Social License to Operate in the Water Sector

Maintaining a Social License to Operate (SLO) is a concept that evolved where relationships with community groups and other stakeholders is critical for building trust and acceptance for ongoing operations. The mining sector comes to mind, but what about a social license for water use?

Recent Master of Integrated Water Management graduate Annelise Herman secured a placement with Seqwater to explore the relevance of the Social License to Operate (SLO) concept for the water sector. With Seqwater, Annelise looked at Minjerribah (North Stradbroke Island) as a case study, to explore the value of SLO as an approach for maintaining trust associated with management of a shared water resource.

Annelise’s research aimed to provide a water authority perspective on social licence to operate, given the complexity of balancing the different social, cultural, economic, and environmental values and interests of different stakeholders.

Case study context

Seqwater is the Queensland Government Bulk Water Supply Authority and is responsible both for planning for regional water security, and for maintaining safe water supply. In SEQ bulk water is managed through an interconnected grid which links dams, weirs, and water treatment plants through a network of pipes that enables drinking water to be transported around the region.

In 1996 the Queensland Government built a pipeline and supporting treatment plants to extract water from the regional aquifer and an associated surface water lagoon on Minjerribah. This water is supplied to the mainland with approximately 20ML of water per day as an integral component of the grid key source for the Southern Morton Bay Islands and Redlands City.

Since construction there has been varying levels of concern from community stakeholders. During the millennium drought in 2007, there was notably higher levels of concern from local community members about the amount of water being drawn from the aquifer and how environmental impact was being monitored and considered.

Furthermore, in 2011, the Federal Court of Australia recognised the existing rights and interests of the Quandamooka peoples, and through native title determination a set of exclusive and nonexclusive rights over land and waters was granted to the traditional owners on and surrounding Minjerribah.

Relevance of SLO to a water authority

Water authorities differ from typical SLO contexts in that they are often a monopoly providing an essential public service. It is, however, similar in extracting a natural resource which leads to the presence of risks around operations and the potential for conflicting local and regional interests.

For a water authority, such as Seqwater, operational context is typically complex, with the need to consider different social, cultural, economic, and environmental values and interests when planning operational strategies.

“Climate change, population growth and urbanisation are exacerbating this challenge and increasing pressure on finite water supply resources,” Annelise explains.

“On Minjerribah, for example, when considering risk of impact from extraction of water, there is a need to consider the cultural values and economic aspirations of the Quandamooka people alongside wider community concerns and regional water security interests. Through this research we explored how social license theory can be applied to unlock benefits and opportunities (i.e., acceptance and trust) from detailed consideration of an organisations capacity to adapt operations to meet social expectations.”

Given the evolving context on Minjerribah, the research findings indicated a strong relevance of the concept of social licence to operate (SLO) where and when acceptance and trust are considered import and there is a recognition that operation actions (e.g. extraction rates) can impact on local values, which in turn impact on acceptance and trust.

Capacity to adopt a SLO approach?

Under the second research question, Annelise adapted and tested a novel approach to assess organisational capacity to apply SLO in practice. This was achieved through the adaption and development of a Capacity Maturity Framework to support assessment of organisational capacity to implement SLO at corporate and case study levels (figure 1).

Figure 1: Adapted Organisational Capacity Maturity Framework for SLO. Framework has 8 attributes, and 24 assessment dimensions adapted from Bos & Brown (2014).

Informing actions aligned with SLO

The organisational Capacity Maturity Framework proved to be a meaningful approach to assess internal capacity (and gaps) and identification of actions that can support management and maintenance of SLO. The capacity analysis identified a number of key recommendations and lessons including that SLO requires:

  • Direction and alignment in strategy and plans towards a clear set of outcomes that consider stakeholder values;
  • An organisational culture that places emphasis on relationship and trust building;
  • Strong leadership and support vertically down through the organisation;
  • A systematic and cross organisational approach towards coordination of initiatives;
  • Clarity of roles for trust building horizontally across engagement, planning and operational teams.

Due consideration should also be given to understanding internal and external factors that can influence trust in the organisation. While relationship management is a fundamental component, management of SLO is not just up to the communications and engagement team. How operations function and or adapt to community sentiment is the foundation for trusting relationships. It was also noted how building trust in one area of operations can also help build trust in other areas.

“I think in the end each and every person working for Seqwater needs to be on board to build trust in the communities where they operate, because ultimately SLO is about building positive relationships,” Annelise concludes.

“This can be challenging given community heterogeneity, dynamic political drivers and the vagueness of when, if ever, SLO is achieved.”

Despite the challenges, findings indicated that SLO is a relevant concept for Seqwater and adds value to existing operational frameworks. The newly adapted Capacity Maturity Framework is a tool that can support benchmarking, reflection on organisational capacity, the attributes required to be adaptive and responsive to social expectations, and thereby contribute to good water governance.

Next steps

Annelise’s research has confirmed the relevance of SLO as an approach that can help water authorities consider issues that influence trust. The Capacity Maturity Framework provides a self-assessment tool for measuring key organisational capabilities related to SLO.

“Building and maintaining trust is integral to Seqwater and management and maintenance of SLO can help lower risk-perceptions and preserve continuity of its activities and economic interests while avoiding rejection of operations and reputational damage,” Annelise said.

While the research was able to highlight current strengths and areas for capacity improvements, this research was limited to an internal review only. That is, the research did not seek to validate what are the current priority values from a community or First Nations perspective. Consultation with the community and First Nations is required to understand the current social expectations, and to explore how understanding of community expectations can inform planning and management of a social license to operate for a given water source, such as the regional aquifer on Minjerribah.