Social licence for a sustainable waste future

Authors: Lauren Harding, Lauren Xuereb

At a glance

One of the biggest challenges facing the Energy from Waste (EfW) industry is a lack of community understanding and acceptance. A practical way for the industry to drive awareness and assist in planning approvals is to strategically consider how to build its Social Licence to Operate (SLO).
One of the biggest challenges facing the Energy from Waste industry is a lack of community understanding and acceptance. A practical way for the industry to drive awareness and assist in planning approvals is to strategically consider how to build its Social Licence to Operate.

Often the criticality of a development doesn’t dawn on a community until it lands on their doorstep – bins stop being collected, toilets stop flushing or people have to get to work in a different way than they’re used to. New South Wales is headed towards a critical moment in how it manages waste, however, this is not widely understood by many communities.

NSW Government figures show that if we continue recycling at our current rate and fail to implement the Waste and Sustainable Materials Strategy, which includes developing Energy from Waste (EfW) facilities, we will run out of landfill space before the end of the decade. While there have been several EfW projects proposed in NSW in the past five years, one has been refused, a number have been withdrawn (due to policy changes) and a couple still await a determination decision.

One of the biggest obstacles facing EfW is lack of community understanding and acceptance – due mainly to a fear around the technology and the perceived health and safety impacts, coupled with a ‘not-in-my-backyard’ mindset. A practical way for the EfW industry to build community acceptance and assist in the planning approvals process is by strategically considering how to build its Social Licence to Operate (SLO), not only at an individual project and company level, but also at an industry-wide level.

How trust underpins social licence to operate

SLO gained traction in the global mining and extractive industry in the 1990s in response to public pressure for the industry to increase its social accountability. SLO is commonly understood as the ongoing acceptability of a project by local community members and other stakeholders.

There is a growing body of literature about what constitutes a social licence and how to establish and maintain one. While it is intangible and hard to measure, it has a strong element of accountability and is based on mutually beneficial relationships between companies and stakeholders.

The underpinning principle to these relationships is trust, which is built through:

  • Meaningful and quality engagement with communities
  • Understanding and managing a company’s impacts on communities
  • Involving communities in decision-making
  • Creating local benefits
  • Creating a lasting positive legacy.

For any company that is truly committed to building and maintaining trust with communities, the question to be asking is not ‘how will local communities and stakeholders impact our business’, but rather ‘how will our operations impact people and our stakeholders?’.

Answering this question is not a straightforward exercise and calls for genuine research and engagement to truly understand the communities in which you seek to operate, what is important to them, and their needs and aspirations. So, how does the EfW industry build its SLO?

Considerations during the project design phase

The NSW State Significant planning system supports the research and analysis required to build a proponent’s SLO to some degree. In NSW, EfW facilities are currently classified as State Significant Developments, which means they require assessment and determination by the NSW Government. As part of the assessment process, comprehensive stakeholder and community engagement as well as a Social Impact Assessment (SIA) must be carried out.

These assessments provide proponents with a structured, evidence-driven approach to understand and map out their responsibilities and actions for managing the social impacts resulting from their operations. They also provide a vehicle for building a company’s relationship with communities, as consultation with potentially affected communities is a core element of the SIA process.

Important considerations for EfW proponents are how to involve communities and stakeholders in their decision-making, and how to engage with all affected communities and stakeholders to gain a balanced view of community concerns - not just those with the loudest voices who are often the most opposed to a project. However, even with a strong and robust community and stakeholder engagement strategy, the rise of social media, coupled with negative publicity about a project, can lead to fear and distrust spreading quickly. This can sometimes lead to full community opposition for a project.

Sharing the economic benefits of a project with the community, in a way that they perceive to be equitable, is known as economic legitimacy and can also go a long way to achieving fairness. This involves directly impacted community members sharing in the economic benefits of a project they are hosting. This isn’t a new concept and has succeeded for many years in many industries, including waste. The establishment of a community fund and issuing grants for community use is a common mechanism employed by proponents to distribute benefits.

Resettlement funds and provision of training or capacity development programs are also common. The Dublin Waste to Energy Community Gain Fund includes a one-off three per cent financial contribution based on the capital cost of their facility, and annual contributions per tonne of waste accepted for thermal treatment at the plant. The fund provides financial support to community initiatives by way of empowering activities based in education, environmental stewardship, recreation, and community building.

In the eyes of a host community, achieving economic legitimacy is the first requirement to obtaining a basic level of SLO. Importantly, benefit sharing mechanisms need to be community led. It’s critical to understand the key drivers and needs for that community, what is the best mechanism to share the benefits, and who are the right people to get involved. The best way to achieve this is through strong social research and community engagement to understand the community in which you are operating, their needs and strengths, and how your operation fits within that context.

Learnings for the Energy from Waste industry

The development of EfW will continue to be a challenge if the responsibility to educate the community about the safety and environmental performance of EfW technology is left to individual proponents on a project-by-project basis.

It should be a coordinated effort between various stakeholders, such as industry bodies and relevant government agencies, to drive awareness about when infrastructure is due for renewal or when new facilities are needed to complement the existing capacity and capability. Whatever the infrastructure, it is a shared responsibility between industry, government and environmental groups to provide accurate, scientific and factual information to communities so that they are better informed ahead of future development proposals. Timing is key. Community awareness and early engagement is important to pave the way for EfW projects in the future.

The effective management of waste in NSW, and indeed Australia, is a matter of national interest and is important for intergenerational equity. It’s the collective responsibility of government, industry and communities to recognise this and work together. Encouraging greater dialogue and fostering trust in the industry will help individual companies focus on establishing their own social licence with the communities in which they operate.