Abstract

Natural resource extraction is a disruptive and inherently conflictual business. For the communities surrounding extractive operations, everything from livelihood opportunities to the visual landscape changes. For the mining company, costly business interruptions can occur when local populations take to the street over dashed expectations. To mitigate the risk of conflict and ensure operational stability, an increasing number of extractive companies seek a ‘social license to operate’ (SLO) from local communities. SLO theory posits that the quality of relations between the mining company and the surrounding communities are a reliable predictor of whether there will be peaceful cohabitation that allows smooth operations or whether there is the risk of confrontation with deleterious consequences for resource extraction. Although SLO began as a risk management approach of mining practitioners, it has evolved into a theory on its own right in the corporate social responsibility (CSR) scholarship. We analyse both the conceptualization and use of “relations” and of “conflict” in the SLO theory from a socio-political perspective. We find a simplistic understanding of relational dynamics and of conflict, which constrains the explanatory power of the SLO theory, weakening its ability to serve as a guide towards meaningful engagement with local realities. The functionalist perspective on the community-company relationship severely limits the ability of company managers to properly understand complex local dynamics. 

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 www.ogel.org/news.asp?key=571