Restoring public trust: from regulation to a social license

Past experience shows that the burdens and benefits of industrial projects are often shared unequally. By and large, communities located near polluting industries bear the environmental and social costs of operations without always seeing benefits such as employment or local infrastructure development. Public consultations serve as a credible mechanism to determine public interest and add legitimacy to a project, a principle recognized in laws governing the EIA and SIA (Social Impact Assessment) processes in the country. Consultation should not be reduced to a one-time exercise as part of the regulatory requirement but must become an ongoing exercise as part of a project's life-cycle to sustain support for the project. In addition, from the company’s perspective, it makes business sense to obtain a ‘social license to operate’, which implies a general acceptability of the project by local communities. This requires the company to build trust and gain the support of the community through measures such as increasing participation by the community, improving transparency and accountability in project operations, and contributing towards strengthening the local economy. There are several examples of companies in India that have done this.