CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Globally, organizations are concerned with value re-investment to the society in appreciation of the contributions of the society to their growth, sustenance and survival. Hence attention is further directed to the potential consumers as well as non consumers of corporate offers as marketing concept philosophies are integrated into societal marketing concept as means of achieving desired level of social responsibility. Given this as the thrust of operations, corporate attention is increasingly being given to issues like equal employment opportunity, thus it is easier for corporation to be re-oriented to corporate social responsibility philosophies. But in the developing economies represented by Nigeria; consumers are unwilling to sacrifice convenience and pay potentially higher prices to protect the environment as they lack knowledge to make informed decisions dealing with their purchase, use and disposition of product; pollution control; energy and natural resources conservation and consumers’ and workers’ protection (Preston and Post, 1975:75). Businesses thus operate on the philosophy of maximization of positive effects of their activities on the society as the negative impacts of these activities are minimized (Farrell and Fredrich, 1997:19). This is the thrust of corporate social responsibility as considered an obligation among businesses in the advanced societies of the globe.
Multinational Corporation is used by people both in the business and non business sectors, to some people it means a fairly big firm that has about five or six branches in a state, while others see it as a big firm that has branches in all the states or divisions of a country. According to Prasad & Shetty, (1976:37) “Multinational corporations are firms that operate effectively under different national sovereignties”. They further stress that multinational corporations are such firms that must cope with wide variations in economic conditions, different values and cultural systems and wide geographical separation. With this definition, multinational corporations are large firms that operate in different parts of the world, but most of the times have one acclaimed headquarters, situated in a place it was first established. There are various multinational corporations both in Nigeria and abroad.
However, For the purpose of this research work, the researcher is using ExxonMobil oil Producing Nigeria at Eket, Akwa Ibom State. It is of note to mention that multinational corporations operating in foreign lands must respect the tunes and dictates of the host government or face expropriation. By the nature of their operation, multinational corporations must cope not only with more complex organizational structure but with far more elaborate and sensitive array of environment variables than domestic operations as these corporations are seen as giants amongst economic entities and primarily because of their size, economic power, efficiency, stability, dynamism, flexibility and quite often a technological oligopoly. Elwood (1979:167), said that the size and scope of multinational corporations within many developing nations often bring about significant social changes that disrupt or counteract social programmes and goals of host government.
Multinational corporations are known for their exploitative tendencies in developing countries. There has been lots of accusation by concerned African countries that these corporations are only out to suck dry the natural and human resources of poor African countries without correspondingly compensating them or showing appreciation in return. Despite the fact that these corporations exploit these African countries and realize huge profits from their business operations, it is difficult for saying they satisfy the yearnings and aspiration of the communities where they operate in terms of business social responsibility. Offiong (1980:55) asserts that, going by the concept of imperialism and dependency as characterized by the exploitation of the developing countries by the west and as manifested by the infiltration of western capital into poor African countries, one can categorically say that the contribution of these multinational corporations to the community development is not encouraging. This is evidenced by public out-cry for compensation by communities where these corporations are operating due to the fact that these communities provides the needed raw materials for that operation.
At times these communities after waiting patiently for these corporations to meet their social demands without any response, take the law into their hands to show their resentments. It is note to stress that the oil producing communities are the ones which are supposed to benefit more from Multinational Corporation involve in oil exploration in such areas. Social responsibility is an issue that most organizations feel committed to. The concept reflects the things a company should do for the community within which it operates, which often times go beyond meeting its obligatory requirements. In more than three decades of operation in Nigeria, oil multinational has consistently demonstrated a high level of social responsibility through various community assistance programmes undertaken by the company. This range from road construction to provision of potable water and electricity, upgrading of educational and health facilities, environmental protection activities, sundry support to professions and civil society groups and recently, capacity building initiative (Mobil Community News, 2005:5). With the merger of Mobil and Exxon now known as ExxonMobil, one would expect more in their corporate social responsibility. This work intends to appraise oil multinational companies and the implementation of corporate social responsibility: Akwa Ibom State experience.
1.2 Statement of the Problem
Taking a look at Corporate Social Responsibility (CSR) among Multinational Corporations in Nigeria, Amao (2012:2) expresses that Multinational National Corporations (MNCs) have for some time gained notoriety in the area of human rights and labour rights in the world economy and politics. He states that the people of the Niger Delta have had to contend with the burden of environmental degradation including oil spills from pipelines polluting the land and waterways, gas flaring polluting the air and destruction of fishing and farming opportunities leading to the destruction of livelihood of farmers and fishermen among numerous problems (Amao, 2012:1-2).
He contends that CSR became a prominent issue in Nigeria in the 1990s following a series of human rights and environmental law infringements involving companies in the oil and gas sector. The most notorious of these incidents was the Ken Saro Wiwa affairs, an incident which brought the Nigerian situation to global attention and was a public relation disaster for the MNCs working in the area. He avers that a development which will serve as a potential opportunity for the companies to engage with the government and work with it in order to work out a framework that will strengthen CSR strategy is the passage of a bill introduced in 2008, aimed at establishing a Corporate Social Responsibility Commission (Amao, 2012:1).
David, Ibok and Ekong (2013:21-28) in their study aimed at assessing the up-to-date role of Exxon mobil in the development of host state, Akwa Ibom state, puts that it has identified, supported and operated a planned and sustainable programme of community development in the state. According to them, Mobil has made great contributions in the area of physical infrastructure such as road construction, water, electricity, health facilities among others. They however, assert that Exxonmobil should balance infrastructural provision with human capacity building.
Most studies have been carried out on Corporate Social Responsibility focusing on oil and gas multinational corporations and the provision of CSR to host communities. The problem of the study therefore is the persistent demand by host Communities on the Multinational Corporations in Akwa Ibom state for CSR which could lead to aggression if not addressed. This study therefore focused on Corporate Social Responsibility of oil multinational company in Akwa Ibom state. The aim of the study is to assess the extent to which these host communities benefit from CSR of these multinationals and how it meets their needs bearing in mind the persistent demand by host communities for CSR.
1.3 Objectives of the Study
The main objective of the study is to assess the oil multinational implementation of corporate social responsibility in Akwa Ibom State.
Subsidiary objectives:
Investigate the extent to which multinational oil corporations have enhanced the socio-economic development of the host communities through their intervention programmes.
Examine the living conditions of the community members before the implementation of the sustainable development programmes and how these programmes have impacted on the standard of living of the host communities.
Examine the extent to which the multinational oil corporations adhere strictly to the principle of corporate ethics and moral maturity in solving the environmental effect of the oil exploration in the region.
1.4 Research Questions
To what extent has multinational oil corporations enhanced the socio-economic development of the host communities through their intervention programmes?
Is there any impact on the living conditions of the community members before the implementation of the sustainable development programmes?
To what extent has the multinational oil corporations adhere strictly to the principle of corporate ethics and moral maturity in solving the environmental effect of the oil exploration in the region?
1.5 Statement of Hypothesis
To enable the researcher to achieve the stated objective, hypotheses were formulated and they are as follows;
H1: Oil multinational corporations have enhanced the socio-economic development of the host communities through their intervention programmes.
H0: Oil multinational corporations have not enhanced the socio-economic development of the host communities through their intervention programmes.
H1: There is relationship between improvement of living standards of host communities through oil multinational corporate social responsibility.
H0: There is no relationship between improvement of living standards of host communities through oil multinational corporate social responsibility.
1.6 Significant of the Study
The study focuses on the contribution of Multinational Corporation to host community when properly articulated, it will be of tremendous benefit to many interest groups.
It will provide an opportunity for policy makers in Akwa Ibom State to formulate policies that will guide corporate social responsibility practice in host communities.
It will create awareness in oil communities, to the type of benefits deserved by the oil producing communities.
It will be useful to the Akwa Ibom State government and all oil producing communities in finding out better ways of improving the living standard and environmental conditions of the people of the state.
This study will proffer solutions to challenges faced by the multinational and oil producing communities.
It will also serve as useful guide for scholars who intends to undertake further research in this area as there are so many areas of concern that can be drawn from this study.
1.7 Scope and Limitation of the Study
This research study is to assess the contribution of oil multinational corporate social responsibility to the people of Akwa Ibom State. It focuses attention on the provision of social amenities and other forms of assistance the firm assisted the people with, the study is limited to Akwa Ibom State, and covers the firms social responsibilities to the people.
In the course of conducting the researcher came face to face with some practical problems. One of the constraints was uncooperative attitude of respondent as some respondent felt the question were made to expose the community’s backwardness in terms of social/economic development. Certain information which ought to have appeared in this study were denied the researcher by the personnel of department of the corporation.
Another constraint was the task of moving from one community to another in order to administer the questionnaire, which was very strenuous due to distance and transportation difficulties. It was also difficult to elicit information from illiterate villagers whom in most case resisted interview. The researcher did not find it easy to continue with the researcher work due to the large work in class. A research work of this magnitude requires quite a time for a meaningful work to be done.
1.8 Definition of Terms
Corporate: of or relating to a corporation, corporate planning/finance/borrowing/loyalty, or corporate identity.
Social Responsibility: is voluntary; it is about going above and beyond what is called for by the law (legal responsibility). It involves an idea that it is better to be proactive toward a problem rather than reactive to a problem.
Corporate Social Responsibility: A demonstration of certain responsible behaviour on the part of governments and the business sector toward society and the environment.
Multinationals: is a firm that own and manages economic unit in two or more countries or existing in or involving many countries.
