Financial Mechanisms to Encourage Social License to Operate

Challenge the practice is addressing: Tool 3.3 in MIREU Social License to Operate Toolbox gives European governments suggestions for how they can support companies in exploration as well as in Social License to Operate activities, such as consultation and community engagement, through financial incentives. The tool is based on financial incentive arrangements in place in Canada.

Concrete practice to achieve the expected goal: First, the practice introduces a few successful financial incentives implemented in Canada. The first one, "Flow Through shares", is an arrangement in which the junior mining company gains financing and the investor gains a tax benefit. The second one is basically a tax deduction arrangement: community engagement activities are counted as exploration expenditure and the investments made to build and strengthen Social License to Operate are therefore eligible expenses. The practice also has a section where the adaptability of such financial incentives to the European context is addressed. Finally, the practice presents a case study example from Canada and gives concrete suggestions on how European governments could incentivise exploration activities.

Expected impact/goal of the practice: The practice aims to give European policy makers good examples on how to financially support junior companies in their Social License to Operate activities.

Who is the target user group of the practice/intervention or implementing the practice/intervention? The target user group of the tool are governments in different EU member states.