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Chapter one


1.1 Background for the Study

Every nation in the world survives by some means or another. Some rely on tourism to survive, while others rely completely on agriculture. However, others are fortunate enough to be endowed with mineral resources such as oil and gas, which generate a lot of cash.

Nigeria once relied heavily on agricultural items such as groundnut, cocoa, palm produce, and others to thrive. This was prior to the finding of oil in 1956 at Olobiri, Rivers State. Today, oil and gas are the country’s primary revenue sources.

The blessing was not without its drawbacks, which included environmental degradation, damage to economic crops and fish ponds, pollution of drinking water supplies, and general health risks to individuals living in oil and gas-producing areas.

According to Okoko and Nna (1998), oil and gas are the primary energy sources in the majority of industrialised countries today, and by all accounts, Nigeria’s most valuable resource, accounting for around 90% of the country’s total revenue.

The Niger Delta is Nigeria’s petroleum industry heartland, with oil fields distributed across the geopolitical regions of Abia, Akwa-Ibom, Bayelsa, Cross River, Delta, Imo, Ondo, and Rivers.

Before the introduction of oil and gas activity in the area, the Niger Delta had a variety of agricultural and natural resources that supported the people’s economic lives. Whiteman (1982) reported that traditional medicine and subsistence jobs were widespread among the locals.

Things have changed dramatically, as the area has been plunged into a state of instability as a result of protests by communities in these oil-producing areas over the environmental impact of oil activities, which has resulted in environmental degradation, poverty, and a lack of social development and employment opportunities.

In February and March 2001, youths from four host towns barricaded the access roads leading to the Mobil Production Terminal in Eket, Akwa-Ibom state, Nigeria.

The youngsters took action because they felt marginalised by the company’s employment practices, contracts, and services. In addition to the actions of the youngsters, the government mobilised its machinery – legislative, executive, court, and media – against the firm in response to environmental degradation and other adverse acts.

Over the years, there have also been protests spanning Okoloba to Ogidigben, Ogbotobo to Bonny, Ogoni to Iko, Gbaran to Obagi, Umuechem to Peremabiri, Egbema to Odegberi, and other regions.

All of these issues stem from a poor attitude towards spill cleanup, an unnecessary delay in environmental impact assessment, and a failure to compensate impacted areas.

In November 1990, for example, the inhabitants of the Umuechem village in Rivers state demonstrated against environmental degradation caused by SPDC, an oil firm operating in the area, claiming that their operations had an adverse environmental impact.

This resulted in the soldiers invading the hamlet, killing many people and destroying approximately 300 dwellings (NDND, 1991). From January 1993 to March 1997

the people of Ogoni in Rivers State organised a series of protests against SPDC’s oil exploration in the area, which resulted in the’stealing’ of natural resources (crude oil) and environmental devastation without proper recompense for the people.

The Federal Government’s reaction was impulsive, and military attacked the area, killing many Ogoni natives as well as foreigners, some of whom were abducted for ransom, and taking other actions detrimental to Nigeria’s corporate existence.

The Ogoni boycotted the 1999 presidential election, oil company operations in the area ceased, resulting in an unprecedented drop in the country’s oil earnings, with the economic loss conservatively estimated at 7.2 billion dollars (Barinuwa, 1999; Human Rights Watch, 2001; ICE case study, No 64, 1997).

The relationship between the private sector and other stakeholders has shifted dramatically during the past two decades. As a result, one of the most important and significant corporate trends of the past decade has been the rise of Corporate Social Responsibility (CSR).

The notion of CSR is highly complex and contentious among writers, scholars, and practitioners due to a lack of agreement on the genuine meaning and content of CSR practices (Carroll & Shabana, 2010; Dahlsrud, 2008; Dobers & Halme 2009; Taneja, Taneja, & Gupta, 2011).

Although definitions of CSR differ by source, it generally refers to supporting people, communities, and the environment in ways that go above and beyond what is legally required of a company.

Corporate social responsibility (CSR) is a commitment to enhancing community well-being through best business practices and corporate resource contributions.

The definition of this notion is actually determined by how individuals who believe in it and those who do not perceive it. People see it from various perspectives. According to those who believe in it, it is the obligation of an organisation to plan and manage its relationships with everyone involved in or affected by all of its activities and operations.

It is a good social investment, and they feel that a socially responsible firm does not engage in behaviours that the public may view to be irrational, cruel, or insensitive. Those who oppose it, on the other hand, claim that businesses cannot be “responsible” because only people can have duties.

To them, it is a breach of accountability to shareholders who have invested their hard-earned funds to benefit. (Ogbemi. 2015). The truth is that profits should not come at the expense of the public. Profit-making should be fair and humane.

The notion of CSR is concerned with crucial issues regarding environmental policy and practices. Its core business is for organisations to give back to society while making a profit. According to Zadek (2000), organisations participate not just to project a positive image, but also to draw stakeholders into the main stream of the business.

CSR typically promotes mutual understanding among organisations and the communities in which they operate. (Keinert, 2008; Matten and Moon, 2008; Monowar & Humphrey, 2013). Corporate Social Responsibility is increasingly an integral aspect of commercial organisations, encouraging significant future gains.

(Brik, Rettah, & Mellahi, 2010; Carroll & Shabana, 2010; Halme & Laurila, 2009; Kemper, Schilke, Reimann, Wang & Brettel, 2013; Monowar & Humphrey, 2013; Porter & Kramer, 2006; Rodriguez, Melo & Mansouri, 2011). Its significance has also grown as more businesses and groups have adopted the notion.

Kurucz, Colbert, and Wheeler (2008) listed and classified the organisations that engage in CSR as follows. These include cost and risk reduction, gaining a competitive edge, building reputation and legitimacy, and achieving win-win results through synergistic value generation.

In contrast to Kurucz, Colbert, and Wheeler (2008), Carroll (1991) created a model that includes four additional types of social responsibilities: economic, legal, ethical, and charitable.

Other characteristics of CSR activities include profit concerns (economic responsibility), legal concerns (legal responsibility), ethical concerns (ethical responsibility), and voluntary action concerns (philanthropic responsibility) (Olajide, 2014).

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