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Measuring the extent of a Social License to Operate: The influence of marine biodiversity offsets in the oil and gas sector in Western Australia

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  • Richert, Claire
  • Rogers, Abbie
  • Burton, Michael

Abstract

Mining companies throughout the world often face a high socio-political risk, in particular because of their impact on the environment. A key indicator of exposure to such risk is a company׳s Social License to Operate (SLO). If a company meets its consumer, shareholders and other stakeholders׳ expectations regarding environmental management, it can gain a SLO. The SLO is an implicit contract between parties which reduces the risk of socio-political challenges to the actions of the company. Here, we apply this concept to a case study of the oil and gas sector in Western Australia, where we evaluate the strength of the SLO granted by the West Australian population to this industry. Our results suggest that, on average, people are not likely to oppose oil and gas projects, because they are economically beneficial for the State. However, it does not achieve as high an evaluation on social legitimacy. We subsequently examine whether the use of marine biodiversity offsets by the oil and gas sector influences SLO. This serves to clarify the social acceptability of offsets as tools to protect the environment. We find that the use of marine biodiversity offsets would improve the SLO of the sector.

Suggested Citation

  • Richert, Claire & Rogers, Abbie & Burton, Michael, 2015. "Measuring the extent of a Social License to Operate: The influence of marine biodiversity offsets in the oil and gas sector in Western Australia," Resources Policy, Elsevier, vol. 43(C), pages 121-129.
    • Handle: RePEc:eee:jrpoli:v:43:y:2015:i:c:p:121-129
    DOI: 10.1016/j.resourpol.2014.12.001
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    Cited by:

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    2. Xu, Min & Liu, Yong & Cui, Caiyun & Xia, Bo & Ke, Yongjian & Skitmore, Martin, 2023. "Social acceptance of NIMBY facilities: A comparative study between public acceptance and the social license to operate analytical frameworks," Land Use Policy, Elsevier, vol. 124(C).
    3. Dumbrell, Nikki P. & Wheeler, Sarah Ann & Zuo, Alec & Adamson, David, 2022. "Public willingness to make trade-offs in the development of a hydrogen industry in Australia," Energy Policy, Elsevier, vol. 165(C).
    4. Rogers, Abbie A. & Burton, Michael P., 2016. "Public preferences for the design of biodiversity offset policies in Australia," Working Papers 231533, University of Western Australia, School of Agricultural and Resource Economics.
    5. Heffron, Raphael J. & Downes, Lauren & Ramirez Rodriguez, Oscar M. & McCauley, Darren, 2021. "The emergence of the ‘social licence to operate’ in the extractive industries?," Resources Policy, Elsevier, vol. 74(C).
    6. Khalil Nimer & Muath Abdelqader & Cemil Kuzey & Ali Uyar, 2024. "Emission targeting and carbon emissions: The moderating effect of female directors," Business Strategy and the Environment, Wiley Blackwell, vol. 33(4), pages 3480-3504, May.
    7. Yıldız, Taşkın Deniz & Kural, Orhan, 2020. "The effects of the mining operation activities permit process on the mining sector in Turkey," Resources Policy, Elsevier, vol. 69(C).
    8. Meesters, Marieke Evelien & Behagel, Jelle Hendrik, 2017. "The Social Licence to Operate: Ambiguities and the neutralization of harm in Mongolia," Resources Policy, Elsevier, vol. 53(C), pages 274-282.
    9. Anna Katharina Provasnek & Anton Sentic & Erwin Schmid, 2017. "Integrating Eco‐Innovations and Stakeholder Engagement for Sustainable Development and a Social License to Operate," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 24(3), pages 173-185, May.
    10. Gastineau, Pascal & Mossay, Pascal & Taugourdeau, Emmanuelle, 2021. "Ecological compensation: How much and where?," Ecological Economics, Elsevier, vol. 190(C).
    11. Anna Katharina Provasnek & Erwin Schmid & Gerald Steiner, 2018. "Stakeholder Engagement: Keeping Business Legitimate in Austria’s Natural Mineral Water Bottling Industry," Journal of Business Ethics, Springer, vol. 150(2), pages 467-484, June.
    12. Mercer-Mapstone, Lucy & Rifkin, Will & Moffat, Kieren & Louis, Winnifred, 2017. "Conceptualising the role of dialogue in social licence to operate," Resources Policy, Elsevier, vol. 54(C), pages 137-146.
    13. Dumbrell, Nikki P. & Adamson, David & Wheeler, Sarah Ann, 2020. "Is social licence a response to government and market failures? Evidence from the literature," Resources Policy, Elsevier, vol. 69(C).
    14. Voyer, Dr Michelle & van Leeuwen, Dr Judith, 2019. "‘Social license to operate’ in the Blue Economy," Resources Policy, Elsevier, vol. 62(C), pages 102-113.
    15. Demajorovic, Jacques & Lopes, Juliana Campos & Santiago, Ana Lucia Frezzatti, 2019. "The Samarco dam disaster: A grave challenge to social license to operate discourse," Resources Policy, Elsevier, vol. 61(C), pages 273-282.

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    More about this item

    Keywords

    Social License to Operate; Biodiversity offset; Oil and gas sector;
    All these keywords.

    JEL classification:

    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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