THESIS DEFENSE

Social Licence to Operate:

assessing Eni's legitimacy, credibility and trust in the Val d'Agri concession

Candidate: Sofia Tagliavini

Supervisor: Prof. Alberto Diantini

Batch 11 - Academic Year 2022-2023

Study Area

Basilicata, a small southern Italian region, has become a strategic hotspot in European and Italian development. Responsible for the production of 82.11% of Italy's crude oil for the year 2022, Basilicata is home to the biggest onshore oilfield in Italy and continental Europe, the Val d’Agri concession, located in an area of great socio-environmental relevance.

Lucanian extractive landscape

Stakeholders

encompassing differt actors such as Legambiente, COVA Contro, Libera etc.

energy company operating in hydrocarbon extraction sector

Eni S.p.A

Associations

Val d'Agri Environmental Observatory and Regional Agency for Environmental Protection

Environemtal & territorial actors

Local Administation

Basilicata region, Potenza province and municipalities

Val d'Agri Residents

Theoretical Framework

Environmental Conflict

SLO

Social Licence to Operate can be difined as the ongoing acceptance and approval of a development by local community members and other stakeholders that can affect its profitability (Thomson & Boutilier, 2011)

from the perspective of political ecology, conflicts are identifiable by the presence of unequal power relations in a resource economy in which conflict emerges as violence in the broadest sense, in its physical, structural, and symbolic forms (Perreault et al., 2015).

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Research aims

Understand if Social License to Operate could be considered a meaningful and useful conceptual tool to analyse conflict

Aim 3

Political Ecology

Aim 2

Considering the study context, define the specificities of these underlying concepts

SLO underlying concepts

Aim 1

Determine wheather SLO underlying concepts of legitimacy, credibility, and trust could be easily applied in the specific case of Val d’Agri concessions

SLO underlying concepts

Methodology

Grounded Theory

Snowball Sampling

Semi- structured interviews

Qualitative approach

Inductive approach

Comparison of materials resulting in the articulation of three steps: open, axial and selective coding

Generating new theories or hypotheses based on empirical observations

Methodological orientation based on collection of data through a bottom-up and close-up process

Reduced in size sample to prioritize in-depth exploration of perceptions and opinions

A total of fourteen interviews were conducted through the use of thematic guidelines

February

Preparatory Phase 1

Fieldwork

February 15th - 18th

Fieldwork mission 1

The empirical material produced consists of:

• a field notebook with notes from ethnographic observation and interviews
• 12 interview recordings later transcribed.

April-June

Preparatory Phase 2

June 5th - 12th

Fieldwork mission 2

June-July

Data Processing Phase

Findings

Community relationships

Socio-economic aspects

Royalties and services

Transparency

Distribution of benefits

Monitoring

Employement & depopulation

Environmental & health conditions

Participation

Discussion

Legitimacy

Credibility

Trust

Conflict

• Eni statements towards the process of trust-gaining
• No sense of co- ownership or psychological identification
• separate identities: us vs them

• Evidence of provision of services and economic inputs
• feeling of mismanagement and lack of long-term socio-economic planning
• Shared responsabilities

• identification of latent forms of conflicts
• divergences and mismatches of interests
• parties perceive that their interests are being opposed or negatively affected by anothers

• Perceptions differ from company’s declarations
• Deficiencies in stakeholders engagement
• Doubts related to monitoring process
• Shaken credibility due to trails

Even with some criticism, sufficient socio-political legitimacy

Believability is minimal: what the company says was not fully matching with participants' perceptions

Efforts to gain trust are being made, still, Eni seems to have achieved a low level of trust

Conflict factors emerged from the use of legitimacy, credibility, and trust as interpretative lenses

Conclusions

Underlying concepts had their own, context sensible specificities: - Legitimacy was established - Trust and credibility were not fully achieved Eni obtained acceptance but could not be regarded as having either approval or psychological identification from all stakeholders

SLO concept emerged to be useful, and its elements of legitimacy, credibility and trust were easily applied to the Val d’Agri helping recognize the context-related dynamics.

The findings suggest the use of SLO may contribute to the identification of factors of conflict.

+ Developments

+ Limitations

Bibliographic References

Jijelava, D., & Vanclay, F. (2017). Legitimacy, credibility, and trust as the key components of a social licence to operate: An analysis of BP’s projects in Georgia. Journal of Cleaner Production, 140, 1077–1086. Doi: https://doi.org/10.1016/j.jclepro.2016.10.070

Moffat, K., & Zhang, A. (2014). The paths to social licence to operate: An integrative model explaining community acceptance of mining. Resources Policy, 39(1), 61–70. Doi: https://doi.org/10.1016/j.resourpol.2013.11.003

Perreault, Tom, Bridge, Gavin, McCarthy, & James. (2015). The Routledge Handbook of Political ecology (1st ed.). London; Routledge.

Prenzel, P. V., & Vanclay, F. (2014). How social impact assessment can contribute to conflict management. Environmental Impact Assessment Review, 45, 30–37. Doi: https://doi.org/10.1016/j.eiar.2013.11.003

Thomson, I., & Boutilier, R. (2011). The social license to operate. In P. Darling (Ed.), SME Mining Engineering Handbook, pp. 1779–1796. Society for Mining Metallurgy and Exploration.

Thomson, I., & Joyce, S. (2008). The social licence to operate: What it is and why does it seem so difficult to obtain? In Prospectors and Developers Association of Canada Convention, Toronto, Ontario, Canada.

Thank You

Conflicts are identifiable by the presence of unequal power relations in a resource economy in which conflict emerges as violence in the broadest sense, in its physical, structural, and symbolic forms (Perreault et al., 2015)

Credibility is the quality of being believed, the capacity to elicit belief (Thomson & Joyce, 2008)

COVA processing center and nearby Viggiano city seen from COVA's main entrance

Distribution of Benefits

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Royalties & Services

High levels of trust are revealed when project proponents and local communities’ interests are aligned. SLO trust, as a form of strong credibility, is built over mutually respectful dialogue as an interactional trust (Thomson & Boutilier, 2011)

Reinjection well Costa Molina 2, Montemurro (Pz)

Limitations

Research

The research had limits related to time and academic restrints; further and in-depth analysis should be carried forward in order to provide an extensive analysis stakeholders’ perception.

SLO concept

Social Licence to Operate should not be understood as unitary: communities are never homogenous and consequently, multiple SLOs will always be required. The conclusions drawn from the applicability of SLO are related to a specific SLO that may and must probably vary over time and community.

Social Licence to Operate pyramidal continuum

Employement and depopulation

Transparency

COVA processing center and Viggiano seen from Grumento Nova (Pz)

Socio-political legitimacy, on the other hand, is the step necessary to provide acceptance of the project by the community in the SLO model pyramid and boils down to provision and fairness, of distribution and process (Jijelava & Vanclay, 2017)

Developments

Solve SLO issues, assess problems & strenghten policies

It could be innovative the recruitment and engagement of consulting companies for SLO assessment that could help with:

• developing functional services for policy design, implementation and monitoring
• incentivising a market for consultancy for social responsibility, justice, reduction and prevention of conflicts
• creating external body fro SLO assessment (external to companies and communities) to elude SLO biases.

Well area MONTE ENOC 4, Viggiano (Pz)

Environmental and health conditions

Monitoring

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Participation

The opinions expressed regarding community participation ranged from the total absence of discussions with citizenship, which "was not asked to participate" (Sara, lawyer), to the existence of attempts by Eni, the institutions, and citizens to establish dialogues during the years of activity. The cases were hard to verify.