JEN GERSON | October 17, 2014 | Last Updated: Oct 17 9:37 PM ET
It started with the War in the Woods, mass protests that quashed plans for clear-cutting in Clayoquot Sound.
Then came decisive demonstrations over airports, cellphone towers, wind farms, biotechnology — and one gas plant so hated by Ontario residents that the Liberals under former premier Dalton McGuinty allegedly spent $1-billion to cancel it.
Now it’s pipelines versus the people: protests over Alberta’s oil sands, and the metal tubes meant to carry its bitumen to market.
The outcome is uncertain. But dozens of recent developments have been overturned by the rise of “social licence” — the idea that community buy-in is as important, or more, than regulators’ approvals.
Or is it just NIMBYism by another name? Who speaks for “the people”? Who decides whether social licence is granted or not?
“You want people to feel heard in their concerns,” says Brian Lee Crowley, the managing director of the Macdonald-Laurier Institute for Public Policy in Ottawa. “But I believe there’s a whole group of people who have become free riders on this concept of social licence, people who are dyed-in-the-wool opponents — whatever it is … They say, ‘Oh, you must not be allowed to do this unless you have social licence. And I’m the standard. I decide whether you’ve got it or not. And because I’m opposed to what you’re doing, you will never get social licence.’ ”
Mr. Crowley was one of a dozen speakers at a recent conference on “social licence” at the University of Calgary’s School of Public Policy. The school has ties to the oil and gas industry, but the symposium included participants from across the political spectrum (both the right-leaning Fraser Institute and the left-leaning Pembina Institute took part).
What they share is a growing concern that as opposition groups — empowered by social media and support from the likes of Neil Young and Leonardo DiCaprio — gain authority they stall the development of anything with a whiff of controversy.
And ultimately undermine the law.
The term “social licence” was coined in 1997 by Jim Cooney, then a B.C. mining executive and an occasional advisor to the World Bank.
One of the organization’s big concerns, he says, was the instability of governments, particularly in developing countries. Not only was there an ongoing risk that they’d change their mind about green-lighting projects — but that communities affected by developments, in some cases marginalized indigenous peoples, would not be properly represented.
So Mr. Cooney suggested a new way forward — with the help of local communities.
“There was legal regulation, and the other, more subtle approval process that I termed ‘social licence,’ primarily to give some parallelism to the government permitting process,” he says.
Around the same time, B.C. faced unprecedented protests opposing the permit for MacMillan Bloedel to cut down old-growth forest. Suddenly, the government’s credibility as an honest broker of public interest was in question at home — not just in the developing world.
In lockstep, Mr. Cooney says he saw an explosion of consulting services to help corporations gain “social licence.”
And the growing influence of a sometimes diffuse and fickle activist class. “The changes in Canadian society that underlie these things is a lack of public confidence and trust — both in the companies and the governments and their agencies to do the right thing [in regulating them],” says Michael Cleland, the Nexen Executive in Residence at the Canada West Foundation in Calgary.
Kai Nagata, the energy and democracy director of the B.C.-based Dogwood Initiative argues that the federal government itself shoulders much of the blame for that loss of trust — particularly when it comes to the regulation of the oil and gas industry through the National Energy Board.
“There’s been a clear politicization of the regulatory process by the federal government in Ottawa. If they thought they were doing favours to the industry, the opposite is true,” he says. The increased surveillance by the RCMP of environmental activists, CRA audits of charities perceived to be government enemies, and natural resource minister Joe Oliver’s conflation of protesters with terrorists have all led to a profound lack of trust in the whole process, Mr. Nagata says.
Earlier this year, the National Energy Board (NEB) approved the deeply divisive Northern Gateway pipeline, which would carry Alberta bitumen to the seaport of Kitimat B.C., provided it met 209 conditions.
But Ottawa’s support of Northern Gateway was so heavy-handed, says Mr. Nagata, that a majority of B.C. residents simply don’t trust that the NEB was either independent or fair — which opened the door to protests, court challenges and threats of blockades and violence.
Art Sterritt, the executive director of Coastal First Nations — a coalition of First Nations groups on the B.C. coast involved in the opposition — believes the project is now a nonstarter.
“Up until about three months ago, you couldn’t eat dinner, watch a TV show, watch the news without Enbridge jamming you with advertising,” he says. “They lost. They lost that to the Coastal First Nations because we provided facts to the people that caused them to oppose the project. That’s social licence. That’s what it means.”
Losing costs, of course. Mr. Sterrit says Enbridge spent tens of millions of dollars on its advertising campaign. Companies may also pay for special consultants and advisors on social licence, or make direct payouts to communities they are wooing in the form of job programs or sports sponsorships.
Most expensive, though, is when projects stall as social licence is debated. Keystone XL, for example, has spent six years in regulatory limbo; since then, costs for the pipeline are predicted to have doubled to $10-billion.
Some critics see the costs of community buy-in as akin to extortion. They stand by the authority of government regulators.
“The rule of law, in my view, says that the law applies to everyone. It is applied fairly by known standards, by known people, who operate under known rules. You have accountable people answering someone subject to appeal, subject to the rules of evidence,” says Mr. Crowley. “That’s exactly what these extreme advocates of social licence reject. They say: ‘Look, if these objective, fair, rule of law processes come up with an answer we don’t like, those answers are to be pushed aside.’ ”
The man who coined the term agrees that social licence has been oversimplified. But he remains optimistic about the value of community buy-in on major developments.
Mr. Cooney points to the ambitious Kitimat LNG project in B.C. as an example. The company behind the liquified natural gas export terminal and a related pipeline has already agreed to pay $200-million to 15 affected First Nations communities, has guaranteed training for Aboriginals, and has located its plant on Haisla land, ensuring property tax revenues and other benefits.
As a result, while the project is still undergoing regulatory review, it is not expected to be opposed like Northern Gateway.
But as development becomes increasingly complex, so does the idea of social licence. While the First Nations communities directly affected by Kitimat LNG appear on board, what about the larger community of environmentalists? In the oil sands, in particular, the impact of development is far-reaching — making “community” buy-in a nearly global affair. (Enter Desmond Tutu.)
“If we’re using today’s standards of requiring approvals and social licence — which is essentially moving towards obtaining support at a community level — it’s hard to see how much gets built at all,” says Kenneth Green, the senior director of energy resources at the Fraser Institute.
“All infrastructure has a simple economic problem; the benefits of the infrastructure are concentrated, but the impacts are diffuse. If you’re building a railroad and shipping things from Point A to Point B, you get the benefits at Point A and Point B. But people all along the route are affected and they don’t get anything out of this.”
Taking the approval process away from the federal government and handing it to special interest groups will ensure that necessary, controversial projects are never built, he argues, and that whole industries may never be developed.
Perfect consensus in a society of competing interests is not possible, which is why we delegate decisions to regulatory bodies comprised of experts, and politicians who are ultimately accountable to the electorate.
Governments are also uniquely equipped to take a wide view. While the failure to win social licence may kill off one project, companies may simply turn to another development. A piece on Politico.com this week, for example, argues that while environmentalists have been slamming Keystone XL, a much larger pipeline project shipping Alberta’s heavy crude to Canada’s East Coast has been put into motion. And larger debates about the costs and benefits of various energy sources, or transportation methods, or farming technologies, remain unresolved.
The answer, then, isn’t expanding social licence — it’s diminishing its influence.
Even Mr. Cooney, who came up with the buzzword, agrees that the best way forward is for governments to regain public trust — to fully incorporate the concerns of affected communities within the regulatory process.
Yes, corporations themselves have to work meaningfully with local communities, but that doesn’t diminish the importance of an independent third body that is entrusted to rule fairly on behalf of the wider public interest.
Without that, the loudest voice wins.