Oil-rich countries with unstable and undemocratic governments often suffer from the 'resource curse', with huge increase in state income leading to negative social development and often violent conflict. To counter such effects, oil companies are increasingly expected to move the focus of their corporate social responsibility (CSR) activities from the micro-level – such as for instance the building of individual schools or health clinics – towards macro-level contributions to the social and economic development of the regions where they operate. This however makes it necessary to address sensitive issues such as corruption, lack of transparency, oil revenue spending and social inequality, which many companies are reluctant to do, fearing to upset their host governments.
BP is widely regarded as a global leader in the CSR field and the company has, at least rhetorically, acknowledged its obligation to counter the resource curse in countries where it is active. In Azerbaijan, BP is the leading foreign company, operating the country's largest oil and gas fields. With Azerbaijan clearly displaying some of the features of the resource curse, BP sees it as a critical test case for carrying out its wider macro-level CSR agenda. Has BP succeeded in this?
The authors of the study – FNI Senior researchers Lars H. Gulbrandsen and Arild Moe – find that BP has indeed done efforts to address some of the macro-level CSR challenges in Azerbaijan. "BP has done a lot to promote oil revenue transparency in Azerbaijan. Firstly through its unprecedented move to make public the size of its signature bonus payments, and secondly through its active role in getting Azerbaijan to become the first country to join the Tony Blair-initiated Extractive Industries Transparency Initiative," explains Gulbrandsen.
"BP has also managed to design investment programmes for community and regional development that could provide models for extractive industries around the world. These programmes are unique because they unite all the oil companies in the joint ventures headed by BP. By linking the programmes directly and formally to the business consortia and the production sharing agreements (PSAs) under which they operate, BP manages to share the costs and political risks of CSR activities with the other oil companies, and also ensures a more stable and long-term CSR commitment," adds co-author Moe.
All is however not well. There are still few control mechanisms on oil revenue SPENDING in Azerbaijan, and corruption remains rampant. The study also finds that BP's actual engagement with the government on solutions to fundamental development problems falls short of the company's bold rhetoric on many accounts. The company seems careful to avoid upsetting the authorities, even though the government's macroeconomic policies and lack of commitment to develop democratic institutions threaten to undermine all CSR efforts.
In spite of such shortcomings, the authors' conclusion regarding BP's macro-level efforts in Azerbaijan, remains mainly positive.
"We found that BP not only in terms of rhetoric but also with regard to CSR activities goes over and beyond most other oil companies in addressing macro-level issues. The BP case in Azerbaijan shows that it is possible for companies to address macro-level issues aimed at countering the effects of the resource curse. That said, more field research is needed to evaluate the actual impact of such macro-level CSR activities," Gulbrandsen ends.
Claes Lykke Ragner | alfa
Microtechnology industry is hiring – positive developments of past years continue
09.04.2018 | IVAM Fachverband für Mikrotechnik
RWI/ISL-Container Throughput Index with minor decline on a high overall level
20.03.2018 | RWI – Leibniz-Institut für Wirtschaftsforschung
What if a sensor sensing a thing could be part of the thing itself? Rice University engineers believe they have a two-dimensional solution to do just that.
Rice engineers led by materials scientists Pulickel Ajayan and Jun Lou have developed a method to make atom-flat sensors that seamlessly integrate with devices...
Scientists at the University of Stuttgart and the Karlsruhe Institute of Technology (KIT) succeed in important further development on the way to quantum Computers.
Quantum computers one day should be able to solve certain computing problems much faster than a classical computer. One of the most promising approaches is...
New Project SNAPSTER: Novel luminescent materials by encapsulating phosphorescent metal clusters with organic liquid crystals
Nowadays energy conversion in lighting and optoelectronic devices requires the use of rare earth oxides.
Scientists have discovered the first synthetic material that becomes thicker - at the molecular level - as it is stretched.
Researchers led by Dr Devesh Mistry from the University of Leeds discovered a new non-porous material that has unique and inherent "auxetic" stretching...
Scientists from the Theory Department of the Max Planck Institute for the Structure and Dynamics of Matter (MPSD) at the Center for Free-Electron Laser Science (CFEL) in Hamburg have shown through theoretical calculations and computer simulations that the force between electrons and lattice distortions in an atomically thin two-dimensional superconductor can be controlled with virtual photons. This could aid the development of new superconductors for energy-saving devices and many other technical applications.
The vacuum is not empty. It may sound like magic to laypeople but it has occupied physicists since the birth of quantum mechanics.
10.12.2018 | Event News
06.12.2018 | Event News
03.12.2018 | Event News
10.12.2018 | Physics and Astronomy
10.12.2018 | Life Sciences
10.12.2018 | Information Technology