Corporate Social Responsibility amongst oil companies in Nigeria

Corporate Social Responsibility amongst oil companies in Nigeria

Corporate Social Responsibility amongst oil companies in Nigeria

The oil industry is a vital factor of the nation’s economy and it has been a source of blessing to the nation and a curse to the host community where they operate because of the environmental impact and hazard the oil exploration has caused.

The oil companies have profit maximization as its primary motive while the host communities are increasingly looking at the companies to provide basic amenities, award educational scholarships, employ their community members and perform other functions that are incidental to the development of their community.

Apart from the economic life that is directly destroyed in the process of oil exploration, there is also the problem of oil spillage which has completely affected the host communities. As a result of the untold hardship being experienced by the host communities, there have been agitations, protests and demands from the oil companies to ameliorate their well being and in some instances, the relationship between the host communities and the oil companies are strained.

In some instances, members of the host communities resort to vandalization of properties belonging to the oil companies, kidnapping of their workers and other actions that affect the businesses of these companies. The question that crosses the mind is, how are the oil companies responding to the expectations of the communities in which they operate?

Multinational Corporations are now involved in plethora of CSR activities in the Niger Delta and other parts of Nigeria. CSR initiatives in Nigeria may include the building of hospitals, schools, markets and provision of pipe borne water amongst others.[1]

In Nigeria, academics such as Edoho,[2] Frynas[3], Tuodolo[4] and others have argued that the CSR process in Nigeria is not far reaching or deeply entrenched. Thus, it has been contended that some of these CSR initiatives are not carried out on a coherent basis and not always sustained.

Arguably, despite the adoption of various CSR mechanisms by oil companies in Nigeria, the oil-producing communities have received a proportionately low amount of benefit compared to the high social and environmental costs of extractive activities.[5]

Notwithstanding the minimal contributions of CSR to oil producing communities in the Niger Delta, many communities still suffer from various ills including gas flaring, oil spillage and violence amongst others.

On the other hand, Idemudia and Ite[6] and Eweje[7] support CSR initiatives, arguing that CSR is making tremendous progress in the area of local community initiatives in Nigeria. To further elucidate these assertions, Eweje illustrates that it is becoming increasingly apparent to oil companies that pollution prevention pays while pollution does not and under pressure from stakeholder groups, oil companies now routinely incorporate environmental impact assessments into their corporate strategy.

Factors that affect the CSR activities of oil MNCs in Nigeria may include the ideological and political system and the economic system of the oil MNC’s home state. Amaeshi and Amao[8] argued that in respect of codes of conduct of Nigeria, declarations by such firms are affected by the economic system in the home country of the MNC.

Thus, if the home country is a mixed economy, its codes of conduct operational in Nigeria will be influenced by its political or economic background. CSR in Nigeria is culture specific and affected by the local context. Thus, CSR in Nigeria is product of historical and cultural influence.

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As a furtherance of this, philanthropy is seen to be a cultural driver for CSR activities in Nigeria. Amaeshi[9] found out in their study of CSR in Nigeria that Nigerian companies practise philanthropy in the guise of CSR as a way of addressing the economic and development issues in Nigeria. Thus, the study confirmed that CSR is part of corporate culture in Nigeria.

Furthermore, the relationship between MOC and the host community can inhibit economic development in the developing countries, particularly, around the type of infrastructure required by the multinational companies.[10] Fynas opined that at times, corporate social initiatives have been used for public relations purposes, irrespective of their success in fostering the long term development of local community.

On the other hand, in extreme cases, oil companies have publicized projects which did not exist on the ground, or were only partially functional, a practice made easier in developing countries because of the difficulties of verifying all such claims.[11]

 

 

[1] K. Amaeshi, et al, Corporate social responsibility (CSR) in Nigeria: Western mimicry or indigenous practices? International Centre for Corporate Social Responsibility, Research Paper n.d,, pp. 1-44.)

[2] F.M. Edoho, Oil transnational corporations: Corporate social responsibility and environmental sustainability. Corporate Social Responsibility and Environmental Management 15(4), 210-222. DOI:10.1002/csr.143

[3] J. Frynas, Beyond Corporate Social Responsibility: Oil multinationals and social challenges. (Cambridge University Press, 2009)

[4] F. Tuodolo, Corporate social responsibility: Between civil society and oil industry in the developing world. ACME: An International E-Journal for Critical Geographies, vol. 8 (3), 2009, pp 530-541

[5] F Lisk, et al, Regulating extraction in the global South: Towards a framework for accountability. Background Research Paper submitted to the High Level Panel on the Post-2015 Development Agenda. Available online at http://www.post2015hlp.org/wp-content/uploads/2013/06/Lisk-Besada-Martin_Regulating-Extraction-in-the-Global-South-Towards-a-Framework-for-Accountability-_FINALFINAL.pdf

[6] U. Idemudia, & U. Ite, Corporate-community relations in Nigeria’s oil industry: Challenges and imperatives in Corporate Social Responsibility and Environmental Management, 13 (4), 2006 pp.194-206. DOI : 10.1002/csr.101

[7]G.  Eweje, Environmental costs and responsibilities resulting from oil exploitation in developing countries: The case of the Niger Delta of Nigeria. Journal of Business Ethics, vol. 69 (1), 2006, pp.27-56 DOI:10.1007/s10551-006-9067-8

[8] K. Amaeshi, & O. Amao, Corporate Social Responsibility in Transnational Spaces: Exploring influences of varieties of Capitalism on expressions of Corporate Codes of Conduct in Nigeria. Journal of Business Ethics, vol. 86 (2), 2009 pp. 225-239. DOI:10.1007/s10551-009-0192-z

[9] ibid

[10] K. Paul and R. Barbato, ‘The multinational corporation in the less developed country: The economic development model versus the North-South model’, Academy of Management Review, 10 (1), 1985, pp. 8-14

[11] ibid

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