-110107-q7uayd.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=398&fit=crop&dpr=1 600w, https://images.theconversation.com/files/261766/original/file-20190303-110107-q7uayd.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=398&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/261766/original/file-20190303-110107-q7uayd.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=398&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/261766/original/file-20190303-110107-q7uayd.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=500&fit=crop&dpr=1 754w, https://images.theconversation.com/files/261766/original/file-20190303-110107-q7uayd.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=500&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/261766/original/file-20190303-110107-q7uayd.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=500&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Markup of revisions to consultation version of Fourth Edition of ASX Corporate Governance Principles.</span>
<span class="attribution"><a class="source" href="https://www.asx.com.au/documents/asx-compliance/cgc-fourth-edn-markup-to-consultation-version.pdf">ASX</a></span>
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<p>According to the <a href="https://www.afr.com/leadership/management/asx-governance-council-dumps-social-licence-to-operate-from-guidance-20190225-h1bp43">Australian Financial Review</a> the Council came to the view that the phrase was “contentious” and that it would “create problems for companies in the gaming, alcohol, tobacco, fast food and mining sectors” – the very sectors where corporate responsibility is at constant risk, and governance is most needed. </p>
<p>David Murray, chair of troubled investment firm AMP, had labelled the phrase “<a href="https://www.afr.com/leadership/board-outrage-over-push-to-have-a-social-licence-20180731-h13doa">politically correct nonsense</a>” – which raises the question as to whether the phrase is indeed left-wing nonsense and why the Council felt the need to dumb it down.</p>
<p>The AMP chair’s comment suggests the financial sector has still a long way to go in understanding that businesses are not only responsible to their owners but also to a wide array of stakeholders who have legitimate claims; among them governments, communities, customers, and citizens. As a consequence, <a href="https://theconversation.com/why-amp-and-ioof-went-rogue-102569">as the AMP ought to well know</a>, businesses operate in an environment of contested values.</p>
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<a href="https://theconversation.com/why-amp-and-ioof-went-rogue-102569">Why AMP and IOOF went rogue</a>
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<p>“Politically correct” or not, the phrase is an accurate metaphor for the reality that companies that disregard the values of the societies in which they operate run the risk of boycotts and legal and legislative action that will put them out of business.</p>
<p>It raises the question why the Council felt the need to shy away from such an accurate depiction of what is necessarily a key governance objective: maintenance of the social licence to operate. </p>
<p>There are probably two reasons: </p>
<ul>
<li><p>guidelines such as the ASX Corporate Governance Principles are outcomes of extensive debate and consultation and so tend to reflect the values of the lowest common denominator</p></li>
<li><p>commercial interests have long dominated ethical considerations in many industries, especially those in which the Council fears the phrase may “create problems” – the gaming, alcohol, tobacco, fast food and mining industries.</p></li>
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<p>As it happens, the mining industry <a href="https://www.australianmining.com.au/news/miners-need-to-improve-social-license-to-operate-nsw-minerals-council/">has long been aware of the need to maintain such a licence</a> and made <a href="https://www.csiro.au/en/Research/MRF/Areas/Community-and-environment/Social-licence-to-operate">significant progress</a> in embracing social responsibility in the fields of human rights and indigenous inclusion strategy. </p>
<p>It is hard to see how the concept of a social licence would create problems for it.</p>
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Read more:
<a href="https://theconversation.com/not-getting-a-social-licence-to-operate-can-be-a-costly-mistake-as-coal-seam-gas-firms-have-found-93718">Not getting a social licence to operate can be a costly mistake, as coal seam gas firms have found</a>
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<p>Other industries have long avoided such a debate and have instead engaged in reputation management through campaigns around responsible gambling, responsible drinking and healthy eating – all of which are paradoxical attempts to soften the edges of a problematic core of their operations rather than to align them with what society wants.</p>
<p>Continuing to do so, by pretending there is no such thing as a social licence, is not in their long term interests.</p>
<p>By surrendering, the Australian Securities Exchange has served neither them nor the cause of corporate governance well.</p><img src="https://counter.theconversation.com/content/112840/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Thomas Maak does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The reality is that companies are at risk without a social licence to operate, so why shy away from the term?Thomas Maak, Director, Centre for Workplace Leadership, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/959272018-05-02T20:22:36Z2018-05-02T20:22:36ZRio Tinto’s climate resolution marks a significant shift in investor culture<p>What does the advocacy group the Australian Centre for Corporate Responsibility (<a href="http://www.accr.org.au/">ACCR</a>) have in common with the <a href="https://www.lgsuper.com.au/">Local Government Super fund</a>, the <a href="https://www.churchofengland.org/about/leadership-and-governance/church-england-pensions-board">Church of England Pensions Board</a>, and the <a href="http://www.government.se/government-agencies/seventh-ap-fund/">Seventh Swedish National Pension Fund</a>?</p>
<p>Quite a lot, it seems. These three institutional investors joined with the ACCR to co-file a shareholder resolution on climate change at mining giant Rio Tinto’s Australian annual general meeting in Melbourne yesterday. While Rio’s board <a href="https://www.asx.com.au/asxpdf/20180314/pdf/43sf7h344xgrbd.pdf">advised shareholders to vote against the resolution</a>, there was a very healthy showing of <a href="https://www.asx.com.au/asxpdf/20180502/pdf/43tqsy22jfb8xx.pdf">18.3% shareholders voting in support</a> (over 20% including abstentions).</p>
<p>The <a href="http://www.accr.org.au/rio_tinto">resolution</a> called on Rio to review and comprehensively report on its membership of industry associations such as the Minerals Council of Australia (<a href="http://www.minerals.org.au/">MCA</a>). The MCA’s pro-coal political lobbying has been distinctly at odds with the position of companies such as Rio, which publicly support measures to reduce carbon emissions in line with the <a href="https://theconversation.com/the-paris-climate-agreement-at-a-glance-50465">Paris climate agreement</a>.</p>
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Read more:
<a href="https://theconversation.com/is-bhp-really-about-to-split-from-the-minerals-councils-hive-mind-84407">Is BHP really about to split from the Minerals Council's hive mind?</a>
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<p>This alliance between civil society and institutional investors is significant for several reasons.</p>
<p>Institutional investors (large investors such as superannuation funds which pool money to buy shares and other assets) are increasingly concerned about the long-term resilience of their investments to the business risks posed by climate change.</p>
<p>For an energy-hungry miner such as Rio, these risks include changing energy prices and markets, as well as operational disruptions caused by climate impacts such as storms, floods, and droughts.</p>
<p>Investors want companies to disclose these risks fully and to outline how they will manage them to maintain company value over the long term. As the Rio resolution suggests, they also want companies to be transparent and consistent in their approach to climate change. Paying multimillion-dollar memberships for industry associations that lobby against climate action is inconsistent with the long-term investment goals of such shareholders.</p>
<h2>New phenomenon</h2>
<p>Shareholder resolutions on climate change are a relatively new phenomenon in Australia. In the United States, however, there is a long history of using resolutions to pressure companies to address human rights abuses and change their approach to <a href="https://www.ceres.org/resources/tools/climate-and-sustainability-shareholder-resolutions-database">issues like climate change</a>. </p>
<p>In Australia, advocacy groups such as ACCR (and its counterpart <a href="https://www.marketforces.org.au/">Market Forces</a>) have taken up this tool more recently and lodged <a href="http://www.accr.org.au/australia">resolutions to Australian banks, utilities, oil and gas companies, insurers</a>, and now the big miners, asking for improved disclosure and better management of climate risks. </p>
<p>What’s more, institutional investors are increasingly <a href="https://www.smh.com.au/business/investments/big-investors-take-a-public-stand-on-climate-change-risk-20180215-p4z0gr.html">backing these requests</a>. This latest resolution to Rio Tinto is also reportedly <a href="https://www.smh.com.au/business/companies/super-funds-put-heat-on-rio-tinto-over-lobby-groups-20180424-p4zbfc.html">supported by key voting advisors ACSI and Regnan, as well as other major Australian super funds</a>. </p>
<p>As a result, it marks a significant shift in investor culture in Australia, signalling an increased willingness to engage proactively and publicly on environmental, social and governance issues.</p>
<p>Compared with the US and UK, shareholders in Australia have more limited rights to bring resolutions to an AGM expressing their views or requesting that certain actions be undertaken by company management. <a href="http://www.afr.com/news/cba-wins-shareholder-activism-test-case-against-accr-20160610-gpgb4y">Australian court decisions</a> have upheld a strict division of powers between company management and shareholders. Nonbinding advisory resolutions on matters that interfere with company management are not permitted. This means shareholders must lodge a special resolution to change the company constitution to allow them to put forward an advisory resolution on a substantive matter such as climate change. </p>
<p>This is not only clunky and inefficient, but also acts as a significant deterrent for investors to support a substantive resolution with which they would otherwise concur. There are <a href="https://www.acsi.org.au/images/stories/ACSIDocuments/generalresearchpublic/Shareholder-resolutions-in-Australia.Oct17.pdf">renewed calls for law reform</a>, widely supported by institutional investors and also, increasingly, by some of the <a href="https://www.asx.com.au/asxpdf/20180314/pdf/43sf7h344xgrbd.pdf">companies facing these resolutions</a>, to change the law to allow for a more consistent and orderly approach in Australia.</p>
<h2>Do these resolutions actually change behaviour?</h2>
<p>From their brief history in Australia so far, it appears that shareholder resolutions on climate change, together with a range of other influences, do have the potential to drive change. Many Australian companies that have faced these resolutions so far have responded with significant improvements in climate risk disclosure and management. </p>
<p>Santos recently released its first <a href="https://www.santos.com/media/4323/santos-climate-change-report.pdf">Climate Change Report</a>; AGL has developed a long term <a href="https://www.agl.com.au/about-agl/what-we-stand-for/sustainability/climate-change">energy transition strategy</a>; and BHP Billiton (which <a href="https://theconversation.com/is-bhp-really-about-to-split-from-the-minerals-councils-hive-mind-84407">faced a similar resolution</a> to Rio Tinto on its membership of industry associations in 2017) has announced its <a href="http://www.abc.net.au/news/2017-12-19/bhp-threatens-minerals-council-withdrawal/9271472">withdrawal from the World Coal Association</a> and <a href="https://www.bhp.com/-/media/documents/ourapproach/operatingwithintegrity/industryassociations/171219_bhpindustryassociationreview.pdf?la=en">reviewed its other industry association memberships</a>, including the MCA. </p>
<p>While these developments are undoubtedly the result of many factors – including technology and market developments, behind-the-scenes engagement with investors on climate risks, and increased pressure from financial institutions and regulators – it seems that shareholder resolutions can help to focus a company’s attention on ensuring its climate stance is defensible to shareholders. The impact of these resolutions in Australia may also be a function of their relative novelty compared with other jurisdictions such as the United States.</p>
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Read more:
<a href="https://theconversation.com/why-has-bhp-distanced-itself-from-legal-threat-to-environment-groups-87093">Why has BHP distanced itself from legal threat to environment groups?</a>
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<p>This week’s resolution at Rio Tinto signals a coming of age for investor engagement on climate change in Australia. Shareholder resolutions have clearly become an important part of the toolbox for civil society in Australia seeking to influence corporate decision making on climate change. </p>
<p>As mainstream investors come on board with these resolutions, their potential impact is heightened considerably. For their part, Australian institutional investors seem to be increasingly willing to stand behind calls for better disclosure and management of climate risks by the companies in which they invest, including by forming new alliances and supporting the use of these more activist tools. </p>
<p>In a country with a relatively conservative approach to investor engagement, these are important cultural shifts. They offer promising signs that Australian businesses and investors are taking a more considered and proactive approach on climate risks.</p><img src="https://counter.theconversation.com/content/95927/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Anita Foerster receives funding from the Australian Research Council. </span></em></p><p class="fine-print"><em><span>Jacqueline Peel receives funding from the Australian Research Council. </span></em></p>The shareholder resolution on climate change at Rio Tinto’s AGM is another indication of how much investor culture is tilting towards demanding that companies take a responsible climate stance.Anita Foerster, Senior Lecturer, Monash UniversityJacqueline Peel, Professor of Environmental and Climate Law, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/945392018-04-12T14:24:43Z2018-04-12T14:24:43ZFracking may have political support, but it still needs a ‘social licence’<p>Fracking looks set to arrive in Britain after all. US-Australian energy company <a href="https://www.naturalgasworld.com/cuadrilla-aims-for-shale-gas-production-in-2019-60080">Cuadrilla recently announced</a> it may begin producing the UK’s first commercial shale gas sometime in 2019.</p>
<p>The government says that <a href="https://www.gov.uk/government/speeches/governments-vision-for-shale-gas-in-securing-home-grown-energy-supplies-for-the-uk">shale plays an important role</a> in the country’s energy strategy. As a domestic resource it can not only can make up for declining gas production from the North Sea, but also help ease concerns about the UK’s dependence on imports, notably against a backdrop of strained relations with Russia as well as recent <a href="https://www.theguardian.com/business/2018/mar/01/uk-is-running-out-of-gas-national-grid-warns-freezing-weather">supply shortages</a>. Supporters of fracking also argue it could fill the gap left by <a href="https://www.theguardian.com/business/2018/jan/05/uk-coal-fired-power-plants-close-2025">the phase-out of coal power</a>, helping decarbonise the energy system while bringing additional jobs. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/213836/original/file-20180409-114098-1eenpie.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/213836/original/file-20180409-114098-1eenpie.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/213836/original/file-20180409-114098-1eenpie.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=376&fit=crop&dpr=1 600w, https://images.theconversation.com/files/213836/original/file-20180409-114098-1eenpie.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=376&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/213836/original/file-20180409-114098-1eenpie.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=376&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/213836/original/file-20180409-114098-1eenpie.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=473&fit=crop&dpr=1 754w, https://images.theconversation.com/files/213836/original/file-20180409-114098-1eenpie.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=473&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/213836/original/file-20180409-114098-1eenpie.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=473&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">How fracking works.</span>
<span class="attribution"><span class="source">Jaddingt / www.shutterstock.com</span></span>
</figcaption>
</figure>
<p>Yet shale gas hasn’t done a great job of selling itself in the UK.
Fracking technology itself has come under fire – in order to obtain shale gas, underground rocks are fractured under high pressure and using chemicals. Many people are worried about groundwater safety, the environmental impact and public health, thus leading to <a href="https://www.lancasterguardian.co.uk/news/oscar-wining-actress-joins-lancaster-protesters-at-fracking-site-1-9075648">protests</a>.</p>
<p>All this raises the question of how to reach an agreement. Is shale gas desirable or not? Is the extra energy worth the environmental damage? Do the jobs created outweigh local residents’ concerns? What’s needed is a shared understanding between the various social, economic and political stakeholders. In short, energy companies need what is known as a <a href="https://www.investopedia.com/terms/s/social-license-slo.asp">social license</a> to frack.</p>
<h2>Evidence from Eastern Europe</h2>
<p>As my recent research on <a href="https://bit.ly/2Hip9Uo">fracking in Eastern Europe</a> suggests, such a social licence rests on a policy process that all stakeholders see as legitimate, along with public acceptance of a technology that doesn’t often go wrong but could be disastrous if it did. </p>
<p>Although shale gas had been hailed as a “game changer” for East Europeans, given their <a href="https://www.politico.eu/article/shale-gas-could-be-game-changer/">strong dependence on Russian gas supplies</a>, Bulgaria ended up banning fracking, exploration plans were shelved in Romania, and quietly abandoned in the Baltics. Across the region, environmental activists were joined by ordinary citizens, the Orthodox Church and even a national grain producer association to protest against the alleged threat of shale gas to food security, the environment and the sell-off of “national treasure” to foreign companies such as Chevron. Only a few countries, notably Poland, remained legally open to shale gas extraction, and there fracking was granted a social licence by stakeholders. </p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"516589750375837697"}"></div></p>
<p>Judged by the actual output, shale gas in Poland <a href="https://www.reuters.com/article/poland-gas-shale/polish-firms-concede-defeat-in-search-for-shale-gas-riches-idUSL8N1CI3PF">isn’t exactly a success story</a>. As in Bulgaria, Romania or Lithuania, the country saw foreign majors abandoning domestic shale prospects. The economics simply didn’t add up, geology proved more difficult than expected and the regulatory environment was far from ideal. But public support for the Polish government’s shale gas policies stayed strong, protests remained limited, and people bought into the idea of unconventional energy being of overall net benefit.</p>
<p>Why was that? Governments that pushed for shale in a top-down manner, cared little about public communication and only involved a few friendly faces from the corporate and NGO world faced public opposition – Bulgaria is a good example. By contrast, countries such as Poland that involved those energy corporations already in place, consulted local mayors and ensured some of the profits would remain in the area, saw their efforts pay off.</p>
<p>The policy narrative is another important element. Research I carried out with my colleague Benjamin Sovacool found <a href="https://www.mitpressjournals.org/doi/abs/10.1162/GLEP_a_00375">very different narratives</a> across Eastern Europe. In Poland, shale gas emerged as a national project that could potentially bring economic prosperity and energy security – and this united various stakeholders behind government policy. In Bulgaria and Romania, the discussion of shale gas focused on authoritarian governments and environmental hazards. Poor public bureaucracy meant that people there had little trust in the policy process and began to question the governments’ motivations.</p>
<h2>Lessons for the UK and elsewhere</h2>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/213844/original/file-20180409-114121-1kwwmwq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/213844/original/file-20180409-114121-1kwwmwq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/213844/original/file-20180409-114121-1kwwmwq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=410&fit=crop&dpr=1 600w, https://images.theconversation.com/files/213844/original/file-20180409-114121-1kwwmwq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=410&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/213844/original/file-20180409-114121-1kwwmwq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=410&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/213844/original/file-20180409-114121-1kwwmwq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=515&fit=crop&dpr=1 754w, https://images.theconversation.com/files/213844/original/file-20180409-114121-1kwwmwq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=515&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/213844/original/file-20180409-114121-1kwwmwq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=515&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Anti-fracking protestors outside a Cuadrilla site in Lancashire in 2017.</span>
<span class="attribution"><span class="source">Seeshooteatrepeat / www.shutterstock.com</span></span>
</figcaption>
</figure>
<p>The upshot is that even proving shale gas is economical to extract – in Lancashire or elsewhere in the country – will not be enough to make it happen. Extracting unconventional energy resources at an industrial scale will eventually require a social licence from society as a whole, not just the local communities that are most directly affected. This won’t be achieved simply through bureaucratic processes, such as production permits, or even through a mandate from an election – the social licence requires a much broader buy-in.</p>
<p>Instead, the UK government would be well advised to think up ways to enhance institutional outreach and community empowerment as well as opportunities to facilitate the buy-in of important stakeholders on national and sub-national levels. This may be a cumbersome process, and the outcome may be hard to determine. But it is the only way to lend legitimacy to its policies and to possibly generate the necessary public acceptance for a highly contested technology.</p>
<p>The broader takeaway, however, is that what holds true for fracking also applies to core aspects of the imminent transition towards low-carbon energy. Are people truly ready for massive numbers of new high-voltage electricity pylons? What about enormous new wind farms? Do they appreciate the technology it will take to eventually achieve <a href="https://www.nature.com/articles/s41560-018-0124-1">negative emissions</a> and meet the Paris climate targets? Society as a whole still doesn’t really anticipate anything of the required scale, and a serious jump into a low-carbon world may come as a shock to people used to the status quo.</p>
<p>Changes of that scale should be broadly acceptable to the nation and would therefore warrant a social licence. Starting with appropriate frameworks for fracking may therefore not be a bad idea, and would pay off at larger scale in future.</p><img src="https://counter.theconversation.com/content/94539/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Andreas Goldthau gratefully acknowledges that the research leading to these results received funding from the People Programme (Marie Curie Actions) of the European Union’s Seventh Framework Programme. He is affiliated with the Harvard Belfer Center for Science and International Affairs. </span></em></p>Governments and energy firms will find it hard to generate the necessary public acceptance for such a controversial technology.Andreas Goldthau, Professor in International Relations & Director, Centre of International Public Policy, Royal Holloway University of LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/937182018-03-23T04:32:37Z2018-03-23T04:32:37ZNot getting a social licence to operate can be a costly mistake, as coal seam gas firms have found<figure><img src="https://images.theconversation.com/files/211688/original/file-20180323-54869-52700t.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">And if you wait too long to survey a community, it can end up being too be too late to turn the tide of opinion.</span> <span class="attribution"><span class="source">Richard Swinton</span>, <span class="license">Author provided</span></span></figcaption></figure><p>In a wide-ranging recent <a href="https://www.ceda.com.au/Digital-hub/CEDA-live-stream">speech</a>, Rio Tinto chief executive Jean-Sebastien Jacques said there was:</p>
<blockquote>
<p>…an opportunity for all of us to turn our social licence into a stronger social bond or contract. I believe this is a “make or break” for companies and it’s especially important for those of us in the extractive sectors.</p>
</blockquote>
<p>He’s right. His comments serve as a useful reminder of the importance of obtaining a social licence to operate – meaning ongoing local community acceptance of a company’s business.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/australian-gas-between-a-fracked-rock-and-a-socially-hard-place-74932">Australian gas: between a fracked rock and a socially hard place</a>
</strong>
</em>
</p>
<hr>
<p><a href="https://www.sciencedirect.com/science/article/pii/S0264837717305185">My research</a> on coal seam gas firms and social licence reveals what’s at stake if they get it wrong, and how they might get it right in the future.</p>
<h2>What is a ‘social licence’?</h2>
<p>“Social licence to operate” is a term that describes how much community support a project, company or industry has in a region. </p>
<p>Some companies view it as intangible, and put it in the too-hard basket. However, my research has found that there are some relatively simple ways to measure it. </p>
<p>Earning community support isn’t always straightforward. It involves interactions between a complex network of individuals and groups in society, and their views can change over time. It’s more than just getting one or two local representatives on side. If you don’t get that support, community pushback can cause expensive and time-consuming issues for a company. Regulations can change. People take to the streets.</p>
<p>Social licence can be a struggle to maintain, but it can also be a tool for promoting collaboration. Case studies in which this has been achieved effectively are still relatively few and far between, but we’re aiming to change this.</p>
<h2>More than just a legal contract</h2>
<p>Present legislation requires land access agreements to be drawn up between companies and the landholders on whose land they wish to operate. However, my research has found that this isn’t enough. </p>
<p>It can often create winners and losers. Natural resources such as freshwater systems extend beyond property boundaries. Just outside the land on which a project operates can be exactly where challenges to a social licence begin. We found that the exclusion of important stakeholders (and not treating them as a stakeholder group), can lead to substantial social licence issues.</p>
<p>For example, in the New South Wales <a href="https://en.wikipedia.org/wiki/Northern_Rivers">Northern Rivers region</a> (which includes places like Lismore, Byron Bay and Mullumbimby) the social movement against the coal seam gas industry began when a group of local ladies were having afternoon tea on their farm. They noticed a drill rig had appeared across the valley to drill on a neighbour’s property.</p>
<p>Those few women, who had never heard of the coal seam gas industry until that moment, nor had they previously participated in activism of any kind, were instrumental in the emergence of the anti-CSG movement.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/211668/original/file-20180323-54863-1q6av90.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/211668/original/file-20180323-54863-1q6av90.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/211668/original/file-20180323-54863-1q6av90.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/211668/original/file-20180323-54863-1q6av90.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/211668/original/file-20180323-54863-1q6av90.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/211668/original/file-20180323-54863-1q6av90.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/211668/original/file-20180323-54863-1q6av90.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/211668/original/file-20180323-54863-1q6av90.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Protesters at the Bentley Blockade in 2014.</span>
<span class="attribution"><span class="source">csgfreenorthernrivers.org</span></span>
</figcaption>
</figure>
<h2>What drives social licence?</h2>
<p>Local context is key. The legitimacy of a project hinges on whether people think a project will create more benefits than problems. And people’s perceptions emerge from a combination of local economics, demographics and <a href="https://www.sciencedirect.com/science/article/pii/S0264837717305185">social values</a>.</p>
<p>This is where a company needs credibility - a reputation for living up to its commitments and responding to concerns. Having a strong social licence is about not only being <em>seen</em> to be doing the right thing; it’s about actually doing the right thing. It’s also about transparency.</p>
<p>It’s important that government and industry approvals and processes are seen as fair.</p>
<h2>Losing your social licence is expensive</h2>
<p>Chief executive of gas company Metgsaco, Peter Henderson, explained to me in early 2012 that he viewed social licence as “an opportunity for NIMBYs to complain” (NIMBY meaning: “not in my backyard”). His view was that we had a democratically elected government that people should trust to make decisions on their behalf.</p>
<p>When we spoke again a year later, Metgasco was experiencing major operating restrictions, resulting from regulatory decisions made with what he saw as “absolutely no scientific, risk-management or factual basis”. His firm’s social licence was lost, and social resistance was in full swing. </p>
<p>A survey of Lismore voters that we conducted on behalf of Lismore City Council showed that in September 2012, <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/1745-5871.12071">87% of voters did not support CSG</a> development.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/211686/original/file-20180323-54898-z0m1zj.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/211686/original/file-20180323-54898-z0m1zj.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/211686/original/file-20180323-54898-z0m1zj.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=337&fit=crop&dpr=1 600w, https://images.theconversation.com/files/211686/original/file-20180323-54898-z0m1zj.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=337&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/211686/original/file-20180323-54898-z0m1zj.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=337&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/211686/original/file-20180323-54898-z0m1zj.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/211686/original/file-20180323-54898-z0m1zj.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/211686/original/file-20180323-54898-z0m1zj.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">Hanabeth Luke</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>By 2013, about half of Lismore voters had participated in protest rallies and marches. In 2014, thousands of people camped on the bordering property of a farmer who had signed a contract with Metgasco, at the historic <a href="http://www.abc.net.au/news/2014-05-20/bentley-history/5463800">Bentley blockade</a>. Eventually, <a href="https://www.smh.com.au/national/nsw/nsw-government-set-to-pay-25-million-for-metgasco-north-coast-gas-licences-20151102-gkodbr.html">Metgasco was paid A$25 million</a> as compensation for its cancelled gas licence. The episode came at great cost to both Metgasco and the NSW government.</p>
<p>It doesn’t need to be this way.</p>
<h2>Applying social licence across the landscape</h2>
<p>Agricultural industries are now starting to recognise social licence as a key issue. </p>
<p>My team’s latest research responds to calls for a strategic approach to social licence in horticulture. Jolyon Burnett, chief executive of the <a href="http://australian-macadamias.org/industry/">Australian Macadamia Society</a>, has said he views social licence as a “top five” priority – not just because its loss would pose a threat to industry growth and profitability, but because it’s important in its own right. He said:</p>
<blockquote>
<p>By understanding what really makes up social licence in each community (because it will differ) and by fostering an understanding of those issues, and a common approach to addressing them, we can build a strong and sustainable relationship between industries (of all kinds) and communities will see us working in partnership, not conflict.</p>
</blockquote>
<h2>Getting social licence right</h2>
<p>The engagement approach you take is everything. This means working in partnership with communities and actively engaging them in the process from the very start. Understanding local perceptions and concerns involves talking to people, but polls and election surveys can help us to understand social licence across an electoral area; how people feel about a company or issue, and why. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/queensland-communities-remain-lukewarm-about-coal-seam-gas-csiro-survey-70709">Queensland communities remain lukewarm about coal seam gas: CSIRO survey</a>
</strong>
</em>
</p>
<hr>
<p>Such simple methods can be used to measure a social licence, provide an understanding of local value systems, and establish knowledge levels on relevant issues. Such research can be used to inform industry code of conduct and best practice guidelines.</p>
<p>But before polling can take place, there needs to have been enough information available for people to make an informed decision. And if you wait too long to run a survey it can end up being too be too late to turn the tide of opinion. This is what happened in the Northern Rivers, with expensive results for the firms involved.</p>
<p>You can read more of our research on this <a href="https://www.sciencedirect.com/science/article/pii/S0264837717305185">here</a>.</p><img src="https://counter.theconversation.com/content/93718/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Hanabeth Luke received a grant of $1500 from PESA in 2012.</span></em></p>‘Social licence to operate’ is a term describing how much community support a project or company has. As the Northern Rivers CSG experience shows, failing to get it can have costly impacts for firms.Hanabeth Luke, Lecturer, Southern Cross GeoScience, Southern Cross UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/794922017-11-02T19:04:47Z2017-11-02T19:04:47ZWhy horse-racing in Australia needs a social licence to operate<figure><img src="https://images.theconversation.com/files/192528/original/file-20171030-18735-suzuij.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Horse racing is enjoyed by many people, employs thousands of people but there are some concerns over the welfare of the horses.</span> <span class="attribution"><span class="source">Shutterstock/Vladimir Hodac</span></span></figcaption></figure><p>Like or loathe horse-racing, there’s no avoiding Australia’s spring racing carnival. </p>
<p>But the question we are asking is: does the industry need what is called a “social licence” to operate?</p>
<p>Australian horse-racing has changed much since the early days when the first races were staged at <a href="http://www2.sl.nsw.gov.au/archive/discover_collections/society_art/races/horse/hydepark.html">Sydney’s Hyde Park in 1810</a>.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/when-the-pressure-is-on-some-riders-breach-the-whip-rules-in-horse-racing-71157">When the pressure is on, some riders breach the whip rules in horse racing</a>
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</em>
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<p>Racing Australia, which represents the nation’s thoroughbred racing fraternity, recently <a href="https://engage.dss.gov.au/wp-content/uploads/2015/12/5.-Scope-and-contribution-of-Australian-thoroughbred-racing.docx">told a parliamentary committee</a> that the racing industry now has more than 230,000 employees, participants and volunteers.</p>
<p>Horse races are watched or attended – <a href="http://www.news.com.au/national/breaking-news/melbourne-cup-carnival-crowd-numbers-up/news-story/6189c82634db4c152b07dfd878eb6a16">not just on Melbourne Cup Day</a> – by <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/Latestproducts/4174.0Main%20Features52009-10?opendocument&tabname=Summary&prodno=4174.0&issue=2009-10&num=&view=">millions of people</a>), many of whom gamble. This not only provides prize winners but also raises millions of dollars for our governments.</p>
<p>But there is also the abiding question over whether enough is being done to protect the welfare of the horses at the heart of the industry. What about the <a href="http://kb.rspca.org.au/What-are-the-animal-welfare-issues-associated-with-Thoroughbred-racing-in-Australia_631.html">use of the whip or of tongue-ties</a>, for example?</p>
<p>The racing industry recognises these issues and is aware it is being watched. As Ray Murrihy, outgoing chief steward in New South Wales, <a href="http://www.theaustralian.com.au/sport/turf-thoroughbreds/soap-operas-dont-rate-ray-murrihy/news-story/8a6fccbb0a006c1b5d29120a9874d1f9">noted in 2016</a>:</p>
<blockquote>
<p>If we don’t pay due regard to welfare matters, it will be at our peril. If we don’t do it ourselves, the next time we’ll be sitting in the back seat, not the driver’s seat.</p>
</blockquote>
<p>Before we consider what a social licence is and what it would mean for horse-racing, let’s first consider the pros and cons of the industry itself.</p>
<hr>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/186354/original/file-20170918-5116-117a484.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/186354/original/file-20170918-5116-117a484.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/186354/original/file-20170918-5116-117a484.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=1010&fit=crop&dpr=1 600w, https://images.theconversation.com/files/186354/original/file-20170918-5116-117a484.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=1010&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/186354/original/file-20170918-5116-117a484.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=1010&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/186354/original/file-20170918-5116-117a484.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1270&fit=crop&dpr=1 754w, https://images.theconversation.com/files/186354/original/file-20170918-5116-117a484.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1270&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/186354/original/file-20170918-5116-117a484.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1270&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">Various/The Conversation</span>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
</figcaption>
</figure>
<hr>
<p>So much for the benefits of horse-racing, but what about any disadvantages?</p>
<hr>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/192754/original/file-20171031-32627-1son8hj.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/192754/original/file-20171031-32627-1son8hj.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/192754/original/file-20171031-32627-1son8hj.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=1784&fit=crop&dpr=1 600w, https://images.theconversation.com/files/192754/original/file-20171031-32627-1son8hj.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=1784&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/192754/original/file-20171031-32627-1son8hj.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=1784&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/192754/original/file-20171031-32627-1son8hj.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=2243&fit=crop&dpr=1 754w, https://images.theconversation.com/files/192754/original/file-20171031-32627-1son8hj.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=2243&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/192754/original/file-20171031-32627-1son8hj.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=2243&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">Various/The Conversation</span>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
</figcaption>
</figure>
<hr>
<p>As these two infographics illustrate, there are significant costs and benefits that should guide any discussions before we renegotiate the conditions under which horses are used for sport.</p>
<p>They also show there is a lot more data available, and some of it more recent, that highlight the benefits rather than the disadvantages of racing, and this is something we believe needs to be addressed.</p>
<p>To outsiders, reform may seem painfully slow. For example, it was not until 1974 that <a href="https://books.google.com.au/books?id=B50Jad7552MC&lpg=PA724&ots=29vTRsfsgH&dq=it%20was%20not%20until%201974%20that%20women%20were%20permitted%20jockey%20licenses%20in%20Australia&pg=PA724#v=onepage&q=it%20was%20not%20until%201974%20that%20women%20were%20permitted%20jockey%20licenses%20in%20Australia&f=false">women were permitted jockey licences in Australia</a>. Also, Australian racehorses <a href="http://www.racingnsw.com.au/stewards-issue-everest-whip-rule-warning-2/">can be whipped 18 times per race</a>, which is <a href="http://www.thepja.co.uk/members-info/regulatory/useofwhip/">ten more than their counterparts in the UK</a>.</p>
<p>Insiders understand that we are all trying to do good, so perhaps the notion of what we mean by good is also changing?</p>
<p>The new good is about industry taking responsibility and sporting organisations recognising the horse as the chief stakeholder. These are just two of several elements feeding into the conversation around the concept of social licence to operate.</p>
<h2>What is a social licence to operate?</h2>
<p>Imagine an intangible, unwritten and non-legally binding social contract whereby the community gives industry the right to conduct its business. That’s a social licence to operate. </p>
<p>This concept of communities giving industry the right to operate (often within confined geographical limits) has existed in <a href="https://theconversation.com/can-you-legislate-a-social-licence-to-operate-10948">mining industries</a> for several years. It has not been without controversy, given its potential to focus on local interests and exclude other stakeholders, such as those who are geographically distant.</p>
<p>But its application to human–animal relationships, and particularly to the use of animals in sport, is relatively new.</p>
<p>The issue was raised by Justice Michael McHugh <a href="http://www.greyhoundracinginquiry.justice.nsw.gov.au/">in his report on greyhound racing in NSW</a> last year when <a href="http://www.justice.nsw.gov.au/Pages/media-news/media-releases/2016/Greyhound-Racing-to-be-Shut-Down-in-NSW.aspx">he recommended</a> that the state’s parliament consider whether that industry had lost its “social licence” to operate.</p>
<p>This was greeted with dismay by Brenton Scott, chief executive of the NSW Greyhound Breeders, Owners and Trainers’ Association, <a href="http://www.theaustralian.com.au/news/nation/greyhound-racing-industry-dogged-to-its-death-by-social-licence/news-story/bcd1045f8b1d199fe2f98188bea698fa">who noted</a> that the industry responds well to clear rules, legislation and policy but challenged the concept of a social licence to operate.</p>
<h2>Who issues a social licence to operate?</h2>
<p>A social licence to operate is said to be granted by a community or the wider society but there is no clear definition of who belongs to the community, hence the possibility of excluding wider interests. This is a core issue that currently undermines the social licence to operate of animals-in-sport organisations.</p>
<p>Before any formal discussion can take place among organisations and those outside the industries, there must be more explanation to those within the industries about what the concept means and how it can influence their business practices.</p>
<p>Conversations around a social licence to operate in the horses-in-sport domain must renegotiate current understandings, for example, practices accepted on racetracks that are illegal elsewhere, such as whipping horses.</p>
<p>A social licence to operate should address the conditions under which horses can partner with humans in sporting activities. It must acknowledge the risks to horses as conscripts to sport, to amateur riders as volunteers, and to jockeys as professionals.</p>
<h2>Measuring and monitoring a social licence to operate</h2>
<p>Discussing a social licence to operate can cause offence and it cannot take place in a vacuum of leadership, but the difficulties are multiplied if no genuine conversation takes place. </p>
<p>The conversation should at least include stakeholders from specific animal-based industries and from animal-protection interests. In the animal-based industries this could include a shared review of agreed metrics such as:</p>
<ul>
<li>industry employment</li>
<li>outreach and industry engagement on key issues</li>
<li>injuries and deaths</li>
<li>levels of wastage.</li>
</ul>
<p>These are just a few examples and these metrics should be published on a government portal that is publicly accessible.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/australias-harness-racing-leads-the-world-in-banning-the-whip-on-horses-69472">Australia's harness racing leads the world in banning the whip on horses</a>
</strong>
</em>
</p>
<hr>
<p>Such discussions must agree on what measures of a social licence to operate represent and how they can be monitored, since in an ever-changing world we need metrics that demonstrate approval. Such metrics, for racing at least, may need to reflect some of the costs and benefits we have highlighted above, hence the need for up-to-date data on both sets of metrics.</p>
<p>Organisations overseeing racing and equestrianism may create ways to integrate the new good of individuals taking responsibility for improving horse and rider welfare through their everyday practices. Committing to reporting on and incrementally improving metrics of welfare may benefit everyone.</p>
<p>Our world is changing. Organisations that govern human-animal relationships, especially when animals are used for entertainment, will have to move with these changes or face the prospect of, as Ray Murrihy put it, “sitting in the back seat”.</p>
<hr>
<p><em>Paul McGreevy and Phil McManus will be available online from noon to 1pm AEDT today (Friday November 3) to answer questions raised in the comments section. Please make sure you adhere to our <a href="https://theconversation.com/au/community-standards">community standards</a> when making any comment.</em></p><img src="https://counter.theconversation.com/content/79492/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Professor Paul McGreevy is an Honorary Fellow of the International Society for Equitation Science and a life member of the RSPCA NSW. He receives funding from the Australian Research Council for research into the welfare of racing Thoroughbreds. He consults to the RSPCA Australia.</span></em></p><p class="fine-print"><em><span>Professor Phil McManus has received funding from the Australian Research Council (ARC) to conduct independent research into aspects of the thoroughbred racing industry. He is a member of The Greens. </span></em></p>Horse racing is enjoyed by millions of people but there are others who have concerns over animal welfare. A social license to operate may help keep all sides happy.Paul McGreevy, Professor of Animal Behaviour and Animal Welfare Science, University of SydneyPhil McManus, Proefessor of Urban and Environmental Geography: Head of School of Geosciences, University of SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/749322017-04-09T19:59:53Z2017-04-09T19:59:53ZAustralian gas: between a fracked rock and a socially hard place<p>Prime Minister Malcolm Turnbull’s response to the <a href="https://theconversation.com/gas-crisis-energy-crisis-the-real-problem-is-lack-of-long-term-planning-74705">looming east coast gas shortage</a> has been to secure a promise from gas producers to increase domestic supply. </p>
<p>In a <a href="http://www.abc.net.au/news/2017-03-15/gas-companies-guarantee-domestic-supply/8357376">televised press conference</a> last month, he said:</p>
<blockquote>
<p>We must continue the pressure on state and territory governments to revisit the restrictions on gas development and exploration.</p>
</blockquote>
<p>But if an onshore gas boom is indeed in the offing, <a href="http://epubs.scu.edu.au/cgi/viewcontent.cgi?article=1250&context=jesp">my research</a> suggests that gas companies should tread carefully and take more seriously the social context of their operations.</p>
<p>Shell chief executive Erik van Beurden, one of the big players in the Australian gas industry, <a href="http://www.telegraph.co.uk/business/2017/03/09/shells-green-van-beurden-warns-looming-peak-oil-demand/">recently admitted</a> that “social acceptance [for our industry] is just disappearing”, while Shell Australia’s chairman Andrew Smith last year <a href="http://www.smh.com.au/business/energy/shell-australia-chairman-smith-urges-lng-industry-to-drop-ego-and-collaborate-20160414-go6d0y.html">urged the industry</a> to be less hubristic and more willing to collaborate. </p>
<p>Industrial developments have social consequences, particularly in the case of unconventional gas extraction. But <a href="http://epubs.scu.edu.au/cgi/viewcontent.cgi?article=1250&context=jesp">my analysis</a> of the social research done by gas firms in the Darling Downs – Queensland’s coal seam gas heartland – indicates a lack of rigorous research to identify community attitudes.</p>
<p>I looked specifically at the “social impact assessments” carried out for Arrow Energy’s <a href="https://www.arrowenergy.com.au/projects/surat-gas-project">Surat Gas Project</a>. I evaluated this assessment against the academic literature on best-practice methods and the results of my own anthropological fieldwork on coal seam gas developments in the Darling Downs, including interviews and participant-observations among a broad variety of residents. This included farmers with and without gas wells on their land, town residents, Indigenous people, activists, and those who viewed the industry favourably.</p>
<p>In my experience, the industry’s social impact assessments do not generally meet the benchmark of good social anthropological research. They are largely completed using computer surveys, with limited amounts of direct local fieldwork and relatively little real attention paid to the particular issues raised by vulnerable groups or what actually matters to local communities. </p>
<p>Social impact assessments should be participatory and take into account the unequal distribution of the impacts among local populations. Some people will feel the impacts more than others – this means that in-depth research in the region is required. </p>
<p>A desktop analysis of census data, complemented with information obtained during a few “consultation” meetings, is unlikely to reveal the variety of impacts caused by industrial projects. The conclusion is that such studies, combined with a regulatory agenda that prioritises economics, have created problematic “<a href="http://jpe.library.arizona.edu/volume_21/Mercer.pdf">silences in the boom</a>”. </p>
<h2>Conflicting priorities</h2>
<p>In Australia, policies governing extractive industries such as onshore gas are mostly viewed in terms of economic cost and benefit – or to use the current mantra, jobs and growth. The projects themselves, meanwhile, are seen chiefly as a series of technical challenges to be overcome by scientists and engineers.</p>
<p>Public concerns about the effect on quality of life or uncertainties about underground impacts are commonly dismissed as <a href="http://www.abc.net.au/news/2013-10-29/reith-fracking-scare-campaigns-threaten-our-prosperity/5051576">irrational, emotional or uninformed</a>. But the main problem faced by onshore gas producers is not an engineering one. </p>
<p><a href="http://www.sciencedirect.com/science/article/pii/S221462961630130X">Social research</a> has shown that the fundamental problems include lack of trust between gas producers and local communities, as well as differing views on livelihoods, culture and the environment.</p>
<p>In the coal seam gas fields of the Darling Downs – a rural and agricultural area – the effects on the ground, including concerns about extraction techniques such as <a href="https://theconversation.com/au/topics/fracking-184">fracking</a> really matter. While individual gas wells typically have a relatively small footprint of about one hectare, the cumulative regional footprint of numerous connected gas fields and associated infrastructure is considerable.</p>
<p>The management of the impacts is negotiated in individual agreements with landholders as well as <a href="http://www.sciencedirect.com/science/article/pii/S2214790X14000598">indigenous groups with traditional connections to country</a>. Dealing with this social world is relatively new to many oil and gas companies that have previously focused mainly on offshore projects.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/162223/original/image-20170323-4938-1ynrio.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/162223/original/image-20170323-4938-1ynrio.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/162223/original/image-20170323-4938-1ynrio.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=354&fit=crop&dpr=1 600w, https://images.theconversation.com/files/162223/original/image-20170323-4938-1ynrio.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=354&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/162223/original/image-20170323-4938-1ynrio.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=354&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/162223/original/image-20170323-4938-1ynrio.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=445&fit=crop&dpr=1 754w, https://images.theconversation.com/files/162223/original/image-20170323-4938-1ynrio.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=445&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/162223/original/image-20170323-4938-1ynrio.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=445&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Satellite view of a coal seam gas field in Queensland.</span>
<span class="attribution"><span class="source">Google Earth</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>Unconventional gas and fracking developments have led to demonstrations, blockades, and the rise of <a href="http://www.lockthegate.org.au/">vocal anti-fracking groups</a> both in Australia and around the world. Gas producers in Colorado, for example, seem to have been <a href="http://www.coloradoindependent.com/160359/decline-to-sign-initiative-75-iniative-78">shocked and surprised</a> at the level of protest against fracking, a technique they have used for decades.</p>
<p>Instead of dismissing public concerns as irrational or ill-informed, politicians and gas producers could look carefully at why their proposals provoke these reactions. Just calling for more gas, more science, and less red tape is unlikely to diminish anti-fracking sentiment.</p>
<h2>Invisible gas</h2>
<p>Gas can be scary. It is everywhere and nowhere. You can’t feel it, see it, hear it or smell it unless you add something to it or measure it with an expensive device. Gas doesn’t have the same cultural symbolism as coal, the black gold of our settler history, or the Snowy Mountains, scene of the great “nation-building” hydroelectric project that Turnbull has <a href="http://www.abc.net.au/news/2017-03-16/snowy-hydro-scheme-funding-boost-to-secure-electricity-supply/8358502">pledged to make even bigger</a>.</p>
<p>Anti-fracking activists, meanwhile, have sought to imbue gas with a cultural symbolism that draws on the underground world of demons and danger. <a href="https://www.youtube.com/watch?v=4LBjSXWQRV8">Footage of burning tapwater</a> is a potent example of “matter out of place”. No matter that methane is sometimes found <a href="https://theconversation.com/river-on-fire-even-if-its-not-coal-seam-gas-we-should-still-be-concerned-58718">naturally in water</a>. Cultural anxieties are rarely eased by natural science.</p>
<p>So while the federal government and industry figures call on states and territories to ease restrictions on gas exploration, they should bear in mind that unconventional gas can provoke strong anxiety and opposition. The architects of Queensland’s coal seam gas boom were slow to recognise this.</p>
<p>Energy is fundamental to our ways of life, and social support is crucial for the companies that provide this energy. Such support is not earned with desktop studies or by dismissing non-economic concerns. It is earned with genuine engagement and social policies that take seriously the experiences and diverse views of people now on fractured and uncertain ground.</p><img src="https://counter.theconversation.com/content/74932/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Kim de Rijke works for The University Queensland and intermittently undertakes contract native title research for Indigenous groups around Australia. He received funding for his postdoctoral research on coal seam gas and fracking disputes in Queensland and the Northern Rivers region of New South Wales from The University of Queensland.</span></em></p>The federal government seems keen to usher in a new boom in onshore gas production. But gas firms will need to tread carefully, as past experience in Queensland’s fracking heartland shows.Kim de Rijke, Lecturer in Anthropology, The University of QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/707092016-12-21T19:02:48Z2016-12-21T19:02:48ZQueensland communities remain lukewarm about coal seam gas: CSIRO survey<p>How do people feel about coal seam gas (CSG) in the regions where the industry is active? In <a href="https://theconversation.com/queensland-survey-reveals-lukewarm-view-of-coal-seam-gas-31522">2014 we surveyed residents</a> in Queensland’s Western Downs region, at the end of a major construction phase. </p>
<p>According to <a href="http://www.gisera.org.au/publications/tech_reports_papers/GISERA-survey-2-report_final.pdf">our new survey</a>, now that the industry has started operating, Western Downs residents have maintained their moderate or lukewarm views on CSG. And even though overall community wellbeing has remained similar, some aspects declined and some improved.</p>
<p>There was no single community view on CSG, with 68% saying they either “tolerated” or “accepted” it. A minority (19%) “approved” or “embraced” CSG and a smaller minority (13%) “rejected” it. Even though most people have a moderate or lukewarm view on CSG development, the 2016 survey showed that on average there was a tendency towards more negative views than in 2014.</p>
<p>While around half of residents thought their communities were resisting or struggling to adapt to changes (51%), the other half (49%) thought their communities were “adapting to changes” or “changing into something different but better”. This is similar to how residents perceived their communities back in 2014.</p>
<p>However, there were pockets across the region where considerable proportions of residents indicated that their community was “resisting” or “only just coping”.</p>
<p>Nevertheless, residents’ perceptions of their overall community wellbeing in the Western Downs region were favourable and remained relatively unchanged between 2014 and 2016. This meant that residents still thought that their community was a good place to live overall.</p>
<h2>Slightly more negative attitudes</h2>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/151195/original/image-20161221-14216-1puuzbr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/151195/original/image-20161221-14216-1puuzbr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/151195/original/image-20161221-14216-1puuzbr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=757&fit=crop&dpr=1 600w, https://images.theconversation.com/files/151195/original/image-20161221-14216-1puuzbr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=757&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/151195/original/image-20161221-14216-1puuzbr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=757&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/151195/original/image-20161221-14216-1puuzbr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=951&fit=crop&dpr=1 754w, https://images.theconversation.com/files/151195/original/image-20161221-14216-1puuzbr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=951&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/151195/original/image-20161221-14216-1puuzbr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=951&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Towns surveyed in inland Queensland.</span>
<span class="attribution"><a class="source" href="http://www.wdrc.qld.gov.au/">Western Downs Regional Council</a></span>
</figcaption>
</figure>
<p>As in our 2014 survey, we conducted a telephone survey asking 400 people living in and around the towns of Chinchilla, Dalby, Miles and Tara about their attitudes to CSG, as well as their opinions on the wellbeing and resilience of their communities.</p>
<p>This time we surveyed 500 people as we also included 100 residents from the eastern Maranoa region for comparison, an area next to the Western Downs which has had CSG wells since the mid-1990s and has less intensively cropped farmland. It includes the towns of Roma, Injune, Surat and surrounding areas.</p>
<p>In both the 2014 and 2016 surveys people had mixed feelings about CSG development. However, attitudes tended to be slightly more negative in 2016 than in 2014 (see figure below).</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/151196/original/image-20161221-14212-g4v8j6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/151196/original/image-20161221-14212-g4v8j6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/151196/original/image-20161221-14212-g4v8j6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=328&fit=crop&dpr=1 600w, https://images.theconversation.com/files/151196/original/image-20161221-14212-g4v8j6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=328&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/151196/original/image-20161221-14212-g4v8j6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=328&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/151196/original/image-20161221-14212-g4v8j6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=412&fit=crop&dpr=1 754w, https://images.theconversation.com/files/151196/original/image-20161221-14212-g4v8j6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=412&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/151196/original/image-20161221-14212-g4v8j6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=412&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Attitude toward CSG development. Note: There was a tendency for attitudes towards CSG development to shift to the left between 2014 and 2016. %s are rounded to nearest whole figure.</span>
<span class="attribution"><span class="source">CSIRO</span></span>
</figcaption>
</figure>
<p>Residents’ overall feelings about CSG development in the region – such as being angry, worried, pleased or optimistic – also became more negative in 2016. They declined from 3.0 out of 5 in 2014, which reflected a neutral feeling on average, to 2.8 (slightly negative on average) in 2016. However, more than 10% of residents had extremely negative feelings about CSG in both 2014 and 2016.</p>
<p>These differences probably reflect people’s previous experiences and current situations, individual needs and wants, and personal world views and beliefs about gas development. They include perceptions of community functioning, environmental management, trust and fairness.</p>
<p>When asked about how they saw their communities responding to change, only half (49%) thought their communities were “adapting to changes” or “changing into something different but better”, which is similar to how residents viewed their communities back in 2014.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/151197/original/image-20161221-14183-n5og3n.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/151197/original/image-20161221-14183-n5og3n.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/151197/original/image-20161221-14183-n5og3n.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=331&fit=crop&dpr=1 600w, https://images.theconversation.com/files/151197/original/image-20161221-14183-n5og3n.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=331&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/151197/original/image-20161221-14183-n5og3n.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=331&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/151197/original/image-20161221-14183-n5og3n.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=416&fit=crop&dpr=1 754w, https://images.theconversation.com/files/151197/original/image-20161221-14183-n5og3n.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=416&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/151197/original/image-20161221-14183-n5og3n.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=416&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Community perceptions of adapting to CSG development.
Note: Differences between 2014 and 2016 were not significantly different.</span>
<span class="attribution"><span class="source">CSIRO</span></span>
</figcaption>
</figure>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/151198/original/image-20161221-14193-1bwq4pn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/151198/original/image-20161221-14193-1bwq4pn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/151198/original/image-20161221-14193-1bwq4pn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=321&fit=crop&dpr=1 600w, https://images.theconversation.com/files/151198/original/image-20161221-14193-1bwq4pn.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=321&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/151198/original/image-20161221-14193-1bwq4pn.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=321&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/151198/original/image-20161221-14193-1bwq4pn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=404&fit=crop&dpr=1 754w, https://images.theconversation.com/files/151198/original/image-20161221-14193-1bwq4pn.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=404&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/151198/original/image-20161221-14193-1bwq4pn.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=404&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Perceptions of community adaptation to CSG development in different subregions: 2016.</span>
<span class="attribution"><span class="source">CSIRO</span></span>
</figcaption>
</figure>
<h2>Creating a positive future</h2>
<p>Overall community wellbeing in the Western Downs was favourable. But wellbeing in the neighbouring eastern Maranoa was higher than in the Western Downs. This suggests that while overall community wellbeing in the Western Downs is robust, it can be improved.</p>
<p>The biggest change in wellbeing from 2014 was the decrease in satisfaction in relation to jobs and employment opportunities. The biggest improvements were in roads and the quality of the environment (such as dust and noise levels). </p>
<p>Perceived management of the environment for the future also improved. However, residents were still dissatisfied on average with the management of groundwater in the region.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/151199/original/image-20161221-14200-1mtq4fx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/151199/original/image-20161221-14200-1mtq4fx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/151199/original/image-20161221-14200-1mtq4fx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=798&fit=crop&dpr=1 600w, https://images.theconversation.com/files/151199/original/image-20161221-14200-1mtq4fx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=798&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/151199/original/image-20161221-14200-1mtq4fx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=798&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/151199/original/image-20161221-14200-1mtq4fx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1003&fit=crop&dpr=1 754w, https://images.theconversation.com/files/151199/original/image-20161221-14200-1mtq4fx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1003&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/151199/original/image-20161221-14200-1mtq4fx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1003&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Community wellbeing dimensions. Note: Scores: 1 = lowest and 5 = highest; scores below 3 indicate dissatisfaction and scores above 3 indicate satisfaction. * indicates a significant difference between 2014 and 2016.</span>
<span class="attribution"><span class="source">CSIRO</span></span>
</figcaption>
</figure>
<p>This report offers a valuable snapshot of the range of views that exist in a CSG community and how these have changed over time. </p>
<p>It highlights four key drivers for people to view their community as a great place to live: the level of services and facilities; the social aspects of community life; feelings of personal safety; and employment and business opportunities.</p>
<p>How can we help people cope with and adapt to CSG development? We identified several factors, including good planning and leadership, access to relevant information, trust, being listened to, and employment and business opportunities.</p>
<p>Other key drivers include good environmental management for the future, community commitment, and working together with government and industry to resolve problems and make the most of opportunities.</p>
<p>Making sure key aspects of community wellbeing remain strong, as well as improving processes for responding to changes associated with CSG development, will drive a sense of optimism and confidence about the future of these communities and others.</p><img src="https://counter.theconversation.com/content/70709/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>This research received funding from National GISERA (National Gas Industry Social and Environmental Research Alliance). This is a collaborative vehicle established to undertake publicly-reported independent research addressing the social, economic and environmental impacts of Australia's onshore gas industry. GISERA receives funding from the Federal and NSW Governments, Australia Pacific LNG, QGC, Origin, Santos and AGL. Research is reviewed and approved by Regional Research Advisory Committees and overseen by a National Research Management Committee. These committees are comprised of CSIRO, independent, industry and government representatives. The governance structure for National GISERA is designed to provide for and protect research independence, integrity and transparency of funded research. Visit <a href="http://www.gisera.org.au/governance.html">http://www.gisera.org.au/governance.html</a> for more information.</span></em></p>The latest survey of residents in coal seam gas regions reveals continuing lukewarm attitudes towards the industry.Andrea Walton, Social scientist, CSIRORod McCrea, Social Scientist, CSIRORosemary Leonard, Professor, Western Sydney UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/109482013-02-26T18:55:00Z2013-02-26T18:55:00ZCan you legislate a social licence to operate?<figure><img src="https://images.theconversation.com/files/18789/original/cjscpq9r-1355721072.jpg?ixlib=rb-1.1.0&rect=42%2C61%2C3070%2C2418&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Social Licences are seen as being earned by mining companies from the communities they operate in.</span> <span class="attribution"><span class="source">AAP</span></span></figcaption></figure><p>The concept of a ‘social licence to operate’ (SLO) is not new. It has been used widely in the mining and minerals industry for some 15 years where it has generally described the informal acceptance or approval a local community extends to a mining operation or development. </p>
<p>In the Australian context, the Minerals Council of Australia (MCA) has <a href="http://www.minerals.org.au/file_upload/files/resources/enduring_value/EV_GuidanceForImplementation_July2005.pdf">described</a> SLO as representing an “unwritten social contract” that reflects the relationship between companies and the communities in which they operate; a relationship the MCA views as being grounded in both a company’s on-ground performance and the level of local community trust that exists.</p>
<p>By this description, a SLO has been something that has very much existed in the local landscape where the focus has been on the site of impact and working with the expectations of those who are directly affected by a mining operation. Mining companies well understand the importance of “being a good neighbour” to their own ability to operate, and profit, from a mining development.</p>
<p>However, as the term has come to be more widely applied (across various industries including forestry, farming and wind energy among others) and by a broader range of stakeholders (beyond the more localised company and community context), there has also been <a href="http://www.sciencedirect.com/science/article/pii/S0301420712000529">increasing debate</a> in the academic literature over how to define SLO and what (if any) value the concept brings to our understanding of the social aspects of sustainable development. </p>
<p>In terms of addressing some of these persistent questions about SLO, CSIRO researchers recently <a href="http://www.csiro.au/en/Organisation-Structure/Flagships/Minerals-Down-Under-Flagship/mineral-futures/Project-Social-licence.aspx">interviewed</a> a small sample of representatives from the Australian mining and minerals industry in order to canvass their views on the current theory and practice of SLO within the industry. While this sample represents only the industry’s perspective, some of the responses highlight how the increasing adoption of SLO beyond its traditionally narrow membership of company and community at the site of impact might be changing the way we use and understand what constitutes a SLO.</p>
<h2>Operating at the intersection of formal and informal licences</h2>
<p>The language of SLO perhaps gained initial appeal within the industry because it mirrored the language of the environmental licences issued by governing authorities. However while the language itself might reflect certain parallels, in practice the two are quite distinct. </p>
<p>Respondents to the CSIRO research described an environmental licence as a formal permission <em>issued</em> by government in line with legislated requirements, whereas they saw a social licence as something their companies needed to <em>earn</em> from their communities. </p>
<p>Legal and social licences also vary in their temporal nature with the environmental licence being issued by government and enduring as long as a company complies with the relevant conditions of the licence whereas a social licence is constantly being renewed and negotiated; reflecting the natural fluctuations in the status and quality of a relationship between a company and a community. </p>
<p>While it has been <a href="http://www.sciencedirect.com/science/article/pii/S0301420712000311">claimed</a> that the concept of SLO emerged as a result of governance arrangements increasingly shifting responsibility away from the state to other actors, recent experience in the Australian context suggests that government actors are now starting to adopt and use the term themselves.
This raises the question as to what role government is to play in negotiating the relationship between companies and communities. As our industry respondents noted, the role of government sits squarely with the regulation of industry practice. But how does this apply to a SLO?</p>
<h2>Legislating industry’s relationship with community</h2>
<p>One recent example that reflects this shift towards government regulation of company-community interactions are the Queensland Government’s guidelines for preparing a <a href="http://www.dlg.qld.gov.au/resources/guideline/cg/social-impact-management-plan-guideline.pdf">social impact management plan</a> (SIMP); a new requirement for all new or expanded major resource development projects in the state. </p>
<p>As part of these guidelines, it is noted that a SLO - which is described in the guidelines as “world best practice” - complements the regulatory licence issued by government and that industry has a shared responsibility alongside government “to facilitate the development of strong and sustainable communities”. </p>
<p>Apart from providing a framework for defining the shared responsibilities of industry and government, the SIMP guidelines are aimed at ensuring “meaningful stakeholder engagement” occurs throughout a project life cycle. Those that support the introduction of SIMPs suggest it is a way of bringing underperforming operators in line with best practice. However, others have cautioned that extending these requirements may also place communities at increased risk of “consultation fatigue”. </p>
<p>This may mean that increased focus on legislating the procedural aspects of consultation and engagement comes at the expense of relational capacity, trust and goodwill. This very criticism has already been levelled against the perceived <a href="http://www.sciencedirect.com/science/article/pii/S0959652611004343">“audit culture”</a> that dominates corporate social responsibility and accountability in the mining industry.</p>
<p>Thus as government appears to be emerging as a third critical stakeholder in negotiating the mining and minerals industry’s SLO with the Australian public, the question appears to be just how will these efforts enhance the development of more meaningful relationships with communities and achieve a more representative reflection of community expectations in how both government and industry meet their collective responsibilities?</p>
<p><em>The CSIRO research referred to in this article was supported exclusively by CSIRO funding through the <a href="http://www.csiro.au/mdu">Minerals Down Under National Research Flagship</a>.</em></p><img src="https://counter.theconversation.com/content/10948/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Justine Lacey does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The concept of a ‘social licence to operate’ (SLO) is not new. It has been used widely in the mining and minerals industry for some 15 years where it has generally described the informal acceptance or…Justine Lacey, Social Scientist, CSIROLicensed as Creative Commons – attribution, no derivatives.