Is this a Real Choice? Critical Exploration of the Social License to Operate in the Oil Extraction Context of the Ecuadorian Amazon

Alberto Diantini, Salvatore Eugenio Pappalardo, Tim Edwards Powers, Daniele Codato, Giuseppe Della Fera, Marco Heredia-R, Francesco Facchinelli, Edoardo Crescini and Massimo De Marchi
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Alberto Diantini: Department of Civil, Environmental and Architectural Engineering, University of Padova, Via Marzolo, 35131 Padova, Italy
Salvatore Eugenio Pappalardo: Department of Civil, Environmental and Architectural Engineering, University of Padova, Via Marzolo, 35131 Padova, Italy
Tim Edwards Powers: Faculty of Education, Monash University, Melbourne 3800, Australia
Daniele Codato: Department of Civil, Environmental and Architectural Engineering, University of Padova, Via Marzolo, 35131 Padova, Italy
Giuseppe Della Fera: GIShub Association, 35138 Padova, Italy
Marco Heredia-R: Departamento de Ciencias de la Vida, Universidad Estatal Amazónica (UEA), Puyo 160101, Ecuador
Francesco Facchinelli: Interuniversity Department of Regional and Urban Studies and Planning (DIST), University of Turin, Viale Pier Andrea Mattioli, 10125 Torino, Italy
Edoardo Crescini: Interuniversity Department of Regional and Urban Studies and Planning (DIST), University of Turin, Viale Pier Andrea Mattioli, 10125 Torino, Italy
Massimo De Marchi: Department of Civil, Environmental and Architectural Engineering, University of Padova, Via Marzolo, 35131 Padova, Italy

Sustainability, 2020, vol. 12, issue 20, 1-24

Abstract: The purpose of this research was to critically analyze the social license to operate (SLO) for an oil company operating in Block 10, an oil concession located in the Ecuadorian Amazon. The specific study area is an important biodiversity hotspot, inhabited by indigenous villages. A mixed-methods approach was used to support a deeper understanding of SLO, grounded in participants’ direct experience. Semi-structured interviews (N = 53) were conducted with village leaders and members, indigenous associations, State institutions, and oil company staff, while household surveys were conducted with village residents (N = 346). The qualitative data informed a modified version of Moffat and Zhang’s SLO model, which was tested through structural equation modelling (SEM) analyses. Compared to the reference model, our findings revealed a more crucial role of procedural fairness in building community trust, as well as acceptance and approval of the company. Procedural fairness was found to be central in mediating the relationship between trust and the effects of essential services provided by the company (medical assistance, education, house availability) and sources of livelihoods (i.e., fishing, hunting, harvesting, cultivating, and waterway quality). The main results suggested that the concept of SLO may not appropriately apply without taking into account a community’s autonomy to decline company operation. To enhance procedural fairness and respect for the right of community self-determination, companies may need to consider the following: Establishing a meaningful and transparent dialogue with the local community; engaging the community in decision-making processes; enhancing fair distribution of project benefits; and properly addressing community concerns, even in the form of protests. The respect of the free prior informed consent procedure is also needed, through the collaboration of both the State and companies. The reduction of community dependence on companies (e.g., through the presence of developmental alternatives to oil extraction) is another important requirement to support an authentic SLO in the study area.

Keywords: social license to operate; trust; acceptance and approval; social performance; mixed methods; oil activities; procedural fairness; self-determination; corporate social responsibility; Ecuadorian Amazon (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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