Social License Criticism – What is a Social License to Operate?
A common definition of a Social License is the local community’s acceptance of a business. A social permission to operate and ongoing community approval.
An offshoot of the CSR movement, Social License to Operate is a term largely created by consultants. With the CSR market saturated, consultants needed a new service to sell to corporations. Enter the Social License. While that is criticism enough, Social License is also undemocratic, based on appeasement and extortion. It reinforces the leftist notion that business is bad, and needs extra social permission to operate.
Social License Criticism – Community vs. Government
Proponents of the Social License claim that government permission, a legal permit to conduct business is not enough. They claim the need for another community/social permission. A defining feature of the Social License, is the community. A word which can mean anything to anyone. “A social group whose members reside in a specific locality”. The community ends up being represented by a loud minority. Usually leftist activists or vested interests.
The government, local and national, is the legitimate representation of the people. If the government is democratically elected, then its permission is the community’s permission. It is elected to represent that community and make decisions on its behalf. If members of the community disagree, they can use democratic means to advocate otherwise.
Social License Criticism – Undemocratic Governments
In some parts of the world, governments are not democratically elected. This is another apparent justification for the Social License. Now the community must be consulted, and its approval sought. But who then represents the community? Does the corporation consult every member of the community? Or a few anointed elites? Does the corporation talk to the loudest member of the community? Or the most likely to violently oppose it?
The community leaders or groups that the corporation seeks permission from, who elected them? If the state is undemocratic, it is highly unlikely that local leaders or activists are democratically elected. In areas where the government is undemocratic, this leads to consultations with groups who are also undemocratically chosen.
The Social License process does not solve the problem of undemocratic governance. It merely replaces an undemocratic state with undemocratic activists and leaders.
Social License Criticism – Appeasement
If your business needs a Social License to Operate, you must have a bad business. Most corporations only need a legal permit and it’s in business. If you need to also consult the community, what danger or annoyance do you pose to them? Are you opening a Slaughterhouse? an Acid mine? a Burlesque House? Drug gangs and mafias spend a lot in their community to get a social license to operate. Is this how your business operates?
Seeking a Social License to Operate admits that your business is particularly dangerous or offensive to the community. You must now appease the opposition. Local leaders, political groups or activists will extort money and political propaganda at your expense. As history shows, appeasement only encourages opposition. Also, by dealing with unofficial groups you will be operating outside of the rule of law. A Social License only provides a false sense of security to insecure corporations.