ABSTRACT
This study appraised the corporate social responsibility of multinational oil companies (MNOCs) to social economic problems in Niger Delta Nigeria with the following specific objectives sought to: (i) determine the extent to which MNOCs provide jobs opportunity for graduates from oil host communities, (ii) ascertain the extent to which oil MNOCs provide job opportunities for unskilled workers in oil host communities, (iii) ascertain the extent MNOCs empower household through the award of scholarship to their children and (iv) determine the extent the MNOCs contribute toward community development of oil host communities. The study had a population size 3,803129 out of which a sample size of 1901 was realised using William kelinger formula of 5% error tolerance and 95 level of confidence. The method used for the collection of data was questionnaire. Out of 1901 copies questionnaire that were distributed, 1,775 copies were returned while 126 copies were not returned. Cross-sectional quantitative research design was adopted for the study. The hypotheses were tested using correlation coefficient. The findings indicate that MNOCs to a large extent contributed to the provision of employment to university graduates from their host community (R = 0.816, f= 3526-223, t=59.382, p<0.05), MNOCs to a large extent contributed to the provision of employment to unskilled workers in their host communities as a give back strategies (r. = 0.893, f= 7017-812, t= 83-772, p<0.05), MNOCs to a large extent contributed to household empowerment through the award of scholarships (r. = 0.852, f= 4707.438, t=68.611, p<0.05) and MNOCs to a large extent contributed to community development through the provision of some basic infrastructures (r. = 0.853, f= 4721.904, t= 68.716, p < 0.05). the study found that MNOCs to a large extent perform their corporate social responsibility which also confirm their integrity concept but such community assistance programmes has not really enhance sustainable development of oil host communities due to the danger from the persistent gas flare and oil spillage from exploratory activities of multinational oil companies in host communities hence the need to shift their corporate social responsibility from community assistance to community development and environmental sustainability by ensuring that the activity line is merged sustainable measures. Also, it is corporate social responsibility of Government to ensure that multinational oil companies adhere to sustainable measures in their activity line even as they perform their corporate responsibility in host communities hence it will be accounted to her as failure.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF STUDY
Human development in almost all countries in Sub Saharan Africa has been so low since several years (Eyong 2006). Human development index as comparative measure of life expectancy, literacy, education, standards of living and quality of life child welfare of countries worldwide (mahbub ul Haq and Amartya Sen 1990) since 2010 adopted new methodology in categorizing human development of different countries into very high human development, high human development, medium human development and low human development. Most of sub Africa countries are categorised under low human development. As at 2013 report index on human development published in July 2014, the highest index for sub Africa countries was 0.540. Nigeria stood at 0.504(World Map 2014).
Pitiably, most of these countries are richly endowed with mineral resources and several other natural resources which are tradable across the continent and the world over but they largely depend on foreign companies for their exploitation and transformation of which Nigeria is not an exemption. Nigeria highly depend on transnational and multinational companies like Shell, Chevron Texaco, Mobil, Total, Elf, etc for the exploration of her richly endowed crude oil in the Niger Delta region.
Exploration of crude oil in Niger Delta region of Nigeria has indeed made huge contribution to government revenue (Ayuba 2012). The region oil accounts for 90% of the nation’s export earnings but still in spite of this generated wealth from the exploration of oil, the region has remained the least developed region of the country both in physical and socio-economic terms. Due to oil pollution the area is now characterized by contaminated streams and rivers, forest destruction and biodiversity loss, in general the area is an ecological wasteland. This affects the livelihood of the indigenous people who depend on the ecosystem services for survival leading to increased poverty and displacement of people.
The fact that oil industries have contributed to the growth and development of the country can not be denied (Ayuba 2012) but its unsustainable exploration activities has rendered the area inhabitable. Its state of under-development, poverty, marginalization and oppression forms the root of the problems and conflict in the Niger Delta (Kemedi, 2003) and so the people of Niger Delta see the government and multinational companies as the bone of contention in this context due to their perceived ethical inconsistencies towards alleviating the numerous problems of the host communities in disregard to the massive contribution of the region oil to government revenue.
The corporate response of the multinational oil corporations to the socio economic problems in Nigeria and Niger Delta, are properly explained through two major concepts, which are micro and macro corporate social responsibility (Onweazu 2012).. The macro strategy is the sudden and steep rises in revenue for extractive industries for the host country and society (Skjaerseth et al., 2004) the effect of this responsibility in developing country is increase in capital flight, human rights controversies and lack of democratic progress while the micro strategy encompasses the immediate effects of the intervention programmes of the multinational oil corporations on the local communities and these include employment of the host community members in their corporations and provision of basic infrastructural facilities in their areas of operations to improve their living condition. Corporate social responsibility does not only enhance community development but also the reputation of Oil Company.
1.2 Statement of the Problem
In the Niger Delta, the source of livelihood is fishing and farming which is highly dependent on the environment. Therefore, the people see environmental degradation as a threat to their livelihood and so the intense protest against oil activities (UNDP, 2002). The protest by Ijaw and Itshkiri women as against Chevron (INDY Media 2002), (Okpowe and Adebayo 2002) described the women as angry lions that vowed to strip themselves naked if Chevron refuse to vacate the premises due to lack of employment, infrastructure and environmental despoliation by the oil multinational. Although, the oil company pleaded with these women that they will look into their plight which centred on employment of their husbands and children and economic empowerment in the face of livelihood displacement due to negative effects of oil activities. The oil company in quote failed to fulfil its promises until the women protested again and took about 700 oil workers hostage.(Jesudaedsan 2003,1-2). Recently still on oil spillage, one of the oil communities threaten to cancel shell’s contract due to refusal to compensate the community on oil spillage. (Guardian News paper 12th August 2014) Gas flaring in Nigeria and its sustained practice has also become natural problem (Aghaliwo 2009) based on the argument by the oil companies that they need sufficient time to acquire the technology that will mitigate flaring. Observation by Ikelegbe (1993) revealed that the flaring site around Isoko area of Delta state generates heat over average radius of 0.5; the high generation of heat had led to loss of numerous trees and plants with their value, loss of biological diversity and constant acid rain in the region. Aghaliwo (2009) suggestion was made for upward review of tax and charges paid by defaulting companies and change in property rights in Nigeria in order to focus on sustainable development and community participation.
Chukwunoyelum(2011) studied the reactions of individuals and communities that were denied justice when they sought for redress in the court due to oil spillage and found out that in most cases, the litigants were disappointed due to unfavourable judgment of the courts which were attributed to passivism, lack of environmental awareness, statutory provisions and notices. He recommended that the government institute a self-reliance court system that will improve the expectations of litigants from the courts when suing for environmental pollution.
Namuyondo (2014) observed that lack of monitoring and enforcement of judicial laws and regulations that should serve as guide to the operation of oil and gas industries in the country contributes to the unsustainable exploration activities. She attributed the problem to weak institutions, lack of public participation, poor communication and unskilled labour in the oil industry, absence of crucial policies, poor organization structures and governance system. She recommended that a robust institution should be established which could shape activities in the oil industries and evade dreadful conditions that could affect both inhabitants and environment.
The urgent need for sustainable development in Nigeria especially in oil host communities as acknowledged by Alabi (2012), Eluka (2013), Namuyondo (2014) and Uzoagu (2015) requires all stake holders; Institutional authority, Multinational corporations, and International institution, NGO to play their roles by instituting variety of polices and laws that will guide how petroleum licensed companies could carry on their activities in a way to enhance the sustainability of the economy. The impact of oil on Nigeria economy shouldn’t only be seen on the economic aspect of development alone but also should foster to social and environmental aspect of development of which it appear that it is as result of neglect in social and environmental aspect of development especially in the Niger Delta Region that gave rise to conflict and contention in the country.
1.3 Objectives of the Study
The main objective of this study is to determine the extent to which oil and gas industry has gone to enhance sustainable development in Niger delta region of Nigeria in terms of fulfilling their social responsibility. The specific objectives therefore include to
i. Examine the extent to which oil companies provide jobs opportunities for graduates in their host communities.
ii. Ascertain the extent to which oil companies provide employment to unskilled workers in their host communities.
iii. Ascertain whether oil companies empower the household through award of scholarship to their children
iv. Determine the relationship between oil companies CSR and community development of host communities.
1.4 Research Questions
i. What extent do oil companies in the Niger Delta provide job opportunities for the graduates in their host communities?
ii. To what extent do the oil companies in Niger Delta provide employment to the unskilled workers in their host communities?
iii. To what extent do the oil companies in the Niger Delta empower the household in their host communities through award of scholarships to their children?
iv. What is the extent of the relationship between oil companies in Niger Delta CSR and community development of oil host communities?
1.5 Research Hypotheses
H01: The oil companies in Niger Delta do not significantly contribute to the provision of job opportunities to Graduates in their host communities.
H02: The oil companies in Niger Delta do not significantly contribute to the provisions of job opportunities for unskilled workers in their host communities.
H03: The Oil Companies in the Niger Delta do not significantly contribute to youth empowerment in their host communities through award of scholarship.
H04: There is no significant relationship between the CSR of oil companies in Niger
Delta and community development of oil host communities.
1.6. Significance of the Study
This present study will be very useful to the oil companies in that it will help them monitor the impact of their activities on their host communities. It will also be beneficial to the government in that it will help them know the impacts of oil and gas activities on the people and help them remodel or shape the laws which guide the activities of the industries or oil sectors.
1.7 Scope of the Study
The study will focus on the Niger Delta Region using some selected Niger Delta communities. The selected Niger Delta communities are Akwa-Ibom state, Bayelsa state, Delta state and Rivers state. These states were selected due to the high deposits of oil in the area of which they served as oil host community to Oil and Gas industry and the peculiarity of the environmental degradation posed by gas flaring and oil spillage in the area.
1.8 Limitations of the Study
Some of the constraints faced by the researcher were negative attitude of some respondents and multinational companies towards giving out necessary information required for the study but that may be probably due to their ignorance of the main purpose of the study.
1.9 Operational Definition of Terms
Niger Delta Niger Delta is expressly defined as noted earlier. By these definitions/boundaries, the states covered by the actual geographical Niger Delta are: Delta, Bayelsa and Rivers. According to Tamuno (2008), the current political definition of the Niger Delta to include Edo,Ondo, AkwaIbom, Cross River, Abia and Imo States
GDP: Gross Domestic product which is the total value of goods and services produced by a country in a year. It also stands as one of the macro economic indicators in Nigeria.
Sustainable development;“Development that meets the needs of the present without compromising the ability of future generations to meet their own needs(Brunt land, 1987). This entails that as more focus is given to maximization of profit or economic development in the country, more concentration should also be given to the environment from which the profit is ploughed by assess the impact of the activity on the environment and also the people; how well they have become.
Social development: This is set to achieve equality in social issues as education, health polities and social infrastructure. Jonathan Harris (2000)
Economic development: This involves achieving balance in all sectors of the economy.(Todaro and Smith, 2011).
Diversification of the economy: It is the process whereby the economy revenue generation for the development of its economy is generated from various sectors. It is using resources from big push investment like oil and gas industry to develop other sectors like agricultural, manufacturing industry, etc.
Oil and gas Jaccard (2005) also defines petroleum as a term applied to a group of materials naturally formed within the upper strats of the earth crust. The minerals are composed of hydro-carbon together with valid amounts of oxygen, Sulphur, Nitrogen, as well as traces of metals. Petroleum is found in liquid and gaseous states and less frequently-as solid in its liquid state it is known as crude oil or crude petroleum, in its gaseous state, as natural gas and its solid state by a number of terms e.g. asphalt, bitumen etc.
Oil spillage and gas flare: discharges and explosions both accidental and operational as well as sabotage –inspired by disgruntled and unhappy rural host communities. (Amnesty international 2013)
Environmental impact assessment: these are laws and regulation that guide the environment against environmental degradation and pollutions. (Federal Republic of Nigeria, 1992). This is the need to assess the impact of a project on the environment and people to determine both the negative and positive contribution before carrying out in the community.
TNCs; Transnational Companies includes foreign companies that are involved in the exploration and exploitation of oil and gas in Nigeria.
CSR; Idumange (2010) views CSR as one of the three key corporate responsibilities that also include economic responsibility and environmental responsibility corporate social responsibility is an intervention programmes by businesses which are geared towards poverty reduction and community development of communities from which they ploughed their profit.
This material content is developed to serve as a GUIDE for students to conduct academic research
AN APPRASIAL OF CORPORATE SOCIAL RESPONSIBILITY OF OIL AND GAS INDUSTRY IN NIGER DELTA FOR SUSTAINABLE DEVELOPMENT
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