Tuesday 25th October 2016

Resource Clips

Rebuilding consensus

A resource advocate calls for a “national conversation” to define social licence

by Greg Klein

The Fraser Institute released its latest annual mining survey February 24, ranking 122 jurisdictions globally and once again demonstrating that there’s much more to evaluating a region than geology. That reinforces a message that Brian Lee Crowley brought to Vancouver in a series of speeches last month—the real advantage of Canada’s resource riches “is not chiefly due to the resource endowment. What makes that endowment almost uniquely valuable in the world is that it exists within another vastly more important endowment of rules, institutions and behaviours.” But, he maintains, they’re threatened by activists who exploit a fuzzy concept called “social licence” to oppose all development.

A resource advocate calls for a “national conversation” to define social licence

The Fraser Institute study’s principal measurement, the Investment Attractiveness Index, considers both resources and public policy. In fact respondents said they base investment decisions roughly 60% on mineral potential and 40% on policy. Among policy considerations are taxation and royalty structures, legal and regulatory consistency and community involvement.

Crowley, managing director of the Macdonald-Laurier Institute in Ottawa, tells ResourceClips.com the 60/40 split “makes perfect sense to me that there would be something roughly like that breakdown between endowment and local conditions.” But he warns that the unexamined notion of social licence threatens to trump responsible development. He suggests Canada needs a “national conversation” to rebuild a consensus on what responsible development entails.

Social licence can be “either a synonym for cool, calm, intelligent risk and reputation management by government and industry or else a polite term for mob rule,” Crowley’s speech stated. As the term’s often used, however, it’s so vague that “we cannot know what the rules are, when you’re in compliance or when you’ve still got work to do. And hard-line project opponents like that vagueness just fine because it gives them unilateral authority to claim that the need for social licence has not been met.”

Crowley sees mob rule in the example of activists opposed to pipeline expansion in a Vancouver suburb, with “demonstrators throwing themselves under Kinder Morgan’s equipment and trying to blockade their access to Burnaby Mountain to carry out scientific testing required and authorized by the [National Energy Board].”

But it’s not enough to speak out against unfair tactics, Crowley insists. He calls for a “national conversation” in some way similar to the Macdonald Commission.

A resource advocate calls for a “national conversation” to define social licence

Brian Lee Crowley: Rules, institutions and
behaviour mean more than resources.
(Photo: Macdonald-Laurier Institute)

In 1985, after three years of hearings and research, Donald Macdonald released his report for the Royal Commission on the Economic Union and Development Prospects for Canada. Crowley tells ResourceClips.com the report “really built a consensus within Canada about free trade with the United States,” an idea he says this country’s political class strongly opposed. “It was only the result of that non-political national conversation which the Macdonald Commission unlocked that we were able to move national public opinion on that issue.”

Crowley wants a similar process “so we can have a conversation about how legitimate concerns can be addressed and what it means to have social licence … so we get people to buy into a national framework, a set of standards that we can all agree on.”

Then, he says, “the only question we would have to ask for individual projects is, ‘Does this project meet the standards that we all agreed to apply?’”

Of courses skeptics might respond that Canada’s too fragmented for such a consensus. Crowley doesn’t think so, although he says some opponents will remain implacable. “I’m trying to isolate the people for whom there is no standard that could possibly justify resource development,” he explains. “They’re just against it in principle. I don’t think that’s the position of the vast majority of Canadians, who wonder what opportunities are available, what jobs are going to be available for their kids. They’re willing to have a conversation about natural resource development and they want to see things done to a standard that Canadians can be proud of…. If the majority signs on, it doesn’t matter if there’s a disaffected minority.”

Crowley doesn’t dissect the demographics of disaffection. Media coverage of Burnaby’s Kinder Morgan demonstrations suggested participation by a mixed group of suburbanites and veteran activists. But across Canada, the most powerful potential opponents are aboriginal. Some mining companies at last month’s Roundup 2015 discussed ways to avoid possible conflict by involving natives in development. Their efforts might be called a learning process that’s showing some success.

A darker view came from this month’s Northern Prospectors Association AGM in Kirkland Lake. NPA president Gino Chitaroni spoke of “first nation empowerment at the expense of the mining and exploration industry which if unabated … [might] spill off to other business sectors, private landholders, farmers and even municipalities,” according to a report in Ontario’s Northern News. “This is a massive sleeper problem that nobody wants to talk about in the press because those who do may be targeted for reprisals and branded bigots and racists.”

Chitaroni added, “We now have a system of separate permits fees, extortion and kickbacks, and double-dealing under the table being forced onto prospectors, juniors, miners, contractors and suppliers if they want to do business on Crown land and/or with operating mines within certain first nation territories.”

That might help explain Ontario’s performance in the Fraser Institute’s Investment Attractiveness Index, where the province dropped from 14th place in 2013 to 23rd last year. Ontario wasn’t alone in its slide. British Columbia fell to 28th from a 16th-place finish the previous year. Alberta dropped to 22nd from 10th.

But five Canadian jurisdictions made the IAI’s global top 10, compared to four in 2013. Saskatchewan climbed from seventh to second place internationally. And Quebec moved from 18th to sixth place, regaining much of its past glory as a mining jurisdiction.

Download the Fraser Institute Survey of Mining Companies 2014.

Download Brian Lee Crowley’s Who Licenses the Licensors?

Read Canada and the mining world: Resources and expertise keep this country at the forefront, but challenges remain.

Comments are closed.

Share | rss feed

View All: Feature Articles