Corporate Social Responsibility of Multinational Oil Corporations to Host Communities in Niger Delta Nigeria

Article excerpt

The volatile nature of corporate-community relations, which has meant significant loss in oil revenue for government and decline in corporate profit for multinational oil corporations (MNCs), has elevated the obtaining of a 'social licence to operate' from the periphery to the heart of strategic business thinking within the Nigerian oil industry. As a result, multinational oil corporations (MNCs) have increasingly responded to this challenge by adopting partnership strategies as a means of contributing to community development, building a mutually beneficial relationship with local communities and reinventing themselves as a force for good in their host communities.

This paper critically examines different community development partnership (CDPs) initiatives' undertaken by Exxon Mobil and Elf oil Nigeria Limited within their corporate-community relations strategy in the Niger Delta, Nigeria. Given the huge environmental control costs and the profit-minded nature of Multinational oil corporations, industry self-regulation is unlikely to be effective where it conflicts with the primary objectives of multinationals. Thus, to turn multinational oil corporations into a more positive force for sustainable development, voluntary initiatives must, by virtual necessity, be combined with effective regulatory mechanisms. The paper concludes by exploring the implications for partnerships' initiatives and business-society relations in developing countries.

INTRODUCTION

The Niger Delta consists of nine states, which make up the south-south geopolitical zone of Nigeria. The region is predominantly inhabited by different ethnic groups such as Ijaw, Istekiri, Urhobo, Ibibio and Edo. It extends over an area of about 70,000 square kilometres, which amounts to about 7.5% of Nigeria's total landmass and the coastline extends for 560 km, roughly two-thirds of the entire coastline of Nigeria (Niger Delta Environmental Survey, 1997). The region has a population of 27 million people, of which 75% live in rural areas (NDES, 1997). Decades of political and economic marginalization resulted in the neglect of the region by successive Nigerian governments and the initial hesitation of Multi national corporations to provide their social responsibilities in the region. This systematically enshrined poverty in the region.

Poverty level in the Niger Delta is very high ( NDES, 1997 ), About 70% of the communities lack access to clean water, no passable roads nor electricity supply, shortage of medical facilities, a large number of dilapidated schools were obvious while the region suffers from severe environmental degradation due to oil production Zanduliet (2002). Yet, the Niger Delta accounts for about 90% of national crude oil exports and 70% of government total revenue. To a considerable extent, the geographical location of the Niger Delta region and its resources determined the traditional occupation of the people: fishing and farming. As a result of the long neglect of the region by the Federal Government of Nigeria and the nonchalant attitude of the companies operating in the area development in the area is very low Abdullahi (1994).

The discovery of oil in commercial quantity at Oloibiri, in the present Bayelsa State in 1956 started a process of unbridled exploitation of natural resources, destruction of community livelihood support systems and communal disempowerment which has left in its wake severe stress and underdevelopment both on the environment and livelihood patterns of the indigenous population Uttinng (2005 ) . The health and livelihood of the inhabitants of the Niger Delta has been visibly impaired by environmental degradation.

The extraction and production of oil and gas by multinational oil corporations in collaboration with the Nigerian government has engendered not just neglect but denied access of local communities to farmlands and fishing grounds as long stretches of thriving forest and arable lands are cut open to allow for laying of pipelines for transportation of crude oil from flow stations and rigs to export terminals, refineries and reservoirs. …