Social development will not deliver social licence to operate for the extractive sector

In the past decade the extractive sector has embraced social responsibility, and more recently extractive companies have extended this to include contributions to social development. A growing number of industry-sponsored, consultancy and academic publications describe how the sector can contribute to the economic and social development of host communities. However, despite its good intentions and frequent focus on confronting issues, the social development approach is fundamentally flawed. It frequently fails to communicate to intended audiences and it asks extractive companies to adopt policies, such as ‘contributing to reducing poverty’, which do not sit comfortably with the remit, capabilities and business imperatives of the extractive sector. This article argues that the approach encourages company priorities and behaviours which blur appropriate boundaries between firms, governments and communities; and may lead to unintended consequences which ultimately result in poorer community outcomes, and thence dilution of the ‘social licence’ eagerly sought. An argument is made for limiting social development ‘outreach’ and focusing more on ‘in-reach’, whereby extractive companies prioritise activities aimed at behavioural (and consequently, attitudinal) change across the whole of their organisation to secure trust and support from host communities.