CSR: Oil Companies in Nigeria - Research Proposal Example

CSR: Oil Companies in Nigeria Name: Institution: Course: Date: CSR: Oil Companies in Nigeria Introduction The mono-economic base that defines the Nigerian economy derived from crude oil production and exportation that located in the Niger Delta. This region comprises nine states that with a populace of approximately 28 million people, which is approximately 16% of the entire Nigerian population (Emanuel 2004). This population in Niger Delta has been experiencing challenges resulting from the effects of oil exploration, which have resulted in years of environmental degradation. It is ironical that oil companies in Nigeria contribute to about 95% of the country’s foreign exchange earnings (George 2006). Joint efforts of different oil corporations such as the Nigerian National Petroleum Corporation (NNPC) have accrued billions of dollars by conducting gas and oil business initiatives on behalf of Nigerian government. NNPC operates through joint venture contracts with Anglo Dutch Conglomerate, Chevron, Nigerian Liquefied Natural Gas, Shell petroleum Development Company being the greatest partners in the joint venture (Ross 2003). Despite the influx of oil companies in Nigeria and the heightening of their operations in Niger Delta, the region has not been able to benefit from the activities of the companies. The oil companies claim that they have been instrumental and active in the establishment and execution of several development projects in the host communities as part of their corporate social responsibilities. Their claims include the construction of infrastructure such as roads, school and hospitals, and provision of portable water (Wifa 2013). These companies have also been active in providing scholarships, supporting health company programs and sponsorships among other activities. The host communities in Niger Delta do not seem to acknowledge the acclaimed community projects by the oil companies as they continue in their hostile disposition to the companies. The relationship between oil companies and oil communities has been characterized by violence and hostility. The hostilities have taken the form of pipeline vandalism, militancy, inter and intra-community conflicts, seizure of oil installations, kidnapping and shutting down of oil companies (Zabbey 2009). The intensification of violence in Niger Delta has been considered as a matter of national and global concern. The increase in the level of instability in the Niger delta has been partially responsible for the fluctuation of crude oil prices in the international market. From a national perspective, the crisis has been accused of constituting a greater threat to the development of the economy. The persistent militancy and restiveness in the Niger Delta exists in spite the claims by oil companies that they are doing enough regarding corporate social responsbility in the region (Turban & Greening 1997). It is against these claims that the study will examine the acclaimed community projects of Chevron, a multinational oil company in Nigeria, in there host communities of Niger Delta. Proposed title CSR: Oil Companies in Nigeria Strategic relevance The relevance of corporate social responsbility efforts by multinational oil companies in Nigeria is dependent on their ability to address the needs of the host communities. The process of addressing the differences existing between the local communities and multinational oil companies sin Nigeria will lead to the development of sustainable solutions towards strategizing for corporate social responsbility initiatives. Through the relevant initiatives, it will be possible to assess the ways through which the host communities and multinational companies can ensure mutual existence that enhances economic development. Research rationale The oil industry in Nigeria plays a crucial role in the performance of the national economy. The existence of hostilities between the oil rich communities and multinational oil companies emanates from the inconsistencies of the corporate social responsbility efforts by these companies. An investigation into the relevance of corporate social responsbility efforts by companies by multinational oil companies in the local communities is vital. The investigations will unearth some of the inconsistencies in the CSR efforts by multinational oil companies will be used in the determination of strategic ways to revamp the situation. The research will seek the development of recommendations of strategic advantage points for the reverse of poor performance trends in the Nigerian oil industry, as a result, boost the economic performance of the country, and improve on the life stands of members of the host community. Problem statement The impatience of the population in the oil rich region in Nigeria and the underlying consequences for the development of the country’ economy has generated debates in recent times. This is because of the existence of heightened tension, agitation among community members’ persistent predicaments in the Niger Delta despite numerous attempts by the Nigerian political systems to engage in the creation of a relatively peaceful environment between the multinational companies and the local communities. Inasmuch as these companies assert that they have initiated numerous corporate social responsbility initiatives, the local communities are still unreceptive and are in continuous clash with oil multinational companies. The corporate social responsbility assertions by the multinational companies and the tenacious aggression by members of the host population makes it a necessity to engage in an examination of the claims of these companies regarding corporate social responsbility initiatives. This will involve gauging the degree by which the local communities are satisfied with CSR efforts and the relevance of these efforts to the needs of the communities. Provide effective responses to underlying questions among members of the community and the oil companies will provide a technique of addressing the hostilities between the local communities and multinational corporations. This will be the main area of focus for this research. The following research questions will be answered to address the objectives of the research. Research questions What are the main projects that constitute CSR determinations of Chevron Company to the oil producing communities in Niger Delta? What is the degree of contentment of the oil producing areas with the CSR schemes initiated by Chevron Nigeria Limited be gauged? How relevant are CSR projects by Chevron Company to addressing the demands of the local communities in Niger Delta? Objectives The long-term objective of the study is to develop effective techniques of understanding the CSR efforts initiated by oil companies in Nigeria and their contribution to addressing the needs of the local communities. This is because of the need to develop methods through which the host communities and the oil companies can mutually co-exist for the development of the national and global economy. The study will operate on the following objectives: To determine the main types of projects in the form of CSR efforts initiated by Chevron Oil Company among host communities in Niger Delta To assess the level of satisfaction among host communities in Niger Delta with the CSR projects initiated by Chevron Oil Company To determine the relevance of CSR projects by Chevron Oil Company in addressing the needs of host communities in Niger Delta Preliminary literature review The Nigerian oil industry has been in operation for more than a century. Germany was the first foreign country to begin oil exploration in 1908. However, their efforts were terminated by the outbreak of the First World War (Nzekwu 1982). In 1937, other players such as the Anglo Dutch Consortium and the Shell Petroleum Development Company made initiatives towards oil exploration in the Niger Delta but their efforts were curtailed by the outbreak of the Second World War. Effective oil exploration business in Nigeria according to Agbo (2008) began in 1956 with the arrival of the Shell Company formerly known as Shell D’Archy. The company set up a camp in Oloibiri and their activities were followed by years of investing millions of dollars within the region for oil exploration business. According to the observations of Lukerman (1998), Shell Company began producing and exporting oil at the rate of 51000 barrels per day. By 1979, the company had doubled the quantity of oil produced and exported with crude oil production reaching a peak of 2 million barrels per day. Over the years, Nigeria has grown to become one of the major players in international gas and oil business with the country’s national oil reserve estimated at 36 million barrels by 2007. The country is the largest oil producing and exporting nation in Africa and the sixth on the global platform. By 2006, the country was able to produce 2.4 million barrels per day (Osuntokun 2010). In the Organization of Petroleum Exporting Countries (OPEC), Nigeria accounts for approximately 30% of the total oil produced in Africa (Osuntokun 2010). Oil producing communities in Nigeria are located South of the country bordering the Atlantic Ocean and Cameroon. The region is representative of approximately 12% of the country’s total surface and according to the 2006 population census, the Niger Delta has a population of about 28 million residents. The settlement pattern in the region is largely determined by the nature of the terrain and availability of dry land. Low levels of rainfall and poor drainage systems are considered as the main factors accounting for relatively low numbers of large settlement in the Niger delta (Opara 2008). Oil rich communities in this region are those that play host to multinational oil companies. The nature of the terrain in Niger Delta makes these communities different from other parts of the country because they are dependent on water of their survival. This means that it is the responsbility of any multinational oil company to develop techniques of improving the livelihoods of the local community (Odenigbo 2008). For such companies this is realizable when they consider that the host communities are living on wetlands where fishing and farming are the major economic activities. These companies also have the responsbility of improving on community livelihood because according to existing statistics by NDDC (2004), poverty levels in oil communities living in Niger delta is relatively higher compared to the national average. According to George (2004), a typical oil community in Niger Delta is characterized by a high population of unemployed youth who are poverty strikes and depend on multinational oil companies to supply drinking water. These communities depend on water transport due to poor state of roads while farming and fishing form the main source of employment. The poverty levels and high unemployment rate among members of the oil communities can be attributed to decades of political and economic marginalization by successive Nigerian governments. Furthermore, the poverty levels can also be attributed to the initial hesitation by multinational oil companies to engage in CSR efforts, which are considered essential in addressing social development and eradication of poverty in the region. Part of the main reason for hostilities and violence between the oil producing communities and the multinational oil companies are the policies developed by these companies (Wifa 2013). According to George (2004), part of these hostilities and violence have resulted in mass killings arising from inter and intra community conflicts, vandalism of oil company property, large-scale theft of oil, hostage taking, disruption and sabotage of the activities of the oil companies. Enyia (2008) argues that level of acute poverty that characterizes life of host communities in Niger Delta puts a number of demands on oil companies operating in the region. Limited involvement of the Nigerian government and the difficult terrain of these communities have contributed to making the area highly volatile and the communities more confrontational. There have been accusations against the multinational oil companies operating in Niger Delta based on claims that they do not engage in relevant CSR projects. This is because despite their activities that generate revenue in the form of billions of dollars, the host communities in Niger Delta still face high levels of poverty, high rates of unemployment, low life expectancy and the challenge of environmental degradation (Peak 2010). However, oil companies such as Chevron and Shell have accused the host communities of insincerity and the development of high level expectation that surpass the ability of the companies (Ekeocha 2001). Companies such as Chevron argue that their business operations and CSR efforts have been directed towards the interest of the society, which includes the ability of the company to take responsbility for the impact of their activities on the host communities. For this company their obligation towards the host communities has been extended beyond the statutory obligation that demands their compliance with existing legislations (Emmanuel 2004). The multinational oil companies perceive their CSR efforts in the Niger Delta as essential voluntary attempts aimed at improving the quality of life for the host communities and the Nigerian society as large. Multinational oil producing companies argue that they have been contributor to improving education standards in the region by constructing and equipping schools with learning materials. In addition, companies such as Shell have been instrumental in providing sponsorships and scholarships to students who excel in their academic work (Omole 2000). Additional contribution by companies such as Chevron has been improving on road and communication infrastructure, which has been considered vital for the economic development of the region. Furthermore, these companies argue that they have been advocates of environmental conservation in Niger Delta through the introduction of community-based programs focusing on environmental conservation. Through such programs, the companies claim that they have been able to merge with the community in the development of strategies on how to ensure that oil exploitation activities do not affect the environment considering that fishing and farming are the main economic activities of the host communities in Niger Delta (Rondinelli & Vestag 2000). Companies such as Chevron have also contributed to the promotion of life and health of members of the local community by constructing and equipping health care facilities in the region. Furthermore, these companies also claim that they have been instrumental in the promotion of hygiene levels among host communities through the provision of clean water for domestic chores and consumption (Birger et al 2004). The differences between host community expectations and multinational oil companies in Niger Delta regarding CSR generate much debate and hostilities in the region. Proponents of relevant CSR efforts argue for the presence of a strong business case because of the underlying benefits of by the oil companies especially when these efforts are based on broader and longer perspectives. Critics of CSR efforts argue that multinational oil companies may be failing in the delivery of CSR efforts pertinent to addressing the desires of oil producing because such actions distract them from their fundamental economic duty in business (Desatnick 2001). Methodology The primary research method for this study will be a meek descriptive investigation of retrospective category. The population of the study will constitute people derived from three oil-producing communities in Niger Delta. These communities are Aruakpo from the Delta State, Elekahia from the River State, and Igbokoda from the Ondo State. The study will embrace purposive sampling technique in the selection of 50 participants that will participate in the study from the host communities selected. The participants chosen to participate in this study will comprise of opinion leaders in the host communities. These will include clan leaders, local administration, youths, women, and public relations officers in these communities who will be purposively selected. The research targets 150 participants. Data will be generated using Corporate Social responsbility project Assessment Instruments that will be validated and developed by the researcher. The instruments will be subjected to reliability test to assess its level of internal consistency and reliability. Descriptive analysis will be embraced as an approach of data analysis to organize common features. Graphical representation will be used in the presentation of analysed data for interpretation (Cresweell 2014). References Agbo, A. and Ofuokwu.K 2008, Let’s Change the Union. TELL Birger.J. Tangen.K. Swanson,P. Christiansen, A.Moe, and L. 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