Corporate Social Responsibility: A Case Study of Royal Dutch Shell in the Niger Delta

Abstract

According to Nasin et.al, 1997: ‘CSR  issues progresses from a period in which the issue was thought of to a period of increasing awareness and expectation for action and then to a period when new standard for dealing with issues become ingrained in the normal functioning of the company’

This research work highlights shell’s CSR in the Niger delta region which has and is still facing a lot of issues which encompasses what Nasin et.al had stated. These issues began sub-consciously from the point shell failed to be proactive in their dealings with the communities in the Niger delta which gave birth to the first stage of their problem, allowing the citizens of the community to think of the issues arising from the exploration of oil & gas from their lands. 

Shell failed to understand the basics of CSR and the basic strategy of CSR which is DEVELOPMENT. They failed to develop the communities they were getting their gains from. They couldn’t bring their business and the society to co-exist, which the principle of CSR. Instead they collaborated with the government of Nigeria and promoted corruption and lack of transparency by the Nigerian government which has led to the failure in governance of Nigeria.

Shell might have had and still have very good CSR initiatives but have failed and would still fail. WHY? This would be analyzed in this research work. 

Communities have termed Shell’s CSR projects as ‘GIFTS’, they have failed to offer genuine development which would benefit the present and future generation. Why?

Conflicts arising frequently due to their CSR problems, which have also led to a decline in their revenue/ profits from the Niger delta region. Why is Shell’s CSR problem causing conflicts in the Niger delta region?

The foundation of Shell’s CSR was bad; it wasn’t well implemented and organized. They failed to unite the two ingredients of CSR- BUSINESS and SOCIETY. They focused majorly on the business aspect of the CSR but failed to align the society aspect with their CSR. 

As said by E. F. Schumacher; ‘[if] the rural people of the developing countries are helped to help themselves, I have no doubt that a genuine development will ensure… [but it] cannot be produced by skillful grafting operations carried out by foreign technicians or an indigenous elite that has lost contact with the ordinary people’.

This statement clearly states why Shell’s CSR initiative has and will still continue to fail.

Table of Contents

List of Figuresvi

List of Tablesvii

Acknowledgementsviii

Dedicationix

Chapter 1 - INTRODUCTION1

What Is Corporate Social Responsibility(CSR)1

Background Of Study…………………………………………………………………………..2

Problem Statement……………………………………………………………………………...2

Aim Of Study…………………………………………………………………………………...3

Objective Of The Study………………………………………………………………………...3

Research Questions……………………………………………………………………………..3

Research Hypothesis……………………………………………………………………………4

Scope Of The Study…………………………………………………………………………….4

Limitations Of The Study………………………………………………………………………4

Explanation Of Some Concepts………………………………………………………………...5

Niger-Delta 5

Multinational Corporation…………………………………………………………………...6

Stakeholder…………………………………………………………………………………..6Shell Nigeria ………………………………………………………………………………...7

Shell Petroleum Development Company7

Shell Nigeria Exploration And Production Company…………………………………………7

Shell Nigeria Gas…………………………………………………………………………………..7

Shell Nigeria Oil Products………………………………………………………………………..7

Nigeria Liquefied Natural Gas……………………………………………………………………8

CSR,The Oil Industry And SPDC……………………………………………………………8

Chapter 2 – Literature Review11

Theoretical Underpinnings Of CSR….……………………………………………………..11

Classification Of CSR………………………………………………………………………14

Drivers………………………………………………………………………………………18

Determinants Of CSR Practices In Developing Countries………………………………….24

Theoretical Background Of CSR……………………………………………………………26

Contemporary Issues In Corporate Social Responsibility…………………………………..27

Communities Responsibilities………………………………………………………………28

Shell's CSR………………………………………………………………………………….29

Shell's Approach To Sustainability………………………………………………………….35

Progress And Barriers In Relation To Sustainable Development In Shell………………….36

Chapter 3 - Methodology41

Introduction…………………………………………………………………………………41

Methodological Issues And Research Implication………………………………………….41

Research Design…………………………………………………………………………….43

Research Tradition And Case Study Approach……………………………………………..44

Case Study Selection And Implication For This Study……………………………………..46

Case Study Design, Analysis And Validity Issues………………………………………….48

Data Collection Methods, Process And Tools………………………………………………51

Negotiating Access, Building Trust And Ethical Dilemmas………………………………..52

Sampling Methods…………………………………………………………………………..54

Secondary Data…………………………………………………………………………...…55

Chapter 4 - Shell's CSR………………………………………………………………………….56

Emergence Of Corporate Social Responsibility At Shell………………………………..56

Goals, Objectives And Interest Of An Oil Producing State……………………………..60

Goals, Objectives And Interests Of Oil MNCs…………………………………………..62

The Drivers Of Shell's CSR Policies In Nigeria…………………………………………62

The Impact Of Local Community Pressure……………………………………………...64

The Impact Of International Scrutiny Of Nigeria Shell Operations……………………..67

Shell's General Business Principles……………………………………………………...67

The Pillars Of Shell's CSR Programme In Nigeria………………………………………69

Chapter 5 - Result And Recommendation……………………………………………………….71

Introduction………………………………………………………………………………71

Main Findings……………………………………………………………………………72

Government Development Efforts In The Niger-Delta………………………………….81

Recommendation………………………………………………………………………...83

Conclusion……………………………………………………………………………….86

References88

Appendix A - Questionnaire89

Appendix B – Nigeria Oil And Gas Map91

List of figures

Figure 2.1. Clasification of literature on CSR in developing countries…………………………14

Figure 2.2. Drivers of CSR in developing countries…………………………………………….18

List Of Tables

Table 1. Developing countries CSR features and contextual factors affecting CSR practices…..25

Table 2. Transition from CA-CD-SCD…………………………………………………………..34

Table 3. Environmental data……………………………………………………………………..37

Table 4. Social data………………………………………………………………………………38

Table 5. Quality assurance issues dealt within this research………...…………………………..50

Table 6. Source of evidence, strengths and weakness during data collection methods and tools.51

Table 7. Sampling methods………………………………………………………………………54

Acknowledgements

I would like to say a big thank you to God almighty for giving me the mental strength, the finance and sound health to write this paper. Also I would like say a big thank you to my mom for her support and prayers all the way till the end of this research. Also I want to say thank you to Ani Adaeze for her encouragement and moral support all through the course of this paper. And to Mr Evans Adikoni for introducing me to this programme, God would continue to bless you wherever you are. And my very wonderful friends, Odia Maxwell and Jonas Chinonso for being there for me at all times. God bless you all.

Also I would like to appreciate JPTS for giving me this opportunity to write this paper and expand my knowledge on this topic. They’ve made me make a difference by writing this paper. 

Dedication

I dedicate this paper to God almighty for making this paper a success. I also want to dedicate this paper to my fiancée Ani Adaeze, Mr Adikoni Evans and my two wonderful friends, Odia Maxwell and Jonas Chinonso