corporate social responsibility (csr) in the oil and gas sector © prof. jedrzej george frynas ...
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Corporate Social Responsibility (CSR) in the oil and gas sector
© Prof. Jedrzej George Frynas
www.frynas.com
Copyright: Prof. J. G. Frynas (2015)
Evolution of CSR in oil and gas, 1995-2015
1995 1997 1999 20032001 2005 20092007 20132011
1996 1998 2000 20042002 2006 20102008 20142012
Brent Spar & Nigeria
Buncefield explosion
Macondo blowout
Extractive Industries
Transp.Initiative
Security & Human Rights
Principles
IPIECA Guidance 2nd edition
Selected key events
Selected key initiatives
2015
Copyright: Prof. J. G. Frynas (2015)
Blowfield/Frynas definition of CSR
CSR means something different to a Greenpeace activist and to an oil manager. CSR also means something different to a BP manager and to an ARAMCO manager.
So it is useful to think of CSR as an umbrella term for a variety of views and practices all of which recognize : 1. that companies have a responsibility for their impact on
society and the natural environment, sometimes beyond legal compliance and liability of individuals;
2. that companies have a responsibility for the behaviour of others with whom they do business (e.g. first and second tier oil and gas contractors).
Source: Blowfield, M., Frynas, J.G. (2005). “Editorial: Setting New Agendas - Critical Perspectives on Corporate Social Responsibility in the Developing World”, International Affairs 81(3): 499-513.
Responsibility for the behaviour of others
Copyright: Prof. J. G. Frynas (2015)
Example of differences in oil and gas
UK• key source of pressure:
public opinion & NGOs• role of government: effective
regulation and social welfare• little spending on CSR
activities in UK• key issues: climate change,
charitable donations and cultural sponsorship
Nigeria• key source of pressure: local
communities & government• role of government:
ineffective regulation and social welfare
• hundreds of millions on social investments
• key issues: local communities, oil spills, gas flaring
Copyright: Prof. J. G. Frynas (2015)
Main CSR issues in oil and gas
Environmental factors
Indirect impact
local supply chaininfrastructure dev.
Local impacts
oil spillswater dischargeswaste
Social factors
Economic factors
Climate / energy
GHG emissionsenergy usegas flaringalternative energy
Direct impact
taxation employmenttechnology
Local community
community relat.social investment
Human rights
Corruption
Political factors
Health and safety
employee healthinjury and illnessproduct safety
Copyright: Prof. J. G. Frynas (2015)
Nature of oil sector operations
• Oil companies can cause harm by the very nature of their operations: climate change, contact with rural communities and impact on national economies and governance.
• Capital-intensive sector: very few jobs created.
• Key impact of oil operations: tax (e.g. Shell in 2012: US$21 billion in corporate taxes and US$85 billion in excise duties and sales taxes, US$149 million on social investments).
• With the exception of reductions in CO2 emissions, companies tend to focus on micro-level social and environmental effects and little attention is given to the nature of operations and investments.
Copyright: Prof. J. G. Frynas (2015)
CSR in the oil and gas sector too often focuses too much on the top of the pyramid
Social investment
Investment as usual
Government taxes
Example: Shell in 2012
US$ 149 million in social investments
US$ 30 billion in net capital investment
US$ 85.1 billion in excise duties and sales taxes, US$ 21 billion in corporate taxes, and US$ 3.6 billion in royalties
Copyright: Prof. J. G. Frynas (2015)
BP Tangguh project in Indonesia
HAZOP analysis
Anglo-American SEAT Toolbox
Learning lessons from best practices
Copyright: Prof. J. G. Frynas (2015)
Innovation and CSR – oil and gas examples
• Petrobras development of low-emission and renewable fuels
• BP reduction of greenhouse gas emissions by 10% in a year
• Shell partnership - Daimler Chrysler, Norsk Hydro, Iceland government to develop hydrogen technology
• Statoil commercial development of carbon capture and storage
• Eco-Centre waste management facility of Baker Hughes
• Oil & Gas Innovation Centre
Copyright: Prof. J. G. Frynas (2015)
• Frynas, Jedrzej George. Beyond Corporate Social Responsibility – Oil Multinationals and Social Challenges. Cambridge University Press, 2009.
• Frynas, Jedrzej George. “Corporate Social Responsibility or Government Regulation? Evidence on Oil Spill Prevention”, Ecology and Society 17(4): 1-13, 2012.
• Frynas, Jedrzej George. “Corporate Social Responsibility in the Oil and Gas Sector”, Journal of World Energy Law & Business 2(3): 178-195, 2009.
Further reading
Copyright: Prof. J. G. Frynas (2015)