Study of Social License to Operate and IFC Performance Standards in Chilean Indigenous Context - Case Statkraft

Sebastian Arkimo

Student thesis: Master thesis

Abstract

This paper studies the concept of Social License to Operate (SLO) and its relation to International Finance Corporation’s Performance Standards (IFCPS) in the context of a conflict between Indigenous Mapuche communities in Southern Chile and the Norwegian hydropower company, Statkraft. The underlying question is, that despite being in compliance with IFCPS and having advanced internal Corporate Social Responsibility (CSR) policies, why has Statkraft failed to gain SLO from the Mapuche communities. The study’s findings suggest that following international standards far from guarantees gaining acceptance from Indigenous Mapuche communities, whose ways of viewing the world are vastly different from the corporate mind-set and of those promoted by the IFCPS. While standards are needed and can be used as useful guidelines, the companies attempting to gain SLO from Indigenous communities should learn to distance themselves from excessive reliance and word-to-word application of them. According to the findings, IFCPS risk legitimising existing power distances between Multinational Corporations and Indigenous stakeholders. The IFCPS themselves include numerous shortcomings from the choices of words to the solutions they promote. In order to establish more sustainable and mutually beneficial stakeholder relations, and to improve the chances in gaining SLO, the company should begin stakeholder engagement well in advance before concrete project implementation and must be able to better relate to the differing worldviews, such as spirituality and attachment to the land held by the Indigenous Mapuche people. The company should thus adjust business practices accordingly, as well as establish critical distance from application and interpretation of international standards.

EducationsMSc in Business, Language and Culture - Diversity and Change Management, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2017
Number of pages90