Ogbonna Nkiru

DEPARTMENT OF PUBLIC ADMINISTRATION AND

LOCAL GOVERNMENT

ENERGIA OIL COMPANY AND CORPORATE

SOCIAL RESPONSIBILITY IN DELTA STATE,

OSSAI N. OSSAI

PG/DPA/06/39903

Ogbonna Nkiru

Digitally Signed by: Content manager’s

DN : CN = Webmaster’s name

O= University of Nigeria, Nsukka

OU = Innovation Centre

FACULTY OF SOCIAL SCIENCES

DEPARTMENT OF PUBLIC ADMINISTRATION AND

LOCAL GOVERNMENT

ENERGIA OIL COMPANY AND CORPORATE

SOCIAL RESPONSIBILITY IN DELTA STATE,

1

: Content manager’s Name

Webmaster’s name

a, Nsukka

FACULTY OF SOCIAL SCIENCES

DEPARTMENT OF PUBLIC ADMINISTRATION AND

ENERGIA OIL COMPANY AND CORPORATE

SOCIAL RESPONSIBILITY IN DELTA STATE,

2

ENERGIA OIL COMPANY AND CORPORATE SOCIAL RESPONSIBILITY

IN DELTA STATE, NIGERIA, 2009 - 2013

BY

OSSAI N. OSSAI

PG/DPA/06/39903

DEPARTMENT OF PUBLIC ADMINISTRATION AND LOCAL

GOVERNMENT

UNIVERSITY OF NIGERIA

NSUKKA

MAY, 2014

3

BEING A THESIS PRESENTED TO THE DEPARTMENT OF PUBLIC

ADMINISTRATION AND LOCAL GOVERNMENT, UNIVERSITY OF

NIGERIA, NSUKKA, IN FULFILMENT OF THE REQUIREMENTS FOR

THE AWARD OF DOCTOR OF PUBLIC ADMINISTRATION (DPA)

SUPERVISOR: PROFESSOR CHIKELUE OFUEBE

MAY, 2014

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APPROVAL PAGE

The dissertation has been approved by the Department of Public Administration and

Local Government, Faculty of Social Sciences, University of Nigeria, Nsukka.

By

-------------------------------- -----------------------------

Prof. Chikelue Ofuebe Dr (Mrs) S. U. Agu

(Supervisor) (Head of Department)

-----------------------------------------------

External Examiner

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CERTIFICATION

This is to certify that OSSAI N. OSSAI (PG/DPA/06/39903), a postgraduate student

in the Department of Public Administration and Local Government has satisfactorily

completed the requirement for the award of the degree of Doctor of Public

Administration.

The research work embodied in this dissertation is original and has not been submitted

in part or full for any other degree or certificate of this or any other university.

_______________________ OSSAI N. OSSAI

PG/DPA/06/39903

_____________________________________

Prof. Chikelue Ofuebe (Supervisor)

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DEDICATION

This work is dedicated to my wife and children

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TABLE OF CONTENTS

1.0 CHAPTER 1: Introduction - - - - - - 5

1.1 Background to the study - - - - - - - 5 1.2 Statement of the problem - - - - - - - 8 1.3 Objectives of the study - - - - - - - 11 1.4 Significance of the study - - - - - - 11 1.5 Scope and limitation of the study - - - - - - 12

2.0 CHAPTER II: Literature Review and Study Area - - 14

2.1 Literature Review - - - - - - - - 14 2.1.1 Corporate Social Responsibility - - - - - - 14 2.1.2 Oil Resources and Multinational Corporations in Nigeria- - - 17 2.1.3 Sustainable Environment and Corporate Social Responsibility

in Niger Delta - - - - - - - 22 2.1.4 Synthesis of the Review - - - - - - 29 2.2. Operationalization of Key Concepts - - - - - 30 2.3 Study Area - - - - - - - - - 33

3.0 CHAPTER III: Research Procedure - - - - - 38 3.1. Research Design - - - - - - - - 38 3.2. Population, Sample and Sampling Procedure - - - - 39 3.2.1 Population of Study - - - - - - - 39 3.2.2 Sampling Size and Procedure - - - - - - 39 3.2.3.Sources and Method of Data Collection - - - - - 40 3.2.4 Method of Data Presentation and Analysis - - - - 41 3.2.5 Validity and Reliability of Instrument - - - - 41

4.0 CHAPTER IV: Data Presentation, Analysis and Findings - 43 4.1 Introduction - - - - - - - - - 43 4.2 Data Presentation - - - - - - - - 43 4.3 Data Analysis and Findings - - - - - - - 45

5.0 CHAPTER V: Implications of Findings for Administrative Efficiency 59 5.2 Implications of the Findings - - - - - - - 59 5.2.1 Increasing Environmental Degradations of Host Communities and CSR 59 5.2.2 Major Projects that Form the CSR Efforts of Energia - - 62 5.2.3 Level of the Host Communities’ Participation in CSR - - 66

6.0 CHAPTER VI: Summary, Recommendations and Conclusion - 72 6.1 Summary - - - - - - - - - - 72 6.2 Recommendations - - - - - - - - 73 6.3 Conclusion - - - - - - - - - 76

Bibliography - - - - - - - - 77

Appendices - - - - - - - - - 88

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ABSTRACT

The Niger Delta is Nigeria‘s oil and gas belt, as it hosts almost all of Nigeria‘s oil resources. The region has one of the world‘s richest oil deposits. Data from the Federal Republic of Nigeria shows that Niger Delta covers 7.5 per cent of the Nigerian landmass. Niger Delta is so rich in oil that it has produced billions of barrels of crude oil for Nigeria since production began with 4000 barrels in 1958. Given the critical role that big business‘ in general and oil companies in particular play in national economy, the oil sector has increasingly come under the pressure of responding to the challenge of corporate (social) responsibility (CSR). This trend is set against a background in which the industry is already under considerable pressures arising from intensified violent conflicts and environmental degradations. Energia/Oando JV which was awarded OML 56 by the Federal Government in 2003 and is one of the largest operating indigenous oil firms in the Niger Delta. The Energia oil and gas industry operates in six (6) communities (Emu-Ebendo, Obodugwa-Ogume, Umusadege, Isumpe, Umusam and Ogbeani) of Delta state, Nigeria. The general objective of the study was to examine the efforts of Oil Companies on corporate social responsibility in the Delta state of Nigeria, with Energia Limited as case study. The main specific objectives were to: (i) identify and explain the increasing environmental degradations of host communities that lead to increased Corporate Social Responsibility among oil companies in Delta state; (ii) investigate the relationships that exist between the major projects that form the Corporate Social Responsibility (CSR) efforts of Energia Limited and the needs of the host communities in Delta state; and (iii) examine the level of the host communities’ participation in the Corporate Social Responsibility Projects of Energia Limited in Delta state. The study was a sample survey with oral and focus group discussion as the survey instrument. Field research involved in-depth personal (oral) interviews with staff of Energia, community leaders, indigenous entrepreneurs, and youth leaders. For the analysis of data, we will rely on qualitative descriptive statistics and logical arguments and inferences. Our conclusions proposed that in spite of good consciousness and goals, the CSR method of oil firms in Delta state remains unprofessional and imprecise. On economic domain, Energia Oil Company Nigeria Limited’s claim of execution of projects as part of her business communal obligation is indisputable, but the results indicated the requirement for Energia Nigeria Limited to embark on a policy re-evaluation of her communal change programmes in the oil communities to make sure that there is always a significant relationship between the needs of the citizens and communities and what the company provides as its CSR program. It may perhaps be essential, as well, for Energia to embrace a bottom-up attitude in its public improvement initiatives. This will ensures appropriate exploration of all pertinent requirements of the public, create home-grown aptitude, improve self-assurance, construct societal investment and encourage development of the indigenous economy, and decrease communal agitation. Finally, oil and gas companies operating in Delta state should be compelled to comply with international best practices to ensure the protection of natural habitats through uncompromising implementation of the demands of the doctrine of corporate social responsibility.

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LIST OF MAPS

Map 2.1: Map of the Niger Delta Area - - - - - - - 40 Map 2.2: Map of the Nigeria showing Delta state- - - - - - 42 Map 2.3: Map of Delta Area Showing Local Government Areas/Town- - - 43

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LIST OF TABLES

Table 2.1: Showing Delta State Population Distribution - - - - 44 Table 4.1: Respondent total population- - - - - - 51 Table 4.2: Respondent total profile - - - - - - 52 Table 4.3: Major Oil Operators - - - - - - - 54 Table 4.4: Energia Major Oil Operator - - - - - - 55 Table 4.5: Problems Associated with Oil Exploration- - - - 55/56 Table 4.6: CSR Projects in Delta Communities - - - - - 57 Table 4.7: Statistical Presentation of Communities’ Satisfaction of Energia’s

Projects by Immediate Communities - - - - 58/59 Table 8: Community Participation in Projects- - - - - 61 Table 9: Community Participation - - - - - - 62 Table 10: Statistical Presentation of Importance of Energia’s Projects to the

Communities of Ndokwa Local Government Area- - - - 62/63 Table 11: Areas of Capacity Development - - - - - 65 Table 12: Statistical Presentation of Degree of Approval of Capacity Building 67

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LIST OF FIGURES Figure 4.1: Energia CSR Projects - - - - - - - 57 Figure 4.2: Satisfaction Level of Energia Projects- - - - - - 60

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ABBREVIATIONS AND ACRONYMS

GDP ------------------------------- Gross Domestic Product

PETAN ------------------------------ Petroleum Technology Association of Nigeria

E&P --------------------------------- Exploration and Production

CSR --------------------------------- Corporate Social Responsibility

TNCs ------------------------------- Trans-National Corporation

UNDP ------------------------------- United Nations Development Programme

UAC -------------------------------- United Africa Company

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CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

The Niger Delta is Nigeria’s oil and gas belt, as it hosts almost all of Nigeria’s

oil resources. The region has one of the world’s richest oil deposits. Data from the

Federal Republic of Nigeria shows that Niger Delta covers 7.5 per cent of the

Nigerian landmass (Omojola, 2007). Niger Delta is so rich in oil that it has produced

billions of barrels of crude oil for Nigeria since production began with 4000 barrels in

1958. The Niger Delta originally consisted of the states of Akwa Ibom, Bayelsa, Edo,

Cross River, Delta and Rivers. It was the Obasanjo administration which expanded it

to include Abia, Imo and Ondo states.

Oil production in commercial quantity started in the 1950s, when Shell

discovered its first commercial oil well at Oloibiri, Bayelsa State. Further oil and gas

discoveries gave rise to the advent and growth in numbers of oil exploration and

production (E&P) companies, led by multinationals like Shell, ExxonMobil,

ChevronTexaco, TotalFinaElf, and Agip amongst others. Energia limited is among the

indigenous oil exploration and exploitation companies incorporated in 2001, with

strong affiliation to some strategic service providers in the upstream and gas industry,

a number which belong to the Petroleum Technology Association of Nigeria

(PETAN) (http://energiang.com/about-us). The primary aim of these companies and

indeed all businesses is to make profit, and contribute directly to the society through

the payment of taxes, royalties, etc.

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Energia Limited Company is a wholly owned indigenous E&P company made

up of leading oil and gas service and technology providers who are key promoters of

PETAN in the country to take advantage of the Nigerian Content dream of creating a

totally indigenous Nigerian Oil and Gas Technology in the immediate and near future.

The consortium of leading service and technology companies that constitute Energia

Limited, that have also made their marks in the Nigerian E&P industry are: Ciscon

Nigeria Limited, Oildata Wireline Services, Weltek Limited, Ariboil Company

Limited, Sowsco Well Services Limited, Skangix Petroleum Limited, Imbe Koru &

Sons Nigeria Limited, Pemec (http://energiang.com/about-us).

The Petroleum industry in Nigeria has undergone significant changes since oil

was discovered in commercial quantity more than four decades ago. The sector has

become the mainstay of the nation's economy, pivoting other sectors, and accounting

for about 90 per cent of the country's foreign exchange earning Nigeria also derives

about 20 per cent of Gross Domestic Product [GDPJ, and about 88 per cent of the

Federal Government collectable revenue from the oil sector. It is, therefore not

surprising that the industry has become crucial to the economic development of the

country’s Waste products and pollution are some of the negative externalities from oil

exploration and production. Funny enough, the burden of waste and pollution are not

directly and necessarily borne by those who benefit from developments ushered in by

the oil industry.

Apart from the degradation of the environment through oil spillage and gas

flaring, there are other issues that have affected the relationship of the oil companies

and their host communities. Indeed, the relationship between the oil companies and

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some of their host communities in the Niger-Delta, has, to say the least not been

cordial in recent years owing to different perceptions of the role that the oil companies

are expected to play in the development process of their host communities. On the one

hand, the host communities claim that oil companies are not doing enough considering

the amount of oil wealth taken away from their lands. On the other hand, oil

companies feel that they are doing enough and, have, in fact gone beyond the realm of

normal Corporate Social Responsibility (CRS).

Given the critical role that ‘big business’ in general and oil companies in

particular play in national economy, the oil sector has increasingly come under the

pressure of responding to the challenge of Corporate Social Responsibility (CSR).

This trend is set against a background in which the industry is already under

considerable pressures arising from intensified violent conflicts and environmental

degradations.

Corporate behavior is generally regulated in three ways, namely: Self-

Regulation, Government Regulatory Bodies; and Regulation by Professional Bodies.

The assumption of corporate social responsibility, more often, is an outcome of

voluntary and altruistic motives. The futility of penal regulations as a means of social

control is clearly evident in environment protection laws. No doubt, corporations have

considerable room to maneuver with resources at their disposal to frustrate attempts at

controlling them through the sanctions (Osumbor, 1990). Social Responsibility goes

beyond encouragement of economic and fiscal growth. It entails amongst other things,

promotion of sound process of production; reduction of damages to health actuated by

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poverty and environmental degradation; improvement of infrastructure; promotion and

protection of individual right, healthy living situations and so on.

Within the Niger Delta, the distinctive demarcations that can often be found

within nation-states are blurred. What is the responsibility of the government and

Trans-National Corporations (TNCs) can lack distinction with the latter ‘filling in

when government falls short’ (Frynas, 2005: 582). Such a blur is not unique. Indeed, it

is becoming more prevalent around the world following the globalisation of products,

markets and underpinning processes alongside neo-liberal programmes. Boundaries

between economic, environmental, political and social issues, the public and private,

state and civil society, national and international are more permeable and often less

transparent. In Nigeria, the boundaries are further complicated because the debate is

less about who assumes responsibility for existing infrastructure and institutions but

who is responsible for developing them in the first place.

1.2 Statement of the Problem

Oil exploration is an energy intensive activity with severe implications on

people and the environment. The paradoxical relation of the economic growth of oil

companies and sustainable environment of host oil communities are recurring issues

of discourse and debate. The theoretical argument of economic growth of international

oil companies place value on profits and generation of rents for the federal

government, therefore, it is the responsibility of the central government to provide

social infrastructures. On the other hand, environmentalists argue that it is

unsustainable to pursue economic growth at the expense of environmentally sound

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policies. Profit may still be an important factor in all business considerations, but it is

no longer going to be the overriding element in setting up a business.

The Delta state region is dominated by rural communities that depend solely on

the natural environment for sustenance living and non-living livelihood (UNDP

Report, 2006). Environmental degradation issues are of topical concern to

communities in the Delta state as it is a major cause of productivity losses (Opukri &

Ibaba, 2008). Oil spills have caused a lot of environmental problems in the Delta state.

Intensive exploitation of oil in Nigeria has caused great and even irreversible damage

to the natural environment. Many exploratory activities were carried out without

adequate environmental impact assessments as required by the law. As Ken Saro

Wiwa, (1996: 42-3, cited in Human Rights Watch, 1999) the Ogoni-born

environmental activist puts it:

The environment in oil-producing communities has been completely devastated by three decades of reckless oil exploitation or ecological warfare by Shell....An ecological war is highly lethal, the more so as it is unconventional. It is homicidal in effect. Human life, flora, fauna, the air, fall at its feet, and finally, the land itself dies.

Explosions from seismic surveys, dredging canals and contamination of rivers and

creeks are among the grievous ecological violence of oil production in Nigeria. During

oil extraction, various chemicals and contaminants such as drill cuttings, drill mud are

released into the streams and rivers and this has disrupted the natural ecological

balance in the Delta state region (Trade and Environment Data, 1997; Worgu, 2000).

Another major cause of environmental disaster in oil-producing communities in

Nigeria is oil spill. Egberongbe et al (2006) categorizes oil spills into four major

groups namely: minor, medium, major and disastrous. Minor oil spill involves the

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discharge of any amount of oil that is less than 25 barrels in inland waters or less than

250 barrels on land without any threat to public health and welfare. Medium and

major oil spills involve the discharge of 250 to 2500 barrels on land, offshore or

coastal waters.

Disastrous oil spill, the most extreme form, is described as “uncontrolled [oil]

well blowout, pipeline rupture or storage tank failure, which poses imminent threat to

the public or welfare” (Ntukekpo, 1996 cited in Egberongbe et al, 2006: 5). Many

communities in the Niger Delta region have experienced several incidents of

disastrous oil spills since the inception of oil exploration on a commercial scale.

Tangential to the above, the Niger-Delta violent conflict is seen as an

environmental conflict. This position has been seriously projected by many

researchers who see it purely as conflicts caused by environmental degradation. Inya

(1997:4) writes that:

Oil exploration and exploitation has over the decades impacted

disastrously on the socio-physical environment of the Niger

Delta – oil-bearing communities, massively threatening the

subsistent peasant economy and the environment and the entire

livelihood and basic survival of the people.

Ibeanu (2008:18) also paints the picture of poverty and environmental damages:

Indeed, a lasting paradox of the petro-state in Nigeria is the

level of poverty in the Niger Delta, which is the source of the

country’s oil wealth. Niger Delta’s poverty is in part the

consequence of oil production, especially its environmental

consequences, which have destroyed livelihoods by destroying

farmland and fishing waters. … Pollution arising from oil

spillage destroys marine life and crops, makes water unsuitable

for fishing and renders many hectares of farmland unusable. At

the same time, flaring in the vicinity of human dwellings and

high pressure oil pipelines that form a mesh across farmlands

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are conducive to acid rains, deforestation and destruction of

wildlife.

Often, the negative impact of some business activities on the society is

scandalous, causing harm to both people and their environment. Such ugly

occurrences bring corporate reputation to disrepute and attract public criticism

(Ihesiaba, 2008:2). Besides, there is a growing level of poverty in the world today. No

doubt, the government of any country has the primary responsibility to see to the

welfare of its citizens.

However, this severe environmental violence has a direct consequence on the

conflict situation in the Delta region. According to Enyia (2000:48), “the local

imperatives of acute poverty in the Niger Delta region of Nigeria have put a number of

demands on oil companies operating in the area. The difficult terrain of these

communities and the low or total lack of government presence in terms of viable

projects, make the area volatile and the people confrontational, with its attendant

Community Relations implications”.

Unfortunately, the influx of oil companies and the heightening of their

operations in Delta state are not matched with an agenda for the development of

Nigeria in general and Delta state in particular. The oil companies claim to have

executed several projects in the host communities as part of their Corporate Social

Responsibility. The claims include: construction of hospitals, roads and schools,

provision of portable water, electricity, sponsorship, scholarships, and; supporting

health campaign programmes among others.

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However, the host communities in Delta state seem not to have acknowledged

these acclaimed community development projects by oil companies as they continue

in their hostile disposition to the companies. “According to Omole (2000), the

relationship of cordiality which existed between oil communities and the oil

companies in the good old days has given way to hostility and violence. The hostility

takes the form of pipeline vandalisation, kidnapping, shutting down of oil companies,

seizure of oil installations, militancy, intra and inter-community conflict”. It is against

this backdrop that we attempt to examine the following questions:

1. Do the increasing environmental degradations of host communities lead to increased Corporate Social Responsibility among Multinational oil Corporations in Delta state?

2. Does a relationship exist between the major projects that form the Corporate Social Responsibility (CSR) efforts of Energia Limited and the needs of the host communities in the Niger Delta?

3. What is the level of the host communities’ participation in the Corporate Social

Responsibility projects of Energia Limited in the Niger Delta?

4. How can the Corporate Social Responsibility (CSR) efforts of Energia Limited be improved upon to help meet the needs of its host communities in Delta state?

1.3 Objectives of the Study

The general objective of the study is to examine the efforts of Energia Oil

Company on Corporate Social Responsibility in the Delta state of Nigeria.

The specific objectives are to:

1. identify and explain the increasing environmental degradations of host communities that lead to increased Corporate Social Responsibility among oil companies in Delta state.

2. investigate the relationships that exist between the major projects that form the Corporate Social Responsibility (CSR) efforts of Energia Limited and the needs of the host communities in Delta state.

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3. examine the level of the host communities’ participation in the Corporate

Social Responsibility Projects of Energia Limited in Delta state.

4. find out how the Corporate Social Responsibility (CSR) efforts of Energia Limited can be improved to help meet the needs of its host communities in Delta state.

1.4 Significance of the Study

This study is part of the developmental discourse on oil resource conflicts and

the post conflict transition in the Niger Delta region beyond the Amnesty programme

of the Nigerian State. The study is designed to advance understanding, promote

debate, and initiate a dialogue on the role of multinational oil corporations in the

development of the Nigerian State and the hosting communities in the Niger Delta

region.

Furthermore, the study will contribute to the existing body of literature on oil

exploitation and economic justice in the Niger Delta, as well as contribute to extant

knowledge about Nigeria’s crude oil wealth, the paradoxes and most pathetic

contradictions of wide spread incidence of poverty in Nigeria in the midst of plenty.

That is, the brazen display and celebration of ill-gotten wealth in Nigeria, most of

which derives from crude oil wealth by a few cabals, while the majority wallow in

penury. The study offers an understanding of the activities of multinational oil

corporations in relation to their corporate social responsibility in Nigeria, with specific

case study of Energia limited Oil Company in the Delta state.

The study serves as documentary evidence to scholars for further researches in

the area. Practically, it will help in awakening Energia to its social responsibility, as it

pertains to the United Nations Global Compact Initiative and its code of conduct,

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which requires it to set out some percentage of its resources to the welfare of its host

communities. The study will benefit from the stakeholder theory, which is based on

the notion that beyond shareholders, there are several agents with an interest in the

actions and decisions of companies.

1.5 Scope and Limitations of the Study

The scope of this study is to examine the efforts of Energia Limited, an Oil

Company, on corporate social responsibility in the Delta state of Nigeria. The period

starts from 2009 when Energia Limited re-entered the Ebendo (ex-Obodugwa) well-1

through self help and carried out various through-tubing interventions that

successfully brought the well on production in 2009 through an Early Production

Facility (EPF) system.

The main limitation to this study is the apparent unwillingness of the oil

companies, especially Energia Limited, to disclose official information on funds and

projects in the course of the study. Furthermore, due to the nature of the terrain, we

encountered a lot of challenges in visiting all the completed projects and the on-going

projects by the oil company, Energia Limited. However, the enormous body of

literature in the Internet and published materials helped the researcher overcome the

likely negative effects of these constraints.

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CHAPTER TWO: LITERATURE REVIEW AND STUDY AREA

2.1. Literature Review

The literature was reviewed under the following sub-themes:

i. Corporate Social Responsibility

ii. Oil Resources and Multinational Corporations in Nigeria

iii. Sustainable Environment and Corporate Social Responsibility in Niger Delta

iv. Synthesis of the Review

2.1.1 Corporate Social Responsibility

The practice of CSR or Corporate Social Responsibility as a paradigm for firms

and businesses to follow has evolved from its early days as a slogan that was

considered trendy by some firms following it to the present day realities of the 21st

century where it is no longer just fashionable but a business requirement to be socially

responsible.

This evolution has been necessitated both due to the myriad problems that we

as a race face which has changed the environment under which firms operate as well

as a realization among business leaders that profits as the sole reason or raison d’être

for existence can no longer hold good.

The reason why companies must look beyond profits is also due to the peculiar

situation that humanity finds itself in the second decade of the 21st century. Given the

political, economic, social and environmental crises that humans as a race are

confronting, corporations have a role to play since they contribute the most to the

economic well being of humanity and in turn influence the political and social trends.

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Current ideas of CSR are based on the notion that companies should undertake

tasks that are traditionally regarded as responsibilities of governments. Commitments

to social, environmental and human rights aims expend the realm company

responsibility to include issues outside the immediate economic interest of

shareholders, and to address interests and expectations of workers, consumers, and

citizens at large.

Despite a general agreement on this ‘core’ concept of CSR, controversies arise

when we attempt to use it to design or evaluate policies There are many theories of

CSR and many labels are used to identify it. CSR has been theorized, for example, in

terms of business ethics, corporate philanthropy, environmental sustainability, or

corporate citizenship (Windsor 2006; Garriga and Mele 2004, Moon and Matten

2004). Corporate managers often understand the concept differently from

policymakers, scholars, and civil society activists. Business people, for example, say

that profit is not inconsistent with the achievement of social aims. Many NGOs, by

contrast, say that CSR goals should be pursued regardless of their effects on profit.

There are therefore many different understandings of the overarching concept

of CSR. In philosophy, this lack of a single definition is called ‘concept contestability’

(Gallie, 1956). The philosopher Walter Gallie in the late 1950s introduced this idea to

refer to disagreement on notions commonly used in philosophy, notions such as

‘fairness,’ ‘freedom,’ or ‘democracy.’ There is agreement on the abstract meaning of

these notions, but disagreement on their applications. Recently, scholars in the fields

of sociology, economics, political science, and management have applied Gallie’s

theory to the notion of CSR (see Moon, 2007 and Okoye, 2009).

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Gallie’s contribution is unfortunately not one that can be automatically

assumed, as the meaning of essential contestability is itself controversial. It is not

clear whether essential contestability means intractable disagreement on the use of

abstract concepts, or the fact that the disagreement is located at the core of the concept

and not in its use. This is not the place for dealing with the dispute extensively but,

for example, the philosopher and legal scholar Jeremy Waldron (2002) argues that the

adjective essential in Gallie’s argument refers to the impossibility to identify a core in

abstract concepts. By contrast, his colleague Ronald Dworkin (1986) reads ‘essentially

contested’ as referred to competing accounts of the same concept.

CSR concept is broad, vague, and slippery. When we talk about concepts, we

do not need a complete account of what they comprise and exclude in order to agree

on their general meaning. When we discuss freedom, equality, justice, and

other fundamental socio political ideas we tend to recognise what we are talking about

because we share a general understanding of these abstract concepts. It is when we

attempt to refer these general ideas to particular phenomena that problems begin.

The contrast between concept and conception is a contrast between levels of

abstraction. At the first level agreement collects around discrete ideas that are

uncontroversially employed in all interpretations; at the second level the controversy

latent in this abstraction is identified and taken up (Dworkin 1986: 70-71). And John

Rawls (1992: 14), summarizing the problem at the beginning of Political Liberalism,

says: “People can agree on the meaning of the concept … and still be at odds…”.

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In this paper we are not going to show how Gallie’s theory works in the case of

CSR concept—Okoye (2009) does it already quite successfully in a recent article. We

are going to assume the concept/conception distinction does apply to CSR, and use

this distinction to discover the conceptual core that precedes the different

understanding of CSR. A series of dichotomies identify the main contrasting

understandings of CSR:

Voluntary vs. non-voluntary

Soft law vs. hard law

Governance vs. government

Business actors vs. non-business actors

Product of neo-liberalism vs. Reaction to neo-liberalism

On the left side we find attributes that associate CSR with voluntarism, soft law,

‘governance’, business actors, and neoliberalism. On the right side we find attributes

that associate CSR also with enforcement, hard law, ‘government’, non-business

actors, and reactions against neo-liberalism.

Though profits are necessary for any business entity to exist, they do not exist

or prosper in isolation. Businesses rely on the society for infrastructure, source of

employees, even the consumer base as well (Utting and Ives, 2006, Uddin, et al,

2008). In justifying the need for MNCs to render social responsibility functions to

society, Handy (2002) argues that:

27

The purpose of business… is not to make a profit, full stop. It is to make a profit so that the business can do something more or better. That “something” becomes the real justification for the business…. It is a moral issue. To mistake the means for the end is to be turn in on oneself, which Saint Augustine called one of the greatest sins…It is salutary to ask about any organization, “If it did not exist, would we invent it”? “Only if it could do something better or more useful than anyone else” would have to be the answer, and profit would be the means to that larger end.

However, there is a great deal of ambiguity and uncertainty about what

corporate social responsibility really means as well as what drives a business to pursue

it. Whatever are the motivations behind CSR theories, it is also interpreted as the

concept of triple bottom-line ("People, Planet, Profit") which captures an expanded

spectrum of values and criteria for measuring organizational success; economic,

environmental and social. Whereas business ethics and corporate governance combine

to generate the means to achieve organizational excellence, the real test is when this

excellence is converted into business sustainability and here, corporate social

responsibility plays a major role.

For Matten and Moon (2004), the fundamental idea of corporate social

responsibility is that “it reflects both the social imperatives and the social

consequences of business success, and that responsibility accordingly falls upon the

corporation, but the precise manifestation and direction of the responsibility lies at the

discretion of the corporation.”

Such a characterization of corporate social responsibility makes it a mandatory

exercise in that it assumes that business has a direct responsibility to help in solving

society’s problems. We argue that, though the modalities of implementing corporate

social responsibility programmes are at the discretion of corporate organizations, it

28

does not make corporate social responsibility a freely chosen programme to contribute

towards social prosperity.

2.1.2 Oil Resources and Multinational Corporations in Nigeria

Corporate social responsibility (CSR) has been debated as long as corporations

have existed. “For centuries legal, political, social, and economic commentators have

debated corporate social responsibility ad nauseam” (Butler & Fred S. McChesney

1999) It is a debate of continued relevance with the growth of multinational

corporations in general, and particularly, the role of international oil companies as

they seek to exploit mineral resources in developing nations.

Discussion of the role of the corporation in a society and its CSR is intricately

linked to the nature of the corporate entity. Tracing the rights of early corporations,

Professor Daniel J. H. Greenwood observed: “In the beginning, everyone understood

that corporations were somewhat sovereign” (Greenwood 2005) He continued,

“Indeed, the British East India Company claimed aspects of sovereignty—the right to

have its contracts treated as international treaties and the right to make war”

(Greenwood 2005:1).

In West Africa, George Goldie founded the United Africa Company (UAC) in

1879, which later received a concession from Britain to control the areas surrounding

the Niger River under the charter of the Royal Niger Company and ultimately became

a tool for British colonization (Amaeshi 2006). The sovereign view gave way to less

lofty perspectives of the corporation as a juridical person, with the right to contract,

own, encumber, and dispose of real and personal property, sue and be sued, make

donations for the public welfare, and be deemed distinct from its officers, employees,

29

and shareholders. Essentially, the two competing present-day theories of the

corporation are the property and social entity views (Allen, 1992).

The oil industry in the Niger Delta started commercial production in 1958

following the discovery of crude oil at Oloibiri by Shell British Petroleum (now Royal

Dutch Shell), in 1956. Today, the oil industry is highly visible in the Niger Delta and

has control over a large amount of land. SPDC alone operates over 31,000 square

kilometers (AI, 2009:9). The area is crisscrossed by thousands of kilometers of

pipeline, punctuated by wells and flow stations. Much of the oil infrastructure is

located close to the homes, farms and water sources of communities. At night often

the only light visible for miles are from flares burning unwanted gas. The oil and gas

sector represents 97 per cent of Nigeria’s foreign exchange revenues and contributes

79.5 per cent of government revenues (Report of the Niger Delta Technical

Committee, November 2008).

Crude oil has had profound impact on the world civilization than any single

natural resource in recorded history. Oil has become a very decisive element in

defining the politics, rhetoric and diplomacy of states. This fact is emphasized Feyide,

when he asserted that;

All over the world, the lives of people are affected and the destiny of nations is determined by the result of oil explorations. Oil keeps the factors of the industrialized countries working and provides the revenues, which enable oil exporters to execute ambitious national and economic development plans. The march of progress would be retarded and life itself would be unbearable if the world is deprived of oil. That is why oil has become the concern of governments, a vital ingredient of their politics and a crucial factor in the political and diplomatic strategies (Feyide, 1986 cited in Pyagbara, 2007:2).

Yet behind this deification of oil, nothing is said about its impact on the environment.

30

The Niger Delta is one of the 10 most important wetland and coastal marine

ecosystems in the world and is home to some 31 million people. The Niger Delta is

also the location of massive oil deposits, which have been extracted for decades by the

government of Nigeria and by multinational oil companies. Oil has generated an

estimated $600 billion since the 1960s (Wurthmann 2006). Under Nigerian law, local

communities have no legal rights to oil and gas reserves in their territory. Section 44

of 1999 Constitution of Federal Republic of Nigeria, states thus;

… the entire property in and control of all minerals, mineral oils and natural gas in, under or upon any land in Nigeria or in, under or upon the territorial waters and the Exclusive Economic Zone of Nigeria shall vest in the Government of the Federation and shall be managed in such manner as may be prescribed by the National Assembly.

Also, The Petroleum Act of 1969, Clause 1 states: “the entire ownership and control of

all petroleum in, under or upon any lands to which this section applies shall be vested

in the State.” Therefore, the Federal Government allocates permits, licences and leases

to survey, prospect for and extract oil to the oil companies, who are then automatically

granted access to the land covered by their permit, lease or licence (Petroleum Act,

1990 and Oil Pipelines Act, 1990).

The property school of thought maintains that the corporation is the private

property of its shareholders geared towards profit maximization. It is a view

represented by Adolph Berle, who posited a “shareholder primacy” and argued that

the corporation exists only to make money for its shareholders (Berle & Means 1932).

He contends that “all powers granted to a corporation or to the management of a

corporation, or to any group within the corporation . . . [are] at all times exercisable

only for the rateable benefit of all the shareholders as their interest appears” (Berle

31

1931 cited in Nwokoro, 2010:236). It is a view echoed by Milton Friedman who

argued that because shareholders own the corporation, the only “social responsibility

of [a] business is to increase its profits” (Friedman 1970).

In contrast, however, is the social entity school of thought represented by

Merrick Dodd, who argued that the corporation had a social service as well as a profit-

making function (Dodd 1932; Stout 2002). According to Dodd, “[B]usiness is

permitted and encouraged by the law primarily because it is of service to the

community rather than because it is a source of profit to its owners (Dodd 1932)”.

Thus, corporations do not simply exist to increase the bottom line, but to

improve the general welfare of the society as well (Allen 1992). While the debate

turns among commentators and scholars, many corporations are making verifiable

public commitments to social welfare, deriving several benefits in the process, such as

increased access to investment capital, employee recruitment and retention, improved

stakeholder relations, and increased business opportunities.

Accordingly, the debate on whether a corporation is oriented towards profit

maximization or contributing to the general welfare of the society is mostly academic

in developing nations, because unlike developed nations, which have largely

integrated social welfare programs and policies into their operations. Adding value to

the community and promoting the general social welfare, therefore, is seen as critical

to maintaining a social license to operate. Hence, Multinational oil corporations in

Niger Delta often engage in community efforts to improve the social welfare levels

and generously make cash and in-kind donations to the various communities where

32

they operate. Beyond this is the question of whether the multinational corporations

integrate social corporate responsibility as a corporate policy in the Niger Delta.

The idea of the firm as citizen is not new (Davis, 1973) a renewed interest in

this concept among scholars of social sciences and environmentalists has appeared

recently. Among these factors, are the crisis of the Welfare State and the globalization

phenomenon, have meant that some large multinational companies have greater

economical and social power than some governments. The corporate citizenship

framework gives an account of this new reality.

The ‘‘corporate citizenship’’ as a framework examining the responsible

behaviours of corporations was introduced into the business and society relationship

mainly by Altman and Vidaver-Cohen, (2000). Since the late 1990s and early 21st

century this term has become popular in academic work carried out (Andriof and

McIntosh, 2001; Garriga, and Mele 2004). Although the academic reflection on the

concept of ‘‘corporate citizenship’’, and on a similar one called ‘the business citizen’,

is quite recent (Matten et al., 2003; Wood and Logsdon, 2002), this notion has always

connoted a sense of belonging to a community, because business needs to take into

account the community where it is operating.

Matten et al. (2003) have distinguished three views of ‘‘corporate citizenship’’:

(1) a limited view, (2) a view equivalent to CSR and (3) an extended view of

corporate citizenship. In the limited view ‘‘corporate citizenship’’ is used in a sense

quite close to corporate philanthropy, social investment or certain responsibilities

assumed towards the local community. The equivalent to CSR view is quite common.

Carroll (1999) believes that ‘‘Corporate citizenship’’ seems a new conceptualization

33

of the role of business in society and depending on which way it is defined, this notion

largely overlaps with other theories on the responsibility of business in society.

Finally, in the extended view of corporate citizenship (Matten et al., 2003,

Matten and Crane, in press), corporations enter the arena of citizenship at the point of

government failure in the protection of citizenship. This view arises from the fact that

some corporations have gradually come to replace the most powerful institution in the

traditional concept of citizenship, namely government.

Theories on corporate citizenship are based on a social contract theory (Dion,

2001) as developed by Donaldson and Dunfee (1994, 1999), although other

approaches are also possible (Wood and Logsdon, 2002). In spite of some noteworthy

differences in corporate citizenship theories, most authors generally converge on some

points, such as a strong sense of business responsibility towards the local community,

partnerships, which are the specific ways of formalizing the willingness to improve

the local community, and for consideration for the environment.

Thus, the exclusive purpose of business organizations is the creation of wealth.

It is held that business operating in a free market is the best way to allocate scarce

resources because society can achieve an optimum situation in the sense of Pareto

(Pareto Optimum). This means that the satisfaction of all people involved in the

situation is the greatest possible or, at least, the situation satisfies most of them

without being detrimental for others. When externalities appear, another system of

society, the political system, should act. The political system must confront these

externalities through taxes, regulation and minimum package of rights. So, business

34

contributes to the welfare of society through the market mechanism and in compliance

with the law.

2.1.3 Sustainable Environment and Corporate Social Responsibility in Niger

Delta One of the most enduring issues in the literature is whether successful

production of extractive commodities, such as oil, promotes or hinders sustainable

development. The thesis, argues that natural resource booms fuel sustainable growth

(Chambers and Gordon, 1966; Cotet & Tsui, 2010). The idea of a ―big push

provides a mechanism by which resource rents help set industrialization in motion.

Understanding the impact of natural resource wealth on development has important

policy implications especially in a time of concern about sustainable economic

development and energy security. With improved measurement of resource

abundance, recent studies find that natural resource wealth tends to positively affect

economic growth (Alexeev and Conrad, 2009; Brunnschweiler and Bulte, 2008;

Lederman and Maloney, 2008).

The association between economic development and oil wealth is controversial.

The cross-country empirical research on the so-called ―resource curse began with

Sachs and Warner's (1995) widely-cited study, which documented a negative

statistical relationship between natural resource dependence, measured by exports of

natural resources as a fraction of GDP, and economic growth (Sala-i-Martin 1997).

However, resource dependence (or comparative advantage in resource products) is not

the same as resource abundance (Brunnschweiler and Bulte, 2008; Wright and

Czelusta, 2004).

35

Debates over ‘sustainability’ and ‘sustainable development’, fuelled by

increased global concern over environmental degradation and widespread failure of

conventional development models to spur ‘modernization’ in third-world societies

throughout the 1970s and 1980s, have expanded in recent years to embrace a

multitude of theoretical perspectives and policy applications. At the core of these

debates lies the dilemma of how to reconcile human social and economic activities

with the long-term resilience, vulnerability and regenerative capacity of the local–

global continuum of ecological systems. In crafting responses to this quandary,

analysts of sustainability are beginning to contend with additional questions such as

how to formulate sensitive environmental policy given imperfect ecological

knowledge; and how to approach sustainability within the context of multiple

interpretations of its goals and implementation strategies.

In the literature there are three main approaches of conceptualizing

sustainability of environment given the rapacious oil exploration and extraction and

development. In its literal rudiments, sustainability means a capacity to maintain some

entity, outcome, or process over time. Agriculture, forest management, or financial

investment might be deemed sustainable, meaning that the activity does not exhaust

the material resources on which it depends. The Brundtland commission report

sustainable development as “the development that meets the needs of the present

without compromising the ability of the future generations to meet their own needs’′

(Tomlinson, 1987:383).

The first is the Economic Models which propose to sustain opportunity, usually

in the form of capital. Robert Solow, states that sustainability

36

Is an investment problem, in which we must use returns from the use of natural resources to create new opportunities of equal or greater value. Social spending on the poor or on environmental protection, while perhaps justifiable on other grounds, takes away from this investment and so competes with a commitment to sustainability (Solow 1993).

With another view of capital, it is assumed that “natural capital” is always

interchangeable with financial capital, argues Daly (1996) and other proponents of

ecological economics, then sustaining opportunity for the future requires strong

conservation measures to preserve ecological goods and to keep economies operating

in respect of natural limits. From a different perspective of the relation between

opportunity and capital, spending on the poor might be regarded as a kind of

investment in the future. According to the economist Amartya Sen’s “development as

freedom” dictum (1999), we create options for the future by creating options for

today’s poor because more options will drive greater development.

The second approach is the Ecological Models. The Ecological models propose

to sustain biological diversity and ecological integrity. That is, rather than focusing on

opportunity or capital as the key unit of sustainability, they focus directly on the

health of the living world (Rolson 1994). Within this model, there are two major ways

of deciding which ecological goods to sustain. From an anthropocentric point of view

essential natural resources should be sustained, as should those ecological systems and

regenerative processes on which human systems rely. From an eco-centric point of

view species should be sustained for their intrinsic value, as should ecological systems

as generators of creatures with intrinsic value.

The third is Political models which propose to sustain social systems that

realize human dignity. Concerned with the way in which local and global

37

environmental problems jeopardize human dignity, these models focus on sustaining

the environmental conditions of a fully human life. Environmental justice and civic

environmentalism represent one strategy of this model; by focusing on

environmentally mediated threats to human life they point to necessary ecological

goods or sustainable environmental management schemes (Ageyman 2005). Other

strategies within this model, such as agrarianism or deep ecology, involve more

substantive visions of the human good. Ultimately, these models recommend

sustaining the cultural conditions needed to realize ecological personhood, civic

identity, or even personal faith through ecological membership (Plumwood 2002,

Wirzba 2003).

Another model is the theological approach or model which represents a

religious view. Many twenty- and twenty-first-century thinkers in diverse fields

include discussions of religious traditions, theological concepts, and spiritual practices

in debates about sustainability. If sustainability already seems a complicated and

pluralist moral concept, why involve religion? Perhaps spiritual commitments

motivate change, or religious communities wield powerful authority for cultural

transformation. Perhaps the roots of globalizing economic and technological systems

lie in a moral consciousness profoundly shaped by religion. In that view, meaningful

cultural change depends on reconsidering those religious roots and criticizing certain

religious attitudes in order to renew the sustaining power of cultural worldviews

(Norton 2005; Jenkins 2008).

Another view on the role of religion in sustainability debates holds that

religious metaphors and spiritual practices have unique capacities for interpreting

38

life’s complexity and generating holistic responses. If part of the challenge of

sustainability is to understand the mutual relations of humanity and nature within a

wider worldview, then religions may have useful resources. If widespread

environmental degradation indicates an alienation of human personhood from the rest

of the living Earth, then spiritual practices may help heal this division and reconcile

humans to their ecological web.

In a content analysis of different definitions of sustainable development,

Gladwin et al. (1995) identified several themes, including human development,

inclusiveness (of ecological, economic, political, technological, and social systems),

connectivity (of sociopolitical, economic, and environmental goals), equity (fair

distribution of resources and property rights), prudence (avoiding irreversibilities and

recognizing carrying capacities), and security (achieving a safe, healthy, and high

quality of life). Despite its broad goals, what is being sustained does not seem to be in

question because, as Hart (1997: 67) points out, the challenge is ‘to develop a

sustainable global economy: an economy that the planet is capable of supporting

indefinitely’. Thus, the challenge is to find new technologies and to expand the role of

the market in allocating environmental resources, on the assumption that putting a

price on the natural environment is the only way to protect it, unless degrading it

becomes more profitable (Beder 1994). Thus, even in the popular Brundtland report,

development is accorded a priority over the environment: ‘environmental protection

constitutes an integral part of the development process’ (Chatterjee and Finger 1994).

If the debate truly was about environmental and social sustainability, surely one would

39

expect the relationship to be reversed, on the assumption that development proceeds

within the constraints and limits of the biophysical environment.

For some communities, the crisis of sustainability presents an opportunity for

religious renewal or spiritual renaissance. Certainly the world has witnessed, in all

lands and from many cultures and traditions, new forms of religious change and

spiritually motivated activism as communities attempt to comprehend and respond to

ecological challenges. The Earth Charter, the definitive document (finalized in 2000)

of the organization Earth Charter Initiative, represents a comprehensive plan to draw

from many traditions and movements in order to invoke shared sacred values and to

call humans into intimacy with the community of Earth.

For the people of the Niger Delta, environmental quality and sustainability are

fundamental to their overall wellbeing and development. According to UNDP, more

than 60 per cent of the people in the region depend on the natural environment for

their livelihood (UNDP, 2006:74.). For many, the environmental resource base, which

they use for agriculture, fishing and the collection of forest products, is their principal

or sole source of food. Pollution and environmental damage, therefore, pose

significant risks to human rights. According to a study carried out by a team of

Nigerian and international environmental experts in 2006, the Niger Delta is

One of the world’s most severely petroleum-impacted ecosystems. The damage from oil operations is chronic and cumulative, and has acted synergistically with other sources of environmental stress to result in a severely impaired coastal ecosystem and compromised the livelihoods and health of the region’s impoverished residents. The Niger Delta has an enormously rich natural endowment in the form of land, water, forests and fauna. These assets, however, have been subjected to extreme degradation due to oil prospecting. For many people, this loss has been a direct route into poverty, as natural resources

40

have traditionally been primary sources of sustenance (Nigeria Conservation Foundation, WWF UK and IUCN, 2006:27).

While oil spills and gas flaring are the most frequently referenced forms of oil-related

pollution in the Niger Delta, there are in fact several other ways in which the oil

industry is harming the environment.

Nigeria’s oil rich Niger delta provides a classical example of the extent to

which exploration activities brew an inter-twine of environmental, resource and

political conflict. Extensive oil exploration has over the decades impacted disastrously

on the socio-physical environment of the Niger delta oil-bearing communities,

massively threatening the subsistent peasant economy and the environment and hence

the entire livelihood and basic survival of the people. This has created an inevitable

conflict of interest between the Niger delta communities that suffers the

environmental consequences of oil exploration and the nation state that is almost

totally dependent on oil revenue as well as companies in the extractive industry

operating in the region. Continuing efforts by the multi-national oil companies to

genuinely contribute to sustainable development in the region have been met with

unassailable pessimism by the people despite tangible and progressive positive results.

Furthermore, because the oil companies are in more direct contact with the

communities than the various government agencies, the deprived population usually

makes demand for social services and economic opportunities from the oil companies

rather than from the inaccessible government.

Two problems arise from these environmental degradation and conflict. The

first is the shrinking of the state from her social welfare programmes. National

governments are increasingly employing neoliberal agendas that have adverse impacts

41

on their livelihoods by restricting community access to natural resources, and not

providing the necessary social and developmental infrastructures in oil resource

communities.

Corporate Social Responsibility principles have long been part of enlightened

business practice, but the concept has witnessed an astounding ascendancy and

resurgence in recent years. To skeptics, CSR is antithetical to sound business practice

and serves to dilute its focus on wealth creation (Clement-Jones, 2005; Murray, 2005).

Proponents however characterize CSR as essential for successful business operations

and as an opportunity for business to look beyond narrow economic returns and take

the wider social concern into consideration (Jackson and Nelson, 2004; Rudolph,

2005).

While views about CSR continue to oscillate between these two extremes, a

growing body of evidence seems to suggest that cultural differences affect CSR

dynamics with companies in different contexts exhibiting varied responses to this

change in the business conduct landscape. A study by Abreu et al (2005) points to the

need for more research on the socio-cultural determinants of CSR. Some studies

considered CSR to entail ethical responsibility, looking at philanthropic responsibility

as an optional add-on (Longo et al., 2005). Other studies have made a distinction

between CSR as simple legal compliance Vs CSR as conducting business with a high

regard for morality (Juholin, 2004). Some studies have referred to various types of

CSR – economic, legal, ethical, philanthropic (Uhlaner et al., 2004); others have

utilized a stakeholder approach, examining the CSR obligations and contributions of

firms vis-a-vis an array of key stakeholders (Longo et al., 2005); while others have

42

made distinctions between classical, socio-economic, philanthropic, and modern

views of CSR (de la Cruz Deniz Deniz and Cabrera Suarez, 2005; Quazi and O’Brien,

2000).

Two major camps in the CSR debate can be delineated. The first camp believes

rather firmly that a corporation is a legal construct and has only the two

responsibilities bestowed by the law creating it, namely making money for owners and

obeying relevant rules (Greenfield, 2004). Another group believes that corporations

act intentionally via the intentional actions of their members and hence bear the duties

and obligations of any good person or citizen, but on a corporate scale (Hancock,

2005; Goodpaster and Matthews, 2003; Pettit, 2005). The first view translates into a

narrow conception of corporate responsibility as simply entailing economic and legal

responsibilities, while the second translates into a broader conception of CSR entailing

a wider range of economic, legal, ethical, moral, and philanthropic responsibilities.

The narrow vision of responsibility of the first camp is closely associated with

the classical perspective, suggesting that the main function of business is to provide

goods and services that lead to the maximization of profit within the framework of

legal requirements (de la Cruz Deniz Deniz and Cabrera Suarez, 2005; Quazi and

O’Brien, 2000). The focus here is on the economic and legal responsibilities of

business. The broader view of responsibility associated with the second camp

translates into attempts at meeting a wider spectrum of expectations, as in protecting

the environment, developing the community, conserving resources, and philanthropic

giving (de la Cruz Deniz Deniz and Cabrera Suarez, 2005; Quazi and O’Brien, 2000).

From this perspective, business like ordinary persons or citizens, is expected to

43

assume responsibility and conform to the principles of morality, accountability, and

integrity with a much wider scope for potential contributions and interventions.

2.1.4 Synthesis of the Review

There are views that contrast states and markets and consider them two worlds

apart. Holders of these views, in some cases, stretch the politics and the market

opposition to the point that they hope one of the two worlds absorbs and cancels the

other – since genuine non-interference appears to be neither feasible nor desirable.

Adversarial views of politics and the market are held both by apologists and

castigators of the markets. My argument started not just from the dissatisfaction with

such views and their Manichaeism.

In this essay we wanted to appreciate that other ways of the relationship

between politics and the market are possible. Contributions that investigate these ways

are useful to improve theory soundness and policy efficacy. The prerogative of this

kind of reading is that it maintains the boundary between markets and politics, while

redefining this boundary as a means of relation, exchange, and coordination.

Boundaries and limits are not merely barriers that prevent expression and

communication; they are, to use Kant’s insight, enabling conditions.

When contemporary socio-economic, political or legal scholars discuss the

influx of the market into the political sphere, they are describing a boundary that

seems no longer suitable to shape the exchange between the two sides. We think that

to question the quality of the boundary – an artificial boundary that is still there to be

44

discussed and redesigned – is a more important task than claiming for the boundary

break to the advantage of either the ‘market or the forum.’

Consequently, this study aims to fill this gap; that is, that CSR does not

undermine business as is generally prevalent in the literature. However, there appears

to exist, a limited literature on a comprehensive framework and general principles

guiding responsible behaviour among oil companies in Nigeria. More importantly,

there are limited studies on CSR of indigenous companies in general and Energia

Limited Oil Company in particular. Therefore, this research used Energia Limited of

Nigeria as a case study to examine the corporate social responsibility behaviours of oil

companies in Delta state, Nigeria.

2.2. Operationalization of Key Concepts

Environmental Degradation

Environmental degradation is the process of destroying the natural flora and

fauna of an environment. In the context of the Niger Delta, environmental degradation

is a negative by-product of extensive oil exploration, exploitation and distribution

culminating in the massive oil spillages and gas flares which have devastated

enormous land and water infrastructure depletion, leading to soil fertility loss,

agricultural decline, forest loss, fisheries decline and bio-diversity depletion.

Energia/Oando Joint Venture Limited

Energia Limited is the Joint Venture Operator of the Ebendo/Obodeti Marginal

Field (ex-Obodugwa/Obodeti Marginal field) located in Ebendo near Kwale, Ndokwa

West LGA, Delta State. The field was awarded to Energia and Oando, in a 55%/45%

equity split with Energia as the designated Operator in the 2003 Federal

45

Government/DPR Marginal Field rounds. The company is a wholly owned Indigenous

E&P company made up of leading oil and gas service and technology providers who

are key promoters of PETAN in the country to take advantage of the Nigerian Content

dream of creating a totally indigenous Nigerian Oil and Gas Technology in the

immediate and near future.

The consortium of leading service and technology companies that constitute

Energia Limited, that have also made their marks in the Nigerian E&P industry are:

• Ciscon Nigeria Limited,

• Oildata Wireline Services

• Weltek Limited

• Ariboil Company Limited

• Sowsco Well Services Limited

• Skangix Petroleum Limited

• Imbe Koru & Sons Nigeria Limited

• Pemec

Other corporate entities are

• Ashbert

• IDD

The Company operates from its own 10,000 bbls crude processing station

(flowstation) at Ebendo and exports its produced crude through its 8.5 km, 6 inches

export line through an Injection Hub, at Umusadege, also in Kwale, Delta State. It has

a 30 MMSCFD gas processing plant constructed in partnership with Xenergi. Energia

Limited has a base Office in Kwale, Delta State, and its Head Office in Lagos.

46

Sustainable Development

The concept of sustainable development is related to the need for the

institutionalization of best business practices by companies, corporations and sundry

business concerns as well as governments in processes of production, distribution and

consumption, vis-à-vis their economic, socio-political and environmental spheres of

activity. Sustainable development is a development that meets the need of the present

generation without compromising the needs of future generation.

Multinational Oil Corporations (MNCS)

These are transnational oil business conglomerates operating or having

investments in several countries of the world. MNCs feature prominently in the

economic development strategies of less developed countries. They are major agents

of foreign direct capital flow and investments. In addition, MNCs contribute to

national economic development through taxes, royalties, rents and fees. It is also

argued that MNCs investments increase the economic output, foreign exchange

earnings, the diffusion of technology, access to global markets, technology and

managerial skills, local production, industrialization, economic growth and general

development.

Oil Resources

Oil Resources refers to a collection of mineral deposits or rather petroleum

reserves that can be found in a place. It includes a nation’s crude oil and gas reserves

that can be harnessed to meet different energy needs.

2.3. Study Area

The Niger Delta, is a densely populated region once known as the Oil Rivers

because it was a major producer of palm oil. This region is on the Atlantic coast of

Nigeria where the Niger River divides into numerous tributaries. The region extends

along the coast from Benin River on the west to the Imo River on the east. There are

47

several linguistic and cultural groups namely the Ijaws, Edos, Urhobos, Itsekiris,

Yorubas, Igbos, Ukwuani, Isoko, Efiks and Kalabari

The area referred to as the Niger Delta region was limited to the geo-political

zone occupied mainly by the minorities of southern Nigeria, which currently

comprises the six states of Akwa Ibom, Bayelsa, Cross River, Delta, Edo and Rivers.

In recent years, the region was politically redefined and enlarged to include all the

nine contiguous oil-producing states, which incorporates new states such as Abia, Imo

and Ondo. Currently, the Niger Delta forms the largest group amongst the ethnic

minorities spread over the south-south geographical zone of Nigeria (Fig. 2.1).

Map 2.1 Map of the Niger Delta Area

Source: Ministry of the Niger Delta http://www.mnda.gov.ng/

It has a population of over 45 million people distributed in over 1600

communities. The Niger Delta has some unique characteristics, which tend to make

development difficult. It is, for instance, one of the largest wetlands in the world. It

covers an area of 70,000 square � kilometers and is noted for its sandy coastal ridge

48

barriers, brackish or saline mangroves, freshwater, permanent and seasonal swamp

forests as well as lowland rainforest. The whole area is traversed and crisscrossed by a

large number of rivers, rivulets, streams, canals and creeks. The coastal line is

buffeted throughout the year by the tides of the Atlantic Ocean while the mainland is

subjected to regimes of flood by the various rivers, particularly the river Niger. By

this, the Niger Delta region is the second largest delta in the world and the largest

wetlands in Africa. The delta is home to an extraordinary variety of people, mostly

fishers and farmers with a proud history and cultural heritage. The Niger Delta is also

the main centre of oil production activity and therefore the centre of Nigeria’s

economy, accounting for more than 90 percent of Nigeria’s foreign exchange earnings

and more than 80 percent of government revenue (Akpan, 2010).

Delta State was carved out of the former Bendel State on August 27, 1991. The

state was created following agitations for the creation of separate distinct states by the

Urhobos and Anioma regions. The then Military President, Gen Ibrahim Babangida

(Rtd) created the state using the name “Delta”. Delta state was once integrated in the

Mid Western state from 1963 to 1976 and later Bendel state, from 1976 to 1991. It is a

state in Nigeria, comprising distinct Igbo subgroups of Enuani, Ukwuani, Ndokwa and

Ika, collectively referred to as Anioma, and the Delta people made up of the Urhobo,

Itsekiri, Ijaw and Isoko ethnic groups. The ethnic groups are grouped into three

senatorial districts, namely Delta North, Delta South and Delta Central, for

administrative purposes.

Map 2.2: Map of Nigeria Showing Delta State

49

Source: http://en.wikipedia.org/wiki/Delta_State

Delta State is ethnically diverse with peoples and numerous languages spoken

in the state. The State is dividing into 2 main groups based on historical relations,

culture and language. The first group is the Igbo subgroup of Delta North Senatorial

district sometimes collectively referred to as Anioma. This group has a historical

affiliation with the Igbos of eastern Nigeria, although some parts of it are more Igbo

than others. For instance the Oshimili due to its nexus to the river Niger is

linguistically and culturally more Igbo than Ika which has been heavily influenced by

the Benin kingdom. The second group comprising Urhobo, Itsekiri, Ijaw and Isoko

ethnic groups are collectively referred to as the delta people. These ethnic groups

occupy the Central and South Senatorial districts of the state. They speak different

languages but have a loosely related culture as they traded and intermarried for

centuries before colonization.

Delta is an oil and agricultural producing state of Nigeria, situated in the region

known as the Delta state, South-South geo-political zone with a population of

50

4,098,291 (males: 2,674,306; females: 2,024,085) (Federal Republic of Nigeria,

Official Gazette, No. 24, vol. 94, 2007).

2.3: MAP OF DELTA STATE SHOWING LOCAL GOVERNMENT

AREAS/towns

The capital city is Asaba, located at the northern end of the state, with an

estimated area of 762 square kilometers (294 sq mi), while Ogwashi-Uku has the

biggest land space for any industry, Warri is the economic nerve of the state and also

the most populated located in the southern end of the state. The state has a total land

area of 16,842 square kilometers (6,503 sq mi). Delta State is made up of twenty-five

Local Government Areas (shown with 2006 population figures in Table below).

2.1: Table Showing Delta State Population Distribution

Delta

Central

Senatorial

District

1,575,738

Delta North

Senatorial

District

1,229,074 Delta South

Senatorial

District

1,293,282

Ethiope East

200,792 Aniocha North

104,711 Bomadi 86,644

Ethiope West

203,592 Aniocha South

140,604 Burutu 209,666

Okpe 130,029 Ika North 183,657 Isoko North 144,155

51

East

Sapele 171,888 Ika South 162,594 Isoko South 227,712

Udu 143,361 Ndokwa East

103,171 Patani 67,707

Ughelli North

321,028 Ndokwa West

149,325 Warri North 137,300

Ughelli South

213,576 Oshimili North

115,316 Warri South 303,417

Uvwie 191,472 Oshimili South

149,306 Warri South West

116,681

Ukwuani 120,390

Source: Federal Republic of Nigeria, 2006 Population Census, National Bureau of

Statistics

However, Energia/Oando JV which was awarded OML 56 by the Federal

Government in 2003 and is one of the largest operating indigenous oil firms in the

Niger Delta. The Energia oil and gas industry operates in six (6) communities (Emu-

Ebendo, Obodugwa-Ogume, Umusadege, Isumpe, Umusam and Ogbeani) of Delta

state, Nigeria.

Thus, Energia is the Operator of the Energia/Oando Joint Venture Ebendo (ex-

Obodugwa)/Obodeti Marginal fields is located in the southern Delta Basin in Delta

State of Nigeria at Emu-Ebendo near Kwale town. As a consortium of very

experienced and fore-front service groups of companies, Energia was able to bring the

Ebendo (ex-obodugwa) field into production through the collaboration of the service

companies, in partnership with Oando.

The company re-entered the Ebendo (ex-Obodugwa) well-1 through self help

and carried out various through-tubing interventions that successfully brought the well

on production in 2009 through an Early Production Facility (EPF) system, which was

later upgraded to a full blown 10,000 bpd flowstation. It exports its crude in

52

collaboration with other Marginal Field Companies operating in Kwale, through a

common Injection Hub, generally called Group Gathering Facilities (GGF) where a

bank of top class Custody Transfer Meters (LACT) is installed to meter each

company’s crude before injecting to Brass Terminal through NAOC’s Kwale

station. Energia commenced its test crude injectin through road tankers to the

Injection Hub at Umusadege, to be able to generate needed cash to construst its 8.5

km of 6” export line, and installation of its LACT meter at the Hub.

It has also in collaboration with its Technical Partners, Xenergi installed a 30

mmscf Gas Processing Plant under a Build Own and Operate basis to handle its

produced gas, in our bid to meet the federal government gas commercialization and

monetization programme, while also meeting the zero flare policy for cleaner

environment.

FIELD DEVELOPMENT STRIDES OF THE COMPANY

• Installed a temporary injection facility at MWOG facility to evacuate test oil.

• Converted the EPF to full blown flow station in 2009.

• Engaged Road Tankers and Trucked crude for eight months with DPR permit.

• Generated funds to construct 8.5 km x 6” export line to Injection Hub at

Umusadege.

• Installed a permanent Leased Automatic Custody Transfer (LACT) unit for

crude metering and fiscalization.

• Installing 2 x 10,000 bbls crude tanks

FIELD DEVELOPMENT MILESTONES

53

• Achieved first oil in December, 2009.

• Reprocessed and re-interpreted entire 3D seismic data.

• Constructed 8.5 km x 6 inch Ebendo-Umusadege Pipeline

• Installed a modern LACT Unit at Umusadege Cluster Hub.

• Constructed 25 MMscfd gas processing plant with Xenergi at Ebendo

• Successfully drilled 3 wells back to back in Ebendo Field.

FIELD DEVELOPMENT MILESTONE

• Increased field production from 1200 to 6000 with 2nd well.

• 3rd Well to increase production to 8000 bopd in 3rd Quarter 2013

• Increase P1 reserve from 6 mmbls to 25 mmbls.

• To drill additional 3 wells in 2013/2014 to increase prod. to 15000 bopd.

• Constructing 2 x 10,000 bbls crude storage facilities – to commission 3rd

Quarter 2013

• Constructing 53 km x 12 inch Umusadege- Eriemu Manifold with Cluster

Group Members

OFFICES OF THE COMPANY

Energia Limited has a base Office in Kwale, Delta State, and its Head Office in Lagos.

MISSION OF THE COMPANY

Our Mission is to exploit, produce and process sustainable energy sources for the

development and up liftment of mankind and his environment, in collaboration with

the communities in our areas of operation, with a workforce that continuously

54

improves its work methods and technology, while maintaining a healthy balance

between our operation and the environment.

VISION OF THE COMPANY

To be an energy Company of reference in Nigeria

CORE VALUE OF THE COMPANY

As an Organization, we value certain behaviors which must essentially define us from

the foundation on which we perform our work and conduct ourselves.

We are courteous, and respectful, and welcome diverse views without compromising

standards, and conduct our business in an ever efficient and effective manner.

These values underlie how we interact with each other and what strategies we employ

in fulfilling our mission and are listed below:

• Transparency

• Commitment

• Responsibility

• Accountability

• Integrity

• Prudence

• Respectful

• Professionalism

BOARD OF DIRECTORS OF THE COMPANY

55

Energia’s general corporate policies and directions are determined by a Board of

Directors who are successful Nigerians drawn mainly from the Oil and Gas Industry

and other facets of the society. The Board members are proven entrepreneurs and

active players in Nigerian economy with vast experience in the E&P sector.

AELEX LEGAL PRACTIONERS AND ARBITRATORS is secretary to the Board.

The membership of the Board are as follws:

• Chief A.K Horsfall - Chairman

• Mr. Pedro Egbe

• Mr. Stephen Aribeana

• Mr. Shawley Coker

• Mr. Emeka Ene

• Mr. Samuel Adegboyega

• Mr. George Osahon

MANAGEMENT OF THE COMPANY

Day by day activities are run by the Management Staff of the company. The

Management staff are result-oriented in their various places of assignment.

The management staff are as follows:

1. Felix A.V - Managing Director/CEO

2. Titilola Opaleye - Chief Financial Officer

3. Godwin Okolo - Operation’s Manager

56

4. Efosa Arthur - Chief Technical Officer

5. Morgan Amadi - QHSE Manager

CHAPTER THREE: RESEARCH PROCEDURE

3.1. Research Design

The study was a sample survey with oral and focus group discussion as the

survey instrument. Field research was used and in-depth personal (oral) interviews

with staff of Energia, community leaders, indigenous entrepreneurs, youth leaders and

key members of Niger Delta Development Commission (NDDC) were adopted. Focus

Group Discussions (FGD) comprising of stakeholders of oil companies, relevant

government ministries, indigenous entrepreneurs, and community leaders were

identified as the most suitable for the case as it gives better opportunity to find out the

thoughts and perceptions of the relevant actors on CSR. A total of 10 people

participated in the focus group discussions, which was conducted in the three oil host

communities.

The research primarily concentrated on Energia’s collaboration with

indigenous people, in terms of developing the capacity of the indigenous businesses

people on entrepreneurship and projects provided as a new dimension of corporate

social responsibility.

The guiding instruments were:

• environmental degradation in the process of oil exploration and extractions

• The nature of the environmental degradations. The measures in place to ensure sustainable environment in the course of oil extraction by Energia.

• Corporate social responsibility as part of the measures to ensure sustainable environment. How do host communities respond to Energia CSR?

57

• The major projects by Energia. The degree it meets the needs/demands of the host communities.

• Do the host communities own the CSR projects? How have the Energia CSR impacted on the host communities?

• What are other ways the Energia can improve on their corporate social responsibility?

3.2. Population, Sample and Sampling Procedure

3.2.1 Population of Study The study focused on the oil companies extraction activities in Delta state

communities, in relation to sustainable environment through corporate social

responsibility. The emphasis was on the activities of Energia Limited. The population

of the study consisted of two categories: a) selected members or representatives of

Energia and; b) host communities, leaders of thought, civil society, youth, traditional

rulers, state and local government representatives and women leaders. These people

were engaged in focus group discussion, while few were interviewed.

3.2.2 Sampling Size and Procedure

Quota Sampling of non-probability sampling technique was used to select

respondents. Quota sampling is appropriate when there is no suitable list of the

population we are surveying. The key idea in quota sampling is to produce a sample

matching the target population on certain characteristics. The assumption is that if the

sample matches the population on these characteristics, it may also match the target

population on the quantities we are trying to measure (Doherty, 1994).

Among the six host communities, three communities – Emu-Ebendo,

Umusadege and Ogbeani Ogbe were selected as our sampling population size as they

more populated and witnesses greater oil exploitation activities. The sampling size

58

was 90 respondents, 30 respondents from each selected community, involving

community leaders, market women/women groups and youth groups; ten from each

group. Ten (10) questionnaires each were administered on the three identified groups

of community leaders, market women/women groups and youth groups, making it 30

questionnaires to each community.

Four representatives of Energia Oil Company were interviewed. The reasons

for the use of four respondents were: first, the data to be generated are descriptive in

nature and does not involve numbers and statistics. It requires an in-depth discussion

and it is a goal-oriented conversation from informed sources. The goal is not only to

represent the population as a whole, but also to gather diverse points of view. This

method does not take the individual as the principal unit of analysis, but strives to

recognize regularities in participants’ accounts in order to examine the phenomena

studied. Second, this is a non-probability method which attempts to match the

characteristics of the sample with those of the entire population, thereby achieving a

small replica of the total population.

3.2.3 Sources and Method of Data Collection

Data was collected from documentary evidence, questionnaire and observation

methods. Documented evidence will be used to gather materials on projects,

environmental degradations, extant rules governing oil exploration and extractions,

degree of compliance by the Multinational oil corporations, etc. The materials will

assist in giving meanings to the expression of opinions with respect to projects,

statement of account, profit and losses. The self-reporting, that is the oral interview

method, will be used to gather evidence from the respondents on the needs/demands

59

of the host communities, level of participation in Energia CSR, satisfaction level and

impact on the wellbeing of the people.

The study depended on institutional and official documents like the reports of

Amnesty International, Human Rights Watch as well as other governmental and non-

governmental organizations. This study employs documentary data collection by

going into archives to dig out the history of crude oil in Nigeria, the amount of

environmental damages by the oil companies, particularly, Energia, and the degree of

Energia involvement in social corporate responsibility in the Niger-Delta States. The

yearly statement of accounts of Energia will be known in order to estimate their yearly

profit, the taxes paid to the Federal Government of Nigeria and the amount of

resources spent on the host communities. The aforementioned institutional and official

documents will be supported by data from other sources such as textbooks, journal

articles seminar, conference papers and magazines as well as other written works that

dwelt on the oil companies and Niger Delta sustainable development.

The use of observational method in this study was complemented by the

experience of the writer has gathered over the years as a keen observer of contentious

international issues especially as it pertains to sustainability of environment, oil

resources, and corporate social responsibility in the Niger Delta.

3.2.4 Validity and Reliability of Instrument

Two concepts that are necessary for ascertaining the appropriateness of the

measuring instrument in a research are validity and reliability. The validity of a

measuring instrument is defined as the property of a measure that allows the

researcher to say that the instrument measures what he says it measures (Ofuebe,

60

2002:66). Reliability refers to the consistency of the measuring instrument. It involves

measuring variables and obtaining consistent results at each repeated measure

(Nzelibe, 1995).

To ensure face and content validity of the instrument used for data collection,

the supervisor of this work validated the initial draft of the questionnaire. The

interview schedule depended on wide consultations with specialist and experts in the

field.

To ensure reliability of the study, the researcher first conducted a pilot test. Pilot

testing is an experimental activity carried out on a small scale to determine how

something on large scale will work (Obasi, 2000: 128). Through a pilot test, errors in a

questionnaire such as ambiguity, contradictory questions, poor wording of questions

were detected and eliminated.

3.2.5 Method of Data Presentation and Analysis

For the analysis of data, we relied on qualitative descriptive statistics and

logical arguments and inferences. Asika (2006:118) defines qualitative descriptive

analysis to mean summarizing the information generated in the research verbally so as

to further discover relationships among variables. The adoption of the foregoing

analytical method becomes necessary since the study will rely principally on

secondary sources of data. Also, straightforward data presentations by the use of

tables, chart and graphs will be employed to present views, opinions and projects

emanating from the study.

61

CHAPTER FOUR

DATA PRESENTATION, ANALYSIS AND FINDINGS

4.1 Introduction

This section comprised of four major areas, namely: the overview of data

collected, descriptive analysis of characteristics of respondents, data presentations by

the use of tables, pie chart and percentage to describe information generated.

4.2 Data Presentation

Ninety questionnaires were administered to indigenes of the three selected

communities: Emu-Ebendo, Umusadege, and Ogbeani Ogbe in Ndokwa West Local

Government Area of Delta State. Out of 90 participants, 86 respondents completed

and returned their questionnaires representing a return rate of 95.6%, while 4 (4.4%)

questionnaires were invalid.

Table 4.1: Respondents Total Population (=N86)

No of questionnaire No of completed Invalid

62

administered and returned questionnaires

90 86 (95.6%) 4 (4.4%)

4.2.1 Characteristics of Respondents

We investigated the characteristic of our survey respondents. The demographic

features of our respondents were examined with frequency analytical method.

Table 4.2: Respondents Total profile (N=86)

Demographic

Character

Categories

Frequency

Percentage

Age 18 – 30 25 29.1%

31 – 40 28 32.6%

41 – 50 13 15.1%

51 – 60 10 11.6%

61 – above 10 11.6%

Gender Male 55 64.0%

Female 31 36.0%

Occupation Self-employed 22 25.6%

Civil/public/private servants

17 19.8%

Unemployed/students 47 54.7%

Community Emu-Ebendo, 29 33.7%

Umusadege, 29 33.7%

Ogbeani Ogbe 28 32.6%

63

Source: Field Work 2013

Out of the 86 valid respondents to our questionnaire 55 or 64.0% were males,

while 31 or 36.0% were females. Among these respondents, 25 or 29.1% of the

respondents fall within the age range of 18–30 and 28 or 32.6% fall within 31– 40.

These two categories of age represent the youth. While 13 or 15.1% respondents fall

within the ages of 41–50, 10 or 11.6% respondents fall within the ages of 51–60,

while 10 or 11.6% respondents fall within the ages of 60 and above. In terms of

occupation, 47 representing 54.7% were unemployed/students, while 22 or 25.6% and

17 or 19.8% were self-employed and civil/public/private servants respectively.

4.3 Data Analysis and Findings

Research Question One: Does the increasing environmental degradations of oil

host communities lead to an increased social corporate responsibility among

Multinational oil Corporations in the Delta state?

In response to the question of infrastructures provided by multinational oil

corporations in the Delta state, four questions were framed to capture the CSR

activities by Energia Oil Company in Ndokwa West Local Government of Delta State.

Question 1, respondents were asked to name four oil companies in Ndokwa

West Local Government Area.

64

Table 4.3: Major Oil Operators

Oil Company Frequency

AGIP 30

PILLER OIL 20

ENERGIA 80

ACME 51

OTHERS 19

NIL 30

Source: Field Work 2013

The response shows that four major oil companies are Agip, Piller Oil, Energia, and

ACME and others. The frequency distribution of the presence of these oil companies

show that 30 respondents identifies AGIP oil limited company, 20 respondent named

PILLER OIL, 80 respondent mentioned ENERGIA as a major oil company while 50

respondents identified ACME. However, about 30 respondents stated nil show their

ignorance of the names of Oil Company operating in their localities.

Question 2, is whether respondents consider Energia as a major operator in the

crude oil exploration and exploitation in your community? The respondents

overwhelmingly stated that Energia oil is a major operator. Table 4.4 represents the

respondents answer to the question. 72 or 83.7% respondents responded “yes” that is

65

that Energia is a major oil operator in their community while 14 or 16.3% indicated

“No” showing that Energia is not a major operator. The table shows that majority of

the respondent agreed that Energia is a major player in oil exploration and exploitation

in the three communities under study.

Table 4.4: Energia a Major Oil Operator (N=86)

No. Respondents Frequency

Yes 72 83.7%

No 14 16.3%

Don’t know 0 0

Total 86 100%

Source: Field Work 2013

Question 3, is the question on the oil problems associated with oil explorations

in their communities? Four problem areas were identified in the literature and

respondents were asked to tick two main problems associated with the exploration of

crude oil. They were as follows: Land deprivation, environmental degradation, abuse

of the culture of the community and poor/non-payment of compensations to affected

community members. The respondent views were stated in table 4.5 below.

Table 4.5: Problems Associated With Oil Exploration (N=86)

Problems No. respondents Frequency

Land deprivation 28 16.3%

66

Environmental degradation 74 43.0%

Abuse of the culture 11 6.4%

Poor/non-payment

of compensations

59 34.2%

Total 172 100%

Source: Field Work 2013

11 or 6.4% respondents mentioned abuse of the culture; 28 or 16.3% respondents

identified land deprivation; 59 or 34.2% were of the opinion that poor/non-payment

compensation arising from the activities of oil corporation are major problem, while

the majority of the respondents 74 or 43.0% stated that environmental degradation

causes more destruction to the communities than other forms of problem.

Question 4, is whether Energia has been involved in the provision of

infrastructures in your community as part of its corporate social responsibility? A

greater percentage of citizens 71 or 82.6% agreed that Energia provides infrastructure,

while 15 or 17.4% disagreed.

Question 5, what are the measures adopted by the Energia oil company to

reduce the effects of environmental degradation in their communities. A list of 7 items

numbered A – G were mentioned for the respondents to identify the projects provided

by Energia Oil Company in their communities.

Table 4.6: CSR projects in Delta Communities

67

CSR projects in Delta Communities No. %

Building/Renovation of schools 1 1.1%

Capacity development (Training of artisans, small-scale

business etc)

1 1.1%

Students Grant and bursary 4 4.7%

Establishment of portable water 28 32.6%

Drug support to hospitals and health centres 3 3.5%

Establishment of electricity 32 37.2%

Monetary support 17 19.8%

Total 86 100

Source: Field Work 2013

Figure 4.1: Energia CSR Projects

Source: Field Work 2013

Figure 4.1 above shows that most respondents indicated that establishment of

electricity 37.2% and the establishment of portable water 32.6% was the major areas

68

of concentration for Energia’s corporate social responsibility projects among

communities of Ndokwa West Local Government Area of Delta state. Following the

above was financial or monetary support (19.8%) and student grants and bursary

(4.7%). However, building/renovation of roads, capacity development of unemployed

citizens and drug support to hospitals and health centers recorded a low return of

1.1%, 1.1% and 4.7 respectively. Indications show low consideration on this are by

Energia Oil Company.

Research Question 3: Were your community leaders involved in the initiation,

planning and execution of any of the projects by Energia? The indication is that 23 or

88.5% said community leaders/members were not part of the planning and execution

of these projects, while 3 or 11.5% said that some community leaders were involved.

This section wants to find out the relationship between the major projects that form

the Corporate Social Responsibility (CSR) efforts of Energia Limited and the needs of

the host communities.

Research Question 6: What is the rate of the immediate communities’

satisfaction with the projects executed by Energia Oil company Nigeria Limited?

TABLE 4.7: Statistical Presentation of Communities’ Satisfaction of Energia’s

Projects by Immediate Communities

NDOKWA L.G.A (DELTA STATE)

COMMUNITIES

EMU-EBENDO

UMUSADEGE

OGBEANI

69

EMU-EBENDO

Not satisfied

Frequency 9 (31.0%)

Fairly satisfied

Frequency

12 (41.4%)

Satisfied Frequency 8(27.6%)

Total 29 (100%)

UMUSADEGE Not satisfied

Frequency 15 (53.6%)

Fairly satisfied

Frequency

10 (35.7%)

Satisfied Frequency 3 (10.7%)

Total 28 (100%)

OGBEANI OGBE

Not satisfied

Frequency 10 (34.5%)

Fairly satisfied

Frequency

13 (44.8%)

Satisfied Frequency 6 (20.7%)

Total

29

(100%)

Source: Field Work 2013

Figure 4.2: Satisfaction Level of Energia Projects

70

Source: Field Work 2013

Figure 4.2 shows the level of approval of the host communities with the

Energia‘s communal enhancement projects. The figure discloses that 31.0% of those

interviewed in Emu-Ebendo indicated their displeasure, 53.6% of the respondents

from Umusadege and 34.5% in Ogbeani indicated dissatisfactions. Those who

indicated fairly satisfactory were as follows Emu-Ebendo (41.4%); Umusadege

(35.7%) and Ogbeani (44.8%); while the minority of respondents expressed

satisfaction Emu-Ebendo 27.6%, Umusadege 10.7%, and Ogbeani 20.7%. By

inference, the total three communities surveyed in Ndokwa local government area of

Delta state, none of the community indicated that they were satisfied with the

Energia‘s Corporate Social Responsibility‘s projects, but majority of the communities

except Umusadege showed they were fairly satisfied.

71

Research Question 7: Do the community members/leaders participate in the

projects executed by Energia?

Table 8: Community participation in projects N=86

Participation No. Per cent

Yes 59 68.6%

No 27 31.4%

Total 86 100%

Source: Field Work 2013

The result indicated that majority of the respondent 59 or 68.6% agreed that the

community members were part and parcel of the projects executed by Energia in their

different communities, while minority of the respondents 27 or 31.4% said that the

community members did not participate in the Energia projects. The following

question intended to understand the level or nature of participation by community

members in these projects. Table 9 below provided answers validating the response of

those that affirm that community members participated in the execution of projects in

their communities. The result indicated frequency level of participation;

planning/initiation 10, funding 0, supply of manual labour 33, supervision 16 and

none 0. Participation at the level of provision of human labour and supervision had the

highest frequency of 33 and 16 respectively.

Table 9: Community Participation N=86

72

Areas of Participation Frequency

Planning/Initiation 10

Funding 0

Supply of labour 33

Supervision 16

None 0

Source: Field Work 2013

Research Question 3: How significant are the projects provided by Energia Oil

company Limited to the community people?

Table 10: Statistical Presentation of Importance of Energia’s Projects to the

Communities of Ndokwa Local Government Area

NDOKWA L.G.A (DELTA STATE)

COMMUNITIES

EMU-EBENDO

UMUSADEGE

OGBEANI

EMU-EBENDO

Not relevant

Frequency 4 (13.8%)

Average relevant

Frequency

5 (17.2%)

Relevant Frequency 13 (44.8%)

Very relevant

Frequency 7 (24.1%)

73

Total 29

(100%)

UMUSADEGE Not relevant

Frequency 9 (32.1%)

Average relevant

Frequency

11 (39.3%)

Relevant Frequency 6 (24.4%)

Very relevant

Frequency 2 (7.1%)

Total 28 (100%)

OGBEANI

Not relevant

Frequency 10 (34.5%)

Average relevant

Frequency

7 (24.1%)

Relevant Frequency 9 (31.0%)

Very relevant

Frequency 3 (10.3%)

Total

29 (100%)

Source: Field Work 2013

74

Source: Field Work 2013

Figure 4.3 Illustrates the significance of the CSR projects of Energia for

citizens of oil communities in Ndokwa West Local Government Area. In Emu-

Ebendo, 44.8%; Umusadege 24.4%; and Ogbeani 31.0% majority of the respondents

considered the CSR projects as relevant. Following that are those who considered the

projects averagely relevant, Emu-Ebendo, 17.2%; Umusadege 39.3%; and Ogbeani

24.1%. However, there are few numbers of respondent 13.8% in Emu-Ebendo; 32.1%

in Umusadege; and 34.5% in Ogbeani who reveals that the projects are not relevant to

the needs of the communities. Comparing this to a very few respondents, who

indicated that the projects are relevant. Comparatively, greater number of respondents

(averagely relevant and relevant) stated that these projects are considered relevant to

the needs community members and the projects contribute in the reducing effects of

75

the damages caused by multinational oil companies in Ndokwa west local government

are.

Supporting this assertion is the number of respondents who considered that the

infrastructures provided improve the quality of the host communities. Table 11shows

that 66 or 65.1% respondents affirm that the projects are of immense benefit to the

communities, while a minority of the respondents 23 or 27.7% indicated that the

projects have not improved the quality of life the community members.

Research Question 11: What are the necessary areas of CSR that will likely

improve the well-being of citizen?

Table 11: Areas of Capacity Development

Areas of Capacity development Frequency Percentage

Award of contract to qualified

indigenes/contractors

11 12.8%

Small-scale businesses/entrepreneurship 20 23.3%

Skill development 20 23.3%

Security guarding of oil installations 4 4.7%

Training and empowering of artisans 20 23.3%

Scholarship/Bursary 11 12.8%

Total 86 100%

76

Source: Field Work 2013

Source: Field Work 2013

Figure 4.4 above shows that majority of respondents indicated that capacity

building and support for individual business enterprises will be more beneficiary to

the citizens. Thus, the data revealed that initiating programmes to develop the skills of

unemployed indigenes such as for small-scale businesses/entrepreneurship, skill

acquisition/development and training/re-training and empowering artisans 20 or

23.3% had the highest frequency or percentage from respondents as the fundamental

areas of concentration for Energia‘s projects under social responsibility among the oil-

host communities. While respondents indicated that scholarship/Bursary and award of

contract to qualified indigenous contractors 11 or 12.8% was the second priority areas

of skill development and training. Security and guarding of oil flow stations received

the less attention of 4 or 4.7%.

77

Research Question 4: do you consider capacity building more effective than

infrastructural provisions by Energia?

TABLE 12: Statistical Presentation of Degree of Approval of Capacity Building

NDOKWA WEST (DELTA STATE)

COMMUNITIES

EMU-EBENDO

UMUSADEGE

OGBEANI

EMU-EBENDO

Not effective

Frequency 4 (13.8%)

Fairly effective

Frequency

9 (31.0%)

Effective Frequency 16 (55.2%)

Total 29

(100%)

UMUSADEGE Not effective

Frequency 3 (10.7%)

Fairly effective

Frequency

8 (28.6%)

Effective Frequency 17 (60.7%)

Total 28 (100%)

OGBEANI

Not effective

Frequency 3 (10.3%)

Fairly effective

Frequency

10 (34.5%)

Effective Frequency 16 (55.2%)

Total

29 (100%)

Source: Field Work 2013

78

Source: Field Work 2013

Table 4.5 above reveals that majority of the respondents indicated that capacity

building is more effective in advancing the wellbeing of citizens and thereby reducing

the negative impact on environmental degradation. The break down shows that in

Emu-Ebendo 16 or 55.2%; Umusadege 17 or 60.7% and Ogbeani 16 or 55.2%

indicated that capacity building is effective; while the fairly effective respondents

were 9 or 31.0% (Emu-Ebendo); 8 or 28.6% (Umusadege) and 10 or 34.5%

(Ogbeani). Those who responded that it was not effective were in the minority of 4 or

13.8% (Emu-Ebendo); 3 or 10.7% (Umusadege) and 3 or 10.3% (Ogbeani).

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CHAPTER FIVE

IMPLICATION OF FINDINGS FOR ADMINISTRATIVE EFFICIENCY

5.1 Introduction

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This section discusses extensively the issues of CSR and community discontentment

with Energia oil company, and endeavoured to isolate and state the salient points

generated by the study of oil companies’ activities and their CSR efforts to mitigate

their negative impact in Delta state.

5.2 Discussion of the Findings

The was done under the following standpoints to give direction and focus to the

reader:

1. identification and explanation of the increasing environmental degradations of host communities that lead to increased Corporate Social Responsibility among oil companies in Delta state.

2. Investigation of the relationships that exist between the major projects that form the Corporate Social Responsibility (CSR) efforts of Energia Limited and the needs of the host communities in Delta state.

3. Examination of the level of the host communities’ participation in the Corporate Social Responsibility Projects of Energia Limited in Delta state.

5.2.1 The Increasing Environmental Degradations of Host Communities and

Corporate Social Responsibility among Oil Companies in Delta state

Good corporate social responsibility in practical terms must be considered from the

point of view of how local/regional managers of these oil companies operating in

Delta State (Soreh, 2012: 60):

• Are sensitive to the issues that affect the lives of the people they live and work

with;

• Are able to understand the conditions in the environment that they could

contribute positively to influence the lives of the people;

• Have a fair understanding of what social changes that their operations in the

area brings to the lives of the people;

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• Have a fair understanding of what social impact their financial and business

decisions may have in the different groups that do business with the company

or do just have contact with the company as well as the environment;

• Are able to co-exist peacefully with the people within the locality of their

operations;

• Do not sow the seed of conflict by influencing the rise and fall of community

leaders of all class;

• Are not only conscious about what the company produces, extracts or does but

on also how the product is produced, extracted or work done;

• Must always be in a cordial relationship with the people and the environment

they live in to work with.

Consequently, this study found that environmental degradation in Delta state is

traceable mostly to the operations of the oil companies in the region, including

Energia. These operations are related to petroleum resources exploitation to meet

global energy needs that are leading to “a deep toxic stain” spreading through air,

water, and land on a universal scale (Ojo, 2012). Aside the level of poverty and

underdevelopment, environment abuse is all too pervasive implicating oil spills and

gas flares which continue unabated since the discovery of oil in commercial quantities

in 1956. Environmental degradation remains the tinderbox of the region and a major

source of grievance and disenchantment against the state and the oil companies.

Yearly, there is news of major oil blow-outs that severely damage the environment

without adequate remediation measures.

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Environmental degradation associated with oil and gas exploitation is a major

source of grievance in the state. This is inevitable since mining for energy is driven

essentially by profit in “the value chain of production that is shadowed by a vast chain

of waste and destruction” on man and his environment (Ibeanu & Luckam, 2006).

Mitigation of the ecological problems has largely been relegated fuelling decades of

community grievance and protests against the oil companies and the government.

In addition, oil spillage has been identified as a major source of environmental

degradation in the region. A report by the Amnesty International blamed the oil

companies operating in the state as responsible for widespread pollution in the area.

The human rights body argues that, “oil spills, waste dumping, and gas flaring are

notorious and endemic”. Till date the average yearly oil spills in the region accounts

for about twice that of the BP Gulf of Mexico deepwater horizon oil blowout in

October 2010. Oil spill is common and often leaves lasting impact on the

environment some of which are irreversible. For instance, as at 1996, the Okpare

community of Delta State had lost 8,500 hectares of farmland to Shell, ruining the

livelihoods of over 2000 people who depended on the land for farming (Ojo, 2012).

Another source of community grievance is gas flaring which constitutes a huge

hazard to human and environmental resources in the oil-bearing Delta state. Gas

flaring occurs in the process of separating oil from gas and flared as associated gas. It

reduces crop yields, damages plant and animal life, and constitutes a menace to social

life in these communities. More importantly, it affects the health of the local

inhabitants negatively. According to World Bank estimate, Nigeria loses as much as

$2.5 billion annually as a result of gas flaring (The Guardian, 13 July 2009, p. 16).

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Compensation from environmental degradation and damage to crops and water

pollution represent another source of community grievance. Compensation is often

denied, or when it is paid at all, is arbitrary and grossly inadequate. For example, since

the promulgation of the Land Use Decree in 1978 (it became a Land Use Act in 1979),

land crisis has worsened in the region due to the huge land grabbing in oil extraction.

The Act vested the paramount ownership of all land and held in trust by the state

thereby undercutting individual and community rights to prime lands.

However, from the perspective of the oil companies, CSR is demand driven to

address host communities perceived needs and poverty reduction. The oil companies

are involved in one form of social amenities provision or the other in the Delta state.

Though they differ in size and commitment, collectively, they provide social

amenities including the construction of roads, building of community hospitals, and

provision of water. Others are local capacity building for resource management,

training for freshers in business, micro-credit schemes, and scholarship for tertiary

education some of which are unrivaled by the absentee government

5.2.2 Major Projects that Form the Corporate Social Responsibility (CSR)

Efforts of Energia Limited and the Needs of the Host Communities in Delta State

To ensure that normalcy and business thrives, Energia entered into a Memorandum of

Understanding (MOU) with her host communities to ensure that they are carried

along. According to the “Preamble” to the MOU:

1.1 This Memorandum of Understanding (MOU) is made in good faith and without prejudice, and with a view to creating understanding, cooperation and consolidating the existing cordial and mutually beneficial relationship between ENENDO

and ENERGIA , in order to achieve the following objectives:

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i responsible partnership:

It is the objective of all the Parties through this MoU to encourage the concept of Responsible Partnership. To attain this, it is imperative that Parties, and other relevant stakeholders, work together as partners for the promotion of development, peace and security. It is understood by all Parties that this objective can only be achieved in an atmosphere of peace, trust and understanding between all the Parties to this MoU.

According to the section titled “Financial”, it was agreed that:

6.1. Energia shall set aside a fixed portion of the revenue accruing from the sales of its oil and gas produced and sold from Obodugwa-Obodeti marginal field for the purpose of creating and funding of a Trust Fund for the sole purpose of implementing sustainable development projects for the direct benefit of the Host Community and impacted Communities within the area(s) of operations of Energia, subject only to the provision of any enabling law.

6.2. This fund shall be administered by a Board of Trustees comprising

of reputable members of the society from Energia, other stakeholders and the Delta State Government. This fund shall be called “Energia Communities Development Trust Fund (Trust Fund)”.

Interestingly, in section 12.3 dealing with the usually controversial and

contentious issue of “Contracts”, the following provisions were made:

i. Parties shall inform each other of all Registered and Approved Energia and ECDA Contractors for contracts to be executed in Ebendo which exceed thirty (30) days executive.

ii. The contractors shall employ suitable qualified candidates from Ebendo based on the allotted quota in (vii) below to fill established vacancies for skilled, semi-skilled and unskilled labour. If Energia shall source for labour from outside Ebendo in the event that suitably qualified candidates are not located from Ebendo.

iii. Such Community workers must demonstrate compliance to industry practice of Health, Safety and Environment

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practice, experience and training that matches the position being applied for and documented evidence that such persons are bonafied members of Ebendo.

iv. Energia shall prioritize company contractors that have partnerships with community based contractors and employ suitably qualified semi-skilled and unskilled staff from Ebendo.

v. Company contractors shall source to the extent possible their non-specialized supplies from Community based contractors provided such supplies meet Energia's project schedule, quality specifications and offered at an industry standard competitive price.

The outcome of the above was that there were sometimes, things to celebrate between

Energia and the host communities. According to Nwabuisi (2013:1), in one such

occasion,

the crowd was unprecedented. The atmosphere was electrific as one could literally feel and touch the excitement in the air. The sky smiled throughout the day, thus ensuring a clement weather for the day’s activities. The joy of the people knew no bound as they sang and danced to the glory of God and in celebration of a milestone in the history of their communities.

Such was the scenario and mood of the people on Saturday, June 9, 2012 at Isumpe-

Ogbe, Umusam, Ogbeani, Emu-Ebendo and Umusadege-Ogbe communities in

Ndokwa West Local Government Area of Delta State when people- oriented projects

built by Energia Limited, operator of OML 56 Energia/Oando Joint Venture were

commissioned by the Managing Director of the Oil Company, Engr. A. V. Felix . The

projects commissioned were the ultra-modern Isumpe-Ogbe community Town Hall, a

block of three classrooms, offices, a water borehole and toilets at Iyiashili Primary

School, Umusam, 50KVA Mikano electricity generator/renovation and furnishing of

Obi-Ogwa in Umusadege-Ogbe community. Others include three-apartment building

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with water borehole at Ogbeani community and an ultra-modern market at Emu-

Ebendo.

Aside these projects the company also provided three electricity transformers, a

water borehole and Toyota buses for Umusadege –Ogbe community, two hilux trucks

for Emu-Ebndo community, electricity for Isumpe-Ogbe and Ogbeani communities,

among several others. Speaking at the epoch-making event, the MD/CEO of Energia,

Engr. A.V Felix, (according to Nwabuisi 2013)said the company was irrevocably

committed to improving the living conditions of their hosts and the right-of-way

communities through the execution of people-oriented projects, skill acquisition

programme for youths and an empowerment programme for the people. He pointed

out that the projects commissioned were signs of more good things in stock for the

communities, just as he commanded the people for providing them the enabling

environment to carry out their operations.

This agrees with the assertion of Amaeshi, Adi, Ogbechie & Amao, (2006) who

found that indigenous Nigerian companies perceive and practice CSR as corporate

philanthropy aimed at addressing socio-economic development challenges in Nigeria.

CSR was mainly seen from a philanthropic perspective as a way of “giving back” to the

society. All respondents of the study agreed that CSR is necessary in the Nigerian

business society. The reasons for this response included for example the need for

private companies to complement the government in providing for the people. Some

also argued that many of the companies in Nigeria make huge profits and ought to give

back to society to gain legitimacy.

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The Energia boss assured the people of their commitment to corporate social

responsibility and sustainable community development, even as he solicited for their

continued support and cooperation to enhance their operations. “Ours is a partnership

that will last. These projects that were commissioned today are tips of the iceberg. We

will continue to touch the lives of people in our areas of operation” he assured. Also

speaking, the Chairman, Board of Directors of Energia, Mr. Ken Mozea, (SAN),

commended the communities for their peaceful disposition, saying that the company

will not relent in impacting positively on the lives of the people.

In his remarks, the Delta State Commissioner for Oil/Gas, Hon. Mofe, Pira who

spoke through his Special Assistant, Mr. Godwin Omadogi, lauded the company for

their contributions to the betterment of their host-communities.

He said the gesture of the oil company was in line with the three-point agenda of the

State Government. He charged the people to make good use of the projects to better

their lot.

In an interview, Miss Udodi Udome and Miss Deborah Odika, among others, who

benefited from the company’s skill acquisition (hairdressing, sewing) programme,

poured encomiums on the company, saying that they never had it so good. They

wished Energia well, adding that they will forever remain grateful to the oil company

for impacting positively on their lives (Nwabuisi, 2013).

Earlier in their welcome address on behalf of their communities, Chief Dennis

Ejechi (Isumpe-Ogbe), Mr. Lucky Ojuma (Ogbeani), Mr. Austin Eni (Emu-Ebendo)

and Barrister Francis Odugbor (Umusadege-Ogbe), thanked Energia for their kind

gesture, stressing that the projects which have put smile on the faces of the people,

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will, no doubt, improve their living standards. They enjoined the company to keep the

flag flying, assuring of their continued support, cooperation, cordial relationship and

peaceful environment to enable the company carry out their operations.

5.2.3 Level of the Host Communities’ Participation in the Corporate Social

Responsibility Projects of Energia Limited in Delta state

To ensure the host communities’ participation in the Corporate Social

Responsibility Projects of Energia Limited in Delta state, the MOU provides what is

termed “Energia Obligations”. According to the document, Energia agrees to use its

best endeavors to:

i. Energia agrees and its contractors award appropriate contracts to registered community contractors commensurate with their proven capabilities and in compliance with Energia’s contracting procedures and Nigerian Local Content Development Goals. All parties recognize that the provisions in the contracts between Energia and its contractors exclusively govern the relationship between Energia and the Community Contractors, subject only to the laws of Nigeria and the terms of this MoU.

What is more, in section 10.0, labeled “Financial Controls”, the MOU states:

10.1 All proposals for SCD contracts, jobs, programmes and procurement shall be quote at prices determined by a detailed evaluation of quotations; including all direct costs, all indirect costs, provision for contingency, capital items required; with proper consideration for recognized prevailing industry practice and the established contracting strategy for the respective contracts. 10.2 These quotations or tendered bids will be approved by the ECDA and TRUST FUND and retained for project cost control, and project awards, funding and implementation. 10.3 there shall be no “patronage” contracts or employment of ghost workers where no value is added. In this regard, in line with industry practice, Contract Awards will be made strictly to technically qualified contractors who best meet the prequalification,

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technical and commercial criteria of any contract or tenders issued by the PARTIES.

However, despite the huge cash outlay, the JV partners, through the Trust

Fund, have also provided other capacity building measures for Obodugwa community.

These are the employment of indigenes, which currently stands at 21 percent of total

company employees, starting a Youth/Women Empowerment orientation programme

in October 2011 in collaboration with a non-governmental organization, NGO (MIND

Foundation), and initiating separate MOUs with Obodugwa as impacted community.

Furthermore, the partners have incorporated a Trust Deed, and established a separate

Trust board to manage revenues accruing to Obodugwa community for sustainable

community development programmes.

Nevertheless, following the field survey, information gathered and analysed,

the study found that Energia‘s corporate social responsibilities are basically on

provisions of health centre, education facilities such as building of schools, awarding

of scholarship and bursary allowances. Others include construction of water bore

holes, monetary support, electricity, and financial donation to the communities.

This implies that the level of CSR provided for the oil communities is

positively related to Energia‘s policy of “areas of responsibility to the society”. This

agrees with Wood’s assertion that motivation for CSR are dependent on the

organizational CSR policies, which the oil corporation considers to advance their

business interest, meaning CSR is the primary and secondary interest areas (Wood

1991), not the citizens‘ preferences and inclinations.

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It is in light of the above, that findings show no significant relationship

between Delta state’s communities’ felt needs and satisfaction on one hand, and what

Energia Oil Company provides to the community on the other. The figure reveals that

31.0% of the respondents in Emu-Ebendo expressed dissatisfaction, 53.6% of the

respondents in Umusadege and 34.5% in Ogbeani indicated dissatisfactions. By

inference, the total three communities sampled in Ndokwa West local government

area of Delta state, except Umusadege indicated they were not satisfied with the

Energia‘s Corporate Social Performance (CSP). The focused group discussion had in

the three communities supports the claims of non-satisfaction by the Umusadege,

because majority opinion shown that they were satisfied with one particular provision

not the entire infrastructural provisions. For instance, Emu-Ebendo community,

particularly women respondent during the FGD were delighted for the market built by

Energia but expressed discontentment with the general poor rate of corporate social

responsibility by Energia Oil Company limited. If communities are not satisfied with

organizational CSR, then this creates the likely opportunity for conflict and

restiveness which disrupt business interest of the company, as currently witnessed in

Niger Delta, Nigeria. This is because, virtually, every aspect of oil exploration and

exploitation has deleterious effects on the ecosystem‘s stability and local biodiversity

– which the peoples’ livelihoods depend upon.

The non-satisfaction of the Ndokwa communities should be placed side-by-side

with the level of environmental damages to the ecosystem of host communities. The

value shared by the bulk of oil companies operating in Nigeria is the deliberate

underreporting of the actual environmental impacts of such oil spills. This is,

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especially, so with those resulting from equipment failures, human errors, corrosion,

and so on in terms of volume of crude oil spilled into the already fragile and over-

stretched ecosystem. Government and the operating companies maintain their own

data on spills but these cannot be considered reliable as both the Government and

operators seek to limit their legal liability for commensurate claims and

compensations from oil spill damages. In worst cases, oil spillages in the Ndokwa are

never reported or merely branded minor without minimum post-spill containment,

recovery and remediation responses.

Relatedly, is the issue of significance of the projects provided by Energia to the

satisfaction of the oil communities. Grading the importance of Energia‘s CSR projects

to the needs of their communities, shows that 13.8% in Emu-Ebendo; 32.1% in

Umusadege; and 34.5% in Ogbeani revealed that the projects are not relevant to the

needs of the communities. While an insignificant number of respondents, such as

24.1% (Emu-Ebendo); 7.1% (Umusadege) and 10.3% (Ogbeani) revealed that projects

are very relevant. These findings established the disparity or gap between Energia and

Delta communities with respect to synergies that will both promote really

development and engagement of youth in meaningful employment and the protection

of ecosystem.

With this finding, it becomes critical for to re-evaluate its CSR efforts in all its

host communities, particularly in Delta state where the host community appears not

satisfied at all with Energia’s efforts. The expressed lack of satisfaction of the host

community with the efforts of Energia may not be unconnected with their high

expectations from the oil giant in return for their environmental degradation over the

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years. According to Birger, Tangen, Swanson, Christiansen, Moe and Lunde

(2004:15), multinational oil companies recognize broader concerns beyond local

community impact and programme, as such does less to satisfy the host communities.

Also, Odien Ajumogbobia quoted by Odenigbo (2008:118) believes that the revenue

that is derived from oil extraction is not re-employed even to restore the environment

of the oil communities.

Guided by the corporate citizenship theory, the data presentation of this study

is focused on ascertaining the areas of CSR that will likely improve the well-being of

citizen. The results indicated an overwhelming approval of capacity building along

issue areas of awarding of contracts to qualified indigenous contractors, small-scale

business/entrepreneurship, skill development/acquisition; and training and

empowering of local artisans. The data revealed that farming (12.8%); and small-scale

businesses/entrepreneurship (23.3%); skill development/acquisition (23.3%); and

training and empowering of artisans (23.3%) had higher percentage interest by

respondents as the major areas of concentration for Energia‘s CSR projects in the

Niger Delta communities.

The focus on capacity building has correlation positive impact on the

minimization of conflict in the Delta state. The break down shows that in Emu-

Ebendo 55.2%; Umusadege 60.7% and Ogbeani 55.2% indicated that capacity

building is effective; while the fairly effective respondents were 31.0% Emu-Ebendo

28.6%; Umusadege and 34.5% Ogbeani in reduction of damages of oil exploration.

The activities involved in petroleum exploration and production produce wastes of

varying chemical compositions, which are generated at each phase of the operation.

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The disposal of these wastes in the Niger Delta has polluted land and water, damaging

fisheries and agriculture, undermining the human right to an adequate standard of

living. Communities have no means of preventing these activities, regardless of the

damage they can cause to livelihoods and food sources – although they should receive

compensation. Compensation, however, is frequently inadequate.

Communities in the Ndokwa expect the oil companies to be responsive and

responsible by attending to key issues that would assure them social license to operate.

These include, but not limited to the following: a) encourage full participation of host

communities in project planning, implementation, monitoring and evaluation, c)

maintain communication with all social segments of host communities in order to

know and address their needs, d) conduct community development programme which

applies world standards of practice to serve host communities, e) protect the

environment and pursue the goal of no harm to people through their activities, f)

consult with all stakeholders and publicly report on performance, g) promote best

practices in the industry, h) Provide basic infrastructures such as roads, electricity,

water and sanitation, i) support healthcare by providing drugs supplies, health centres,

and so on, and j) initiate capacity building programmes, and employ qualified

indigenes.

There are a number of useful suggestions that can be deduced from the

conclusion. Whether the business activities of Energia Oil Company have a direct

impact on the kind of projects nominated for execution can lead to the desired and

specific results is also significant as the scope of the assimilation of communal matters

and influences within the area of company policy.

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Another major shortcomings, is the tendency of some corporations to focus on

one or two particular project at expense of others, this goes against the principle of

equity and fair representation in terms of CSR. This is even considered immoral if

such focus is mainly on the old-style financial area, such as health care centre,

education facilities, building of jetties, pathway bridges, award of scholarships and

bursary, delivery of pipe born water, medical facilities to hospitals and health centres,

launch of energy and jobs.

The enhancement of conditions of life among host communities of big firm will

not be realistic in the non-attendance of energetic private sector involvement within

the structure of accountable professional business practice. Developing countries need

the active contributions of private sector initiative in corporate social responsibility.

More importantly, that though CSR had become part of Energia‘s medium of

giving back to communities, CSR projects are still inadequate, top-down driven and in

communities where projects are bottom-top driven, the scope of such communities is

too narrow to make the desired impact. Corporate Social Responsibility projects are

not making the desired impact in host communities because, most CSR projects are

political, intended to satisfy political friends, pacify hostile communities and

sometimes an unnecessary duplication.

Tangential to the above is the non-implementation of MoU with respect to

skilled labour, indigenous contractors, agreed compensation and for the Energia oil

company to re-invest back to the communities .75% of her total proceed.

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CSR initiatives in Nigeria have a positive impact on the society but what can

also be observed in the theoretical findings is that many of the CSR initiatives are ad

hoc and not always sustainable, sometimes even generating negative impacts on

society. What the empirical findings show is that the organisations involved in the

field study all have similar programmatic areas, as for example community

development and health. These areas are of course of great significance if Nigeria is

going to reach sustainable development.

CHAPTER SIX

SUMMARY, RECOMMENDATIONS AND CONCLUSION

6.1 Summary

The summary of our results from the population of the study were stated and

presented in a clear and systematic method based on our study outline. Logical data

and descriptive statistical explanations opened up the study and degrees of conformity

with the hypothesis, while areas of non-conformity have also been stated and

elaborated. Given the critical role that big business‘ in general and oil companies in

particular play in national economy, the oil sector has increasingly come under the

pressure of responding to the challenge of corporate (social) responsibility (CSR).

This trend is set against a background in which the industry is already under

considerable pressures arising from intensified violent conflicts and environmental

degradations.

6.2 Recommendations

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First, oil and gas companies operating in the region should be encouraged and

if necessary, compelled to comply with international best practices to ensure the

protection of natural habitats through uncompromising implementation of the

demands of the doctrine of corporate social responsibility.

Second, there should be well thought-out plan for cleaning up oil spillage and

other damages to the host communities. An oil spill need not be devastating. A swift

and effective process of clean-up, remediation and compensation should minimize

damage to livelihoods.

Third, there should be specific programme, that is, compensation programmes

for farmers. A significant problem for the rights of farmers in the Niger Delta is the

failure to address the long-term impacts on soil fertility and agricultural productivity

of oil pollution. Experts said that in some cases soils recover in a reasonably short

time, while in others the impact can last for decades. One problem is that some sites

have been affected by repeated spills. Fourthly, CSR projects should be made gender

biased in favour of women as they bear the full brunt of environmental devastations

and as child bearers and home keepers.

Fifth, the principle of profit sharing of international agreed 10% to the host

communities should be implemented. The time is now ripe for profit sharing rather

that corporate philanthropy; it is proposed that 10% of the yearly profit of the MN oil

companies operating in the Niger Delta Region should go directly to the communities

where the MN oil companies operate. This is apart from the taxes and royalties paid to

the Federal and state governments of Nigeria. The effect of this is that the

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communities will become real and genuine stakeholders in the oil business rather than

the philanthropic gestures of buying tables and chairs and providing free meals to the

students in the Niger Delta.

Six, this then must be followed by a sincere and constructive engagement of the

people to dialogue with the government and oil companies. True representatives of the

region can be mobilized through grassroots consultation and community involvement.

This should steadily lead to granting them an authoritative voice on matters affecting

their lives. It would precipitate over time a gradual restoration of a sense of belonging

and partnership. This should be complemented with a sustained drive to expand

human and social capitals, which are basic ingredients for beating swords into

plowshares. For the attainment of these objectives a complete re-orientation and

change in the attitude of government and oil companies towards host communities, is

a sine qua non.

Seventh, there is a need for further studies to be carried out as to how to make

the chiefs/head of the community to shun corruption and think about what will benefit

the community in general rather than being satisfied with eating the crumbs that drop

from the table of the multinational oil companies. There is also a need to find a way of

compelling the youths to get educated, rather than turning into militants and

kidnapping expatriates and even some senior Nigerian managers.

6.3 Conclusion

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Our conclusions propose that in spite of good consciousness and goals, the

CSR method of oil firms in the Delta state remains unprofessional and imprecise. On

economic domain, Energia Oil Company Nigeria Limited‘s claim of execution of

projects as part of her business communal obligation is indisputable, but the results

indicated the requirement for Energia Nigeria Limited to embark on a policy re-

evaluation of her communal change programmes in the oil communities to make sure

that there is always a significant relationship between the needs of the citizens and

communities and what the company provides as its CSR program. It may perhaps be

essential as well for Energia to embrace a bottom-up attitude in its public

improvement initiatives. This will ensures appropriate exploration of all pertinent

requirements of the public, create home-grown aptitude, improve self-assurance,

construct societal investment and encourage development of the indigenous economy,

and decrease communal agitation.

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APPENDIX I

QUESTIONNAIRES Dear Respondent, I am, Ossai Nicholas Ossai, student, undertaking a research on Oil Companies and

Corporate Social Responsibility in Delta State, Nigeria: The Case of Energia Limited for the award of Doctor of Public Administration (DPA) in the Department of Public Administration and Local Government, University of Nigeria, Nsukka. Please, kindly respond to these questions with every sense of objective. I equally assure you that the identity of the respondent will not be disclosed and the information generated will be used for academic purposes. Thank you sincerely Signed

Ossai, N. Ossai PG/DPA/06/39903

Sex: Male [ ] Female [ ] Age: 18-30 [ ] 31-40 [ ] 41-50 [ ] 51-60 [ ] 61 & above [ ] Occupation: Self-employed [ ], Civil/public/private servants [ ] unemployed/students [ ] Community: ……………………..

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1. List four oil corporations in your community? a)………………… b)………………… c)………………… d)………………… 2. Do you consider Energia as a major operator in the crude oil exploration and exploitation in your community? Yes [ ] No [ ] 3. What can you regard as the main problems associated with oil exploration and exploitation in your community? A. Land deprivation [ ]

B. Environmental degradation [ ]

C. Abuse of the culture of the community [ ]

D. Non-payment of compensation [ ] 4. Has Energia been involved in the provision of infrastructures in your communities as part of its corporate social responsibility? Yes [ ] No [ ] 5. What are measures adopted by the Energia to reduce the effect of environmental degradation in your community?

A. Building of schools [ ]

B. Capacity development (artisans, small-scale business etc) [ ]

C. Students grants and bursary [ ] D. Drug support to hospitals and health centres [ ]

E. Establishment of portable water [ ]

F. Establishment of electricity [ ]

G. Financial support [ ] 6. What is the level of community satisfaction with Energia corporate social responsibility?

a. Not satisfactory [ ]

b. Fairly satisfactory [ ]

c. Satisfactory [ ] 7. Does the community members/leaders participate in the provisions of social facilities by Energia? Yes [ ] No [ ] 8. If yes, at what level do the community members/leaders participated?

a. Planning/initiation [ ]

b. Funding [ ]

113

c. Supply of human labour [ ]

d. Implementation/supervision [ ]

e. None [ ] 9. How relevant are these social amenities to the community?

a. Very relevant [ ]

b. Relevant [ ]

c. Average [ ]

d. Not relevant [ ] 10. Does the provision of infrastructural amenities by Energia Company improve the quality of life of the host communities? Yes [ ] No [ ] 11. What are other ways the Energia can improve on their corporate social responsibility in the community? …………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…..

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APPENDIX II

This memorandum of Understanding (hereinafter referred to as (moU) is made this ……………day of……………. 2009 Between

ENERGIA LIMITED, a company incorporated in Nigeria and having its registered office at Suite A8 Ikota Shopping Complex, VGC, Victoria Island Lagos, (hereinafter referred to as ENERGIA) which expression shall wherever the context so admits, include its successors-in-title and assigns) in its capacity as operator of the Obodugwa/Obodeti Marginal Field in former OML 56 located in Emu Ebendo Community of the First Part

And

Pa Stephen Akpati Edigbue, (Okpala Uku of Emu-Ebendo), (2) Elder Emmanuel

Okpara, (President-General Emu-Ebendo Community Development Association

(ECDA), (3) Engr. Henry Anioje, (Secretary-General, ECDA, (4) Chief Oluji Ebieh, (Onotu-Uku of Emu Ebendo), being the head and principal members of Emu

Ebendo Community for and on behalf of the Emu Ebendo Community in Ndokwa West Local Government Area of Delta State (hereinafter referred to as Ebendo) which expression shall where the context so admits include the indigenes of the above named Community, bodies, their respective traditional and institutional rulers, every member of the Community, successors-in-title, agents and assigns of the Second Part 1.0. Preamble

1.2 This Memorandum of Understanding (MOU) is made in good faith and without prejudice, and with a view to creating understanding, cooperation and consolidating the existing cordial and mutually beneficial relationship between ENENDO and ENERGIA , in order to achieve the following objectives:

i responsible partnership:

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It is the objective of all the Parties through this MoU to encourage the concept of Responsible Partnership. To attain this, it is imperative that Parties, and other relevant stakeholders, work together as partners for the promotion of development, peace and security. It is understood by all Parties that this objective can only be achieved in an atmosphere of peace, trust and understanding between all the Parties to this MoU.

ii Development Agencies/Stakeholders Interface

It is envisaged that all developmental projects/programmes from this MoU shall be managed and coordinated in such a way as to avoid the duplication of resources and projects from other stakeholders.

iii Transparency and Accountability i Oil and Gas Exploration and Development ii Oil and Gas Processing and Production iii Environmental, Safety and Environment Management iv Any other activity as may be proposed by Energia 5.0 Obligations of Parties

5.1 ENERGIA OBLIGATIONS Energia agrees to use its best endeavors to:

i Energia agrees and its contractors award appropriate contracts to registered community contractors commensurate with their proven capabilities and in compliance with Energia’s contracting procedures and Nigerian Local Content Development Goals. All parties recognize that the provisions in the contracts between Energia and its contractors exclusively govern the relationship between Energia and the Community Contractors, subject only to the laws of Nigeria and the terms of this MoU.

ii Provide funding for SCD projects and programmes under the MoU on a

timely and quarterly basis as stipulated in article 6.0. iii Utilize the monitoring and governance procedures and committees

described in the MoU for facilitating uninterrupted production operations. Community relations, security, safety, environmental and spills management, active pipelines surveillance, and first level arbitration.

iv Honour the provisions of the MoU in its dealings with Ebendo v Without prejudice to SCD, projects and programmes implemented under

the provisions of the MoU, wherever possible bring other Ebendo

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development needs to the attention of the Niger Delta Development Commission (NDDC) or similar body as may be set up by the Federal Government, donor agencies and other multinational agencies.

vi Without prejudice to SCD projects and programmes implemented under

the provisions of the MoU, Energia shall carry out other projects and programmes that may impact on Ebendo as part of its corporate social responsibility.

5.2. EBENDO OBLIGATIONS

Ebendo agrees that it shall: i Ensure that the activities and focus of the ECDA remains on:

� Implementing sustainable development projects and programmes in Ebendo

� Pursuing the Economic growth and empowerment of the people of Ebendo

� Maintaining the security of personnel and the property of Energia and her Contractors.

� Managing the interface and relationship between Energia and Ebendo on issues including but not limited to pipelines surveillance, spills management, prevention, management and resolution of conflict etcetera, all aimed at providing a safe and conducive operating environment for Energia and goodwill between Energia and the Ebendo Community.

ii Ensure that no individual person or group from the communities making up

Ebendo challenges, invalidates varies, adds to or re-opens discussions of the terms already agreed herein, except strictly in accordance with the terms of this MoU.

iii Barring the provisions of Article 15 thereof, nothing whatsoever shall in

any way invalidate this MoU, or in any way release Ebendo and or its representatives from their obligations arising here from.

iv Use all powers and authority vested in Ebendo to ensure that no party

within Ebendo, disturbs, disrupts or restricts Energia from carrying out its legitimate activities.

v Inform and facilitate immediate access to spill sites for clean up and

remediation, if necessary. vi Recognize that this MoU is comprehensive and complete in the sense that it

shall apply to, and captures all understandings in respect of all and any

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parts of the activities and work programmes to be executed by Energia throughout the period of the MoU.

vii Not enter into another Community Agreement, MoU or any other

Agreement by whatever name called with the Contractors, sub-contractors, agents and personnel of Energia working in Ebendo

viii Ensure accountability and transparency in all dealings and to this end, must

give full, complete and timely information to the full assembly of all the communities that make up Ebendo at all times on all issues of common interest regarding the various benefits coming to Ebendo from Energia.

ix Take a positive leadership role and take responsibility for the action of their

indigenes. x Through dialogue and in consultation with the Delta State Government and

other government agencies and Energia work to achieve a standard of fairness in all issues concerning security in the community in the community and for the Parties’ benefit.

xi Take all reasonable actions to eliminate violence, antagonism and to

promote mutual understanding of the needs and problems of the Parties to this MoU.

xii Provide a conducive and peaceful work environment for Energia to work

free from disturbance, disruption, invasion, interferences and threats whether in the field, work locations, residences or office facilities.

xiii Contribute to environmental protection efforts through active surveillance and intelligence reporting on all Energia property, including production facilities, pipelines, flow lines, etc, and ensure that none of these is attacked, vandalized, sabotaged, broken, looted or damaged.

xiv Ensure that all decisions, understanding and agreements reached between

ENERGIA and EBENDO regarding any issue discussed shall be binding on all its members.

6.0 FINANCIAL 6.1. Energia shall set aside a fixed portion of the revenue accruing from the sales of

its oil and gas produced and sold from Obodugwa-Obodeti marginal field for the purpose of creating and funding of a Trust Fund for the sole purpose of implementing sustainable development projects for the direct benefit of the Host Community and impacted Communities within the area(s) of operations of Energia, subject only to the provision of any enabling law.

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6.2. This fund shall be administered by a Board of Trustees comprising of reputable members of the society from Energia, other stakeholders and the Delta State Government. This fund shall be called “Energia Communities Development Trust Fund (Trust Fund)”.

6.3. Ebendo shall be entitled to a sum equal to 1.25% of the revenue accruing to the

Energia Communities Development Trust Fund. 6.4. 0.5% of this 1.25% due to Ebendo from the Trust Fund shall be paid quarterly

into an Ebendo/Energia operations account to be opened in a reputable bank by Energia, for the activities of ECDA, within 60 days following the commencement of oil and gas production operations and sales and upon the signing of this MOU.

6.5. All production from testing to daily production of oil and gas activities shall be

subject to the financial commitment to the Trust Fund. 6.6. Energia shall through the trust fund, duly approved SCD projects and

programmes contained in this MOU. 6.7. ECDA shall utilize these funds solely for identified and approved projects and

activities designed to improve the quality of life and provide sustainable development in Ebendo and shall be accountable to Energia and Trust Fund.

10.0 FINANCIAL CONTROLS 10.1 All proposals for SCD contracts, jobs, programmes and procurement shall be

quote at prices determined by a detailed evaluation of quotations; including all direct costs, all indirect costs, provision for contingency, capital items required; with proper consideration for recognized prevailing industry practice and the established contracting strategy for the respective contracts.

10.2 These quotations or tendered bids will be approved by the ECDA and TRUST

FUND and retained for project cost control, and project awards, funding and implementation.

10.3 there shall be no “patronage” contracts or employment of ghost workers where

no value is added. In this regard, in line with industry practice, Contract Awards will be made strictly to technically qualified contractors who best meet the prequalification, technical and commercial criteria of any contract or tenders issued by the PARTIES.

10.4 expenditures not included in an approved budget must be separately approved.

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10.5 All funds due to the TRUST FUND for SCD projects shall be deposited by ENERGIA into the designated TRUST FUND account(s) before distribution of the stipulated portion to the designated ECDA account.

10.6 All checks written on TRUST FUND or ECDA bank accounts shall always

require at least two signatures, to the designated TRUST FUND and the ECDA respectively.

10.7 accounting and documentary records shall be kept consistent with established

industry standards. 10.8 The PARTIES shall, at least on an annual basis, audit the financial

compensation due to EBENDO under this AGREEMENT. 10.9 The TRUST FUND manager shall send to Parties, quarterly financial reports

on the TRUST FUND financial status applicable to EBENDO as such reports become due and available in its normal course of business, but not later than ten (10) days after the end of the preceding Quarter.

12.0 Contracting and Local Content Policies and Procedures 12.1 The award of contracts shall be in line with the goals of the Nigerian Local

Content Policy, whose objectives include the following:

i. To recognize the needs of Ebendo contractors and suppliers and to ensure that they receive the opportunity to tender for works of a type and complexity appropriate to their abilities, experience and established capacity and Energia's operational requirements.

ii. To contribute to the economic development of Ebendo by assisting in the

growth and utilization of a viable contractors community.

iii. That contracts under this MoU shall only be awarded to: (a) Community qualified contractors who are indigenes of Ebendo. (b) Contracts shall be open to a competitive bidding process, provided that all

prequalified Contractors Comply with Energia's technical and commercial tender procedures and requirements; Comply with and maintain energia's standards of Work/Quality/HSE and Comply with Energia/ECDA provisions for termination/suspension of work.

12.2 Now in consideration of the foregoing, the parties hereby freely agree to and

accept the following commitments:

i. Energia/ECDA shall develop a fair, transparent, objective and equitable mechanism in the award of contracts to registered contractors.

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ii. To provide opportunities to Ebendo contractors and suppliers to bid for and execute non-specialized contractors.

iii. To give approved Ebendo contractors and suppliers the opportunity to

tender for and execute specialized contracts.

iv. To maintain expertise and ensure industry-standard quality in the services rendered to Energia.

v. To encourage and maximize the utility of locally available resources and

facilities. 12.3 CONTRACTS

vi. Parties shall inform each other of all Registered and Approved Energia

and ECDA Contractors for contracts to be executed in Ebendo which exceed thirty (30) days executive.

vii. The contractors shall employ suitable qualified candidates from Ebendo

based on the allotted quota in (vii) below to fill established vacancies for skilled, semi-skilled and unskilled labour. If Energia shall source for labour from outside Ebendo in the event that suitably qualified candidates are not located from Ebendo.

viii. Such Community workers must demonstrate compliance to industry

practice of Health, Safety and Environment practice, experience and training that matches the position being applied for and documented evidence that such persons are bonafied members of Ebendo.

ix. Energia shall prioritize company contractors that have partnerships with

community based contractors and employ suitably qualified semi-skilled and unskilled staff from Ebendo.

x. Company contractors shall source to the extent possible their non-

specialized supplies from Community based contractors provided such supplies meet Energia's project schedule, quality specifications and offered at an industry standard competitive price.

xi. Remuneration/quota of Ebendo community workers:

S/N Category Numbers Wages

1 Skilled Based on availability, qualifications and competitive recruitment.

To be consistent with Company's condition of service. Contract employees to be negotiated

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2 Semi-skilled 50% N3,000:00/day (12hrs)

3 Unskilled 60% N2,000:00/day (12hrs)

4 Terminal Benefits Benefits

>3 months < 1 year >1 year duration < 2 years > 2 years to 5 years <

11/2 months salary 3 months salary 1 month salary * number of years served

5 CLO For Community Negotiable

xii. Rates depend on the peculiarities of the environment. Extra hours of work shall attract overtime on five (5%) percent of the daily salary per hour for week days including Saturdays and ten (10) percent of the daily salary per hour for Sundays and Public Holidays. Overtime is optional to all parties and refusal shall not be treated as an act of indiscipline, although Energia reserves the right to replace community personnel who cannot meet the industry standard efficiency, productivity and schedule of the jobs or projects being executed.

xiii. In line with the federal government policy on pension; Energia shall

operate a contributory pension scheme for its full-time staff in strict compliance with the Pension Reform Act. In this regard, affected qualifications, experience and performance in recruitment interviews.

xiv. Energia and Ebendo recognize that the number of workers to be hired is

a function of the scope of work and other project considerations and should be at the discretion of the Contractor in accordance with the terms of the contract between Energia and Contractor. Nevertheless, the number of positions shall be based on the needs of the contractor and justified by contractual minimal workforce requirements.

xv. Energia/Contractors will issue letters of employment or employment

contracts to each qualified Ebendo worker to be employed. This letter or employment or employment contract will specify the type of work offered, the work schedule, the work hours, terms of employment, compensation, work codes and practices, safety rules and regulations.

xvi. These Contractors recognizing and accepting Energia's work procedures

and requirements that contracts must be tendered competitively among pre-qualified contractors and tenders for contracts are subject to technical and commercial analysis. Also, that technically acceptable bids must be commercially attractive to be considered for award.

xvii. Energia's standard of WORK/QUALITY/HSE must be maintained on all

contracts. As in other contracts, the provisions for termination or suspension of work in certain specified circumstances shall be exercised.

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xviii. The Parties further agree that they will award contracts in a fair, transparent, objective and co equitable mechanism to ensure the even spread of jobs amongst registered community contractors. Parties also agree to support the growth of indigenous capacity of community contractors with larger value competitive contracts.

xix. In addition, Energia will ensure that on all contracts, approved

contractors shall demonstrate compliance with the provisions of all Energia Contracting Policies and Procedures; Compliance with all Sustainable Community Development Policies and Procedures; Compliance with Articles headed 'Permits', Laws and Regulations' and "Business ethics" contained in ENERGIA 's Conditions of Contracts.

xx. ENERGIA shall only register qualified Ebendo contractors who fulfill

all the safety, techical and commercial requirements relevant to the category(ies) being applied for, subject to the availability of work related to the specified category.

13.0 EMPLOYMENT POLICY AND PROCEDURES

13.1 Direct Employment into Energia

i. Energia shall employ qualified skilled/unskilled workers from Ebendo to fill its allotted quota as indicated in Article 12.3 - (vii), subject to availability of vacancies, meeting the minimum competency requirements for the respective job positions and consummate to the level of activity in EBENDO as determined by Energia.

ii. Energia employees from Ebendo shall be given the same terms and

conditions of service as other Energia employees of similar positions in the company.

iii. Energia shall employ a Community Liaison Officer (CLO) directly from

Ebendo responsible for specific duties related to maintaining good community labour relations. This is without prejudice to Energia's right to employ suitable Supervisory Officers from outside EBENDO, responsible for Labour relations within and outside the TERRITORY.

13.2 Employment by Energia Contractors and Community Contractors

i. Disclosure of such employment opportunities shall be as stipulated in

Article 12.0

ii. The number of employees to be used in each project shall be as stipulated in

Article 12.3

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iii. Community employment shall be sixty percent (60%) unskilled, fifty

percent (50%) semi-skilled of available employment opportunities and skilled labor shall be based on availability,

13.3 Now in accordance of the foregoing, the parties hereby freely agree to and accept the following commitments;

ENERGIA

COMMITMENT

EBENDO COMMITMENT

1. No work no pay for site shutdowns by communities. No ghost worker will be allowed.

2. Any worker that

misbehaves or whose performance is below standard will be reported to the ECDA for immediate replacement.

3. Proactively engage Ebendo to pursue a mutually beneficial relationship at all times.

4. ENERGIA and her Contractors shall keep Ebendo informed of employment opportunities in the company by making available relevant information on vacancies to the ECDA.

5. ENERGIA shall endeavor to resolve any disagreements between Ebendo and Contractors that affect the commencement

1. Workers will be paid for hour and days actually worked.

2. No work-no-play rule will

apply for any period of site shutdown.

3. Unruly and inefficient casual workers reported to ECDA and shall be immediately replaced within 24 hours by new nominations.

4. The employment of community workers take effect from the day that they resume duty in accordance with the documented terms and conditions in their letters of employment.

5. Community Workers shall maintain a work schedule to be drawn up by Energia Contractors.

6. ECDA shall qualify and recommend contractors to Energia for any community-dedicated job.

7. Resolve to actively work and cooperate towards ensuring a peaceful environment and a conducive atmosphere for ENERGIA’s operations and

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and/or continuation of an activity/project with the support of the ECDA.

6. ENERGIA and her Contractors shall comply with the terms set out in this MoU.

the execution of Ebendo projects.

8. Ebendo is committed to an amicable, cordial, constructive relationship free from violence, destruction or acts that may disrupt peace and ENERGIA operations.

9. Ensure that the elected representatives of Ebendo take full responsibility to discharge their duty to safeguard this MoU agreement entered into with ENERGIA and its contractors.

10. Take all legal steps and diligent actions to forestall activities in Ebendo that may be detrimental to the safety of lives and property and to bring person(s) to book irrespective of whether they are members of Ebendo and its agents.

11. Ensure that where names of Ebendo members/representatives, etc, are required in the course of interaction with ENERGIA that such names are well authenticated and confirmed to be genuine from EBENDO.

12. Forward only names of qualified and competent personnel for jobs/positions offered to Ebendo under his MoU and other interactions with ENERGIA.

13. Ensure that Ebendo personnel offered jobs/positions are subject in entirety to the terms

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and conditions of employment of their employer(s).

14. Agree to observe and execute the terms of this MoU in its entirety, notwithstanding and any change in the name, constitution, and community executive or communal authority in Ebendo.

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APPENDIX III

MoUs and community engagement: Energia/Oando JV style

VANGUARD Online November 15, 2011 / in Energy 12:00 am / Comments

By Clara Nwachukwu

IT is not uncommon to hear about disputes between host communities and oil

companies operating in the region. However, while some settle such disputes through

dialogue, others are not so successful and often result in conflicts.

In the past, such conflicts resulted into youths’ restiveness and militancy, often

characterised by violence and other criminality including kidnappings, pipelines

vandalism and ultimately production losses, revenue losses and loss of lives and

property.

Under such developments, while the oil companies blame the communities for lack of

tolerance and peaceful co-existence, the communities lash back accusing the

companies of lack of sensitivity and corporate irresponsibility in their modes of

operations.

Communities often demand of companies to up their games in their corporate social

responsibility, CSR programmes and give back more to the communities from where

they are reaping so much profit. Many of the CSR programmes are captured in

Memoranda of Understanding, MoUs, that stipulates what is expected of each

party/parties and dictate the terms of their relationships.

Commitment to the terms of agreement result in peaceful co-existence, while more

often than not, conflicts arise due to the failure of one or all of the parties to keep their

own part of the deal.

Accordingly, MoUs are becoming very dynamic and modeled after current realities, or

so one would expect. But judging from level of disagreements, this may not be so.

Public scrutiny

Whereas some companies are doing relatively well with their host communities and

are willingly to subject their MoUs to public scrutiny, others prefer to hide under the

confidentiality clause.

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In this regard, Energy Limited in joint venture with the Oando Group, enters into

agreements with Emu-Ebendo community, in Ndokwa West Local Government Area

of Delta State.

Energia is the operator of the Obodugwa/Obodeti Marginal Field, better known as Oil

Mining Lease, OML 56.

In the 29-page document, the company explained that the MoU “is with a view to

creating understanding, cooperation and consolidating the existing cordial and

mutually beneficial relationship between Ebendo and Energia.”

The objectives of the agreements include:

* To encourage responsible partnership between the operator and the host community.

* To foster greater development agencies/stakeholder interface with a view to

eliminating duplication of resources and projects.

* To institute transparency and accountability in enforcing agreements among parties.

* To build and grow capacity of the rural community with resources provided by the

company.

* To enhance security of life and property and obedience to the Rule of Law.

* Community empowerment and sustainable development, and a host of many others.

The agreements are intended to transfer the responsibility and accountability for

decision-making, planning and execution of development projects/programmes to the

Ebendo Community Development Association.

“It is expected that if properly implemented, this process will assist Ebendo and its

constituent communities to develop the capacity to own and manage their own

development programmes,” the MoU stated, adding that over time, community

members will gain the skills and competency to drive self-reliant development.”

As part of the agreements, Energia has already set up a Trust Fund to facilitate

development programmes in the community. The interesting thing about the MoU is

the fact that it is progressive.

According to the company, as production increases, more funds will be made

available in the Trust Fund that will enable both the Energia/Oando JV and the

community to undertake such projects in Obodugwa, such as road construction

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projects (ring roads); scholarship Programme; and housing projects. About 0.75

percent of the gross production is ceded to Obodugwa community.

Others are the mega town hall projsects; rural electrification; empowerment

programmes, and education grant system.

Huge cash outlay

Despite the huge cash outlay, the JV partners, through the Trust Fund, have also

provided other capacity building measures for Obodugwa community. These are the

employment of indigenes, which currently stands at 21 percent of total company

employees, starting a Youth/Women Empowerment orientation programme in

October 2011 in collaboration with a non-governmental organization, NGO (MIND

Foundation), and initiating separate MOUs with Obodugwa as impacted community.

Furthermore, the partners have incorporated a Trust Deed, and established a separate

Trust board to manage revenues accruing to Obodugwa community for sustainable

community development programmes.

Energia is currently producing an average of 1750 bopd from one well – Obodugwa

well-1, and operates a 10,000 bpd Flowstation at Obodugwa, and has been producing

since December 2009. Crude produced are transported to Umusadege through the 8.5

km x 6” export line.

Although Oando holds the majority equity in the JV with 55 percent, while Energia as

the operator holds the balance of 45 percent.

- See more at: http://www.vanguardngr.com/2011/11/mous-and-community-

engagement-energiaoando-jv-style/#sthash.eqVIcPl4.dpuf

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APPENDIX IV

Energia Limited is the Joint Venture Operator of the Ebendo/Obodeti Marginal Field

(ex-Obodugwa/Obodeti Marginal field) located in Ebendo near Kwale, Ndokwa West

LGA, Delta State. The field was awarded to Energia and Oando, in a 55%/45% equity

split with Energia as the designated Operator in the 2003 Federal Government/DPR

Marginal Field rounds.

The company is a wholly owned Indigenous E&P company made up of leading oil

and gas service and technology providers who are key promoters of PETAN in the

country to take advantage of the Nigerian Content dream of creating a totally

indigenous Nigerian Oil and Gas Technology in the immediate and near future.

The consortium of leading service and technology companies that constitute Energia

Limited, that have also made their marks in the Nigerian E&P industry are:

• Ciscon Nigeria Limited,

• Oildata Wireline Services

• Weltek Limited

• Ariboil Company Limited

• Sowsco Well Services Limited

• Skangix Petroleum Limited

• Imbe Koru & Sons Nigeria Limited

• Pemec

Other corporate entities are

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• Ashbert

• IDD

The Company operates from its own 10,000 bbls crude processing station

(flowstation) at Ebendo and exports its produced crude through its 8.5 km, 6 inches

export line through an Injection Hub, at Umusadege, also in Kwale, Delta State. It has

a 30 MMSCFD gas processing plant constructed in partnership with Xenergi.

Energia Limited has a base Office in Kwale, Delta State, and its Head Office in

Lagos.

______________________________________________________

MISSION

Our Mission is to exploit, produce and process sustainable energy sources for the

development and up liftment of mankind and his environment, in collaboration with

the communities in our areas of operation, with a workforce that continuously

improves its work methods and technology, while maintaining a healthy balance

between our operation and the environment.

______________________________________________________________

VISION

To be an energy Company of reference in Nigeria

____________________________________________________________

CORE VALUE

As an Organization, we value certain behaviors which must essentially define us from

the foundation on which we perform our work and conduct ourselves.

We are courteous, and respectful, and welcome diverse views without compromising

standards, and conduct our business in an ever efficient and effective manner.

These values underlie how we interact with each other and what strategies we employ

in fulfilling our mission and are listed below:

• Transparency • Commitment

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• Responsibility • Accountability • Integrity • Prudence • Respectful • Professionalism

_______________________________________________________________

BOARD OF DIRECTORS

Energia’s general corporate policies and directions are determined by a Board of

Directors who are successful Nigerians drawn mainly from the Oil and Gas Industry

and other facets of the society. The Board members are proven entrepreneurs and

active players in Nigerian economy with vast experience in the E&P sector.

AELEX LEGAL PRACTIONERS AND ARBITRATORS is secretary to the Board.

• Chief A.K Horsfall - Chairman • Mr. Pedro Egbe • Mr. Stephen Aribeana • Mr. Shawley Coker • Mr. Emeka Ene • Mr. Samuel Adegboyega • Mr. George Osahon

_____________________________________________________________________

MANAGERS

Day by day activities are run by the Management Staff of the company . The

Management staff are result oriented in their various places of assignment.

Our management staff:

1. Felix A.V - Managing Director/CEO

2. Titilola Opaleye - Chief Financial Officer

3. Godwin Okolo - Operation’s Manager

4. Efosa Arthur - Chief Technical Officer

5. Morgan Amadi - QHSE Manager

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APPENDIX V

Thursday, November 07, 2013

Projects Commissioning: Celebration in Emu-Ebendo, Other Communities

By Vin-Myke Nwabuisi

The crowd was unprecedented. The atmosphere was electrific as one could literally

feel and touch the excitement in the air. The sky smiled throughout the day, thus

ensuring a clement weather for the day’s activities.

The joy of the people knew no bound as they sang and danced to the glory of God and

in celebration of a milestone in the history of their communities.

Such was the scenario and mood of the people on Saturday, June 9, 2012 at Isumpe-

Ogbe, Umusam, Ogbeani, Emu-Ebendo and Umusadege-Ogbe communities in

Ndokwa West Local Government Area of Delta State when people- oriented projects

built by Energia Limited, operator of OML 56 Energia/Oando Joint Venture were

commissioned by the Managing Director of the Oil Company, Engr. A. V. Felix .

The projects commissioned were the ultra-modern Isumpe-Ogbe community Town

Hall, a block of three classrooms, offices, a water borehole and toilets at Iyiashili

Primary School, Umusam, 50KVA Mikano electricity generator/renovation and

furnishing of Obi-Ogwa in Umusadege-Ogbe community.

Others include three-apartment building with water borehole at Ogbeani community

and an ultra-modern market at Emu-Ebendo.

Aside these projects the company also provided three electricity transformers, a water

borehole and Toyota buses for Umusadege –Ogbe community, two hilux trucks for

Emu-Ebndo community, electricity for Isumpe-Ogbe and Ogbeani communities,

among several others.

Speaking at the epoch-making event, the MD/CEO of Energia, Engr. A.V Felix, said

the company was irrevocably committed to improving the living conditions of their

hosts and the right-of-way communities through the execution of people-oriented

projects, skill acquisition programme for youths and an empowerment programme for

the people. He pointed out that the projects commissioned were signs of more good

things in stock for the communities, just as he commanded the people for providing

them the enabling environment to carry out their operations.

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The Energia boss assured the people of their commitment to corporate social

responsibility and sustainable community development, even as he solicited for their

continued support and cooperation to enhance their operations.

“Ours is a partnership that will last. These projects that were commissioned today are

tips of the iceberg. We will continue to touch the lives of people in our areas of

operation” he assured. Also speaking, the Chairman, Board of Directors of Energia,

Mr. Ken Mozea, (SAN), commended the communities for their peaceful disposition,

saying that the company will not relent in impacting positively on the lives of the

people.

In his remarks, the Delta State Commissioner for Oil/Gas, Hon. Mofe, Pira who spoke

through his Special Assistant, Mr. Godwin Omadogi, lauded the company for their

contributions to the betterment of their host-communities.

He said the gesture of the oil company was in line with the three-point agenda of the

State Government. He charged the people to make good use of the projects to better

their lot.

In an interview, Miss Udodi Udome and Miss Deborah Odika, among others, who

benefited from the company’s skill acquisition (hairdressing, sewing) programme,

poured encomiums on the company, saying that they never had it so good. They

wished Energia well, adding that they will forever remain grateful to the oil company

for impacting positively on their lives.

Earlier in their welcome address on behalf of their communities, Chief Dennis Ejechi

(Isumpe-Ogbe), Mr. Lucky Ojuma (Ogbeani), Mr. Austin Eni (Emu-Ebendo) and

Barrister Francis Odugbor (Umusadege-Ogbe), thanked Energia for their kind gesture,

stressing that the projects which have put smile on the faces of the people, will, no

doubt, improve their living standards.

They enjoined the company to keep the flag flying, assuring of their continued

support, cooperation, cordial relationship and peaceful environment to enable the

company carry out their operations.

Ukele dance groups of Isumpe-Ogbe, Emu-Ebendo, Otu-Ezeugo cultural dance from

Ashaka in Ndokwa East Local Government Area of Delta State and four young boys,

who thrilled the people with their scintillating and tantalizing Michael Jackson’s

dance style/steps were on hand to add glamour, colour and beauty to the historic

occasion which culminated in bliss and glee at Emu-Ebendo, the last port of call by

the MD/CEO of Energia and his large entourage.

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APPENDIX VI

Energia targets 10,000bpd increase in oil production

June 6, 2013 by Dayo Oketola

A marginal exploration and production company, Energia Limited, has concluded plans to increase production to 10,000 barrels of oil per day in 2014.

Energia is the operator of OML 56 owned by the Energia/Oando Joint Venture.

The Managing Director, Energia Limited, Mr. Felix Valentine, while addressing

newsmen in Lagos, on Wednesday. said current production level remained at 3,000

bpd.

He said this was as a result of crude capacity restriction on the export line to Brass

terminal, adding that its drilling of well 4 jacked up production to 4,000 bpd but for

the restriction.

Valentine maintained that the successful drilling of Ebendo well-6 in May this year,

which encountered additional hydrocarbon sands hitherto not seen in its various wells

is expected to add additional 3,000 bopd by July 2013.

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He further disclosed that the firm in March this year successfully drilled and

completed Ebendo well-5 with another 8,000 to 9,000 bpd expected from Ebendo

well-6 in July this year

He said, “Our major challenge at the moment is the crude injection capacity restriction

on the export line to Brass terminal, as we are presently unable to inject all of our

available crude for export.

We are, however, working with our marginal field cluster members to negotiate for

higher injection capacity with Agip, which we believe will free most of the cluster’s

locked in potential.”

As a permanent solution to the persistent injection restriction, he explained that

Energia in collaboration with Midwestern Oil and Gas and its joint venture partners

had concluded plans to construct a 53 kilometre, 12 inch export line from Umusadege

field to Eriemu manifold as an alternative export line for the cluster line.

The line, he said, should remove the present bottleneck currently being faced through

the export line to Brass terminal while the alternate line is expected to handle the

additional crude produced from the new wells (Ebendo 6 and 7) stating that the

alternate line should be operational before the end of 2013.

“We are also working with our partner, Xenergi in operating our 25 mmscfd modular

gas processing plant in Ebendo field. Let it be noted that we are one of the very first

marginal companies to have achieved this milestone,” he said.

SOURCE: http://www.punchng.com/

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APPENDIX VII

Energia To Begin Production From Ebendo 6 Well in July

Posted in NOGintelligence Issue 55, Upstream News | 0 comments

Jun 14, 2013

Energia Limited, the operator of the successful Oando/Energia-owned

Ebendo/Obodeti marginal field, has announced that it is on course to complete its

Ebendo 6 well this July. Speaking at NOG Tech, the Managing Director/Chief

Executive Officer of Energia, Mr. Felix Valentine, said:

137

“We are presently preparing to complete this well, which we expect will add

additional 2,000-3,000 bpd in July 2013. This is following another successful drilling

and completion of our Ebendo well-five in March 2013. Upon completion of well-six,

Energia is expected to produce 8,000-9,000 bpd in July 2013.”

He added that the company intends to increase production through aggressive drilling,

saying: “We expect to ramp up field production to more than 10,000bpd with these

new opportunities in 2014.” The company also plans to drill three more wells on

Ebendo after drilling opened up new prospects. Wells seven, eight and nine will be

drilled in the next few months. With this ambitious drilling programme it expects to

ramp production up to 15,000 bpd by 2015.

In preparation for the anticipated scaled up production volume, Energia has begun a

major facility upgrade in line with its field development programme.

The company also has plans to overcome the challenge it faces in terms of the

evacuation of its crude. Currently, it uses the export line to Brass terminal, which does

not have sufficient capacity. As a result, the company is working on the construction

of a 53-kilometre pipeline from Umusadge to Eriemu in partnership with Midwestern

Oil as an alternative. The pipeline should be ready in time for production for its

proposed 7, 8 and 9 wells.

Mr Valentine also disclosed that the company intends, together with the marginal field

cluster group of Midwestern Oil and Gas, Pillar Oil, Platform Petroleum and Chorus

Energy, to build a refinery with an initial capacity of between 10,000 and 15,000

barrels of crude oil per day. He said the company was in discussions with consultants

on the viability of the project. He explained that the idea of the refinery was in

response to the staggering level of crude oil theft they had experienced.

He said: “Our cluster group lost about $72 million to crude theft in 2012 alone and at

the rate we are going, this might increase to $100 million (N15.9 billion) in 2013.”

The successful indigenous company also has a 30 MMSC.lllFD gas processing plant

constructed in partnership with Xenergi.

The Ebendo/Obodeti Marginal Field (ex- Obodugwa/Obodeti Marginal field) located

near Kwale, in Ndokwa West LGA, Delta State was awarded to Energia and Oando,

in a 55%/45% equity split with Energia as the designated Operator in the 2003 Federal

Government/DPR Marginal Field rounds.

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APPENDIX VII

Community Development Strive

January 6, 2012 in News by kevwe

COMMUNITY DEVELOPMENT STRIVE

Energia recognizes the need of gainful employment to the youths and people of our

area of operation, and we have taken up that a working policy by continuously

interacting with the people to ensure that their children are given employment

opportunities in all areas of our operation. A substantial number of our total workforce

are indigenes of the communities within our areas of operation.

Our policy also ensures that service providers and contractors working on our location

engage local labours as assistants and support to their work.

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Ebendo 1.8KM Road Constructed by Energia Ltd

Obodugwa 1KM Road Constructed by Energia Ltd

Entrepreneurship Program

28 Ebendo and Obodougwa Communities’ nominated youths, male and female, are

receiving various apprenticeship training through an NGO, Mind Foundation.

The participants are being mentored from capacity building to providing the trainees

with specific occupational skills, as well as valuable employability skills,

interpersonal skills, and a general knowledge of the business environment. Trainees

who successfully complete the program will have the option of entering the workforce

directly under paid employment or establishing their own small scale businesses.

140

The essence is to assist provide a base for indigenes of immediate communities in our

operational area to look beyond, avoid dependence on one source of livelihood and

OKPALA UKU PALACE AT UMUSADEGE

The palace, presently under construction, is to house the okpala uku of umusadege,

one of energia right-of-way (row) communities. When completed, it shall become a

permanent residence and office complex for successive okpala uku of umusadege and

a rallying point for the community’s unity of purpose. Being executed by the energia-

impacted-communities trust board (EICTB) in line with energia’s admirable

sustainable community development (scd) programs,

it shall change the community’s mobility of community head to different locations

where the okpala uku or his family has residence for him and also make it possible for

all those who attain the position of the oldest-man-of-the-community to ascend the

throne without extra cost and burden on him or his family for providing befitting

community meeting venue.

UMUSAM COMMUNITY ROAD

The first tarred road to traverse the umusam community traditional settlement since

the world began. It ripens umusam community age long desire to have a taste of what

her other sister communities in utagba

the 1.6km road, one of the energia

projects for 2013, is at advanced stage and shall be completed before the end of the

year.

SOURCE:

CSR: ENERGIA HANDS OVER N4.48M PROJECTS TO HOST

The first tarred road to traverse the umusam community traditional settlement since

the world began. It ripens umusam community age long desire to have a taste of what

ommunities in utagba-ogbe kingdom enjoys. Construction work of

the 1.6km road, one of the energia-impacted-communities trust board (EICTB)

projects for 2013, is at advanced stage and shall be completed before the end of the

SOURCE: http://energiang.com/author/kevwe

APPENDIX VIII

CSR: ENERGIA HANDS OVER N4.48M PROJECTS TO HOST

COMMUNITIES

141

The first tarred road to traverse the umusam community traditional settlement since

the world began. It ripens umusam community age long desire to have a taste of what

ogbe kingdom enjoys. Construction work of

communities trust board (EICTB)

projects for 2013, is at advanced stage and shall be completed before the end of the

CSR: ENERGIA HANDS OVER N4.48M PROJECTS TO HOST

142

CSR: Energia hands over N4.48m projects to host communities

By Editor on Mar 11, 2014 Community

Energia, a marginal oil field company operated jointly with Oando Plc, has handed

over several projects worth N448,228,568 million, under its corporate social

responsibility programme to its host communities in Ndokwa Local Government Area

of Delta State.

The projects were executed from the $5,937,687.96 so far remitted to the host

communities through their respective community Trust Funds.

The projects include the 2.8 kilometer Emu-Ebendo community road, asphalted with

interlocked walkways and drainage system; Obodougwa community road; and

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Umusam community road. Others are Umusedege Okpalauku’s palace project and

several water boreholes with generating sets for all round pumping.

The Emu-Ebendo road was built at the cost of N265,378,652; Obodougwa road cost

N46,270,504. Umusam community road was constructed at a cost N94,234,520,

Okpalauku’s palace was built and furnished with N30,134,139, while the bore holes

project cost N12,210,753.

Several other projects such as markets, refurbishing of schools, town halls, water

projects, transformers for stable power supply and peace and reconciliation

programme were executed in the 2011/ 2012 development year.

The company said the projects were in line with its Corporate Social Responsibility

approach, whereby a percentage of crude production was given to the communities

who decide what projects they would execute with the allocation.

Speaking at the opening and handing over ceremony, the Deputy Governor of Delta

State, Professor Amos Utuama, commended Energia for being novel in its approach to

community development projects and assured that the state would do all within its

powers to ensure a good and peaceful working environment.

Utuama who spoke through Mr. David Ighovoja, his Senior Special Assistant on

Information Communication Technology, urged the communities to maintain a

peaceful working environment that will boost the company’s production, which will in

turn, transform the communities.

He enjoined other companies operating in the state to borrow a leaf from Energia as

government could not handle all development projects alone. He expressed happiness

that within a short period of its operations, Energia has improved the lots of its host

communities.

Also speaking during the occasion, Managing Director of Energia, Mr. Felix Amieye-

Ofori pointed out that the projects inaugurated were part of the many projects and

programmes so far executed by his company and expressed hope that despite the

144

challenges the company is faced with, its relationship with the host communities

would get better.

He explained that Energia ensured the building of a transparent structure through the

signing of Memorandum of Understanding and Trust Fund, which outlined the

obligations of each party in the agreement.

He said: “Pursuant to the trust Deeds and MoUs with the respective communities, a

Trust Fund where three per cent of the gross production proceeds of crude sale by the

Joint Venture is remitted for the sustainable infrastructural development projects and

human capacity building of the respective communities.

Thereafter, Trust Boards were set up from the host communities of Emu-Ebendo,

Obodougwa-Ogume, Umusadege, Isumpe, Umusam and Ogbeani and Energia/Oando.

They manage the remittances to the Trust Fund bank accounts as well as meet with

communities to approve which projects would be executed.

Apart from project executed under the Trust Fund, Energia has carried out other

training and skill acquisition programmes. These include Elders welfare programmes,

educational remedial programme, internal security administration and management,

agricultural programmes, youths skill acquisition programme and donation of vehicles

among others.

So far, Energia has employed 157 host community people since inception of

production. The company currently produces 8,000 barrels of oil per day (bopd) and

targets to boost production to 15,000 bopd in 2014/2015 from the four wells it has so

far drilled.

Chairman of the Impacted Communities Trust Board, Mr. Chuks Ochonogor, poured

encomiums on Energia, pointing out that if other oil companies with bigger

production capacities were committed to development of their host communities as

Energia, there would probably not be security issues in the region.

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APPENDIX IX

THE CONCEPT OF CORPORATE SOCIAL RESPONSIBILITY: A

PHILOSOPHICAL APPROACH

Adele Lebano

November 2010

Working Paper No. 508

ISSN 0921-0210

The Institute of Social Studies is Europe’s longest-established centre of higher

education and research in development studies. On 1 July 2009, it became a

University Institute of the Erasmus University Rotterdam (EUR). Post-graduate

teaching programmes range from six-week diploma courses to the PhD programme.

Research at ISS is fundamental in the sense of laying a scientific basis for the

formulation of appropriate development policies. The academic work of ISS is

disseminated in the form of books, journal articles, teaching texts, monographs and

working papers. The Working Paper series provides a forum for work in progress

which seeks to elicit comments and generate discussion. The series includes academic

research by staff, PhD participants and visiting fellows, and award-winning research

papers by graduate students.

Working Papers are available in electronic format at www.iss.nl

Please address comments and/or queries for information to:

Institute of Social Studies

146

P.O. Box 29776

2502 LT The Hague

The Netherlands or E-mail: wpapers@iss.nl

147

Abstract

Corporate social responsibility (CSR), or the idea that companies should

combine economic, social and environmental concerns, seems an unavoidable

component of discourses on business and society. Why is this the case? Is it

because we are in a post neoliberal era, and in an economic crisis, that we are

acknowledging the drawbacks of unrestrained business activity? Or is the

opposite true, and the popularity of CSR is the product of the triumph of

neoliberal ideology? Both views can be supported by equally convincing

theoretical and empirical arguments. In this paper rather than arguing for either

view, I propose to set the problem of CSR according to a different perspective,

which may help to move beyond narrow alternative of CSR as ‘reaction to

neoliberalism’ or ‘as product of neoliberalism.’

My thesis is that CSR and its concerns are much older than neoliberalism

and post-neoliberalism. These are concerns that have to do with how to

organize our social life, and what institutional arrangements can better promote

justice and well-being. These concerns have to do with economy and politics at

the same time. While many people may think that corporate social

responsibility is empty rhetoric, I argue here that there is some substance to

CSR, and that this substance has to do with the inextricable connection

between economic, political and moral concerns. In the first part, I argue that

disagreements about the nature of CSR can be addressed using the distinction

between ‘concept’ and ‘conception.’ I identify the main understandings of CSR,

and argue that all obscure, to varying degrees, the nuances of the relationship

between economy and politics. In the second part, I argue that the relationship

148

between politics and the market, which lies at the core of CSR, can be better

understood if we reverse the neoclassical analogy between market and politics.

In the third part, I address the opposition between voluntary and hard

regulation and link this opposition to the tension between political means and

ends. I conclude with some questions about the limitations of the label

‘Corporate Social Responsibility.’

Keywords

Market, politics, morality, liberalism, freedom, corporate social responsibility.

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The concept of corporate social responsibility: a

philosophical approach1

Introduction

Corporate social responsibility (CSR), or the idea that companies should

combine economic, social and environmental concerns, seems an unavoidable

component of discourses on business and society. Why is this the case? Is it

because we are in a post-neoliberal era, and in an economic crisis, that we are

acknowledging the drawbacks of unrestrained business activity? Or is the

opposite true, and is the popularity of CSR the product of the triumph

neoliberal ideology? Both views can be supported by equally convincing

theoretical and empirical arguments.

In this paper rather than arguing for either view, I propose to set the

problem of CSR according to a different perspective, which may help to move

beyond narrow alternative of CSR as ‘reaction to neoliberalism’ or as product

of neoliberalism.’ My thesis is that CSR and its concerns are much older than

neoliberalism and post-neoliberalism. These are concerns that have to do with

how to organize our social life and with what institutional arrangements can

better promote justice and well-being. These concerns have to do with

economy and politics at the same time.

These concerns are addressed by the timeless dispute about what to leave

to market and what should remain under direct control of the state (and its

citizens) in order to get closer to ideals of justice and further away from

150

injustice. CSR as one of the ways to interpret this dispute has to do with

matters of morality that have always been interwoven with economic and

political choices.

In this paper I will suggest that rather than neoliberal or post-neoliberal

we could think about CSR simply as liberal. Here I refer to liberalism as the

tradition of thought that has formulated these concerns about individual and

collective good and just institutions in their modern form. Liberalism, as John

Gray (1986) among others reminds us, 2 is a philosophy of modernity.

Liberalism is grounded in a modern idea of politics that subverts the

relationship between governed and governors, between individuals and the

state, by putting the individuals-citizens at the centre and limiting the power of

governments over them.3 In this paper I argue that the concept of freedom

implied by CSR is closer to the liberal idea of freedom than to the neoliberal

one.

The difficulties in grasping the liberal core of CSR have to do with the

difficulties in sharing a definition of CSR. Despite the flourishing of writing on

the topic, CSR is still a theoretically weak field (Okoye 2009: 614). Yet

establishing more solid foundations it essential to make use of CSR. This paper

contributes to the quest for foundations of CSR by using the tools of political

philosophy.

The reason for undertaking a philosophical exploration of CSR is that I

believe that behind the brand “CSR” there is some substance. This substance

has to do with essential concerns of political life, crucial questions such as: how

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is it possible to combine individual happiness and justice in society? Which

institutions are more appropriate for this purpose?

CSR has a strong normative core. It is about how things should be—how

to improve the impact of business on society—and not just about how things

are. But it is important to look closer at this core, to be able to use CSR

normative potential.

Examining what the core of CSR includes and excludes may consist of

conceptual investigations and empirical investigations. In this paper I develop a

conceptual investigation that is driven by the question: what is CSR about?

In order to answer this question I address the disagreement on CSR

definitions and its lack of foundations as a theoretical problem that has

important empirical implications. For some people, for example, philanthropy

is one aspects of CSR. For others philanthropy is charity —another name and

concept all together– and a company might be generous yet socially

irresponsible (Almeida Ashley 2010). For some people CSR is either voluntary,

or it is not. For others it may include governments’ interference to make

companies socially responsible (Bredgaard 2004; Streurer 2007). But we need

to agree at least on a general concept if we want to identify the measures of

CSR in place, classify their types, the circumstances in which they occur, and

finally evaluate their impact on human rights, and social and environmental

ends.

The conceptual investigation, which I will develop, can help to identify

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research questions and cases that mirror the controversies and different ‘souls’

of CSR concept. A possible research question may be: do voluntary and non-

voluntary, narrow or broad, neoliberal or left-liberal readings of CSR have to

do with its conceptions or with its concept? Once we have removed

conceptions of CSR that are not consistent with its core, the appropriate

conceptions and policies of CSR may depend on circumstances, institutional

settings, quality of hard and soft code, types of relationships between state and

non-state actors.

An empirical study that compares, within countries and between countries,

companies and non- business actors that appear to interpret the concept in

different ways may achieve two important aims. On the one hand, it may help

to understand how interpretations of CSR differ and why. On the other hand,

it may help establish which interpretations in each country are more successful

in achieving economic, social and human rights aims. In this sense, the conceptual

investigation that follows can be seen as a preparatory step to any empirical

investigation on CSR.

Definitions and controversies

Current ideas4 of CSR are based on the notion that companies should undertake tasks

that are traditionally regarded as responsibilities of governments. Commitments to

social, environmental and human rights aims expend the realm company responsibility

to include issues outside the immediate economic interest of shareholders, and to

address interests and expectations of workers, consumers, and citizens at large.

Despite a general agreement on this ‘core’ concept of CSR, controversies

arise when we attempt to use it to design or evaluate policies There are many

theories of CSR and many labels are used to identify it. CSR has been

153

theorised, for example, in terms of business ethics, corporate philanthropy,

environmental sustainability, or corporate citizenship (Windsor 2006; Garriga

and Mele 2004, Matten and Moon 2004).5 Corporate managers often

understand the concept differently from policymakers, scholars, and civil

society activists. Business people, for example, say that profit is not

inconsistent with the achievement of social aims. Many NGOs, by contrast,

say that CSR goals should be pursued regardless of their effects on profit.

There are therefore many different understandings of the overarching

concept of CSR. In philosophy, this lack of a single definition is called ‘concept

contestability’ (Gallie 1956). The philosopher Walter Gallie in the late 1950s

introduced this idea to refer to disagreement on notions commonly used in

philosophy, notions such as ‘fairness,’ ‘freedom,’ or ‘democracy.’ There is

agreement on the abstract meaning of these notions, but disagreement on their

applications. Recently, scholars in the fields of sociology, economics, political

science, and management have applied Gallie’s theory to the notion of CSR

(see among others Moon 2008 and Okoye 2009).

Gallie’s contribution is unfortunately not one that can be automatically

assumed, as the meaning of essential contestability is itself controversial. It is

not clear whether essential contestability means intractable disagreement on the

use of abstract concepts, or the fact that the disagreement is located at the core

of the concept and not in its use.6 This is not the place for dealing with the

dispute extensively but, for example, the philosopher and legal scholar Jeremy

Waldron (2002) argues that the adjective essential in Gallie’s argument refers to

the impossibility to identify a core in abstract concepts. By contrast, his

colleague Ronald Dworkin (1986) reads ‘essentially contested’Raw as referred

to competing accounts of the same concept. In this essay I endorse the last

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view and argue that, in the case of CSR, the problem is not the essential

contestability of the concept in itself but the distance between the core concept

and the applications, or use we make of it.7

CSR concept is broad, vague, and slippery. When we talk about concepts,

we do not need a complete account of what they comprise and exclude in

order to agree on their general meaning. When we discuss freedom, equality,

justice, and other fundamental socio political ideas we tend to recognise what

we are talking about because we share a general understanding of these abstract

concepts. It is when we attempt to refer these general ideas to particular

phenomena that problems begin.

The contrast between concept and conception is… a contrast between levels of

abstraction…At the first level agreement collects around discrete ideas that are

uncontroversially employed in all interpretations; at the second level the

controversy latent in this abstraction is identified and taken up (Dworkin 1986:

70-71).8

And John Rawls, summarising the problem at the beginning of Political

Liberalism, says: “People can agree on the meaning of the concept … and still

be at odds…” (Rawls 1992: 14).

In this paper I am not going to show how Gallie’s theory works in the

case of CSR concept—Okeye (2009) does it already quite successfully in a

recent article. I am going to assume the concept/conception distinction does

apply to CSR, and use this distinction to discover the conceptual core that

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precedes the different understanding of CSR.9

A series of dichotomies identify the main contrasting understandings of

CSR:

Voluntary vs. non-voluntary

Soft law vs. hard law

Governance vs. government

Business actors vs. non-business actors

Product of neo-liberalism vs. Reaction to neo-liberalism

On the left side we find attributes that associate CSR with voluntarism,

soft law, ‘governance’, business actors, and neoliberalism. On the right side we

find attributes that associate CSR also with enforcement, hard law, ‘government’,

non-business actors, and reactions against neo-liberalism. I want to argue here

not for either side of this dichotomy, but rather that neither the left nor right

side fully captures the limits and potentials of CSR. We need, instead, to move

beyond these dichotomies to reveal the nuances in the relationship between

economy and politics, states and markets, public and private actors, or hard

and soft law.

As anticipated in the introduction, the view defended here is that CSR is

worth investigation for the old concerns regarding our social life on a shared

and finite planet it brings back. These concerns are expressed by the

relationship between states, markets, and civil society, and not captured by any

of the three by itself. For this reason, it is more appropriate to talk about

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“public policies” for CSR, rather than just of measures of CSR.

Underlining this policy dimension means to acknowledge that

contributions to the end of responsible behaviour in the market sphere come

from different actors and are affected by different variables, both institutional

and informal. Crane (2008) talks of a variety of drivers of CSR, including civil

society, local communities, managers, government, investors and consumers.

State and non-state actors are both involved in CSR; soft aspects (managerial

and decisional styles, local cultures, implicit codes, incentives) matter as much

as hard laws and state regulations. The core of CSR is to be found at the

intersection, or better in the continuum, of the public and private spheres;

politics and markets; individuals and organizations; hard codes and soft law.

The view here defended is that in none of these pairs one of the two sides is

irresistibly virtuous or vicious.

The attribute “public” referred to policy for CSR is to be read in two ways.

On the one hand, it emphasis the role of governmental bodies as a driver of

social responsible behaviour in economic activities – a role exercise either

directly, through initiatives addressed to firms, or indirectly by enabling other

actors’ initiatives. On the other hand, ‘public’ refers to the quality of the

problems — problems that are of collective concerns and the solutions of

which require coordinated efforts by different actors. In either senses public as a

modifier of policy does not imply that governments are, or should be the main

authors of the initiatives.10

On old concerns, analogies, and metaphors

157

Before proceeding, I want to underline two critical statements that summarise

the nature of my argument:

1. CSR is interesting because it deals with old and intertwining moral, political, and

economic concerns.

2. The relation between politics and the market that lies at the core of CSR can be

better understood if we master analogies and metaphors

I am aware that these statements need to be made more clear, which is

what hopefully this essay will do. But since they are the main pillars11 on which

my argument stands – and they answer the crucial question “what is this paper

about?” – I would like to spend some words to introduce them.

The two statements summarise both the object and the argumentative

strategy of this paper. They are strictly related and in this argument have the

same weigh. My story could not be told missing one of two. The first

statement refers to what makes CSR worth investigating. CSR is interesting

because it brings our attention back to important, enduring concerns and

offers the occasion to rethink the relation between politics and the market.

Depending on the theory we hold — and before this, depending on the

world view we favour — we will use different attributes to qualify this relation.

Different views of politics and markets correspond to different ways of

distinguishing or assimilating the two parts of the relation. These ways, though,

have at least one thing in common: they all address the boundary between the

two parts of the relation, the limits between ‘the market and the forum’ (Elster

158

1986). The attributes we use to qualify the boundary—e.g. sharp, impermeable,

fix, shifting, dissolving or fading— reveal something of the way we interpret

the relation between the parts this boundary identify. 12 Shamir (2008), for

example, talks about dissolving boundary between politics and the market;

Brown (2006) about erosion of the boundary, Elster (1986) wants to recover a

sharp boundary between politics and economy. As we move on an imaginary

continuum between the two extremes of impermeable limits and fading ones,

something happens to the two parts of the analogy. We move from a

maximum of non - relation to a situation in which the two parts dissolve into

one another.

The last considerations bridge us to the second statement about the

importance of mastering analogies and metaphors in order to discuss the

relation between the market and politics.

The analogy between politics and the market is accurate provided we do

two things. First we need to reverse it to take account of the fact that it is not

politics that looks—better, should look— like the market, but the other way

round. Neoclassical economic and political thought is characterised by a strong

normative assumption about the virtue of the market. The neoclassical view is

described, especially by its supporters, as a realistic account of politics. But in

fact neoclassical views recommend rather than simply describe. The

recommendation is that politicians and citizens should behave like sellers and

consumers and give up any ‘romance’ about the capacity of politics to rescue

the market and correct injustice.13 Yet in the market as in politics, private

preferences and choices either contribute to or detract from collective good. Politics

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here identifies the conditions of the social life, the space of shared ends and

suitable means to achieve them. In this sense, the market, as the sphere of

economic activities is not divorced from politics, but strictly linked to it. As a

matter of the fact ‘the forum’ included ‘the market,’ the place they where

located in the city was the same in ancient Rome.

Second, we need to discuss the nature and location of the boundary

between the two terms of the analogy, ‘market’ and ‘politics.’ This boundary

marks distinct but related parts. And this is, I think, the account that better

represents the actual relation between politics and the market and that is more

appropriate to improve our societies. Differently from authors talking about

dissolving boundary, what I want to underline is that if the market overflows

politics it is because the boundary that is supposed to shape their relationship

needs to be redrawn. The boundary has been changing for as long as the entire

human history as a consequence of changing ideas about individuals and

society and of structural dynamics.

Accepting the analogy and accepting the boundary between markets and

politics implies rethinking the relationship between the political and the

economic sphere and the roles of different actors— both public and non-

public— in it.

Freedom and responsibility in the Market and in

Politics

I am going to look more closely at the analogy between markets and politics.

160

This allows me to address directly the neoclassical view of economic and

political choices.14 Furthermore, analogy as a rhetorical figure is still

appropriate to describe the relation between politics and markets, a relation in

which the two terms look to some extent alike, but are not identical. As the

philosopher Hilary Putnam reminds us speaking of the facts/values relation,

what counts in analogies are differences more than similarities (Putnam 2002).

In the style of Putnam, I argue about the appropriateness of sweeping away the

dualism between politics and the market, which does not mean to rule out the

distinction between the two.

The analogy between politics and the market is a core component of the

neoclassical view of political and economic choices. The analogy is usually

criticized by opponents of neoclassical economics for reducing politics to the

aggregation of self-interested preferences. By contrast, I think this analogy is

valid, but in the other direction.

Politics, as the space of shared objectives and concerns, is composed of

moral sentiments, principles, and values that go beyond questions of mere self-

fulfilment. But this is equally true of the market. Thinkers such as Adam Smith,

John Stuart Mill and, more recently, Amartya Sen are both moral philosophers

and economists, because they investigate the relationship between moral

sentiment and the distribution of wealth and other public goods. In the

thought of these philosophers, the notions of ‘self-interest’ and ‘freedom’ have

a broader meaning than is often acknowledged. Classical economics, at its

offspring and in its contemporary versions, holds that moral, political and

economic concerns are inextricable.

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Adam Smith similarly to his contemporary philosophy confrêres, Scottish

and French, unveils the irresistible link between economic and politics. In both

his major works, Smith argues for the connection between political and

economic freedom, which is closer to Smith ideas about political justice than

any apology of markets wisdom, as it has been underlined recently by

economic historians (Rothschild 1992; Walsh 2000).

Unfortunately the contribution of Smith the radical thinker, the friend of

Hume and Voltaire, was obscured by his first biographer Dugald Stewart. In

his attempt to defend himself from prosecution and Smith’s name from

ostracism, Stewart was indeed successful. Smith shifted from being a

revolutionary scholar, at least until mid 1790s, to being the conservative

philosopher of economic freedom and established institutions (Rothschild

1992: 75).

Vivian Walsh’s rescue of Smith as a moral and political thinker focuses on

the notions of self-interest and freedom. Walsh (2000) underlines how Smith’s

self-interest is not captured by present aims or goals, but it requires taking into

account all our foreseeable future needs. As Walsh puts it, according to Smith

true self-interest, differently from simplified and reductive versions of it,

requires focusing on life-long interests as opposed to present aims (Walsh

2000: 10).

Self-interest so interpreted comprises a strong moral and political

dimension, besides the economic one. Such dimension is at stake when

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individuals deal with concerns that are broader in space and time than the

fulfilment of particularistic, short-term, or raw desires. In Smith and classical

economics, we find an entanglement between economic facts and moral

values, rather than a sharp dichotomy. According to Walsh, Sen has rescued

Smith from the neoclassical view of self-interest as gross, short terms self-

indulgence (Walsh 2000: 11). And in fact, Sen’s capability approach is derived,

as Sen himself points out, from Smith. In Sen’s reinterpretation of poverty as

lack of capability rather than lack of income, as inability to function in a certain

society, the moral, the political and the economic concerns are inextricable.

There is nothing new in claiming that economy has always been political.

Economy has to do with the construction and survival of societies, and the

well-being of its individuals. The contemporary globalized world unveils this

strict connection and calls our attention once again on the relationship

between politics and the market.

In his homonymous essay Jon Elster criticizes the analogy between “the

market and the forum” that wants to reduce choices in the forum to choices in

the private market arena (self-interested, affecting only the chooser). Elster

defends a more demanding view of politics than the neo-classical view of

rational choice theorists. I follow Elster in his critique of neo-classical

economics, but I depart from him when I argue that the analogy should be

maintained and reversed to explore normative and policy implications of the

relationship between markets and politics, between markets and morality.

The idea of CSR has the merit of encouraging such a reversion of the

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analogy. It challenges us to rethink the interaction among state, markets and

civil society and the role of different actors in it. The two terms of the analogy

– politics and the market – are distinct but they present similarities. Actors’

moral responsibility is implied when they act in the market as in politics.

Choices in the market – consumers’ choices, producers’ choices – similarly

choices in politics have to do with the good of third parties.

Reversing the analogy between politics and economy enables us to gain a

deeper understanding of the notions of freedom and responsibility as political

rather than merely economic. Emphasis on freedom and responsibility is often

seen as the product of neoliberal emphasis on private solutions to public

problems. As politics retreats in failure or impotence, market mechanisms of

regulation advance, and with them emphasis on voluntary economic

behaviours.

Critics of neoliberalism often extend their suspicion towards neo-liberal

political logic and intentions, to the very ideas of freedom and responsibility

that accompany it. But this suspicion rests on a fundamental misunderstanding

of freedom and responsibility. The pursuit of one’s self-interest is not freedom

at least not as it is conceived in either classical or contemporary political

liberalism. Freedom is not the same in neoliberalism and liberalism, which

represent two very different views of politics and economy.

In the terms of classical liberalism, focus on market choice is just as likely

to endanger individual freedom, as it is to realize it. When citizens approach

political decisions as they approach houses or cars, as the neoliberal view of

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politics would suggest, they give up the task of evaluating political institutions.

By contrast, classical liberalism emphasizes the responsibility of citizens to act

and choose in the public interest. In classical liberalism, unlike in neoliberalism,

freedom is a demanding concept. The core meaning of freedom we find in

Locke, Kant, Smith, and John Mill is the freedom to check and remove

illegitimate power in the private, as well as the in public sphere. It is not merely

to assert private interests or ownership. Freedom, in classical liberalism, means

responsibility at its higher degree. Freedom may become so explicitly demanding

in certain liberal accounts that some critics have referred to it as “self-tyranny”

(Berlin 1969). 15

CSR: neoliberal or liberal?

CSR is based on this demanding notion of freedom and responsibility. CSR

refers to mechanisms of voluntary, autonomous behavioural control. It echoes

the account of freedom and responsibility of classical liberalism, not of

neoliberalism. Freedom is control over one’s choices achieved through rational

scrutiny, evaluation of the quality of the actors’ interests and desires in the light

of their impact on third parties — for example the chooser itself in the future,

the rest of the planet, or future generations.

Since it is neoliberalism not liberalism that is usually referred to in the

debate on CSR, I would like to say some words to distinguish the two.

Liberalism is a theory of politics and society, and therefore also an economic

theory. It includes social contract theorists such as Locke and Kant, and quasi-

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utilitarian ones as Mill.16 By contrast, neoliberalism is what political theorist

Wendy Brown calls an “impure” version of classical economic liberalism

(Brown, 2006: 694). This ‘impurity’ rests in the neoliberal requirement that

states support markets through laws and policies, but do not interfere in

matters of wealth distribution. In neoliberalism, the criteria of productivity,

efficiency, and profitability are substitutes for the juridical criteria that otherwise

govern the sphere of politics (Brown 2006: 693-696).

In criticising neo-liberalism, it is important to address the interplay between facts and

values. On the one hand, the shift from ‘government’ to so-called ‘governance,’ from

top-down to diffused authority, results from certain unavoidable facts: welfare states

are overstretched, governments are increasingly indebted, inefficient, and ineffective

in dealing with social problems. But the choice of where to spend and where to cut—

where to interfere and where to retreat—is a matter of value priorities, not just ‘facts.’

And about this interplay between facts and values, it is interesting to note, together

with Brown, how in neo-liberal times corporate responsibility became the

“watchword” of both left liberals and neo-conservatives. Supposedly animated

by very different motives, both parts lament the emptiness of moral meaning

that characterizes free market capitalism (Brown 2006). Both sides invoke CSR

to moralize the market. Other readings of the current neo-liberal times,

underline the dark side of the “the moralization of the market,” and call CSR a

product of neo-liberalism, and not a reaction to it.

Roner Shamir, for example, analyses this moralization as one of the two

processes that characterize the shift from government to governance. The

market assumes direct responsibility for issues traditionally confined to politics,

as politics progressively abdicates its tasks of regulation and control, to assume

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the more sustainable role of partner for other private sources of authorities

(‘the economization of politics’) (Shamir 2008). The result of the two

combined processes is a morality that has lost its normative and prescriptive

character to turn into business opportunity. A morality so embedded in the

market so as to become ‘toothless.’

Brown and Shamir provide a good example of criticism ‘from within’ and

‘from outside.’17 The two critiques are very similar in their premises and focus,

yet Brown’s critique of neo-liberalism ‘from within’ is more accurate than the

more widespread critiques from outside, in Shamir’s style. To anticipate the

argument of those pointing at the risk of being partisan in criticizing what is

too close to us, I will only underline that distance in itself does not make us

better critics (Walzer 2002). Tendentious account of our adversaries’ thoughts

and behaviours are at least as frequent as the accounts vitiated by excess of

indulgence for what we care about. But I think that the danger on

oversimplifying foes’ theories is more pernicious for at least two reasons. First,

because it is a closer risk — we tend to think that the so-called critical distance

is a safer path to good criticism. Second, because it both diminishes the fair-

play of the knowledge enterprise and weakens our arguments. How much

theoretical value has the defeat of a hopeless theory? I am aware, of course,

that for scholars who are not saints, the temptation is great.

We would like things to be either black or white, but the ‘morality of the

market’ is too nuanced for this. The interplay between market, politics, and

morality requires us to make distinctions and find similarities, for example

distinguishing between liberalism and neoliberalism when we talk about large

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concepts like freedom, justice, and, indeed, ‘corporate social responsibility.’

CSR is therefore useful because it challenges us to question dichotomies and

easy labels.18

In the last section I will address another important dichotomy that

characterises the debate on CSR: the opposition between voluntary and hard

regulation. I will then link this dichotomy to the unresolved question of the

divide between means and ends in politics.

Soft and hard law, means and ends. Walking the line

The divide between hard and soft laws is echoed in the dispute over voluntary

versus non–voluntary measures as the appropriate means to foster social

responsible behaviour. Because CSR refers to a relation between public and

private actors characterised by the shift from the logic of linear top-down

authority to diffused horizontal network of authorities, it questions the

discontinuity between hard and soft law, and the supposed superiority of the

first.

Generally speaking, soft law refers to mechanisms of regulations the

normativity of which does not rely on binding rules and sanctions. By contrast,

hard law refers to the regulations proceeding from the state in its legislative

function (Di Robilant, 2006: 499).

On the specific issue of voluntary against non-voluntary measures of CSR,

we can identify two extreme positions: the enthusiasts of soft laws as opposed

to the sceptics of it and defenders of hard codes. The enthusiasts hold soft law

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to be flexible, modest and tailored on real problems, and hard law to be slow,

expensive and distant from real problems and feasible solutions.19 By contrast,

the sceptics lament its lack of coherence, accountability and democracy, as well

as effectiveness. At the same time they underline the distinctiveness and

superiority of hard law and the danger of shortening the distance between the

two.20 The suspicion against soft law rises partly because of the special place

that the legislative power occupies in liberal-democracy as defence against

arbitrary power — not just illegitimate state power, but the power of any

stronger part over weaker ones. Arguments in favour of soft law are therefore

opposed because they appear to downsize the relevance of the rule of law by

claiming the efficacy and legitimacy of other form of regulations.

I proposed to look closer at the two positions to better grasp their

connections with the other dichotomies that we saw characterizing the concept

of CSR. I will first continue with a “dramatized” account of the contrasting

aspects, in order to set the problem. In the development of my argument

nuances within each side should emerge.

For the enthusiasts of voluntarism and soft law, the path goes roughly

from recognising the moral responsibility of economic actors, to claiming that

binding regulations would endanger this responsibility. In making the danger

explicit, they refers to matters of principles (responsible behaviour cannot be

imposed, it must be spontaneously endorsed, or it would cease being

responsible) and to matters of facts (command-and control measures are

expensive and ineffective). By contrast, the sceptics of voluntary measures who

defend hard codes appeal to coherence, certainty and democracy, which hard

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law has and soft law lacks. They cite the proliferation of self-imposed and self-

monitored codes of conduct of dubious effects to ground their opposition to

soft-law and voluntarism in facts, and not just theoretical and moral tastes

(Neal 2008, Epstein 2009, Vogel 2005). Yet a different line of criticism of the

soft-hard law divide moves beyond these two extreme views and claims for

redrawing the line between hard and soft, on the basis of theoretical and

empirical arguments.

The legal scholar Gralf-Peter Calliess, for example, addresses the

conditions for crossing the line between hard and soft law in global

governance regimes. As a matter of fact, global governance regimes, he argues,

often pass this line as they are based both on hard law and social norms and

have the potential and legitimacy to swing from soft to hard codes (Calliess

2009: 273). Calliess identifies two conditions for the shift from soft to hard

law. First, soft law must provide an impartial dispute-resolution procedure;

second, it must save a memory of past decisions. The first condition refers to

the possibility of resolving a dispute about what is legal versus what is illegal by

means of a third party, just like in the case of hard law. The second condition

refers to the mechanism to stabilize normative expectations of a society. Hard

law enables people not to relinquish their expectations about what is

legal/illegal, even when the expectations are not fulfilled in a specific case.

According to Calliess, legal systems can evolve through the aid of other forms

of regulations, providing these regulations satisfy the two conditions.

This evolution, the author argues, it already taking place, because when

hard codes fail to succeed in behaviour control or dispute resolution, due for

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example to their formalism, alternative mechanisms take their place. Some of

these mechanisms compete with hard law both at performance (the first

condition for trespassing the line) and at function level (the second condition

for trespassing the line from social norms to law). The author cites lex

mercatoria and internet regulations as examples of regulations that go beyond

the hard vs. soft dichotomy by fulfilling both the conditions. While other

regulations, such as CSR, competes with hard law only at the level of

performance.

CSR in Calliess’s account is an example of how corporate behaviour can

be regulated by social norms. CSR is a governance mechanism that competes

with hard codes in performing behavioural control, but not as alternative

dispute resolution. The irresponsible behaviour is sanctioned by public opinion

and not by the state. CSR is defined as codes of conduct voluntarily adopted

by companies to commit themselves to social and environmental responsible

behaviour. CSR guidelines are not directly legally binding, so they cannot be

used to resolve conflicts, yet they can be a means for producing social pressure

that in the long run will produce changes (Calliess 2009: 271-273). Public self-

commitment to responsible behaviour becomes an effective means for change

because publicity is directly linked to accountability.

Robert Goodin provides a similar statement about the link between

publicity and accountability, and the normative force of mechanisms that do

not rely on sanctions other than bad publicity and public embarrassment. He

criticises the scepticism of what he calls ‘hobbesian realpolitik tradition’

towards ‘toothless’ accountability mechanism (Goodin 1992: 135). Sceptics’

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objection is that obligation to tell publicly a good story — a story of good

management, or of environmentally responsible public procurement — is not a

sufficient constraint to irresponsible behaviour. Conversely, Goodin argues not

just theoretically, but on the bases of cases, that being exposed to public shame

may actually induce people to internalise moral norms, to be become

accountable. After all, what is today’s law was yesterday social norm,

encouraging or discouraging certain behaviours (See also Epstein 2009 on the

same point). Yet the passage between soft and hard may as well proceeds in

the opposite direction, from hard codes to soft codes and social norms. But in

this case hard code should not retreat even though they have been interiorised.

A retreat of hard code to leave space to soft code, would be like saying that

after have been punishing the homicide of an unfaithful wife as a crime for

decades, we can now rely on the interiorization of the hard code we can stop

sending uxoricides to prison and count, instead, on public shame. Besides the

above provocation, a way to argue in favour of maintaining hard code even in

those situations in which the rules have been interiorised is that keeping the

law in place is both effective and efficient. Hard codes are still good incentives

not to misbehave and when fewer and fewer people do misbehave they are also

quite cheap.

A further argument of the sceptics of soft law, as I mentioned at the

beginning of the section, underlines its uncertainty and the evanescence of its

boundaries, but mostly, its lack of democratic legitimacy. Who are the

extensors of soft law and why should we trust them to work in the interest of

responsible behaviours in the market or in politics? According to this line of

critique, state laws should be overriding because they are legitimately produced

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through democratic mechanisms. In this view, supporters of soft laws need to

answer two main questions: what are the criteria for regulations to be soft

laws? What is the relation between soft law and democracy? (Pariotti 2009)

Concerning the first question and the problem of the criteria, authors who

defend continuity between hard and soft law, hold that these criteria should

balance between strictness and flexibility. They should not be too strict, in

order to avoid a state-centric views. And they should not be too loose and

inclusive, in order to avoid that any social, economic, cultural pressure or

practice results in a norm. The objective in this case is to find the right balance

between hard and soft modes of juridical normativity (Pariotti 2009).

Concerning the second question and the problem of democracy and soft

law, the matter under discussion is how the spread of soft law affects

democracy. Some authors have underlined that we can reconcile self-regulating

behaviour of non-state actors with democratic legitimacy once we redefine

democracy and move beyond a merely procedural conception and closer to

forms of participatory and reflective democracy (Mertus 1999). Thoughts and

critiques to democracy, Mertus underlines, are triggered by the contemporary

state of affairs characterized by globalisation and neo-liberal devaluation of

democracy and legal standards in favour of privatization of authority and rules.

Some of these critiques claim for de-politicization in favour of deliberation

(Pettit 2004, 2003; Elster 1986). Others instead claim for more participatory—

democracy from below (Mertus 1999, Brown 2006, Urbinati 2010). There is a

thin line between the two criticisms to procedural democracy, but this is not

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surprising, since both criticisms build on Jean-Jacques Rousseau’s political

theory.

The first line of criticism calls for less democracy (in the sense of majority

decisions) and more rational deliberation through dedicated bodies of citizens.

It refers to Rousseau as the father of consensual and deliberative democracy,

rather than of majoritarianism.21 The ISO 26000 standards of social

responsibility, for example, may be seen as the results of a non democratic, but

deliberative setting of decision. The second line of criticism calls for more

democracy, but of a different kind—democracy from below as opposed to

institutionalised representative democracy, and appeal to Rousseau’s idea of

democracy as self-government. In her appeal to “doing democracy differently.”

This appeal to democracy of a different kind could be an argument to defend

the actions of NGOs against the accusation of being illegitimated because not

democratically elected. On this regards, Mertus argues that strict conditions of

participation, transparency and accountability should be in place and they

should include national and trans-national civil society, in order to substantially

improve democracy and its processes.22 I would add that strict conditions are

required also to avoid that substantive, participatory democracy translates into

appeals to the “will of all” of a bad populist kind. Rousseau himself was careful

in distinguishing the “general will” from the “will of all.” The first is the will of

the people when they are deliberating for the general, and not for the

particularistic good, on the basis of their considered judgments, and not just

raw self-interests. The second is the mere aggregation of the votes of

contingent majorities.23

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The heterogeneity of thoughts and criticisms that characterises ideas and

practices of democracy challenges those who defend the continuity between

hard and soft law. The dichotomy between binding and non-binding normative

tools, according to many authors, loses importance. The so-called soft law is

after all still based on standards, it has a system of accountability, and it is

effective in filling the gaps of hard law (Pariotti 2009: 101). Its informality and

bottom-up character is argued to take better into account the cultural

specificities that influence the respects of the norms. What prevents soft law

from becoming a legitimate normative tool is a still dominant positivistic idea

of law.24

In this view, rather than worrying for the lack of democratic legitimacy, we

should engage with more substantial conceptions of democracy. Because,

Pariotti continues, it is time to move beyond the dichotomy between a world in

which juridical community and political community overlap via the rule of law

and one in which norms are produced by private actors and the civil society.

The dichotomy does not represent the current state of the world in which law

becomes autonomous from nation-states and their politics and subjected to the

influence of other actors and dynamics (e.g. business and civil society actors

and economics dynamics) (Pariotti, 2009: 104). Pariotti does not argue that law

is arbitrary, as post-modern conceptions of law do, but that it has a rationality

that precedes and overcomes nation state boundaries. Governing is no longer

an exclusive prerogative of nation-states in the age of governance, when the

capacity of governing has been dispersed among a wide range of state, non-

state and transnational actors.25 This may as well be the case, but the way we

manage the shift from procedural to substantial ideals and practices of

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democracy, and bridge the gap between government and governance still

makes a difference. The link between means and ends is a crucial one, either

when discussing ideals of democracy, or when defending tools of regulations in

times of governance.

CSR seems based on the idea that soft law is better than hard law. Rules,

regulations, and codes seem more and more autonomous from nation-states

and their politics, more and more subjected to the influence of other actors

and more voluntary dynamics (for example, business and civil society actors

and economics dynamics). Voluntarism and autonomous regulations are

therefore key aspects of the concept of CSR. But, returning to the distinction

with which I began, do these ideas refer to the concept of CSR, or are they

merely one conception of it?

Voluntarism, I think, does not lie at the core of CSR concept. Voluntarism

is not related to CSR’s ends, but rather to its means. Yet CSR is not only about

means, or particular measures, but also about ends: fair distribution of rights and

resources in the interests of each and every person. Voluntary or non-

voluntary, narrow or broad, neo-liberal or left-liberal readings of CSR all have

to do with conceptions, not with the core concept. The concept of CSR has to do

with ends. Behaving in a responsible way in the economic sphere, when

producing, distributing, consuming goods, or when dealing with the waste

generated by consumer society, requires hard as well as soft regulations.

Voluntary as well as non-voluntary measures are both appropriate, depending

on the institutional setting, quality of existing laws, and the kinds of

relationships between state and non-state actors that exist in particular places.

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Conclusions: What’s in a name?

There are views that contrast states and markets and consider them two worlds

apart. Holders of these views, in some cases, stretch the politics and the market

opposition to the point that they hope one of the two worlds absorbs and

cancels the other – since genuine non-interference appears to be neither

feasible nor desirable. Adversarial views of politics and the market are held

both by apologists and castigators of the markets. My argument started not just

from the dissatisfaction with such views and their Manichaeism. In this essay I

wanted to appreciate that other ways of the relation between politics and the

market are possible. Contributions that investigate these ways are useful to

improve theory soundness and policy efficacy.

The prerogative of this kind of reading is that it maintains the boundary

between markets and politics, while redefining this boundary as a means of

relation, exchange, and coordination. Boundaries and limits, are not merely

barriers that prevent expression and communication, they are, to use Kant’s

insight, enabling conditions.

When contemporary socio-economical, political or legal scholars talk

about the flood of the economic into the political sphere, they are describing a

boundary that seems no longer suitable to shape the exchange between the two

sides. I think that to question the quality of the boundary – an artificial

boundary that is still there to be discussed and redesigned – is a more

important task than claiming for the boundary break to the advantage of either

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the ‘market or the forum.’

My argument builds on two distinct points. First, ‘politics and market

analogy’ can be maintained, but should be reversed. Second, the two terms of

this analogy (as in any analogy) share some features, but are distinct, because

there is a boundary in place between them. We see this boundary shifting and

broadening the market or the politics side, depending on contingencies, and

interests of powerful actors (but also depending on fashionable lines of

criticism). When we hold a more normative or philosophical view of this

boundary, we wants to discuss the quality of it, and the justice and well-being

that it allows or prevents. Once cleared the field from easy adversary attitudes,

there is something that can be said about how to make the boundary more

consistent with the current state of affairs and the ends of global justice.

Social and environmental urgencies, welfare state-overstretch, globalized

competition, information technology spread, and the multiplication of players

and rules of governance call theorists and practitioners to think about more

appropriate limits between the market and politics. Markets and politics are

distinct, and this distinction is important, but they cannot and should not be

conceived as alternatives. Discussing the limits means to look for solutions to

improve their relationship that are both feasible and desirable, and CSR

policies can be among these solutions.

I would like to conclude by raising a question: what happens when we

change the name ‘CSR’? Do we change the name to our conception of CSR, or

do we change concept?

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Different labels are used to evoke different conceptions of CSR. The label

renames the concept to make explicit the conception of CSR proposed. This is

what John Rawls did about the concept of justice, when he named his theory

“Justice as Fairness.” In other words, the proposition is “CSR as X,” where X

is the conception we choose to defend, but the subject is still CSR. But it is

also possible to change concept when changing name. In this case, we might

change the very name ‘CSR’ because we are abandoning the concept

altogether. This is what Simone de Beauvoir did about women’s condition,

when she argued it was not a matter of equality, but of freedom. The

proposition here becomes “Not CSR, but rather Y,” where Y is some new

concept, a different subject matter that we think more useful in framing the

relationship between market and politics. Both these possibilities demand

better insight into what the concept of CSR includes and what it excludes.

In this paper I argued that the concept of CSR has to do with the morality

of the market—the old entanglement among moral, political and economic

concerns that has been at the centre of philosophical, economic and political

theories before the rise of any disciplinary boundary. This is the rediscovery of

old concerns that CSR puts forward, and in it rests its core, that precedes its

name.

Notes

1 This paper owes much to the discussions with Patricia Almeida Ashley and the

research group ‘Interactions between civil society and markets’ and to comments from

Bert Helmsing and Peter Knorringa.

2 On the modernity of liberalism see also Sheldon Wolin (1960, last edition 2006).

3 There have been forerunners of liberalism for example in the ancient Athens of the

sophists and Socrates, and in Rome of Cicero and the stoics. I will here refer mostly to

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the historical offspring of liberalism in seventeen century Europe and only

incidentally to its ‘pre-history’ (Gray 1986) in classical Athens and Rome.

4 I follow Rawls’s use of “idea” as defined in Political Liberalism: “I use ‘ideas’ as

the more general term and as covering both concepts and conceptions.” (Rawls 1992:

14)

5 Adaeze Okoye (2009) provides a thorough and up to date overview of the main

theories of CSR, and the terminology used to refer to the concept.

6 Gallie introduced the attribute of essential contestability out of the dissatisfaction for

the usual stances held on philosophical questions. Stances commonly assumed are of

dogmatism —my answer is right, the others are wrong— or of scepticism — all the

answers have the same weight for nothing definitive can be argued on normative

matters. Built to solve a problem, the argument gives rise to new ones.

7 For those interested in a closer overview of the two positions, John Rawls addresses

the concept/conception problem in A Theory of Justice (1971) and Political iberalism

(1992); Jeremy Waldron (2002) and Abbey (2005) also apply Gallie’s argument; the

former to law and the latter to liberalism.

8 I am here drawing mainly on Fred D’Agostino’s account (1996). In his Free Public

Reason the political philosopher offers a synthetic and exhaustive review of the

difference between concept and conception (D’Agostino 1996: 15-21).

9 For a similar application of the concept/conception distinction to liberalism, see

Sartori (2004).

10 Yet it does imply that governments should play a role in them and therefore share

part of the responsibility with business and other non-state actors. Many recent

contributions on the topic of CSR go in this direction and recognise government as

one of the driversYet it does imply that governments should play a role in them and

therefore share part of the responsibility with business and other non-state actors.

Many recent contributions on the topic of CSR go in this direction and recognise

government as one of the drivers of CSR. See for example Fox (2002); Moon (2002,

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2008); Vogel (2005); Albareda et al. (2008); Neal (2008), Steurer (2009); Epstein,

(2009).

11 I chose the image of the pillars thinking more about Ken Follett’s trade book title,

than about European Commission’s vocabulary.

12 For a recent contribution on attributes and theories of the boundaries in the age of

globalisation, see Canale (2009).

13 To grasp the normative nuance of neoclassical view of economics and politics see

for examples William Riker’s account of democracy in Liberalism against Populism

(1982), or James Buchanan’s account of politics failures, in “Public Choice. Politics

without romance” (2003). For a criticism of the value assumptions of neoclassical

economics see Wendy Brown: “Part of what makes neo-liberalism “neo” is that it

depicts free markets, free trade and entrepreneurial rationality as achieved and

normative, as promulgated through law and through social and economic policy - not

simply as occurring by dint of nature” (Brown 2006: 694).

14 Other theory of economics has smoothed the reductionism of neoclassical view of

individual preferences as given, for example underlining the relevance of motivations

and intentions other than self-interest in importance of the setting of choice. There is

for example a stream of “revisionist public choice.” “the mainstream public choice

position is one that emphasizes a relatively narrow conception of self-interest as

motivating choice in the political as well as the economic domain. By contrast,

revisionist public choice theory seeks to move away from the strict conception of

homo economicus, and this movement operates in several dimensions.” (Brennan and

Hamlin, 2008: 2; Christiano, 2004).

15 On this point, see Isaiah Berlin’s famous reading of Kant’s and Mill’s instable

positions between Locke and Rousseau in Two concepts of liberty (1969).

16 On the eccentricity of Mill, see Mill on Liberty. A defence, by John Gray. See also

Gray (1983) for an historical and philosophical account of liberalism, and my “Think

liberalism?” on different conceptions of liberalism as a political theory (Lebano 2009).

181

17 For the distinction between criticism ‘from outside’ and criticism “from within,”

see Michael Walzer’s argument in The Company of Critics (1998, second edition

2002) and Nadia Urbinati’s distinction between ‘radical criticism’ and ‘criticism from

within’ (Urbinati 2009).

18 In many cases unsound adversary attitude does not help. The label CSR is used as

much by left and by right critics of neo-liberalism; Kant and Mill are theorists of

negative liberty, as much as the far-too-liberal Locke, but at the same time they

embrace positive liberty, just as the not-exactly-liberal Rousseau.

19 Anna Di Robilant distinguishes between a “neo-medievalist” and a “social

genealogy” of soft law, both underlining the merits of soft law. In the author’s words,

the fist genealogy depicts soft law as “the ideal tool for strengthening the European

market, eliminating the obstacles resulting from the diversity of national laws and

responding to the actual needs and demands of the business community.” The second

genealogy underlines “soft law pluralistic dimension and social potential” (De

Robilant, 2006: 502-503).

20 See for example J. Klabbers, “The Redundancy of Soft Law,” in «Nordic Journal

of International Law», 65, 1996, pp. 167-182; J.J. Kirton, M.J. Trebilcock (eds.), Soft

Law and the Elusive Quest for Sustainable Global Governance, Aldershot, Ashgate,

2004. For a critical assessment of the sceptic position, see Pariotti (2009).

21 This is a difference that both critics from the left and from the right omit to

underline. Radical left critics share one of their dearest dichotomies (the Locke vs.

Rousseau one) with their neoliberal foes, even though they stand on opposite sides of

the boundary. For an account of Rousseau’s duality, see Gaus (1997), Burgio (1989),

Cohen (1986) and my “Is Rawls a populist? Liberalism and ‘good’ and ‘bad’

populism,” MPSA-Paper, Chicago 2009.

22 On the role of civil society, voluntary associations as a key too improve democratic

states, see Joshua Cohen’s and Joel Rogers’s article in Associations and Democracy:

the real utopias project (1995).

23 On the fundamentals of the social contract, not majority but consensus is requires.

182

Rousseau ([1762] 1973).

24 On this point see also Calliess and Renner (2009).

25 “[t]he essence of governance is its focus on governing mechanisms which do not

rest on recourse to the authority and sanctions of governments” (Stoker 1998:17).

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