AN EVALUATION OF THE CORPORATE SOCIAL

ELOKE JULIUS IKENNA

TITLE PAGE

IKIRIKO, STELLA

PG/MA/10/57777

AN EVALUATION OF THE CORPORATE SOCIAL

RESPONSIBILITY PRACTICE IN SHELL

MASS COMMUNICATION

ARTS

ELOKE JULIUS IKENNA

Digitally Signed by: Content manager’sDN : CN = Webmaster’s nameO= University of NigeriOU = Innovation Centre

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AN EVALUATION OF THE CORPORATE SOCIAL

RESPONSIBILITY PRACTICE IN SHELL

CATION

: Content manager’s Name Webmaster’s name

O= University of Nigeria, Nsukka OU = Innovation Centre

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AN EVALUATION OF THE CORPORATE SOCIAL RESPONSIBILITY

PRACTICE IN SHELL PETROLEUM DEVELOPMENT COMPANY

(SPDC) IN RIVERS STATE

BY

IKIRIKO, STELLA

PG/MA/10/57777

BEING A RESEARCH PROJECT SUBMITTED IN PARTIAL

FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF

MASTER OF ARTS DEGREE OF THE DEPARTMENT OF MASS

COMMUNICATION, UNIVERSITY OF NIGERIA, NSUKKA.

OCTOBER 2012

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CERTIFICATION

This research work has been read and approved as an original work that meets the

requirement for the award of Master’s Degree in the Department of Mass

Communication, University of Nigeria, Nsukka.

_______________________ __________________ Nnanyelugo Okoro (Ph.D) Date Project Supervisor _______________________ __________________ Nnanyelugo Okoro (Ph.D) Date Ag. Head of Department _______________________ __________________ External Examiner Date

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DEDICATION

May honour, glory and adoration be given to God Almighty. This project is dedicated

to God Almighty and my grandson, Zainea Leroi Abiye Awan Eli

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ACKNOWLEDGEMENTS

I express my profound and immeasurable gratitude to God Almighty for His

love and care throughout the period of this academic programme. I am most grateful

to my amiable Lecturer and project supervisor, Dr. Nnanyelugo Okoro for his

encouragement, advice and timely assistance in the course of this project.

Also, to share from my debts of gratitude are my lecturers, Prof. Ike Ndolo,

Prof. Charles Okigbo, Dr Church Akpan, Dr. Greg Ezea, Mr. Michael Ukonu, Miss E.

U. Ohaja, Dr. Ray Udeajah, Mr. Anorue, Mr. Ekwueme, and others whose works I

consulted in the course of this research.

I record my debt of gratitude to some scholars, colleagues, friends, relatives,

study mates and well wishers whose involvement in this scholarly exercise ensured

my success. Dr. Sam Kalagbor, Rev. C. C. Elemuo, Dr. B. Okon, Dr. Iruene, Mr.

Richard N. Amadi, Mr. D. Harry, Mr. Windy Alokor, Mr. O. K. Amadi, Mr. Nnadi,

Mr. Chieme, Mr. Peace Amana, Mr. Onyekwere, Justice Njoku, Ednah Alete, Mrs.

Dokubo, Mr. Amos, Mr. Elechi and my roommates.

I remain grateful to Christian Chinedu Odoemelam, Moses C. Ani and Philip

Amune who have contributed greatly to my academic success. My sincere thanks goes

to my dear friend and sister Mrs. Grace Akpughunum Okwulehie for her assistance,

and encouragement during the period of my study, may Almighty God bless her

family.

Not forgetting (my amiable class rep.), Okey Chukwuma, Orekyeh Emeka,

Ganiu, Ekwe, others too numerous to mention for their prayers, resourceful assistance

and encouragement.

Finally, others who also worked tirelessly to sustain my academic zeal are

Pastor Iyke Iheamama, Bishop Habila Jonathan, Evangelist O. Eric and special

gratitude to my three daughters, Mrs. Esther Ebi – Tantua, Mrs. Tamuno-Wapiri A.

Eli and Mrs. Bebuery B. Ataku and my sons-in-law may God bless them all.

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TABLE OF CONTENTS

Title page .. .. .. .. .. .. .. .. .. .. .. i

Certification .. .. .. .. .. .. .. .. .. .. ii

Dedication .. .. .. .. .. .. .. .. .. .. . iii

Acknowledgements .. .. .. .. .. .. .. .. .. iv

Table of Contents .. .. .. .. .. .. .. .. .. .. v

List of Tables .. .. .. .. .. .. .. .. .. .. vii

Abstract .. .. .. .. .. .. .. .. .. .. .. viii

CHAPTER ONE: INTRODUCTION.. .. .. .. .. .. .. 1 1.1 Background of the Study.. .. .. .. .. .. .. .. 1 1.2 Statement of Problem .. .. .. .. .. .. .. .. .. 6 1.3 Objectives of the Study.. .. .. .. .. .. .. .. 7 1.4 Research Questions .. .. .. .. .. .. .. . .. 8 1.5 Significance of the Study .. .. .. .. .. .. .. .. 8 1.6 Scope of the Study.. .. .. .. .. .. .. .. .. 9 1.7 Definition of Terms .. .. .. .. .. .. .. .. .. 9 References.. .. .. .. .. .. .. .. .. .. .. 10

CHAPTER TWO: LITERATURE REVIEW.. .. .. .. .. 12

2.0 Introduction.. .. .. .. .. .. .. .. .. .. 12 2.1 Empirical review on Essentials of Corporate Social Responsibility.. .. 12 2.2 Public Relations and Corporate Social Responsibility .. .. .. .. 19 2.3 Public Relations and its role in Corporate Organization .. .. .. .. 21 2.4 Causes of Oil Induced Conflict in the Niger Delta .. .. .. .. .. 23 2.5 Government Approaches to Resolving Oil-Induced Conflict in Niger Delta 25 2.6 Corporate Social Responsibility and Societal Development .. .. … 31 2.7 Motives for CSR Engagement and their Implications .. .. .. .. 32 2.8 Corporate Social Responsibility and Conflict Areas: The Role of MNCs.. 34 2.9 The Challenges of CSR in Host Countries of Multi-national Companies .. 35 2.10 Theoretical Framework.. .. .. .. .. .. .. .. 43 References.. .. .. .. . .. .. .. .. . …. 46

CHAPTER THREE: RESEARCH METHODOLOGY.. .. .. .. 49 3.1 Research Design .. .. .. .. .. .. .. .. .. 49 3.2 Population of Study.. .. .. .. .. .. .. .. .. 49 3.3 Sample Size .. .. .. .. .. .. .. .. .. 49 3.4 Sampling Technique.. .. .. .. .. .. .. .. .. 50 3.5 Research Instrument.. .. .. .. .. .. … .. 50 3.6 Validity of Research Instrument .. .. .. .. .. .. .. 51 3.7 Reliability of Instrument .. .. .. .. .. .. .. .. 51 3.8 Method of data analysis.. .. .. .. .. .. .. .. 53 References.. .. .. .. .. .. .. .. .. .. … 54

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CHAPTER FOUR: DATA PRESENTATION AND INTERPRETATION.. 55

4.1 Data Presentation.. .. .. .. .. .. .. .. .. 55 4.2 Discussion and Interpretation of Findings.. .. .. .. .. .. 60 References.. .. .. .. .. .. .. .. .. .. .. 64

CHAPTER FIVE: SUMMARY, CONCLUSION AND

RECOMMENDATIONS.. .. .. .. .. .. .. .. 65

5.1 Summary.. .. .. .. .. .. .. .. .. .. 65 5.2 Conclusion.. .. .. .. .. .. .. .. .. .. 65 5.3 Recommendations.. .. .. .. .. .. .. .. .. 66

Bibliography.. .. .. .. .. .. .. .. .. .. 68

Appendixes .. .. .. .. .. .. .. .. .. .. 74

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LIST OF TABLES

Table 1: Distribution of responses according to the respondents’ level of awareness of

CSR practice by SPDC in Rivers State

Table 2: Descriptive on the areas which the community benefits from SPDC CSR

activities in Rivers State

Table 3: Descriptive on the assessment of the activities of SPDC in Rivers State

Table 4: Descriptive on the respondents’ rating of the extent of needs met bt the

activities of SPDC

Table 5: Descriptive on areas of challenges that impede on SPDC activities

Table 6: Descriptive on the lapses in SPDC activities

Table 7: Descriptive on the strategies to overcome the challenges

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ABSTRACT

This study is an evaluation of the corporate social responsibility practice in Shell Petroleum

Development Company in Rivers State. The motivation behind this study is anchored on

perennial conflict between the multinational oil companies and their host communities in

Rivers State. The work is aimed at X-raying the effectiveness of SPDC’s , CSR in their areas

of operation in the state under investigation. The investigation was carried out through

survey methodology using questionnaire as the research instrument to collect data from the

sample size of 400 respondents drawn from a total population of 5-6 million people that

reside in the state especially the oil bearing communities. The study found that SPDC exhibits

exploitative motives in their areas of operation. The study equally found out that SPDC

adopts a defensive and reactive CSR in dealing with their host communities. The study

equally found out that SPDC is insensitive to the yearnings and aspirations of their host

communities in areas of environmental degradation, pollution, employment, capacity

building and infrastructural development. Consequently, the following recommendations are

made among others: SPDC should adopt proactive CSR programmes or projects in dealing

with her host communities. The study equally recommends that SPDC should embark on

periodic evaluation of her CSR programmes or projects to ascertain their efficacy. The study

also advocates community-oriented CSR projects rather than company-driven.

CHAPTER ONE

INTRODUCTION

1.1 Background of the study

In recent years, the Niger Delta area has been engulfed in a crisis of instability

caused by protesting oil producing communities agitating for environmental

protection, community development, palpable poverty, lack of basic social amenities

and employment opportunities. The communities have charged the oil companies of

insensitively centered on the problems over oil spillage, such as the delay in

assessment of spilled oil in affected areas.

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Oil is the main source of energy in the industrial world today; by any standard,

it is Nigeria’s most economic resources as it contributes nearly 90 percent of

government revenue (Oloko and Nna 1998).

The Niger Delta consists of nine states in Nigeria, they are: Abia, Akwa Ibom,

Bayelsa, Cross River, Delta, Rivers, Edo, Imo and Ondo States. The region is

predominantly inhabited by different ethnic groups such as Ijaw, Yoruba, Urhobo,,

Ibibio, Ishan, Igbo and Ikwere. It extends over an area of about 70,000 square

kilometers, which amounts to about 75% of Nigeria’s total landmass and the coastline

extends for 560 km, roughly two – third of the entire coastline of Nigeria (Niger Delta

Environmental Survey, 1997). The region has a population of 27 million people.

The Niger Delta area prior to the activities of oil and gas had abundance of

diverse natural resources, good agricultural lands, coupled with flourishing oil palm

trees, rubber trees and other economic crops.

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 Ultinrg (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 corporation in

collaboration with the Nigeria 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 terminal, refineries

and reservoirs.

The Niger Delta was reported by the World Bank in 1999 to have agricultural

potential of feeding the whole of West Africa. Today, hunger in the region is

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widespread as non inclusive political decisions and policies by the various

governments have hampered sustainable livelihood which led to the emergence of

social movement and ethno-nationalists groups organized around demands for self

determination and resource control (Mosen, 2000).

Through the 1990’s till date, the operating environment for these multinational

oil corporations was one of mistrust between the companies and the communities on

which the company increasingly depended for its ‘social license to operate’. This

crises of governance has allowed the youth of the village to create a range of

disturbances including the theft of crude oil, kidnapping of expatriate staff, damaging

of equipment, blockage of oil facilities, oil pipeline vandalization, and human rights

violation with subsequent cooperate reputation damaged, which has negatively

affected both government revenue and corporate profit.

The oil producing areas both in Rivers State and Bayelsa include Okoloba to

Ogidigben, Ogbotobo to Bonnu, Ogoni to Iko, Gbaran to Obagi, Umuechem to

Perema biri, Egbema to Edagberi etc. Protests of various degrees of manifestation

have become a frequently occurring phenomenon. In many instances, the grievances

have turned into outright antagonism leading to abduction of company officials,

sabotage of company properties. For example, in November, 1990 Umuechem

community in Rivers State staged a peaceful demonstration to voice its complaints of

environmental degradation by Shell Petroleum Development Company (SPDC) The

Army was invited to repress the demonstration. At the end of the invasion 100 people

were killed and over 495 houses were looted and burnt (NDND, 1991).

Also between January, 1993 and March, 1997 to date the people of Ogoni in

Rivers State also embarked on series of massive protests to express their concern over

their environment. The event, which followed these series of protest, was the

invitation of soldiers, within these periods over 57 Ogonis sons were killed by

soldiers. The Ogonis boycotted presidential election, oil activities were disrupted

leading to a drastic drop of the country’s revenue and huge economic loss.

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In the last 20 years there has been a little change in the private sector’s

relationship both with the state, civil societies and host communities. Globalization,

conflict management, deregulation, privatization and redrawing of the lines between

the state and markets have changed the basis on which private enterprise is expected

to contribute to the public good. Within this period, the relationship between

companies and civil societies and host communities has moved on from paternalistic

philanthropy to a re-examination of the roles and rights and responsibility of business

in society.

1.1.2 An Overview of Corporate Social Responsibility

The concept of social responsibility as an important aspect of corporate

organizations mission received a major impetus from Bowen (2000) who posits that

Business firm’s missions should not be exclusively economist but that social

implications of their decisions should be taken into cognizance.

The entirety of corporate social responsibility (CSR) can be discerned from the

three words contained within its little phrase “Corporate, Social and Responsibility.

Therefore, in broad terms, (CSR) covers the responsibilities corporations (or other

profit organizations) have to the societies within which they are based and operate.

Moreover specifically, corporate social responsibility (CSR) involves a business

identifying its stakeholders groups and incorporating their needs and values within the

strategic and day to day decision making process (Arndt, 2003). It refers to a

company linking itself with ethical values, transparency, employee relations,

compliance with legal requirements and overall respect for the communities in which

they operate. It goes beyond the occasional community service action (Handy, 2002).

The institute of Directors, in United Kingdom sees corporate social

responsibility as a means of analyzing the inter-dependent relationship that exist

between business and economic systems, and the communities with which they are

based. Corporate social responsibility is a means of discussing the extent of obligation

a business has to its immediate society; a way of proposing policy ideas on how those

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obligations can be met as well as a tool by which the benefits to a business for

meeting those obligations can be identified (ID, 2002).

According to the World Business Council for Sustainable Development

(WBCSD) Corporate social responsibility is the continuing commitment by business

to behave ethically and contribute to economic development while improving the

quality of life of the workforce and their families as well as of the local community

and society at large (WBCSD, 2001). European Commission (EC) defines corporate

social responsibility as not only fulfilling legal expectations, but also going beyond

compliance and investing more into human capital, the environment and relations with

stakeholders (EC, 2001).

Gray (2001) sees corporate social responsibility as operating a business in a

manner that meets or exceeds the ethical, legal, commercial and public expectations

that society has of business. The Organization for Economic Cooperation and

Development (OECD) has also been engaged in developing the concept of corporate

responsibility. The organization sees CSR as a strategy to ensure that the operations of

enterprises are in harmony with government policies, to strengthen the basis of mutual

confidence between enterprise and the societies in which they operate, and to enhance

the contribution to sustainable development made by multinational enterprises (OECD

2000).

1.1.3 Brief History of Shell Petroleum Development Company (SPDC) in Nigeria.

Shell Niger is the colloquial name for Royal Dutch Shell’s Nigeria operation

carried out through four subsidiaries primarily through Shell Petroleum Development

Company of Nigeria Limited (SPDC). Royal Dutch Shell accounts for more than

40% of Nigeria’s total Petroleum production.

Shell started business in Nigeria in 1937 as Shell D’Arcy. In 1938, the

company was granted an exploration license. In 1956, Shell Nigeria discovered the

first commercial oil field at Oloibiri in the Niger Delta and started oil exports in 1958.

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Shell Petroleum Development Company (SPDC) is the largest fossil fuel

company in Nigeria, which operates over 6,000 kilometers (3,700ml) of pipelines and

flow lines, 87 flow-stations, 8 natural gas plants and more than 1,000 producing wells.

SPDC’s role in the shell Nigeria family is typically confined to the physical

production and extraction of petroleum. It is an operator of the joint venture, which

composed of Nigeria National Petroleum Corporation (NNPC) (55%), Shell (30%)

Total S.A (10%) and Eni 5%. Until relatively recently, it operated largely onshore on

dry land or in the mangrove swamp.

Shell Nigeria exploration and Production Company (SNEPCO) was established

in 1993. It operates two offshore licenses, including for the Bonga field. Shell Nigeria

Gas (SNG) was established in 1998 for Shell Nigeria natural gas activities and natural

gas transmission system operations.

Shell Nigeria oil Products (SNOP) was incorporated in 2000 for developing the

market for Shell branded products and services, such as fuels, chemicals and

lubricants.

Nigeria liquefied National Gas (NLNG) is a joint venture for liquefied natural

gas production. Shell has a share of 25.6% in his company and is also its technical

adviser. Other partners are Nigeria National Petroleum Corporation (NNPC) (49%),

Total (15%) and Eni (10%).

Shell Nigeria is a rich oil company, which has over five different companies

operating under it, but has little or nothing to offer to host communities. Due to the

attitude of shell, in the 1990s tensions arose between the native Ogoni people of the

Niger Delta and Shell. The concerns of the locals were that very little of the money

earned from oil on their land was getting to the people who live there under the

environmental damages caused by Shell practices. In 1993 the Movement for the

Survival of the Ogoni People (Mosop) organized large protests against Shell and the

government, often occupying the refineries. Shell withdrew its operations from the

Ogoni areas. The Nigerian Government raided their villages and arrested some of the

protest leaders. Some of these arrested protesters, Ken Saro –Wiwa being the most

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prominent, were late executed, against widespread international opposition from the

common wealth of nations and human rights organizations.

1.2 Statement of Problem

The perennial conflict between oil multinational companies and host

communities in Rivers State gave rise to this study. This is informed by growing

criticism against the multinational oil companies in their area of operation due to their

insensitivity to the yearnings and aspirations of the communities that play host to

them. The communities often accuse the multinational of exploitation and

environmental degradation, ecological problems, unemployment and

underemployment without commiserate corporate social responsibility in areas of

infrastructural development, capacity building, employment creation, business support

programmes, environmental protection among others.

The corporate organizations accused the host communities of being hostile to

the operation of their companies and their personnel. These accusations by the former

and the latter have led to “cat and dog relationship” between the corporate

organizations and their host communities, leading to incessant picketing of the

companies’ premises, kidnapping companies’ personnel, blowing of oil pipeline, and

in some cases leading to oil bunkering activities, and outright killing of oil workers,

whereas, in some cases, the companies are declared persona non grata by their host

communities.

This alleged ill-motivated actions and inactions perpetuated by oil producing

companies have become a perennial issue. These actions are propelled by lack of

corporate social responsibilities towards oil bearing communities (Elewon and Mittee,

2001) SPDC’s position has been a major bane of hostility between them and their

host communities in the state under study.

These situations have affected directly and indirectly the economic fortune of

the multinational oil companies in particular and the Nigeria nation at large. This is

because Nigeria’s economy is driven by oil. It is based on this premise that this study

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attempts to x-ray the corporate social responsibility practice of multinational oil

exploration and production companies in Rivers State using SPDC as a case study.

1.3 Objectives of the Study

This work focuses on Evaluation of Corporate Social Responsibility practices

of multinational companies in Rivers State. The main objectives are:

a. To ascertain if there are Corporate Social Responsibility roles carried

out by SPDC in Rivers State.

b. To find out if the host communities are benefiting from the activities of

SPDC oil exploration and production in Rivers State.

c. To determine the level to which SPDC has met the yearnings and

aspiration of its host community.

d. To examine the challenges that impede on the activities of SPDC in

carrying out its Corporate Social Responsibility in Rivers State.

e. To identify what can be done to improve the activities of SPDC

operation in Rivers State with the hope of adding value to the Social

Welfare of oil bearing communities.

1.4 Research Questions

This study will attempt to provide answers to the following questions:

a. Are there Corporate Social Responsibility roles carried out by SPDC in Rivers

State?

b. Are the host Communities benefiting from the activities of SPDC in Rivers

State?

c. To what extent has the activities of SPDC in Rivers State met the yearnings of

the host communities?

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d. Are there likely challenges that impede on the activities of SPDC in carrying

out Corporate Social Responsibility in Rivers State?

e. What can be done to improve the activities of SPDC in Rivers State with the

hope of adding value to the Social Welfare of the host community?

1.5 Significance of the Study

a. It will provide an opportunity for policy makers in Rivers State to formulate

policies that will guide corporate social responsibility practice in host

communities.

b. It will create awareness in oil communities, to the type of benefits deserved by

the oil producing communities.

c. It will be useful to the Rivers State government and all oil producing

communities in finding out better ways of improving the living standard and

environmental conditions of the people of the state.

d. This study will proffer solutions to challenges faced by the multinational

and oil producing communities.

e. It will also serve as useful guide for scholars who intends to undertake

further research in this area as there are so many areas of concern that can

be drawn from this study.

1.6 Scope of the study

This study covers all oil multinational companies in the Niger Delta region and

the researcher will source for data from various parts of the region but for the purpose

of this study, the researcher’s area of concern will be SPDC in Rivers State.

Also, the researcher will undertake a study of all the local government areas in

Rivers State where responses will be drawn from both primary and secondary sources.

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1.7 Definition of Terms

In this study, terms are defined according to their usage and well known

acronyms are adopted to avoid misconception.

SPDC: Shell Petroleum Development Company. It is one of the multinational oil

exploration companies that operates in the Niger Delta

Corporate: of or relating to a corporation, corporate

planning/finance/borrowing/loyalty, our corporate identity.

Social Responsibility: is voluntary; it is about going above and beyond what is called

for by the law (legal responsibility). It involves an idea that it is better to be proactive

toward a problem rather than reactive to a problem.

Corporate Social Responsibility: This is what a company does as part of its

contribution to the development of its host community where it operates. This is an

age long practice of public relations where companies undertake a need assessment of

the yearnings of the community where it operates and carries out certain development-

oriented activities to meet those needs.

Multinationals: is a firm that own and manages economic unit in two or more

countries or existing in or involving many countries. Atapiki (1997).

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REFERENCES

Akinfeleye, R.A (1992). Essentials of modern African Journalism: A premier (2nd ed.) Lagos: University of Lagos Press.

Anaeto, S.G. (2006). “Crisis management in the oil-rich Niger Delta of Nigeria: A

Community relations perspective,” Babcock Journal of Management and

Social Sciences vol. 5 No 1 September 2006.

Arowolo, Adebolu (May 5, 2008). “Rage of militants”, an article published in the Punch.

Black, Sam (1990) Introduction to Public Relations. London, Modino Press. Cutlip, SM Centre, A.H and Broom, G. M. (2000). Effective public relations (8th ed.).

New Jersey: Prentice Hall. Craft, J H and Cancannon T. (2006). Niger Delta Conflict: Basic facts and Analysis.

London stakeholder Democracy Network. Imobighe, T.A et al (2002). Conflict and instability in the Niger Delta: The Warri

case. Ibadan: Spectrum Books Ltd. Ikeiegbe, A. (2005). “The economy of conflict in the oil rich Niger Delta region of

Nigeria,” in Nordie Journal of Africa studies. Nwodu, L. C. (2004). “Social responsibility and community relations as critical

factors in managing the Niger Delta conflicts” in Nwosu, Des Wilson (ed) Communication media and conflict management in Nigeria, Enugu: Prime Target Limited.

Niger Delta Development Commission (2001): Environmental situation in the Niger

Delta. Niger Delta Environmental Survey (2003). Phase 1 Report on the Niger Delta

Environment Niger Delta News Digest (NDND), save us from the hands of shell”, 7 Oct, 1991.

Onojovwo, D. (June 25, 2008). “Niger Delta Peace, still Elusive”, an article published

in the Punch. Oharisi, L. (2000). Linking Environment and poverty. Ibadan: page publications Ltd. Okoko, K.A.B and Nna, J. N. (1998). Emerging trends and community perception in

the Nigerian oil and industry. Nigeria.

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Udoakah, N. (2004), “Corporate social responsibility: An inoculation against industrial related conflict” in Nwosu, Des Wilson (ed) Communication

media and conflict management in Nigeria, Enugu: Prime Target Limited.

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CHAPTER TWO

LITERATURE REVIEW

2.0 Introduction

The review of literature in this study is segmented into two major headings;

theoretical and empirical review. In the first instance, related concepts are reviewed;

secondly, concrete findings from related studies are reviewed in the empirical section

of the work. The review however, is done under some sub-headings. This section also

accommodates theoretical framework of this study.

2.1 Empirical Review on Essentials of Corporate Social Responsibility

Reviewed in this section are related studies carried out on aspect of corporate

social responsibility.

2.1.1 Oil Companies and Corporate Social Responsibility

Adekola and Uzoagu (2012) in their study on oil companies corporate social

responsibility and conflict resolution for sustainable community development in

Rivers State found out that corporate social responsibility efforts of multinational oil

companies to promote sustainable community development in their host communities

are not well felt.

Adekola and Uzoagu further identified via their study that multinational oil

companies especially Shell Petroleum Development Company adopt defensive

corporate social responsibility rather than proactive CSR. According to them, this act

stimulates hostilities relationship between the oil companies and their host

communities.

The researcher therefore, recommended among others, that government should

put machineries in place to have a holistic review of CSR policy of the oil companies.

Adekola and Uzoagu’s findings are consistent with Okoko (2003), when he

observed in his study that money spent on community relations projects by SPDC has

not been fairly felt by the benefiting communities because of high level of corruption

among oil companies officials, contractors and community leaders which has been

found to be responsible for execution of sub-standard community development

projects whose impact is not felt by the people.

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Their findings also corroborate the study of Onyeozu (2007) who discovered in

his work that grievances and conflict between host communities and the oil companies

are often caused by payment of compensation and initiation of community

development projects to specific communities.

This findings corroborates Von-Kenedy (2005) research findings when he

discovered that a change in development strategy from ordinary development to

sustainable community development in 2004 was to reduce agitations and conflicts in

the host communities and to harness efforts and expenditure towards supporting host

communities to improve and maintain their capacities to generate and sustain their

own socio-economic development and quality of life.

Jike (2004) study on corporate social responsibility and image sustainability of

Multinational Oil and Gas Companies in Rivers State, found out that community

development activities of the companies especially SPDS have not addressed key

areas of sustainability issues such as programmes integration and, active beneficiaries

involvement in CSR projects. The findings of this study is also in line with Nigerian

Television Authority (20211) research and documentary on development in the Niger

Delta that non passage of Oil Industry Bill by the Nigeria National Assembly is a way

of promoting conflict in the host communities since it allows the oil companies to

escape from mandatory commitment to the development of the host communities.

According to Omotola (2007) study on corporate social responsibility and

community development in the Niger Delta, oil companies in Rivers State use CSR to

resolve conflict in their host communities rather than development –oriented.

This findings is in line with Nyemelu (2006) observation that oil companies in

the Niger Delta have been using what can be referred to as “token pacifism” in their

efforts in relating with their host communities. He further identified via his study that

partial rather than holistic approach by the oil companies, their community

development activities have failed to produce the desired development result that are

sustainable in nature.

From the foregoing, it is obvious that multinational oil companies operating in

Rivers State have not be alive to their corporate social responsibility, and even when

they embark on it, they are pressurized to carry out CSR programmes, hence, they

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often engage in accommodative and reactive CSR rather than proactive CSR (Mittee,

2012).

This insensitivity of multinational oil companies especially SPDC has been

identified in several studies as the major case of hostilities between oil exploration and

production companies and their host communities in Rivers State in particular and

Niger Delta in general.

This observation lends credence to the adoption of relative deprivation theory

in this study. The scenario of course, has led to the ‘cat and dog’ relationship between

the former and the latter in several oil bearing communities in Rivers State.

2.1.2 Social Responsibility as Recipe for Community Relations

Corporate social responsibility as a moral and ethical obligation which an

organization owes its immediate constituents and environment has been identified as

recipe for effective community relations by many scholars.

In line with this, a study conducted by Nwanegbo (2005), centered on

corporate social responsibility as stimulant to community development of oil bearing

communities observes that rivers, streams, creeks and farmlands are totally and are

continuously polluted. The atmosphere is faced with hydrocarbons and carbon

monoxide caused by oil exploration and exploitation companies without effective

remedial approach by the companies concerned or the government.

According to the findings of this study, oil bearing communities have abundant

water but they cannot drink of it because of endemic oil pollution which pollutes the

river, creeks and streams and destroys the aquatic lives.

Nwanegbo finding is in consistent with the Ogoni Bill of Rights (1990), which

observes that the result of environmental pollution in the Niger Delta particularly in

Ogoni land is manifest among which are infertile lands, lack of drinking water,

destruction of aquatic lives, sea foods such as crabs, periwinkles, mudskippers,

cockles, mussels, shrimps are drastically reduced in their areas of habitation.

The study equally found out that the health of the people residing in oil

producing communities in Ogoni land is dangerously hampered. The study therefore,

recommends for the remediation of the land and massive community –oriented

24

projects to cushion the effects of the oil exploration and production in Ogoni-ethnic

nationality in particular and Niger Delta in general.

In a study conducted by Ibaba (2010) on the state of Oloibiri after oil was

discovered in the area, that Oloibiri is adversely affected by oil activities in Nigeria.

Farming which used to be the mainstay of the community’s economy has been

paralyzed as farmlands have been destroyed, fishing activities grounded and aquatic

lives virtually castrated by many years of oil prospecting and production without a

commensurate community relations programmes. The study equally, identified

absence of corporate social responsibility in the community where crude oil was first

discovered at commercial level in Nigeria. This finding corroborates Bobo Brown

(2007), when he observed that real economy of oil bearing communities have

collapsed without a measurable corporate social responsibility by multinational oil

companies hence, the agitation of resource control by the Niger Delta militants.

Ibaba (2010), identified in his study that oil producing communities of the

Niger Delta have not derived the desired benefits from the oil companies nor the

Nigerian government. He observes that there is a high level of poverty, squalor;

disease, unemployment; inequality and deprivation pervade nearly all facets of the

community. He therefore, recommends for creation of community relation recipes that

will improve the socio- economic welfare of the oil bearing communities in the Niger

Delta in order to keep the crises in the region at bay.

Koko (2010) study on responsible corporate social responsibility as a tool for

management of Niger Delta crises in post Amnesty era found out that modern

development has eluded the oil producing communities in the region due to neglect,

and state laws have excluded them from the oil wealth. He further observes that the oil

companies have not only fallen short of people’s expectations, but have also dashed

the hopes of many who have been expecting improvement on their lives via

community development programmes.

Okoko therefore, recommends for total overhauling of community relations

policies of multinational oil companies by socio- economic status. According to

Igbeni’s study, to make their worry known to the multinationals and the public, they

often adopt the following approaches:

25

Writing of petitions to government blocking of access

roads to the companies premises hostage taking of oil

workers, protest march against multinational oil

companies, forceful occupation of company premises,

obstruction of companies operation, pipeline

vandalization, theft of companies equipment, assault on

company’s employees piracy, sabotage and oil

bunkering’.

These communities’ reactions do not only affect the multinational oil

companies adversely but to a great extent, affect the economic status of Nigerian

nation which is dependent on oil revenue.

Perhaps, this informs the recommendations of Igbeni as follows: Community-

induced projects to trigger off symbiotic relationship between the companies and their

host communities. Secondly, holistic proactive corporate social by Federal

government through legislative process in order to provide a legal framework upon

which oil bearing communities can hinge their demand for human and infrastructural

development.

Igbeni (2007) research finding on the relationship between multinational oil

companies and the oil producing communities shows that in Niger Delta today

particularly in Rivers State, host communities to multinationals are under serious

stress of economic exploitation with consequent negative socio- economic effects as

their rewards.

Igbeni further observes in his study that sustainability of the host communities

are becoming highly endangered due to excessive oil exploration and exploitation

activities. The communities now face the problems of the overcrowding,

deforestation, poverty, prostitution, global warming, and loss of bio- diversity,

drought, ozone layer depletion, water pollution and related consequences.

In view of this, both visible and invisible indigenes of the host communities to

the multinationals are worried over their poor state of responsibility to stimulate

fruitful community relations devoid of hostility. The position of this study is in line

with Ikelegbe (2008) submits in International Conference on the Nigerian State, Oil

Industry and the Niger Delta when he observes that conflict in the region is predicated

26

upon the actions and inactions of multinational oil companies toward community

relations programmes.

Ikelegbe further observes that relationship between the multinationals and the

oil producing communities in the Niger Delta is diametrical in nature. Therefore,

needs an ample of community relations programmes and projects to redeem the

stigmatized image of the multinationals.

Akporaro (2008) in a study on Niger Delta, oil and community development

observes that since the advent of oil exploration and production in the region over four

decades ago, the region has become the bread winner of the nation, which is the main

source of foreign earnings for Nigerian nation as a whole but has been left

underdeveloped by the operators and the owners of the oil companies. This scenario,

according to his findings, breeds conflict. The inherent danger now is the agitation for

the emancipation of the region by the youths of the region. The study therefore,

recommends for provision of basic social amenities, employment and capacity

building programmes as recipes for building sustainable mutual understanding and

goodwill between the multinationals and their host communities in the Niger Delta

particularly in Rivers State. The study equally, argues that the implementation of the

above mentioned programmes and projects will reduce community relations- induced

conflict in the region drastically.

Corporate social responsibility is an emerging corporate discipline which

imposes a management obligation on every organization to put the interest of the

people first in all matters that relate to the conduct of the enterprise and to serve the

primary needs of people dependent on it for their needs satisfaction. By taking care of

the needs of their various publics, organizations easily create the much needed good

will for them to operate smoothly and make profit.

Rukeh et al (2008) submit that in corporate social responsibility, the central

issue therefore, is for organization to actually care and let the members of the public

know that they care by attending to their needs. A good corporate social responsibility

translates into a good corporate personality which in turn guarantees a hostile free and

friendly atmosphere for profitable business operation.

27

Also Ogbemi et al (2008) added that Corporate social responsibility (CSR) can

best be understood in terms of the changing relationship between business and society.

Many people believe it is no longer enough for a company to say that their only

concern is to make profits for their shareholders, who they are undertaking operations

that are fundamentally affecting both negatively or positively the lives of communities

in countries throughout the world. Corporate Social Responsibility therefore means

balancing the interest of a wider group of stakeholders and strategically managing the

interconnected social, environmental and economic impacts of business activities.

According to (Imide, 2008), the rationale for corporate social responsibility in

business operations and development include the following: To promote a closer

relationship with host communities, civil societies and government.

Corporate Social Responsibility can help multinational companies gain specific

contracts or trading relationship with other companies that communicate directly with

host communities through environmental and social labels.

According to Mellford in New African (August/September, 2007: 50):

Corporate Social Responsibility can be explained as a

combination of sustainable development and treating

employees and the society with which companies

operate with respect. The environmental impact of

any economic activity should be weighed against the

economic benefit and any measures that could

mitigate the negative impact should be entitled to fair

and reasonable treatment at work, a fair wage for the

job undertaken within the local market and minimum

health and welfare benefit.

His view explains our belief in the potency of Corporate Social Responsibility

as a tool for appeasing, alleviating, relieving and abating the plight of the people of

the Niger Delta. Profits, the welfare of shareholders, board members and

managements of the oil companies should not be the only concern. It should include

those of the workers as well as the communities hosting them.

Ogwezzy (2006:36) further elaborates on this when he writes:

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Corporate Social Responsibility entails addressing

the legal, ethnical, commercial and other

expectations of all shareholders. In this regard,

Corporate Social Responsibility is seen as a

comprehensive set of policies practice and

programmes that are integrated into business

operations and decision making processes

throughout the company and whatever the company

does business.

The concept of Corporate Social Responsibility is not a face scratching

exercise. It is rather an in-depth integrated and management philosophy, which should

touch all the operational segments of an organization. It entails balanced decision

making detailed enough to positively work in the overall interests of both the

companies and its diversified chasses of its stakeholders and publics (Allede et al,

2008).

2.2 Public Relations and Corporate Social Responsibility

Organizations are characterized not only by profit motives, but also a feeling

for developmental aspirations of their host communities. As corporate citizens, they

are socially responsible to their host communities. As part of business policy

framework, corporate bodies should embark on developmental project which have

direct bearing on their public.

Ekwelie (1997) discussing the role of social responsibility towards corporate

existence of an organization, states that, “social responsibility is an index of

preventive public relations which tends to reduce the heat in times of crisis and which

breeds goodwill and helps bring about a good atmosphere for growth”.

Social responsibility is a conscious effort to avoid embarrassing situations as

well as the will and determination to go beyond the dictates of the law in pursuit of

effective community relations. A measure of such relations, so far are anticipatory and

preventive, is a true measure of social responsibility (Ekwelie, 1997).

According to Ekwelie, social responsibility is a balancing act between the drive

for profit and community welfare. All companies ought to realize that social

29

responsibility cannot be invented as needs arise. On the whole, it is a fall-back

position on which a company can plead its case (Ekwelie, 2007).

Alikor (2008) holds that social responsibility is formalized as in infrastructural

facilities: roads, water, electricity, promotion of health centre, corporate sponsorship

programmes, capacity building, etc.

Cutlip and Centre (1965: 252) assert that social responsibility keeps

organizations in touch with its host communities to avoid isolation as noted in Randell

(1962).

Lynch (2003: 376) states that corporate social responsibility can be forced by

law or persuaded voluntarily. According to Lynch, the law plays an important role in

business but not a dominant role in enforcing mutual relationship between an

organization and the host communities.

Thompson et al (2004: 231) state that corporate social responsibility is a

conscious effort an organization makes to maintain a mutual understanding with its

host community. Thompson et al further argue that corporate social responsibility is

held in a manner that balances economic goal with environmental and social impacts

on the local and global communities.

According to Thompson et al, the concept of social responsibility stipulates

that: “doing well in business environment goes in hand with giving back to the

community and protecting the environment. Companies should strive to make a

positive difference in communities where they operate (Thompson et al, 2004: 48).

They further suggest that companies should at least contribute five percent (5%) of its

pretax profit annually to support “socially responsibility initiatives”.

Igben (2007: 140) sees corporate social responsibility as a stimulant to

actualization of corporate goals of a business organization. Igben believes that social

responsibility enhances standard corporate behaviour and prevents or control

community hostilities. It is a reference point for a corporate organization in time of

crisis. Social responsibility equally guarantees organization survival, profitability and

continuity (Igben, 2007)

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2.3 Public Relations and Its Role in Corporate Organization

Public relations is like the lifeblood of every organization. What the blood does

to the body is akin to what public relations does to every reputable organization. It is a

potent key that holds the corporate image of an organization that values its corporate

identity (Alikor, 2009).

Jefkins (1998: 24) discussing the role of public relations in an organization

states that public relations performs the following role:

…maintaining cordial relationship between an

organization and its public both internal and external

publics. Arranging press, radio and television

interviews for management. Commissioning and

maintaining forms of corporate identity and house

styling such as logos, colour schemes, and print

house style and typography delivery of vehicles.

Handling of public relations sponsorships of

community relations programme.

Ezirim (2001: 33-34) holds that public relations plays a vital role in keeping

image of an organization intact.

2.3.1 Public Relations Planning Paradigms

Every business organization needs a conscious public relations model to be

used in striving to achieve organizational objectives. This of course, calls for a

strategic plan by a public relations practitioner whether in-house or consultancy

services.

Against this background, Jefkins (1998:40) states that public relations model is

a planning by objective procedures, but depends on the skill and efficiency with which

it is applied. He further asserts that: “the kingpin of the expense is understanding the

situation: where are no? What are their misunderstandings?

To this effect, Jefkins theorized a-six point public relations planning model:

1) Appreciation of the situation

2) Definition of objectives

3) Definition of publics

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4) Selection of media and techniques

5) Planning of a budget

6) Assessment of results.

Okon (1998: 106), identifies the RACE model as an important public relations

paradigm for solving public relations problems. In this case; ‘R’ stands for Research,

‘A’ stands for Action, ‘C’ stands for Communication, while ‘E’ stands for Evaluation.

Hendrix and Hayes (2007: 369-374) observed in addressing emergency public

relations problem in limited states of America, that ROPE paradigm was used

extensively in order to achieve the desired result.

Alikor (2009) in discussing the efficacy of public relations paradigm stated that

a good public relations paradigm should have the potency of addressing the trend on

record time.

2.3.2 Public Relations in Conflict Situation.

The first responsibility of public relations is to understudy the context of the

conflict in order to identify the reality of the situation. The second responsibility of

public relations is to communicate; this could be both verbal and non-verbal. Verbally,

it encourages the use of right symbols based on relevant facts; through the prism of

non verbal communication it promotes good deeds that provide the basis for good will

and mutual understanding. Such good deeds must be perceived by all stakeholders not

feigned deception but genuine desire to pursue good of all. It can be interpersonal and

mediated by way of the mass media. But in all, the objective is to prevent

misunderstanding and block all roads that lead to negative ends to the common good.

It is also within the scope of its fundamental objective to sustain or maintain existing

good relationship as well as proffer public relations based solutions when the going

gets sour or reveals such symptoms of going sour (Hardey 2008).

It is the souring state that is generally called conflict because it is the position

of divide where stakeholders can no longer believe in the realization of individual or

corporate goals as a result of the actions of others.

Preventive public relations which is popularly referred to as proactive public

relations is a modern responsibility of public relations to stimulate strategies within

the context of public for redirecting activities whether as policy or action of

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individuals or organization from crisis bound ends to friendly ends. This involves

taking action ahead of time. Such action must be right enough to ward off the threat to

existing friendly climate or environment.

When issue is properly managed or given the right public relations attention the

result is enthronement of a friendly socio-cultural and socio-economic environment

where all stakeholders are able to pursue their individual goals without interference or

interception. But the failure to give the right public relations close leads to crisis and

very often expressed in various terms of hostilities like have been experienced in the

Niger Delta in the past couple of years.

Harwood (1940) states that the essence of public Relations:

Is not the presentation of a point of view, not the art

of tempering mental attitudes nor the development

of cordial and profitable relations instead, he said

the basic function is to receive or adjust in public

interest those aspects of our personal and corporate

behaviour which have a social significance.

(Cultlip, Centre and Broom, et al 2000), hold that the role of public relations in

crisis management in the Niger Delta is to reconcile private and corporate interests for

the social good of the Niger Delta community.

2.4 Causes of Oil Induced Conflict in the Niger Delta

The Niger Delta is strewn with complex and multi-layered conflicts caused by

a number of factors. Corruption at all levels of government has deepened social

inequality and incited violent conflict (Amafuna, 2008).

Poor oversight of the oil industry and decades of corporate exploitation have

created a permissive environment for widespread dispossession and daily violations of

basic human rights.

The lack of accountability means those responsible for abuses have enjoyed

impunity. Poverty, political violence, unemployment and proliferation of arms and oil

bunkering” has triggered spiraling insecurity. The Nigeria government’s failure to

protect the human rights of its citizens is a great source of tragedy.

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Understanding and acceptance: if every stakeholder in the Niger Delta crisis

embraces public relations practices, the crisis in the region will be easy to manage and

at the long run be resolve amicably.

There is no conflict with at least a cause especially this one that has impacted

so negatively on our economy. A critical study of the Niger Delta crisis has implicated

some factors as the major causes of the conflict; they include: Quasi-Federalism and

Environmental degradation. Quasi-federalism in Nigeria is ethnic nation forged

together by Lord Lugard in 1914. Before this merger there were many nations exiting

and operating independent of the other, but the merger brought all of them under one

leadership. First, in any country where there are divergences of language and of

nationality particularly of languages – a unitary constitution is always a source of

bitterness and hostility on the part of linguistic or natural minority groups (Asadu,

2008).

Chief Obafemi Awolowo remarked among other things as follows:

The side effect of the unitary constitution

government. On the hand, as soon as a federal

constitution is introduced in which each linguistic

or natural group is recognized and accorded

regional autonomy, any bitterness and hostility

against the constitutional arrangements as such

disappear. If the linguistic or national group

concerned are backward, or two weak vis-va-vis the

majority group or groups, their bitterness or

hostility may be dormant or suppressed. But as soon

as they become enlightened and politically

conscious and / or courageous leadership emerges

amongst them, the bitterness and hostility are into

the open and remain sustained with all possible

rancour.

Today, what is happening in Niger Delta as well as other minority areas in

Nigeria is what Chief Awolowo saw many years ago as the side effects of the unitary

constitution. As a matter of fact, the agitation of resource control is legal under

Federalism. Every state has the exclusive right to the ownership and control of

resources both natural and created within its territory (Sagay www.wado.org)

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Environmental Degradation: The Niger Delta is a swampy river-rine terrain,

rich in oil and gas, palm produce, silica sand for making glass etc. The major

occupation is fishing, farming and other business that depends on the environment.

The discovery of oil caused the worst environmental problem in the area as Ekpu

(2008:15) graphically observed:

The oil displaces people, dislocates their farm

lands, their waters and fauna and turns their lives

topsy-turvy. They are exposed to delectating health

hazards occasioned by oil spills, hydrocarbon

pollution, gas flaring and other terms, severe and

not so severe of environmental degradation

2.5 Government Approaches to Resolving Oil-Induced Conflict in Niger Delta

Since 1957 that Willink’s commission made some recommendations about the

development of the Niger Delta, the government has been making efforts towards this,

all the efforts made so far are not visible. This can be part of the reason there has been

continued agitations, protests and militancy to show their grievances over the state of

development both human and structural in the area.

• Setting of Commission

The first civilian government in 1961 set up the Niger Delta Development

Board (NDDB) as the body that will handle the speedy development of this peculiar

terrain. The board had the Yenogoa province, Degema province, the Ogoni Division

of Port Harcourt and the Western Ijaw Division of Delta province as its areas of focus.

By 1966 where there was a military takeover, the board had carried outs no significant

development project on ground (Yishaw, 2007: 28).

After the war, the military continued in power and dropped the idea of NDDB

and set up Niger Delta River Basin Development Authority (NDRBDA) to carry out a

similar job. The life span of the commission ended with the military rule in 1979.

In 1980 former president Shehu Shagari set up what he called 1.5 percent

committee. This body was to use 1.5 percent of the federation account to address the

development needs of the region. This committee did nothing until the government

was overthrown by General Buhari in 1983.

35

Also through Degrees 23 of 1992, General Ibrahim Babangida established the

Oil Mineral Producing Areas Development Commission (OMPADEC). The

commission was given the mandate of turning around the situation in the region with

three percent of oil derivation fund (Yishau 2007).

In 1999 Niger Delta Development Commission (NDDC) was set up by the

former president Olusegun Obasanjo. The commission started with the mission of

rapid, even and sustainable development of the region into an economically

prosperous social stable, ecologically regenerative and politically peaceful region

(Yishau 2007). A critical look at these commissions indicate that most of them end

with the regimes that set them or that they die because of lack of fund, lack of focus,

corruption, politics etc their failures have always worsened the agitation and crisis.

• Use of Force by the Government

The Niger Delta struggle for recognition and development started very long

ago. It started as a very quiet and peaceful protest by women or a whole village. For

instance, the protest to Ogoni land in the early 1990s that made Babangida to enact

Treason, and Treasonable offences decree was peaceful but drew international

attention to the Niger Delta environmental and development issues. Thus decree as

reported by Adeyeno (2005: 22) reads that: Anybody who conspires with groups

within and outside the country and professes aside as that minimizes the sovereignty

of Nigeria as guilty of Treason, punishment with death.

It was this decree that General Sani Abacha used to condemn, Ken Saro-Wiwa

and eight other Ogoni people. The use of military to address and protests in the region

have made the agitators battle ready. They now show their anger through guns.

Asari in an interview with Maureen Chigbo said “we give you time for

dialoque. But the Nigerian state is saying no, there will be no dialogue. We will use

force or arms to kill you”, we will subdue you” (Newswatch, Sept. 20, 2004 p 10).

In another interview with Tell after he was released from the cell he reiterated

his resolve to defend himself.

36

And you cannot fold your arms if somebody comes

to kill you. When you’re dead, they will say you are

killed by an unknown soldier or unknown policemen

and they will investigate like they did for (Alfred)

Rewane, Kudirat Abiola, Marshal Harry, Bola Ige

and Aminasoari Dikobo case closed (see Agbo,

2001: 30)

Kuhah in Akosab – sarpong (2002) pointed out that the state always uses

violence even when it is not needed. He stated inter alia:

The character of the Nigerian state, of which”

violence is key to its existence and reproduction,

has elicited counter violence from some ethnic

based civil society groups pejoratively referred to

as ethnic militias. In most cases, these groups start

on a note of non-violence only to be socialized in

the culture of violence by the state. The process of

armed violence between the state and ethnic militia

groups is therefore a cyclical one (See Adejumobi,

2002)

• Economic Causes

The main economic causes of conflict in Niger Delta are lack of social

resilience due to the monopoly on economic activity of the oil industry, corruption and

the dominance of the illegal economy. Akinkuoto (2007: 3) added that one cannot talk

of the Niger Delta without having to contend with the twin areas: issue of the national

question and true federalism and of course, resource control.

In addition, Craft and Cencannon (2006) noted that the vast wealth and

impurity from prosecution of the political elite and those associated with them through

their patronage networks have resulted in the fundamental weakness and polarization

of all institution of civil society. One of the most obvious examples of this is that

whilst much of Rivers State continues to lack pipe borne water and electricity, the

former governor, Dr Peter Odili had two private jets masquerading as air ambulances.

37

• Political Causes

Although military rule has given way to democracy, most politicians have

failed to use the nation’s resources at their disposal for the good of the people. The

control of every single seat at both the federal level and state by the Peoples

Democratic Party (PDP) has aggravated conflict in Nigeria. Rigging of elections and

arming local youths with weaponry during election has been the order of the day and

has escalated conflict in Niger Delta.

• Political Compensation

The Niger Delta since independence has never been a quiet place. Every

government that comes always experience one form of heat or the other from that

place. Some strategic oil positions at least to pacify the people, before the government

of Obasanjo which did not have ministry of petroleum, most ministers of petroleum

have been Niger Delta people.

It was equally discovered that most of these commissions on Niger Delta have

always been handed by a south-south man at least to give them a sense of belonging

and probably to blame themselves for failure if any.

The heights of this political settlement came in 2007 during the presidential

elections. The period of democracy recorded highest number of agitations and

military. As a matter of fact, the heat was much and centered on their producing the

next president for 2007 elections. Solutions were sought from all angles. The south-

south was therefore, advised to work together towards producing a presidential

candidate for the election (Aiyetau, 2006)

Eventually Goodluck Jonathan was picked as the vice-president ostensibly to

calm the situation in the region. Previously consideration is not given to Niger Delta

sons and daughters.

• Good Governance

It is better for us to understand what good governance means the process of

taking and implementing decisions. Law man (2008:6) citing the world bank said that

governance is the exercise of political authority and the use of institutional resources

38

to manage society problems and affairs, the use of institutions, structures of authority

and even collaboration to allocate resources and coordinate or control activity in

society or the economy.

Good governance, therefore means when the institutions of governance as the

running of the affairs of governments in positive and progressive manners beneficial

to the governed and which delivers the public goods. To deliver public goods means

that the government institutions exist to produce for the needs of the led. According to

Hayatie-deed (2007: 53) observed that good governance is crucial for the stability,

economic efficiency long term economic growth and raising the quality of life of all

citizens. Any attempt to develop a place without all these being in place is a waste.

According to Asadu (2007:258) of good governance as it can be seen is very

central to every development. It is epitomized by predictable, open, enlightened policy

making, a bureaucracy imbued with professional ethos acting in furtherance of the

public good, the rule of law, transparency and a strong civil society participating in

public affairs (Hayatudeen 2007).

The foregoing cannot be achieved if there is no free and untrimmed flow of

information from the corridors of power to the people to participate meaningfully in

the politics and developments of the society. Information and its interpretation create a

society knowledgeable enough to respondent heat according to the going on in the

politic. (Asadu, 2007) information flow is an instrument of checks and balances in

governance.

The demands for the speedy passage of the freedom of information bill in

Nigeria. This bill will definitely make office holders accountable to the people and

limit situations conducive for corruption. It is based on this notion that Bretten woods

institution emphatically states that, good governance can only be achieved if those in

authority set good examples by strengthening accountability, encouraging public

debate, and nurturing a free press (Hayatu-deen 2007) .

Supporting this, Hass, Mazzi and O’leary (2007:18) declares:

that there should be consistent messages to be conveyed

to all the relevant stakeholders, oil producing

communities, government officials in the implementing

39

agency; contractors, suppliers, consultants, members of

civil society affected by the project and the local press.

Information should also be disseminated to project

beneficiaries sufficiently to monitor the delivery of

project benefits, notice on the project performance and

where necessary, on corrective actions.

It therefore means whatever development project the government wants to

undertake in the Niger Delta should be made open from the cost of the contract, the

contractor, suppliers of the materials to when the project is expected to be completed.

It also means that the government should through the people know the level of

development on the project, not the ones completed on papers or at condition level in

the site.

• Oil Spillage

According to (Afamefuna 2008) Oil spillage occurs when there is damage of

oil pipelines and instead of oil to follow the proper channel it spills to the surface of

either land or water. For this, oil spillage can be harmful to the land, or water because

of the hydrocarbon emission. When it occurs on the land, it can lead to land infertility.

When it occurs on the water it can kill the aquatic lives trapped under the oil film. The

fisher men can no longer fish; farmers cannot farm any longer, because when planted,

crops will continue to depreciate.

• Gas Flaring

Nigeria has been rated as the highest glarer of gas in the whole world. When oil

is being tapped, it comes in association with gas. Gas flaring is very dangerous as it

emits hazardous gases and substances that constitute green house effect. They can

cause respiratory problems, ashma, cancer as well as acid rain, it generates heat. The

heat generated by the flaring stack has the capacity of increasing the temperature of

the environment to an atomically heights, this not only affect human beings but also

the farms around that place.

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2.6 Corporate Social Responsibility and Societal Development

Wells et. al. (2005), have argued that the impact of CSR must also be seen in a

much broader context of international development, not least since CSR is now being

advocated by policy-makers as an alternative route to the public delivery of

development. CSR is seen as a potentially long-term solution for delivering

development. Therefore, CSR cannot be seen solely through the lens of the ‘business

case’, as the expectations of what CSR could potentially accomplish are much

broader. From society’s point of view, it is important to assess the contribution that oil

companies can make to development. To put it differently: Can companies deliver

development?

Progress towards changes in corporate governance to enhance social

responsibility increasingly takes place via voluntary measures (Foran,2001:iii). In a

study by Lordes (2010) on the Corporate Social Responsibility (CSR) practices of

multinationals from Latin America, it was discovered that (CSR) was major driver of

the economic growth in recent years. Thus Multinationals from Latin America have

thrived in the last years and are embracing CSR practices (Lordes 2010).

The Multinationals have used CSR to make virtue of necessity. After brand-

threatening publicity in the 1980s and 1990s (such as the Exxon Valdez spill, BP’s

alleged involvement with the Colombian military, and Shell’s role in the attempted

disposal of the Brent Spar oil storage buoy in the North Sea and Ken Saro-Wiwa’s

execution in Nigeria), the companies needed to trumpet new and higher standards.

And in today’s cut-throat game in which the western majors wrestle with Asian

national companies for contracts, big oil sometimes reaches for CSR to gain an edge:

‘Western multinational companies face strong competitive pressures, are driven purely

by commercial concerns and their access to many of the world’s oil reserves is

limited, so they need to use any available means to gain a competitive advantage over

their rivals. CSR may just be one of those means’ (Frynas, 2009:36).

Corporate Social Responsibility (CSR) emerged in the late 1980s as a label for

a philosophy of economic growth in business that values only those gains that can

endure into future generations. Different organizations understand CSR in different

ways. It used to be the sole preserve of socially progressive companies. Now, most

41

multinationals have adopted some CSR principles. The World Business council for

Sustainable Development defines CSR as “the continuing commitment by businesses

to behave ethically and contribute to economic development while improving the

quality of life of the workforce and their families as well as of the local community

and society at large.” Traditionally, in the United States, CSR has been linked to

philanthropy. Companies make profits, unhindered except by fulfilling their duty to

pay taxes, then they donate a certain share of the profits to charitable causes. It is seen

as tainting the act for the company to receive any benefit from the giving. The

European model is much more focused on operating the core business in a socially

responsible way, complemented by investment in communities for solid business case

reasons.

CSR activities in oil companies have many elements, encompassing

employment issues, environmental issues and local community issues. This article

focuses on the last of these three categories and, more specifically, on local

community development projects. These projects are sometimes labelled as mere

philanthropy in the western world and do not appear on CSR radar screens, but in

many developing countries—particularly in Africa—firms are expected to assist their

local communities actively. When asked by the World Business Council for

Sustainable Development how CSR should be defined, for instance, Ghanaians

stressed local community issues such as ‘building local capacity’ and ‘filling in when

government falls short’. Taking this grass-roots African understanding of CSR as a

starting point, this segment of review takes a look at local community development

projects funded by oil companies and tries to assess their actual and potential impact

on development.

2.7 Motives for CSR engagement and their implications

It is often assumed that the rise of CSR can be traced directly back to

globalization and a concomitant expectation that firms would fill gaps left behind by

global governance failures, at the same time as it became easier for NGOs to expose

corporate behaviour in far-flung corners of the planet (Frynas, 2005:583). As a result,

firms have been pressurized to ‘do something’ about the environment, community

42

development or global warming. In some cases the serious social engagement of a

company was triggered by a pressure group campaign against it, a process illustrated

by the impact of the 1995 Brent Spar and Nigeria crises on Shell’s conversion to CSR.

Companies have been subjected to public pressure of varying strength, which helps to

explain why the reactions of companies to calls for greater social engagement have

also varied, as illustrated by the contrast between Exxon’s and BP’s responses to NGO

pressures regarding global warming, or the contrast between the approaches adopted

respectively by some western and Asian-based oil companies. However, the fieldwork

for this study suggests that the firms’ motives for social engagement are much more

complex than simply a response to external pressure. These motives greatly limit the

positive developmental potential of corporate social engagement. What, then, drives

specific firms to engage in social investment? Frynas (2005:584) identified at least

four important factors impelling firms to embark on community development projects:

• obtaining competitive advantage;

• maintaining a stable working environment;

• managing external perceptions;

• keeping employees happy.

This list is by no means exhaustive and other drivers may be added.

Furthermore, social initiatives may serve to address several of these motives

simultaneously or may be partly motivated by a genuine desire ‘to do the right thing’.

But even this brief list can help us to understand why social initiatives have only

limited developmental potential.

2.7.1 The Business Case for CSR

Companies all over the world have, at times been accused of using CSR

initiatives as a public relations exercise to improve their image. However, CSR

programs do help to move companies to the next stage of success and to integrate

them better with the concerns of the societies in which they operate. And we should

not forget the ability these policies have to motivate employees. Bimbo and Natura’s

employees see themselves as part of a wider project besides their mere employees of

43

their respective firms. Grupo Bimb community bank FinComún to provide credit to

small shops. Eighty per cent of the multinational’s revenues come from small stores,

and a quarter of those need small credits. The partnership of Grupo Bimbo and

FinComún allows them to provide credit to their clients and make the value chain

safer and more stable.

At 81 per cent, Latin America has one of the highest enrolment ratios at all

levels of the educational system. However, the emphasis is on higher education,

producing a situation where middle-class children coming out of private primary

schools enjoy world-class universities, while students from poorer families coming

from public primary education are unable to go to university because the quality of

public primary education is poor. Companies that help to improve the level of

education of their employees, as well as their employability, provide long-term

benefits to those who set up specific programs. For example, the biggest Brazilian

private bank Banco Itaú has made education projects as the priority of their CSR

policies. Their educational program ‘Raizes e Asas (Roots and Wings)’ has had a

major impact in the salaries of the students in the program. The bank insvests

US$12,000 per student and research shows that later on their salaries are 12 per cent

higher than those who do not attend the program significant.

2.8 Corporate Social Responsibility and Conflict Areas: The Role of MNCs

The question arises whether an MNC should continue to operate in a region

where its business might be directly or indirectly aggravating an existing conflict.

Some leaders of MNCs facing this dilemma have argued that leaving the area will

simply allow a less scrupulous corporate actor to partner with a corrupt government,

thus diminishing the prospect of respect for human rights. MNCs cannot and should

not replace governments as the primary actors in international peacekeeping.

However, multinational corporations working in partnerships with government, NGOs

and civil society can use their business skills and financial leverage to promote

regional stability.

According to Bennett (2002:408), the private sector can contribute to pre-

conflict or conflict prevention strategies in stable and peaceful regions in three ways:

44

“through its core business activities, social investment programs, and engagement in

policy dialogue and civic institution building.”4 Business can play a role in conflict

prevention through activities that incorporate social and environmental policies or

guidelines on human rights. Managing pre-conflict or conflict situations in higher risk

regions is more challenging but can be accomplished through “preventive diplomacy,

fact-finding and mediation missions,”5 although it is extremely rare for a company to

become involved in actual peacekeeping operations or military deployment unless it

provides logistical support services as a core business activity. An MNC can also

contribute to crisis management in conflict zones through commercial or philanthropic

support for humanitarian relief and responsible management of security arrangements

for the company’s operations, thereby minimizing the risks of human rights abuses.

Finally, businesses can support post-conflict reconstruction and reconciliation

by participating commercially in rebuilding infrastructure and investing in key

productive sectors. They can help create the conditions for resuming trade, improving

savings rates, increasing domestic and foreign investment, promoting macroeconomic

stabilization, rehabilitating financial institutions and restoring appropriate legal and

regulatory frameworks. Currently, many cross-sector partnerships promote

international security and explore conflict prevention, crisis management and post-

conflict reconstruction strategies that address the three principal causes of conflict:

corruption, poverty and social inequality (Nelson, 2000:45).

2.9 Challenges of CSR in Host Countries of Multi-national Companies.

Wells et. Al (2005), have argued that the impact of CSR must also be seen in a

much broader context of international development, not least since CSR is now being

advocated by policy-makers as an alternative route to the public delivery of

development. Bennett (2002:406-408) has identified some of these challenges as

follows:

• Corruption

Corruption stems from the lack of an honest, transparent and accountable

governance system. Corruption may result in government’s loss of control and order,

leading to institutional breakdown and conflict. Consequently, multinational

45

organizations and NGOs are increasingly drawing the private sector into the global

initiative against corruption in order to encourage good governance and conflict

prevention. Financial institutions that once considered themselves removed from

social and environmental controversies have suddenly found themselves the center of

attention. The financial industry has become a major focus of the global anti-terrorism

movement, as evidenced by the US and European governments’ efforts to freeze the

assets of suspected al-Qaeda supporters and other terrorist organizations (Bennett,

2002:408).

In 2000, the anti-corruption organization Transparency International convened

a meeting of 11 international private banks, including Citibank and Chase, to agree

upon a set of “know thy customer” anti-money-laundering guidelines, which became

known as the Wolfsberg Principles.6 Transparency International’s integrity pact calls

for businesses to control extortion, bribery and corruption and to adopt policies of full

transparency regarding funding arrangements in government contracts (Bennett,

2002:409).

Similarly, the UN Office of the Global Compact is examining the issue of

transparency in revenue sharing as a tool for conflict prevention. BP, Statoil and

Newmont Mining Corporation have begun acting on these principles. In 1997, BP

recognized that the company’s involvement in Angola could become problematic, “if

the government fails to live up to the commitments to increase democracy,

accountability and transparency, and if oil revenues continue to be the main source of

income to the government.” BP chairman Peter Sutherland announced that the

company would insist that the payments BP made to the government be transparent.

BP took this step in advance of its first oil production as a result of ongoing dialogue

with Angolan civil society leaders, international NGOs, its own employees and the

Angolan government. Statoil applies the same standards of accounting, reporting and

transparency to its operations in Angola as its operations in Norway. The accounts

covering its revenues and expenses in Angola are in the public domain with the

Norwegian Register of Company Accounts at Brønnøysund (Bennett, 2002).

In 1998, when Newmont Mining Corporation began its joint-venture Batu

Hijau copper mine in Indonesia, it created a program to promote transparency in

46

revenue-sharing payments to host governments. With its first royalty payment,

Newmont placed a full-page advertisement in local and regional newspapers detailing

the amount of money transferred to the national government. For subsequent

payments, totaling more than $38 million by the first quarter of 2002, the company

generated news coverage detailing the royalty payment, transfer documents and

deposit account number. Legally, a percentage of royalties is to flow back to the

region of impact but, in reality, it is often delayed or not sent at all. At first, regional

authorities whose receipt of mining royalties was suddenly exposed to public scrutiny

reacted by attempting to deny the payments. Over the course of a year, however, both

local and regional authorities used the increased transparency and media coverage to

pressure the national government to return funds more quickly to the region (Bennett,

2002).

In combating corruption, businesses find themselves complying with

international laws. The Organization for Economic Cooperation and Development’s

(OECD) Convention on Combating Bribery of Foreign Transactions, known as the

OECD Bribery Convention, obligates its 34 member states to criminalize the bribery

of foreign public officials in the conduct of international business. Similar laws have

been passed by numerous regional organizations such as the Organization of

American States (OAS), Global Coalition for Africa (GCA), Asia Pacific Economic

Cooperation (APEC) and Council of Europe (COE). UN member states are

negotiating a new legally binding international convention against corruption to

address the problems it poses (Bennett, 2002).

On the largest macro-issue, the governance of oil states, Frynas captures the

exasperation of all concerned. The majors can hardly deny that they are intimate

associates of corrupt and authoritarian governments, especially in Africa and the

Caspian Basin. Yet their incentives and leverage are severely constrained by

competitive forces. The western majors have backed one headline good-governance

campaign: the Extractive Industries Transparency Initiative, in which governments

divulge their earnings from oil. But progress has been slow, and the evidence shows

that transparency on state spending, not revenues, is crucial for improvements. In the

end Frynas doubts whether CSR—seen as a distinct track of corporate action parallel

47

to and often overwhelmed by normal business practices—can be more than a

distraction from huge challenges such as governance in oil-producing countries. He

speculates that a robust corporate citizenship could increase long-term profitability,

yet concedes that agencies above companies (like states making trade treaties) would

need to impose common rules on most western firms for this posture to become

possible (Frynas, 2009:203).

• Inequality And Poverty

As poverty and social injustice can be root causes of conflict, greater

understanding is needed of the ways in which global economic forces increase the risk

of conflict. Ways to diminish those risks also need more attention. Many people

believe that the global economy exploits them and that global business and its

symbols, such as the World Trade Center, are legitimate targets of violence. For

United Nations Secretary General, Kofi Annan asserted at Davos in January 2001: “If

we cannot make globalization work for all, in the end it will work for none. The

unequal distribution of benefits, and the imbalances in global rule making,which

characterize globalization today will unravel the open world economy that has been so

painstakingly constructed over the course of the past century” (http://www.ifc.org).

While company operations may be disruptive to local communities, they can

also help provide stability by addressing the concerns of those who are neglected and

excluded from the benefits of the operations. Poverty reduction plans and business

creation programs, as well as revenue-sharing schemes such as funding for

foundations that support social development and environmental remediation, can all

make a difference (Chen, 2006).

Corporate managers feel that dialogue with host government, home

government, local government representatives, civil society groups, local and/or

indigenous community leaders and, when relevant, multilateral organizations, is

important for building bridges for understanding. The World Bank’s Emerging Best

Practices on Consultation calls for “gathering relevant social and cultural information,

designing community relations programs, and developing local capacity to effectively

communicate complex issues across cultural barriers.” Many MNCs work under a

social license. These companies are expected to help develop the region where they

48

operate by hiring local employees, providing training programs, sourcing locally and

consequently supporting the local economy. Some MNCs have avoidance or do-no-

harm mechanisms, which provide compensation for damages to land or costs of

resettlement. Others initiate community outreach projects to build schools, hospitals

and roads that may have little to do with their business interests. These projects often

go hand-in-hand with local capacity- building efforts to ensure the sustainability of

these projects beyond the life of the company’s operations in the area (Bennett, 2002).

• New Leadership

Business leaders need to be sensitized to the effects of globalization. Business

schools still tend to reflect Milton Friedman’s belief that a company’s role is only to

maximize profits for shareholders. Such beliefs are removed from the cutting-edge

research of leading NGOs and the real activities of international corporations. In fact,

doing business in various parts of the world forces executives to promote stability by

being socially and environmentally engaged in their regions of operation. In April

1999, in a significant act of corporate leadership, the chief executive officers (CEOs)

of Reebok, Levi Strauss & Co. and Phillips Van Heusen Corp. sent a joint letter to

Jiang Zemin, the President of the People’s Republic of China. They stressed their

concern “about the arrest and detention of Chinese citizens for attempting peacefully

to organize their fellow workers or to engage in non-violent demonstrations

concerning the conditions of their employment.” While the President has yet to

respond, it does mark the first time that CEOs have banded together in an attempt to

advocate human rights. More important, some executives have recognized the need to

learn from past mistakes. Public attention to the role of extractive companies in civil

conflict peaked in 1995 when Ken Saro Wiwa and eight other Ogoni were executed by

the Abacha regime in Nigeria on trumped-up murder charges. Many saw Saro Wiwa’s

real crime as advocating the rights of the Ogoni people, who opposed Shell Oil’s

operations on their land. The company was destroying the environment and providing

little compensation for the local community. At the time, a Shell spokesman asserted

that the company could not publicly comment on the Nigerian government’s hanging

of the Ogoni Nine because it was not an appropriate subject “for private companies to

comment on” (Bennett, 2002).

49

Five years later, in 1999, Shell’s chairman, Mark Moody- Stuart, said, “The

demands of economics, of the environment and of contributing to a just society are all

important to a global commercial enterprise to flourish.”12 Today Shell is a leading

member of several partnerships aimed at averting crimes such as the execution of Ken

Saro Wiwa (Bennett, 2002).

• Partnership Initiatives

Recently, governments, businesses and NGOs have begun to work together,

developing innovative strategies that help alleviate problems in conflict zones. At the

end of the Second World War, the business community actively promoted the creation

of the United Nations to further its own interest, and that of the world community, in

recovering from the destructive effects of violent conflict. In January 1999, fromer

UN Secretary-General Kofi Annan initiated the United Nations Global Compact to

harness the energy and influence of multinational corporations to act as good

corporate citizens. Annan proposed the idea at the World Economic Forum in Davos,

Switzerland, and formally launched it at UN headquarters in July 2000. The compact

calls on companies to embrace nine universal principles concerning human rights,

labor standards and the environment.13 In its first year, Global Compact focused on

business operations in conflict zones and on ways to enhance cooperation between

business and government. It examined how the private sector deals with security and

human rights issues in conflict zones and identified tools that could potentially

contribute to the prevention and resolution of armed conflicts. The United Nations

now relies on its partnerships with the private sector to help fund its development

work around the globe. Ericsson, a telecommunications company, has a partnership

with the UN Office for the Coordination of Humanitarian Affairs and the Committee

of the International Red Cross, which provides telecommunications for humanitarian

relief work in disaster areas. Cisco Systems supports the United Nations Development

Programme (UNDP) through the NetAid.org initiative, which has raised more than

US$17 million to support humanitarian causes. Microsoft designed computerized

registration systems for the United Nations High Commissioner for Refugees during

the crisis in Kosovo. The World Bank has created many initiatives to enhance security

for companies willing to invest in risky parts of the world. In 1998, the World Bank

50

launched Business Partners for Development, an alliance of business, government and

civil society. The International Finance Corporation, the private lending arm of the

World Bank, offers the “sustainability initiative,” a service that targets investments

that are “financially viable, socially and environmentally beneficial and economically

environmentally beneficial and economically sustainable,” even in risky and uncertain

markets. In countries with weak or no democratic structures and widespread human

rights abuses, the World Bank is incorporating conflict prevention mechanisms in its

lending framework for agreements between multinational corporations and host

governments. The controversial funding for the Chad Cameroon pipeline project is a

case in point. The US$3.7 billion Chad–Cameroon oil pipeline project will develop oil

fields in southern Chad, while constructing a 1,070 mile pipeline through Chad and

Cameroon to the Atlantic coast. It involves two sovereign states, Chad and Cameroon,

their respective pipeline companies (TOTCO and COTCO), three oil companies

(Exxon Mobil, at 40 percent; Malaysia’s state-owned Petronas, at 35 percent; and

Chevron, at 25 percent), and $700 million in loans from the World Bank and the US

and French governments.15 The World Bank, in an attempt to prevent governments

from using their revenues for purchasing weapons of war, is incorporating social,

economic and environmentally sustainable practices intended to benefit the civil

societies of Chad and Cameroon. The Bank’s funding requirements stipulate that 80

percent of each government’s share of the revenue must be spent on improving public

health services, education, agriculture, infrastructure and rural development, while 10

percent is to be held in trust for future generations. The World Bank’s lending

requirements also reduce companies’ political risks in a region that has been plagued

by sporadic outbreaks of civil war for most of the past 30 years, and encourage

companies to invest in local economic development. As Business Week put it: The

$3.7 billion project could bring Chad about $200 million per year for the next 25

years, roughly doubling the government’s annual budget. If used wisely, it could help

rescue Chadians from their crushing poverty (Chen, 2006:402) . The project was

upheld as a model for new partnerships to prevent oil revenues from being diverted to

corrupt government officials, but it was thrown into disarray in December 2001 with

51

the announcement that Chad’s President Idriss Deby had used $4.5 million of the

government’s first oil receipts to buy weapon.

Many MNCs have come to learn that their operations and reputation can

become inextricably involved when government security forces commit abuses

against local populations. Shell in Nigeria, Occidental in Colombia and Enron in India

all experienced such situations. Over the past several years, leading human rights,

environmental and conflict resolution groups have focused their energies on the

extractive sector. They see it as not only complicit in human rights abuses, but also a

potential powerful and influential mobilizing force that could prevent the funding of

conflict and perhaps even promote peace building. Unlike other industries, extractive

companies are tied to the ground and cannot simply leave when conflicts arise. The

end of the Cold War has seen superpower confrontation replaced by a growing

number of localized conflicts. Corporations involved in natural resources extraction,

such as oil and mining, frequently find themselves heavily invested in some of the

most politically and socially unstable regions in the world. On 20 December 2000, the

governments of the United States and Great Britain finalized the Voluntary Principles

on Security and Human Rights, a groundbreaking agreement drawn by several major

oil and mining companies to support a set of human rights principles governing their

use of security forces in foreign operations.

As Frynas (2009) has observed the difficulty for these multinationals is that,

having accepted more responsibilities, they are then expected to do ever more—more

than business priorities can justify. Firms have been loaded with increasing

responsibilities in oil-producing countries because the often dysfunctional local

governments have been unable to fulfil them. (Indeed Frynas argues that CSR can

often just be seen as remedial private action for governance failure: avoiding oil spills

counts as CSR in poorly run Nigeria, but only as regulatory compliance in well-

governed Norway.) The book shows the oil majors shouldering some of these burdens,

but mostly with discomfort.

Environmental CSR is the big success story. Though many problems remain,

the majors have made great progress in reducing spills, cutting gas flaring, and

reporting on impacts. The firms have been proactive both because environmental harm

52

loves publicity and because the business case for cleaning up has added up.

Environmental reforms have been ‘win-win’: selling gas instead of flaring it can be

profitable; installing slower-rusting pipelines can reduce costs. Moreover,

environmental reforms are the kinds of challenges liked by the managers and

engineers who dominate the industry: these are discrete, technical initiatives with

clearly quantifiable outcomes (frynas, 2009).

Frynas depicts firms using funds labelled ‘development’ to further their

commercial goals: gaining access to oil; protecting their facilities from predation;

boosting their brands; and maintaining employee morale. In some cases (one firm’s

donation to the Angolan president’s personal charity) poverty relief seems foremost in

nobody’s mind. Yet even in more promising efforts, such as when a company builds a

town hall or a hospital, closer inspection reveals a rather shallow business motive:

funding showy projects that will keep local leaders, investors or employees happy.

Frynas finds little evidence that real poverty reduction flows from such projects.

Frynas’s careful study of an industry provides much material for meditating on

what responsibilities we should want corporations to bear. Oil companies are

businesses, extremely adept at locating, extracting, refining and selling a minute

fraction of the earth’s molecules. When pressured to step in where governments fail,

they have tended to be reluctant and unreliable (Frynas, 2009)

2.10 Theoretical Framework

This work adopted Corporate Social Responsibility theory of public relations

and Relative Deprivation theory as its theoretical framework.

Corporate Social Responsibility Theory

This theory states that corporate organization should be socially responsible to

the communities where they operate. It should be responsible to their host

communities in the areas of infrastructural development, creation of employment,

environmental protection among others.

The theory further states that corporate organization should contribute to the

development of the community where it operates. According to Ekwelie (1999) as

sighted in Alikor (2009) corporate organization can only maintain their corporate

53

identity and image when they meet the yearnings and aspiration of their host

communities.

Corporate responsibility stimulates understanding and good will between an

organization and its host communities. According to Jackson and Center (2005: 250)

corporate social responsibility is central to the survival of any organization that values

its corporate image.

This work engages social responsibility theory because of its relevance to the

project topic. Since the thrust of public relation is to create mutual understanding and

good will between its host community and the organization. This shows that there is a

linkage between social responsibility theory and public relations vis-à-vis evaluation

of public relations paradigms or techniques.

Similarly, social responsibility theory of public relations in a nutshell,

prescribes that corporate social organization should contribute to the development of

its host community, and protect the environment where the organization operates

from.

Relative Deprivation Theory.

Relate deprivation theory is of the view that interface with goal directed

behaviour creates frustration which in turn leads to aggressive response usually

directed against those reputed to be cursing the frustration (Gurr, 1968: Dowse and

Hughes, (1974). The proponents of this view sees conflict as the outcome deprivation

of groups in society vis-avis other groups that is, what one should get relative to what

others when one identifies as one’s peers or equal are getting. This condition derives

out of scarcity and usually, competition for scarce socio-economic resources remains

the basic causative factor for inter-ethnic conflict (Nwnegbo, 1995), and generally,

mostly, conflicts among human existences. It has to do with recognizing justice,

without recognition of justice (in sharing and public interest); in exchange,

distribution problem arises. According to Zartman (1997: 124) unequal division is

unacceptable and most times negotiation statements.

Relative Deprivation is very suitable in the attempt at finding out the place of

conflict in Africa under-development. First, it links the numerous problems of

conflicts in Africa to a course. It helps us to understand that the numerous problems in

54

Africa are predominantly contention for the resources (as will be seen in the next

section) to make this argument sustaining, we should know that resources are scarce

relative to human needs everywhere, but of peculiar circumstance in Africa having

being exploited, and as a post colonial states and being still, an appendage of the

imperialist countries of the world.

It could also be seen that many of the conflicts also seems as if it is against the

state or for the state (resources) conflict. The response for that is also not far-fetched.

The centrality of the state in (post colonial) African Administration made the whole

lot of the few resources to be centered in the hand of the state, hence struggle for the

resources leads to conflict even in election, governance and more especially resource

allocations.

The essence of this is that crisis permanently generated where there is

conflict/crisis among various interests in the society over the appropriation of the

resources. Those deprived, then, in many ways try to get advantage or distrust the

skewed appropriation. Their instruments could either be their ethnic group, their

religious group, their corporate group etc. It is relevant in understanding also that the

problem of development in Africa is not totally removed from the various country’s

social injustices which colonialism, through its developed and transferred government

structure introduced to African’s heterogeneous societies and un-technically merged

nations (Coleman, 1986).

The relative deprivation theory serves as a good instrument to deal with the

palpable causes and solutions when adequately validated in relation to Nigerian

practical experience. Also this text accepts the first hypothesis as having being tested

and validated by the relative deprivation theory as it advances an acceptable answer to

the question of the curses of conflict in Africa

55

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Okparra , O.K (2001). Niger Delta: Peace and Cooperation through sustainable

development. In Environmental Policy and Law Journal, pp. 302-308. Omotola, S. (2006). Oil politics, environmental apocalypse and rising tension in the

Niger Delta Lagos; African Centre for the Constructive Resolution of Disputes Occasioned Papers. Series 1, volume 1 (pp. 7- 21).

Onyeozu, A.M (2007). Understanding community development. Port Harcourt:

Davidstones Publishers Ltd. The World Business council for Sustainable Development (2010). What is CSR? Wells,J; Perish, M. and Guimaraes, L. (2001).‘Can oil and gas companies extend best

operating practices to community development assistance programs?’, paper presented at the SPE Asia Pacific Oil and Gas Conference and Exhibition, Jakarta, Indonesia, 17–19 April 2001.

58

CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Research Design

For the purpose of this research, the survey research method was used. The

relevance of this research design is vividly explained in the words of Okoro

(2007:37); “as a process of gathering data from a target population through

questionnaire…for the purpose of reaching conclusions on subject matter of study”. In

his view it is obvious that survey design helps the researcher to elicit relevant

responses from the sample of his universe of study. These responses will be generated

as questions drawn from the objective of study; it will be directed to the sample

representing the population of study.

32. Population of Study

The population of this study includes all persons affected directly or indirectly

by the activities of multinational oil exploration in Rivers state. Their opinion is

therefore relevant to evaluating the corporate social responsibility practice of Shell

petroleum Development Company (SPDC) in Rivers state. Hence, the population of

study includes all people that live in all the local government areas in River state. In

all, we have a total of 23 local government areas in River state, with a proposed

population size of about 5.6 million persons (NPC, 2006). The sample frame include

all individuals who can read and write and is 16 years and above.

3.3 Sample Size

Using the Taro Yamane (1963) formular (quoted in Ogbuoshi 2006:17), the

researcher was able to draw up his simple size for the study. The formular is given as

follows.

n = 2)(1 eN

N

+

Where n = Sample Size

N = Population

59

I = Constant future or unit

e = error margin allowed (i.e. 5% or 0.05)

n = 2)05.0(40,185,51

400,185,5

+

n = )0025.0(400,185,51

400,185,5

+

n = 5.129631

400,185,5

+

n = 5.12964

400,185,5

n = 399 (approximately 400)

Hence, for the purpose of this study, a total of 400 sample size was used. This

was distributed as follows: 360 for the citizens of Rivers States while 40 for the staff

of SPDC.

3.4 Sampling Technique

The sampling technique used in this study is multi-stage non-probability

technique. This involves several techniques at different stages of the selection. First,

the researcher selected two (2) local governments each from the three (3) senatorial

districts in Rivers State using simple random selection method. This gives a total of

six (6) local governments. From each local government, two (2) wards are selected

randomly go give a total of 12 wards. A simple size of 400 will be distributed among

these 12 wards in Rivers State.

3.5 Research Instrument

The questionnaire was the research instrument used to draw responses from the

target population of study. The idea behind using questionnaire (especially for staff of

SPDC) is to give balance to the responses from contact with respondents (the

members of the community) so as to build facts that can provide the desired answers

to questions posed in this study.

The questionnaire consists of 50 questions which were drawn from the

objectives of study bearing in mind the relevant answers to the formulated research

60

questions. A total of 400 copies of questionnaire were distributed to both residents of

the communities and staff of SPDC to elicit relevant responses for the study.

3.6 Validation of Research Instrument

The questions in the questionnaire were tested (content-tested) to ascertain if

they relate to the topic under study. Also, it was checked by my supervisor if the

questions adequately covered the topic as well as ascertaining clarity and lack of

ambiguity. Questions were constructed in such a manner as to eliminate biases using

the Likert scale approach.

3.7 Reliability of Instrument

In the words of Asika (2006:73) reliability is “the consistency between

independent measurements of the same phenomenon…the accuracy of precision of a

measuring instrument”. The test for reliability is to ascertain internal consistency with

the objective which the study seeks to achieve. This was done using Reliability Scale

method in SPSS.

Reliability

Table 1: Part B (1) (Questions for Members of the Community)

Case Processing Summary

N %

Cases Valid 350 87.5

Excludeda 50 12.5

Total 400 100.0

Reliability Statistics

Cronbach's Alpha N of Items

.893 10

61

Table 2: (still on Part B [1])

Case Processing Summary

N %

Cases Valid 321 80.2

Excludeda 79 19.8

Total 400 100.0

Reliability Statistics

Cronbach's Alpha N of Items

.738 17

Table 3: Part B [2] (Questions for Staff of SPDC)

Case Processing Summary

N %

Cases Valid 361 90.2

Excludeda 39 9.8

Total 400 100.0

Reliability Statistics

Cronbach's Alpha N of Items

.749 10

From the above tables, the reliability of the instrument was carried out with the

three sections of the questionnaire. The first two sections contained questions for the

members of the community with each having 0.893 and 0.738 reliability (Cronbach’s

Alpha) (see tables 1 and 2), while that containing questions for the staff of SPDC

recorded 0.749 reliability (Cronbach’s Alpha) (see table 3). Hence, with the scale for

measuring reliability put at 0.5, it implies that all the results are reliable, thus the

instrument is reliable.

62

3.8 Method of Data Analysis

The responses generated from the sample size were arranged in tables using

frequency, mean and standard deviation. This is done to show the relationship

between each answer, bearing in mind the research questions formulated for the study.

The use of mean cut off point (as an average of the 4 point Likert scale) was to

enable the study address the respective research questions comparing their deviation

from the mean score. In all, both qualitative and quantitative analysis methods were

employed using statistical package for social science (SPSS) research. Hence, there

was a comparison of the means of each table as it addresses each research question to

meet the objective of the study.

63

REFERENCES

Asika, N. (2006). Research methodology in the behavioural science. Lagos: Longman Nig. Plc.

Ikeagwu, K. (1998). Groundwork of research: Methods and procedures. Enugu:

Institute for Development studies. Muogbo, O. Fagbemi, S.E. and Subair, G. (January, 10:2007). Kano has largest

population in Tribune. Ibadan. pp 1 – 4. Ndagi, J. (1999). Essentials of research methodology for educators. Ibadan:

University Press. Ogbuoshi, L.I. (2006). Understanding research methods and thesis writing. Enugu:

Linco Publishers Ohaja, E. (2003). Mass communication research and project writing. Lagos: John

letter man Ltd. Okoro, N. (2001). Mass Communication research and methodologies. Enugu: AP

Express Publishers.

64

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

4.1 Data Presentation

The data collected for this study used the frequency distribution tables showing

the various responses as indicated using the 4 point Likert Scale of Strongly Agreed

(4), Agreed (3), Disagreed (2) and Strongly Disagreed (1). The tables also include the

mean, standard deviation as well as the decision from the responses. The questionnaire

was analyzed using the Statistical Package for the Social Sciences (SPSS). Below is

the data presentation in tables in relation to the research questions used in this study:

Research Question 1: Are there Corporate Social Responsibility roles carried out by

SPDC in Rivers States?

Table 1: Distribution of responses according to the respondents’ level of awareness of

CSR practice by SPDC in Rivers State

Are you aware of the activities of Shell

Petroleum Development Company (SPDC)

in Rivers State?

Frequency

Percentage

Yes 376 94.9

No 20 5.1

Total 396 100

Out of a total of 400 copies of questionnaire distributed, 396 respondents gave

their responses on this issue. Hence, from the above table it shows that more people

are aware of the activities of SPDC in Rivers State as 94.9% of the respondents

affirmed to that effect. But to further buttress this, the researcher asked to know the

areas which the community benefits from these CSR activities based on their

awareness.

NB: SA = strongly agreed, A = agreed, D = disagreed, SD = strongly disagreed, M =

Mean and StD = Standard Deviation

Mean cut off point = (SA+A+D+SD) ÷ 4

(4+3+2+1) ÷ 4

65

(10) ÷ 4 = 2.5

Table 2: Descriptive on the areas which the community benefits from SPDC CSR

activities in Rivers State

Areas SA A D SD M StD Decision

Construction of good

roads

38 49 123 170 1.8 0.98 No

Provision of electricity 49 132 79 128 2.26 1.05 No

Provision of water

supply

39 150 67 120 2.29 1.03 No

Housing Development 17 49 98 210 1.66 0.87 No

Scholarship to indigenes 62 138 83 99 2.43 1.04 No

Employment 25 130 106 121 2.15 0.95 No

Agriculture 14 45 149 171 1.74 0.81 No

Skill Acquisition 43 134 87 115 2.28 1.02 No

Health care delivery 30 69 127 153 1.94 0.95 No

Using a cut-off point of 2.5 for the mean, which invariably informed the

decision made from the responses, it was obvious that the communities in Rivers State

are not benefiting from the activities of SPDC; hence the company’s Corporate Social

Responsibility roles are not felt. But from the above table, scholarship to indigenes of

the state ranked highest in the responses (with a mean of 2.43), which implies that to

some extent CSR is felt in that area by the host community. Generally, the decision

made from the above responses is that there are no Corporate Social Responsibility

roles carried out by SPDC in Rivers State since none of the indicators scored a mean

of 2.5 as the cut off mean for the responses.

Research Question 2: Are the host community benefiting from the activities of

SPDC in Rivers State?

Table 3: Descriptive on the assessment of the activities of SPDC in Rivers State

66

Assessment Rating SA A D SD M StD Decision

Productive 72 118 107 73 2.51 1.02 Yes

Unproductive 73 105 106 78 2.48 1.04 No

Productive and

Exploitative

92 165 64 46 2.83 0.95 Yes

Unproductive and

Exploitative

64 100 120 84 2.39 1.02 No

To provide answers to research question two, the researcher used the data from

tables 2 and 3. From the responses in table 2 as analyzed above, it was evident that the

community is not benefitting from the activities of SPDC in Rivers State. In

explaining further, table 3 reveals the respondents’ assessment of the activities of

SPDC to accentuate their earlier claim on whether or not they benefit from the

activities. From the finding, it shows that the activities of SPDC are productive as well

as exploitative as revealed in the decision made from the data. These two indicators

scored above the cut off mean of 2.5, with productive and productive & exploitative

recording mean scores of 2.51 and 2.83 respectively, which reflected in the “Yes”

decision on both.

This points to that fact that most of what SPDC does to its host community has

a corresponding benefit to them rather than to the host community. This negates the

principle of Corporate Social Responsibility which says CSR is what a company does

as part of its contribution to the development of its host community where it operates.

Research Question 3: To what extent has the activities of SPDC in Rivers State met

the yearnings of the host community?

Table 4: Descriptive on the respondents’ rating of the extent of needs met by the

activities of SPDC

Extent Rating SA A D SD M StD Decision

To a very large extent 48 48 135 141 2.01 1.01 No

To some extent 47 178 90 66 2.54 0.92 Yes

To a very low extent 94 120 100 52 2.70 1.01 Yes

Not at all 74 42 116 123 2.19 1.13 No

67

Since the findings in tables 2 and 3 reveal that the host community is not

benefitting from the activities of SPDC the way they should as expressed in the

principle of Corporate Social Responsibility, the findings from table 4 affirms that

observation. It reveals that “to some extent” and “to a very low extent” recorded

above the 2.5 score for the mean cut off, hence the decision “Yes” from the responses

showing the infinitesimal extent of the SPDC activities meeting the needs of the host

community.

Research Question 4: Are there likely challenges that impede on the activities of

SPDC in carrying out Corporate Social Responsibility in Rivers State?

Table 5: Descriptive on areas of challenges that impede on SPDC activities

Areas of Challenges SA A D SD M StD Decision

Militant Activities 138 78 96 60 2.79 1.11 Yes

Government Policies 50 114 154 61 2.40 0.91 No

Corruption 199 127 41 21 3.30 0.87 Yes

Pipeline Vandalization 183 102 57 34 3.15 0.99 Yes

Kidnapping of

Expatriates

115 128 84 40 2.87 0.98 Yes

Human right violation 68 130 122 47 2.60 0.93 Yes

Table 6: Descriptive on the lapses in SPDC activities

Lapses in SPDC activities SA A D SD M StD Decision

Insensitivity to the needs of

the host community

197 139 16 27 3.34 0.86 Yes

Lack of strategic Corporate

Social Responsibility

123 203 29 18 3.16 0.76 Yes

Exploitative motive 144 126 90 22 3.03 0.92 Yes

Poor management operation 146 119 89 22 3.03 0.93 Yes

Lack of Public Relations 140 161 54 18 3.13 0.84 Yes

The above responses reveal that all the above listed areas of challenges in table

5 impede SPDC activities except “Government Policies”. The respondents (i.e. staff of

68

SPDC) agree to the fact that the policies of Rivers State government do not in any way

restrict multinational oil exploration companies from carrying out Corporate Social

Responsibility, hence, “militant activities”, “corruption”, “pipeline vandalization”,

“kidnapping of expatriates” and “human right violation” with mean scores of 2.79,

3.30, 3.15, 2.87 and 2.60 respectively constitute barrier to the activities of SPDC in

meeting the yearnings of the host community.

On the other hand, there are certain lapses in the activities of SPDC that

contribute to the constraints they have in carrying out Corporate Social Responsibility

in Rivers State. From table 6, this was revealed from the responses of the members of

the host community. They all affirm that “insensitivity to the needs of the host

community”, “lack of strategic CSR”, “exploitative motive”, “poor management

operation” and “lack of public relations” with mean scores of 3.34, 3.16, 3.03, 3.03

and 3.13 (which is above the cut-off point) all constitute challenge to SPDC carrying

out their Corporate Social Responsibility roles in Rivers State.

Research Question 5: What can be done to improve the activities of SPDC in Rivers

State with the hope of adding value to the social welfare of the host community?

Table 7: Descriptive on the strategies to overcome the challenges

Strategies to

overcoming the

challenges

SA A D SD M StD Decision

Improve the environment 242 115 9 10 3.57 0.67 Yes

Employ the citizens 260 112 6 3 3.65 0.55 Yes

Collaborate with

stakeholders

114 203 42 8 3.15 0.70 Yes

Carry out strategic CSR 208 153 9 4 3.51 0.60 Yes

Develop maintenance

culture

160 175 24 12 3.30 0.73 Yes

69

Table 8: Descriptive on government’s role to help the situation

Government’s role SA A D SD M StD Decision

Probe corrupt staff 243 96 28 12 3.50 0.77 Yes

Give the indigenes control

over the resources

145 130 70 31 3.03 0.95 Yes

Develop environmental

sustainability policy

220 120 25 11 3.46 0.75 Yes

Stop gas flaring 251 103 12 10 3.58 0.68 Yes

Monitor the activities of

SPDC

275 96 9 5 3.66 0.59 Yes

From the two tables above, the respondents agree that both government and

SPDC have a role to play in ameliorating as well as bringing a lasting solution to the

situation. All the indicators listed in table 7 on the strategies which SPDC should

adopt to improve their activities in meeting the needs of the host community recorded

above the cut-off point of 2.5 (Mean Score). Moreover, the need to improve the

environment and provide employment for the citizens ranked highest in the strongly

agreed point scale from the responses. Hence, the respondents place premium on the

two indicators as paramount if SPDC must gain the loyalty and acceptance of the host

community.

On the other hand, from the role of the government in helping the situation (as

seen in table 8), it reveals that the need to stop gas flaring and monitor the activities of

SPDC ranked highest in the strongly agreed point scale. This also shows that the

respondents see these two indicators as important from others in ameliorating the

situation as well as adding value to their social welfare.

4.2 Discussion and Interpretation of Findings

According to the corporate social responsibility theory which states that

corporate organizations should be socially responsible to the communities where they

operate. The theory further has it that these companies should be responsible to their

70

host communities in the areas of infrastructural development, creation of employment,

environmental protection among others.

The areas of benefit as revealed in the findings of this study, show that SPDC

failed in its corporate responsibility as seen in tables 2 and 3, hence, their corporate

image is threatened. This agrees with the findings of Alikor (2009), that corporate

organization can only maintain their corporate identity and image when they meet the

yearnings and aspirations of their host community.

The major indicators from the findings (in table 2) which the respondents

strongly disagreed (which ranked highest) in areas of benefit from SPDC activities

were: housing, construction of roads and agriculture. These indicators point to the

basic necessities of life (i.e. food, shelter and clothing), which when lacking can lead

to serious aggression from the host community.

This is what relative deprivation theory tries to explain. According to the

theory, the interface with goal directed behaviour creates frustration which in turn

leads to aggressive response usually directed against those reputed to be cursing the

frustration. (Gurr, 1968: Dowse and Hughes, 1974).

It is not out of place for the host community to respond negatively to the

activities of the oil multinationals which has affected their basic necessities of life and

as such threatens their existence.

On the extent of the assessment of the activities of SPDC, the findings (in table

3) reveal that it is both productive and exploitative. What this means is that the

activities of SPDC leads to their own benefit at the expense of that of the host

community. The relative nature of these benefits is what accounts for the aggressive

tendencies seen in the behaviours of the host community. These behaviours (e.g.

militant activities) in turn impedes on the activities of SPDC in carrying out their

Corporate Social Responsibility roles in Rivers State as discovered in the findings of

this study.

Studies have shown that despite some notable exceptions that may have been

inspired by the protestant ethic, the concept of corporate responsibility for most

companies was largely economic in the 19th century. This view has modified with

time under the influence of government and public pressure, with a resulting

71

contemporary view of CSR that is still economically oriented, though underpinned by

the requirement to consider social causes and the social consequences of an

organization’s economic activities. The major perception of CSR is that it can be an

excellent tool for enhancing the legitimacy of the firm among its stakeholders and the

development of a positive corporate image.

On the challenges that impede the activities of SPDC in Rivers State,

corruption and pipeline vandalization ranked highest in the strongly agreed point

scale from the responses (in table 5). This also points to the earlier findings that the

relative deprivation of basic necessities of life led the host community to engage in

pipeline vandalization and other corrupt practices to express their grievances to the

neglect show by SPDC to the needs.

The relative deprivation theory also finds expression in this finding, as it

explains the cause of conflict and helps one understand the numerous problems

accruing from it. Here, emphasis is on conflict of interest. Both the host community

and SPDC have different interest in their relationship, but an attempt to deprive one

from another leads to conflict which affects development.

Also, insensitivity to the needs of the host community and poor management

operation of SPDC ranked highest from the strongly agreed point scale as expressed

by the respondents (in table 6). This agrees to other findings that the bone of

contention is still interest.

The need of the host community (food, shelter and clothing) far outweighs

other benefits that should be considered, if SPDC must gain acceptance in Rivers

State.

It is important to note that a key vehicle for enhancing corporate image is the

social report (Hess 1999). The value of the social report is perceived as residing in the

creation of social transparency as well as in institutionalizing responsible decision-

making and creative thinking in management. Hess (1999) argues that there is a need

to establish an audit system that includes all aspects of a firm’s social performance.

This will help assess the significant benefit which the host community derives from

the activities of multinational oil exploration companies in Rivers State with particular

reference to SPDC.

72

On the ways to improve the activities of SPDC in Rivers State, the findings

reveal that there is the urgent need to improve the environmental conditions of the

host community, provide gainful employment for the citizens as well as the need to

monitor the activities of SPDC by the government. These all ranked highest in the

strongly agreed point scale (in tables 7 and 8).

This explains that it is a collective effort which must involve all stakeholders

(the host community, SPDC and the government of Rivers State). Other studies on

how to carry out effective Corporate Social Responsibility agrees with this finding.

According to a study on Pharmaceutical companies conducted by Clark (2000),

a major cause of the challenges of CSR in companies’ stakeholder relations identified

in the literature show that it partly derives from the different priorities demanded from

firms in the name of CSR by different stakeholders. Further, the literature revealed

that although effective communication methods are recognised as paramount for the

overall impact of managing corporate stakeholder relationships, they are largely

absent from social responsibility literature (Clark 2000:363).

Finally, there are various dimensions to the findings in this research and each

finding is linked to another cause in the study. It produces a kind of chain reaction of

the cause – effect relations observed from the findings. First, the failure of SPDC to

carry out effective Corporate Social Responsibility leads to aggressive tendencies

which in turn impedes in the general activities of the company to meet the needs of the

host community. Also, certain lapses from the company itself have contributed to the

nature of CSR that is practiced. A deliberate and conscious sensitiveness to the needs

and aspirations of the host community was discovered as a major lapses in SPDC,

which finds expression in constant communication with stakeholders on how best to

address the basic needs of the host community.

73

REFERENCES

Hess, D. (1999). Social reporting: A reflexive law approach to corporate social responsiveness. Journal of Corporate Law, Fall, 25 (1), 41-85.

Clark, C. (2000). ‘Differences between Public Relations and Corporate Social Responsibility: An Analysis’ Public Relations Review. 26(3): 363-80

74

CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 Summary

The activities of oil exploration by Shell Petroleum Development Company

(SPDC) in Rivers State is a far cry from what Corporate Social Responsibility practice

should be from the findings in this research.

The cycle observed from the findings in this study can be traced to one major

lapse from SPDC which is: not being sensitive to the needs and aspirations of the host

community. This insensitivity can be traced through the 90’s to date, when the

operating environment for these multinational oil corporations was one of mistrust

between the companies and the communities in which these companies operate.

More so, the crisis nature of governance in the region paved the way for youths

to engage in all forms of disturbances that threatened the wave of development which

should have improved the living conditions of the people of the region.

To a large extent, this has greatly affected the significant benefit that effective

Corporate Social Responsibility practice would have produced if such enabling

environment was provided.

Huge losses have been recorded in the Niger Delta region due to environmental

degradation that affects the major means of livelihood of the people, which is

agriculture and fishery.

The exploitative tendencies observed in the activities of SPDC as revealed in

the findings of this study creates an impression that may not foster a cordial

relationship between the company and its host community.

This indeed is what effective Corporate Social Responsibility would address

using communication and constant dialogue with stakeholders on better ways of

meeting the needs and aspirations of the people of the region.

5.2 Conclusion

This study is an evaluation of the Corporate Social Responsibility practice in

multinational oil exploration and production companies in Rivers State with particular

reference to the activities of SPDC.

75

The researcher undertook a general overview of the nature of the activities of

multinational oil companies in Rivers State and by extension all oil producing states in

the country.

This study was anchored on the Corporate Social Responsibility theory as well

as the Relative Deprivation theory. Using the survey method of research and the

questionnaire as the instrument for data collection, responses were gathered on the

nature of CSR activities carried out by SPDC in Rivers State.

This was done to ascertain if actually the host communities are benefitting from

these CSR activities, their level of assessment of the benefits and the likely challenges

faced by SPDC in carrying out these activities as well as ways to improve on the

activities.

The result revealed a cycle of operations that have cause and effect relation,

which is explained by what SPDC does to its host community and how the host

community responds to the activities of SPDC in view of what constitutes effective

Corporate Social Responsibility.

5.3 Recommendations

The practice of Corporate Social Responsibility by SPDC in Rivers State has been

greeted with contempt as revealed in the findings of this study. Hence, the researcher

gives the following recommendations:

(a) Shell Petroleum Development Company’s CSR in Rivers State should be

anchored on the basic needs of the host communities. Hence, in running their

business affairs, the company should do so in close conjunction with an array

of ‘Stakeholders’ so as to promote the goal of sustainable development.

(b) Companies that engage in CSR should not just be concerned with making it

work but should rather consider what catalyzes them to engage in increasingly

robust CSR initiatives and consequently impart social change.

(c) Shell Petroleum Development Company’s Corporate Social Responsibility

practice should always aim at doing well by doing good. Hence, the yardstick

to measuring its effectiveness should go beyond the workings of the practice.

76

(d) Studies have shown that people perceive CSR involvement as developmental in

nature; hence, companies should have capital development as a focal point of

operation.

(e) Companies that engage in CSR should undertake a periodic assessment of how

the host communities perceive their CSR activities in meeting with the needs

and aspirations of the people in the community where they operate.

(f) Shell Petroleum Development Company and other multi-national oil companies

operating in Rivers State should cultivate the culture of adopting proactive

Corporate Social Responsibility rather than their culture of defensive and

reactive CSR in order to minimize community relations-induced hostilities in

their areas of operation hinged by poor CSR activities.

(g) Shell Petroleum Development Company’s CSR programmes meant to

stimulate symbolic relationship between its host communities and itself should

be participatory and communities-driven in order to make the host communities

feel a sense of belonging. The host communities should be carried along right

from the conception of the CSR programmes to its implementation.

(h) Shell Petroleum Development Company and other multi-national oil companies

should embark on periodic evaluation of their CSR programmes carried out

hitherto in their areas of operation in order to ascertain the disposition of the

beneficiaries and the efficacy of the programmes in their host communities

which are meant to save as recipes for fruitful relationship with their immediate

constituents or host communities.

77

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APPENDIX

QUESTIONNAIRE

Department of Mass Communication, Faculty of Arts, University of Nigeria, Nsukka. 2nd June, 2012 Dear Respondent,

REQUEST FOR THE COMPLETION OF RESEARCH

QUESTIONNAIRE

I am a post-graduate student of the above-named Department and institution,

conducting a research on: An evaluation of the Corporate Social Responsibility

practice in Shell Petroleum Development Company (SPDC) in River State.

This is strictly an academic enquiry for my Master’s Degree programme. Your

honest response will be highly appreciated and treated in the strictest confidence.

Thank you for your cooperation.

Yours faithfully,

Ikiriko, Stella

PART A (PERSONAL DATA)

INSTRCUTION: Please tick (√ ) appropriately

1. Age: 18 – 25 26 – 35

36 – 45 45 and above

2. Sex: Male Female

3. Marital Status: Single Married

Divorced Separated

4. Religion: Christianity Islam

Others (specify)

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5. Educational Qualification:

First School Leaving Certificate SSCE

OND / HND Bachelor’s Degree Masters and Above

PART B (RESEARCH DATA) PART 1 (FOR HOST COMMUNITY)

6. Are you aware of the activities of Shell Petroleum Development Company

(SPDC) in Rivers State? Yes No

NB: For your response below, the following are the meanings to the acronyms

(SA = Strongly Agreed, A = Agreed, D = Disagreed and SD = Strongly Disagreed)

7. In your own opinion in what area is your community benefiting from the

activities of SPDC in Rivers State?

S/N AREAS SA A D SD

7 Construction of good roads

8 Provision of electricity

9 Provision of water supply

10 Housing Development

11 Scholarship to indigenes

12 Employment

13 Agriculture

14 Skill Acquisition

15 Health-care delivery

8. What is your assessment of the activities of SPDC in Rivers State?

S/N ASSESSMENT RATING SA A D SD

16 Productive

17 Unproductive

18 Productive and exploitative

19 Unproductive and exploitative

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9. To what extent do you think the activities of SPDC in Rivers State have met

the needs of the people in your area

S/N EXTENT OF MEETING NEEDS SA A D SD

20 To a very large extent

21 To some extent

22 To a very low extent

23 Not at all

PART B (2) (FOR STAFF OF SPDC)

10. The activities of SPDC in Rivers State are faced with these challenges

S/N AREAS OF CHALLENGES SA A D SD

24 Militant activities

25 Government policies

26 Corruption

27 Pipeline vandalization

28 Kidnapping of expatriates

29 Human right violation

11. The activities of SPDC in Rivers State are aimed at achieving the following.

S/N ACHIEVEMENT RATING SA A D SD

30 Development of the economy

31 Exploiting the resources

32 Degrading the environment

33 Industrialization

34 Corporate Social Responsibility

35 Investment

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PART B (1) CONTD (HOST COMMUNITY)

12. What can SPDC do to overcome the perceived challenges?

S/N WHAT SPDC CAN DO SA A D SD

36 Improve the environment

37 Employ the citizens

38 Collaborate with stakeholders

39 Carry out Corporate Social Responsibility activities on

host community

40 Develop maintenance culture

13. The following are the perceived lapses of SPDC in their oil exploration

activities.

S/N LAPSES IN SPDC ACTIVITIES SA A D SD

41 Insensitivity to the needs of the host community

42 Lack of strategic CSR

43 Exploitative motive

44 Poor management operation

45 Lack of public relations

14. Things government can do to help ameliorate the situation or reduce the

adverse effect of these activities of SPDC.

S/N GOVERNMENT ROLE SA A D SD

46 Probe corrupt staff

47 Give the indigenes control over the resources

48 Develop environment sustainability policy

49 Stop gas flaring

50 Monitor the activities of SPDC