Consultation vs. Social Licence

Attribute	Consultation	Social Licence
Definition	Process of seeking input or feedback from stakeholders	Permission or acceptance granted by the community for a project or activity
Scope	Can be limited to specific topics or issues	Broader and more encompassing, involving overall acceptance and support
Goal	To gather input and feedback to inform decision-making	To gain social acceptance and approval for a project or activity
Process	Typically involves one-way communication from organization to stakeholders	Requires ongoing dialogue and engagement with stakeholders
Legal Requirement	May be required by law or regulations in some cases	Not a legal requirement, but increasingly seen as essential for project success

Definition

Consultation is the process of seeking input, feedback, or advice from stakeholders before making a decision. It involves engaging with individuals or groups who may be affected by a decision to gather their perspectives and incorporate them into the decision-making process. On the other hand, social licence refers to the acceptance or approval of a company's activities by the community in which it operates. It is not a legal requirement but rather a social contract based on trust, transparency, and mutual benefit.

Purpose

The purpose of consultation is to ensure that all relevant stakeholders have a voice in the decision-making process and that their concerns and interests are taken into account. It helps to identify potential issues, gather diverse perspectives, and build consensus around a decision. Social licence, on the other hand, is about building trust and credibility with the community. It is essential for companies to maintain their social licence to operate effectively and sustainably in the long term.

Scope

Consultation typically focuses on a specific decision or project and involves engaging with stakeholders who have a direct interest in the outcome. It can be a one-time process or ongoing, depending on the nature of the decision. Social licence, on the other hand, is broader in scope and encompasses the overall reputation and relationship of a company with the community. It is not limited to a specific project but applies to the company's operations as a whole.

Process

The process of consultation usually involves identifying stakeholders, communicating with them, gathering feedback, analyzing the input, and incorporating it into the decision-making process. It may involve public meetings, surveys, focus groups, or other forms of engagement. Social licence, on the other hand, is built over time through consistent communication, transparency, and engagement with the community. It requires companies to listen to concerns, address issues, and demonstrate their commitment to responsible business practices.

Legitimacy

Consultation is often seen as a legitimate and necessary part of the decision-making process, especially in situations where stakeholders may be directly impacted by a decision. It helps to ensure that decisions are well-informed, fair, and inclusive. Social licence, on the other hand, is based on the perception of legitimacy by the community. It is not a formal process but rather a reflection of the community's trust and confidence in the company.

Benefits

The benefits of consultation include improved decision-making, increased stakeholder buy-in, reduced conflict, and enhanced relationships with stakeholders. It can also help to identify opportunities for collaboration and innovation. Social licence, on the other hand, brings benefits such as enhanced reputation, increased community support, reduced regulatory risk, and improved access to resources. It can also lead to a competitive advantage in the marketplace.

Challenges

Consultation can be challenging due to issues such as stakeholder diversity, conflicting interests, power imbalances, and limited resources. It may also be time-consuming and require skilled facilitation to be effective. Social licence, on the other hand, can be challenging due to issues such as changing community expectations, competing interests, and the need for ongoing engagement. It requires companies to be responsive, transparent, and accountable to maintain their social licence.

Conclusion

In conclusion, consultation and social licence are both important concepts in stakeholder engagement and corporate responsibility. While consultation focuses on gathering input and feedback from stakeholders to inform decision-making, social licence is about building trust and credibility with the community. Both processes have their own unique attributes, benefits, and challenges, but ultimately, they are essential for companies to operate responsibly and sustainably in today's complex business environment.