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INVESTIGATION INTO CORPORATE SOCIAL RESPONSIBILITY STRATEGIES FOR OIL AND GAS COMPANIES IN NIGERIA

 

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

The Niger Delta has fallen short in its economic and social development despite the presence of many oil and gas firms operating in the region tapping the oil and gas resources of the Niger Delta (Ibaba, 2008).  One of the key questions that has been raised is how the oil and gas companies can contribute to the development of the Niger Delta.  This research focuses on determining the contribution of the corporate social responsibility actions of Chevron in the Niger Delta region.  This is an important topic as this leads to the determination of the role of corporate social responsibility in the economic and social development of the Niger Delta region.  The corporate social responsibility actions of Chevron also has implications on the environment in the Niger Delta region.  In assessing the corporate social responsibility activities of the oil and gas firms, the research evaluates how the oil and gas firms have taken responsibility for key development actions to overcome the shortcomings of the Nigerian government. 

Recent related research on issues in the Niger Delta region have highlighted the lack of development in the region and the poor management of the environment resulting from the impacts of the operations of the oil and gas industry firms (Nliam, 2014).  Various efforts have been taken in order to address the impacts from the oil and gas operations with the weaknesses from the government infrastructure and support resulting in greater responsibility from the oil and gas firms (Phil-Eze & Okoro, 2009).  However, while this is the case, there has not been an assessment of the responsibility of oil and gas firms in their contribution to the social and economic development of local communities through corporate social responsibility activities.  This study seeks to provide the research to address this gap and provide a foundation from which future research could be undertaken in the evaluation of the corporate social responsibility of oil and gas firms in the Niger Delta region.

The research has several elements that form part of the foundation of the study.  The first element is the focus on corporate social responsibility (CSR) as the main area of research.  The study provides an assessment of the need for CSR from companies to support social and economic development in developing countries.  The second element is a focus on oil and gas firms in Nigeria with these firms and their actions providing the basis for the assessment in the research. The operations of oil and gas firms lead to significant environmental impact and risks, and hence it is important to understand the trade-off between the need for these firms to operate in countries and their contribution to the local and national economies.  The third element is Chevron, a large global oil and firm, as the case study for the research and representing the oil and gas firms in Nigeria in relation to the corporate social responsibility activities. Chevron's impact and role in the development of Niger Delta is important to focus on given the significant operations of Chevron in the region.

1.2 Purpose of the study

The main purpose of the research is to explore the corporate social responsibility activities of oil and gas firms in Nigeria in general, and Chevron in the Niger Delta region in particular.  Oil and gas firms have a responsibility to contribute to the local communities because of the impacts that the activities of the oil and gas firms have on the local communities and environment.  Oil and gas firms also generate significant value from their operations. The research provides an evaluation of the extent of corporate social responsibility activities executed by the oil and gas firms with an objective to form a view on how oil and gas firms in Nigeria should pursue corporate social responsibility activities.

1.1 Objectives of the study and Research questions

The research question for this study is the following: What are the challenges experienced by Chevron in implementing corporate social responsibility strategies in Niger Delta?  There are several research objectives in the study.  These are the following:

To identify different CSR activities in the Niger Delta region from the oil and gas firms. The study aims to determine the key CSR activities that are being executed by the oil and gas firms in the region. To analyse the impacts of corporate social responsibility in the Niger Delta region. The research seeks to provide an understanding of the impacts of current CSR activities on the social and economic development of the region. To provide recommendations to Chevron on the corporate social responsibility actions to take following the findings from the research. The research aims to have defined recommendations for Chevron as to the types of CSR activities that would benefit Chevron and the local communities in the region.

There are different problems and issues explored in this research.  One issue is the extent of contribution provided by oil and gas firms to local communities and countries through corporate social responsibility activities.  This is explored in the study to gain an understanding of the contribution of oil and gas firms in general and Chevron, as the case study firm, in particular on the social and economic development of local communities in the Niger Delta region.  Another issue is the impact of these corporate social responsibility initiatives of the oil and gas firms.  Given the significant value extracted by the oil and gas firms from the use of the oil and gas resources of the local communities and countries such as Nigeria, this issue needs to be explored to determine if the oil and gas firms are contributing a proportionate size of benefits to the local communities which are considerably impacted by the activities of the oil and gas firms. 

The other research questions that the study will address relate to the research objectives.  For example, a research question is: what have been the impacts of corporate social responsibility in the Niger Delta region from the oil and gas firms?  Another research question is: what are the current suite of corporate social responsibility activities that the oil and gas firms are engaged in?

In addressing the research questions and research objectives, the study aims to develop insights on the reasons that corporate social responsibility is important for oil and gas firms.  In addition, the study also develops insights on why corporate social responsibility is taken on by companies.

1.4 Research Justification

There is significant justification to conduct this study. For oil and gas firms, the results of the research are relevant as these firms continue to operate in similar environments to the Niger Delta region.  In understanding the relevant CSR activities that would have the most significant positive impacts in a region, the oil and gas firms are effectively operating in an environment designed to lead to the greatest success for the oil and gas firms, and the local communities. 

The results of the research also lead to significant contribution to academia. The material that results from the research adds to the knowledge and understanding of corporate social responsibility by researchers and provides recommendations as to the actions that oil and gas firms can execute as part of their CSR portfolio of activities

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