The Rebirth of Social Licence

Abstract

Canada’s energy industry and the agencies that regulate it are suffering a crisis of legitimacy. Both are battered by shifting public opinion, opposition from powerful NGOs, a troubled history with many communities and Indigenous groups, and the actions of political parties that consider opposition to oil and gas projects to be central to their platforms. In such an environment, the concept of social licence to operate, or simply social licence, seems more important than ever to the energy industry. This Article argues, however, that it is not the ability or inability to obtain social licence, as the term is currently used, that will allow the fossil fuel industry to maintain some measure of public good will and to lower municipal and provincial resistance to energy projects. That is because, while social licence has some value as a normative concept, it is functionally meaningless. Not only has the term itself been hollowed out by overuse and fluctuating definitions, but what it represents in popular discourse — a broad public acceptance or approval — is probably not achievable. For too long, the national debate over social licence has obscured the very real concerns over the local impacts of energy projects, and this has eroded the trust and support of communities. This Article proposes that the concept of social licence should be understood as descriptive only, and what should matter instead is what measures companies can take to earn that descriptor. This Article also argues that, in order to obtain acceptance from local and community groups and thus to obtain social licence, Canadian energy companies should follow the lead of companies in other jurisdictions and employ community agreements to demonstrate their commitment to responsible resource development and to earn local buy-in for projects.

Keywords: Energy Law, Natural Resources Law, Consultation, Contracts, Canadian Law, Environmental Law

JEL Classification: K11, K12, K23, K32, Q4