On April 20, Alan Ross, a partner in BLG's Calgary office,
was invited to offer his insight to the Senate of Canada's
Transport and Communications Committee on their ongoing
study of the transport of crude oil in Canada.
At its essence, social licence is the demand on, and
expectations for, business enterprise that emerges from
neighbourhoods, environmental groups, First Nations, communities,
and other members of the surrounding civil society. It is not a
literal licensing arrangement, but a "metaphor to encapsulate
values, activities and ideals which companies must espouse within
society to ensure successful operation."
Social licence issues have become part of any sophisticated
corporate risk management strategy. In sectors with highly visible
business activities, long term horizons, high exposure to global
markets, or a wide range of stakeholders keen to influence the
business, the need for a social licence to operate is even more
In the current climate for pipeline development, companies are
generally viewed as responsible for obtaining social licence. The
role of government is sometimes obscured in that debate. However,
governments, as both regulators and recipients of a share of
resource rents, have an important role to play. Both federal and
provincial governments' role in the social licence debate
arises from their powers to exercise reasonable control over
persons and property within their jurisdictions respecting
security, environment, health, safety and welfare, among other
interests. The federal government can address social licence by
improving regulatory processes that exist to ensure public trust.
Alternately, governments and regulators through legislation, public
policy or ensuring public trust in institutions, can facilitate
social licence and the public acceptance necessary for new energy
Social licence is largely untested as a regulatory concept, but
can be considered a form of regulation by drawing from market
forces and norms that encourage certain types of behaviour. Because
there are consequences for failing to comply with social licence
conditions, such as reputational damage, delay or ultimately
preclusion of a natural resource project, it is nonetheless a de
facto form of regulation.
The federal government clearly has a role in the social licence
debate. What will be required is a meaningful intersection between
regulation and social licence. This may help ensure that a pipeline
company does not find itself with a National Energy Board pipeline
approval, but without the ability to construct and operate that
pipeline. Moreover, it can serve to ensure that Canada itself does
not become little more than an energy superpower in waiting, as
pipeline developers struggle to reconcile these social and
Canada is a constitutional monarchy, a parliamentary democracy and a federation comprised of ten provinces and three territories. Canada's judiciary is independent of the legislative and executive branches of Government.
The Government of Alberta recently announced a number of policy changes that will impact the Alberta Electricity Market, composed of its generators, transmitters, distributors, retailers, electricity consumers and wholesale electricity market.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).