Are oil companies really upholding a social responsibility?

When Dr. Ward from DigitalGlobe Intelligence Solutions was speaking today, he mentioned that their program was used to identify points where oil was being stolen specifically in Nigeria. He said that the program wasn’t there to get people in trouble, but instead to help the oil companies identify which groups were stealing the most so the oil companies could work with the communities stealing the most oil to provide them with jobs, support the local economy and improve their relationships with these communities. Without meaning to sound rude, I asked him if there was any evidence that these companies were actually helping these communities move forward. He actually had personal experience with this, having lived in Nigeria while his father worked for a major oil company and collaborated with the local communities. I was interested in learning more about this topic, and I’m glad he touched on it for a bit.

In looking into it further, I was surprised about the number of articles discussing the positive impacts of the oil companies. It seems that there is an increasing expectation of oil companies to uphold their social responsibility to the countries in which they work. This article, for example, discusses how Chevron is partnering with Baylor Global Health Corp. to provide medical training and support research on child mortality in Liberia, where they are also looking for oil. The article says, “Altruism is part of it. So is business”. However, there is no way that this article is telling the whole story. It is great that oil companies are starting to take their social responsibility more seriously, but I was surprised there weren’t more articles describing the damage that big oil companies can do on developing countries.

Dr. Ward also talked about how a big challenge for oil companies in supporting the well being of local citizens is that often when these companies give money as part of their social responsibility, they have to give it through the local government. This means that they have little control over how the money is actually used, especially in developing countries where corruption is an issue and money is rarely allocated as it should be. This article discusses that many developing countries rich in oil face paradoxically face high and growing levels of poverty because of this kind of corruption. They also outline policy measures that international oil companies should take to begin to address these issues. Suggested measures include “Requiring companies to make public what they pay to governments to extract natural resources,” and “Increasing the transparency of extractives contracts and strengthening government officials’ ability to negotiate contracts that are beneficial to the country and its people.” Though the article does not talk about the role of ICTs in achieving these goals, after Dr. Ward’s presentation I think ICTs could play a huge role in implementing these measure. For example, they could be used to increase transparency of extractive contracts by making these contracts available online. As energy becomes a scarcer resource every single day, it will be important to keep in mind the impact of this scarcity on the developing world.

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About kbruce2016

Junior studying Public Health and International Development, interning at the UNHCR this summer! View all posts by kbruce2016

3 responses to “Are oil companies really upholding a social responsibility?

  • vceaser

    To me, oil companies and altruism are both terrifyingly ironic and a paradox if I’ve every heard of one. I’m biased, however, and I suppose the efforts of any company attempting to implement social change should be appreciated. The reason that developing countries rich in oil often have extreme levels of poverty is that 1) these are transnational oil companies-profits are not being pumped into the local economy and 2) profits that are shared in the country are concentrated in the very top of the socioeconomic ladder. I think one way these oil companies can be more socially minded is not simply giving money to corrupt governments, but really trying to incorporate the local community into the company. ICTs could be used for the the training and proliferation of knowledge needed to be employed by the oil companies. Building a local workforce in the oil companies would be fantastic for the economic development of the nation. However, this is in an infrastructural change that doesn’t have the same “pazazzz” as saying the company donated millions of dollars, and thus I’m not sure how oil companies would react to this idea.

  • jboleky

    The thing that I don’t understand with regards to oil companies practices, is they are not even acting in their own interest. To explain what i mean, consider the BP oil spill in the gulf. By ignoring regulations and saving MEASLY amounts of money they now have to pay Billions of dollars, lost millions of barrels of oil, had to suspend operations in the golf for many weeks losing all that revenue, pay for investigations into their company, launch a hundred million dollar PR campaign, have permanently lower sales (at least in the southern US) and lost tax breaks. They risked all of this for a couple million saved in operating costs by not listening to regulations? It doesn’t even make sense. So i find it strange, not that oil companies are becoming smarter and looking at the problem holistically and solving it the most effective way, but that its taking them so long to realize this is the best solution. So it might be possible to get a company to change its practices by explaining to them in person why its in their OWN interest many times to solve problems like this. Or maybe they’ll ignore you like they usually seem to do. But this is certainly a good example of solving the problem the right way and actually having it get smaller and eventually become a non-issue. Thoughts?

  • jgallag2

    I am glad you asked this question in class because it would have been easy for us all to assume what we did anyway and as vceaser points out that we think oil companies have no intention of promoting social good. However, Dr Ward’s very human response reminded me that on the ground in a foreign country something may actually be implemented very differently than we would expect and its unfair for us to make those judgments when we are the ones hoping for and expecting social change.

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