THE CHOICE BETWEEN THE LESSER OF TWO EVILS?
The difference between Chinese and Western European CSR and how it affects the “ordinary folk”
Juraj Gajski
Supervisor: Luc Fransen Second Reader: Robin Pistorius
June 2017
Master thesis Political Science – International Relations
University of Amsterdam
2
1. Introduction………...………..…….7
2. Theoretical Framework………….……….………...….………..…...9
2.1. Concepts....………...……….…...….…...………...…….…………...9
2.1.1. Concept: Human Security………...……….….10
2.1.2. Concept: Sustainable Security………...………...11
2.1.3. Concept: Governance………...……….……...12
2.1.4. Concept: Limited Statehood………...……….…….13
2.2. Theoretical Discussion...14
2.2.1. Observable Gap in the Literature...16
2.2.2. Chinese MNCs and CSR...17 2.2.3. Western MNCs and CSR...18 3. Methodology...21 3.1. Case Selection...21 3.2. Data Collection...22 4. Empirical Chapter...23 4.1. About Nigeria...23 4.2. MNCs and Nigeria...24
4.3. Western Europe – CSR and Relations to Nigeria...27
4.3.1. Shell...28
4.3.1.1. Projects and CSR...30
4.3.2. Philips...32
4.3.2.1. Projects and CSR...33
4.4. China – CSR and Relations to Nigeria...37
4.4.1. Huawei...42
3
4.4.2. CNOOC Limited...44
4.4.2.1. Projects and CSR...45
5. Data Analysis...46
6. Conclusion and Discussion...48
6.1. Conclusion...48
6.2. Discussion...50
4 List of tables and figures
Figure 1: Causal link of the key concepts of the thesis………...…………10 Figure 2: “The diagram illustrates the linkages between CSR education and implementation, peace and profit maximization”... 20 Figure 3: Philips Business Model...35
Figure 4: “Trade between China and Nigeria, 2000 – 2010”...39 Figure 5: “The comparison between the importance on human rights in Chinese companies and findings of the business recognition report”...40
5 List of abbreviations
ACP African, Caribbean, and Pacific Group of States CED Committee for Economic Development
CNOOC China National Offshore Oil Corporation CSR Corporate social responsibility
ECOWAS Economic Community of West African States ECU European Currency Unit
EU European Union
FDI Foreign direct investment
GMoU Global Memorandum of Understanding INGO International non-governmental organization ISO International Organization for Standardization MEND Movement for the Emancipation of the Niger Delta MNC Multinational corporation
MOC Multinational oil company
MOSOP Movement for the Survival of the Ogoni People NNPC Nigerian National Petroleum Corporation
OPEC Organization of the Petroleum Exporting Countries PR Public relations
SPDC Shell Petroleum Development Company of Nigeria UK United Kingdom
6 UN United Nations
UNDP United Nations Development Programme
UNICEF United Nations International Children's Emergency Fund US United States
7 1. Introduction
When talking about peacebuilding and security, in recent year there are more demands for private actors to get involved. These demands come from both the academia and international organizations. Private actors are mostly linked to concepts of sustainable and human security which complement each other. The basis for this demand is in the fact that the buildup of weapons only increases the security dilemma and true security can be achieved only by solving non-military threats. These demands originate from a liberal perspective in international relations and provide a more holistic image of security taking into consideration climate change, food and water shortages, unemployment and poverty. The previous Secretary-General of the United Nations Ban Ki-moon claims that the “…basic building block of peace and security for all peoples is economic and social security, anchored in sustainable development” (Ki-moon, 2008). This approach to security sees sustainable development as a tool that addresses the root causes of armed conflict.
The concept of human security, on which I will be focusing in my thesis, requires efforts from international, national and sub-national actors. “Within this framework, the private sector has an invaluable role to play in the fulfillment of this aspiration through the opportunities it creates for employment, broader livelihoods and economic growth” (Appiah and Jackson, 2015: 5). On the international seminar on business and human rights in London in 2005 the Prosecutor of the International Criminal Court, Luis Moreno Ocampo, after explaining the horrible situation of child recruitment in northern Uganda, urged corporate leaders to create jobs for these youths so they do not pursue the life of crime and violence (Tripathi, 2008: 85). “[G]lobalization and the mounting number of conflicts occurring in regions where multinational corporations (MNCs) operate have prompted international organizations, the media, human rights groups, social investors and consumers, as well as some corporate executives, to discuss the responsibility MNCs share in promoting peace and avoiding conflict” (Bennett, 2002: 394).
This shows that there is a certain pressure on MNCs to contribute to security, especially in areas of limited statehood. The private sector can have positive and negative effects of security, though. MNCs that are solely oriented on profits, for example, will invest as little as possible and exploit as much as possible. It is not only about more or less investment though, MNCs can even finance authoritarian regimes or certain rebel groups to get what they want. That being so, a CSR framework is crucial in guiding the efforts of the private sector to contribute to security. “With the right levels of support, experience and commitment, corporations can, for example,
8 play a role in preventing the rise and escalation of company-community conflicts in fragile environments” (Appiah and Jackson, 2015: 6).
When talking about MNCs the distinction between western and rising power multinationals has to be made. Even though the international humanitarian law applies to state actors, is non-derogable and the respect for local cultures, customs and traditions should guide corporate conduct, many of the CSR frameworks appear „Western“ (Tripathi, 2008: 88). Indeed, a 2007 survey on human rights policies by Chinese companies by John Ruggie shows that although Chinese companies are not very different from Western ones, there is less concern with responsible investment or human rights in their spheres of influence (Ruggie, 2007).
That being so, there is a difference between CSR in Western European and Chinese MNCs, and the main purpose of my thesis is to determine which understanding influences security in a more positive way in Nigeria – a country with low levels of human security. Taking all of this into consideration I will be observing the effects on human security by two Western European (Shell and Philips) and two Chinese (Huawei and CNOOC Limited) multinationals in Nigeria, which leads me to my main research question:
How do Chinese and Western European multinational corporations affect human security in Nigeria?
In order to answer my main research questions, several auxiliary questions need to be answered first:
How does CSR look in Western European companies? How does CSR look in Chinese companies? What is the political and security situation in Nigeria?
My thesis will be divided into six chapters. The second chapter provides the theoretical framework for my thesis. The concepts of human security, sustainable security, governance and limited statehood will be elaborated. After the explanation of key concepts, I will be using comes the theoretical discussion which serves to both show the observable gap in the literature my thesis aims to fill and provides a theoretical basis for my argument by providing the theory behind the two (Western and Chinese) understandings of CSR.
9 Chapter three will be dedicated to methodology. The reasoning behind my choice of MNCs and Nigeria will be explained in detail. After the explanation of case selection, I will elaborate the data collection process along with the interview.
Chapter four will be the empirical chapter. In this chapter, the context of Nigeria will be presented, along with Nigerian relations to Western Europe (EU) and China. The whole situation with MNCs emerging in Nigeria and the empirics about Western and Chinese CSR will also be explained. In chapter four each of the four companies will be looked at, their history in Nigeria first, and then their CSR practices and projects. For each of the four companies a descriptive conclusion will be drawn in order to make a descriptive comparison.
Chapter five will be the data analysis chapter. The purpose of this chapter is to provide an overview of information gained from the interview and to put the findings about the four MNCs into context.
Chapter six will be the conclusion and the discussion chapter. Starting theories and the empirical findings will quickly be repeated, and conclusions will be drawn based on them. The whole thesis will be rounded up. The final section will reflect the research done, how it could have been improved and invoke further research into the topic.
2. Theoretical Framework 2.1. Concepts
In this section, key concepts that I will be using in my thesis will be thoroughly explained. It is important to understand basic concepts before embedding them into further theoretical and empirical discussion. Through the explanation of concepts, my research direction will become apparent.
I have divided the literature I will use for my thesis into three parts: literature about the Chinese companies and the Chinese influence in Nigeria, literature about Western multinationals and the influence of Shell and Philips in Nigeria, and theoretical and empirical literature that incorporates theoretical articles about the concepts of limited statehood, governance, human security, sustainable security and CSR that I will be using, as well as empirical literature about Nigeria itself with the literature about the emerging new roles of MNCs in general.
10 Figure 1 summarizes how the aforementioned concepts fit into my thesis:
Figure 1: Causal link of the key concepts of the thesis. 2.1.1. Concept: Human Security
The term “human security” was first used in the UNDP’s 1994 Human Development Report and refers to the protection of freedoms that are the essence of life (Appiah and Jackson, 2015: 5). The need for this new concept arose from the fact that until that point the term security has been interpreted narrowly as security of territory from external aggression (UNDP, 1994: 22). The concept incorporates the human elements of security, rights and development – the freedom from fear and freedom from want. These components, when combined, advance the freedom of all people from the fear of violent and non-violent threats (Appiah and Jackson, 2015: 5). Such a broad concept needs the cooperation of international, national, sub-national and private actors. The private sector has an invaluable role in human security through employment and economic growth. Operations in human security also affect the eco-system, as well as the cultural and societal situation (Ibid.).
In my thesis, I will use the concept as it was defined in 1994 by UNDP and inspired by the Cold War. For better understanding I will present a full quote from the 1994 Human Development Report:
“Forgotten were the legitimate concerns of ordinary people who sought security in their daily lives. For many of them, security symbolized protection from the threat of disease, hunger, unemployment, crime, social conflict, political repression and environmental hazards. With the dark shadows of the cold war receding, one can now see that many conflicts are within nations rather than between nations.” (UNDP, 1994: 22).
This quote summarizes the concerns of ordinary people who just struggle through their daily lives without concerns about high politics which is exactly what human security aims for. In the UNDP report, human security is characterized as a universal concern, its components are MNCs + CSR Areas of Limited Statehood Human Security Sustainable Security
11 interdependent, early prevention is better than later intervention and it is people-centered (Ibid.: 22 - 23). Human security depends on the richness of the nations, people from rich nations seek security from the threats of crime, unemployment, degradation of environment, etc. On the other hand, people from poor nations seek security from poverty, hunger, disease and so on. The UNDP report classifies economic, food, health, environmental, personal, community and political threats as categories that threaten human security the most.
To summarize it all, human security is a concept that arose after the Cold War. It views security in a broader sense as the freedom from fear and freedom from want. The main focus of this concept is the individual and his daily struggles. Human security aims to protect people from violent and non-violent threats such as unemployment, disease, poverty and crime as well as advance the freedom of all people. Human security is often connected to environmental challenges such as climate change and the degradation of the environment. Since the environment is a big part of human security sustainable development and CSR practices by MNCs can have a direct influence on human security, both positive and negative. Furthermore, already in 1994, when the term was first used, private actors were identified as important for human security and Nigeria was one of the countries with a big concentration of FDI.
2.1.2. Concept: Sustainable Security
“The central premise of sustainable security is that we cannot successfully control all the consequences of insecurity, but must work to resolve the causes. In other words, ‘fighting the symptoms’ will not work, we must instead ‘cure the disease’” (SustainableSecurity.org, 2017). The concept of sustainable security is a truly green approach to security stating that security anywhere depends on sustainable development everywhere. Sustainable security focuses on the long-term causes of insecurity such as climate change, competition over resources, marginalization of the majority world and global militarization (Ibid.). Similar to human security it arose from the need for a broader approach to security. Approaches to national and international security that are based on the premise of militarization and balance of power are proving to be flawed and new approaches are entering the field. The concept of sustainable security is younger that human security, appearing in the 21st century as a thematic programme by the Oxford Research Group. The concepts is interdisciplinary and provides a comprehensive, systemic approach that takes into account interactions of different trends (Ibid.).
12 Sustainable security starts with a premise that the world is interconnected and yet socio-economically divided with apparent environmental limits (Ibid.). In this approach main concerns of insecurity are climate change which can cause the loss of infrastructure, resource scarcity, civil unrest, inter-communal violence and international instability; competition over resources which can lead to even more instability in already resource poor areas; marginalization of the majority world further increasing socio-economic divisions; global militarization increasing the security dilemma; radicalization; increase in global population; shortcomings of global governance (Ibid.). Ban Ki-moon was one of the advocated of sustainable development to tackle security challenges. He states that sustainable development is a key to solving security issues because “…it allows us to address all the great issues – poverty, climate, environment and political stability – as parts of a whole” (Voigt, 2009: 163). To summarize, sustainable security is a new concept that aims to tackle root causes of insecurity such as climate change, resource scarcity, militarization and shortcomings of global governance. It is similar and complementary to human security in a sense that it starts from topics that are traditionally not viewed as security concerns such as climate change, unemployment, etc. Both approaches are holistic and inter-disciplinary and both stress the importance of sustainability to increase security. Even though there is no explicit notion of the importance of private actors in the concept of sustainable security their role cannot be overlooked. In my opinion targeting root causes of insecurity such as climate change and resource scarcity is best done through private actors that can act quickly and have tangible effects.
2.1.3. Concept: Governance
Since the 1980 the word “governance” has seen an increase in use. This was caused both by the changing social theories that led the people to see the world in a different way and the fact that the world changed (Bevir, 2012: 1). The theories have moved away from the central institutions and are looking at the activity of governing incorporating private, voluntary and public actors. “Governance refers, therefore, to all processes of governing, whether undertaken by the government, market, or network, whether over a family, tribe, formal or informal organization, or territory and whether through laws, norms, power, or language” (Ibid.). Governance is focused on the social practices and activities. It can also be defined as the „...collective modes of regulating social matters“, with a goal to „...achieve certain standards in the areas of political authority and rule making, security as well as welfare and environment“ (Risse and Lehmkuhl,
13 2006: 4). In its most general definition governance refers to “…all modes of coordinating action in human society” (Ibid.: 7).
Important to mention are also “new” modes of governance which are characterized by the systematic involvement of private actors, and by “soft” modes of steering on the other (Risse and Lehmkuhl, 2006: 7). “New” modes of governance investigate “…networks and negotiation systems as non-hierarchical and self-regulatory modes of horizontal social coordination and political steering” (Ibid.). The first key feature of these “new” modes of governance is the direct involvement of non-state actors in political steering. Secondly, they are characterized by the fact that they are not so much structured in a classic, hierarchical way but via mechanisms of “soft steering” (Ibid.: 8). Generally speaking there are three types of governance: sovereign action by the state (governing by government), governance through networks of private and public actors (governance with government) and regulation by non-state actors or self-regulation by the civil society (governance without government) (Ibid.: 7).
To summarize, ever since the 1980s and a shift in public organization the word “governance” has seen an increase in usage. Terms such as global warming, epidemies and corporations are more and more linked with governing and governance. In its definition, it is a process of governing undertaken by formal or informal actors that is oriented on social practices and activities. Governance steps away from the old view of hierarchical, top-down approaches to regulating social matters and focuses on a wider approach including private and public actors. In my thesis, I am focusing on MNCs as private actors that can participate in governance, especially in areas of limited statehood.
2.1.4. Concept: Limited Statehood
Statehood or state is traditionally defined as a central authority that has the monopoly over the legitimate means of violence. Functional states have the ability to enforce political decisions and maintain sovereignty over their territories. Taking this into consideration limited statehood refers to a deficit in one or more of the previously mentioned roles of the state. When we talk about limited statehood, we talk about “...those parts of a country in which central authorities (governments) lack the ability to implement and enforce rules and decisions and/or in which the legitimate monopoly over the means of violence is lacking, at least temporarily“ (Risse, 2012: 4). Usually limited statehood refers to parts within a country, but it is not excluded that
14 an entire country can be an area of limited statehood. Areas of limited statehood belong to internationally recognized states, but the problem lies with their domestic sovereignty.
Failing or failed states, transitional and developing countries and post-colonialist countries are considered to have areas of limited statehood in them. The importance of external actors in areas of limited statehood must not be overlooked since “…foreign governments, international organizations, multinational companies, INGOs and others – are relevant ‘players’ in governance in areas of limited statehood” (Risse and Lehmkuhl, 2006: 12).
With the concept of limited statehood, the concept of governance had to change as well. Up until the 21st century the discourse of governance remained centered on the modern sovereign statehood. “Limited statehood does not imply the absence of political, social, or economical order” (Risse, 2012: 6). Governance and service provisions occur even under the conditions of failed statehood but in that case the actors are often various combinations of state and non-state actors. (Ibid.: 7). For example, Somalia which is the most extreme example of limited statehood still manages to provide services and maintain some sort of governance. Some authors like Schäferhoff argue that the success of service provision depends on the level of state capacity and the complexity of services (Schäferhoff, 2014: 675).
The question relevant for my thesis is can MNCs be the ones that provide services and governance in areas of limited statehood? Hönke and Thauer argue yes, under two conditions: MNCs must be legitimate and the institutional design of the firms’ service provision programs is an important factor for effectiveness (Hönke and Thauer, 2014: 697).
2.2. Theoretical Discussion
In this part, I will provide a theoretical overview of my thesis. Firstly, the observable gap in the literature will be presented which serves as a way of embedding my thesis into the relevant literature. Secondly, since my thesis talks about the difference between the CSR practices in Western and Chinese MNCs and their effect on human security, a theoretical overview of CSR in Chinese MNCs will be presented. Lastly, CSR in Western (European) MNCs will also be elaborated. The basis for my argument is that there is a difference in regards to CSR practices between Chinese and Western (European) MNCs.
Theory wise my thesis falls into a category of liberalism in international relations as far as grand theories go. It looks at human security (and ultimately peace) through non-state actors and
15 political economy/economic liberalism. “The belief that economic liberalism promotes peace is hardly new; indeed the idea has a powerful intellectual heritage, with Montesquieu, Kant, Cobden and Angell amongst its most celebrated advocates“ (Selby, 2008: 14). Since 1980s and with the acceleration of globalization a lot of the initial theories of economic liberalization and peace have showed their flaws and things in real life proved to be much different than the theories anticipated. That being so, a grand theory is not what my thesis will be tackling. My thesis will fall into the category of a mid-level theory on multinationals, human security and corporate social responsibility. It will show the difference between Western European and Chinese multinationals and their regard to CSR. Then it will take a look at how two different understandings in CSR affect human security in a fragile country that has areas of limited statehood in them.
My research will take an inductive approach, moving from specific observations about the Western and Chinese multinationals in regards to CSR in Nigeria that I will gather through my empirical research, and moving towards broader generalizations and conclusions about their influence on human security. My aim is to see whether different understandings of CSR (Western and Chinese) influence human security in local communities differently. I will use a “bottom up” approach by looking into four companies (Philips, Shell, CNOOC Limited and Huawei), their practices and the local context of Nigeria and making an effort to generalize my findings to a more general level of multinationals, CSR and security. I will start with specific observations about the CSR practices and projects and their influence on local communities in regards to human security. Afterwards I will compare the projects and practices of the four MNCs and look at which MNC’s project and practices contribute the most and why. Lastly, having the data from my empirical research I will check if the theory about the difference between Western and Chinese CSR (Chinese MNCs being less worried about CSR and Chinese CSR being less impactful in general) holds true for the case of Nigeria.
My thesis will incorporate a descriptive and causal analysis. While the causal studies are designed to determine whether one or more variables affects the value of other variables, descriptive studies are designed to describe what is going on or what exists (Jefferys, 2017). Taking this into consideration, first my research will look at “what is going on” in Nigeria in regards to human security by looking at practices from Western European and Chinese multinationals. I will start from the companies’ reports and describe the characteristics of their practices. In this part of my research I will be focusing on the “what” question, answering what
16 the characteristics of Western European and Chinese multinationals’ CSR practices are in Nigeria. After the descriptive part, when I will have a picture of CSR practices of the companies I will be looking at, I will switch to a causal analysis, trying to determine whether one or more variables affect the value of another variable. In this part, I will be focusing on the cause-and-effect relationship between four CSR practices and human security. After looking at each of the four companies’ reports and projects a conclusion will be drawn in order to make a descriptive comparison between the influences of CSR practices of the four companies. I will be focusing on the change in human security caused by four variables – four different CSR approaches.
2.2.1. Observable Gap in the Literature
The first gap in the literature I was able to identify is the overall absence of any comparison between Western and Chinese multinationals in Nigeria. Most of the articles about the Western multinationals are very critical towards Western CSR policies but fail to put them into the context of more and more Chinese companies investing in Nigeria. The second gap I identified is the absence of connection between Western and Chinese multinationals to human security as a concept. Most of the articles end up on labor rights, environmental rights or human rights, and many do not even make the link between criticizing a company and linking it to any broader context.
The literature about Chinese CSR and, Chinese MNCs in Nigeria always came short of any comparison with Western CSR and Western MNCs in Nigeria. This body of literature provides useful insights into the practices of Chinese MNCs and how China expanded to Nigeria, but the problem lies in the fact that Chinese MNCs are viewed as isolated cases. Chris Alden and Christopher Hughes, for example, show how the lack of pressure groups and non-governmental organizations inside China can be a problem for the Chinese policy of expansion into Africa (Alden and Hughes, 2009: 563). More specific is the article by Eghosa Osa Ekhator tackling corporate social responsibility in Chinese oil multinationals in Nigeria. The article shows how CSR is more prominent in the developed world and is largely driven by Northern actors often neglecting local concern of developing countries (Ekhator, 2014: 125, 126). Apart from the comparison and putting the whole “China phenomenon” in Nigeria into a broader context of Western CSR, all of these articles never look at the effects of Chinese understanding of CSR and how it affects the everyday lives of people. All of the articles end up on, either, explaining or criticizing the effects of China, but never go a step further to see the concrete effects of Chinese CSR.
17 The body of literature about Western MNCs and CSR in Nigeria also lacks any sort of comparison with the Chinese MNCs and CSR. The articles often take a narrow approach of either explaining or criticizing a company without any broader conceptualization. Gabriel Eweje, for example, takes a critical approach to MOC’s CSR initiatives in Nigeria stating that the local population believe that MOC’s CSR initiatives are not addressing social and environmental problems they intend to resolve (Eweje, 2007: 220). A case study by Esther Hennchen about Shell in Nigeria provides a very detailed case study about the scope of responsibilities and legitimacy of multinationals It is focused on the precedent set when Shell was held liable for oil pollution in the Niger Delta (Hennchen, 2013: 1).
All of the aforementioned articles do a great job in explaining a single topic. However, they never put the topic they are explaining into a broader context and any sort of relation between Western European and Chinese MNCs is lacking. The goal of my thesis is to look at the CSR practices by Western European MNCs and Chinese MNCs, put them into a broader context of governance and service provisions, look at how they affect human security and draw a conclusion which ones contribute more.
2.2.2. Chinese MNCs and CSR
In this part, the character of CSR in China will be presented form a more theoretical point of view. When talking about theory behind the Chinese CSR, no real theory exists. The theory of CSR is as it is, and most of the insights about Chinese CSR come from empirics. In order to stay out of the empirical part in this section, I will start by providing some general insights about the CSR in China and then present the link between the Chinese government and CSR practices.
Even though the international humanitarian law applies to non-state actors, is non-derogable and the respect for local cultures, customs and traditions should guide corporate conduct, many of the CSR frameworks appear „Western“ (Tripathi, 2008: 88). Chinese strategy is not very different from the way European companies behaved in Africa a century ago, but nowadays Western firms have adopted rules and CSR that aim to eliminate bad practices (Ibid.: 97). China’s relation to business has been shaped by its own communist and revolutionary past. The business model of a typical Chinese MNC is heavily reliant upon political support, receives financial backing from the state and is involved in either mining or energy industries (Alden and Davies, 2006: 3).
18 CSR in China has a different character than CSR in Europe or the US. In China “...corporate responsibility is not driven by the consumer, as in the United States. The state-owned enterprise is the leading edge of corporate social responsibility at the moment.” (Mullich, 2011). CSR practices in China are often driven by governmental practices and policies, while the general public may not be aware of them. For example, the Chinese government developed plans in 2009 to spend much on reforestation. As a reaction, many companies in China have launched initiatives for planting trees as part of their CSR projects (Ibid.). Philanthropic efforts by the companies are focused on what the government wants and are rarely long-term projects since governmental policies can change rapidly. In 2012, 22.6% of government-led enterprises issued CSR reports compared to only 9.4% of private enterprises showing that this trend is driven by the government (Marquis and Chen, 2013). Generally, when it comes to CSR in Chinese MNCs the governments is lacking the mechanisms for monitoring after the implementation of CSR standards and CSR reports
2.2.3. Western MNCs and CSR
In Western MNCs CSR is mostly in the form of its definition as a “...management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders. CSR is generally understood as being the way through which a company achieves a balance of economic, environmental and social imperatives (‘Triple-Bottom-Line-Approach’), while at the same time addressing the expectations of shareholders and stakeholders” (Appiah and Jackson, 2015: 5). In this part I will present a historical development of CSR naming important institutions and authors in the first part. The purpose of this is to show that CSR can be seen as a “western” phenomenon. With the historical perspective, theory and examples of good practices will be presented.
The whole concept of CSR was formed mostly in the 20th century, especially from 1950s until now. The biggest contribution to the concept of CSR came from the CED in its publication from 1971, Social Responsibilities of Business Corporations (Carroll, 2008: 29). CED is a business-led organization based in Washington, US. Similar to governance, the term CSR took off in the 1980s. Both civil societies and business actors were involved in mobilizing around it (Utting, 2005: 375). Ever since the 1980s, civil society engagement with CSR issues has expanded with NGOs, consumer groups and trade unions coming together around issues such as child labor, pollution, deforestation, the rights of indigenous people and so on (Ibid.: 376). Along with the “from below” pressure, the reforms were introduced “from above” as well.
19 Business proved to be very capable of organizing around the new CSR norms. Big business proved to be a proactive player shaping the CSR agenda. “The corporate CSR discourse is structured around a series of propositions that tie in with new theories and thinking associated with modernisation, neo-liberalism, global governance, new institutional economics, and business management” (Ibid.: 379). CSR is often presented as a “win – win” scenario for big business stressing out four claims: CSR can enhance a company’s competitive advantage, some forms of CSR can reduce costs, CSR is good for staff morale, and CSR is a proxy for competent management and associated qualities related to innovation, the ability to anticipate and deal with risks, and learning and using knowledge effectively (Ibid.: 379 – 380).
There are several theories within the CSR approach; for example, instrumental theories see corporations as instruments for wealth creation; political theories are interested in power corporations have and responsible use of that power; integrative theories look at corporations as the ones focusing on the social demands; ethical theories are based on ethical responsibilities of corporations (Garriga and Melé, 2004: 51).
Currently ISO, based in Switzerland, issues guidance on social responsibility. ISO 26000 provides guidance for businesses and organizations on how to operate in a socially responsible way, meaning acting in an ethical and transparent way that contributes to the health and welfare of society (ISO, 2017). Currently the UN Global Compact is the biggest corporate sustainability initiative. “The UN Global Compact’s Ten Principles are derived from: the Universal Declaration of Human Rights, the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development, and the United Nations Convention Against Corruption” (UN, 2017). The ten principles cover areas of human rights, labour, environment and anti-corruption. In 2005 Philip Kotler and Nancy Lee wrote a book presenting 25 best practices that can assist companies with their CSR programs. The practices are categorized into six major types of social initiatives, along with practical examples. “The categories include: (1) cause promotion (increasing awareness and concern for social causes); (2) cause-related marketing (contributing to causes based on sales); (3) corporate social marketing (behavior change initiatives); (4) corporate philanthropy (contributing directly to causes); (5) community volunteering (employees donating time and talents in the community); and (6) socially responsible business practices (discretionary practices and investment to support causes)” (Carroll, 2008: 40 – 41).
20 CSR movement is definitely a global phenomenon meaning that more and more companies are adopting a CSR approach, but the interest and growth are most apparent in Europe. The effectiveness of CSR initiatives in Europe is associated with the effectiveness of systems of private and public governance (Ibid.: 41). In the UK for example, CSR is a part of societal governance embedded in a system intended to give direction to society (Ibid.). The pressure for CSR in Europe “...is actually exerted by government, though not by law, but by clear indications of ‘expected’ behavior, especially when influenced by pressure from people who have strong feelings and expectations about issues in which corporate entities are themselves stakeholders” (Phillips, 2006: 23).
CSR converges around three dimensions: economic, environmental and social. In practice, this is known as the Triple Bottom Line (DESUR, 2012: 8, 9). Some of the good practices in the area of environment include switching to renewable energy sources or a decrease in pollution. In the social dimension, good practices include the abolishment of child labour, fair wages or an increase in safety of employees as well as increasing the quality of life of the local communities. The economic dimension refers to the effect of CSR on a company’s finance. Linking CSR to human security, the “Corporate Social Responsibility and Human Security in Fragile States” policy brief states that a CSR “...framework is instrumental in guiding efforts of the private sector to contribute to human security” (Appiah and Jackson, 2015: 5). CSR provisions have to be accessible and comprehensible.
Here is the diagram that illustrates the link between CSR education and implementation, peace and profit maximization:
21 Figure 2: “The diagram illustrates the linkages between CSR education and implementation,
peace and profit maximization” (Appiah and Jackson, 2015: 6). 3. Methodology
This chapter will provide information about my case selection and data collection. The four companies I will look into were carefully selected to make a valid comparison and a generalizable conclusion. The focus of my data collection is primary and secondary literature about Nigeria, Western European and Chinese MNCs and data about four companies I am analyzing. Along with the literature analysis, one interview was conducted with Olivier van Beemen, writer and journalist, the author of the book “Heineken in Africa” and an expert in MNCs in Africa. The interview had a character of an informal conversation where I presented my empirical findings about the four MNCs and Mr. van Beemen provided his opinions about the findings and additional insights gained from his own research.
3.1. Case Selection
As previously mentioned I will look into four companies in Nigeria, two Western European ones and two Chinese ones. The Western European companies I will be focusing on are Shell and Philips, and the Chinese firms are Huawei and CNOOC Limited. I chose these companies because all of them are big brands, they incorporate CSR policies, have sustainability and annual reports and they operate in Nigeria. Philips and Huawei are electronics companies and CNOOC Limited and Shell are oil and gas companies. I chose companies from the same sector so I can make a valid comparison and chose two sectors so I can make my conclusion more generalizable. Had I made a case study of one company or a comparison between two companies in the same sector I could make a conclusion that is either applicable to a single company, or a single sector. I believe that by incorporating four companies, and two sectors the societal relevance of my thesis is increased and my conclusion is more easily generalizable. Moreover, both Shell and CNOOC Limited operate in the Niger Delta region which can be defined as an area of limited statehood which should guarantee a valid comparison. While Philips and Huawei are mostly focusing on selling their products, Shell and CNOOC Limited are active in prospecting and extracting natural gas and oil from Nigeria.
When it comes to Nigeria, I chose it for a multitude of reasons. Firstly, it is a country with the biggest population in Africa – 186,053,386, and 42,79% is between the ages of 0 and 14 (IndexMundi, 2016). Secondly it is the largest producer of crude petroleum in Africa, the fifth
22 largest producer within OPEC and the eighth largest exporter of crude oil in the world (Amao, 2008: 94). Thirdly, it has a bilateral relation with China that is evolving incredibly fast. From less than $US 2 billion in 2000, trade between China and Nigeria rose to nearly $US 18 billion in just ten years (Egbula and Zheng, 2011: 3). Lastly, the pragmatic reason of Nigeria being well covered both by the media and academia. The case of Shell is closely observed both by journalists and scientists, as well as Chinese presence in Nigeria which should make it easy to find relevant literature about MNCs (both Chinese and Western) in Nigeria.
3.2. Data Collection
For the descriptive part of my research primary and secondary literature has been analyzed – Sustainability Reports, scientific articles, news articles, and several other reports. The information about CSR practices and projects since the companies came to Nigeria will be presented. Scientific articles focus on either the case of Shell or more generally Western European and Chinese MNCs in Nigeria. News articles were used to present certain projects of MNCs in Nigeria. The purpose of Sustainability Reports is to provide an overview of companies’ policies and financing in regards to CSR projects in Nigeria. Lastly, reports are useful for their data and quantitative dimension.
The case of Shell has been well covered by both the media and academia making finding relevant data very easy. As far as Huawei and CNOOC Limited go, several reports about the China – Nigeria relations mention them, and they both talk about Nigeria in their Sustainability Reports. Conclusions about those two MNCs will be drawn by cross referencing the literature about CSR in Chinese MNCs, literature about China – Nigeria relation and Sustainability Reports. The least amount of literature is available for Philips specifically. For this company, a multitude of news articles will be used in combination with the Annual Report and more general articles about Western MNCs in Nigeria.
One interview was conducted as a second data source. By only looking into Sustainability and Annual Reports a one-sided image of MNCs is obtained - the image of how they present themselves. The purpose of the interview was to gain new insights and opinion about the data found in the Sustainability and Annual Reports. The criteria for picking the interviewee was that he is knowledgeful about Africa, MNCs operating in Africa and topics of sustainability and CSR, as well as that he is not bias towards any MNC I am looking into. The interviewee was Olivier van Beemen, writer and journalist, the author of the book “Heineken in Africa” and an
23 expert in MNCs in Africa. The interview was held in English and it took place on the 12th of June, 2017.
The interview was informal. I presented my findings from Sustainability, Annual Reports and news and academic articles about the four MNCs I am looking into and Mr. van Beemen provided his opinions about their practices and CSR projects, as well as considerable insights from his own research and expertise.
4. Empirical Chapter
The purpose of this chapter is to provide some relevant data, first about Nigeria itself and the Delta Niger region, then about the emergence of MNCs in it. Western European and Chinese relations to Nigeria will also be presented and, lastly, concrete actions of four MNCs along with their Sustainability and Annual Reports will be explained and analyzed. Before any data analysis local context and historical development of MNCs in Nigeria have to be understood. Understanding the local context and the historical dimension brings new rationale to certain actions, both by the Nigerians and the Nigerian government and the MNCs. Along with the local context and a historical dimension, a legal dimension of the control over the MNCs in Nigeria will also be presented.
4.1. About Nigeria
Nigeria is located in West Africa, it is the most populous country in Africa and seventh most populous country in the world. The modern state originated from British colonial rule in the 19th century. After World War II a series of constitutions granted Nigeria greater autonomy (CIA, 2017). Nigeria became independent in 1960 with Prime Minister Sir Abubakar Tafawa Balewa (BBC, 2017). The period between 1960 and 1999 was marked by coups and mostly military rule with the civil war occurring in 1967. In 1999, a new constitution was adopted, but the government continues to face challenges of institutionalizing democracy and reforming the economy. One of the biggest problems in Nigeria are the ethnic and religious tensions between Christians and Muslims and Hausa, Fulani, Yoruba and Igbo as the biggest ethnic groups. Currently, Nigeria is experiencing the longest lasting period of civilian rule. “The general elections of April 2007 marked the first civilian-to-civilian transfer of power in the country's history and the elections of 2011 were generally regarded as credible” (CIA, 2017). In 2009 Boko Haram launched a campaign of violence (BBC, 2017). However, the 2015 elections were considered the most well run since the return to civilian rule (CIA, 2017).
24 Along with its massive population, Nigeria is the largest producer of crude petroleum in Africa, the fifth largest within OPEC and the eighth largest exporter of crude oil in the world (Amao, 2008: 94). Nigeria’s petroleum industry contributes around 9% to its economy. The US is the largest buyer of Nigerian crude oil amounting to 40% of the country’s total exports. When it comes to oil production the Niger Delta region is of great importance, although poor corporate relations with local communities, damages to the oil infrastructure and environmental pollution continue to occur. Oil in Nigeria was discovered in 1956.
Despite a decline in civil wars and other forms of armed conflict, the collective sense of insecurity in Nigeria is now higher than ever before, especially in the Delta Niger region. Some of the factors of that insecurity are: poverty and poverty related insecurities, the lack of good governance and the high sense of injustice resulting from the imbalance between “haves” and “have nots” (Enu and Ugwu, 2011: 255). The Delta Niger region is rich in petroleum resources, but it is suffering marginalization and neglect. “The major problem is the disconnection between promises made by successive government right from independence and the reality of post independence to the people of the region” (Ibid.). Due to that neglect and marginalization the inhabitants of the region have resorted to self-help methods of drawing the attention of the government which made the whole region volatile. Along with that the “...hostility in the area is traceable to lack of opportunity for political participation...” (Ibid.). People of the Niger Delta region have joined into an umbrella militant group MEND to draw the attention of the government.
“MEND adopted a wide variety of satanic operational methods and criminal activities to sustain its source of financing and unleash terror in the region. Methods such as high profile kidnapping of expatriates, illegal oil bunkering, smuggling, counterfeiting, drug trafficking, arms sale etc. to advance its course in addition to political donations by political office holders who believed in the use of violence to attain political power” (Ibid.)
An increase in human security in Niger Delta and whole of Nigeria calls for a new approach and sustainable security throughout the country.
25 In 2004, Phillips Consulting conducted a survey investigating what the stakeholder values were for people seeking support from the corporate world in Nigeria. The aim of the survey was to determine what exactly people expect from the corporations when they seek for help. All of the requirements resulted from government failure meaning that mostly people wanted what the governments could not provide. Among the top requirements were “...preferences and expectations with reference to education, health, poverty alleviation and economic empowerment” (Phillips, 2006: 24). CSR in the Nigerian context is a strategy that is not driven by any policy meaning that there are no official guidelines about sustainability and CSR from the Nigerian government, it is all voluntary. Many companies have adopted the approach of linking their spending on social issues in response to demand. “Such CSR activities depend on who comes to the door first and/or shouts the loudest” (Ibid.: 26). Moreover, the focus of many organizations is too wide, and funding is very inconsistent (Ibid.: 26 – 27).
CSR practices in Nigeria are most prominent in the oil and gas sector and among MNCs. Main tools of CSR by MNCs include corporate codes of conduct, voluntary social reporting and community development projects (Amao, 2008: 89). Areas covered by CSR projects include human rights, labour issues, transparency, bribery and corruption, employees’ welfare, environmental issues, disclosure of information, and consumer protection” (Ibid.).
The earliest that MNCs entered Nigeria was during the colonial period. The basis of modern Nigerian legal and institutional framework was established in British colonial administration. In 1900, all mineral rights were nationalized and vested in the British crown and in 1907 all lands were also nationalized and vested in the crown (Ibid.: 91). In 1937, an exploration licence was given to Shell-BP to search for oil. “By 1959, on the brink of Nigeria’s independence, the sole-concessionary right granted to Shell-BP had been reviewed and companies of other western nationalities were brought into the field” (Ibid.: 92). After the independence in 1960, several legislative changes occurred. Rules for investing non-resident capital in Nigerian businesses and methods for transferring foreign interests to non-residents and residents were established (Ibid.). In 1968, the Companies Act introduced the requirement for a foreign corporation to reincorporate as a Nigerian one before it could operate (Ibid.: 93).
The perception of MNCs in Nigeria was negative, they were viewed as new ways of colonization. “The country’s leaders in the 1970s thus perceived the process of indigenization as a way of asserting the nation’s right under international law to exercise sovereignty over natural resources in her territory, to regulate foreign participation and exercise the right to
26 naturalize such investments” (Ibid.). After the independence, the governments were interested in nationalizing certain sectors of Nigerian economy. They were very selective in the nationalization which left a lot of economic areas free to govern by foreign MNCs. The goal of the indigenization process was to increase local participation without the elimination of foreign investments. Generally, the approach was not very effective. In 1980s a shift towards economic liberalization happened. The Enterprises Promotion Act 1989 was Nigeria’s first step towards the deregulation and liberalization of its economy (Ibid.: 94).
Today, major sectors like manufacturing, construction and telecommunication are dominated by MNCs. When it comes to oil, the biggest MNC is Shell, producing more than 40% of Nigeria’s total output (Ibid.). All of the oil MNCs operate in a joint venture partnership with the, state-owned, NNPC.
There are six areas of Nigerian law that regulate the operations of MNCs: company law, human rights law, criminal law, tort law, labour law and anti-corruption law (Ibid.: 95). The violation of human rights by MNCs in Nigeria has been a subject of much debate. The reason for that is the fact that “...many of the issues remain at the level of allegations by citizens and civil society organizations, both local and international” (Ibid.: 102). A development in using human rights to control the MNCs came with the case Gbemre versus Shell. The case was brought to court by Jonah Gbemre on behalf of himself and the Iwhereken Community in the Niger Delta region against Shell Petroleum Development Company Nigeria Ltd. They claimed that oil production in that region led to an increase in gas flaring which in turn caused pollution which exposed the community to respiratory problems violating their rights to live and destroying their crops. “In its judgment, the court held that the constitutionally protected rights include rights to a clean, poison-free, pollution-free environment and that the actions of Shell in continuing to flare gas in the course of its oil exploration and production activities in the plaintiffs’ community violated their right to life and/or the dignity of the human person under the constitution and the African Charter” (Ibid.: 109). Even though there is no right for a “clean poison-free, pollution-free and healthy environment” in Nigerian constitution, the court relied on the African Charter. This case is of significant relevance because it provided a massive shift in the control of MNCs through human rights and outside of Nigerian constitution.
An interesting phenomenon in Nigeria in regards to control of MNCs is the effect social media has. A lot of criticism of, mostly oil MNCs, by stakeholders is being done through social media. “The accelerated rate of environmental advocacy by Nigerians (Deltans) made possible by
27 social media is reshaping how oil and gas MNCs in Nigeria are dealing with CSR issues” (Nwagbara, 2013: 693). MNCs are beginning to reinvent their communication strategies with the local communities. As an effect, MNCs are adjusting their CSR policies to be more socially responsible.
4.3. Western Europe – CSR and Relations to Nigeria
This chapter will present the Nigeria – EU relations. In this part, the EU will be used because its norms guide the policies of EU member states and in a degree MNCs in them. I believe that the relation to Nigeria is better presented through the documents and policies of the EU than host states of the two Western European MNCs.
Historically, relations between Western Europe and Nigeria were those of a colonial character. Today, the Cotonou Agreement is what regulates relations between Nigeria and the EU. It is the most comprehensive partnership agreement between the EU and the developing countries, including Nigeria. “This agreement constitutes the legal basis for the EU and Nigeria's partnership on political issues, development cooperation and trade” (EEAS.europa.eu, 2017). The aim of the agreement is to reduce and eliminate poverty and eventually integrate the ACP countries into the world economy. It is based on three pillars: development cooperation, economic and trade cooperation and the political dimension (Consilium.europa.eu, 2017). The agreement will expire in February, 2020.
In 2008, a decision was made to intensify the dialogue and increase cooperation between EU and Nigeria which was formalized in 2009 in the form of the Nigeria EU Joint Way Forward (Ibid.). “The main areas of priorities identified for such dialogue are: Peace and security, good governance and human rights, economic development, including trade and regional integration, energy, environmental sustainability and climate change” (Ibid.). In the political dimension the EU states that it is helping Nigeria strengthen its democratic rule.
Economically, the EU is the most significant trade partner for the ECOWAS countries. It is the top destination for Nigeria’s oil and non-oil exports with € 39.6 billion trade in 2014 (Ibid.). In 2011, the amount of EU FDI in Nigeria was € 25.3 billion, and that amount increased to € 29.6 billion in 2013 (Ibid.). Oil takes the biggest share of that trade, but also cocoa, leather, fish, rubber, copper and wood.
28 “Economic analysis and performances indicators show in fact that
despite oil and raw materials currently dominating the Nigerian economy, sustainable development (i.e. increase in income and jobs for the for the long run) will mainly come from the non-oil sector (agriculture, of course, but also manufacturing and services)” (Ibid.).
Development cooperation between EU and Nigeria started in 1975 when Nigeria joined the ACP group of states and signed the Lomé Convention (Ibid.). For Nigeria, this meant that exports could enter the European Economic Community duty-free. Also, the European Economic Community donated ECU 3 billion of aid for investments in the ACP countries. The cooperation was terminated in 1995 because of the execution of nine Ogoni activists for four years. The EU supports ECOWAS with its headquarters in Abuja. “This includes strengthening the efforts of ECOWAS to build a common market, based on a Custom Union and the principles of free movement of goods, people and services, as well as to foster democracy and to maintain peace and security in West Africa” (Ibid.).
Currently the EU recognizes three main sectors that require EU assistance in Nigeria: the social sector, economic sector and governance sector. In the social sector, the EU aims to help improve access to primary health care, fight against malnutrition, access to clean water and reinforce livelihoods and revenue generation in rural populations through food and nutrition security (EEAS.europa.eu, 2016). In the economic sector, the EU aims to increase access to sustainable electricity, improve conditions for economic growth with a focus on improving competitiveness and diversification, and promote development of renewable energy in order to create a stable environment (Ibid.). In the governance sector, the EU aims to support actions to strengthen democracy in Nigeria, fight against corruption, trafficking of human beings, drugs and small arms, reform the justice system, help build civil society organizations and control migration (Ibid.).
4.3.1. Shell
First time Shell came to Nigeria was in 1936 by founding Shell D’Arcy. The Exploration licence to prospect for oil in Nigeria was granted in 1938 (Shell, 2017). In 1956, the first successful well was drilled in Oloibiri, in the Niger Delta region. In 1961 and 1971 two big terminals were commissioned (Ibid.). In 1979, the company’s name changed to SPDC. The Nigerian National Petroleum Corporation came to own 55 percent over time, Shell owned 30 percent, France's
29 Total owned 10 percent and Italy's Eni 5 percent. Shell remains the operator” (Reuters, 2013). In 1990, MOSOP starts campaigning for a fair share of oil wealth with the Ogoni people (southeast Nigeria) living on the oil fields and compensations for environmental damages (Ibid.). Massive protests against Shell occur in 1993 and the military occupies the region. In 1995, Ken Saro-Wiwa and eight MOSOP leaders were executed by the military government on alleged murder charges (Ibid.). In 1997, Shell became first among the oil multinationals to publicly declare its support for the Universal Declaration of Human rights. In 2006, MEND emerges and starts attacking Shell facilities and kidnapping staff. Similar to MOSOP, MEND seeks a bigger share of oil wealth for the people of Niger Delta and reparations for oil spills (Ibid.). SPDC suspends operations in western Niger Delta region due to attacks. In 2009 Shell agreed to pay US$ 15.5 million for a lawsuit settlement in the US for alleged human rights abuses in the case of Ken Saro-Wiwa (Hennchen, 2015: 2). In 2010, SPDC sells fields in Nigeria and starts looking for growth in other countries. In 2011, UN criticizes Shell and the Nigerian government for contributing to almost 50 years of pollution in Ogoniland. It is estimated that Ogoniland will need the largest oil clean-up ever, lasting for almost 30 years (Reuters, 2013). 2012 and 2013 were marked by big lawsuits, first one being at the London High Court and the second one in The Hague.
The 2013 lawsuit set a precedent in that it was the first case of a MNC being sued by foreign citizens on its own territory and losing the case. In The Hague, the district court found SPDC “...guilty of neglecting its duty of care in that the company failed to take reasonable steps to stop a foreseeable sabotage from occurring on their crude oil wellhead” (Hennchen, 2015: 2). However, Shell operated in a very complex environment. The most responsible for damages to infrastructure causing oil leaks were indeed the heavily-armed militant groups involved in oil, theft and sabotage. The Nigerian government was unable to develop the rule of law and establish socio-economic safety for the population of the Niger Delta region as well. In a situation like that Shell had to “...step in this public responsibility deficit and assume traditional government responsibilities that went beyond legal requirements and traditional corporate social responsibility (CSR) programs” (Ibid.). In Shell CSR policies were transferred from headquarters to business units (that are closer to the local level) and the supply chain and they include policies such as the Health, Safety, Security, Environment and Social Performance Executives, the company’s Statement of General Business Principles and Code of Conduct (Ibid.: 3). Shell installed a permanent Nigeria team at the headquarters level. They were
30 responsible for partnership management and external engagement with local and international stakeholders.
4.3.1.1. Projects and CSR
Shell’s community development projects were considered as positive by the World Business Council for Sustainable Development and in 2011, SPDC was voted “Best Company in most Innovative CSR” (Ibid.: 4). In Nigeria, at the local level, Shell increased its community development budget from US$ 300,000 – US$ 400,00/year in 1990s, to US$ 25 million/year in only six years (Ibid.: 5). In 2000, the Shell Foundation was set up as an independent charity focusing on problems of poverty and environment. SPDC’s Managing Director Sunmonu claimed that SPDC, in 2010 spent about US$ 56.8 million on community development projects in the Niger Delta region (Ibid.). Shell is contributing to employment generation, health and education, having around 17 000 students yearly on a Shell scholarship (Ibid.). Director Sunmonu stated that the biggest contribution from the company are the taxes and royalties payed to the government (Ibid.). In 2006, SPDC introduced GMoU, an agreement between SPDC and a group of several communities.
“The GMoU brings communities together with representatives of state and local governments, SPDC and non-profit organizations, such as development NGOs, in a decision-making committee called the Cluster Development Board (CDB)” (Shell, 2017).
The communities (the local, indigenous people) decide the development they want while SPDC provides secure funding for five years. By the end of 2011, SPDC has implemented agreements covering 290 communities which is around 30% of the communities around Shell’s business operations in the delta (Ibid.). In 2011, 596 projects had been completed through GMoU and over US$ 79 million has been provided in funding (Ibid.).
In its Sustainability Report for 2015 Shell has an entire chapter dedicated to Nigeria. The Sustainability Report states that SPDC divested its interests in three onshore leases and a major pipeline (Royal Dutch Shell, 2015: 24). Oil theft remains a major issue with attacks to flowlines and well heads. When it comes to spills the number went down from 37 in 2014 to 15 in 2015. (Ibid.). Theft of crude oil went down from 37 thousand barrels a day in 2014 to 25 thousand barrels a day in 2015 (Ibid.). Down came the number of sabotage-related spills as well, from 139 in 2014 to 93 in 2015, although theft and sabotage still cause 85% of the spills (Ibid.).
31 Shell is also involved into working with the communities implementing programmes that focus on community and enterprise development, education and health. In 2015 SPDC Joint Venture and Shell Nigeria Exploration & Production Co Ltd invested around US$ 10 million in scholarships and education programmes (Ibid.: 25).
“Grants were awarded to 930 secondary school students and 638 university undergraduates during 2015. Ten postgraduate scholarships were also awarded to students from Rivers, Bayelsa and Delta states to study engineering and geosciences at international universities” (Ibid.).
The cradle to career programme started in 2010 and over the five years period 410 places have been awarded with 60 new students only in 2015 (Ibid.).
When it comes to health, the SPDC Joint Venture supported community health since the 1980s. The Obio Cottage Hospital in Port Harcout has become one of the most visited hospitals in the region due to a community health-insurance scheme which has over 45 000 people enrolled in it (Ibid.). SPDC supports 27 health facilities in the Niger Delta region and supports services including health education, vaccinations, eye-testing, treatment of malaria and minor ailments, the distribution of mosquito bed nets, HIV screening and de-worming school children (Shell, 2017). Shell Nigeria Exploration & Production Co Ltd is working on a year-long pilot study to promote clean cook stoves in Lagos, providing 2500 clean cook stoves (Ibid.).
“LiveWIRE, Shell’s youth entrepreneurship programme, has now been extended beyond the Niger Delta to include Lagos, with 255 trainees, and 126 business grants awarded in 2015” (Ibid.).
SPDC Joint Venture also provides funds for communities through the GMoU. In 2015, 359 communities are covered.
To summarize, the history between Shell and Nigeria is very complicated and filled with conflicts. The Nigerian people wanted a fair share of oil wealth and less pollution. Shel even came under criticism by the UN and lost several lawsuits. All of this and the complexity of the environment in which Shell operated urged Shell to create numerous CSR policies.
Currently Shell is investing mostly in the Niger Delta region. The budget for the local level has consistently been expanding and in 2010 Shell invested US$ 56.8 million on community development projects. The GMoU is a big project by Shell where the local communities in the
32 Niger Delta region “pitch their ideas” to Shell and Shell finances their projects for up to five years. In 2011, 596 projects were financed and over US$ 79 million has been provided in funding.
When it comes to education, 17 000 students yearly are influenced by the Shell scholarship in order to affect education and employment generation. In 2015, US$ 10 million was invested to scholarship and education programmes affecting 930 secondary school students, 638 university undergraduates and 10 postgraduates. The cradle to career programme started in 2010 and so far, 410 places have been awarded. The LiveWIRE youth entrepreneurship programme has been extended beyond the Niger Delta region to include Lagos with 225 trainees and 126 business grants awarded in 2015.
As far as the health sector is concerned, Shell helped to develop a community health-insurance scheme which has over 45 000 people enrolled in it. Currently Shell supports 27 health facilities that employs 880 people in them.
Other projects include a one year pilot study to providing 2500 clean cooking stoves in Lagos. Through the multitude of its projects Shell influences mostly the employment and health dimensions of human security. Both the individual and communities are affected by numerous Shell’s projects. Shell shows even some governance ambitions through the health insurance scheme. Scholarships and grants to students improve not just the individual, but the whole community by increasing the number of well educated people. When it comes to Shell, I can not argue that the practices are changing due to Chinese MNCs appearing. Most of the changes appeared after the lost lawsuits and criticisms from the UN.
4.3.2. Philips
The relationship between Philips and Nigeria is less conflict ridden as the one between Shell and Nigeria. Philips Nigeria is comprised of Health Systems, Personal Health and Lighting Solutions businesses of Royal Philips in the Netherlands (Philips, 2017). Kenya, Ghana and South Africa appear to be the main focus of Philips, so the other countries in Africa are “taking a back seat”. In articles and Sustainability and Annual Reports specific countries are rarely mentioned, rather Africa is mentioned as a whole. That being so, it is hard to pin point exactly where and on which projects Philips operates (when not talking about Kenya, Ghana or South
