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Abstract

This article proposes a way to zoom in on the concept of the social license to operate (SLO) from the broader normative perspective of contractarianism. An SLO can be defined as a contractarian basis for the legitimacy of a company’s specific activity or project. “SLO”, as a fashionable expression, has its origins in business practice. From a normative viewpoint, the concept is closely related to social contract theory, and, as such, it has a political dimension. After outlining the contractarian normative background to the SLO, we will show how academic concepts such as legitimacy and stakeholder management have a tendency to provide the intellectual underpinning for the business case for securing an SLO. While business case perspectives on the SLO may well be in line with the use of the term in business practice, we will highlight certain difficulties and ambiguities related to the instrumental use of the expression. In the final section, we briefly introduce the articles of this Special Issue to the reader and explain how they relate to the topic.

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Notes

  1. “Probierstein der Rechtmäβigkeit eines jeden öffentlichen Gesetzes”; cf. “Allein dieser Vertrag […] ist keinesweges als ein Faktum vorauszusetzen nötig” (Kant 1793).

  2. Under conditions of globalization and the fragmentation of social and legal orders, Palazzo and Scherer, developing the notion of “moral legitimacy”, argue for a “radical” repositioning of legitimacy, proposing a discursive concept, under which companies not (only) engage with influential groups, but must actively justify their actions towards society as quasi political actors (cf. Palazzo and Scherer 2006). Our hunch is that this deliberative approach is much closer to Kantian contractarianism based on good reasons rather than a Hobbesian vision based on interests.

  3. Managing an SLO is therefore not necessary when and where an organization’s presence and activities are already taken for granted or not questioned at all, because they cannot even imagine an alternative (cf. Suchman 1995: 574, who speaks of “cognitive legitimacy” that is difficult to influence).

  4. According to mainstream stakeholder theory as it is defended by Freeman and others, stakeholder interests are taken into account instrumentally, i.e. with a view to maximizing the value of the firm (see for example Phillips et al. 2003: 479, 486 et seq. See also Jones 1995 for the notion of instrumental stakeholder theory).

  5. FPIC requirements have gained international attention through their inclusion in the United Nations Declaration on the Rights of Indigenous Peoples (see UN resolution 61/295 of 13 September 2007). The principle plays a role in the policies of international organizations (such as the UNDP, ILO or the World Bank and its International Finance Corporation) related to development or extraction projects and working conditions, and has been implemented in some national laws, either as a customary international law principle or explicitly in legal texts.

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Demuijnck, G., Fasterling, B. The Social License to Operate. J Bus Ethics 136, 675–685 (2016). https://doi.org/10.1007/s10551-015-2976-7

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