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Some say social licence is now the most important determinant of successful resource development. Others argue the concept doesn’t belong in a market-based economy and that the national interest is more important.
In a paper for the Canada West Foundation, released Monday, Michael Cleland argues the ad hoc approach used so far is inadequate to meet the challenges ahead and that a new approach is needed.
Some of the things he says need fixing right away include: restoring public confidence in the regulatory system; developing a credible way forward on greenhouse gas management; building capacity so communities can share in the benefits of projects; and doing a better job of compiling and sharing independent information on environmental effects.
First, let’s acknowledge the obvious: like it or not, new forces are influencing resource projects and having a profound impact on industry’s ability to move forward.
Just ask those involved in building pipelines like Enbridge Inc., which is awaiting a response from the federal cabinet in the weeks ahead about whether its controversial Northern Gateway pipeline will get a permit; or those producing gas and oil using hydraulic fracturing techniques; or those building oil sands projects.
Companies are changing their practices to try to meet the new expectations, resulting in increased costs and extended schedules. Some have gone as far as demanding more stringent government regulation — for example, on greenhouse gases — as a way to temper opposition to their plans.
Those forces are not going away. They include Canada’s aboriginals, who are becoming more organized, better educated and more confident about weighing in; communities that will push away investment if they don’t see enough upside for themselves or new risks to worry about; and environmental organizations that demand increasingly higher standards.
Other forces have to do with a decline in deference and mistrust of elites at the same time as celebrities are successfully channeling the anti-development message, and a fragmentation of society in which narrow interests are successfully driving their agendas, Mr. Cleland writes.
So far, the debate has been about whether the new expectations are legitimate, rational, or economic for a high-cost resource developer like Canada.
In his 35-page paper, Mr. Cleland, Nexen executive-in-resident at the Calgary-based think tank and the former president and CEO of the Canadian Gas Association, proposes some interesting solutions.
For the rest of this article, click here: http://business.financialpost.com/2014/05/26/how-canadas-ad-hoc-approach-to-social-licence-is-hindering-resource-development/?__lsa=79b4-4887