Why Social License is the most important goal for new capital projects

When I look at the majority of new legislation being passed in Canada that is applicable to new capital projects, I see concepts such as sustainable development and new frameworks for consideration of the Public Interest.

The focus of Sustainable Development and the growing movement toward Corporate Social Responsibility is the three legged stool of environment, economic and social impact. Legislation and regulations have provided further clarity around environment and Environmental Impact Assessment (EIA), and practitioners have clearly developed frameworks to analyze environmental impact; however, that same clarity has not been provided around social impact and economic benefit.

When it comes to economic benefit, a case can always be made around the number of dollars being spent, the number of jobs being created and the benefit to existing and new local business of a proposed project. However, the same certainty cannot be presented in the area of social impact.

What is a significant social effect or benefit? Can Community Support or a Community's core values be a valued socioeconomic component that can be assessed and protected in the public interest? 

In the 1980’s and 1990's we saw effective legislation being drafted in the interests of protecting the environment. And with it, we witnessed a huge growth in the environmental services sector.  In 1985 the environmental consulting services industry was a collection of "mom & pop" companies that filled a specific niche of interest (soils companies, water companies, foresters, agrologists etc).  In the 1990s and the first decade of this century this industry experienced a paradigm shift not dissimilar in many ways to the internet in terms of changing the way people fundamentally think.

Today, the environmental companies are some of the largest service providers in the consulting services space. Western Canadian companies like Golder, Stantec, AMEC are dominant forces. Each of these started as Engineering companies that had the foresight to grow into this new space and today the engineering services departments in these companies take a back seat in revenue generation to, and derive much of their revenue from, supporting their environmental upstart colleagues.

When I started in environmental consulting, I was an anomaly because I didn't have a beard or even own a pair of Birkenstocks. Environmental consultants didn't own suits and were never allowed in the Boardroom. Today, Environment has earned a seat at the adult's table. Most project strategy development centres around minimizing environment footprint, minimizing environmental impact and ensuring environmental compliance, as environment has often been the hurdle that was insurmountable for project approval. Today environmental performance is on par with worker safety, engineering integrity and commercial considerations; it is fundamental to a project and core to its perceived success.

Looking beyond today there is a sea change.  Projects are able to leap the gap past significant environmental impact through better mitigation and science surrounding impact assessment determination, but are still stumbling and never crossing the finish line. Recent unsuccessful projects have been environmentally-acceptable to regulators, but misalignment with Aboriginal and stakeholder interests and community values have been the fatal flaw that held them back. One only has to look at the Joint Panel Review and/or NEB decisions for projects like Kemess Mine, Whites Point Quarry and Sumas to see that it is not the environmental issues but the people issues that stop these projects.

So why is this happening? Why are communities rallying against these projects? Why are landowner associations forming, community interests groups intervening and public opposition growing? How are these companies getting so cross-threaded with the communities that they may impact or benefit? 

It isn't for lack of caring or disrespect for the people that live there. But it may be lack of having all the right people at the table or not incorporating community core values into the project strategy. What I believe is needed is a paradigm shift similar to the environmental wave of the early 1990's where social impact and community values and fair dealings become the fourth pillar beside commercial viability, engineering feasibility, and environmental sustainability.

In my early project days of the 1980's it was the engineers that led the way of integrity. Their code of ethics, strong precautionary controls and professional organizations ensured their integrity was equivalent to other professionals of medicine and law. Even their Canadian symbol - the iron ring - was an ever present reminder of what can happen when rules are bent and integrity is allowed to slip. At that time, the engineers were the unquestioned leaders of projects. They directed my bearded, open-toed colleagues who collected environmental information to support a project proceeding. Then environmental professionals developed their own rules, standards and ethics.  They evolved their discipline into a true profession that held its own rules of integrity. Today, it is those disciplines that deal with people that are developing standards, rules and best practices that are being followed in the hope that they will assist a project's approvals.

Will the stakeholder relations service industry see the same growth as was seen in environmental performance? And who will lead this next stepwise progression in project leadership?  Will it be the land companies or the consultation practitioners who deal with stakeholders day-to-day? Or will it be some other forward thinking professions that lead the charge?

I think that the first battle is to realize the sea change is upon us and try to convince project proponents that it is real and non-negotiable. Then I believe there is an opportunity that can be seized by those who claim the space.