Whereas many years ago pipelines used to mainly be the concern of landowners, today pipelines have become the focus of strong environmental movements. At this time, more than ever before, the Canadian oil and gas sector has been under intense public scrutiny. As a result certain pipeline projects have now been required not only to obtain strict regulatory approval but also a "Social Licence" in order to proceed.
The issues surrounding this recent and highly contentious concept of "Social Licence" was highlighted by Mr. Rowland Harrison Q.C. in a lecture last week titled, "Social Licence to Operate: The Good, the Bad, and the Ominous." The University of Alberta, Faculty of Law, was honored to have Mr. Rowland Harrison Q.C share his expertise and knowledge on this topic. Mr. Harrison currently sits as the Chair for TransCanada in Administrative and Regulatory Law, and was a former member of the National Energy Board.
Mr. Harrison credits BC mining executive Jim Cooney, with creating the concept of social licence due to his concern that communities affected by developments would not be properly represented in developing countries facing government instability. Therefore, Mr. Cooney suggested that alongside legal regulation there should also be a more subtle approval process-, which he termed 'social licence.' This concept was ultimately expanded and adopted by public interest groups in Canada who demanded that society at large have a role in the decision-making process of a proposed project.
Mr. Harrison further explained that the concept of social licence, "has been embraced and endorsed by the energy regulatory scene with considerable pervasive impact, and that obtaining such a licence for an energy project is considered a necessity, even more so than formal regulatory approval." He went on to note, "that the concept has been extended to challenge the regulatory process itself and… this special license and its widespread adoption by industry has resulted in the concept being broadened as a right of society to veto an approved project." However, he further elucidated, that major ramifications permeate the idea that a social licence is as important, or more, than regulators approval.
The concept of "Social Licence" arguably undermines the rule of law and rejects the traditional legal processes in obtaining approval to proceed with a project. Mr. Harrison discussed that, "a social licence exists independently of the formal legal regulatory approval process, and it is a barrier to development, notwithstanding that formal regulatory approvals have been obtained." The term social licence has been embraced by industry leaving many projects and resources underdeveloped not for a lack of a legal license but a lack of a social licence. Mr. Harrison explained that the issue of the concept social licence is not in its rational but in its lack of a structured framework. There is no universal definition or clear understanding of what a social licence is, who grants it, who determines whether it is earned and what it is measured by. This begs the question, why should we resort to extra considerations when we have an identified legal framework that already exists?
Mr. Harrison answers this questions by stating that, "although a social licence may take into consideration the interests of all affected parties and communities [it is compounded by the fact] that it rejects the formal regulatory process by adding requirements for something that must be obtained through an unidentified process that exists outside the legal system." Mr. Harrison went on to state that, "the point is, that part of the formal regulatory process is to hear those whose interests may be affected by a proposed project and to consult with them..the board then considers this information as one of the factors in leading to a conclusion if the proposed project is in the public interest." Such a decision is made in a legal framework; enacted by legislation and applied by the courts- this is the essence of the rule of law. Mr. Harrison explains that, "social licence as it operates is without legislative authority, illegitimate, and not sufficiently well defined to meet the requirements of the rule of law, which is stable, clearly defined, and just…it rejects the regulatory process and therefore affects the degree of certainty in decision making"
However, Mr. Harrison notes, "given the phrase is widely applied through government and industry it would be unrealistic to suggest that the concept be rejected." Instead, Mr. Harrison suggests that, "we need to push back on the concept of social licence as an independent threshold to proceed with resource development." In order to do so he proposes that, "instead of the use of the word licence- which implies in its ordinary meaning the authority to do something, we should use the terms acceptance or support. Additionally, "government needs to see emaciation of this concept and show leadership in supporting legitimate outcomes of our current structured regulatory process; they should resist using a social license as a justification for rejecting lawful authorization. Lastly, although a tall order, the regulatory process itself should experience a reform, by broadening the process to address societies legitimate concerns." In the words of Mr. Harrison, "the regulatory system is under threat, if I had a solution I would propose it to you now, but the challenge is there, maybe the government needs to address this."