(In)Effective Business Responsibility Engagements in Areas of Limited Statehood: Nigeria’s Oil Sector as a Case Study

Abstract

In reality, most state actors—especially those in the developing world—are usually incapable of effectively governing all facets of their territory. This has necessitated the intervention of non-state actors (in this instance, corporations), who through their social responsibility engagements act as functional equivalents to state-driven government. Using empirical data, this article evaluates the “governance” interventions of corporations in the oil industry in Nigeria’s Delta region. While arguing that the area qualifies as an area of limited statehood, the article asserts that corporate social responsibility practices that are based on Western (neoliberal) approaches cannot contribute effectively to the sustainable development of host-communities. In this context, the article contends that since the social responsibility engagements of corporations in the Niger Delta (as in most developing countries) are influenced by a pro-West philosophy, the end result is a business responsibility engagement which is ineffective as a development strategy.

Why Do Institutions Revert? Institutional Elasticity and Petroleum Sector Reforms in India

“…We look at three key conditions-scope of change, pace of change, and actor constellations within the field, and develop propositions specifying the linkages. Finally, based on our examination of a state-driven change in a critical sector like petroleum, we draw implications for policy and business-government relationships, thus adding to recent research on the topic (Nwoke, 2019;Tian et al, 2009).…”

“…Successive governments were not willing to risk giving licenses to any private player in this industry as the energy industry was considered critical to the interests of society (Marcus & Anderson, 2013). In E&P sector, specifically, government-owned companies controlled vast majority of this sector across the world (Nwoke, 2019;Rai, 2010). From India's independence in 1947 till 1991, although there were few attempts at competitive bidding for allocation of exploration blocks, these did not meet with much success.…”

Governance and Business-Society Relations in Areas of Limited Statehood: An Introduction

“…However, these boundaries are more problematic in ALS as various actors can engage in governance systems that often operate in parallel or even replace the state. The contributions by Nwoke (2021) and Belhoste and Nivet (2021) show how the differences between legitimate and illegitimate stakeholders become blurred when businesses seek to become governors or empower terrorist groups as governors in extreme contexts (Flanigan, 2014; Hanekom & Luiz, 2017). Moreover, as war and conflict studies underscore, the threshold for who are perceived legitimate or illegitimate actors in conflict areas is a highly political one, which can change according to the shifting local and international political interests at any given time (Berti, 2018; Hill, 2017; Phillips, 2003).…”

“…Our collection of articles provides a more nuanced pictures of the drivers of strategic decisions by businesses in ALS than extant research (Thauer, 2014). The studies by Nwoke (2021), and Belhoste and Nivet (2021) show that governing corporate responsibility differs across the global South, that corporations have multiple strategic options available, and that choice is driven by amalgam considerations of governance structures, actors, and corporate interests. This observation is in line with recent studies that shed light on the prevalence of multiple logics tied to different institutional orders.…”

“…The central question explored by Belhoste and Nivet (2021) in their study of the French corporation Lafarge’s operations in war-torn Syria is why the corporation remained in an area of limited statehood for so long, since their presence empowered terrorist groups as governors, and had negative consequences for the company and for the various political forces in the region and elsewhere. Nwoke’s (2021) study of the oil industry in the Niger Delta investigates to what extent corporate social responsibility, in a context of limited statehood, contributes to “community development.” He finds that business contributions to community development are limited since oil companies are more inclined to their affirmative duties (i.e., the pursuit of moral and social good) than to their negative injunction duties, such as addressing oil spills and environmental damages. This challenges the findings of other studies on business as governors in ALS, showing that companies curb their negative externalities by setting and implementing environmental, labor, and social standards but are reluctant to engage in the direct provision of public goods, such as education, health, or infrastructure (cf.…”