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The Northern Gateway and Keystone pipelines keep getting hammered, the result of what seems like universal adoption of a new free-market killing concept known as a “social licence to operate.” The idea is an outgrowth of the anti-corporate governance crusades and NGO activism of the last few decades. First came stakeholderism, then corporate social responsibility(CSR). At least with CSR corporations were seen to be in charge of their own affairs, taking it upon themselves to curb their carbon emissions and diversify their workforces, or whatever, as they saw fit.
Under social licence mandates, corporations must now negotiate directly with the people, in line with the old Communist maxim: “Everything belongs to the people.” The corporate sector fell for the idea, and now it is lost under what has become something of social licence to kill growth and jobs.
In a non-binding plebesite earlier this month, residents of Kitimat, B.C., appeared to reject Enbridge’s Northern Gateway gas pipeline and tanker port project. The 60-40 verdict was taken as a defeat for Enbridge, a sign that -–as the Vancouver Sun editorialized—the company “simply does not have the social licence necessary to proceed.”
A few days later, U.S. President Barack Obama again postponed a decision on the Keystone XL pipeline, a blow to TransCanada and evidence that the company had failed to secure a “social licence” for the project that would give Washington the social authority to approve the project.
It’s not new, but over the last couple of years the idea that corporations need to obtain a “social licence to operate” has rocketed to the top of ideological hit parade. Some see it as a part of a major reform of capitalism, taking economic decision-making away from corporations and private initiative and imposing greater social control. Harvard’s Michael Porter, consultant to the corporate elites, sees an opportunity to “reinvent capitalism” by bringing “business and society back together.”
Apparently it’s not enough that business operates in a free-market economy governed by property rights, regulation, the rule of law and the market. Now business needs something more, some kind of project-by-project public consent to build plants, open mines, ship oil, or operate drive-through do-nut shops. More broadly, corporations need to secure social licences for their brands, from Coke to Exxon, or face constant war with NGOs and an endless parade of people with social, political and ideological grievances.
Exactly what these social licences entail remains mostly a mystery. Even its proponents refuse to, or simply cannot, define the concept. One of the chief proponents of the social licence movement, industry consultant Ian Thomson, waffled endlessly last week when he was asked repeatedly on CBC Radio’s The 180 with Jim Brown to explain what a social licence meant. “It is defined by the people, and we talk about community but a community is not necessarily a homogenous being. We look for a consensus position and what is driving that…So a social licence is based on people’s perceptions, it’s impermanent, it’s unwritten, it’s subject to change.”
For the rest of this article, click here: http://business.financialpost.com/2014/04/22/terence-corcoran-from-northern-gateway-to-keystone-the-undefinable-social-licence-movement-is-in-control-of-jobs-and-growth/