Sustainable Development: Corporate Responsibility in the Niger Delta

1. Corporate Social and Environmental Responsibility of Multinational Oil Companies in the Niger Delta, Nigeria Dr Uwem E. Ite UK Coordinator, Lancaster (UK) – UNIUYO (Nigeria) Link Programme Department of Geography, Lancaster University, Lancaster LA1 4YB United Kingdom Tel: +44 1524 593301 (direct line); Fax: +44 1524 847099 Email: u.ite@lancs.ac.uk

2. Introduction • Variety of concepts and definitions corporate social responsibility (CSR), but no single, commonly accepted definition • Several terms are used interchangeably, including: • Corporate citizenship • Ethical corporation • Good corporate governance • Corporate philanthropy • Corporate social responsiveness

3. Definitions Of CSR • Operating a business in a manner that meets or exceeds the ethical, legal, commercial and public expectations that society has of business. (Business for Social Responsibility, 1998) • The commitment of business to contribute to sustainable economic development, working with employees, their families, the local community and society at large to improve their quality of life. (World Business Council for Sustainable Development, 2000)

4. Core Elements Of CSR • Rights: Human, Employee and Stakeholder • Environmental Protection • Community Involvement and Relations • Supplier Relations • Monitoring and Communication • Reporting/Disclosure/Transparency • Principles/Codes • Consumer Education/Product usages/Stewardship  • Corruption

5. Drivers Of CSR • Values • Business feel responsibility for wealth creation as well as social and environmental goods • Strategy • Social and environmental responsibility is important for strategic development of a company • Public Pressure • Consumers, media, the state, pressure groups expect companies to become more socially responsible

6. Major Debates on CSR • Proponents: Business has responsibilities beyond the production of goods, services and profit making • Socially responsible business can help to solve important social and environmental problems • Counterarguments: CSR distorts the market by deflecting business from its primary role of profit generation • Business has no social responsibility beyond compliance with the law

7. Purpose of the Presentation • To critically examine the roles of the private and public sector in the promotion of CSR • To determine the extent to which CSR is a myth or reality in Nigeria • To consider the wider implication for governance, environment and development

8. Nigeria: The Niger Delta States

9. Niger Delta: Oil And Gas Fields

10. Oil Business Environment: Issues For CSR • Political, including: • Revenue sharing and resource allocation • Government insensitivity/institutional issues • Socio-economic, including: • Good corporate governance • Unemployment • Environmental, including: • Environmental degradation • Performance and issue of double standards

11. CSR for Sustainable Development in the Niger Delta • Private Sector i.e. Oil Companies • Community Relations and not Public Relations • Sustainable Development Reporting, with reference to disclosure and transparency • 2. Public Sector i.e. Nigerian Government • Good Governance and Enabling Environment

12. Shell In The Niger Delta: Public Or Community Relations?

13. Towards Accountability, Communication and Openness: Sustainability Reporting • Evaluation of corporate performance in environmental, social and economic terms makes good business sense • Reporting helps to mitigate risk, protect corporate brand and secure a competition • Report should give a clear picture of corporate values, principles, governance, management practices and performance

14. Sustainability Reporting: An Overview • Public reports by companies to provide internal and external stakeholders with a picture of corporate position and activities on economic, environmental and social dimensions • There is as yet no standard approach to sustainable development reporting • The Global Reporting Initiative (GRI) = the first major global attempt towards a common platform

15. Global Reporting Initiative (GRI) • Global initiative to develop, promote, and disseminate a generally accepted framework for sustainability reporting – voluntary reporting of the economic, environmental and social performance of an organisation • Multi-stakeholder initiative incorporating the active participation of corporations, NGOs, governmental representatives, universities, consultancies, business associations, labour, investors, etc • Open to all individuals and organisations interested in sustainability reporting

17. GRI: The Journey So Far • 1997: Founded by the Coalition for Environmentally Responsible Economies (CERES) and the United Nations Environment Programme (UNEP) • 1999: First draft of Sustainability Reporting Guidelines released and pilot tested • 2000 and 2002: Revised versions of the Guidelines released after intensive feedback • 2002:Guidelines launched at the World Summit on Sustainable Development, Johannesburg, South Africa

18. GRI Sustainability Reporting Guidelines • Are not a code of conduct or a performance standard • Are a reporting framework, an instrument for measuring and reporting an organisation’s contribution to sustainable development • Used by 268 companies in 26 countries to shape their sustainability reports (as at June 2003) • Shell International has been involved in the development, piloting and using the Guidelines since its inception

19. GRI Will Help… • Business – uncover areas for improvement, bolsters stakeholder communications • NGOs and Labour – facilitate dialogue with business, provides comparable information • Investors – harmonise non-financial disclosure with financial reporting • Governments – complement regulations

20. Public Sector Roles in CSR: The Theory • Mandating: Definition of minimum standards embedded in legal framework • Facilitating: Incentives for businesses to engage in CSR agenda • Partnering: Acting as participants, convenors or facilitators • Endorsing: Direct recognition of efforts, award schemes, honourable mentions in Ministerial speeches

21. Public Sector Roles in CSR: The Reality in Nigeria • The ‘enabling environment’ for CSR in Nigeria is either lacking, yet to be developed or at best ineffective • Limited significant evidence of political support and public sector endorsement of CSR in Nigeria • Culture of blame and community protests • Weak regulatory institutions e.g. the Nigerian National Petroleum Corporation

22. Emerging Issues for the Niger Delta • Failure of the Nigerian state to provide and/or actively encourage social and economic development • Reliance by the Government and local communities on the multinational oil companies for development • Sustainability of Shell’s contribution to development is dependent on availability of enabling environment for CSR • Need for greater public sector involvement in the promotion of CSR in Nigeria

23. Wider Implications • The importance of national macro-economic planning and management, backed by equitable resource allocation cannot be over-emphasised • An effective enabling environment has significant implications for overall performance and sustainability of CSR efforts • Good governance in all its dimensions is essential to the promotion and success of CSR in developing countries

24. Conclusions • Corporate social responsibility: • Can reduce the adverse impacts of oil multinational corporations on local communities • Requires tri-sector partnerships and alliances (i.e. between multinationals, civil society and governments)