As the Regenerative Living Lab on Flinders Island evolves, the issue of social licence continues as a thread of discussion. ‘Social licence’ refers to the level of acceptance, support or approval that communities extend to a business, an organisation, a project, or a sector to conduct business or continue their operations.
But here is the tricky part! Social licence is not a tangible 'thing' that can be defined in a number of easy steps. Nor does it have clear criteria that, by ticking boxes, one can prove social licence exists. There is also no social licence certificate that can be awarded. Social licence depends on a number of elements including:
community sentiment
the perceived impacts of the business or the sector
whether those impacts are positive or negative
the distribution of those benefits (i.e. who wins and loses).
Social licence is dynamic and can change quickly, especially if there is a trigger event that shifts sentiment. This post explores the issues and challenges of social licence.
What is social licence?
The term ‘social licence’ is a metaphor coined over 20 years ago that refers to the broad level of acceptance that the mining industry had in the conduct of their operations. It is relevant to all sectors and businesses that use public goods, community and/or nature's assets. Social licence shines a light on whether a company, an association, a project or a sector can be regarded as a ‘doing good', and whether it is trustworthy, credible and legitimate in the eyes of communities, consumers and other stakeholders. Importantly, whether a business, operators, or sector has social licence depends on the level of responsibility it demonstrates in addressing the negative impacts associated with its operations. But this is simply doing no harm. Beyond that however, contributing a positive systemic impact is a way of rising to the challenge and demonstrating true commitment to social licence. Perceptions of trust, openness and accountability are core attributes.
Transparency is therefore important. Efforts to collect data, measure, and evaluate impacts, and communicate actions that address impacts will help to build the reputation of the business, organisation or sector as a 'good' actor. Systemic positive impact will go even further to establishing social licence.
A recent and relevant example where social licence has been questioned is the aquaculture industry in Tasmania. Salmon production, like tourism, has previously been touted as a 'gold star' industry for Tasmania and maintained that image for some time. But as the salmon production companies began to expand, and questions were raised about the impact of fish farms on the environment, tourism and community amenity, relationships have soured and trust in the industry has started to erode.
Drawing upon this and other examples, social licence can be characterised by the following:
Social licence requires that all stakeholders operate in good faith to secure good outcomes and to reduce impacts and risks to an acceptable level. An ‘acceptable level of impact or risk’ can be subjective and thus requires clear measures, good communication, negotiation, and transparency.
Social licence is dynamic and may change over time depending upon emerging issues, events, and shifts in attitudes and information.
Social licence cannot be defined, regulated or secured in any fixed way because it is based on the perceptions, opinions and attitudes of communities. It follows that social licence cannot be awarded or prescribed by an external authority or a project.
The social licence of tourism can be influenced by a range of direct and indirect issues including housing, employment and quality jobs, perceptions of risk, an acceptable level of impact, and ethical behaviour of the sector, individual operators, and/or the actions of organisations.
Social licence is 'earned' by a company, association, project or sector by taking responsibility for their actions and impacts, and by acting in transparent, credible, and legitimate ways.
Social licence is therefore a slippery concept. The best way of securing the social licence for tourism is to set up and operate within an accountable, transparent, and trustworthy governance framework that is both collaborative and consultative. Monitoring, evaluating and acting upon community and other stakeholder opinions and perceptions are important in the identification of issues, and in identifying and communicating the actions being taken to address community concerns.
Put simply, for the visitor economy of the future to address social licence, it requires that every stakeholder, business, and tourism operator take responsibility for operating in good faith, participating in open, constructive dialogue, and in addressing issues in a timely and transparent manner. When communities perceive that the decisions being made about the visitor economy are addressing mutual interests, then social licence - as an expression of consent - might be closer to being achieved.
Social licence and the Islander Way project
Adopting a regenerative approach to hosting visitors provides an undeniable opportunity for businesses, operators and the sector in general to establish social licence. A regenerative approach seeks to ensure that the hosting of visitors generates positive benefits that contribute to the restoration and regeneration of communities, cultures, places and environments. It adopts a living systems perspective wherein we are in a dynamic state of evolution and interconnection. The actions we take have implications for the health and wellbeing of other parts of the system.
A regenerative approach delivers clear and identifiable benefits, where the sector can demonstrate that it is investing back into the communities, cultures and environments on which it relies. The sector's willingness to evolve, take greater responsibility for its impacts, and communicate the steps it is taking to regenerate communities, cultures and environments can only build its trust and credibility. It follows that securing social licence is ultimately the responsibility of operators, businesses, and the broader sector.
The Islander Way project has laid the groundwork for operators, businesses and the sector, in general, to pursue social licence by gathering evidence about community perspectives, attitudes, and opinions. Acknowledgement of these impacts and a considered response to the issues identified within the project would go some way to helping identify what actions can be taken to address the sector's social licence.
The project has dedicated considerable time to co-designing future directions and activating projects that are aligned with the values of the Islands' communities and which the community sees as fundamental in building their resilience. After all, the hosting of visitors can only be done when underlying social and environmental conditions are stable and resilient. Support of community-led projects would be an easy and direct way of establishing social licence by acknowledging the wider implications of the visitor economy on the Island and its communities, cultures, and environmental challenges.
The project itself has sought to establish its own social licence via an open and constructive dialogue through community engagement, a community project accelerator program, project champions meetings, and ongoing advocacy and information sessions as requested by stakeholders from local to state and federal levels. The project has also demonstrated an inclusive approach, with the integration of individuals who showed an interest in participating at any time during the process. Of course, not everyone may be interested, available, or willing to participate. However, the extended consultation process has provided sufficient opportunities for anyone wanting to lean in, learn about the project, and participate.
The information that has been gathered and evaluated by the project provides a trove of insights on how operators, businesses, and other stakeholders can position and operate their businesses or organisations so as to secure social licence and be perceived as ‘good actors’.
How businesses and operators might establish social licence
The figure below captures the broad dynamics of social licence. On the lower left side, a loss of social licence occurs when an organisation or business is not seen by the community as having a legitimate role in making decisions that affect the community. This can happen when a company, organisation, or sector is seen to be pursuing narrow or selective interests at the expense of the broader public interest. On the upper left-hand side of the diagram, the way of addressing declining social licence is to increase transparency, accountability and inclusion by adopting good governance practices.
ELEMENTS AND DYNAMICS OF SOCIAL LICENCE
On the lower right-hand side of the diagram, a lack of legitimacy can be addressed by increasing consultation processes, more transparent communication, reviewing governance practices, and improving the transparency and accountability of decision-making. Genuine efforts to address social licence can be rewarded by the community through enhanced community ownership, support and a willingness to provide intangible assets such as goodwill, hospitality and welcome.
Taking responsibility and social licence in practice
This discussion illustrates that social licence is fickle and dynamic, and depends on the perspectives and attitudes of the community towards businesses, operators, and organisations that are involved in the delivery of tourism and generating impacts (positive and negative). In a small community, social licence is particularly sensitive. It can be difficult for individuals to publicly identify practices that contravene what they consider to be good governance, particularly if those practices are carried out by those who are known to them. Put simply, it is easier for an individual to say nothing. However, division and conflict can bubble up when actions that contravene social licence become more frequent.
A cautionary word about social licence
But a cautionary word is in order. There are many instances where corporations have used the concept of social licence to their own ends. Mining companies, for example, have been known to divide and conquer Indigenous groups and, in the process, claim they have the social licence of the legitimate group. Corporations have also commissioned their own consultants or undertaken their own community engagement only to produce 'evidence' that there is community support for their project or operations. Social licence can be misused and misconstrued, which is why clear, independent, and inclusive community engagement using multiple engagement tools and sources of information is necessary.
To this end, ways to address social licence might include:
Embrace a regenerative approach and take responsibility to deliver, in the first instance, positive impact. Beyond this, the longer term aim is to work with communities and other stakeholders to identify and implement visitor experiences and hosting initiatives that replenish and regenerate communities, cultures and environments.
Acknowledge the issues raised in the community engagement process in a clear-eyed and constructive way. Refuting, denying, or worse still, correcting, perceptions of the community may only exacerbate suspicion and tension.
The transition towards purpose-led businesses that are aligned with community values, that deliver a social and/or environmental mission, or that make a positive impact in clear, measurable ways.
Review current governance arrangements for the management of tourism with a view to making such arrangements future-fit given the shifting of values and policy narratives towards positive impact and regeneration.
Adopt good governance practices that address aspects such as trust, transparency, legitimacy, and accountability, by adopting a Public-Private-Community-Nature (P-P-C-N) partnership approach.
These suggestions go some way to establishing trust and accountability. Becoming a first mover and embracing a regenerative approach can also contribute to the confidence in and credibility of the business, organisation, or sector.
Final reflections
In our work, a regenerative approach is internally motivated; it is a sense of responsibility to give back and regenerate people, place and nature, for we are all interdependent. In many ways, it makes the idea of externally generated 'social licence' redundant, because, in a regenerative approach, motivation to do good comes from our integrated intelligence (a balance of head, heart and instinct). That said, and reflecting on our own diverse conversations, many in the tourism sector are not there yet. This is perhaps why social licence as a concept could be useful. However, there is still a long way to go in cleaning up and effectively using the notion of social licence. Aligning with a regenerative mindset would appear a tangible step forward.
ADDITIONAL RESOURCES
Boutilier, R & Thompson, I. 2009. Modelling and measuring the social license to operate.
The Ethics Centre. 2018. Ethics Explainer: Social Licence to operate
Learning for sustainability. 2019. Social licence to operate.
Talis Consultants. 2022. Social licence to operate in the waste and resource recovery sector.