Social Licence

“Social licence to operate” is rapidly becoming a widely recognised and used term across multiple industry sectors and it is extremely relevant to aquaculture because the industry commonly utilises a community resource.

Social licence in NZ is critical and NZ aquaculture has already had serious issues in this realm.

Steps of an Assessment of Environmental Effects AEE

Protests against the expansion of NZ King Salmon farming

Social Licence is:

There is no accepted single definition for the social licence to operate, and it is often expressed in relation to other terms such as corporate social responsibility, community acceptance and reputation. The social licence to operate has been described as stakeholder perception of the legitimacy of a project, a company or an industry.

The four levels of the social licence to operate. Most companies and projects are located at the Acceptance or Approval level most of the time.

The four levels of the social licence to operate. Most companies and projects are located at the “Acceptance” or “Approval” level most of the time.

The concept of the social licence to operate is much broader than just “community” issues. Relevant issues include but are not limited to:

•                Environmental performance: Local communities and regulators are often concerned about issues such as air and water pollution, water extraction, impacts on biodiversity and waste management

•                Ethical business conduct and transparency: Trust in companies is easily eroded if there is a perception of dishonest dealings or inappropriate collusion

•                Workers’ rights and safety: Failure to ensure that safety incidents do not occur can have a negative impact on corporate reputation

•                Community relationships: Community issues can delay or even prevent projects from proceeding. Issues include disputes over land access and ownership, equitable sharing of benefits from corporate activity and the risk of human rights violations

Merely aiming for legal compliance generally does not suffice in achieving a social licence to operate.

There are many examples of where a social licence to operate is lost. This can manifest itself in different ways and at different scales, including complaints, protests, blockades, boycotts and social media campaigns. It can affect an individual site, a company or an entire industry. Losing it can lead to very real financial consequences.

Globally, for aquaculture “maintaining a social licence to operate” is one of the major business risks facing the industry.

Ernst and Young note that for aquaculture, “there are a number of issues that can affect a company’s social licence to operate – such as environmental performance, safety incidents and land or water disputes that can cause delays in obtaining approvals, damage corporate reputation and even prevent projects from proceeding”.

There are two main linked aspects to building and maintaining a social licence to operate:

1.              Clearly understanding and managing the relevant risks and opportunities relating to the social licence to operate – in a proactive and strategic way.

2.              Open and transparent discussions with key stakeholders (employees, suppliers, clients, communities, non-governmental organisations) around issues that are important to them, following through on issues raised, and delivering on promises.

The first point is about ensuring that organisations embed the management of risks and opportunities into core business processes. This is important because when something does go wrong, as is likely in aquaculture, with a complex value chain, it allows the organisation to demonstrate the measures it has taken to manage the issue proactively.

The second point is about building solid relationships with stakeholders that are based on honesty, mutual respect and trust. Stakeholders should be able to answer the following questions in the affirmative:

While frameworks and standards are certainly useful in providing guidance, organisations need to be serious about their application to avoid losing the social licence to operate. This is not a future requirement as many in the industry have assumed.

Sashimi Group