Applying for a licence

What does the social licence to operate mean to you?

Aligning corporate culture with business leads to an authentic stakeholder engagement that creates value and secures social legitimacy. But how can communications be part of this process? We asked leading communicators in Asia Pacific for their take on the relationship between business and society.

Given the essential nature of food produce, controversies surrounding quality and price can be especially damaging to public perceptions of legitimacy for food and beverage companies. However, as Jonathan Dong, head of corporate affairs at Nestlé Greater China Region explains, a focus on organisational transparency draws the expectations of stakeholders and companies closer together.

How do controversies such as the recent coverage of “Nestlé’s baby formula price hike” impact your mission to obtain the licence to operate?

Conversely, issues like this offer an opportunity for open and constructive engagement, often with positive results. As long as we remain transparent when managing these issues, stakeholders and consumers will quickly come to their conclusion about whether these are the result of misperception or an honest mistake. For example, despite various issues, Nestlé has gained on approval rankings by organisations such as Oxfam over the past few years.

What are the biggest risks to Nestlé’s licence to operate?

Lack of understanding is the biggest risk, thus why we focus on open and transparent engagement. As you may be aware, since 2013 Nestlé has been publishing a list of commitments with a clearly defined timeline in our annual Nestlé in Society report. Such transparency has proved to be very useful in enhancing mutual understanding between Nestlé and various stakeholders.

“We seek to create mutual understanding and establish a common agenda for the benefit of both the company and society.”

What communication strategies do you have in place to help secure the licence to operate?

Through open and transparent engagement with all stakeholders, we seek to create mutual understanding and establish a common agenda for the benefit of both the company and society. We look to understand high impact areas, embrace open and constructive engagement and communicate in a transparent manner. Knowing the high impact areas is essential. This has allowed us to design outreach programmes accordingly. The above-mentioned commitments provide the framework for such programmes.

This focus on transparency is not unique to Nestlé. Another communicator operating in the Chinese region, Grace Li, director of communication with Evonik Greater China Region, suggests that a cooperative approach to communications with the company’s wide range of stakeholders has helped substantiatethe benefits of its operations.

How do organisational communications help secure validity for Evonik’s operations?

Evonik is committed to being a reliable partner that does what we have promised to others. That’s why it’s important for us to communicate the main outlines of our entrepreneurial ideas and actions openly and clearly to our key stakeholders, including our employees, the community, our customers, suppliers and partners. It is also important to listen and understand the expectations from our stakeholders, and to respond to them in a timely and professional manner.

Evonik have announced plans to build a specialty silicones plant in China. How has the company obtained the social legitimacy necessary to construct in this highly-regulated environment?

In March 2016, Evonik broke ground for the construction of a production facility for organically modified specialty silicones in the Shanghai Chemical Industry Park (SCIP). The project is part of a global investment initiative and will serve customers in Asia after completion in mid-2017. Specialty silicones offer a wide range of applications for numerous industries and markets for specialty silicones in China and Asia have grown substantially over the past years. The specialty silicones plant is being built in Evonik’s multi-user-site-China (MUSC) in SCIP. With accumulated investment of over €600 million, the MUSC is Evonik’s largest production base in China. Operated according to Evonik’s global environmental, safety and health standards, MUSC ensures that all businesses of Evonik in China benefit from the leading technology, equipment and joint infrastructure facilities on MUSC. For example, the shared infrastructures and services lead to higher yield and less energy consumption; waste water is collected with advanced system and by-products are recycled within the plant.

Which risks do Evonik encounter in China relating to its social licence to operate?

In China the public perception of the chemical industry is not always positive. This is partly due to the historical development of the industry in China. More and more companies in China have adopted the global Responsible Care (RC) standards governing environmental, health and safety operations, along with stepping up communication with the public. Evonik is committed to the RC global charter and an active RC practitioner in China.

How do you promote Responsible Care?

We promote Responsible Care through the joint efforts with the industry associations. Evonik has defined clear roadmap to implement RC and live it through various programmes, including the establishment of internal evaluation standards, a self-assessment programme in all the sites of Greater China region, the Open to Public Days and other events. We also put emphasis on how chemical products contribute to better lives and sustainability in our communication to the general public. Last year Evonik China launched an online branding campaign that explains our products and solutions through social media.

Like chemical companies in China, the mining industry in Australia has faced a declining approval in public perception in recent years. Jonathan Hawkes, director of public affairs at Minerals Council of Australia (MCA) works to secure the licence to operate to protect an entire industry’s reputation.

How does the resource sector receive the mandate to work in environmentally-fragile areas?

The approval process for new projects varies state by state and project by project. Significant research and work goes into meeting all social and legislative requirements. It is a pre-requisite before any activity takes place. Of critical importance is that mining proposals are assessed on the merit and not simply excluded from certain areas. There should be no automatic presumption of incompatibility. Instead, we support the use of sound scientific approaches and a strong ethos of risk management, in line with leading environmental management approaches.

“A track record of sound environmental management is important to achieve both the companies’ regulatory and social licence.”

Does this work for all operators?

Not all operators are the same and, in Australia, a track record of sound environmental management is important to achieve both the companies’ regulatory and social licences. Government takes past performance into account and companies with a poor track record may not be allowed to proceed. The MCA works to ensure that governments take a science-based approach to the assessment of potential impacts. To support this, the MCA produces communications material which demonstrates the industry’s environmental performance. Case studies are critical to this.

How does MCA work with its members on the communications front?

The industry is proactive in its approach to responsible operation. All MCA member companies are, as a condition of membership, required to commit to the Enduring Value: the Australian Minerals Industry Framework for Sustainable Development. The framework is an implementation guide based on the 10 ICMM sustainable development principles. Enduring Value has been recognised as a leading initiative which demonstrates the industry’s commitment to operating responsibly and is a cornerstone of MCA advocacy efforts.

What other communications approaches do you take?

The MCA run a proactive and positive communications and advocacy programme where we produce frequent publications that highlight different aspects of the industry including many of the untold stories that people may not be aware of. The MCA provides information to elected federal representatives through regular briefings and attendances at industry discussions. We regularly run mine site visits for federal members and senators to different mines across Australia that covers the main commodities. We have a strong online presence via our website and main social media platforms where we highlight the economic contribution of the industry to the nation’s economy, the work the industry does at a local community level and the investment it makes in local environmental improvements.

Just as the MCA works to counter negative public perceptions, agricultural technology provider Monsanto must rebuild a reputation that has been plagued by various forms of criticism. Adam Blight, director corporate & government affairs with Monsanto Southeast Asia, Pakistan, Australia & New Zealand says the company is taking this on board and working towards aligning with societal expectations.

As a company that has attracted scrutiny from the public, what is the role of communications in promoting legitimacy for Monsanto’s operations?  

We acknowledge that the company has struggled to bring the community along with us in regards to our technology such as GM crops. But that does not need to define us into the future, nor is it an excuse to accept the status quo and not make an effort to better engage society. A good starting point is to take a fresh look at what society expects from its leaders and organisations. What I believe we are seeing is society now expecting to understand not just what we do but why we do it. To do this effectively we must first explain who we are and what we stand for and then back these claims up with our actions over the long term. Indeed, establishing authenticity and trust is impossible without it. When this approach is packaged up and delivered through humble, honest and optimistic language that people can relate to, a connection between an organisation and the community starts to emerge.

“A good starting point is to take a fresh look at what society expects from its leaders and organisations."

How does Monsanto secure the mandate for its operations in Asia Pacific?

Our mandate to operate in the Asia Pacific ultimately relies upon the demand for our technology and products by our farmer customers. If farmers do not see the value in our technology to help them produce more using less resources and improve their own livelihoods, our mandate would simply vanish. Establishing and maintaining our mandate also involves clearly articulating to decision makers and the community the specific challenge we are trying to overcome: producing more food for a rapidly growing population without ruining our environment. If the challenge is more or less understood, then there is a better chance that our ideas and solutions will be accepted, or at least not completely misunderstood, and that is a prerequisite for doing business today.

How does Monsanto seek to mitigate the risks that most harm your efforts to maintain a social licence to operate?

The modern public affairs landscape can be hostile terrain to navigate with issues igniting at rapid speeds. Extreme or ill-informed views can take hold quickly and undermine public confidence in the safety or effectiveness of our technology and activist groups are becoming more sophisticated in their ability to engineer this. Being able to respond effectively to these issues on the day is one thing, but proactively engaging the community and key stakeholders ahead of an issue breaking is how you build trust and mitigate risks to social licence. It is also how you give yourself the time to explain complex topics away from the distortions of an unfolding issue. •

All those interviewed have participated in the activities of the Asia-Pacific Association of Communication Directors (APACD), the partner association of Communication Director. APACD is a knowledge exchange network for in-house communicators that aims to drive professionalisation in the region. Find out more at

Jan Wisniewski

Jan Wisniewski is an editor at Communication Director, under his role as an editorial and content manager at Quadriga Media. He works to ensure the Communication Director community has access to genuine insights into the world of corporate communications. He held previous assistant editorial roles at The Conversation Media Group and Street Press Australia.