Social License to Operate
The Good, the Bad, the Ominous*

WRITTEN BY
ROWLAND HARRISON

Introduction.
THE CONCEPT OF A SOCIAL LICENSE TO OPERATE HAS BEEN EMBRACED ON THE CANADIAN ENERGY REGULATORY SCENE WITH ALACRITY  –  AND PERVA – SIVE IMPACT.

Indeed,  obtaining  such  a  license for  major  energy  development  projects  –  such  as Enbridge’s  Northern  Gateway  Project,  the  expansion  of  Kinder  Morgan’s  Trans  Mountain  Pipeline(the  TMX  project)  or  TransCanada’s  Energy  East Project – is widely considered to be just as necessary  as,  perhaps  even  more  so  than,  any  formal  authorizations that are required as a matter of law. In  the  case  of  Northern  Gateway,  the  certificates to construct  and  operate  the  project have been issued, as the outcome of a comprehensive regulatory review process, yet the project remains stalled, in  part  at  least  for  want  of  a  “social  license.”[1] The concept has even been extended to challenge the regulatory process itself and to require that regulators earn a social license to regulate.

What   is   this   inchoate   idea   that   employs the  language  of  the  law  while  at  the  same  time frequently  rejecting  the  legitimacy  of  traditional legal  processes  and  authority?  The meaning  of, and  requirements  for,  obtaining  such  a  license are,  to  say  the  least,  obscure.  As a metaphor for the quality of the relationship between project developers and local communities, the concept may have much to commend it. However, the specific phrase “social license” – and its widespread adoption, including by industry – has resulted in the concept being broadened to imply a right to veto an approved project, a result that, I would argue, potentially Undermines the rule of law.

As applied to  resource  development  projects,  the  phrase  is of  recent,  largely  Canadian,  origin.  It has, however, been widely adopted by project opponents,  by  governments  and  politicians, and even by project proponents themselves. It is often assumed that a failure to obtain such a license is a barrier to proceeding.

It is not surprising that project opponents would promote the concept of a social licence to operate as something that must be obtained in addition to formal approvals issued through conventional regulatory processes – thereby establishing another means of potentially preventing projects from proceeding.

It is, however, somewhat surprising to note that some governments  have  also  adopted  social  license  as  a  necessary  element of  the  overall  resource  development  process.  For example,  in describing  the  role  of  the  recently-established  Alberta  Energy Regulator, the Alberta Energy website states:

The  single  regulator  is  one  part  of  the  province’s  commitment  to  improve  integration  of  its  resource system.  This integration sets and achieves the environmental, economic and social outcomes Albertans expect from resource development, while maintaining the social license to develop resources.[2]

The statement acknowledges, and implicitly endorses, the need to maintain social license as a fundamental value that is supported by, but exists independently of, the formal regulatory process. It is perhaps surprising that the Alberta  government  –  a  government  that  generally  supports  resource  development  –  would  endorse social licence as a requirement that could impede development.

What is perhaps more surprising is that the concept has been adopted by many companies in the Canadian resource development  industry,  again  with  the  implicit  acknowledgement  that the absence of a social licence presents a barrier to development, notwithstanding  that  formal  regulatory  approvals  are  obtained.  In a speech in June last year, the President and CEO of Enbridge said:  “[I]t’s  the  need  to  achieve  what  some  call  ‘social  license’ that’s  proving  to  be  our  greatest  test.”[3] The previous year, the President and CEO of TransCanada was quoted as saying: “If we don’t  regain  public  confidence,  we  won’t  be  able  to  retain  our social license to continue to operate.”[4]

A random sampling of the websites of energy project proponents displays widespread use of the term in corporate policies and publications.  Suncor’s  2013  Report  on  Sustainability,  for example,  states:  “Establishing  strong,  long-term  relationships with  those  impacted  by  our  business  is  important  to  us,  and essential to maintaining our social license to operate now and in the future.”[5] TransCanada  states  on  its  website,  under  “Responsible Stakeholder  Relations”:  “And  we’re  committed  to  earning  social license  to  operate  wherever  we  do business.”[6] Encana’s  2013 Sustainability  Report  states:  “This  sustainability  strategy  will support and enhance Encana’s social license to operate…”[7]

In addition to its adoption by individual companies, collective acceptance  of  the  concept  is  found  in  the  positions  of  the  two leading  energy  industry  associations.  The  Canadian  Association of Petroleum Producers (CAPP) reports in the President’s message in the 2013 Year in Review that CAPP focuses on delivering results for its members under two broad themes: “Competitiveness and Social License.”[8] The Canadian Energy Pipeline Association (CEPA) website  contains  an  extensive  discussion  of  whether  pipeline companies need social license and states: “Companies have realized that in order to build new pipeline infrastructure, they must obtain a social license from the communities where they operate.”[9]

In virtually all of these instances, the implicit assumption is that a social license is necessary and that, in its absence, projects cannot legitimately proceed, even when formal regulatory approvals have been issued.  As a manager for Anadarko Petroleum, speaking  of  the  challenge  of  getting  community  acceptance  of proposed  drilling programs  in  northern  Colorado,  put  it:  “Those minerals go undeveloped , not for lack of the legal license, but for lack of growing, earning, maintaining that social license.”[10]

What  is  strikingly  absent  in  most  cases  is  any  discussion  of the  validity  of  this  assumption  that  projects  cannot  proceed  in the  absence  of  social  license.  The  issue  is  not  whether,  in  this day  and  age,  a  certain  level  of  public  and  community  support is  needed  before  major  infrastructure  projects  should  proceed. Rather,  the  question  is:  What  is  the  basis  for  concluding  that  the  acceptable  level  of  support  is  to  be  determined  by  earning a  social  license  through  an  undefined  process  that  exists  independently  of  established  regulatory  review  processes,  without the sanction of any duly enacted law?

The  challenge  in  answering  that  question  is  compounded by  several  related  questions.  What exactly is a social license? There is no accepted definition. Rather, there are vague descriptions  of  what  it  is about   (such  as  “trust  in  the  company  to  do the right thing, trust in the industry to keep the public safe”) or when it is considered to exist (such as “[s]ocial license is generally considered  to  exist  when  the  perceptions,  opinions,  and  beliefs

held  by  a  local  population  regarding  a  development  allow  for  the ongoing public approval of the related activity”[12]). But how is it earned?  Who grants it?  The emphasis here is usually on “the local community,” but not universally. The Pembina Institute, for example, in a single sentence speaks of the perceptions of “a local population[allowing] for the ongoing public approval” of activities – a local population, I suggest, is not “the public” in the context of making decisions on behalf of society at large.

As the respected Globe and Mail columnist Jeffrey Simpson asked recently:

Who defines “social license?”  Interest groups such as NGOs  or  businesses?  Courts?  Public opinion, but as measured by what? Polls?  Write-in  campaigns?  Social media comments? Street demonstrations? Elections?[13]

In  order  to  explore  these  questions  further,  it  is  helpful  to  step back and examine the essential nature of decisions with respect to natural resource development.

It must be emphasized, firstly, that there is no right or wrong answer to the question of whether to develop a natural resource. Rather, a decision whether or not to proceed in a particular case is fundamentally a choice that must be made by society at large, a choice that, in the past at least, was typically described as being based on a determination of the public interest. The phrase “the public interest” itself implies an overall balancing of various, competing interests.

The task, then, is, firstly to identify who is to make that determination on behalf of society and, secondly, to establish a process for doing so.  There are various models, but typically they include a  structured  regulatory  review  process,  such  as  is  found  in  the National  Energy  Board  Act.[14] Under  that Act,  the  National  Energy

Board’s role with respect proposed interprovincial and international pipelines  is  to  recommend  to  the  federal  government  whether  a certificate  of  public  convenience  and  necessity  should  be  issued in  a  particular  case.  In  forming  its  recommendation,  the  Board is  required  by  the  NEB  Act to  consider,  among  other  things, “any public  interest  that  in  the  Board’s  opinion  may  be  affected  by  the issuance  of  the  certificate  or  the  dismissal  of  the  application.”[15] In  exercising  its  mandate  in  this  regard,  the  Board,  in  addition  to hearing  directly  from  a  wide  range  of  interests  that  would  potentially  be  affected  by  a  proposed  project,  requires  applicants  to file  with  the  Board  information  on  the  public  consultations  that the  applicant  has  undertaken.  Applicants  are  expected  to  have a  company-wide  Consultation  Program  “to  anticipate,  prevent, mitigate and manage conditions which have the potential to affect persons  and  groups.”[16] An  application  is  required  to demonstrate that those potentially affected have been adequately consulted and that  any  concerns  raised  have  been  considered  and  addressed  as  appropriate.  The  Board  then  considers  this  information  as  one  of  the factors leading to its conclusion on whether a proposed project would be in the public interest. The Board’s mandate and its process require the Board to consider, and balance, all relevant interests.

The  role  of  local  opposition  to  a  proposed  project  in  the Board’s  determination  of  the  public  interest  was  addressed directly  by  the  Board  in  a  2004  decision  on  an  application  for  an  international  power  line  that  was  proposed  to  pass  through  the  City  of  Abbotsford  in  B.C.[17]  The  application,  originally  filed in  1999,  attracted  the  largest  public  response  of  any  NEB  application  ever  filed  with  the  Board  up  to  that  time.  More  than  400 parties  registered  as  intervenors  and  the  Board  received  more than  22,000  letters  of comment.  A  local  Member  of  Parliament,  registered  as  an  intervenor  in  the  proceeding,  filed  a  motion

requesting  that  the  Board  dismiss  the  application,  without proceeding to a hearing, on the ground that “it is the unanimous opinion  of  all  Canadians  so  involved  in  the  process,  that  [the application] not be approved…” The language of “social license” had  not  yet  become  widely  used,  but  it  is  clear  the  basis  of  the motion was that the applicant did not hold what would today be described as a social license for the proposed project.

Not surprisingly, the Board dismissed the motion.  The Board emphasized that it was committed to ensuring that stakeholders are engaged effectively in its public processes and that one aspect of that commitment was “to have effective public participation in oral hearings before the Board.” However, the Board also stated:

[T]he  Board  must  focus  on  the  overall  Canadian,  or national,  public  interest.  Various  decisions  of  the  courts have  established  that  a  specific  individual’s  or  locale’s interest is to be weighed against the greater public interest, and if something is in the greater public interest, the specific interests must give way.[18]

The Board concluded:
[D]ecisions  by  regulatory  tribunals  such  as  the  National Energy  Board  are  not  made  by  conducting  a  plebiscite  or merely  on  the  basis  of  a  demonstration  of  public  opposition  or  support.  Rather, such decisions  are  made  within  a legal framework enacted by the legislature and applied by the courts. This is, of course, the essence of the rule of law.[19]

Having  weighed  all  of  the  relevant  factors,  the  Board  ultimately concluded  that  the  project  was  not  in  the  public  interest  and  dismissed  the  application,  a  decision  that  was  upheld  by  the Federal Court of Appeal.[20]

It is unlikely that any major resource development project will ever be universally accepted and supported. Unlike a mine development, which is geographically localized, pipelines in particular extend over several hundred, even thousands, of kilometers and thus  impact  numerous,  diverse  local  and  community  interests. Competing  interests  (both  geographic  and  philosophical)  must be  balanced  –  and  regulatory  review  processes  are  established, under  the  authority  of  duly  enacted  laws,  for  the  very  purpose of undertaking the challenge. Whether such processes in fact do so  comprehensively  and  effectively  is  another  matter.  The  point  here  is  that  society  has  chosen,  through  its  duly  elected  representatives,  to  have  decisions  about  resource  development  made on  its  behalf  through  such  processes.  In  making  such  decisions, is  not  the  overall  regulatory  process  granting  “social  license”? As  one  commentator  asked:  “Isn’t  ‘social  license’  something granted by elected officials in a democracy?”[21]

The  popular  concept  of  the  social  license  in  effect  rejects the  legitimacy  of  the  formal  regulatory  review  process,  by super-adding   a   requirement   for   something   that   must   be obtained  independently  through  an  unidentified  process  that exists outside the established legal system. However, given that the  phrase  is  widely  applied  by  both  project  opponents  and proponents  alike,  and  sometimes  by  governments,  it  would  be  unrealistic  to  suggest  that  it  should  simply  be  rejected  out  of  hand. So, let me explore the concept in a little more detail, under the headings of “the good, the bad and the ominous.”

Firstly, “the  good.”  While  there  is  no  universal  agreement  on the origin of the phrase “social license,” its use is widely attributed to Jim Cooney, formerly Vice President, International Government Affairs  for  Placer  Dome  Inc.,  now  Adjunct  Professor  at  Simon Fraser University.[22] Cooney has explained that he introduced the term into the discourse on social and political risk management by  mining  companies  in  developing  countries,  as  a  necessary risk  management  response  to  a  lack  of  government  willingness or  capacity  to  address  the  needs  and  concerns  of  communities. The  drivers  underlying  the  expanded  use  of  the  concept  in  the Canadian context go well beyond such a practical need to address a real business risk faced by a specific, local development project, such  as  a  mine.  They  include  increasing  expectations  by  society  at  large  –  enabled  by  the  advent  of  the  internet  and  social media  –  to  participate  directly  in  decision-making  processes. The  phrase  serves  as  a  reminder  that  the  integrity  of  project review  processes  will  depend  in  large  measure  on  the  extent  to which  those  processes  include  a  consideration  of  all  affected  interests, including particularly local and community interests.

Let  me  digress  here.  I  believe  the  rapid  rise  of  the  concept  of social  license  is  related  to  the  evolution  of  aboriginal  rights  to consultation.  However,  I  see  a  fundamental  difference  between  the  two  developments.  Aboriginal  rights  to  consultation  are  legal rights, grounded in the law as administered by the courts. Asserting such rights to challenge regulatory processes and outcomes presents  legal  issues  that  can  be  resolved  in  the  courts,  according  to law.  Social  license,  on  the  other  hand,  purports  to  challenge  the  outcomes of legal processes by means that operate outside of the established  legal  system.  Thus, while  those  asserting  aboriginal rights and the advocates of social license may be natural allies in opposing  projects  in  some  cases,  I  see  a  fundamental  difference  between the two. Nothing I say should be interpreted as implying that  my  criticisms  of  the  social  license  phenomenon  have  any  application to the pursuit of aboriginal rights.

Secondly, “the bad.” As I noted earlier, there is no clear understanding of exactly what a social license is. Who is to determine whether  it  has  been  earned?  More  fundamentally,  what  are  the  criteria  for  determining  that  a  social  license  has  or  has  not  been  earned?  Recognizing  that  it  is  almost  certainly  impossible  to  obtain  unanimous  support  for  any  major  resource  development,  what  level  of  support  should  suffice?  Fifty  per  cent  plus  one? Fifty per cent of what denominator? The local community? How local? What about the national interest of society at large?

Merely posing these questions emphasizes that, at the end of the  day,  answering  each  requires  judgment,  which  is,  of  course the  very  reason  for  establishing  a  formal  regulatory  process. A  structured  regulatory  framework  explicitly  answers  the  questions of who is to decide on behalf of society, specifies the criteria to  be  applied  and  establishes  the  process  to  be  followed.  (If  the outcomes  are  not  acceptable  to  society  at  large,  the  solution should be found in overhauling the framework, not in the extra-legal concept of social license, a point to which I shall return.)

Finally,  what  I  describe  as  “the  ominous”  emanates  from  the  elements  of  “social  license”  that  I  have  identified  as  “bad.” I believe that, when applied as a justification for rejecting formal regulatory  approvals,  the  concept  of  a  social  license  to  operate  is  fundamentally  antithetical  to  the  rule  of  law.  Social  license, as  it  is  popularly  invoked,  operates  without  legal  authority or  legitimacy  and  is  not  sufficiently  well-defined  to  meet  the requirements  of  the  rule  of  law  that  laws  are  “clear,  publicized, stable and just; [and] are applied evenly…”[23]  It may be objected to this point that social license is not law and should not, therefore, be held to the rigors of the rule of law. My answer is that, while social license may not be formal law, it is invoked by many of its proponents as if it were law, when, for example, it is embraced as justification  for  ignoring  properly  granted  approvals  or  even  for refusing to comply with court orders, to which I turn now.

The   social   license   framework   for   determining   whether resource  development  projects  should  be  allowed  –  that  is  to  say  should  be  “licensed”  –  to  proceed  is  not  only  conceptually  inconsistent  with  the  rule  of  law;  it  can  directly  threaten  legal and  civil  order.  Empirical  evidence  abounds  of  a  growing  willingness  by  project  opponents  to  reject  regulatory  processes  and  their  outcomes  and  even  to  refuse  to  comply  with  court  orders. Over  the  past  several  weeks,  we  have  witnessed  the  intervention  of  the  RCMP  to  physically  remove  protesters  against  Trans Mountain’s  TMX  project  from  Burnaby  Mountain.  The  protesters were  defying  an  injunction  granted  by  the  B.C.  Supreme  Court on  the  application  of  Trans  Mountain  to  enable  the  company  to undertake survey work to support its application for the TMX project, as it had been directed to do by the National Energy Board.[24] In  another  incident,  members  of  a  group  identified  as  “Burnaby Mountain  Caretakers”  locked  themselves  to  the  entrance  to  the Supreme Court in Vancouver “to draw attention to the role of the courts  in  ongoing  colonial  occupation  of  Indigenous  territory  on  Burnaby Mountain and across the country.”[25]

It  is  interesting  to  note  that  the  B.C.  Court,  in  granting  the injunction in favor of Trans Mountain, was sensitive to the potential effects on the right to freedom of expression:

The  courts  must  be  careful  not  to  act  in  ways  that dissuade  concerned  and  engaged  citizens  from  expressing  their  opposition  to  activities  which  they  view  as destructive of the social or political good.[26]

The  Court  concluded,  however,  that  “as  much  as  the  right  of  public dissent must be carefully protected, what is at issue in the present case goes beyond that and engages a strong prima facie case of liability for tortious behaviour.”[27]

Recently,  a  Justice  of  the  Superior  Court  of  Ontario  spoke directly to the threat to the rule of law in the context of issuing an  injunction  ordering  the  removal  of  a  blockade  of  the  main  Canadian National Railways line between Toronto and Montreal, bringing  freight  and  passenger  traffic  to  a  halt.  Mr.  Justice D.  M.  Brown  (now  a  Justice  of  the  Court  of  Appeal  for  Ontario) minced no words in addressing the matter:

We  seem  to  be  drifting  into  dangerous  waters  in  the  life of the public affairs of this province when courts cannot predict,  with  any  practical  degree  of  certainty,  whether police  agencies  will  assist  in  enforcing  court  injunctions  against  demonstrators  who  will  not  voluntarily cease  unlawful  activities,  such  as  those  carried  on  by  the  protesters  in  this  case.  Just  over  two  weeks  ago,  on December  21,  2012,  I  issued  an  injunction  requiring  the First Nation protesters blocking a CN Spur Line in Sarnia to remove ‘forthwith’ their obstructions. To my astonishment,  the  local  police  failed  to  assist  in  enforcing  that order  until  January  2,  2013,  under  pressure  from  another  judge of this Court, a passage of almost two weeks.[28]

Citing  from  the  reasons  for  his  original  decision,  Mr.  Justice  Brown added:
As  a  judge,  I  make  an  order  expecting  it  will  be  obeyed  or enforced. If it will not be enforced, why should I make the order? An order which will not be enforced is simply a piece of paper with meaningless words typed on it, and making a meaningless order only undermines the authority and concomitant legitimacy of the courts.[29]

He Continued:

Saturday  night  I  made  a  time-sensitive  order  because  the  evidence  showed  that  significant  irreparable  harm resulted from each hour the blockade remained in place, yet  the  OPP  would  not  assist  the  local  sheriff  to  ensure  the  order  was  served  by  the  time  stipulated  for  the  removal  of  the  blockade.  Such  an  approach  by  the  OPP  was  most  disappointing  because  it  undercut  the  practical  effect  of  the  Injunction  Order.  That  kind  of  passivity  by  the  police  leads  me  to  doubt  that  a  future  exists  in  the  province  for  the  use  of  court  injunctions  in  cases  of  public demonstrations.[30]

The threat to the rule of law, I suggest, is troublingly obvious.

In  a  more  recent  Ontario  case  in  which  landowners  challenged the approval of a wind farm, the same Mr. Justice Brown was   quoted   as   asking   one   of   the   challenging   landowners  whether  his  argument  would  give  the  public  a  constitutional  veto over rural development, to which the reply was: “We do as members of the public have a veto.”[31]

So, what can be said of the concept of social license to operate  looking  forward?  In  addressing  that  question,  there  are  two observations I would make about how the concept has come to be widely accepted as something that can operate independently of the legal system to thwart formal regulatory approvals.

The first is with respect to the use of the word “license,” which, in its  ordinary  meaning,  implies  authority  to  do  something  that  would  otherwise be unlawful, or at the least would not be permitted. While the  word  does  not  always  imply  legal  authority,  it  most  often  does.  Thus, the use of the word in the phrase “social license” feeds the view that,  in  the  absence  of  such  a  license,  a  project  is  not  authorized  to  proceed. More appropriate terms, I suggest, would be “acceptance” or “support,”  either  of  which,  I  believe,  would  appropriately  accommodate  the  legitimate  expectation  that  all  affected  interests  should  be considered,  while  not  implying  any  substantive  consequence  in  the  absence of such acceptance or support. I would also suggest that any

proper determination of the public interest in a structured regulatory process  would  include  consideration  of  the  degree  and  nature  of  acceptance of, or support for, a project. Indeed, most regulatory review processes  do  so,  as  noted  with  respect  to  the  consultation  requirements that are included in the National Energy Board’s process.

My second observation is that I believe acceptance by industry  and  by  governments  of  the  concept  of  a  social  license  to  operate – and the adoption of the term “social license” itself – has tended to validate the view that the absence of such a license can operate  as  a  barrier  to  proceeding  with  a  development  that  has  otherwise  been  lawfully  approved.  Columnist  Terence  Corcoran put it bluntly when he wrote in the Financial Post last year: “The corporate sector fell for the idea…”[32]

Both  industry  and  governments,  while  acknowledging  the legitimate expectations of a wide range of interests to be considered  in  the  decision-making  process,  should  push  back  against  the  concept  of  social  license  as  an  independent  threshold  for  proceeding  with  resource  developments.  Opponents  of  such  developments are unlikely to abandon the concept, but industry and  governments  could  hope  to  change  the  dynamics  of  the

overall resource development debate by shifting the focus away from  “license”  onto  the  concepts  of  acceptance”  and  “support,”  neither  of  which,  I  suggest,  carries  the  same  connotation  of  a  permission – or license – that has or has not been granted. Perhaps  a  shift  in  industry  thinking  is  beginning.  As  noted,  TransCanada’s  report  on  Corporate  Social  Responsibility  speaks  of  “earning  our  social  license  to…operate…”  The  comments  in a  recent  interview  with  the  company’s  CEO  perhaps  suggest  some reservation:

What is the bar by which we get approval? And they keep using  terms  like  social  license,  but  we  can’t  enter  into  a  process  by  which  we  don’t  have  a  defined  way  of  determining what that social license looks like.[33]

Governments  in  particular  should,  I  suggest,  recognize  the  ominous  implications  of  the  current  popular  concept  of  social  license  to  operate  and  show  leadership  in  supporting  the  legitimacy,  and  enforceability,  of  the  outcomes  of  structured  regulatory processes. Governments should resist the use of social license as a justification for rejecting lawful authorizations.

There are some signs that this might be beginning to happen. The  Minister  of  Finance,  Joe  Oliver,  was  quoted  as  saying  at  a  conference in Ottawa last week that social license “is too often used by a small minority of activists to block projects that have been  approved  by  regulatory  agencies,  endorsed  by  elected  governments  and  supported  by  a  majority  of  Canadians.”[34] However, B. C. Premier Christy Clark was quoted as saying at the same conference “project proponents do need social license.”[35]

No  doubt  it  will  be  argued  that  the  regulatory  process  for  major  resource  development  projects  has  failed  to  adequately  consider society’s concerns and that this failure is itself a driver behind  the  widespread  invocation  of  the  popular  concept  of  social  license.  The  argument  has  merit.  Regulatory  processes  have not kept pace with public expectations in a world in which the  decisions  to  be  made  are  seen  by  many  as  fundamental  to  the future of society. In a recent speech, the President of Enbridge acknowledged  the  “heightened  legitimate  public  concern  around  climate  change  and  the  impact  of  greenhouse  gas  emissions associated  with  fossil  fuels.”[36]

Furthermore,  some  measures  aimed at “reforming” the regulatory process to make it more efficient and effective – for example, the imposition of time limits and restrictions on rights to participate in the process – I believe have  been  counter-productive  and  have  only  served  to  further  foster  widespread  disillusionment  with  established  processes.  A  notable  example  was  the  recent  withdrawal  by  a  prominent  intervenor in the NEB review of the TMX expansion project from further participation in the process, calling it a “sham.”[37]

 I  would  argue  that  the  answer  must  be  found  in  addressing  the source of the problem, by broadening the regulatory process to address society’s legitimate concerns. That, no doubt, is a tall order.

My  objection  to  the  popular  concept  of  “social  license  to operate”  is  NOT  an  objection  to  recognizing  and  considering the  role  of  community  and  public  support  for,  or  opposition  to,  a  project.  Rather,  my  objection  is  to  using  social  license  as  a  justification  for  holding  projects  hostage,  by  outright  rejecting  the  outcomes  of  formal  regulatory  processes  and  thereby  undermining  the  rule  of  law.  I  believe  this  ominous  result  has

been  fostered  by  the  use  of  the  term  “license”  and  by  a  failure  on  the  part  of  governments,  and  indeed  industry  itself,  to  insist  that  the  regulatory  arena  is  the  proper  forum  in  which  to  determine  “the  public  interest”  and  to  deliver  outcomes  that  should be seen as granting “social license to operate.”

As published in the November/December

2016 issue of Right of Way Magazine.

Rowland J. Harrison Q.C. is an energy regulation consultant and former senior government official with more than 45 years’ experience. He was a member of the National Energy Board from 1997 to 2011 and is the co-Managing Editor of Energy Regulation Quarterly.

Notes

* A public lecture presented at the Faculty of Law, University of Alberta, March 10, 2015.

**TransCanada Chair in Administrative and Regulatory Law, University of Alberta. Mr. Harrison was a member of the National Energy Board from 1997 to 2011, during which he served as a member of the Joint Review Panel for the Mackenzie Gas Project.

  1. The opposition of Aboriginal groups is also a major obstacle to proceeding with the Northern Gateway project at this time. I draw an important
    distinction between opposition to projects on the basis of a lack of social license and opposition based on the assertion of aboriginal rights. See infra, following note 22
  2. http://www.energy.alberta.ca/Initiatives/3591.asp. Emphasis added.
  3. Al Monaco, President and CEO, Enbridge, Inc., presentation to a C.D. Howe Institute Roundtable Event, Calgary, June 4, 2014.
  4. http://www.calgaryherald.com/business/ipeline+CEOs+they+will+work+restore+public+confi-dence+around+safety/8484542/story.html
  5. Suncor Report on Sustainability 2013: http://sustainability.suncor.com/2013/en/social/social-responsibility.aspx. Emphasis added.
  6. TransCanada report on “Responsible Stakeholder Relations,” http://csrre-port.transcanada.com/Community/ResponsibleStakeholderRelations.html. Emphasis added.
  7. Encana, Sustainability Report 2013, http://www.encana.com/pdf/sustain-ability/corporate/reports/sustainability-report-2013.pdf. Emphasis added.
  8. CAPP 2013 Year in Review: http://www.capp.ca/context/Pages/MessagefromthePresident.aspx.
  9. CEPA, “Do pipeline companies need social license?” http://www.cepa.com/do-pipeline-companies-need-social-license. Emphasis added.
  10. Wyoming Public Radio, December 8, 2014: http://wyomingpublicmedia.org/post/relationships-101-oil-and-gas-looks-social-license-operate
  11. CEPA website, supra note 9.
  12. “The costs of losing social license,” Pembina Institute, June 6, 2014: http://www.pembina.org/blog/the-costs-of-losing-social-license
  13. The Globe and Mail, October 22, 2014: http://www.theglobeandmail.com/globe-debate/define-consultation-and-social-license/article21199386/
  14. R.S.C., 1985, c. N-7.
  15. Paragraph 52 (2) (e).
  16. NEB Filing Manual, Chapter 3: http://www.neb-one.gc.ca/bts/ctrg/gnnb/flngmnl/fmch3-eng.html#s3_4
  17. Sumas Energy 2, Inc, EH-1-2000.
  18. Id., at p. 9.
  19. Id., at p. 14.
  20. Sumas Energy 2, Inc. v. Canada (National Energy Board), [2006] 1 F.C.R. 456.
  21. Energy Magazine, November 5, 2014: http://www.hudson.org/research/10803-keystone-consequences-for-the-future-of-large-infra-structure-projects
  22. CEPA website, supra note 9.
  23. http://worldjusticeproject.org/what-rule-law
  24. Trans Mountain Pipeline ULC v. Gold et al, November 14, 2014, in which the B.C. Supreme Court https://www.documentcloud.org/docu-ments/1361182-judge-cullen-re-trans-mountain-pipeline-ulc-v.html
  25. Vancouver Observer November 27, 2014: http://www.vancouverobserver.com/news/burnaby-mountain-caretakers-lock-themselves-supreme-court-entrance
  26. Supra, note 24, at paragraph 115.
  27. Id., at paragraph 117.
  28. Canadian National Railway Company v. John Doe, 2013 ONSC 115, at paragraph 15.
  29. Id
  30. Id., at paragraph 20.
  31. As reported in The Globe and Mail, November 21, 2014: http://www.theglobeandmail.com/news/national/legal-bat-tle-over-ontario-wind-turbine-farm-may-redefine-harm/article21714017/
  32. Financial Post, April 22, 2014: http://business.financialpost.com/2014/04/22/terence-corcoran-from-northern-gateway-to-keystone-the-undefinable-social-license-movement-is-in-control-of-jobs-and-growth/
  33. Calgary Herald, January 2, 2015: http://calgaryherald.com/business/energy/nothing-straightforward-for-tran-scanadas–irlinghttp://www.theglobeandmail.com/news/politics/leave-action-on-climate-policy-to-provinces-bc-tells-ottawa/article23350033/
  34. Id.
  35. Loc. cit. supra, note 3. Emphasis added.
  36. Letter of Withdrawal by Marc Eliesen, October 30, 2014: https://docs.neb-one.gc.ca/ll-g/llisapi.dll/fetch/2000/90464/90552/548311/956726/2392873/2449925/2451033/2543157/C118-6-1_-_Marc_Eliesen_Letter_of_Withdrawal_-_A4E1Q6.pdf?nodeid=2543843&vernum=-2. Eliesen is a former CEO of B.C. Hydro and a former Chair of Manitoba Hydro and of Ontario Hydro.

 

Published: The Negotiator, March 2017

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