The idea of a “social license to operate” is not a new concept. However, the focus was on establishing such a concept from the early stages of its development. What emerges now is the need to obtain and maintain a social license at the later stages of a project, during decommissioning and beyond. The full document highlights some of the challenges of maintaining a social license to operate during the decommissioning process.
Define the social license to operate
This term refers to the continued acceptance of a project, business or industry by its stakeholders. It is granted at the discretion of the stakeholders, depending on the perception of a project or an operation. Once acquired, it can be lost and therefore requires continued concentration to be maintained.
The backdrop for obtaining and maintaining a social license to operate is becoming increasingly complex. Much of this is the result of social media, which has provided stakeholders with a platform to share their concerns in new ways and with instant speed.
For the oil and gas industry, this means that what would historically have been a local problem can quickly turn into a global problem affecting a company’s reputation. The result is vigilance in all operations to protect a company’s positive public reputation. It also means that new projects, or the dismantling of existing operations, attract not only local but also global attention.
Effective planning of stakeholder engagement
Stakeholder engagement plays an essential role in obtaining and maintaining a social license to operate. Good engagement starts with structured planning. This provides a solid understanding of a project, an operation or the stakeholders themselves, including their likely interests, concerns and influence.
Mapping the stakeholders of a project or operation is the first step in the planning process. The mapping process should identify all stakeholders. This includes non-governmental and community organizations, regulators, neighboring communities and the media. Mapping makes it possible to identify not only the stakeholders of a project or an operation, but also the relationships that exist between the stakeholders. Understanding these relationships is critical as key influencers often exist within a stakeholder group. Focusing at least initially on these people generally helps to maximize the efficiency and effectiveness of engagement efforts.
The planning process can also help interpret stakeholder preferences regarding preferred communication channels. Understanding this will help tailor the engagement approach and increase the likelihood that the messages communicated will be heard. Social media should be an essential channel of communication. The full article provides details and ideas on using social media as an engagement mechanism.
It is important to note that not all stakeholders will need the same type or frequency of messages, information or engagement. With a good understanding of the stakeholders of a project or operation, the population can be stratified and the different stakeholders can receive the messages and information they need.
Early engagement in the decommissioning process
In an ideal scenario, engagement with decommissioning will begin during the early stages of a project or operational planning process (i.e. during project or operational design). By engaging early, the end state of the operation can be defined so that it can be reached later clearly. This proposed end state should be determined based on feedback from stakeholders, especially stakeholders and directly affected communities as well as regulators and government agencies.
Many opportunities exist to generate positive results during the decommissioning process. However, these opportunities must be identified at the earliest. For example, in order to reuse an old onshore treatment facility site, it is necessary to understand the level of effort (e.g. This effort must be integrated into the decommissioning approach and accepted by stakeholders, including regulators.
In a range of geographic areas, regulators conduct the review of potential effects associated with decommissioning as part of the initial project or operational approval process. This aspect is likely to continue to evolve, with more and more jurisdictions requiring consideration of decommissioning at the earliest stages of a project or operation. Many oil and gas operators have also incorporated the requirement to consider decommissioning as part of their decision-making at an early stage. This development began to influence the design of an operation to some extent. Despite these considerations at an early stage, the extent of planning varies. Often, stakeholder engagement focuses on the construction, commissioning and operation phases, rather than decommissioning.
Much of the planning at an early stage is for new projects or operations. However, for existing projects or operations, commitment to decommissioning often occurs at later stages. Historically, the reason for this delay has often been the timing of the decommissioning, which is generally expected to occur in the distant future. It is often assumed that the regulatory environment and local context will change prior to decommissioning, which means that the likely end effects and requirements will change. Thus, it is commonly accepted that detailed planning is not necessary.
Commitment during decommissioning to build a positive legacy
Stakeholders should be given the opportunity to actively participate in planning for decommissioning. This will achieve procedural fairness. This normally involves an ongoing dialogue with stakeholders, which is an iterative process. Having a representative body, such as a community reference group or community advisory committee, of stakeholders facilitated by the project or operation, has proven to be a useful tool in generating participation. This usually involves establishing a stakeholder group that meets at regular intervals during the planning process.
To realize the benefits of establishing and maintaining such a representative body, an ongoing commitment to engagement is necessary. This includes putting in place the right resources to ease the body and maintain momentum. While having a dedicated group is a useful mechanism, it should be complemented by other forums for engagement. The community at large must be given the opportunity to give its opinion.
Identification and management of impacts
As part of the engagement process, information should be made available regarding the potential effects and opportunities that will be created by the decommissioning process. Dismantling can lead to a series of changes. This includes a reduction in direct and indirect employment, as well as a reduction in taxes, rates and other sources of income, such as social investment. When a large land footprint exists, changes in the size of the population and the composition of neighboring communities may occur, as well as changes in sense of place, community identity and social cohesion.
However, the magnitude of this impact depends largely on the nature of the project or operation. Many of these identified effects are magnified in cases where a shore operation is adjacent to an offshore community or platform, or other infrastructure is adjacent to a commercial or subsistence fishing location.
Strategies should be put in place to help mitigate these effects to the extent possible. Examples of potential mitigation strategies include assisting with the relocation or retraining of workers. Often, the most effective management and mitigation strategies are selected together with stakeholders in a project or operation, including representatives of local communities as well as government agencies and regulators. This helps to build early buy-in and ongoing support during the implementation of these mitigation strategies.
Capitalize on opportunities
While many of the effects or impacts identified are likely to be negative, potential benefits may also exist. These include a reduction in noise and air emissions, which can be related to traffic movements or the operation of a factory on land. There may also be opportunities to reallocate infrastructure or rehabilitate land to support economic diversification.
Stakeholders often have innovative and creative ideas about identifying and capitalizing on the opportunities that exist. Their opinions often reflect what works best in the local context. This is a natural point for engaging stakeholders.
Although a growing body of literature focuses on opportunities for infrastructure reallocation, issues of liability (e.g., potential residual contamination) and land tenure (e.g., incompatible zoning) often exist and need to be addressed so that opportunities materialize.
It is also important to engage with the government. Official infrastructure will have a role to play in managing potential changes in jobs, income or population in a region. Providing a long lead time can help local government plan for the transition that accompanies the decommissioning of a project or operation.
Companies are increasingly looking for opportunities to differentiate or stand out. This can be done through innovation, societal contributions, third party assurance or certification, or alignment with international standards of good practice. Despite this, the industry is often judged by its lowest common denominator. In other words, the actions of one operator can affect, and increasingly do, other operators. It is important that individuals work to maintain the social license to operate their project or operation, but also that they work together to maintain the social license to operate the industry. It is at this point that industry organizations have the opportunity to bring the industry together and mobilize their collective response to stakeholder concerns and, in some cases, activism.
With well-planned engagement, a business can help build and maintain its social license to operate. However, this requires continued focus and a commitment to open and transparent engagement with stakeholders at every phase of the project life cycle, from exploration to decommissioning. Decommissioning offers a unique opportunity to help stakeholders plan for a future that they can influence and lead. When done well, this engagement planning provides an opportunity to build the organization’s legacy and contribute to its social license to operate.
This article, written by JPT Technology Editor Chris Carpenter, contains article highlights SPE 199203, “Stakeholder engagement in the decommissioning process”, for Sabrina Genter, Environmental Resources Management, prepared for the 2019 SPE Symposium: Decommissioning and Abandonment. The document has not been peer reviewed.