Title: Exploring the Origins of “Social License to Operate” in the Mining Sector: Perspectives from Governance and Sustainability Theories
Author/Institution: J. Prno & D.S. Slocombe, University of Waterloo
Publication Year: 2012
Why Social License Emerged Beyond Formal Regulation
Prno and Slocombe’s 2012 article provides a foundational explanation of how the concept of social license to operate (SLO) emerged as a response to declining public trust in both governments and corporations managing natural resource development. Situating SLO within governance and sustainability theory, the authors argue that formal regulatory approval is no longer sufficient to guarantee operational continuity, as communities and civil society increasingly function as influential actors in determining project legitimacy. Social license, in this
framework, is not a legal instrument but a dynamic social contract rooted in trust, transparency, and perceived fairness, reflecting the growing complexity of stakeholder expectations in the mining sector.
From Compliance to Governance Integration
The study conceptualizes SLO as embedded within evolving governance networks where authority is shared among state institutions, companies, local communities, and transnational actors. Rather than viewing stakeholder engagement as reputational management, Prno and Slocombe position it as a structural governance requirement. Projects operating in socially sensitive environments must demonstrate procedural justice, environmental responsibility, and meaningful participation mechanisms, as compliance alone cannot prevent conflict or disruption. This shift from regulatory adherence to governance integration helps explain why contemporary mining debates increasingly focus on community partnerships, concession transparency, and long-term institutional credibility.
Implications for Social License, Governance, and Stakeholder Prosperity
Prno and Slocombe’s framework remains directly relevant to current discussions on concession renewals, fiscal renegotiations, and formalization policies. The authors suggest that durable access to mineral resources depends on aligning legal authority with sustained social legitimacy, ensuring that economic benefits translate into visible community value. In today’s environment of geopolitical competition and rising stakeholder scrutiny, mining stability hinges on embedding legitimacy into project design, fiscal arrangements, and engagement systems. Their analysis anticipates the transition from a narrow “license to operate” toward broader stakeholder prosperity, where institutional trust becomes the central determinant of long-term sector resilience.