Corporate social responsibility won’t fade away soon

The concept of “corporate social responsibility” has generated considerable attention over the last several decades, as companies have recognized the need to observe human rights standards, comply with environmental regulations and adhere to ethical norms that perhaps never before intersected with the business world.  International pressures coupled with growing demands for transparency have resulted in of many companies moving towards adopting policies and practices in tune with this kind of moral responsibility.  As a result, the buzz surrounding “corporate social responsibility” is likely here to stay; and as a liberal arts college churning out future CEOs, politicians, investors, and socially conscious consumers, a discussion at Allegheny is certainly warranted.

On March 27, the subject of the Quigley Town Hall meeting was “Oil, Human Rights, and the Niger Delta.”  This was in anticipation of the symposium to follow on “Human Rights, International Corporations and American Law.”  The meeting stimulated a discussion and raised important questions surrounding responsibility in the Niger Delta, specifically in regards to the role of international oil giant Royal Dutch Shell.

The current situation in the Niger Delta region is deplorable.  The population struggles with widespread extreme poverty, exacerbated by decrepit institutions and a dire lack of infrastructure.  In an area that fulfils one fifth of the energy needs of the United States, access to electricity is poor, and telecommunications and technological use is low.  Much of the rural population depends on untreated well water, which increases incidence of disease and creates major health issues.  Aside from those that service oil production specifically, roads are in poor condition or nonexistent, which is especially problematic for rural populations and makes access to drinking water and general health care even more difficult.  Furthermore, the oil-related environmental destruction in the Niger Delta has not only resulted in these health problems and a significant drop in life expectancy, but also in a loss of livelihood for the large portions of the population that depended on farming and forestry.  Increased unemployment has created a restless youth, who have turned to interfering with oil production by destroying and stealing from pipelines.

All of these issues have created a situation in which the Niger Delta region, although at the heart of the Nigerian economy, is largely politically and socially marginalized from the state.  This is primarily a consequence of the relationship between the Nigerian government and dominant multinational oil companies, which has led to the neglect of the people.  Foreign companies with extensive holdings in the Nigerian oil industry yield a great deal of political power, and thus, have the tendency to manipulate the state.  As the company with the highest oil production rates, Shell has played an especially visible role in manipulating the situation in the Delta.  Shell was found to be particularly involved in Nigerian politics during the era of military rule, and admitted to arming regional security forces to quell government opposition in the Delta, which generated a host of human rights issues.  The Shell operational camps and facilities are well maintained and in no way resemble the abominable conditions in the rest of the Niger Delta.  In response to mounting international pressure and growing domestic resistance, Shell has committed to an agenda of “sustainable community development” that includes initiatives such as road building and securing access to safe drinking water, but impact on the region has been questionable in light of corruption and the fact that company reports contain lists of programs and development initiatives that in fact, do not exist.  On the whole, the presence of multinational oil companies such as Shell has created a situation in which substantial oil windfalls do not trickle down to the origin, and the resulting environmental destruction, negative health-related consequences, mass poverty, and loss of livelihood have become major barriers to development.

Shell’s hand in exacerbating environmental and human rights-related problems in the Niger Delta brings to light a host of important questions about corporate social responsibility and business ethics.  Is it only in the face of controversy that large corporations will cave and implement such policies and commitments to responsibility?  If the international community had not been paying attention, would Shell executives turn a blind eye to the blatant disregard of environmental regulations and human rights abuses?  Unfortunately in this case, it appears so.  In a broader sense, is incorporating socially sustainable practices in a business model essentially about “saving face?” Do companies who do so yield greater financial success?

Regardless of the motivation behind corporate responsibility, this issue is not going to fade away anytime soon.  If anything, the pressure on companies to pay attention to ethics and morality will only build in an increasingly connected and transparent world.  At Allegheny, students are encouraged to become “global citizens.”  While there are many factors that contribute to establishing oneself as a global citizen, a key component is ensuring that being aware of issues such as the situation in the Niger Delta will lead to responsible and informed decision-making.   While I cannot offer a solution to Shell’s mess in the Niger Delta, I can definitively say that corporate social responsibility begins with the education of future policy makers, executives, and consumers, and therefore, that the most beneficial, powerful discussions are undoubtedly happening here at the source.