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THE ISSUES AND CHALLENGES OF CORPORATE SOCIAL RESPONSIBILITIES IN THE NIGER DELTA REGION OF NIGERIA (A CASE STUDY OF SHELL NIG PLC)

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The concept of corporate social responsibilities is a new concept in the business world.  Corporate social responsibility is the ability of a corporation to relate its operations and policies to the needs of the environment and the workforce to the benefit of the organization and the host communities. Corporate social responsibility involves management of an organization, working and relating with host communities and own labour force to ensure that the company or organization is responsible and responsive to corporate governance.  It includes the participation of the company in such vital area as environmental protection training of its workforce and welfare package and employment, provision of social amenities within plant location, such as water, electricity, bridges, roads, school, scholarship programmes and youth development for the communities and natural development. Business and society are inter-dependent because business cannot operate in a vacuum, it operates in the society and contribute immensely to the hazards of the environment from citizens and at same time provides employment security and other many values of the community. Thus concept of social responsibility of business is vital in the life organized business operations.

1.2     STATEMENT OF THE PROBLEM

Presently, it is obvious that most corporate citizens or organization are not living up to expectation of their duties in the host communities. These contributed immensely to environmental degradation of the region, the air, water and land pollution, destruction of natural habitations and waste disposal system that are harmful and destructive to the host community. Lack of corporation to tackle the problem and reduce the effects of drilling activities on the environment and raise the standard of living of the people in the host communities became a source of concern to the youth of the region. Secondly, lack of infrastructures and social amenities in the host communities of Niger Delta region by the federal government and the oil companies operating in the region. Thus, the researcher is intended in finding out the cause of the problems in the region.

1.3     OBJECTIVES OF THE STUDY

The main objectives of the study is to explore how best to use the practice of public relations to manage and reduce the challenges facing the people of the Niger Delta, the oil companies therein and the peace and security of the lives and property in the Nigerian state.

The research objectives include the following:-

1. To know whether the neglect of social responsibility have negative impacts on the organizations operating in the region.

2. To know the relationships that exists between the corporate organizations and their host communities.

4. To know the effective methods of handling the relationships between the organizations and the environments in which they operate.

1.4 RESEARCH QUESTIONS

The following research questions have been formulated to enable the researcher do the study properly.

1. Do the activities of the multinational corporations in the region pollute the environment of the region?

2. Does the pollution of the environment by the oil companies make the host communities unable to farm and fish in their land and water?

3. Do the people of the region suffer from unemployment?

4. Do these multinational corporations provide adequate infrastructure and amenities in the region?

1.5     STATEMENT OF HYPOTHESIS

HYPOTHESIS I

Ho: The activities of the multinational corporations in the region doe not pollute the environment of the region.

Hi: The activities of the multinational corporations in the region pollute the environment of the region.

HYPOTHESIS II

Ho: The people of the region does not suffer from unemployment

Hi: The people of the region suffer from unemployment

HYPOTHESIS III

Ho: The community does not benefit from the social responsibility of company

Hi: The community benefit from the social responsibility of company

1.6 SIGNIFICANCE OF THE STUDY

The significance of the study lies in the fact that it would add to the alliteration guiding the federal government of Nigeria on how best social responsibilities of business concepts could be used and investigated in the region in order to restore progress, peace and security of lives and property of the communities and the corporations therein.  The concept, if fully managed, would bring harmony between the organization and the host communities operating in the region. These will also create the impression that business is not only for profit making but also improvement for the welfare of its work force and the host communities. It will equally help the government make motivating polices to encourage organizations in the region participate and implement fully, the corporate social responsibilities polices and goals in communities of operation.

1.7     THE SCOPE OF THE STUDY

The scope of the study focused on the role of corporate social responsibilities of multinational companies in the Niger Delta region. Specifically, the host communities expect the companies to improve and raise the standard of living of the people and also what the companies expect from the host communities, especially what shell company is able to do in this direction, to alleviate the impacts of oil exploration on the people of the region.

1.8 LIMITATIONS OF THE STUDY

On the course of this research, the following problems were encountered, like short time frame. Financing problem, scarcity of information or data, etc. this is due to mainly, the wide scope of this study which emphasizes on a complex institution like Nigeria.  Now, the implication is that the short time frame mapped out for this research work posed a problem of assessing these programs as whole, but that doesn’t threat the authentication and quality of this work. Again, enough finance for the accomplishment of this work became a problem in the sense that gathering information was costly, the researcher needed enough money to gather them.

 1.9     DEFINITION OF TERMS

1. SOCIETAL MARKETING: A principle of sustainable marketing that holds marketing decisions by considering consumer’s wants, the company’s requirements, consumer’s long- run interests and society’s long-run interests. (Kolter, Armstrong 2008:628)

2. CORPORATE SOCIAL RESPONSIBILITY: This is the act whereby organizations or institutions operating in an area engage in the provision of social amenities to better the living condition of the people of the area. (Akpoveta 2007:190)

3. COMMUNITY: A community is a group of people living in the some place and satisfying their desires for good spiritual, materials, social and cultural life through the service of schools, churches, libraries, government, business and social welfare organizations of the host community. (Akpoveta 2007:189)

4. OIL COMPANIES: These are companies responsible for the exploration of oil in the Niger Delta region. (Ejomafuuwe 2007:190)

5. PUBLICS: This is any group that has an actual or potential interest available to the people as a whole, and the affairs of the communities to impact on an organization’s ability to achieve its objectives. (Kolter, Armstrong 2008:93)

6. CORPORATE CITIZENS: Individual or organizations who strive to strike a balance before what it owes society, and what is expected from it. (Ogundife, 2002)

7. SOCIALLY RESPONSIBLE: It means adherence to legislations put in place by the constitution of Nigeria to protect various rights such as welfare, safety and environmental rights. (Okiyi 2004:211).

8. CUSTOMERS: Those people who patronize the organizations and seek for the value of their product, and services. (Eluwa 1998:159)

9. AMENITIES: Features that makes place pleasant, comfortable or easy to live in (Oxford advanced Dictionary).

1.10 HISTORICAL PROFILE OF SHELL OIL COMPANY IN NIGERIA

One of North America’s leading producers of oil, gas and petrol chemicals, Shell Oil Company has distinguished itself through its commitment to industry and innovation.  It operates as the leading oil and gas producers in the deep-water Gulf of Mexico and its four major operating segments include oil products and chemicals products. Shell Oil operators as a subsidiary of Shell Group, and second largest oil and its USA based. Company beginning in the early 20th Centaury.  The Shell group began selling gasoline imported from Sumatra in the United State in 1912 to capitalize on the growth of the country’s automobile industry and to compete with the formation of the settle-based American gasoline company.  Shell Group also founded Roxana Petroleum in 1912 in Oklahoma to locate and produce crude oil.  This was followed by opening of refineries in New Orleans, Lovisiana in 1916.  It soon became clear to Shell Group that with so much gasoline already available in nearby California, it was impractical to continue importing the product for sale in the Pacific Northwest.

By the 1960s, growing environmental concerns led Shell to invest heavily in systems instead to reduce pollution and to conserve energy in its plants.  In the following decade, the company began publishing a series of Consumer Oriented booklets on such topics as car maintenance and energy conservation. At the same time, the company turned its attention to offshore and began drilling for oil and natural gas deposit in Alaska and Gulf of Mexico.  It soon became an expert in using enhanced techniques to find and recover oil.  This recovery operation was expected to produce 100 Million barrels of oil per day. In 1970, Shell moved its headquarters to Houston in the U.S.  The company expanded into coal production in 1974 with formation of shell mining company.

In 1991, shell decided that it had to cut operating costs to generate enough money to boost its sales. In 1994, Shell had 8,600 stations operating in 40 states and had strengthened its positions and the top Gasoline marketer in he United State.  Shell refinery activities in the early 1990’s were highlighted by the beginning of construction of a $1 billion clean fuel project. The company also formed Shell Midstream Enterprises (SME), a business unit designed to market the firm’s expertise and pipelines infrastructure in the Gulf of Mexico to Oil Companies with no pipelines of their own. The firm also made some key partnerships in 1997 relating to production and exploration. In October 5, 2003, achievement of one million and barrels of oil per day.

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