Published 16 April 2019
Companies' need to gain and maintain "social license to operate" (SLO) is widely taken for granted, particularly in the extractive industries such as mining and oil and gas. The concept of SLO is not clearly defined, but in general it's understood as approval of a corporation's operations by local communities and various constituent groups. Such approval is believed to be contingent on the corporation achieving various social goals (such as contributing to charity, reducing income inequality, and fighting climate change), in addition to producing and trading material values to create wealth for its shareholders. After briefly describing the moral arguments for SLO, this article makes a moral case against it on the grounds that it undermines human survival and flourishing. An argument for an alternative to SLO is also provided. The alternative is based on the moral code of rational egoism that advocates the pursuit of long-term self-interest, which entails the recognition of individual rights and voluntary, mutually beneficial trade. Companies enhance human survival and flourishing by maximizing in one objective function: profits, and should be left free to do so. Implications of abandoning SLO for profit maximization for companies, government, other members of society, and lawyers are discussed.
This paper will be part of the OGEL Special Issue on "Social Licence to Operate (SLO) in the Extractive and Energy Sectors". More information here https://www.ogel.org/news.asp?key=571