CR development and NGO-business engagement over time in a developing country context

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1 | P a g e CR development and NGO-business engagement over time in a developing country

context

Student: Jan-Paul Meijer Student Number: 10518193

Business Studies: International Management Final Submission: 25th_{May 2014}

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ABSTRACT

Purpose – This paper aims to understand how a company’s CR and engagements with NGOs develop over time, in a developing country context.

Methodology – The study analyzes Shell International CSR reports published between 1997 and 2013, SPDC reports published between 2000 and 2006, and various reports published by NGOs such as Amnesty International and Christian Aid. The data is analyzed through a content analysis to make preliminary conclusions. Further analysis is done through a thorough time-series analysis. The data analysis focuses on CR types and NGO-business engagements forms over time.

Findings – The findings show that CR develops towards a higher form over time. Subsequently, the engagement forms with NGOs develop towards a higher degree of integration.

Value – The paper shows how CR and forms of engagement with NGOs develop over time. It also expands theory on CR in developing country contexts, and provides paths of future research.

Keywords – Sustainability, Corporate social responsibility, Non-governmental organizations, Nigeria, Oil and Gas industry, Philanthropy, Integration, Innovation, Sponsorship, Dialogue, Partnership

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1 Introduction

Non-governmental organizations (NGOs) and corporations engaging in a relationship to tackle social or environmental issues is a relatively new phenomenon that started to emerge around the 1990s (Murphy and Coleman, 2000). Previously, NGO-business relationships were mostly adversarial (Bendell, 2000; Yaziji, 2004). Until the 1990s it was seen as impossible to align the goals of businesses and NGOs. Major scandals such as the dumping of the Brent Spar and the execution of Ken Saro-Wiwa brought attention to major multinational corporations (MNCs) and their malpractices to the communities and the environment. Simultaneously, the emergence of a globalizing economy saw an increase in powerful MNCs coupled with a diminishing role of the state, which led to the creation of the governance gap (Newell, 2000). NGO-business relationships changed from being adversarial to cooperative. By cooperating with NGOs, MNCs gained credibility for taking Corporate responsibility and minimizing the governance gap (Bendell, 2000).

Research has identified country differences in Corporate Responsibility (CR) practices which are reflected by differences in their national contexts (Aaronson, 2003; Chapple & Moon, 2005; Maignan and Ralston, 2002; Welford, 2004). There is a much larger amount of research on CR in developed countries than there is of developing countries or emerging markets, although it is debated that the need for CR is greater in developing countries due to fewer constituencies and institutions providing social goods (Li et al, 2010; Baughn, Bodie & McIntoch, 2007; Dobers & Halme, 2009). Institutions are an important factor in economic development, but the interaction between multinational corporations and host country institutions is not well understood yet (Wiig & Kolstad, 2010). Because relatively little research has been done on CR in the context of developing countries, it might suggest that CR research originating from Western countries may be inapplicable for developing country contexts (Fox, 2004; Prieto-Carrón et al., 2006; Ewing and Windisch, 2007). Therefore this research will focus on a developing country context, Nigeria.

Furthermore, research on NGO-business relationships is still scarce (Holmes and Moir, 2007), but over the past decades, the amount of NGOs and their power have increased significantly (Bendell, 2000;

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7 | P a g e Doh and Teegen, 2003; Teegen, 2003). Only recently have researchers started to emphasize the need to study relationships between NGOs and MNCs (Kolk and van Tulder, 2004; Tulder and van der Zwart, 2006). NGOs are a potentially rich area for future research for International Business researchers (Teegen, Doh and Vachani, 2004).

So far, no longitudinal studies have been conducted where the development of a MNC and how its relationships with NGOs have developed over time. This thesis will try to fill that gap by providing how CR approaches have changed and also how NGO-business engagement forms have changed. This thesis will also try to contribute to CR literature in developing country contexts. Therefore, the following research questions have been formulated to try to fill these research gaps.

How does a company’s CR approach develop over time?

How do NGO-business relationships develop over time?

This study focusses on a major oil company operating in a developing country context. Shell has been operating in the Niger Delta since the 1950s. While the Nigerian Federal Government is a major stakeholder in the Shell Petroleum Development Company (SPDC), and 95% of the company’s revenue flow to the government, the country remains largely underdeveloped and characterized by extreme poverty.

1.1 Outline of the thesis

First, the literature review will provide an overview of existing literature regarding the subjects corporate responsibility and NGO-business engagement forms, mainly based on the works of Austin and Kourula. Second, the methodology of this thesis will be explained, followed by the empirical findings and a discussion of these findings, where the research questions will then be answered through content analysis and a time-series single case study. In the discussion, a new theoretical framework will be proposed. The thesis will conclude with the conclusions in which the main findings will be discussed.

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2 Literature review

This section will present the most relevant and recent studies on the research topic. To put the research topic into context, the first section will provide an overview of current CR literature. The second section will provide an overview of the literature on NGO-business relationships. The final section will provide a short summary and discussion.

2.1 Corporate Social Responsibility

The literature has provided a variety of CR definitions and underlying mechanisms (McWilliams et al., 2006). In the business and social literature, CR has gained popularity over the last decade. The literature is highly fragmented, despite the various literature reviews that have been published (Aguinis and Glavas, 2012). The reason of such a high degree of fragmentation is due to the fact that CR is a dynamic phenomenon, there are no clear boundaries, and scholars study CR through different disciplinary and conceptual lenses (Carroll, 1999; Garriga & Melé, 2004; Waddock, 2004; Lockett, Moon & Visser, 2006). Bowen’s book on CR in 1953, marks the beginning of CR and from there on the field has grown significantly and now contains a proliferation of theories, approaches and terminologies (Garriga and Melé, 2004). Definitions of CR fall into two general schools of thought, those that argue that business is obligated only to maximize profits within the boundaries of the law and minimal ethical constraints (Friedman, 1970; Levitt, 1958 cited in Schwarts and Caroll, 2003), and those that suggest a broader range of obligations towards society (Andrews, 1973; Carroll, 1979)

Dahlsrud’s (2006) study on the definition of CR identifies many available definitions of CR, but they consistently refer to five dimensions: stakeholder, social, economic, voluntariness, and environmental. The definitions that are used by different scholars and organizations are mostly congruent, which makes the lack of a single universally accepted definition less problematic than has been identified in the existing literature. According to Dahlsrud (2006) the most commonly used definition of CR is from the Commission of the European Communities (2001): “A concept whereby companies integrate social

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9 | P a g e and environmental concerns in their Business operations and in their interaction with their stakeholders

on a voluntary basis.” This definition relates to all five dimensions of CR.

2.1.1 Typologies of Corporate Responsibility

Over the recent years, various typologies CR has been developed. Unfortunately, most of these typologies have been developed to serve research purposes, and therefore do not translate well to CR managers’ efforts of CR at their companies.

Halme and Laurila (2008) have distinguished three main typologies of CR:

1. motivation-based,

2. expected responsibility-based and 3. stage typologies.

Ad 1. It is possible to make distinctions between firms or their management based on the motivation to undertake CR efforts. Husted and Salazar (2006) distinguish three CR types based on the motivation of the firm. They differentiate between altruism, enforced egoism, and strategic intent. Windsor (2006), on the other hand, makes the distinction between economic and ethical CR, and corporate citizenship conception.

Ad 2. The so-called normative responsibility typologies analyze the responsibilities that a firm is expected to accomplish. The most well-known of such typologies is Carroll’s four-part pyramid classification, which includes economic, legal, ethical and philanthropic responsibilities. Carroll’s pyramid of CR depicts the four components of CR. At the base is the basic notion that economic performance supports all other layers. At the same time, it has to comply with formal regulations because these are society’s codification of acceptable and unacceptable behavior. The third layer is business’ responsibility to be ethical. This is the obligation to act morally, and to avoid or minimize harm to all of the company’s stakeholders. Finally, as depicted in the top layer of the pyramid, business is expected to be a good corporate citizen. This is captured in the philanthropic responsibility where business is expected to contribute financially and human resources to improve the quality of life.

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10 | P a g e Ad 3. The final type of typologies, stage typologies, are based on the notion that companies are at different stages of their CR development. These models begin with stages that are labeled as “defensive” or “reactive” but move towards more complicated stages which are characterized by strategic and transformative orientation to CR (Post and Altman, 1992; Zadek, 2004; Mirvis and Googins, 2006).

To provide an answer to the proposed research questions, Kourula and Halme’s (2008) typology of CR will be used. Kourula and Halme (2008) have distinguished three types of CR that differ significantly from each other. Previously developed CR typologies were aimed at research, while Kourula and Halme developed a typology which was more pragmatic. In order to build a framework for assessing CR action type, we employ these issues by combining three ways in which the CR activities practiced by the firm may differ: CRs relationship to the core business; the target of responsibility actions and the benefits expected from CR activities. It is possible to distinguish the following three CR types that are distinct from each other in this regard.

1. Philanthropy 2. CR Integration 3. CR Innovation

The most basic form of CR is philanthropy. This type of CR is characterized by charitable actions and using generic corporate resources for ‘doing good’, such as donations of money or time, which do not require anything in return. These charitable activities are not directly related to the company’s core business activities, and they are not meant to provide direct benefits to the company. Philanthropic activities aim to reduce intrusive public policy or to improve its reputation and market opportunities (Godfrey, 2005).

Firms characterized by CR integration attempt to combine responsibility aspect with their core business operations. In terms of stakeholder management, they are primarily concerned about responsibility towards their primary stakeholders as customers, employees and suppliers. CR

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11 | P a g e integration is characterized by actions which ensure high quality products and investments in R&D, avoiding excessive salaries and bonuses to top managers, stimulating diversity, on-time payment to suppliers, and educating suppliers on sustainable practices (Kourula, 2008). In other words, in CR integration responsibility considerations are integrated with the business operations of the company in question. As to the expected benefits, the company may simultaneously seek improve its corporate reputation, increase cost-savings, decrease risk reduction, or anticipate new legislation (Kourula, 2008). To summarize, CR integration aims to incorporate environmental and social responsibility in its business processes.

The third type, CR innovation, which has not been systematically addressed in previous academic literature, is different from the previous two in several respects. Most importantly, a business enterprise takes an environmental or a social problem as a source of business innovation and seeks to develop new products or services that provide a solution to the problem. In contrast to philanthropy, this kind of CR should fulfill the win-win condition. While the company tries to develop new business that would alleviate an environmental problem or benefit a chosen poor market segment, it also aims to create revenue for the enterprise. Corporations are not expected to provide products or services to low-income markets or to protect the environment out of mere a willingness to do good or to help. Instead, the underlying idea is to cater for the poor or to benefit the environment so that it also makes business sense.

Relatively little is known about the management of CR by MNCs which resulted in global MNCs often failing to respond to issues of importance in their host countries effectively (Gnyawali, 1996; Meyer, 2004; Logsdon and Wood, 2005). MNCs often use strategies where local units have limited functions with a limited number of employees which results in not insufficient resources to monitor and effectively respond to issues related to CR.

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2.2 NGO-business relationships

The following chapter will aim to give an overview of the theories developed by Kourula and Austin on NGO-business relationships. Subsequently, these two sets of typologies will be integrated into a single framework.

There has been an increasing amount of research interest in NGO-business engagement over the recent years (Winston, 2002). Winston (2002) describes and evaluates different strategies that have been employed by human rights NGOs in attempting to influence the behavior of MNCs. Traditionally, the relationship between NGOs and business has been seen as adversarial (Spar and La Mure, 2003). However, more recently the focus has shifted towards NGOs and business as allies strive to achieve a common goal instead of adversaries (Laasonen, Fougere, and Kourula, 2012).

In the domain of NGOs there is a divide on strategy on how to deal with MNCs: Engagers try to draw corporations into dialogue in order to persuade them by means of ethical and prudential arguments to adopt codes of conduct on a voluntary basis. On the other hand, confronters believe that corporations will act only when their financial interests are threatened, and therefore try to take a more adversarial position. Research has ranged from the strategic purpose of NGO-business relationships, legal and ethical aspects, and the societal impacts of NGO-business arrangements (Seitanidi and Crane, 2009). When business and NGOs engage to address problems relating to CR various engagement forms may occur over different stages. Kourula (2006, 2008) distinguishes nine forms of engagement between NGOs and Business.

1. Sponsorship: Financial support or charity provided by a company to an NGO. 2. Single issue consultation: An NGO is consulted on a single, specific issue.

3. Research cooperation: The NGO and the company provide resources for a research project. 4. Employee training and/or voluntarism: Representatives of the NGO are invited to train the

employees of the company, or company employees donate their time and effort for an NGO project

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13 | P a g e 5. Certification or eco-labeling: An NGO certifies a firm’s products or services when it meets

certain environmental and/or social performance measurements.

6. Systemic dialogue: Systematic forms or forums of dialogue such as roundtables with NGOs and other stakeholders.

7. Common project/programs: The company and NGO cooperate in the form of a projects with concrete actions and goals.

8. Strategic partnerships: A company and NGO can sign a partnership agreement for long-term common goals and combine various forms mentioned above.

(Kourula, 2006, 2008).

These forms of engagement can be classified into three main strategies: sponsorship (focusing on “externalizing” social responsibility by emphasizing charitable donations to NGOs), dialogue (relying mostly on creating or being part of forums for discussions), and partnership (emphasizing the creation of successful long-term and contract-based partnerships) (Kourula, 2010).

Austin and Seitanidi (2012), have also created a conceptual framework to categorize and summarize a range of literature that have addressed aspects of NGO-business relationships. The purpose of this framework is to make academics and practitioners aware of the potential value of different kinds of NGO-business engagement form, and also to distinguish sources of value which are likely to trigger that value potential (Austin and Seitanidi, 2012). It is built on two components, the value creation spectrum, which distinguishes types and sources of value, and the collaboration stages (philanthropic, transactional, and integrative). Austin (2000) argues that engagement between NGOs and business goes through multiple phases and that NGO-business relations can develop over time. He argues that there are three NGO-business engagement forms. Firstly there is the philanthropic type. The firm is a charitable donor to the NGO, where the NGO does not do anything in return (Austin, 2000). Secondly, there is the transactional type. This form of engagement is characterized by exchanging resources for a specific activity between the firm and the NGO. The final form of engagement is called integrative,

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14 | P a g e in which the NGO’s and firm’s activities merge into collective action and organizational integration (Austin, 2000).

2.2.1 Philanthropy

Philanthropic donations or gifts are the most common forms of relationships between MNCs and NGOs (Austin, 2000; Neergaard et al, 2009; Jamali and Keshishian, 2009). In philanthropic collaborations, the direction of the flow of generic resources is primarily unilateral, flowing from the corporation to the NGO. The NGO could just as well have received the resources from a different MNC (Austin and Seitanidi, 2012a). According to Godfrey, there is a transfer of wealth rather than a transfer of value, value is created by the NGO by using the transferred wealth (Godfrey, 2005). This transferred value of resources helps the NGO to pursue its mission to create social value (Austin and Seitanidi, 2012). These donations can be seen as “buying” CR. The NGO has the organizational capabilities, which the corporation lacks to address certain social needs, and the corporation has the resources which the NGO does not possess (Margolish and Walsh, 2003). Similarly, NGOs can gain credibility and improve their image by having been selected by MNCs as recipients of funding (Galaskiewicz and Wasserman, 1989).

Philanthropic relationships are assumed to not be economically critical to either party (Austin, 2000). The resource which has been transferred is depreciable and continuously needs to be renewed for the relationship to continue creating value (Austin, 2000; Austin and Seitanidi, 2012a). Managing reputational risk is an important factor for MNCs and NGOs since both parties run the risk of being affected by the others’ negative actions and bad publicity (Galaskiewicz, Sinclair Colman, 2006). Philanthropic activities undertaken by MNCs provide the company an insurance policy which mitigate negative events (Godfrey, Merrill and Hansen, 2009).

It is commonly argued that both the MNC and NGO can gain affirmative associational value at this philanthropic stage (Austin and Seitanidi, 2012), because at this stage of collaboration the NGO is not expected to return any services to the MNC. However, some NGOs might give limited recognition in

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15 | P a g e the form of a public thank you message (Seitanidi and Ryan, 2007). Austin suggests that involvement in a philanthropic relationships may serve as the stepping stone to venture into further stages of collaboration such as transactional or partnership oriented stages, because the NGO and MNC get to know each other in this stage (Austin, 2000). A study by Neergaard et al (2009) supported this notion. They found evidence that strategic partnerships do not often arise without being involved in a transactional or philanthropic relationship first.

2.2.2 Transactional/Dialogue

The types of collaborations that characterize the transactional stage are: highly developed volunteer programs, event and other sponsorships, name and logo licensing agreements, certification arrangements, assigned responsibilities, programmed activities and predetermined timetables. As opposed to the philanthropic stage, transactional relationships have bilateral flows of resources (Austin and Seitanidi, 2012a). There is an explicit exchange or resources and reciprocal value creation (Googins and Rochlin, 2000). At this stage, the relationship is mutually beneficial and organization specific resources could be transferred in addition to generic resources (Austin and Seitanidi, 2012). Compatibility and complementarity between the MNC and NGO becomes increasingly important and the partners have linked interest “in that creating value for oneself is dependent on creating value for

the other” (Austin and Seitanidi, 2012a:739).

The primary benefit a MNCs gets from partnering with an NGO in the transactional stage is a stronger associational value. However, this value is also dependent on other factors such as fit and motive (Austin and Seitanidi, 2012). Non-monetary transactions produces a deeper relationship between the NGO and MNC, creating a higher amount of “donor stickiness” than a simple monetary donation could have generated which leads to higher interactional value (Austin and Seitanidi, 2012). A sponsorship is a good example of a transactional stage relationship between an NGO and an MNC. Sponsorships require substantial levels of marketing and communication thus it exceeds just being associated with one another. It also entails the marketing of that associational value (Cornwell and Maignan, 1998;

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16 | P a g e Walliser, 2003). Sponsorships require a symmetrical rather than an asymmetrical exchange of resources (Austin and Seitanidi, 2012). While some researchers have their doubts to whether sponsorships are truly charitable and commercial (Galaskiewicz and Sinclair Colman, 2006), others see sponsoring a social cause to be an effective tool for MNCs to communicate their CR (Geue and Plewa, 2010). Furthermore, NGO certified products can spark a willingness environmentally conscientious consumers to pay a premium price for certain products and services (Thompson, Anderson, Hansen and Kahle, 2010).

Berger et al. (2004) accentuate the importance of aligning NGO and MNC’s mission, resources, management, to create a higher degree of fit between the two partners, which will eventually generate value beyond the “first-order” such as direct benefits of enhanced revenues for the company to produce “second-order” associational benefits, like stronger relationships with employees, investors, and the larger community. A good fit between the parties enables the generation of synergistic value, the higher the fit, the higher the created value (Austin and Seitanidi, 2012).

As in the philanthropic stage, in the transactional stage there is the assumption that channeling resources to NGOs, social value creation will be enabled.

2.2.3 Integrative

In integrative collaborations, the partners have reached new levels of integrating their missions, organizations and activities. This form of relationship generates the highest utilitarian value potential for the NGO as well as the MNC. It requires much effort and careful relational processes, to create this value (Le ber and Branzei, 2010). The partnership depends on organization specific resources rather than generic resources. The partners also increasingly utilize their key assets and core competencies and combine them these key resources to co-create value through common goals, strategies and efforts (Jamali and Keshishian, 2009, Austin and Seitanidi, 2012). The importance of this intermingling of resources is that it can create a new combination of productive resources, which may hold potential for co-creating greater value for the MNC, NGO and society (Austin and Seitanidi, 2012). Interaction

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17 | P a g e value emerges as a more significant benefit derived from the more intense interrelations between the partners. Bowen (2010) argues that “value is more likely to be created through engagement which is

relational rather than transactional”(Bowen, 2010, 311).

Integrative partnerships can take on several forms. However, the most common form is a project-oriented partnership, in which the NGO and MNC target a project which is related to the context the MNC operates in. Also, a production oriented partnership would entail developing new products or services which result in improvements of the environment or society.

Integrative collaborations are more complex and organic than transactional forms of collaboration. They need deployment of more valuable resources and demand more managerial and leadership effort. Therefore, they imply a much deeper commitment from both parties However, the compensation for these greater investments in co-creation is of greater value for both the partners and society (Austin and Seitanidi, 2012).

To conclude, Heap (2000) points to that partnerships do not necessarily need to be based on the two partners’ missions and values converge into one. But that a social issue could be addressed based on the same goal, they may be approached from two different motivations and angles: “NGOs should not

be endorsing companies, but engaging with them critically. Some of the best partnerships will come

from those who disagree with each other” (Heap, 2000:560).

2.3 Theoretical framework

Kourula and Austin both have developed a frameworks which exhibit quite some overlap. The sponsorship strategy and philanthropic stage focus on externalizing social responsibility by emphasizing charitable donations to NGOs. Basically the MNC is just “buying” CR. The dialogue strategy and transactional stage focus mostly on creating a platform for discussion and learning for the MNC and NGOs. There is a higher degree of communication between the parties, and the MNCs transfers more organization specific resources instead of generic resources. The most complex form of engagement is the partnership strategy and the integrative stage. This is when the two parties engage

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18 | P a g e in long-term contract-based partnerships to promote sustainable development. This type of collaboration is characterized as more intense and by a deep level of integration between the MNC and NGO.

Austin and Seitanidi (2012) suggest that NGO-business engagement forms shift towards higher degrees of integration end complexity, therefore it is expected that the CR approach chosen by a company also will shift to a higher, and more sustainable form.

Most research on NGO-business relationships in the context of CR used qualitative methods such as case-studies and content analysis to gather data. Despite existing qualitative research, there are still large unexplored areas in this field of study. In particular research in developing country contexts, but as well as longitudinal studies on the relationship between NGOs and MNCs. This study aims to fill the gap by exploring the relationship between NGOs and MNC in the context of CR, changes over time in developing country contexts.

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3 Methodology

The objective of this thesis is to research how a company’s CR approach develops over time. This chapter will present the research techniques to provide answers to the formulated research questions. The first section will present the chosen research techniques. The second section will discuss what company and NGO documents have been studied and why these are relevant and a discussion of the generalizability of the study. Finally, the last section will discuss the strengths and weaknesses of the chosen research methods.

3.1 Research Methods

The thesis investigates the company’s CR actions and how the relationship with NGO’s have changed over a period of almost 65 years, although the research focuses mostly on the last 20 years. The majority of literature on CR fails to appreciate the context in which CR strategies are developed, therefore this study focuses in greater depth on a developing country context, also there is a limited amount of research on CR in the oil industry, with a focus on NGO relationships. Most research on CR focuses the retail and clothing industries. Since the subjects of this thesis are relatively unexplored, qualitative research is the most appropriate research method for analysis in this study.

According to Neerdgaard et al (2009) qualitative methods are useful to understand and approach complex phenomena such as partnerships. Partnerships have not been researched in depth in the past, therefore it needs the openness and flexibility which qualitative research methods offer (Yin, 2003). Case studies are a good tool to seek answers to how and why questions related to phenomena. NGO-business relationships are a current phenomenon, that attracts attention with regard why the two parties choose to engage in a relationship, and how the relationship is further implemented. A qualitative case study approach which draws upon multiple sources is therefore the best method to answer the previously formulated research questions.

The thesis will start by taking a deductive approach. First theory and a research strategy will be chosen and designed to answer the research questions (Saunders et. al., 2007:117). The thesis will then move

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20 | P a g e in the direction of an inductive approach. Data will be collected which will lead to the data analysis (Saunders et. Al., 2007). This approach will mainly rely on secondary data source for qualitative data (Creswell, 1994). The data will specifically be collected to understand the context of the research and to answer the research questions.

The thesis aims to be exploratory, descriptive, and explanatory (Saunders et. Al., 2007: 132). The exploratory aspect is that it tries to seek new insights. It is descriptive, as a part of the thesis portrays profiles of the oil companies and their contexts. It is also explanatory as it aims to explain some insights, with the use of the interview.

The analysis will start by providing preliminary findings through a content analysis. Certain words that identify sustainability, the community, and partnerships, are counted to identify patterns in the collected data and to put the coded words into context (Morgan, 1993). Qualitative research analysis tool nViVo, is used to perform a word count on multiple documents, which represent data points over time. This research method shows how the use of certain words has changed over the years. However, it does not confirm if actually changes have been made over a period of time. Content analysis is the primary tool to analyze the published CSR reports. The method is widely used when investigating CSR reports.

As explained earlier, a time-series analysis strategy of a single case study is used to make an empirical investigation, by employing multiple sources of evidence. Time-series analysis is used to lay a foundation for the conclusions of the case study. Multiple data points, spread over time used to from multiple sources are used to present a case for the analysis. This type of analysis allows the researcher to trace changes of a period of time.

3.2 Sampling and generalizability

The research questions are subjected to empirical analysis by using secondary sources such as published texts, scientific reports, the Internet, published statistics. These secondary sources may provide both qualitative and quantitative data. Furthermore, primary qualitative data has been

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21 | P a g e gathered through a semi-structured interview with an SPDC employee in the function of Team Lead, Information, Education Communication (IEC) & Capacity Building.

Data was gathered through documentary research using CSR reports, NGO reports and websites. 18 CSR reports from Shell International were collected, 7 reports from SPDC as well as various NGO reports.

Shell is selected because it is an interesting company to study. According to Sigwatch (www.sigwatch.com), Shell is the most criticized company in the world by NGOs. It is also one of the largest MNCs in the world. Furthermore, the company operates in Nigeria, an extremely difficult context to operate in, due to a wide variety of stakeholders with conflicting interests.

Stake (1994) argues that a case study should aim at understanding an individual and particular case and ,”direct comparison diminishes opportunity to learn from it”(1994). This study will be based on the relationship of one company with multiple NGOs. Selecting informants in reality often depends on choosing subjects which are available and willing to cooperate in the research (Yin, 2003).

This study aims to make analytic generalizations from the findings. According to Yin (2003) ”In analytic

generalizations, previously developed theory is used as a template against which to compare the

empirical results of the case study”. Therefore, the purpose of this single-case study is to expand

existing theory.

A single case study design is used to confirm or test a theory. It is also often used to represent a unique outlier or extreme case (Yin, 2003). Furthermore, single case studies are also ideal for analyzing phenomena which were previously inaccessible. These type of studies can be holistic or embedded, where embedded case studies involve more than one unit of analysis (Yin, 2003).

3.3 Research quality

A strength of this research design is that chosen method has proven to be successful before. Although this study focuses on a single company, it analyzes the phenomenon of CR and NGO relationships over

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22 | P a g e a period of time. The main source of material for this research are texts which can be considered a substitute for the reality that is studied (Flick, 2006). A limitation of using qualitative research methods is that it cannot claim to neutrally reflect what it is studying.

It uses multiple sources of data, as well as primary data sources as secondary data sources. A weakness of might be that relying too much on secondary data sources may not give a high level of control over the quality of these data sources. The original purpose of the secondary data may differ from the current usage for this thesis. (Saunders et. Al., 2003). Therefore, primary data will be used to complement the secondary data.

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4 Empirical Findings and Analysis

To understand how SPDC’s relationship with NGOs has changed over time, we must first understand how the company’s CR approach has changed over the recent years. The following chapter will aim to analyze the different approaches to CR Shell and SPDC have used since the 1960s. The company has undergone three major paradigm shifts between 1960 and 2004, adopting a higher mode of delivery of development to the local communities with each shift.

This chapter will first describe the context of the research, followed by shortly presenting the introductory findings from CSR reports from Shell international between 1997 and 2013 and SPDC annual reports between 2000 and 2006. After the introduction, the findings will be explained in greater depth and will be discussed accordingly. The findings will be presented by time period, and include how the company’s CR approach has changed over that period, why it has changed, what the failures were of that type of approach, and in the relationships with NGOs.

4.1 Background: Shell in Nigeria

Nigeria is classified as a typical petro-state Watts (2005). The country largely depends on oil resources as a source to generate revenues for the government. The majority of oil-producing communities are located in the Niger Delta. As in all petro-states, the Nigerian Federal Government has strong control over natural resources, regulation of MNCs, and taxation of profits (Iledare and Suberu, 2010). Oil revenues account for over 90% of national export earnings and up to 70% of revenues accruing to the federation accounts. Despite this fact, Nigeria remains largely underdeveloped and is characterized by extreme poverty, poor infrastructure, administrative neglect, and environmental pollution (Ite, 2007; Amnesty International, 2009). The country lacks the capacity to implement assets which can translate oil into revenues. Instead it depends on foreign MNCs which possess the knowledge and skills needed to translate oil into funds (Nwete, 2007). Through Nigeria’s state-owned oil company, Nigerian National Petroleum Company (NNPC), the country is invested in the joint venture Shell Petroleum Development Company (SPDC) in which Royal Dutch Shell is the technical operator and the second

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24 | P a g e largest shareholder with a stake of 30%. Further stakeholders, besides NNPC, (55%) are Elf (10%) and Agip (5%).

Royal Dutch Shell comprises of over 300 individual companies dispersed over 100 countries. It operates in Nigeria through SPDC (on shore), a joint venture between Shell and NNPC . During the 1990s, Shell was pressured by the media and a civil society campaign in which it was accused the company of polluting the Niger Delta for over four decades while providing a disproportionate small amount of economic and social support (Wheeler et al, 2002). In the past, Shell has regularly sought protection from the Nigerian government, which had violently halted demonstrations by members of the affected communities. These actions threatened the company’s reputation and profitability, which prompted Shell to rethink their corporate strategy to include sustainable development, explicitly taking into consideration human rights and placing emphasis on the interests of its stakeholders (Wheeler et. Al, 2001). Subsequently, the company’s first public report on social and environmental issues was published in 1997 (Murphy and Bendell, 2002).

After over 40 years of oil exploitation, the Niger Delta has received little attention from successive administrations, in particular in the areas of socio-economic and infrastructural development (Ite, 2007). It is a common political characteristic of the Nigerian government as well as political elites to blame the foreign oil MNCs for social, economic and environmental problems in the region. The general perception and understanding among local communities in the Niger Delta is that the benefits of government funded projects derived from oil revenues, hardly reach the suffered communities (Ite, 2007). This perception has led to protests by various groups within Niger Delta the communities, against the oil-MNCs (Frynas, 2001; Ite, 2007).

Youth and ethnic militia have emerged due to frustration by the lack of benefits from the large revenues created in the Niger Delta. SPDC employees have repeatedly been kidnapped, production facilities have been shut down or vandalized, pipelines have been sabotaged and oil has been stolen. The security situation in the Niger Delta has severely worsened over the last few years and violence

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25 | P a g e and crime has led to a decrease of two-thirds in 2008 in comparison with maximum outputs (SPDC, 2009; SDN, 2010).

The failure of the Nigerian government to provide social and economic development has led to the reliance by the government and communities on the oil MNCs. Simultaneously, the oil MNCs require a social license to operate, in particular in a conflict zone like the Niger Delta, therefore they have increased the level of their CR actions since the 1990s.

4.2 Preliminary findings

This chapter presents the preliminary findings which were gathered through a content analysis. The preliminary analysis of Shell’s CSR reports provide some interesting results. This analysis gives an indication to the company’s changes over the years, by analyzing how the use of certain words have changed over the years. Content analysis over these CSR reports, published by Shell since 1997 until 2013, have shown an increasing emphasis on communities. Since 1997, Shell has included environmental and social metrics in the overall Shell scorecard. Since 1999, Shell’s CSR report has included a separate chapter dedicated to Nigeria placing greater emphasis on CR actions in that country.

As can be seen the following graph, the use of the words “community” and “communities” have increased significantly.

Graph 1: Word count of the words "community" and "communities"

0,00% 0,05% 0,10% 0,15% 0,20% 0,25% 0,30% 0,35% 0,40% 0 20 40 60 80 100 120 140 160 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 References Coverage

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26 | P a g e Content analysis of SPDC’s annual reports also show an increased focus on long-term solutions. As can be seen in the following graph, the use of the words “sustainable” and “sustainability” has more than doubled in the period between 2000 and 2006.

Graph 2: Word count of the words "sustainable" and "sustainability"

While focusing on long-term solutions aimed at the communities, there has also been an increased focus on creating partnerships. Although there was a sharp decline of the words “partnership” and “partnerships” in the year 2005, overall these words have been used more over the years, 2000 to 2006.

Graph 3: Word count of the words "partnership" and "partnerships"

0,00% 0,05% 0,10% 0,15% 0,20% 0,25% 0 5 10 15 20 25 30 35 40 45 2000 2001 2002 2003 2004 2005 2006 References Coverage 0,00% 0,02% 0,04% 0,06% 0,08% 0,10% 0,12% 0,14% 0,16% 0 5 10 15 20 25 30 35 2000 2001 2002 2003 2004 2005 2006 References Coverage

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27 | P a g e Content analysis shows there has been an increased focus on providing long-term solutions to the communities. Subsequently, the more the company has focused on this approach, more partnerships have been formed with NGOs to achieve this goal. Further in depth case analysis shows evidence that support these findings.

Results of analyzing the CSR reports of Shell International is inconclusive whether there has been an increased focus on the civil society. As graph 4 shows, the years 1997 to 2003 show a fairly irregular decline of the use of the words “NGO”, “non-profit”, “civil society” and ”voluntary organization”. Over the years 2003 to 2013 there has been an increase of the use of these terms, although there is a large variance over these years. No solid conclusions can be made on the basis of these findings.

Graph 4: Word count of the words “NGO”, “non-profit”, “civil society” and ”voluntary organization”

These words were chosen because it illustrates if the company increased its focus that particular topic. Unfortunately, no SPDC reports were available from before 2000 and after 2006, therefore Shell International CSR reports were analyzed.

A word count of the words “community” and “communities” illustrates the company focus on the community over the years. A higher word count could suggest that the company has put in more effort in listening to the communities’ wishes and demands. A word count of the words “sustainable” and “sustainability” would suggest that the company is focusing on long-term sustainable CR initiatives.

0,00% 0,02% 0,04% 0,06% 0,08% 0,10% 0,12% 0,14% 0,16% 0 10 20 30 40 50 60 70 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 References Coverage

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28 | P a g e Similarly for the words “partnership” and “partnership” an increased use of these words would suggest that the company is involved in more partnerships during that data point. The final graph depicts the word count of NGOs and its synonyms. An increase of these words over time would suggest the company is more engaged with NGOs.

The preliminary empirical findings support the findings found in the time-series analysis. These findings could offer new directions of inquiry, such as investigating certain combinations of words or perhaps a comparative analysis.

NGO reports are the main source of critique on SPDC’s CR strategy. However, later Shell CSR reports acknowledge that previous approaches to CR were not effective in delivering development to the communities of the Niger Delta.

4.3 SPDC and Community Development in the Niger Delta

The following chapters present the findings which were gathered through a thorough time series analysis of Shell’s CSR reports, SPDC’s CSR reports, NGO reports and an interview. The findings are largely based on Ite’s (2007) work. The three stages of the company’s CR approaches are developed by the SPDC, but Ite (2007) has explained them in more detail. The findings presented in the following chapters aim to contribute to his work.

4.3.1 Community Assistance

From the 1950s SPDC’s program to CR focused mostly on providing community assistance (CA). It was initiated to complement government spending in the communities (Living Earth, 2000). As government presence declined during the 1980s, SPDC was drawn into providing development assistance of a more infrastructural nature. The CA program department consisted largely of engineers and focused on high-impact visible and large infrastructure projects, which were controlled from within SPDC and led by a top-down approach (ECCR, 2010). There was a strong emphasis on the payment of funds to the contractor, rather than service delivery and implementation. CA initiatives consisted of ad hoc

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29 | P a g e development projects, where the communities were just receiving assistance, rather than coordinated plans.

SPDC painted themselves in a corner and dependency on them grew to embark on similar projects in the poorer communities. Subsequently, less and less emphasis was placed on communities taking matters into their own hands (Living Earth, 2000). This resulted in many projects being abandoned or not even initiated. Many of these projects were not necessarily the priority of the community (ECCR, 2010).

Due to the ad hoc nature of development projects, the communities perceiving themselves as helpless victims of circumstances rather than actors in the development process that have a voice (Ite, 2007). The communities of the Niger Delta did not see the philanthropic gifts by SPDC as charity, but rather as a form of rent for the company making use of the land. During the CA approach, the company adopted a philanthropic approach to CR. The philanthropic activities take place outside of the company’s business, and no direct benefits are sought from them. Philanthropy is often used to improve the corporate reputation and to create market opportunities (Godfrey, 2005), which led to community groups being just passive recipients of SPDC’s donations (Ite, 2007).

“When we were doing the Community Assisted approach I would say, there was limited engagement

because at that time everybody was more or less in the mood of receiving, which is basically the answer.

It was not much of questioning so to speak from NGO perspective about what Shell was doing because

Shell effectively became more or less the benefactor to many communities and so you would find that

the level of engagement or discussion that we have now was far less in those periods (Ite, 2014,

personal communication).”

NGOs did not need to question the motives of MNCs, because they were providing development which the government failed to do. They saw SPDC as an organization that wanted to do something for the community. Also, local NGO’s did not have the capacity or knowledge to pressure Shell during this period:

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30 | P a g e “And so when you see some elements of government failure to provide development and then you see

an organization that comes in trying to help. So the NGO’s were not really that much exposed to

question, because in the first instance the whole concept of CR for them was that they had limited

understanding. If ever they had any issues, it would be on the human rights issues, not necessarily on

the CR perspective, it would be on human rights, which has a lot to do with the oil spills and the

clean-up process (Ite, 2014, personal communication).”

Previously, NGOs were not critical towards SPDC, they were just receiving increasing amounts of assistance:

“The communities were more or less receiving a lot more. At that time they saw Shell as a benefactor.

They were not really questioning Shell as to what it was doing or not doing. It was nothing really critical

(Ite, 2014, personal communication).”

This approach to CR has not been very effective in alleviating poverty in the region (UNDP, 2002). Development projects mainly provided work for local contractors, and only a small percentage of the community profited from it, mainly the elites. In 1995, SPDC was starting to experience considerable problems over the protests and claims of environmental devastation caused in Ogoniland in the Niger Delta. It became clear that the situation was unsustainable and something had to change.

4.3.2 Community Development

In 1997, SPDC shifted away from a CA approach to a more community oriented, community development (CD) approach. Since 1997, Shell’s Business principles have included a commitment to support human rights and to contribute to sustainable development (Shell, 1997).

NGOs started to question SPDC on what projects the money was spent, and why no development could be seen in the communities. The NGOs started questioning both environmental records as well as human rights records:

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31 | P a g e “Most righteous question was the amount of money being spent would little be seen on the ground and

so the NGO’s began to put their spotlights questioning what Shell was doing, questioning

environmental records, questioning human rights records. So when they started questioning asking

those questions, obviously some of them very critical questions (Ite, 2014, personal communication).”

This pressure from NGOs forced SPDC to take a clearer stand on their CR approach, and started a dialogue between SPDC and the NGOs. Bilateral flows of flows of resources started flowing. If SPDC would not have done this, their reputation would have become even more tarnished:

“That is how Shell then became much more interested in talking to NGO’s to try to understand their

perspective and also trying to explain why they are doing and what they are doing. Obviously within

the context of Reputation Management (Ite, 2014, personal communication).”

Basically, the NGOs forced SPDC to change their approach to CR. Although the Movement for the Survival of the Ogoni People (MOSOP) waged an important campaign against SPDC, most pressures came from International NGOs. In a move away from these adversarial relations, SPDC was trying to engage with NGOs in Nigeria by entering into dialogue, collaboration, and partnership with them over a range of issues (Living Earth, 2000). Although SPDC was trying to move away from adversarial relations with NGO’s, various international NGOs, including Greenpeace International, Human Rights Watch, Project Underground, and Movement for the Survival of the Ogoni People still condemned the company and undertook direct action protest against alleged environmental and human rights abuses by SPDC in Nigeria. By starting to listen to complaints by the community, it started to attempt to combine responsibility aspects into the company’s business operations. In 1997, the company stated that it wanted to end all gas flaring operations by the end of 2008 (SPDC, 1997). These are characteristics of a CR Integration initiative.

However, most local NGOs did not have the capacity or understanding of the issues to pressure SPDC to change their CR approach. Also, their judgment was clouded by the resources they received from SPDC as Community Assistance.

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32 | P a g e “Most of pressures came from International NGO’s, not local NGO’s , because the local NGO’s lack the

capacity and understanding of the issues and some were even beneficiaries and if you are a beneficiary,

sometimes you will be clouded by a sense of judgment, so you will not even be able to ask critical

questions because you are at the receiving end (Ite, 2014, personal communication).”

The International NGOs led the way in transforming SPDC’s CA approach to a CD approach. They sought partnerships with local NGOs to get a foot in the ground and try to influence SPDC:

“It was International NGO’s that really kind of led the campaign asking for Shell to change and also

adopt International based practices in what Shell was doing. So that is where it came from. Obviously

the process they became aligned, some of them became aligned with the local NGO’s. The Friends of

the Earth, became aligned with some of the local NGO’s, some kind of coalition happened (Ite, 2014,

The International NGOs created alliances with local NGOs, and even though they were not immediately influential, they needed to have people on the ground in Nigeria. It was impossible to campaign influence SPDC from an overseas office.

“International NGO’s were the ones that really started trying to more or less steer the process of

change. It was later that the International NGO’s found that they had to have their feet in Nigeria, so

they had to start creating partnerships or coalitions either how you describe it. Before now we never

had “Friends of the Earth”, we did not have “Living Aid Foundation”, even Amnesty International was

not existing in Nigeria, even if it was, it was on the periphery, but they thought that they needed to

have a stronghold, they needed to have people on the ground. That is why they came in. For example

“Living Earth Foundation”, they came to start “Living Earth Nigeria”, because they could not be running

it from London. It did not work, they needed local allies, so they had to find an existing NGO, who was

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33 | P a g e Local NGOs remain questionable, some are even out there to gain personal benefits. They try to attack SPDC by publishing information which damages SPDC’s reputation. Other local NGOs may not be credible, some are just a few people who hold a grudge against the organization:

“Even as we speak now, when you talk about NGO’s in Nigeria, some of us have doubts of how they

function. Some of the are really out there to….They are not advocating much, they are trying to attack

you, so that you can come and maybe make peace with them and find them something, maybe give

them a role to play in what we do. But that is not really in where it should go. When it comes to local

NGO’s in Nigeria, you have to ask yourselves the question: re they really credible? If they are credible,

if they were to use the yardstick for measuring International standards, would they pass the test. Some

of them may not, because they are just one or two people who have a grudge against any organization

and they try to campaign. If you would really question their ……. you would not find much (Ite, 2014,

Shifting towards CD was SPDC’s first attempt in really trying to put the communities in charge of promoting development. After the Ogoni crisis, the company wanted to improve living conditions for the local communities by providing in order to maintain their license to operate.

SPDC also wanted to significantly reduce community dependence on SPDC for socio-economic development. Empowering communities involved SPDC’s community development advisors assisting the communities to assess their development priorities and needs, and also support for the communities to create their own Community Development Plans CDPs (Ite, 2007). The company engaged in dialogue with local communities and with local and international NGOs on its $50 million community development program. As a result, more partnerships were formed with community based organizations and more projects were undertaken with the help of NGOs (Shell, 1999). The CD approach offered SPDC and the communities to create operational synergy through partnership. The CDPs were designed to provide a comprehensive program which addressed all sectors, which previously had been addressed in isolation (SPDC, 1999; Ite, 2007). In contrast to the previously

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34 | P a g e mentioned CA approach, the CD approach adopted a bottom-up approach to development, by listening to the communities’ wishes (SPDC, 1999). SPDC continued its CD program throughout 2001 as the company focused on stakeholder consultation and advocacy for development, and also began a strategic transition towards a partnership model for program development and delivery (Shell, 2001). SPDC invited a number of external reviews of its community development activities and programs to continue to improve its social performance. These included an assessment by representatives of the World Bank, UNICEF, ProNatura, and Nigerian Government agencies (Shell, 2001).

The CD approach was an attempt to move away from cash payments and towards improving the quality of development projects (Shell, 2002). SPDC tried to adopt and promote a partnership and multi-stakeholder approach with regard to CR activities. Thanks to this approach, international organizations were attracted to the region to help address social and environmental issues (Shell, 1999; Ite, 2004). According to Shell International and Living Earth, the engagement between the organizations in Nigeria is an example of a progressive partnership involving the interaction between the Business and non-governmental sectors of society. It has been suggested that the relationship moves beyond the traditional philanthropic and adversarial relationships, to one that attempts to develop solutions to an operational problem that has affected both Shell and the communities in the Niger Delta (Living Earth, 2000).

Some however argue that “such companies seek to undermine the activist and grass roots opposition

to their Business by deliberately engaging with less “activist” NGOs.” (Living Earth, 2000).

SPDC did not have the structures or ability to treat outside organizations a partners: “Used to dealing

with engineering firms as suppliers and sub-contractors, Shell Nigeria had neither the structures nor

the ability to treat outside organizations as “partners.” (Living Earth, 2000). SPDC believed that a

sub-contracting relationship with NGOs whom they might deal with in the future, would be an appropriate form of engagement. However, this was not the way Living Earth envisaged the form of partnership with SPDC. They had SPDC sign a Memorandum of Understanding that would outline their relationship

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35 | P a g e and the work that had to be done. Since then, Living Earth has produced quarterly reports (Living Earth).

However, some organizations were concerned that SPDC would use partnerships for “greenwashing” (Living Earth, 2000). Despite this, Living Earth recognized that if they could push SPDC to adopt a more participatory approach to engagement and providing development, greater benefits would be reaped (Living Earth, 2000). Due to personal relationships built up over time, trust between certain individuals between NGOs and SPDC has been growing and has been enabling a great deal of what has followed.

SPDC desired to work with an international NGO who would add legitimacy to its efforts to change its relations with the communities. SPDC realized that relationships with NGOs would be key to easing community discontent. Accordingly, NGOs carried out community development programs on SPDC’s behalf and contributed towards the company’s reorientation of community attitudes towards development work conducted by SPDC. This approach was in contrast with SPDC’s intent to have more strategic objectives for the relationship (Living Earth, 2000).

SPDC’s CD approach in the Niger Delta did not bring much change according to Christian Aid (2004). In 2004, the company claimed that 75% of its projects were successful, but in arriving at its figure, it only allowed external reviewers to examine projects less than a year old. Christian Aid also thought that SPDC’s CD program is to closely associated with the company’s commercial activities and its target at communities in which Shell already works or hopes to expand its operations (Christian Aid, 2004). The problem with CD projects in the Niger Delta, is that they are not used to help communities, but as a pay-off for access to land (Christian Aid, 2004). CD projects are used to acquire a social license to operate in the host communities.

SPDC found it difficult to reap the benefits of this CD approach, mainly because the CA approach was not totally abandoned (SPDC, 2004; Ite, 2007). Christian Aid (2004) believed that SPDC still is making cash payments to communities as late as 2004. This resulted in the communities demanding increasingly more, because they did not see the impacts of the community development projects (WAC

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36 | P a g e Global Services, 2003). SPDC concluded that the benefits, over a longer period of time, of CD would require additional investments, therefore it decided additional focus should be placed on sustainability, which marked the beginning of the present era (Ite, 2007).

There is a split between the strategic needs for Shell International in home country, and the operational focus of SPDC and NGOs in the host country. Working with NGOs can be seen as an important tool for communication for a Western audience (Living Earth, 2000).

Providing community development created a problem for SPDC. Because SPDC was doing so much to help the community, it had taken over tasks which were actually the responsibility of the Nigerian government. Partnering with NGOs was SPDC’s way of making clear that their core Business is oil gas exploitation:

“Unwillingly, they were creating a problem for themselves by seeming to take over Government

responsibility. By trying to bring in partners, what Shell was trying do was to make it obvious that they

are not a Development Agency. They are an Oil and Gas Company and that the main rule of Government

is to champion development of the country and indeed the Nigeria Delta. And that there has been

Government failure over the past years and that they themselves want to shift one part of the spectrum

of Development to allow Government to lead the process, while they are supporting from behind

towards CR (Ite, 2014, personal communication).”

4.3.3 Sustainable Community Development

In 2004 SPDC tried to incorporate communities even more by adopting a SCD approach. The shift towards Sustainable Community Development (SCD) strategy in 2003, marked the beginning of the current era of CR approaches. The new SCD approach was developed to improve the way SPDC manages all community interfaces. The aim of this approach is to put the communities in control for their own development, to improve the sustainability of development programs (SPDC, 2004). This program is intended to involve partnerships with local community based organizations and higher capacity local and national NGOs.

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37 | P a g e The SCD strategy places greater emphasis on building and working through strategic partnerships with the government, local and international NGOs, communities and other stakeholders (SPDC, 2004). The SCD approach was constructed to shift towards a thematic approach with a primary focus on economic empowerment, human capital development, healthy living and basic services (SPDC, 2004).

Until the SCD approach, development projects and programs lacked sustainability. In order to move towards sustainable development, SPDC needed to create partnerships with NGOs to accomplish this:

“From the Community Assisted Approach to the Community Development Approach, whereby there

was an element of partnership. Shell was trying to understand what the Communities actually wanted,

what they needed for their Development. When you look at the whole, all the gamut of projects and

programs it is still lacks one essential thing: Sustainability, because Shell was still in front and the

Community was still behind in terms of Development thinking, so there was lack of ownership of the

projects. You will find, that most Communities still thought that whatever Shell was doing, they had a

sense of entitlement, it was some kind of compensation for what they may perceive as the adverse

environmental conditions of their Community. So, it did not have that element of sustainability. And

that is why there was a need to move away from that idea of creating partners to really making it

sustainable, so a change of approach became imminent. And that is what happened (Ite, 2014, personal

communication).”

NGOs play an important role in disaggregating the community to ensure a wide section of groups and interests have been heard. This will ensure ownership of the Community Development Plan and reduce the level of marginalization experiences by community members as a result of capture by the elites. (ECCR, 2010).

SPDC actively sought an audience with international NGOs to meet its human rights and environmental responsibilities in Nigeria. This led to constructive dialogues with some of these NGOs and a refinement of SPDC thinking and policies that drew on NGO’s development and human rights expertise (Shell, 2004).