How do you build and keep a social license? What are the levers to be pulled in policy, regulation and procurement and what do you do when it all goes pear-shaped?
These questions and more were on the lips of a packed room of infrastructure professionals at this week’s IAQ event – $20B Reasons to Care About Social License.
Event moderator, Kirsty O’Connell, Industry Director for the Next Generation Engagement Program said:
‘This is such a timely discussion to be having as we near the mid-point of Australia’s unprecedented $100B infrastructure program.’
‘This is the time when we start to see some real challenges from impacted communities who are experiencing the effects of construction and it’s a time when social license is particularly easy to lose.
‘It’s just as things start to go wrong that we often see decision makers clamming up, thinking they will shut down the media cycle if they just stop engaging. Less information is released, approval processes and timelines for communications materials become longer and more difficult to navigate and when statements are made it tends to be around a tight set of key messages rather than providing a genuine response.
‘The other thing that often happens is that budgets are squeezed for governments and contractors. Community-focused initiatives and staff are often the first things to go. This can be disastrous for projects trying to build and maintain a social license.’
Panelists, Building Queensland CEO Damian Gould, Greater Sydney Commission Acting CEO Danielle Smalley, Cross River Rail GM Matthew Martyn-Jones, KPMG corporate affairs specialist Sarah Ramsay and Struber CEO Julie Castle offered keen insights for participants.
The group was in unanimous agreement that a social license, or the lack thereof, has a tangible impact on bottom line performance.
‘We’re seeing evidence of the value of social license and the cost of losing social license in so many forums,’ Ms O’Connell said.
Panellists emphasised that socio-political risk is a key issue for global infrastructure investors and that public policy backflips are a real deterrent to infrastructure investment IAQ’s Infrastructure Investor and Developer Survey, released at this week’s event, bears this out. Its findings reinforce that of other recent surveys, demanding attention to these issues.
Separately, the Global Infrastructure Hub recently revealed that social and environmental issues are at the heart of up to 40 percent of contractual disputes between infrastructure owners and contractors.
This fits with the results of Next Gen’s 2017 Infrastructure and Community Survey, which saw industry respondents rate stakeholder and community pressure as the most likely cause of project delay.
‘We estimate a total project value of more than $20B over the past decade alone of Australian infrastructure projects that have struggled to achieve or maintain a social license and which have been cancelled, significantly delayed or mothballed after completion.’
‘Social license is a key issue at every step of the infrastructure lifecycle and proponents are learning that the pain doesn’t necessarily end with construction.’