CHAPTER ONE
INTRODUCTION
1.1 Background of the study
The field of Corporate Social Responsibility in business has become an almost unavoidable concern and focus for large organisations as well as small sized enterprise (SMEs). The British American Tobacco company Nigeria is no exception. In Nigeria, the British American Tobacco started an operational presence in 1912. Commercial growing of tobacco started in 1934 when British American Tobacco (BAT) decided to source tobacco leaf locally, this subsequently led to the establishment of a full scale factory in 1937 in Ibadan, Oyo state. However, tobacco cultivation first started in Ogbomoso, Iseyin and Ago Are, all in the present day Oyo state, before spreading to the Northern part of the country. By 1978, there were three operating factories located at Ibadan, Port-Harcourt and Zaria. (BAT: 2014).
However, the nose-diving of the Nigerian Tobacco Company (NTC), with the closure of Porthacourt factory 1983, and Ibadan factory closure in December 1995, leaving the failing Zaria factory for operation, there was another spirited attempt by BAT to launch cigarette production in Nigeria. (BATN 2014).
British American Tobacco (Nigeria) Limited was incorporated on July 11, 2000 and subsequently merged with the Nigerian Tobacco Company on November 6 of the same year. The company is a fully owned subsidiary of the British American Tobacco Group. Therefore, on
September 24, 2001 at an event tagged “Nigerian Investment Summit”, BAT signed a Memorandum of Understanding (MoU) with the Federal Government of Nigeria for an
investment of $150 million to build a state-of-the-art-factory in Ibadan, Oyo State. The investment started a process that has impacted all aspects of the tobacco industry, from leaf growing, through to the manufacture and distribution of tobacco products.
It is not a thing of surprise that within a short time of existence, agitations for social commitment to host communities by opinion leaders, agencies and members of host communities are on a high demand. The rising importance and attention of socially responsible investment, increasing consumer and environmental concern, and a growing political/ legislative environment have driven the British American Tobacco Company Nigeria to engage in corporate social responsibility (CSR) programmes to satisfy the continuous needs of host communities.
According to Tariq, Ahmed, Sheraz&Mehfooz (2012: pg. 41), corporate engagement with society, also termed corporate social responsibility (CSR), has become a commonly used term in contemporary society and refers to one process by which an organization expresses and develops its ‘corporate culture’ and social consciousness (Rupp et al,2006 and Calderon, 2011).
CSR has been receiving lots of attention from various backgrounds of researchers worldwide (Ismail 2011), it has attracted a great deal of attention over the past decade (Zu& Song 2008), and according to some researchers, it has gathered great momentum over the past number of years and is now regarded to be at its most dominance(Sweeney 2007). As a result, business leaders, government officials, and academics are focusing more and more attention on the concept of “Corporate Social Responsibility” (Reinhardt et al 2008).
Realizing the disconnect between organization’s and the host community, the issue of corporate–community relations (CCR) is now often part of strategic business thinking and action, because community expectations and perceptions now define how an organisation should operate, and an organisation that ignores community expectations does so at its own peril (Burke,1999). Indeed, Waddock and Boyle (1995) have argued that corporate–community relations is simply no longer a buffer between the organization and its community (i.e., a collateral system), but has become a function that integrates community interest with that of the corporation (i.e., an interpenetrating system). As such, Humphreys (2000) has suggested that the key to community relations’ success is genuine involvement, as opposed to traditional approaches such as making charitable contributions or being a good employer.
Against this backdrop, an evaluative study on the level of community participation in corporate social responsibility of the British American Tobacco Company Nigeria in Oyo state becomes highly necessary this time that the media have been inundated with several criticisms of the organization’s activities in Nigeria. Therefore, the question is; what is the level of community involvement in CSR projects? What is the process of selecting community participation in CSR projects aimed at community development? To what extent were the company’s CSR projects acceptable to the host communities in Oyo state?
1.2 Statement of Problem
Multi-nationals and indigenous manufacturing organizations are integral part of Nigeria’s economy. However, most of them are facing harsh criticisms from suspicious and aggrieved publics, especially their immediate communities. In the corporate world, the level of corporate performance is tied to how well managers of an organisation respond to the needs of the shareholders, and their host communities. A corporate organization that performs its CSR to the community may likely experience cordial working relationships with the community. This it can achieve through community dialogue and community participation in corporate socially responsible projects designed for communities.
The British American Tobacco Company Nigeria has been operating in Oyo state for quite some time. It is not certain whether the corporate organization is involved in CSR projects, and where they are involved, it is uncertain if community participation is a key factor in deciding such CSR projects, because it is worrisome that in spite of the acclaimed CSR programmes carried out by the British American Tobacco Company Nigeria, the company has continued to be criticized across the media and by relevant agencies in Nigeria. Thus, could the cause be inadequate involvement or participation of host communities or poor implementation of CSR programmes? Where the communities are informed, it is difficult to say whether the host communities are involved in the process leading to the design and execution of such projects. It is also in doubt that the individuals involved in dialogue or participation may not be selected by the host community, rather British American Tobacco Company Nigeria may have selected the representatives on their own intuition. These doubts call for immediate shedding of light, so as to understand the claims and counter-claims.
The purpose of this research is to investigate the host community engagement approach, level, rationale and implications for corporate social responsibility (CSR) management and governance in the Nigerian tobacco sub-sector. Also it seeks to evaluate community participation in CSR of British American Tobacco Company Nigeria in Oyo state. In this evaluation, the level of community participation and involvement of host communities will be critically analyzed.
