An institutional perspective on the ‘Social License to Operate’: Gaining legitimacy for mining and renewable energy projects in Latin America

Abstract

Because of its social and environmental impact, the establishment and operation of mining, energy and industrial plants often raises concerns among both local and global civil society. To reconcile conflicts of interests and expectations, the concept of the ‘social license to operate’ (SLO) has gained ever more attention outside the mining environment, where it was initially conceived. SLO has been defined as the ongoing approval of a mining project by a community based on its demands, expectations, and beliefs beyond the legal requirements set out in a legal license. Appealing to the social agreement rather than the legal contractual arrangement, the concept still lacks coherent conceptualization as well as empirical evidence to account for the mechanisms to attain such consensual and enduring agreement. We theorize SLO as a social institution, not as regulations, but as stable patterns of interaction, based on mutual expectations and where sanctions are imposed in case these expectations are not met. The aim of this conceptualization is to develop an operable research agenda that helps disentangle the institutional work in which investors, government and civil society engage to attain mutual legitimacy for the implementation and operation of local projects. We seek to apply this agenda to the energy transition debate and the local negotiation processes around it focusing on mining and renewable projects in South America.