Gunns, forestry, and the flawed notion of 'social licence'

Nevertheless, if it is accepted that Gunns' failure to secure a 'social licence' was because they were intent on building the mill in the wrong place and they perverted the mill's approvals process; it should follow that they would have gained their 'social licence' if these issues had been satisfactorily addressed.  However, despite the logic, this is highly unlikely given the deeply entrenched hatred of Gunns and virtually all aspects of forestry by a minority of Tasmanians who have long engaged in campaigns of misinformation and would surely have found other ways to oppose the project.

Indeed, the level of opposition to Gunns and its proposed pulp mill raises important questions about the concept of 'social licence' and whether it could ever be achievable under circumstances where there is such intransigent extremism.

According to the Australian Centre for Corporate Social Responsibility (ACCSR), the term 'social licence to operate' was coined in the mining industry about 15-years ago but is now used extensively across all sections of industry and government to underpin engagement with social, community and environmental issues.

The ACCSR defines 'social licence' as the level of acceptance or approval continually granted to an organisation's operations or a project by the local community and other stakeholders. They go on to explain that "the social licence is a perception of legitimacy – does the company go about its business in a proper way?" They view this as being distinct from a company's reputation which is "the overall favourability of the image of a company or project …….. it's more of an emotional like and dislike".

There are several flaws with this concept. Firstly, 'social licence' is a metaphor rather than a 'real' licence, so it's hard to say whether it has been granted or not. Secondly, it's easy for stakeholders to claim that a company doesn't have a 'social licence', and equally easy for that company to claim that it does. Hence, it is quite difficult for an impartial observer to make a balanced judgement. There is no 'truth' here, only opinion, based on each party's interests and assumptions. Further, even if the majority of local community members or society broadly, withdraws acceptance of a company's presence, the company is not obliged to cease operations, as it can point to its regulatory licence to operate.

Forestry projects differ substantially from mining. Unlike the quite localised impacts of a mine, a proposed pulp mill for example, includes operations hundreds of kilometres distant in the forests and/or plantations from where the mill's feedstock is drawn.

Accordingly, the stakeholders to be considered in any assessment of 'social licence' for the Gunns' pulp mill were far more extensive than just the local community living in the vicinity of the mill. These stakeholders include the myriad of environmental groups that are intransigently opposed to forestry and in the case of larger groups, like the Widerness Society, have a majority of their members and supporters living far beyond Tasmania's shores.

While the ACCSR believes that 'social licence' should be independent of a company's reputation, it is clear that for most people judging the Gunns' pulp mill project, the two concepts are heavily intertwined. Accordingly, the social acceptability of the project has been overwhelmingly influenced by perceptions of how Gunns has operated in other areas both before and since the pup mill was proposed.

As gaining a 'social licence' essentially requires a company or project turning its detractors into supporters, it relies on its opponents being reasonable and open-minded enough to be capable of changing their attitudes. There is little evidence to suggest this is the case in relation to Gunns or virtually any Tasmanian forestry activities after decades of opposition to native forest harvesting, which is now spreading to plantations largely on the grounds of pesticide use.

Nevertheless, the lengths to which community and societal concerns were addressed in relation to the pulp mill project are impressive and arguably unprecedented.

For their part, Gunns has reportedly spent $250 million on project development including meeting the requirements implicit in gaining its regulatory approval; as well as voluntarily divesting themselves of their substantial interests in native hardwood in what appears to have been an attempt to gain some kudos as an environmentally-responsible corporate citizen. In addition, the State and Federal Government approvals process over a 4-year period added enforceable constraints and conditions to the project which would reportedly make it the world's most environmentally-friendly pulp mill.

Despite all these efforts, there is nothing to suggest that this has done anything to moderate or turn around negative attitudes amongst the detractors of Gunns and their pulp mill project.