In a recent analysis published by YaleGlobal Online, John Morrison argues that in the age of globalization, businesses now need “the consent of local people and not just a certificate from the town hall or central government” in order to set up operations. He rightly points out that consent by local populations is increasingly linked to the concept of “social license” – an acceptance by the impacted local communities of the business activities and a necessary requirement for firms to establish and sustain community support for their activities.
The concept of a “social license to operate” is not new, but it is one that is continuing to gain increased resonance as an essential management practice beyond the extractive and apparel industry sectors – traditional bases where corporate policies and management practices first shifted to adopt guidelines for local consent and community engagement. Today, corporate commitment to social licensing has expanded beyond its traditional base to new industry sectors ranging from solar power to mobile telephony to private security.
Take private security – a polarizing industry for many but one that is certainly here to stay. Traditionally, experienced international private security providers developed policies to ensure compliance with all provisions of local and national law (to include the company’s domicile state, the states from which it drew its employees, and the states in which it operated) but in the aftermath of the Afghanistan and Iraq-driven growth of the industry, a look back shows that operating within these legal parameters, while essential, was insufficient. A legal license does not equate to a social license and new guiding frameworks were codified to ensure respect for human rights and foster local community support.
These frameworks and guiding principles, most notably the recent International Code of Conduct for Private Security Providers (with 708 separate corporate signatories at last count), the UN Guiding Principles for Business and Human Rights, and the ANSI/ASIS PSC.1 2012 – Management System for Quality of Private Security Company Operations provide specific provisions for private security providers to “know and show” how their policies and practices respect human rights and provide remedies (such as local community grievance mechanisms) to foster engagement and trust with local communities to prevent and address issues when they occur.
While compliance with these new normative standards will not, in and of itself, achieve a social license to operate, non-adherence will certainly create a significant barrier for the private security provider and, by extension, its client, to obtain and maintain the consent and trust of the local population necessary to achieve a social license for the firm’s activities. Private security providers are businesses and have the same obligations to rights-holders as any other commercial activity. Forward-looking private security providers know this and are adapting their practices accordingly.