The Question of Social Licence and Regulatory Responsibility

The School of Public Policy convened a roundtable with former energy regulators to discuss the impact and implications of broader use of the term social licence. This report offers a summary of recommendations from that meeting that highlight conclusions regarding needed legislative clarity on the relevance and role of the term in the future. Energy in a variety of forms from liquid hydrocarbons to electricity is vital for modern society. Useful, affordable and dependable energy in turn, is entirely dependent on the technology to convert it's potential and the necessary infrastructure for delivery to consumers. Consequently, in developed countries, a working relationship and authority will exist between policy-makers and regulators; regulators typically approve or deny project permits, establish and enforce rules and set standards for the development and operation of these systems. The public is technically represented in this process by elected policy-makers and then in turn by appointed regulators who monitor day-to-day operations in the energy sector. Since energy systems are highly technical, the process of hearings, evidence submittal and evaluation of performance is usually dominated by testimony and submittals that are based on scientific, engineering or economic calculations. As a practical matter, however, public interest especially in areas of environmental impact or rate changes can be high, even in the absence of technical expertise or experience. Determining how to integrate public involvement in the hearing process as a consequence can pose a dilemma for regulators, both in terms of testimony or submittals or a perception on the part of the public that regulatory forums are appropriate to discuss or even demand changes in policy prescriptions for energy issues. One consequence of this is a collision of the public's interest and desire to understand or be involved in those regulatory processes and hearings normally reserved for applicants and experts. An example of the resultant conflict between some members of the public and regulators is a tension emanating from insistence that a so-called "social license" be perfected before permits or permission are granted. This term of art is not provided for in current law or practice. Consequently, it is more a reflection of changeable public opinion than the underlying authority, structure and evidence in the regulatory process itself. In short, the term social license becomes shorthand for a demand from self-defined interest groups to be consulted and granted effective veto power over regulatory approvals or mitigation conditions prior to any final project approval. There is no precedent to guide regulators who are faced with this type of request or demand. Ultimately, they must decide how to include or not include testimony, data or other submittals as a part of a quasi-judicial hearing or case. The result is a challenge to regulatory procedures designed to focus on proposed projects or to interpret the value of any given infrastructure project in satisfying future supply and demand needs. Absent new judicial and policy prescriptions, the matter can only be incompletely and inconsistently dealt with when approached from the regulatory side alone