Corporate Social Responsibility: Case Study Of Community Expectations And The Administrative Systems, Niger Delta

Poor community-company relations in the Niger Delta have drawn attention to the practice of corporate social responsibility (CSR) in the region. Since the 1960s, transnational oil corporations operating in the Niger Delta have adopted various CSR strategies, yet community-company relations remain adversarial. This article examines community expectations of CSR and the influence of the traditional, political, and administrative systems on community expectations of CSR in the Niger Delta region. An overview of CSR, oil industry CSR practices in the Niger Delta, and the methodology used is presented. The findings show that community expectations were framed through the lens of underdevelopment and its implications for the social and economic well being of the indigenes. The implications of the traditional, political, and administrative systems and the network of organizations for CSR in the Niger Delta are discussed. Keywords: Corporate Social Responsibility, Community Expectations Community-company Relations, Sustainable Development, Case Study, Niger Delta

Community expectations of responsible corporate behavior often form the basis for community attitude toward business corporations (Idemudia & Ite, 2006). In the Niger Delta, poor community-company relations correlates to several factors including the lack of consideration for the views of the communities and the domination of the oil industry by the government and the transnational oil corporations (Frynas, 2005; Frynas & Mellahi, 2003; Idemudia & Ite, 2006; Ite, 2004). A common occurrence in such politically constructed systems of disparities is that frustration ultimately erupts into violence. The displeased groups revolt against the existing order when they become conscious that the dominant actors systematically thwart their attempts to overcome their plight (Reimer, 2004; Wai, 1978). In contrast, when people claim ownership of an object or process, by virtue of stewardship or having an influence in the process, they protect the object or process.

The increasing global demand for fossil fuel energy highlights the strategic significance of the Niger Delta (Center for Strategic and International Studies [CSIS], 2004). Instability in the Niger Delta has had an impact on the price of crude oil in the international market (Ikelegbe, 2005, 2006; Watts, 2004). The region generates about 5% of crude oil supplies to the United States and exports substantial amounts of crude oil to China, India and other countries (Watts, 2004). According to Watts, the US Congressional International Relations Sub-Committee on Africa acknowledged the significance of Nigerian oil, taking particular note of its strategic value, high quality, and the low cost of its reserves.

The escalation of violence in the Niger Delta has imposed substantial costs on the Nigerian government, the oil corporations and the communities (Congressional Research Service [CRS], 2012; CSIS, 2004; Idemudia, 2007a; Omeje, 2006). In 2005, Chevron-Texaco lost roughly $500 million and in 2006, the Shell Petroleum Development Company (SPDC) of Nigeria lost $6.8 million per day due to widespread violence in the Niger Delta (Amnesty International, 2005; Watts, 2007). Continuing hostility toward the oil companies indicates that past CSR practices in the Niger Delta left gaps that require further examination of community expectations of CSR in the Niger Delta (Idemudia & Ite, 2006; Ite, 2004; Livesey, 2001).

As businesses continue to expand beyond national borders, transnational companies located in developing countries will increasingly be confronted with issues related to sustainable development. Corporations that align business interests with community interests in terms of CSR objectives can minimize the risks and liabilities associated with operating in culturally different regions from their home countries (Bertels & Vredenburg, 2004; Grossman, 2005; Lépineux, 2005; Porter & Kramer, 2006; Thompson, 2005). An understanding of local community expectations will aid companies operating in rural communities to integrate community expectations into CSR strategies, and align company and community interests in developing countries.

This article examines community expectations of CSR in the Niger Delta in the context of the traditional, political, and administrative systems, drawing from primary research conducted in the region. The goal is to provide an interpretive framework through which a better understanding of the expectations and demands of the various interests groups in the region can be attained. The following sections include a summary of key concepts in the CSR literature and a review of CSR practices in the Niger Delta. Following that is a description of the data collection and analysis procedures. The article concludes with a discussion of the findings and the implications of the administrative systems and the local organizations on community expectations of CSR.