CSR & Extractive Industry

CSR & Extractive Industry

There is a disconnect between the massive revenues received from the extractive industries in Nigeria and the economic development of the communities where the revenues are derived from. Lack of social dimension to the development of the people has caused tension between those who work in the extractive industries and those who are in the receiving end of industrial practices. The adverse impact of the extractive industries on the citizenry has raised many mind boggling questions. Is there a strategic vision to encourage the people at the level of operationalization? Does the extractive industry encourage economic demand and how can sustainability in the extractive industries be implemented at the level of policy implementation to enhance good community relations? Who is to be held responsible for community development? Is it the extractive industries which the people believe are exploiting their lands or the government that is supposed to be responsible to them? These were some of the issues that Bekeme Masade’s led CSR-in-Action; a non Governmental Organization with focus on Corporate Social Responsibility (CSR) addressed when it brought stakeholders in the extractive industries together and deliberated on how sustainability of CSR could be enhanced and projected thorough regulatory frameworks for organizational practice. Dr. Uwem Ite, Team Lead, Information, Education, Communication and Capacity Building Sustainable Development and Community Relations of Shell Production and Development Company (SPDC) spoke to Nigeria’s Oil and Gas Monthly Correspondent, OGODO DOUGLAS, on Shell’s role concerning CSR, that the company being one of the pioneer extractive industry in Nigeria, has done a lot and should be commended. Excerpts:

As one of the extractive industry in Nigeria, what is the role of Shell in the aspect of CSR? Shell has traditionally focused on four main groups of activities when it comes to CSR. The first one is education, the second is community led development otherwise known as the Global Memorandum of Understanding (GMOU). The third one is Enterprise Development and the fourth, Community Health. These are the four key aspects. In education, Shell has just launched a new strategy which is fixed on the United Nations Educational, Scientific and Cultural Organization (UNESCO) strategy which is about education for all. Shell looked at the two options and tried to find some good things that it could implement from there. Shell did not intend to take everything from those two documents. The company endeavoured to contribute its quota to Nigeria’s education so as to meet up with international standard. In the area of Enterprise Development, we know that unemployment is a very big issue in the country and the Niger Delta as well. Shell trained young people on how to start a business, manage it and even employ other people, so that they do not expect or believe that they can only work in the oil industry. Obviously, if they have jobs they can do they should be able to work for themselves. Shell provided the training and some start-up fund. In some cases the start-up equipment they utilize to start the business. We have trained people in different vocations such as fashion design, catering, hospitality management, furniture and carpentry depending on what their interest is. On the aspect of community health, there are some communities that do not have access to health care facilities, not even a clinic. What Shell did in its areas of operation was to have mobile clinics and hospitals. Shell went to these communities with full complement of doctors and equipment. Sometimes, Shell medical staff stayed there for two to three days a week for free medical attention to the communities. The Community led Development which is called the GMoU, what we did was to allow the community themselves to be in the driving seat of their own development. We provide money on a five year basis and give them technical support by employing a Non Governmental Organization (NGO) to assist in planning the development of the communities. Through this process they determine their own project and Shell does not decide for them. What Shell did was to provide financial support based on the volume of production. The communities are grouped into what we call cluster and on that basis they are able to have a developmental plan over a five year period. They decide what they want to do based on the money they get from us.

A participant spoke at the conference that she saw Shell’s brochure on CSR, having been to the Niger Delta before, that, it is just a mere paper work. Is Shell using Public Relations gimmicks to deceive Nigerians? I think she was surprised that we could print those photographs in those brochures that were given out to people. When she asked the question, I clarified that those projects and the pictures are real because I was part of those who worked to produce the brochures. I know where these projects are and they are real. That is why we put the names of the locations. If you go to those places shown in the brochures, you will find those projects and the people who have benefited in Shell’s GMoU.

Legbosi Saro Pyagbara, President of the Movement for the Survival of the Ogoni People (MOSOP) was also of the view that there is nothing on ground to show that Shell has involved itself in CSR in the Niger Delta. What is your response to this? Ogoni is a different case which I am not going to comment on because it is still a case that has not been resolved yet. Ogoni does not have a GMOU and you don’t expect them to have because they are not in our areas of operations. It is an isolated incident. So, Ogoni, when it comes to community development, it is a completely different story. But for those that have GMOU, they can attest to that fact. If you look at the brochures, we have clearly stated where those projects are and if you open the brochures you will see the names of the communities. The projects are conspicuous for people to see in these communities.

If Shell has actually done so much for the Niger Delta people having been in operation in Nigeria for the past sixty years. Why is it that people are still aggrieved, agitating and holding the government to ransom, if there are realities on ground to show that as an extractive industry in Nigeria, Shell has tremendously affect the lives of its host communities in terms of CSR? The dept of poverty in the Niger Delta, no company can have the resources to solve the problems. Although it is understandable that they will always ask for more because they have been left in a situation which is not the fault of Shell. We have always emphasized that government has the primary responsibility for development. The government of this country has failed to do that, even with the rich amount of resources it has. The people will be clamouring for more based on what they think they should get not necessarily because of what they think that Shell should give. The fact that they have been neglected by successive governments in this country which has made the poverty level to be high is enough for them to ask for more. People should know that Shell is only making a contribution to community development and it cannot be obliged. It is not the responsibility of oil companies to provide developmental facilities for communities. But if they do it as part of their CSR, they should be commended.

Remember that Shell has been in oil production in Nigeria for many years It does not matter, it is the responsibility of government to provide development for its people and it does not matter how long an oil company has been in a place.

Don’t you think the people are far from the Federal Government? People cannot be far from the government because governments are of different levels. They have local government that they can work with which is just a walking distance from them. They have state and Federal Government. They have to make a choice to move closer to those who represent them as government and they are not far because they are of different levels.

Participants who attended this conference were shown slides from Texas and the Niger Delta, the impression given was that Texas was built with proceeds from oil production. Today, in Nigeria, there are about three multinational oil companies from America in Nigeria. Why have they not replicated what they did in their country in Nigeria? Texas was not built by Shell or any other oil company in America. It is the government of the US and the state of Texas that used royalties and taxes that were paid by the oil companies to develop Texas; it was not done by the oil companies. None of the oil companies operating in the US built Texas.

The impression that was given is that Texas is developed by the oil companies and it is a centre for major oil and gas conferences in the world. Why is Nigeria not like Texas since oil was discovered in 1956? It is a wrong impression, what the slides were showing is that Nigeria can convert the Niger Delta to be like Texas and that is where the government comes in. if the government does not have the right institution and if the government does not use the resources it has judiciously, what we have seen in Texas will not happen in Nigeria. That is why most people are complaining that why would oil money be used to build Abuja? Look at the road there? Where did they get the money from? Yet, the people in the Niger Delta live in squalor without development. It is not the fault of the oil companies operating in the Niger Delta. It is the responsibility of Nigeria’s government to build Niger Delta and make it look like Texas.

Why is it that the multinationals in Nigeria cannot call the attention of the government on the issue of CSR and community development since they are at the receiving end from aggrieved people? It is not the role of multinationals to determine where the government spends its money. The role of the oil majors is to produce oil because they are oil and gas companies. Although they are at the receiving end that is why they endeavour to educate and inform the people to understand the roles that oil companies have played and that of the government. It has been emphasized that oil companies are not in the business of development. They are in the extractive industry and they pay taxes and royalties to government that is supposed to use the resources to develop and provide social amenities for the people. If they don’t do it, then it means they have failed the people that they are governing.

The Editor-in-chief of BusinessDay, Professor Onwuchekwa Jemie was of the view that what the oil companies do in Nigeria is quite different from what they do in their countries and other places where they operate. In terms of CSR, they have done much in other countries. How can this anomaly be corrected? That is not correct. Oil companies don’t build schools in America, Canada or any where they operate in the world. It is only in Nigeria that an oil company wants to do business, it will be asked to construct roads and be involved in infrastructural development of the country. The schools, roads and facilities you see in other countries were done by the government that is why there are enabling environment. In Nigeria, oil companies do not have enabling environment.

As an expert in the oil and gas industry, what is your advice for the government? The government is to take up its responsibility and be transparent. It should be accountable to the people it governs. When that is done, people can then ask their local government Chairmen that are closer to them in the grassroots to account for revenue collected every month because the bulk of the money comes from oil proceeds. This will enable people to know how much their local government got and how it was spent and what it was spent on. There will be trust and accountability on the side of government and the people. But when there is a gap between governments at all levels and the people they govern, transparency and accountability will be put to question and there will be problem. Of course that is part of what this conference tries to address.

What is your advice for the people? The people should hold their government accountable because they elected those in government. The people in the House of Representatives are not representing the oil companies but the people from their respective geographic region. Those people also in the Senate at Abuja are representing the people, not the interest of the oil companies. These people are from the communities. If the people have representatives that they neither know nor see, then there is a problem.

Originally published here: http://www.nigerianoilgas.com/csr-extractivs-industries/


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