What we hear more and more, not only but particularly in the waste and recycling industry, is that anyone who wants to build any new facility needs to “obtain a social licence to operate” as a condition of obtaining development approval for the project.
I was reminded of that at a recent industry breakfast organised by the Waste Management and Resource Recovery Association (WMRR) of Australia.
At the breakfast, the new NSW Environment and Heritage Minister, James Griffin, was asked some questions about his position regarding new landfills and Energy from Waste facilities.
His answer was vague, as was to be expected, but when he was pushed he said something like “you must obtain a social licence to operate”.
This begs the question: What actually is social licence, and how do we know that we have it or not?
Apparently, the term social licence was first used in the mining industry to ensure the local population was on-side before pursuing a particular project.
It’s not easy, but at least mining projects bring large-scale employment opportunities with them and, especially in Australia, whole communities depend on them. If you have ever been to the Pilbara, you know what I mean.
Governments love the mining industry. Why? Royalties!
Waste is quite different. Waste is stuff we think we don’t need or don’t want anymore. We put stuff into a bin and take the bin out to the street. What happens after that most people don’t know, don’t want to know or don’t really care about too much. Let’s be honest!
One exception: if you want to build a waste facility, any waste facility, really, anywhere near where people live, all hell breaks loose.
We have all heard about the NIMBY (not in my back yard) syndrome
I recently had an interesting conversation with a lady helping with the community consultation for a larger resource recovery park that includes a landfill.
She said: “You can tell people all the good things that are happening with what we are doing here on site – the materials we are recovering, the positive impact on the environment, on jobs and so on. The people listen and are all happy with what we do, but in the end they say, ‘why can’t you do it somewhere else? We don’t want this or that facility here.’”
When you tell them that it is a problem that everyone has and if everyone has the same attitude then no one takes care of the waste, no recovery ever occurs, they simply say: “Yes, we understand, we know all that, but we still don’t want you here.”
End of story.
Anyone in the waste industry knows exactly what I am talking about.
We know that the NIMBY syndrome in relation to waste facilities is pervasive. Why then do we ask developers of such facilities to obtain a social licence?
What does the term actually mean?
We know that the NIMBY syndrome in relation to waste facilities is pervasive. Why then do we ask developers of such facilities to obtain a social licence?
But back to the term itself. We know what “licence” means. It means permission. But what does the term “social” mean? It sounds a bit vague, because it is.
The term “social” relates to various stakeholders, such as the affected population, but also relevant government agencies and industries.
Social licence then hints at a certain level of acceptance of a project, which due to its vagueness, raises more questions than it answers.
The term “social” was to be enshrined in the Corporate Governance Council’s Governance Principle of the ASX (the Australian Stock Exchange), but this was dropped due to its vagueness.
Yet we continue to hear it mentioned in relation to waste projects by government agencies and ministers.
To be fair, the term is not used in the energy from waste regulations or policy statement. The requirements there are that the proponent of a project is a “good neighbour” who provides accurate and reliable information and genuinely engages with the community.
Providing accurate information and engagement are appropriate measures and, importantly, can be measured and judged if a matter ends up in court.
But imagine a judge having to decide whether a project has obtained a social licence. What would the judge ask? “Please, dear EPA or Department of Planning, can you tell me which aspect of ‘social’ the applicant did not fulfil, specifically? But before you do that, please tell me which legal definition of ‘social license’ you are referring to, also specifically?”
Answer: “It’s the vibe, your honour”.
Managing what you can’t measure
Remember the old adage: “if you cannot measure it, you cannot manage it”? How can anyone decide whether a project has obtained a social licence?
I am sure there may be exceptions, if a proponent just doesn’t care or doesn’t engage with the community at all. But in reality, most proponents do what is right.
However, there are always people who are against a project. They are typically also the loudest. You can count them in any community meeting. But who counts the mostly silent people?
There is also another issue that the insistence on obtaining a social license has created. The communities within which new infrastructure is to be built are aware that they have to provide consent to the facility, that is they provide the permission via the social licence.
Communities are smart, too. They are asking for something in return. “What’s in it for us?” they ask and the proponent of the infrastructure has to pay up.
It is fast becoming an accepted fact that if you want to build a new windfarm or solar farm, you pay your neighbours “to keep them quiet”.
I take issue with that. What sort of society do we want to be? Do we want “baksheesh” to become the new norm for infrastructure projects?
This also creates an additional cost or indirect tax making that same infrastructure which is bringing jobs and government income (via tax) more expensive. Funny that we are not asking the same for landfills, isn’t it?
In my view, the insistence on social licence is having the opposite effect that new technologies to avoid landfill were supposed to have.
We are artificially making them more expensive and harder to obtain, which is exactly the opposite of what should be happening I would have thought. But, as I said in a previous article, logic and reason are not exactly the tools of the policy trade.
Ah, I hear you think, but what about the landfill levy? Landfills are taxed, too, right?
Yes, that is right. The whole idea of the landfill levy was to make landfilling artificially more expensive so alternatives to landfill could become more commercially viable. The indirect tax called “social licence” reverses that economic instrument to a degree. As I said, don’t look for logic.
The vagueness of social licence creates uncertainty and uncertainty is a killer for investment. That’s not smart.
Did the government obtain a social licence to build Westconnex or sell it? Was a social licence obtained before we privatised our energy generation assets? Why are we measuring with two different yard sticks?
Ask yourself this: When did the government last obtain a social licence to build or privatise infrastructure?
In my view, Social Licence is a “fig-leaf” that is used to create an artificial barrier to enable government to “pull the plug” on projects that are not politically opportune.
It is also somewhat misleading and deceptive in the sense that no real “social licence” is issued from or by anyone. The only relevant permissions are issued by a Council or the Department of Planning and the EPA.
I am all for measurable targets. That means “yes” to stakeholder engagement, and “yes” to effective, open and truthful information. But “no” to social licence.
Australia is not a direct democracy. Pretending we are is deceitful.
