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Plenary Session Identifies Transparency as Key to Social License to Operate

March 18, 2014

Transparency is important to maintaining the oil and gas industry’s license to operate, according to a panel of four on Tuesday at SPE’s 2014 International Conference on Health, Safety, and Environment.

More than 400 people turned out to hear “What Needs To Be Done To Maintain/Retain Our License to Operate,” the subject of the second plenary session at the conference in Long Beach, California.

“It is very important that the oil industry see itself as a force for good in society,” said Michael Engell-Jensen, executive director of the International Association of Oil and Gas Producers. “It is very, very important that we show that we wish to contribute to society positively. We do that by engaging in the public debate and addressing the concerns of the public.”

From left, Miriam Potter, Allen Leberg Jorgensen, Michael Engell-Jensen, Stephen Newton, and Jennifer Schneider discuss the oil and gas industry's social license to operate.

From left, Miriam Potter, Allen Leberg Jorgensen, Michael Engell-Jensen, Stephen Newton, and Jennifer Schneider discuss the oil and gas industry’s social license to operate.

Engell-Jensen went on to introduce what turned out to be the major theme of the discussion. “If I had only one word,” he said, “I  would say transparency. Transparency is where we need to get to, and that is a very, very difficult thing. But, we have to do it. We have to take the journey. Why? Because transparency is a prerequisite for trust. We are one of the most mistrusted industries … . It is up to us to change that.”

In addition to Engell-Jensen, the panel consisted of Miriam Potter with the nongovernmental organization (NGO) Robin des Bois; Stephen Newton, chief executive officer of Equitable Origin; and Allen Lerberg Jorgensen, department director for human rights and business at the Danish Institute for Human Rights. The session was moderated by Jennifer Schneider from the Colorado School of Mines.

Potter said that the industry’s reaction to accidents and pollution shapes the way it is perceived by the public. “Concerning accidents … upstream and downstream planning and transparency are key concepts. You must be the first to notice and react,” she said. “If the public reacts, if the public notices before you, if NGO’s notice before you, it’s not good.”

Potter continued by pointing out barriers she sees to a positive public perception of the oil and gas industry. “Your image is not just impacted by major pollution and major accidents … . Your image is polluted by small accidents as well and by people seeing pollution in their daily lives,” she said. “A cleaner image for the industry will only come if the industry itself is cleaner.”

Jorgensen said the social right to operate is entwined with human rights and equated the human rights challenges in the industry with the safety challenges the industry has been addressing for decades.

“In many ways, this is a journey of culture,” he said. “Most of your colleagues down to the lowest operators in your companies will notice a safety incident or a near miss if they see one. Will they know a human rights incident or a human rights near miss if they see one?”

All of the panelists agreed that educating the public about the oil and gas industry is a major step toward improving transparency and maintaining the social license to operate.

When asked if improving public education about the industry is the answer to the challenge of maintaining the social license to operate, Newton answered, “It can’t do any harm, that’s for sure. I think the more people know, the more they’re going to understand. They may never like the oil industry, but at least they will understand that’s how their cars run, that’s how their lights come on.”

“The bottom line is it is increasingly more important for trust between the public and oil and gas companies to be restored,” Newton said.