i
THE APPLICABILITY OF SOCIETAL MARKETING CONCEPT BY
MULTINATIONAL OIL COMPANIES (A STUDY OF SHELL
AND CHEVRON IN NIGER DELTA REGION)
BY
IHEZUE CHIEMEREM OSINACHI
REG NO: PG/MBA/08/47520
SUBMITTED IN
PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE AWARD
OF MASTER OF BUSINESS OF ADMINISTRATION (MBA) IN
MARKETING
DEPARTMENT OF MARKETING
FACULTY OF BUSINESS ADMINISTRATION
UNIVERSITY OF NIGERIA
ENUGU CAMPUS
DECEMBER, 2009
ii
THE APPLICABILITY OF SOCIETAL MARKETING CONCEPT BY
MULTINATIONAL OIL COMPANIES (A STUDY OF SHELL
AND CHEVRON IN NIGER DELTA REGION)
BY
IHEZUE CHIEMEREM OSINACHI
REG NO: PG/MBA/08/47520
SUBMITTED IN
PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE AWARD
OF MASTER OF BUSINESS OF ADMINISTRATION(MBA) IN
MARKETING
DEPARTMENT OF MARKETING
FACULTY OF BUSINESS ADMINISTRATION
UNIVERSITY OF NIGERIA
ENUGU CAMPUS
SUPERVISOR: DR.IC. NWAIZUGBO
DECEMBER, 2009
iii
TITLE PAGE
THE APPLICABILITY OF SOCIETAL MARKETING CONCEPT BY
MULTINATIONAL OIL COMPANIES (A STUDY OF SHELL
AND CHEVRON IN NIGER DELTA REGION)
CERTIFICATION
iv
We hereby certify that this project work titled “The Applicability of
Societal Marketing Concept by Multinational Oil Companies (A Study of Shell
and Chevron in Niger Delta Region)” written by IHEZUE CHIEMEREM
OSINACHI with registration number PG/MBA/08/47520 meets the requirement
for the award of Master of Business Administration (MBA) certificate in the
Marketing Department of the University of Nigeria, Enugu Campus
___________________ _____________ Ihezue Chiemerem Osinachi Date (Student Researcher)
__________________ ______________ Dr. I. C Nwaizugbo Date (Project Supervisor)
________________ _____________ Dr. (MRS) G.E Ugwu-Onah Date Head of Department
DEDICATION
v
To God Almighty for his grace, life, mercy, favour, wisdom and steadfast
love.
ACKNOWLEDGMENTS
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I wish to acknowledge God Almighty without whom this work would
ever have been completed.
The researcher cannot thank enough her erudite supervisor and lecturer
Dr I. C Nwaizugbo for his immense contributions, patience, humorous prodding
and encouragement. Words cannot express my appreciation. My greatest
indebtedness, love and gratitude go to my wonderful parents Prof and Mrs U.H
Ihezue, my brothers Drs Chuks, Obinna, Obioma and my sisters Drs Ndidi and
Nwanne, my sister-in-law, Dr Lynne and Amarachi and Kelechi (my nephew
and niece) for their prayers, love, and encouragement, financial and moral
support. I am very grateful.
In addition, I wish to thank immensely my aunt and her husband Ven
(Prof) & Dr (Mrs) G.C.E Duruamaku of Department of Business Education,
University of Calabar for their encouragement. Finally, I thank all who
contributed towards the typing and production of this research. Indeed, I
appreciate all your efforts and pray the good Lord to bless you all.
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TABLE OF CONTENTS
TITLE PAGE … … … … … … … … i
CERTIFICATION … … … … … … … … ii
DEDICATION … … … … … … … … iii
ACKNOWLEDGEMENT … … … … … … … iv
TABLE OF CONTENTS … … … … … … … v
LIST OF TABLES … … … … … … … … viii
ABSTRACT … … … … … … … … … ix
CHAPTER ONE: INTRODUCTION
1. 1 Background of the Study … … … … … … 1
1.2 Statement of Problem … … … … … … 7
1.3 Objectives of the Study … … … … … … 9
1.4 Research Questions … … … … … … … 10
1.5 Research Hypotheses … … … … … … … 11
1.6 Significance of the Study … … … … … … 11
1.7 Scope and Limitation of the Study … … … … … 12
1.8 Operational Definition of Terms … … … … … 13
References … … … … … … … … … 15
CHAPTER TWO: LITERATURE REVIEW
2.1 The Impact of Oil Exploration on the Nigerian Economy … 17
2.2 Exploration and Development of Petroleum in Nigeria … 17
2.2.1 The Development of the Nigerian Oil Industry … … 17
2.2.2 Establishment of the Nigerian National Petroleum Corporation (NNPC) and Government involvement in the oil sector … … … … … … … … … 18
2.2.3 The Enabling Business Environment … … … … 19
2.3 Historical Evolution of Societal Marketing Concept … 21
2.4 Relevance of Societal Marketing Concept … … … … 23
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2.5 Corporate Social Responsibility … … … … 24
2.6 Evaluation of Societal Marketing Concept … … 28
2.7 Nature of Societal Marketing Concept: Challenges and Opportunities … … … … 30
2.8 Societal Marketing Concept Views … … … 32
2.9 The Niger- Delta Region … … … … … 34
2.9.1 Eminent Problems in the Niger-Delta Region … … 35
2.9.2 Pollution in the Niger-Delta Region … … … 37
2.10 Establishment of the Niger-Delta Development Commission (NDDC) … … … … … … 42
2.11. Multinational Oil Companies … … … … 42
2.11.1 Shell Petroleum Development Company of Nigeria 42
2.11.2 Shell’s Affiliated Companies in Nigeria … … 43
2.12 Chevron Nigeria Limited (CNL) … … … … 44
2.13 Multinational Oil Companies and Societal Marketing Concept … … … … … … … 44
2.14 Sustainable Community Development (SCD) … … 46
2.15 Community Based-Development Project for Sustainable Development … … … … … 50
2.16 Impact of Oil Companies on their Host Communities 54
References … … … … … … … 62
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Scope of the Study … … … … … … 65
3.2 Sources of Data … … … … … … 65
3.2.1 Primary Sources … … … … … … 65
3.2.2 Secondary Sources … … … … … … 66
3.3 Population of the Study … … … … … 66
3.4Sample Size Determination … … … … … 67
3.5 Sampling Techniques … … … … … … 69
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3.6 Reliability and Validity of Data Collection Instruments 69
3.7 Data Analysis Techniques … … … … … 70
3.8 Level of Significance … … … … … … 71
3.9 Decision Rule … … … … … … … 72
References … … … … … … … 73
CHPATER FOUR: DATA PRESENTATION AND ANALYSIS
4.1 Introduction … … … … … … … 74
4.2 Allocation and Return of Questionnaire … … … 74
4.2.1Distribution and Collection of Questionnaires … … 75
4.2.2Educational Qualifications of Respondents Returned 75
4.2.3 Gender of Respondents … … … … … 76
4.4. Analysis of Residents/Host Communities Questionnaires 76
4.5 Analysis of Staff Questionnaires … … … … 80
4.6 Testing of Hypotheses … … … … … … 87
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION
AND RECOMMENDATIONS
5.1 Summary of Findings … … … … … … 95
5.2 Conclusion … … … … … … … 96
5.3 Recommendations … … … … … … 97
BIBLIOGRAPHY … … … … … … 99
APPENDIX 1 … … … … … … … 104
APPENDIX 11 … … … … … … 105
QUESTIONNAIRES FOR STAFF OF OIL COMPANIES… … … … … … … 106
QUESTIONNAIRES FOR RESIDENTS OF OIL
COMPANIES … … … … … … … 109
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LIST OF TABLES
i) Distribution and Collection of Questionnaires … 75
ii) Educational Qualifications of Respondents … 75
iii) Gender of Respondents … … … … 76
iv) Analysis of Residents/Host Communities Questionnaires … … … … … … 76
v) Analysis of Staff Questionnaires … … … 80
vi) Testing of Hypotheses … … … … 87
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ABSTRACT
The fundamental objective(s) of most businesses is primarily to maximize
profit(s) without any regard to the threat posed on the environment due to their
multifarious businesses activities. This insatiable and inexhaustible quest for
profit maximization is been brought under strict scrutiny and great criticisms.
Over the years, various stakeholders have indeed opined that businesses are not
in essence set up solely to make profit(s) only rather should include the
advancement of the interests and protection of the totality of the society and its
environment as a whole. Due to the recent awareness in the proper role of
businesses in the society and has led to an increased sensitivity to social,
environmental and ethical issues. This has further necessitated the need for
effective and efficient adoption, implementation and execution of policy
guidelines in line with the rudiments, tenets and principles of societal marketing
concept postulated by Philip Kotler. Multinational oil companies after a careful
perusal of data obtained in the field have not adequately internalized the
principles of societal marketing concept. In contrast to the expectation(s) of
their host communities, thus, resulting in a situation where residents of the host
communities feel marginalized, abandoned, neglected and left at their own
whims and caprices without bearing in mind that their immediate environment
(both flora and fauna) have been greatly ravished and abused. As a measure in
streamlining and mitigating the adverse impact on the lives of the residents of
host communities as gathered from analysis of data obtained by the researcher
in the field, basically due to the presence and activities of these multinational oil
companies. There is indeed an urgent need for an increased and routine
periodic review on the scope and implementation of societal marketing concept
by these multinational oil companies.
CHAPTER ONE
INTRODUCTION
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1.1 BACKGROUND OF THE STUDY
Marketing can best be described as a “social process by which individuals
and groups obtain what they need and want through creating, offering, and
exchanging products and value with others” (Kotler,2000). Modern conceptions
of marketing philosophy are usually traced back to the early part of the
twentieth century. Many marketing theoreticians have concurred that there are
five distinct eras in the development of marketing theory and includes the
production orientation, product orientation, sales orientation, market orientation,
and the societal marketing orientation (Keith,1960; Dawson, 1969; Bartels,
1974; Kotler and Keller, 2006). The various perspectives on the development of
marketing theory are in reality the differences in perspective, with some
researchers viewing it not simply as a managerial and economic activity but also
as a social process (Bartels, 1970; Bartels, 1974; Hunt, 1976; Kotler, 2000].
The objective of businesses to maximize profit has been under great
criticism. There have been several views that the fundamental objective of
businesses should not be to maximise profit only, but should include the
advancement of the interests of the society as a whole. Today’s awareness and
interest in the proper role of businesses in society has promoted the increased
sensitivity to social, environmental and ethical issues. Environmental damage
and improper treatment of workers are highlighted in the media. In some
countries, government regulation regarding environmental and social issues has
increased, and standards and laws are often set at a supranational level (e.g. by
the European Union).
DEFINITION OF SOCIETAL MARKETING CONCEPT
Societal marketing concept is an enlightened marketing concept that
holds that a company should make good marketing decisions by considering
consumers' wants, the company's requirements, and society's long-term
interests. It is closely linked with the principles of corporate social
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responsibility and of sustainable development. The concept has an emphasis on
social responsibility and suggests that for a company to only focus on exchange
relationship with customers might not be suitable in order to sustain long term
success. Rather, marketing strategy should deliver value to customers in a way
that maintains or improves both the consumer's and the society's well-being.
Most companies recognize that socially responsible activities improve their
image among customers, stockholders, the financial community, and other
relevant publics. Ethical and socially responsible practices are simply good
business, resulting not only in favorable image, but ultimately in increased
sales.
The societal marketing concept holds that the organisation should
concentrate on the needs and wants of their customers, and then deliver the
desired satisfactions more effectively and efficiently than competitors, in a way
that maintains or improves the consumer's and the society's well-being. It
considers as well the possible conflicts between consumer short-run wants and
consumer long-run welfare. Taking care of society's well-being is good for
business. Societal marketing managers believe that consumers will respond
more favourably to companies which are socially responsible, and react
unfavourably to companies, which they feel, are not socially responsible. This
gives socially responsible companies a competitive edge over their competitors.
Environmentally damaging developments should not be financed or
financed only following modification to make them more environmentally
benign. Similarly, enterprises and projects promoting environmentally friendly
development should be supported. Companies should seek to achieve:
• reduction in energy consumption and improve energy efficiency
• conserve resources and use renewable or recyclable materials
• minimise or recycle waste
• dispose of waste in an environmentally responsible manner
• reduce the use of chlorofluorocarbons (CFCs)
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• favour suppliers and contractors who adopt environmental initiatives
through sponsorship.
Societal marketing concept should not be confused with social marketing.
The societal marketing concept was a forerunner of sustainable marketing in
integrating issues of social responsibility into commercial marketing strategies.
In contrast to that, social marketing uses commercial marketing theories, tools
and techniques to social issues. Social marketing applies a “customer
orientated” approach and uses the concepts and tools used by commercial
marketers in pursuit of social goals like anti-smoking campaigns or fund raising
for NGOs.
According to the free internet encyclopaedia (Wikipedia), societal
marketing concept is an expression used to describe what some see as a
company’s obligation to be sensitive to the needs of the stakeholders and the
environment in its business operations. Societal marketing concept can be
defined as the organizations task which tries to identify the needs and interests
of the consumers and delivers quality services or products as compared to its
competitors and in a way that consumer's and society's well being
is maintained. In other words, organizations have to balance consumer
satisfaction, company profits and long-term welfare of society. This is a new
marketing philosophy and tries to reduce the inequalities at various levels. This
theory emphasizes that organizations should not only think of cutthroat policies
to achieve targets and jump ahead of competitors but should have ethical and
environmental policies and then back them up with action and regulation.
Societal marketing can be achieved by following a few principles. It should
always be remembered that consumer's needs are of paramount interest.
Improvements in products, which are both real and innovative, should be
carried out to give long term value to the product; do what is good for the
society with a sense of mission and trust. In this way, the focus shifts from
transaction to relationships. If a client 'repeats business' a bond is created
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between him and the product and is worth its while for the organization to
nurture this bond.
A company’s stakeholders are all those who are influenced by, or can
influence a company’s decisions and actions. These include employees,
customers, suppliers, community organizations, subsidiaries, affiliates, joint
venture partners, local neighbourhood investors and shareholders. It is
important to distinguish between societal marketing concept from marketing
concept. Corporations in the past, spent money on community projects,
scholarship endowment and establishment of foundations. They have also often
encouraged their employees to volunteer to take part on community work
thereby creating goodwill in the community and further enhance the reputation
of the company. Societal marketing concept goes beyond charity and requires
that a responsible company will take into full account the impact on all
stakeholders and on the environment when making decisions. Pertinent to
balance the needs of all stakeholders and the environment when making
decisions.
Societal marketing concept is closely linked with the principles of
‘Sustainable Development’ in proposing that enterprises should be obliged to
make decisions based not only on the financial/economic factors but also on the
social and environmental consequences of their activities. A widely quoted
definition by the World Business Council for Sustainable Development states
that ‘Corporate Commitment by business is essentially to contribute to
economic development while improving the quality of life of the workforce as
well as the community and society at large’.(1999) This holistic approach to
business as regards organizations in their communities, rather than seeing them
more narrowly as being primarily in business to make profits and serve the
needs of their shareholders.
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The Policy Statement by Committee on Economic Development (CED)
(1997) highlighted activities by business to improve societal welfare on the
aggregate; the major areas are as follows:
• Education;
• Employment and trading
• Civil Rights and Equal; opportunity
• Pollution Abatement;
• Conservation and Recreation
• Culture and Arts;
• Health care; and
• Government Activities.
Therefore, evident that organization(s) in pursuit of social responsibility
will have to address these areas. Multinational oil companies being corporate
bodies no doubt need to embark on different societal marketing
programmes/strategy such as corporate social responsibility in their areas of
operation to sustain a cordial relationship with their host communities.
Chevron Producing Limited and Shell Petroleum Development Company
of Nigeria Limited, being among the companies in the upstream petroleum
sector embark on some kind of societal marketing activities/programmes aimed
at ensuring a continuous and justifiable existence. The oil companies’
management see themselves as good corporate citizens behaving in accepted
ways with the public however; host communities hardly share the same view.
They view oil companies as uncaring organizations licensed by Government to
destroy and degrade the environment and exploit the people. The oil producing
communities believe that activities of the oil companies have several adverse
effects on their social, economic and cultural environment and consequently the
need for adequate compensation is non-negotiable. Ken Saro Wiwa (1993)
summaries the feelings of the oil producing communities as follows:-
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“in Nigeria because of the lack of care in oil exploration and
because the rulers of Nigeria are in collusion with the oil
companies, the environmental damage to the Delta is totally
irreparable”.
The Niger Delta Region has been an area of turbulence for several years
because of the communities demand for the control over the oil resources in the
area. This could be attributed to the fact that other means of livelihood of the
people have been destroyed by oil exploration activities. Thus, the people
believe they have to compel the Government and oil companies to finance
projects that would protect the environment. The Niger Deltans are of the
opinion that these multinational oil companies have a natural prejudice towards
environmentalism, which they perceive slow down innovations, and restrict
growth in the industry. The Ogoni dispute and campaign against oil companies
have raised issue of political and ethical dimension in the nation’s political
economy.
Chevron and Shell multinational oil companies have employed
community strategies to sustain relationship with their host communities.
Whether the societal marketing programmes/strategies adopted by these oil
companies are applicable or not is not clear and forms the focus of this research.
1.2 STATEMENT OF PROBLEM
Over the years, Nigerian Government had enunciated policies geared
towards improving the living standard and the environment in the Niger Delta.
A proper evaluation and appraisal of the socio-economic needs of the citizens
has made it imperative that multinational oil companies operating in the region
should assist the Federal and State Governments should in the discharge of
certain obligations ensure effective and efficient implementation of the
rudiments of societal marketing concept, which includes:
1. Provision and Development of Education at all levels;
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2. Adequate protection of both the flora and fauna in the environment.
3. Development and Improvement of the rural communities;
4. Provision of clean water and rural electrification;
5. Provision and improvement of medical care;
6. Provision of micro credits to aid in business development
7. Youth Empowerment.
The poor socio-economic situation in the Niger Delta region spells out
poverty, which calls for immediate attention and remedy in order to improve the
welfare of the populace. In addition, host communities land have been degraded
and turned into environmental refugees due to displacement from their lands. As
already stated, according to Policy statement issued by the Committee on
Economic Development (CED) (1997), there are certain societal marketing
concept strategies
that ought to be carried out by business taken together towards improving the
welfare of the populace. However, in the area of operation, no organization is
expected to cover all the areas extensively. This study will therefore consider all
relevant area that applies to the needs of the populace of Chevron and Shell
catchments areas.
Oil companies engage in some form of community development
programmes (corporate social responsibility) in showing their interests in
carrying out the tenets of societal marketing concept bearing in mind that the
future growth and development are dependent on cordial relationship with their
host communities. As a measure to enhance the cordial relationship between the
oil companies and host communities thereby creating an enabled business
environment and confidence, the Federal Government enacted Decree 23 1988
establishing the Oil Mineral Producing Area Development
Commission(OMPADEC) to handle the transformation of these areas and
create a better standard of living. OMPADEC was also commissioned to
rehabilitate and develop these oil-producing communities. The Obasanjo led
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Government created the Niger Delta Development Commission (NDCC) to take
over from the default OMPADEC.
Despite all these efforts by these multinational oil companies and the
Government to develop these oil communities in the Niger Delta region, there
have been persistent allegations of utter negligence by the inhabitants of these
areas. They accuse the oil companies of carting away their natural heritage and
the Government for using their money in developing other parts of the country.
It is against this background that the researcher wants to make an in depth
assessment of the applicability of societal marketing concept among these
multinational oil companies and also address this problem of finding out
whether policy decisions of these oil companies reflect on the interest of their
host communities, whether their host communities believe that these oil
companies are partners in development, what strategies these companies use in
addressing this subject and whether the operational activities of these oil
companies have any environment and socio-economic effect on the host
communities.
1.3 OBJECTIVES OF THE STUDY
This research work is carried out among other things to access the impact
and applicability of societal marketing concept by adopting the corporate social
responsibility strategy by business organization(s) in their host communities as
well as identify the effects of these on their host communities. A research of this
nature ought to cover all the oil-producing states in the Niger Delta as these
states have been clamouring of marginalization and resource control. The time
required for the completion of the study is limited to enable the researcher carry
out an elaborate study covering all the oil producing communities of the Niger
Delta region hence the study of Warri and Port Harcourt was done. In addition,
the researcher has limited financial resource to enable her expand the
communities under study.
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The objectives of this research are as follows:-
1. To assess the applicability of societal marketing concept by these
companies and also the impact of some of the social strategies such as
corporate social responsibility adopted by these companies on the
environmental and socio-economic lives of host communities.
2. To identify and study the corporate social activities, strategies and
programmes of these companies and determine how they fit into the
doctrine of societal marketing concept.
3. To appraise the extent to which the multinational oil companies are able
to meet with the environmental and socio-economic requirements of their
host communities.
4. To identify the basic problems that confront the organization in their bid
to undertake the effective applicability of societal marketing concept and
its strategies or approaches adopted and to make appropriate suggestions
and recommendations in line with the findings of this research.
1.4 RESEARCH QUESTIONS
To guide the researcher an attempt will be made to answer the following
questions:-
1. To what extent are multinational oil companies truly committed to the
applicability of societal marketing concept?
2. To what extent are the strategies adopted in the applicability of societal
marketing concept such as corporate social responsibility by
multinational oil companies commensurate to the resources they get from
their host communities?
3. Are the host communities satisfied with the level of applicability of
societal marketing concept and its strategies such as corporate social
responsibility?
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4. Does the policy decision taken by multinational oil companies reflect the
interest of the host communities?
5. Is the Federal Government doing enough to ensure that these
multinational oil companies duly enforce the rudiments of societal
marketing concept and its strategies such as corporate social
responsibility to their host communities
1.5 REASEARCH HYPOTHESES
1. Ho: Multinational oil companies in Nigeria do not effectively and
efficiently apply the rudiments of societal marketing concept in their
host communities
H1: Multinational oil companies in Nigeria effectively and
efficiently apply the rudiments of societal marketing concept to
their host communities
2. Ho: Host communities of multinational oil companies are not satisfied
with the applicability of societal marketing concept so far rendered
to them by oil companies
Ho2: Host communities of multinational oil companies are satisfied
with the applicability of societal marketing concept so far rendered
to them by oil companies.
3. Ho: The policy decisions of multinational oil companies do not
reflect the interests of their host communities
H3: The policy decisions of multinational oil companies reflect the
interests of their host communities
4. Ho: There is no cordial relationship between the multinational oil
companies and their host communities.
H4: There is a cordial relationship between the multinational oil
companies and their host communities.
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1.6 SIGNIFICANCE OF THE STUDY
This study will enable multinational oil companies to understand whether
there is adequate applicability of societal marketing concept and if their
strategies are achieving their cardinal objectives and also provide them with
requisite information to decide whether to sustain their current programmes or
not.
It is also expected to highlight the dispositions of the communities within
the operating environment. Furthermore, provide the communities with valuable
information on the feasibility of their demands and expectations from these
companies. This study will invariably help the Government to direct and
monitor the activities of oil companies in meeting the current and future
aspirations of the oil producing communities.
1.7 SCOPE AND LIMITATION OF THE STUDY
This study will cover multinational oil producing companies in Nigeria
but with particular focus on Chevron Producing Limited and Shell Petroleum
Development Company (SPDC) as they have taken requisite steps in the
implementation of the tenets of societal marketing concept and have further
rendered great measure of corporate social responsibilities to their host
communities. The study will also cover the Nigerian National Petroleum
Corporation (NNPC) as these oil companies are in joint venture agreement with
NNPC. The study is conducted in two oil-producing communities namely: Port
Harcourt in Rivers State and Warri in Delta State due to their strong influence.
These two communities were selected to represent the whole Niger Delta
Region, which is made up of eight oil-producing states.
Generally, research of this nature does experience some obstacles as
some managers do withhold certain vital information required and reluctant to
offer such information as they see it as exposing their company’s
xxiii
inefficiencies/deficiencies or an avenue to obtain the information by
competitors. Despite these limitations, the researcher is optimistic to achieve the
stated objectives with the available information gathered.
1.8 OPERATIONAL DEFINITION OF TERMS
These include-
1. Concept:
This refers to an idea/principle relating to something abstract.
2. Societal Marketing Concept (SMC)
Refers to an enlightened marketing concept that holds that a company
should make good marketing decisions by considering consumers' wants, the
company's requirements, and society's long-term interests.
3. Corporate Social Responsibility (CSR)
Corporate Social Responsibility is the realization of business
contributions to sustainable development goals. It refers to how business takes
account of its economic, social and environmental impacts in the way it
operates by maximizing the benefits and minimizing the downsides.
4. Sustainable Development
This means the deliberate and continuing commitment by business to be
socially and ethically committed to economic development while improving the
quality of life of the work force, the local community and society at large.
5. Niger Delta Region
Wetland situate in the south –south of Nigeria of about 20,000 square
kilometres containing a number of ecological zones: sandy coastal ridge
barriers, brackish or saline mangroves, freshwater, seasonal swamp forests, and
lowland rain forests. Subsistence farming and fishing is the mainstay of the
people. More than 3,000 long-settled communities of about 27million and the
oil-producing region hosting multinational oil companies under study inhabit
the area.
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6. Multinational Companies (MNCs)
Refers to such corporations, which have their home in one country but
operate and live under the laws of other countries as well. Features associated
with multinational companies are: their activities involve more than one nation,
responsible for most foreign direct investment (FDI), certain share of revenues
must be achieved in other countries other than the home country.
xxv
REFERENCES
Abratt, R.; and Sacks, D. (1989); “Perceptions of the Societal Marketing
Concept”; European Journal of Marketing, Vol.23, No.6, pp. 25-33.
Bartels, R., (1974); “The Identity Crisis in Marketing'”, Journal of Marketing, Vol.38, pp.73-76. Carrigan, M. (1995); “Positive and Negative Aspects of the Societal
Marketing Concept: Stakeholder Conflicts for the Tobacco Industry”; Journal of Marketing Management, Vol.11, No.5, pp.469-485.
Dawson, M. (1969); “The Human Concept New Philosophy for
Business”; Business Horizons, Vol.12, pp.29-38. Drumwright, M.; and Murphy, P.E. (2001); “Corporate Societal
Marketing”. In Handbook of Marketing and Society, Bloom P.N and Gundlach G.T, (Eds.), Thousand Oaks, CA: Sage Publications, pp.162-83. Khan, S .A (1994): “Nigeria: The Political Economy of Oil: Oxford University Press. Kotler, P. (2000); “Marketing Management, Analysis, Planning and
Control”, Prentice-Hall (India) Pvt. Ltd., New Delhi. Kotler, P. and Keller, K.L. (2006); “Marketing Management”; Pearson Education (Singapore) Pte. Ltd., Delhi. Kotler, P. and Sidney J. Levy, "Broadening the Concept of Marketing," Journal of Marketing, Vol. 33 (January 1969), pp. 10-15 Marsden, D. (2005); “Societal Marketing”; Blackwell Encyclopaedic Dictionary of Marketing, New York. Mathiason N (2002), “Company Ethics? They’re not our Business”
The Observer November 172992(online)
Ohomier, P.E (1997) “Companies Responsibilities on host
Communities” Newswatch December 15th
xxvi
Sagar, I. E (1997), “Compensation for Land Rights and Pollutants:
Two Sources of Conflict on |Oil Producing Company
Relationship” Lagos: Macmillan Publishing Co. Ltd.
Yusuf, F.A.O 91992) “Business Corporate Responsibility” A Lecture delivered at a monthly meeting of the NIPRL at the NICON NOGA Hotel, Abuja from 21st and 23rd February
ON LINE Wikipedia: (www.wikipedia.org/wiki/corporate social responsibility) Downloaded 28/07/09 Wikipedia: (www.wikipedia.org/wiki/societal marketing concept) Downloaded 28/07/09.
xxvii
CHAPTER TWO
LITERATURE REVIEW
2.1 THE IMPACT OF OIL EXPLORATION ON THE NIGERIAN
ECONOMY
The oil sector assumed its present significant position in the national
economy in 1970’s and has become the predominant source of foreign exchange
and development finance, and most viable access to international investment
opportunities. Thus, presently the mainstream of contemporary Nigeria
economy as no other resource in Nigeria whether natural, material or work force
has played such a towering role over the national economy.
Nigeria, with a dense population is a major member of OPEC
(Organization of Petroleum Exploring Countries) and a large exporter of crude
oil. The income distribution is highly inequitable and the growth in capital
income does not benefit the larger part of the society. Nigeria’s heavy debt is
attributed to over dependence on the oil industry for export earnings and this
have left the economy very vulnerable to market fluctuations. Adenikiju (1998)
stated that the country earned in excess of US $200 billion from oil exports
between 1970 – 1990, but these have not been translated into good measure of
economic growth. Economic growth has stagnated with uncertain political
terrain often disturbed by countrywide political crisis.
2.2 EXPLORATION AND DEVELOPMENT OF PETROLEUM IN
NIGERIA
2.2.1 The Development of the Nigerian Oil Industry
Oil prospecting began in Nigeria as far back as 1968 by a German
Company, the Nigerian Bitmon Corporation in the Araromi area of the present
Ondo State. Their pioneering efforts however, ended with the outbreak of the
First World War in 1914. In 1937, oil prospecting was resumed in Nigeria. Shell
xxviii
D’Arcy (the forerunner of the present Shell Petroleum Development Company
of Nigeria) was the only company in Nigeria. The Second World War of 1939 –
1945 interrupted their activities but they resumed in 1947. It was not until 1956
that oil was discovered in commercial quantities in Oloibiri in the present Ondo
State after several years of search. The discovery of oil in commercial quantity
by Shell BP saw the increase in the number of multinational oil companies in
the exploitation and exploration of oil resources in the country.
The exploration rights, which had formerly granted to Shell alone, was
extended to the new comers in line with the Government policy of increasing
the pace of exploration in Nigeria. It is interesting to note that these companies
are still subsidiaries of International Oil Companies. The oil companies engage
in prospecting, processing, refining and marketing of the oil products.
Oil production and export from the Oloibiri field first started in 1958 by
Shell at a production rate of 5,100 barrels of crude oil per day. Nigeria has
attained the status of major oil producer, ranking seventh in the world, by 1972
and has since grown to become the sixth largest oil producing country in the
world.
2.2.2 Establishment of the Nigerian National Petroleum Corporation
(NNPC) and Government involvement in the oil sector.
The role of the Government in the oil Industry has gradually progressed
from a regulatory one to direct involvement in oil exploration and exploitation.
Initially, Government interest was only limited to the collection of royalties and
other dues offered it from the oil companies and making rudimentary laws to
regulate the activities of the oil industry. This was partly because oil was very
insignificant to the economy before the late sixties and the relative lack of
trained personnel and expertise. By 1971, oil had become important to the
economy. To strengthen and establish Government control in the industry
therefore, the Nigerian National Oil Corporation (NNOC) had the responsibility
xxix
for both upstream and downstream activities in the industry. Sequel to all these
developments, Government has acquired a new stature and active participation
in the industry’s activities.
Meanwhile, the Ministry of Petroleum Resources, which function as
mainly a regulatory body, was also running concurrently with the NNOC. It was
not until 1st April 1977 that a merger between the NOC and the Ministry of
Petroleum Resources created the Nigerian National Petroleum Corporation
(NNPC). Thus, combining the commercial functions of the former NNOC
(namely, exploration, production, transportation, processing of oil or refining,
marketing of crude oil and its refined products) with the regulatory function of
the former Ministry of Petroleum resources. These regulatory functions are still
vested on an independent arm of the NNPC petroleum Inspectorate. The NNPC
is also responsible for carrying out research in connection with petroleum of
anything derived from it and promoting activities for turning to good account
the result of such research.
2.2.3 The Enabling Business Environment
A business organization does not operate in a vacuum. It operates in a
system. According to Oavis (1983) cited in Adowale (1993: 15) “A single
organization does not exist alone. It is part of a larger system that contains
thousands of other elements. All business organizations have a large number of
stakeholders, some of who are recognized by the company as constituents, and
some of who are not. Management must also be innovative in today’s
competitive environment. Being able to manage, change and respond to
challenges ensures the survival of the company. According to Gorden et al
(1990) “An organization stakeholders is an individual or group whose interest
are affected by the organization’s activities”. The stakeholders include the
following: -
- Employees
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- Customers,
- Suppliers
- Community organizations,
- Subsidiaries and affiliates,
- Joint venture partners,
- Local neighbourhoods,
- Investors,
- Shareholders.
A social contract concerns the relationship between an organization and
the public, which includes the individuals, government, other organizations and
the society in general.
i) Obligation to other Organisations
An organization must make sure that it relates with other organisations
very well. These include competitors and organizations that are quite different
from their company. To compete with others on an honourable basis, without
subterfuge or reckless unconcern for their mutual rights.
ii) Obligation to the Government
Government is an important part to the social contract for every kind of
organization. Under the auspices of government, companies have a license to do
business along with patent rights, trade organizations are expected to recognize
the need for order rather than anarchy and to accept some government
intervention.
iii) Obligation to the Society in General
The traditional responsibilities of business firm are to produce and
distribute goods and services in return for profit. Businesses have been able to
make significant contributions to the living standard of the society primarily
because of the manner in which the free enterprise economic system operates.
Profit motivates and provides incentive to businesses to produce products and
services efficiently.
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2.3. Historical Evolution of Societal Marketing Concept.
The ideal business organization(s) have a responsibility to their
environment other than producing goods and services at a maximum profit is
indeed a very old concept as far back as 1919. H. L. Gariff (1919) opined that
the community would attempt to take over business organizations, if business
neglected what he called their social responsibilities. In the same vein, Sheldon
(1923) stressed that management has a corporate social responsibility, “it is
important, therefore, early in our consideration of management in industry to
insist that, however, scientific management may depend upon the use of the
scientific method, its primary responsibility is social and communal”.
In 1948, the Harvard Business School Alumni Association selected
“Business Responsibility” as the theme of its annual conference signalling the
coming of age of the American Management Association (AMA) with a special
focus on their managerial creed or statement of objectives, it was discovered
that nearly all of them expressed a belief in corporate responsibility to the
society.
The view that business can have obligations that extend beyond economic
roles is not new in many respects. Throughout recorded history the roles of
organization(s) producing goods and services, for the market place where
frequently linked with and include political, social, and/or military roles. During
the nineteenth century, corporation’s evolved rapidly. It took on a commercial
form that spelled out responsibilities on the board of directors and management
to shareholders (i.e. fiduciary duty). In this later evolutional form, public policy
frequently addressed specific social domain such as health and safety of
workers, consumer protection, environmental protection, etc. Thus, corporations
responded to tenets of societal marketing concept because they were mandated
to comply with law and public policy.
xxxii
By the twentieth century, business management experts such as Peter
Drucker and being considered in business literature were discussing societal
marketing concept. In 1970, economist Motor Friedman outlines his view that
societal marketing concept by corporations is to make profits within the
boundaries of societal morals and laws (but cautioned that social responsible
initiatives by corporations could lead to unfocused management directions,
misallocations of resources, and reduced market competition opportunity and
choice.
In the last decade, societal marketing concept and such related concept
like corporate social responsibility and corporate sustainability have expanded.
This has perhaps occurred in response to new challenges such as those
emanating from increased globalization on the agenda of business managers as
well as related stakeholders communities. It is now more a part of both the
vocabulary and agenda of academics, professionals, now – governmental,
organisations, consumer groups, employees, suppliers, shareholders, and
investors.
Some scholars and managers still question the basis for societal
marketing concept. Most business leaders today, agree that its underlying logic
is impeccable. What perhaps remain debatable is the definition and scope of
societal marketing concept. The worldwide trend has been to evolve various
approaches to it. In other words, it is for each organization to define its
approach, develop relevant guidelines for action and ensure that its managers
and employees are sufficiently aware of these guidelines.
2.4 Relevance of Societal Marketing Concept.
The benefits of societal marketing concept to business vary depending on
the nature of the enterprise, and are typically very difficult to quantify. A major
meta-analysis has been conducted seeking to draw a correlation between
social/environmental performance and financial performance. This is Orlizty,
xxxiii
Schmidt, Rynes 2002 (http.www.finazasostenibile.it/moskowotz2009.pdf)
which found that corporate virtue is likely to pay off in this sense. The business
may not be looking at short run financial returns when developing its societal
marketing concept strategy. However, the business case for implementation of
societal marketing concept within a company would likely rest on one or more
of these arguments.
Corporations are motivated to involve stakeholders in their decision-
making and to address societal challenges because today’s stakeholders are
increasingly aware of the importance and impact of corporate decisions upon
society and the environment. The stakeholders can reward or punish
corporations. Corporations can be motivated to change their corporate
behaviour in response to the business case, which a potential societal marketing
concept promises.
Organizations have a stake in ensuring that they have a good corporate
image and social responsibility policies. They operate to serve the public whose
perceptions of the performance of the company in their extended environment
can influence their purchase decisions and reaction to the organization.
Corporate image can significantly be hampered if the company is perceived in a
bad light and this perception could limit its ability to provide its intended
corporate social responsibility function to the society.
Companies have certain obligations to their communities not just to
provide jobs but also to protect and improve the quality of their natural
environment. However, companies that fail to deliver these important services
to their communities are often entangled to litigations and poor public reactions
with its effectiveness. It is also important that the self-esteem and motivation of
employees could be significantly diminished when their companies are poorly
regarded in the community. Madu (2004:206).
“Societal Marketing Concept has become a mantra of multinationals
accused of despoiling the planet and exploiting poverty or at the least intensive
xxxiv
to the misery that coincides with their profitable operations. The timing is not
arbitrary boycotts, or the threat of them, have jolted Nike and Shell, among
other global brands. Maass (2005:1).
2.5 CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility (CSR) is necessarily an evolving term
that does not have a standard definition or a fully recognized set of specific
criteria. With the understanding that business play a key role on job and wealth
creation in society. It is generally understood to be the way a company achieves
a balance or integration of economy, environmental, and social imperatives
while at the same time addressing shareholders and stakeholders’ expectations.
The World Business Council for Sustainable Development in its
publication “Making Good Business Sense” by Lord Holme and Richard Watts
(downloaded from www.mallen baker.net/csr), used the following definition.
“Corporate social responsibility is the continuing commitment by business to
behave ethically and contribute to economic development while improving the
quality of life of the workforce and their families as well as the local community
and society at large”.
The same report gave some evidence of the different perceptions of what this
should mean from a number of different societies across the world. Definitions
are different as “CSR is about capacity building for sustainable livelihoods.
According to Mallen Baker (www.mallenbaker.net/csr)” CSR is about how
companies manage the business processes to produce overall positive impacts
on society. Companies need to answer two aspects of their operations:
1. The quality of their management – both in terms of people and
processes (the inner circle).
2. The nature of and quality of their impact on society in the various
areas.
xxxv
Traditionally, corporate social responsibility (CSR) has been defined much
in terms of philanthropic model. Companies make profits, unhindered except by
fulfilling their duty to pay taxes. Then they denote a certain share of their profits
to charitable causes. It is seen as tainting the act of the company to receive any
benefit for the giving. Corporate social responsibility becomes an integral part
of the wealth creation or process – which if managed should enhance the
competitiveness of business and maximize the value of wealth creation to
society.
CSR is generally seen as the business contribution to sustainable
development, which is defined, as “development that meets the needs of the
present without compromising the ability of future generations to meet their
own needs” and it generally understood as focusing on how to achieve the
integration of economic, environmental and social imperatives. (www.strategies
gc.ca). CSR also overlaps and often is synonymous with many features of other
related concepts such as corporate sustainability, corporate accountability,
corporate responsibility, corporate citizenship, corporate stewardship, etc.
Large companies now produce annual reports that cover sustainable
development and CSR issues, and these reports are often externally audited.
However, there is no common template for the reporting. The style and
evaluation methodology varies between companies (even within the same
industry). Critics often comment that some of these reports are little more than
spin and as an example note that Enrol produced a glossy “Corporate
Responsibility Annual Report” every year and that tobacco corporations such as
BAT also produce social reports.
The Global Reporting Initiative (GRI) is an attempt to standardize
sustainability reporting and the AA 1000 standard in an attempt to improve their
legitimacy. The history of CSR reporting goes back to environmental and
sustainability reporting
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(http.//www.4sustainability.org/international/CSR-reporting-Development.htm). Although,
there are difficulties on making decisions that are already the most socially
responsible, some guidelines do exist.
Sterner (1971:120) has suggested the following criteria for socially
responsible decisions:
1. There is no ready-made formula for corporate social responsibility
decisions. A business must think through their social responsibility.
2. No action should be taken to erode the profit motive of business. Non-
economic objectives should have some financial incentive attached.
3. Business should exercise corporate social responsibility in proportion to
its social power. The larger and more powerful the firm, the greater its
social responsibility.
4. Business should be willing to take social actions that are in the interest of
the long run profits even if short run-profits are reduced.
5. A business should not be expected to voluntarily take actions that will
make it difficult to attract stockholders investments.
6. Those institutions best fitted to deal with them should solve social
problems.
The implication of these suggested criteria for corporate socially
responsible decisions show that:
a) There is no formula for all business or any one business. Each firm must
decide for itself. Because they can take action but it is not compelled to
do so expects when law and custom determine otherwise.
b) Business must be considered to be predominantly on economic institution
with a strong positive motive.
c) Business should be expected to take the long view and perform social
responsible actions that might temporarily lessen net profits but they are
in the profit interests of the company in the long run. It is quite clear that
xxxvii
the long range self-interest of business on correcting such problems as
unemployment, civil disorders, environmental polluting and crime.
d) An individual business has corporate social responsibilities
commensurate with its social power. In other words, an organization
grows larger if it has an actual and potential influence on more people.
Society then takes a greater interest in what it does and the company in
turn thinks more carefully about its responsibility. It tends to become
affected with public interest.
e) No one should expect a business voluntarily to jeopardize its ability to
attract stockholders investment if a company directs substantial sums of
money to social proposes. It will reduce its average return on investment,
which in turn will bring reduced growth rates, lower market evaluation of
its securities or both.
f) Effort should be made to determine which agencies in society are best to
undertake tasks in dealing with social problems, and proper
responsibilities should be assigned to them. In some areas, the
Government is clearly the best manager.
g) Finally, businesses should be obliged to internalize more of its external
cost. In the past, business were excused from bearing such cost of
productions as air and water pollution, scaring hills sides in the search of
coal and defacing natural beauty. So society then held the economic
output of business to be of higher priority. Today, priorities are shifting
and business is expected to bear costs that are more social.
For both business and society general, clear boundaries must be set. In the
light of today’s economic realities, the intensity of social expectations, goals,
the survival, profit and growing productivity of business depends on the extent
to which it satisfies the expectations of its task of business, which must be
accorded the same seriousness, analysis, and careful attention.
xxxviii
2.6 Evaluation of Societal Marketing Concept
Businesses face the question of how to assess societal marketing concept.
Historically, methods of evaluating the effective implementation of societal
marketing concept were usually based on the firm’s contributions to national
output and the provision of employment opportunities. Items such as weekly
wage payment were often used as crude measures. However, such methods
ignore the area of business responsibility, industrial safety, product safety,
labour issues, and pollution. Industries have traditionally been unable to answer
its critics because of lack of effective and adequate measurement of evaluating
societal marketing concept.
Some companies are now developing means of implementing societal
marketing concept. No generally accepted form has emerged but the work is
encouraging. Development groups and public interest groups have attempted to
relate measure of corporate performance. Early attempts at measuring corporate
social responsibilities were bound by problems and failures. Measuring social
goals have been regarded by lack of inadequate evaluation system for corporate
social performance. However, aside normal indices in measuring profitability of
a business, the goodwill and mutual understanding existing between the
organization (business concern) and various stakeholders are quite indicative of
the degree of success of the type of corporate social responsibility being
undertaken.
Measuring business corporate social performance audit can be defined as an
effort at measuring the corporate social performance of a business in contrast to
its economic performance as measured in financial audit, Yusuf (1992). It can
also be described as the effort to qualify a company’s position in relation to its
corporate social responsibilities and design a programme that can be used to
measure its social effectiveness. Yusuf (1992) summarizes the essence of
societal marketing concept audit as follows: -
xxxix
i. To examine systematically the existing policies and practices relating to
corporate social responsibility internal and external to the business;
ii. To analyze strengths, weakness, threats and opportunities in these
policies and practices;
iii. To review progress regularly and to test priorities.
iv. To prepare an improvement plan, short and long term, concentrated on a
limited number of identified priorities.
There is no universal method for carrying out a single social audit. This is
because there is no single definition for it and more over, all businesses are not
alike. They vary in practices and shapes. Three possible types of social audits
are currently being utilized. They are -
1. Simple inventory of social activities
2. Compilation of social relevant expenditure, and
3. Determination of social impact.
The simple inventory of activities is generally a good starting point. It
consists of listing of socially oriented activities undertaken by the firm.
Examples are:
1. Monitoring employment and training
2. Support of minority enterprises
3. Pollution control
4. Corporate giving
5. Involvement in selecting community projects by executives, and a
hard-core unemployment programme.
2.7 Nature of Societal Marketing Concept: Challenges and
Opportunities
There is increasing focus on both the private and public sectors to be
proactive in the area of societal marketing concept. Various challenges are
emanating from consumers, shareholders, non-governmental organizations,
xl
international organizations, and other stakeholders. These challenges are
increasingly recognized in public policy debates as well as in the market place
by companies and industry sector associations and they are frequently
recognized as opportunities.
Stakeholders challenge corporations to play social responsibility roles at
both the domestic and international levels. Challenges usually focus on one or
more elements societal marketing concept such as corporate social
responsibility, environmental protection, health and safety, corporate
governance, human resource management practice, and consumer protection. In
many cases, the challenges are framed in an incremental way and on other
occasions the challenges are spelled out in a more comprehensive and over
arching manner. The challenges often call for voluntary action by businesses to
demonstrate responsible behaviour and effective responses to social and
environmental problems – both in the domestic and international contexts. The
demands also call upon the public sector to reinforce corporate leadership and
use other policy tools such as economic and regulatory instruments to
encourage societal marketing concept.
The challenges for action can differ censurable from one stakeholder
group to another. For example, the demands can range from a call for more
disclosure of information to demands for improved stakeholder involvement to
requests for changes in management practices to proposals for altering the
relationships between company directors, business mangroves, auditors,
shareholders, debt holders, employees, suppliers, customers, community
members and other stakeholders. Some of the challenges are oriented to the
ways that businesses manage their internal operations such as human resources
management while others are directed at the ways that a business interacts with
the rest of the community and society (e.g. human rights, consumers and
suppliers relationship).
Key challenges to Societal Marketing Concept include:
xli
1. The rule of corporate law that a corporation’s directors are prohibited
from any activity that would reduce profits;
2. Other mechanism established to manage the principal agent problem;
such has accounting oversight, stock options, performance evaluations,
deferred compensation and other mechanisms to increase accountability
to shareholders.
It has become clear that societal marketing concept activity generally can
only be effective at achieving social or environmental outcomes to the extent
that it maximizes profits. Resources applied to societal marketing concept
activities must have a higher return than those resources could obtain if applied
anywhere else, e.g. capital or productivity investment, lobbying for tax relief,
out sourcing, off-shoring, fighting against unionization, taking regulatory risks,
or taking market risks – all of which are frequently pursed strategies.
Corporations with their constant incentive to maximize profits often have
identified all areas where profits could be increased, including those that have
positive external social and environmental outcomes.
2.8 Societal Marketing Concept Views.
Some critics of societal marketing concept, such as the economist Milton
Friedman, argue that a corporation’s principal purpose is to maximize returns to
its shareholders, while obeying the laws of the countries within which it works.
Others argue that the only reason corporations put in place social projects in
utilitarian, that they see a commercial benefit in raising their reputation with the
public or with Government. Proponents of societal marketing concept, however,
would suggest a number of reasons why self-interest corporations solely seeking
to maximize profits are unable to advance the interests of society as a whole.
Critics of the role of business in society argue that: -
♦ Unchecked companies will squander scarce resources.
xlii
♦ Companies do not pay the full costs of their impact. For example, the
costs of cleaning pollution often fall on society in general. As a result,
profits of corporations are enhanced at the expense of social or ecological
welfare.
♦ Regulation is the best way to ensure that companies remain socially
responsible.
Supporters of a more market-based approach argue that: -
♦ Largely, free markets and capitalism have been at the centre of economic
and social development over the past two hundred years and that
improvement in health, longetivity or infant morally (for example) have
only been possible because economies (driven by free enterprise) have
progressed.
♦ There are indeed occasions when externalities, such as the costs of
pollution are not built into normal market pries in a free market. In these
circumstances, regulatory interventions are important to redress the
balance, to ensure that costs and benefits are correctly aligned.
♦ Whilst regulation is necessary in certain circumstances, over regulating
creates barriers to entry into a market.
Some would argue that it is self-evidently “good” that business should
seek to minimize any negative social and environmental impact resulting from
their economic activity. It can also be beneficial for a company’s reputation to
publicize (for example) any environmentally beneficial business activities. A
company which develops new engine technology to reduce fuel consumption
will be able (if it chooses) to promote societal marketing concept (credentials as
well as increase profits.
Some commentators also say, citing Friedman’s dictum, that the idea of
an “ethical company” is an oxymoron since the corporation if by nature
compelled to maximize its own interest whatever the external price. Corporate
executives and employees in turn have strong incentives to internalize the
xliii
corporations’ statutory obligations as human beings. These tendencies of
course, encouraged by the desire to keep one’s job and by a system that judges
and rewards performance strictly by bottom line returns. The results of this
tendency were clearly seen in the many corporate scandals of the late twentieth
and early twenty-first centuries.
Some commentators are cynical about the true level of commitment of
corporations to ideas in line with societal marketing concept and sustainable
development and their actual motivations for responsible behaviour.
(Corporations that create the appearance of acting responsibly just for its public
relations values are said to be “green washing”).
2.9 THE NIGER-DELTA REGION
The Niger-Delta Region is one of the largest wetlands in the world. It
covers an area of 70,000 square kilometres and consists of a number of
characteristics ecological zones, sandy coasts ridge barriers, brackish or saline
mangroves, fresh water permanent and seasonal swamp forest and low land rain
forests. Farmlands have replaced most rain forests in the upland areas. Only the
seasonable and permanent swamps still have natural vegetation.
The hydrology of the region, is determined by the tides of the Atlantic
Ocean and the flood regime of the Niger River, is particularly sensitive to
changes in water quality, such as salinity or pollution. A number of long-settled
communities inhabit the region, although in recent times, significant movement
of people have occurred in general, following centres of near activities, mostly
the oil industry. The total population is about 7 million. Uplands areas are
densely populated, swamps have scattered settlements taking advantage of
higher grounds. Subsistence agriculture dominates rural land use, fishing takes
place in inland waters near shore and offshore. The land areas are highly
populated bringing increasing demand for scarce farmland. Crops yields are
dropping and farmers are migrating to marginal lands.
xliv
2.9.1 Eminent Problems in the Niger – Delta Region
The exploration and exploitation of oil in this region has given rise to a
lot of socio-economic and environmental malaise that hinders the producing
areas from optimally achieving their tremendous potentials for economic
growth and sustainable human development. Oil minerals currently account for
over 90 percent of Nigeria’s revenue and the oil is mainly located in the Niger-
Delta. Despite huge earnings made from this region, the area is faced with
insufficient infrastructure, high rate of unemployment, a stagnant economy and
a rising frustration among these oil producing communities.
According to a World Bank Report in 1995, “despite the vast oil reserve,
the Niger Delta remains poor. GDP per capital is below the national average of
US $280 in the face of high population growth rate combined with serve
habitable land constraints”. Health indicators for the Niger Delta Region are low
than for the entire country and particularly low in comparison with the South-
Eastern Region where water is ubiquitous. Childhood malnutrition, which
increases infant morality, reduced mental capacity, degradation to the quality of
life and restricted economic productivity, is a common phenomenon. Housing,
in both quality and quantity and infrastructure are deficient in much of the
region. The high frequency of flooding during the rainy season requires that
many families in low-lying areas, costal barrier, and islands construct their
houses on shifts to keep the floor above flood level.
The most pressing infrastructure deficiencies are access to portable water
and sanitation. According to Babahola (1997) only about 60 percent of urban
communities in the region have access to drinking water and about 20 percent
of the rural communities have access to safe drinking water resources. In
addition, transportation is often difficult and expensive, especially in the flood
season when water transport becomes the most common form of transportation
and in the dry season less than 20 percent of the region is accessible by road.
xlv
Tabunor Ogedegbe’s noted that the oil producing communities (Nigeria-
Delta) problems are: -
♦ Low level of educational and technical skills.
♦ Weak economic base with little or no existent surplus
♦ Predominant self-employment with low productivity
♦ Precarious institutional presence of the national regional or Local
Government in their communities.
♦ Disruption of family life and values. Self-esteem is low and dormant.
♦ High cost of living due to the presence of oil.
♦ Environmental pollution through operational hazards, aging pipes, gas
flaring and sometimes oil spillage.
♦ Presence of well-informed community based pressure groups, NGOs,
individuals, committed to addressing perceived injustice.
In general, the benefit of the exploration and exploitation of oil in the
Niger-Delta and its attendant assault on the environment in the region has been
less obvious. In addition to degradation of the environment, impairing human
health and precipitating social disruptions, oil activities have undoubtedly led to
talk of genuine efforts to explore the good agricultural land, extensive forest and
excellent fisheries towards harnessing their latent potentials for sustainable
socio-economic and environmental developments.
In his articles titled “Why is Niger-Delta Region still a forest?” Ejuwa
(2005:41) wrote, “The Niger – Delta Region which today is the fountain head of
the nation’s wealth, alternatively, the goose that lays the golden egg, has
become a nightmare. The people of the region have suffered gross neglect and
deprivation over the years despite the region’s monumental contributions to the
economic prosperity of Nigeria. Consequently, there is widespread poverty, lack
of social and economic infrastructure and a high rate of unemployment and
xlvi
crime. Thus, resulting in a frustrated population, ethnic polarization, anti-
establishment, hostility and agitation”.
2.9.2 Pollution in the Niger-Delta Region
Myriad environmental problems follow the exploration and exploitation
of oil in the Niger-Delta. The include pollution from the exploration and
exploitation activities, oil spillage, gas flaring and sometimes sabotage. All
these have physical negative impact on the environment. Potential pollution
outlets are categorized as air emissions, water effluents and waste generation.
Air emissions; usually originate from gas flaring in relation to gas and crude oil
separation. Water effluent result for the separation of production water and oil
spillage. Water generation mainly originates from hazardous sludge from
separation of crude oil and water, drilling sludge, household waste, scrap and
worn-out equipment. (Nest: 1991, World Bank; 1995).
The Federal Environmental Petroleum Agency (FEPA) Act defines
“pollution as manmade or man-aided alternation of chemical, physical or
biological quality of the environment to the extent that it is detriment beyond
acceptable limits”. The United Nations Group of Experts on Scientific Aspects
of Marine Pollution (UNGE SAMP) of 1974 gives more comprehensive but
similar meaning. According to their definition, “pollution is the introduction by
man, directly or indirectly, of substances into the marine environment
(including casualties) resulting in such deleterious effects as: -
♦ Harm to living resources;
♦ Hazards to human health;
♦ Hindrance to marine activities including fishing;
♦ Impairment of use of seawater and
♦ Reduction of amenities.
xlvii
The detrimental effects of pollution and indeed its devastating
consequences on the environment are well known to the oil producing
communities, and those concerned with it are affected by it.
Oil Spillage
The major causes of pollution arising from oil production operations are oil
spills and these arise from several sources such as -
i. Blow outs
ii. Equipment failure
iii. Operators/maintenance failure
iv. Sabotage
v. Sand out (erosions) and
vi. Accidents.
According to Babashola (1997), “the greatest environmental problem
often cited in connection with petroleum exploitation in Nigeria is oil spillage
and its attendant hydrocarbon pollution”. He further stated that the major oil
producing states in the country are reported to suffer from an estimated 300
major oil spills in a year. The impact of such spills includes -
1. Neutrality of bi-valves such as oyster and fish and subsurface and floating
macrophytes,
2. Contamination of surface and ground water bodies.
3. Contamination of agricultural products and destruction of vegetation,
particularly mangrove swamps, sheltered salt marshes and sheltered today
flats.
4. Emigration of wild life and consequent loss of biodiversity.
5. Destruction of agricultural and related activities, and
6. Pollution migration.
On 17th January 1980 at about 1:00pm, the Funiwa-5 oil well located in
the Funiwa field which is 5,000km offshore the Niger-Delta blew out as a result
of equipment failure. This field is a joint venture by three oil companies – the
xlviii
Nigerian National Petroleum Corporation, Chevron Oil Company (Nigeria) and
Texaco Overseas (Nigeria) Petroleum Company. The field was operated by the
latter company after obtaining a license to operate from the Government. The
blowout, which lasted for about twelve and a half days, after which the well
caught fire for two days, caused a lot of damage to the people and the
environment.
The effect of the blow out was very devastating, as large quantities of oil
were discharged from the oil well into the sea and carried to the land of the
waves. About five villages are affected. The creeks in these villages, which
serve as roads, became almost impassable due to the oil pollution. In addition,
fish, crabs, oysters and periwinkles on the water were killed or tainted with oil.
Moreover, a total of roughly 836 acres of mangrove forest was destroyed.
Adewale (1989:173).
Gas Flaring
Oil production in the Niger-Delta produce, which continues to be flared
constantly Nigeria currently flares more gas than any country in the world, and
this has resulted in large emission of greenhouse gases such as carbon dioxide.
Carbon dioxide from gas flaring amounted to an estimated 35 million tons per
year and 12 millions per year respectively. In addition to loss of revenue, the
major environmental impact of gas glaring in the Niger Delta Region includes:
1. Atmospheric pollution by combustion determinants,
2. Increased temperatures in the immediate surroundings in the flares;
3. Ecological destruction of nearby surroundings,
4. Bad odours and its attendant health hazardous, and
5. Acidification of soils, rains, and buildings.
However, the eventual take-off of the Nigeria Liquidized Natural Gas
(LNG) Project has substantially reduced gas flaring. Although, oil spoilage and
gas flaring are about the most serious environmental pollution source in the
Niger-Delta Region, infrastructure development in the region appears to cause
xlix
severe hazards connected to oil exploitation impacts. In general, during
exploitation and exploration of oil, the landscape is usually considerably
disturbed, from the presence of large number of people that are involved in
various activities. These setting up of the field camp, construction of helipad,
erection of drilling rigs, generation of wastes, etc take up substantial amount of
space and may displace all other land users at the expense of agriculture and
related activities.
Construction related fire or pipeline rupture could result in the direct
morality of wildlife or loss of bio-diversity through forest fire. Risk of fire may
result in damage of agricultural crops and built up areas. The turbidity and
situation caused by dodging to clear vegetation at drilling sites is another
important environmental problem resulting from exploration and production of
oil in the aquatic ecosystem in the Niger-Delta. The suspended material
resulting from these activities will decrease primary productivity of the rivers
and water bodies by reducing the light available to algae and other aquatic
plants.
Much of the above concentrates on physical impacts of oil exploration
and exploitation in the Niger-Delta Region. The socio economic costs could
also be enormous. The creation of construction and related jobs could have
negative implications on community structure, and acquisition and local
economic activities to affect agricultural and general land use. In the context of
the above analysis, there is the general concern that the utilization of the nature
resources of the oil-producing region in Nigeria may neither be economically,
socially nor environmentally sustainable. The fact that the majority of the
people in the oil producing areas still depend on agriculture for their livelihood
calls for a rethinking in the development process and experience of the Niger
Delta Region. This becomes inevitable in the light of the following:
♦ What happens to the people when the fossil fuel runs out?
♦ What are the processes of back to land for sustainable livelihood?
l
♦ What becomes a trend of development?
The answer lies in the adoption and implementation of appropriate
strategies that would promote sustainable community development in an
environmentally sound and friendly manner. This necessitates the involvement
of the affected communities in the foundation and implementation of
sustainable strategies to promote the utilization of the available resources in the
Niger-Delta in a manner that both intra-generation and inter-generation needs
for livelihood are met. (World Bank: 2000).
2.10 Establishment of the Niger-Delta Development Commission (NDDC)
The Niger-Delta Development Commission (NDDC) was established by
Act 2000 and consists of Abia, AwkaIbom, Bayelsa, Cross River, Delta, Edo,
Imo, Ondo, and Rivers States. “The Act was established to provide for the
repeal of the OMPADEC Decree 1998. The functions and powers of the
Commission includes -
� Development of social and physical infrastructure,
� Technology
� Economic revival and prosperity,
� Ecological/environmental redemption and stability
� Pursuit of a peaceful environment under which tourism will thrive and a
buoyant culture nurtured.
2.11 MULTINATIONAL OIL COMPANIES
There are numerous oil and related companies involved in the exploration
and exploitation of oil in Nigeria. The companies that will be studied in this
research work include Shell Petroleum Development Company of Nigeria and
Chevron Nigeria Limited.
li
2.11.1 Shell Petroleum Development Company of Nigeria:
The Shell Petroleum Development Company of Nigeria Limited (SPDC)
is the pioneer hydrocarbon exploration and production company incorporated in
1837. The current production capacity of about one million barrels per day of
crude oil and more than 700 millions flare of gas from its oil fields; it remains
the largest producer of oil and gas in Nigeria. In comparative terms, the
company produces almost half of Nigeria’s crude oil from more than 90 oil
fields and supplies about 70 percent of the country’s commercial gas.
The company’s operations are concentrated in the Niger-Delta Region
and the adjoining shallow offshore, where she operates in oil mining lease area
of about 31, 000 square kilometres. Shell has over 6,000 kilometres pipelines
and flow lines, 87 flow stations 8 years points and more than 1,000 producing
wells. In 2001, the joint venture accounted for 39 percent of Nigeria’s oil
production and about 55 percent of the country’s crude oil reserve base. The
company produces over 70 percent of the country’s commercial gas.
2.11.2 Shell’s Affiliated Companies in Nigeria
1. Shell Nigeria Exploration and Production Company (SNEPCO)
SNEPCO was established in 1993, and later that year, it signed
production-sharing contracts with the Nigerian National Petroleum Corporation
(NNPC) to operation two deep water and three onshore licenses. SNEPCO
made two major deep discoveries. The development of these fields allows Shell
to bring its expertise in deep water technology into play and transfer the
relevant technologies and skills to Nigeria.
2. Shell Nigeria Gas Ltd (SNG)
This company was incorporated in March 1988 to promote gas
utilizations as a cheaper, more reliable and cleaner fuel alternative and feed
stock for industries. SNG is driven by the vision that natural gas will over take
liquid fuel as the fuel of first choice for Nigerian Industries by 2010.
lii
3. Shell Nigeria Oil Products Limited (SNOP)
SNOP incorporated in Nigeria in 2000. The company, which aspires to
become serious competitors in the downstream sector will develop and maintain
in market for Shell branded products and services to customers in Nigeria. The
Company’s vision is to become the largest suppliers of refined petroleum
products in the country.
4. Nigeria Liquefied Natural Gas Limited (NLNG)
Shell has 25.6% share holding in NLNG and is also the technical leader.
Its partners in this company are NNPC (48%), ELF (15%) and Agip (10.4%).
Trains 1 and 2 of the $3.8 billion plant began operation in late 1999, supplying
liquefied natural gas to markets in Europe, and also the U. S. The plant is
currently being expanded with a third train, which will increase its capacity by
50 percent and raise Nigeria’s share of the liquefied natural gas market in the
world to 8 percent. The partners have approved further expansion of the plant’s
capacity. The largest single consumer of the gas is the Nigeria Liquefied
Natural Gas Limited (NLNG).
2.12 CHEVRON NIGERIA LIMITED (CNL)
In over forty years of operation in Nigeria, CNL has established itself as a
leader in oil gas exploration and production. In 1963, the company discovered
Nigeria’s successful offshore field – Okan-located in the Western Nigeria Delta.
It again blazed the trail in gas utilization when in 1997 it commissioned the
Escrvaous Gas Project Nigeria’s first major gas utilization scheme. Chevron
Nigeria Limited is the operator of the NNPC/Chevron Joint Venture in which
the NNPC holds 60 percent with Chevron retaining the balance of 40 percent.
2.13 Multinational Oil Companies and Societal Marketing Concept
Multinational oil companies were among the first private sector
companies that pioneered the practice of societal marketing concept in
liii
management in Nigeria. For instance, Shell Petroleum Development Company
(SPDC) set up a full-fledged Public Relations Department in 1969 and
mandated it to embrace all activities relating to their activities between the
company on one hand and the Federal Government, State, Local Government,
local communities, the press, commercial organizations, educational institutions
and others.
Oil Companies embark on societal marketing concept
activities/community relations in order to demonstrate in concrete terms their
organizations appreciation of the enabling environment where it operates;
through active involvement by its management and staff in public programmes
and activities related to the welfare of the community within which it operates.
To this effect, Shell has community development policies which aim at
improving the quality of life in communities. It operates through the following:
♦ Establishing a community development programme which applies world
standards of practices to serve its host communities.
♦ Work in partnership with its host communities, Government, donors,
Non-Governmental Organizations (NGOs), community based groups and
other stakeholders,
♦ Encourage the full participation of host communities in project planning,
implementation and monitoring,
♦ Maintain communication with all social segments of host communities in
order to address to their needs,
♦ Focus on community development assistance in activities having high
impact and broad benefits for the host population.
In 2003, Shell’s Community Development Policy transformed into the
“Sustainable Community Development Policy”. The transition from
Community Development to Sustainable Community Development (SCD) also
involves shifting to a thematic approach with primary focus on economic
empowerment, human capital development, healthy living and basic services.
liv
The SCD strategy places greater emphasize on building and working through
strategic partnership with the Government, Local and International
Development Organizations, the communities and other stakeholders”.
(www.shellnigeria.com).
SCD involves improving the manner all community interface is managed
by establishing them as a core line responsibility and complemented by
enhanced central guidance and monitoring from the SCD organization. SCD
allows prompt attention to community issues and concerns thus enhancing
internal controls and accountabilities.
The overall goal of SCD is to leverage the resources that can offer and
empower local communities to take the lead on their issues for their own
development. It is hoped that the SCD will accelerate development and
employment generation opportunities in the communities where they are
operated and thereby help to reduce poverty in the Niger-Delta region. A key
factor in implementing the SCD Strategy is the full application of the “Big
Rules” that were introduced in SPDC in 2003.
2.14 SUSTAINABLE COMMUNITY DEVELOPMENT (SCD) “BIG
RULES”
1. SCD sets the corporate direction and strategy of community interactions
and manages corporate community development activities in SPDC.
2. Project/programmes must be in accordance with the agreed/approved
five-year rolling SPDC community development plan, which is aligned to
the Niger Delta Master Plan where appropriate.
3. All community budget and expenditure must be approved and accounted
for in accordance with SCD procedures.
4. SCD programmes/projects must have a sustainability plan and existing
strategies, which must be subjected to independent verification. All new
projects must have a base line community survey and all existing projects
lv
must have a social evaluation review. All Community Molls (Memorandums
of Understanding) must conform to SCD guidelines.
In their way, Chevron Nigeria Limited believes in community
development. It believes that infrastructure support programme is a way in
which to strike a balance between their business and their corporate social
responsibility in their various areas of operations. Chevron has invested more
than $130 million income in community initiatives over the past 10 years and
$143 million over the past five years to the Niger Delta Development
Commission (NDDC). These funds are in addition, to the tax and royalty
payments made to the Government.
Chevron also provided more than 2,000 jobs locally, about 90 percent
were occupied by Nigerians. Acting on this backdrop, Chevron initiated a new
community engagement model that promotes accountability and participation
by multiple stakeholders. In 2005, Chevron worked with State Governments and
Local Communities to establish Regional Development Councils (RDCS), each
of which comprises members from different communities in the Niger-Delta
Area where Chevron Nigerian operates. Each RDC has a management board
made up of stakeholders’ representatives from State and Local Government,
Non-Governmental Organizations (NGOs), Chevron Nigeria and the RDC. The
boards are to oversee the planning and implementation of development
programmes and activities.
Chevron hopes that this participatory approach would help deliver
sustainable projects that meet the needs of individual communities. It also hopes
that communities will become empowered to design and implement projects
that ultimately strengthen their local capacity and begin to address the
development needs they face. Chevron plans to support their process by
continuing to invest funds and resources in ways that generate positive
outcomes.
lvi
A careful perusal of community development policies or strategies of oil
companies show that their main objectives in planning of such community
development polices are to ensure the existence of unobstructed channels of
communications with these bodies so as to create an atmosphere of
understanding and co-operation they facilitating the daily operations of the oil
companies. The community development activities of these multinational oil
companies referred to above have one common characteristic. They have a long
lasting, positive impact on the lives of all those who live in the communities for
which these structures are built.
A thorough diagnostic perception between oil producing areas, oil
companies and Government reveal that the relationship is below that expected.
Rather than identifying ways of aligning the aspirations of the companies with
the oil producing communities, evidence suggest that cordial relationship is still
far away. While the oil companies believe that since they do not have a
statutory responsibility, the commitment to their communities is a moral
responsibility, which is complementary to Government efforts. Most often, the
oil companies feel that the responsibility for provision of basic needs to the
people rests with the Government.
Achebe (1995) argued that, “theirs (Shell) is a business and they cannot
take over the responsibility of Government. It is the opinion of Shell and other
oil companies that Government whom they pay a royalty of 19 percent and
petroleum profit tax of 18 percent should not shy away form meeting its
legitimate commitment to the people.
However, the oil producing communities see the situation from a
different perspective. The communities are not inclined to know whose
responsibility it is. “While they agree that the oil companies are business
organisations with profit motive, they also believe that they should pay more
attention to the plight of their host communities where they operate and
sometimes live”. Ohimir (1995:13).
lvii
According to Peter Maass (2005:1), “Sangama is an example of what
happens when good intentions, or good public relations, go bad. As I learned
during a visit to the Health Clinic built there by Shell, it has never operated
because, villagers say, Shell opted against paying for medicines or doctors. The
water tower also built by Shell has not distributed a drop of water or anything
because Shell did not dig a well or connect it to the water system at its plant.
According to the villagers, Shell decided its job is completed with the
construction. They believed Government ought to take care of the rest. The
Government, to the surprise of Shell said it had no money to help out”.
Maass (2005:2) also noted that Shell fuelled conflicts by allotting
contracts, resources, or compensation to community leaders who shares little
with their communities, thereby sparking division within them. “Shell is an
integral part of the Niger-Delta conflict environment. The cumulative effort of
(its) practices is a perception by the communities.
The environmental issues raised by the Niger-Delta people over the years
have not been addressed. Environmental standard have not improved, the area
remains an ecological disaster, while Government has not considered the issues
of infrastructural facilities in the development of the region. None of the
fundamentals problems of the Niger-Delta Region has been addressed. Before
deviation, agitation/compensation for old pollution was never paid, but now a
token amount is being paid.
The Government further complicated the case of the communities
affected by the Funiwa – five (5) oil well blowouts stated before in its work.
Experts who were flown in from abroad to assess the damage and recommended
that the compensation to the people should be about US$60 million. The
Federal Government intervened, set up a tribunal of inquiry and asked the oil
company(Texaco) to pay US $12 million as compensation through the State
Government. The decision to pay through the State Government turned out to
be an error on the part of the Federal Government because the Rivers States
lviii
Government diverted the funds for other developmental purposes. Members of
the communities affected sued Texaco for compensation since the money paid
to the State Government was not disbursed to them.
Shell chose to funnel much of its development monies through the
Government when it could do so via local NGOs or through its own offices. In
2003, Shell Nigeria gave $54 million to the NDDC and spent only $30 million
on development programmes of its own. “The oil companies funnel some of
their good works money through the Nigerian Government, however much of
the money was wasted” Maass (2005:1).
2.15 Community based-development project for sustainable
development
A people-centered and community development programme guided by
certain basic principles and objectives, is the only safeguard against
environmental and social disintegration that are causing conflicts in the Niger-
Delta. The focus of such development strategy is the empowerment of the
people to participate fully in their economic, political and social life in such a
manner as to ensure gender and group equity, without compromising the needs
of the future generations. In this regard, its basic objectives should be to ensure
a full integration of human, economic, social-political, cultural, environmental
and other dimensions of development in a holistic way to enhance and sustain
economic growth and spread the benefits of the growth to the poor.
Sustainable development stresses the importance of participation as a
means to sustain the development process and ensure a more equitable
distribution to beneficiaries created by development initiatives. Its focus in the
utilization of national resources according to Babashola (1997) is to:
a. Meet the people’s needs
b. Achieve sustainable livelihood system, especially agriculture, in a
given community.
lix
c. Eliminate poverty,
d. maintain the physical and environmental for the present as well as
succeeding generation of members of the community; and
e. Achieve global inclusion by ensuring the mobilization and participation
of all members of the community in the development process as well as
equitable distribution. A paradigm views participation as a proactive
measure as well as involvement whereby communities are able to identify
their own problems, prefer solution to them and then and make tangible
contribution of the implementation of their own development
programmes.
The above ensure community participation in the development process of
the Niger-Delta towards sustainable economic developments evolving from a
self-reliant understanding of local needs and resources. Thus, a deepened and
strengthened society is the most important vehicle for advancing sustainable
human development concern. The effectiveness of their policies and institution
is central to their development successes and failures and the eventual
attainment of self-reliance. Genuine decentralization, which involves the
process of transferring or devolving powers from central institution (e.g.
Federal/State/Local) to constitutionally district community –based – institution
making is a pre-requisite for the attainment of long-term sustainable human
development in the Niger-Delta. Such participatory development will bring
many benefits. It will contribute to development and increase the chance of
development objectives and outputs being relevant to perceived needs.
Moreover, it will instil the sense of ownership development activities by
community-based organisations, capacity of community members will be
strengthened to generate initiatives and influence development at various levels,
thereby increasing the access of the hitherto marginalized people. Another
benefit will be the enhancement of manual and technical skills, planning
managerial competence and analytical reflective abilities of beneficiaries.
lx
To achieve grassroots participation in the development of the oil producing
areas of Nigeria, four basic strategies according to Babashola (1997) be
adopted. These may include -
a. Mobilization Strategy (development actions is chosen and designed by
outsiders before the peoples involvement begins)
b. Community/institutional development strategies (social surveys are
carried out to achieve better understanding of community institutional
perception about specific problems,
c. Organizing strategy in which people are organized to increase their
strength and influence on decision making and;
d. Empowerment strategy.
Whatever strategy adopted, participation necessitates the creation of
organisations. Thus to facilitate participation, community/grassroots levels,
community based organisations and NGOs become useful partners. In this
regard, the roles of officials and state organs have to be less visible. By virtue of
their constant interaction with their local environment and in pursuit of
development objectives an approach to development by:
a. Pooling resources to achieve collective strength and countervailing
power,
b. Enhancing manual and technical skills, planning, managerial competence,
and reflective abilities of beneficiaries (local communities).
c. Sensitizing high-level decision and policy makers on the facets and
operation of sustainable human development, particularly as it affects
sustainable agriculture and environmental protection,
d. Strengthening community resource management, increasing stakeholders’
commitment to and ownership of policies and projects,
e. Developing, promoting and implementing development projects,
f. Conscientising and mobilizing members of the communities to the
macro-level national development goals,
lxi
g. Creating an enabling environment for collaboration framework among
various organizations and stakeholders (e.g. government, private sector,
NGOS, CBOS, donors) to promote a holistic approach to sustainable
development livelihood and protection of the natural resource base (air,
land and water) and
h. Enhancing greater participation of targeted beneficiaries, particularly the
marginalized and socially excluded people, in development.
In practical terms, participatory development at the community level may
prove difficult in the face of many constraints, which may militate against its
implementation. These constraints may be grouped into two main categories
depending on whether they have as their origin, the people themselves and
administrative set up. Major community based constraints to participation
development are:
a. Dwelling group (age group), and instructs which may not encourage unity
of ideas and objectives,
b. Relative pauperization of the rural majority,
c. Absence of control of the planning instruments within the community.
The absence of democracy, centralization of policies and the hierarchical
set up of administrative and socio-political organization of development are
some of the serious obstacles that are external to the community. Excessive
centralization of power at the Federal Government in the three-tier system of
governance has been responsible for limited people’s participation in the
planning and implementation of problem solving and sustainable development
programmes and projects in Nigeria. Policies and decisions are often handed
down authoritatively from the Federal through the State to the Local
Government level in a typical show down approach to development.
Development administrators are always convinced about the relevance and
implications of encouraging participatory approaches. Bureaucratic principles
and fund distributed often out weights other considerations and work against
lxii
community participation in development. Participation is no panacea and
targeted beneficiaries do not always participate in the way that will ensure
sustainability. Thus ensuring community participation in the sustainable
development of the Niger-Delta requires that most of the above constraints are
addressed and removed.
2.16 Impact of Oil Companies on their Host Communities
To carry out community development activities in their host
communities, oil companies establish Public Affairs Department. This
department has the duty of seeing that the companies relate well with the public
and particularly their host communities. They embark on different community
relations/development programmes. These programmes are designed and
carried out in order to reduce the effects of their operational activities in those
areas of operations. Efforts are made here to appraise the oil companies’
commitments so far in areas of health, education, agricultural support,
environmental projection, employee welfare etc.
Education
The primary aim of the oil companies while funding education is to help
ensure an enlightened citizenry who will be better equipped for gainful
employment in the country and elsewhere. Shell and Chevron have all
contributed immensely to the education of the young ones and adult literates.
This they do by awarding scholarship to the indigenes of their host communities
in both secondary and tertiary institutions.
The companies have over the years built classroom blocks, science
laboratories and equipment laboratory facilities, libraries and other
infrastructures. They have also encouraged education by promoting the study of
science in the country through the sponsorship of Annual Science Competition
among secondary school in many states. This competition has helped to
stimulate the interest of young people in the study of sciences.
lxiii
The NNPD/Chevron Joint Venture operates two programmes as part of its
contributions to the Nigerian Youth and the development of superior Nigeria.
One of the exclusively for the company’s host communities while the other is a
national market programmes throughout the country. Both cover secondary
education. Approximately, 3000 beneficiaries are sponsored by the programmes
at any given time (www.petroleuminfonigeria.com/chevron).
Shell on its part supported education in the year 2004 in the following ways:
-
- Awarded 2, 6000 secondary schools and 80 university scholarships.
- Undertook leadership raining programmes for 84 schools prefect from
five states.
- Supported curriculum enhancement through deployment of 82 NYSC
teachers, and 320 professional teachers to community schools.
- Extended audit literacy programmes to 2531 audits on 14 centres (Daily
Independence 2005: A8).
Vocational Training
The two multinational oil companies under study have helped the youths
in its area of operation through the technical skills acquisition programme to
develop skills that would enable them gain employment in the public or private
sector, or in the long run become entrepreneurs. Most of such projects were
executed with NGOs which have gained worldwide expertise in the executive of
community development schemes.
In the year 2004, Shell trained 335 youths under various youth
development schemes. They also signed a 2 year Telecom Self Empowerment
Programme (TELSEP) with Globacom to establish “Mobile Call centres” for
Niger-Delta Youths. By the end of 2004, some 41 centres had been set up.
Agriculture
Priority is given to Agriculture particularly to programmes that provide
employment opportunities. Generally, support for projects in the realization and
lxiv
intensification of assistance in agriculture will in the long run result in a self-
sufficient populace in operational areas. Such project include cash crop farming
assistance, fish farming including inputs to co-operative e.g., trawlers, nets etc.
Chevron in conjunction with Techno Serve, a non-governmental organization
that specializes in rural development is working with the community’s farmers
co-operative to develop pond fisheries as an alternative to traditional fishing
methods.
In the year 2004, Shell completed 12 projects in fishing, crop farming,
livestock production and food processing. Another 14 began during the year. It
trained 704 farmers on improved farming practices. In addition, another 132
farmer’s co-operative societies received training and support on improved
farming practices. In addition, another 132 farmers’ co-operative societies
received training and support on organization and business management
capability. Shell also began implementation of the Cassava Enterprise
Development Programme (CEDP), an aspect of the $20 million partnership with
USAID. A medium scale cassava-processing factory was commissioned in Abia
State during the year as part of CEDP.
Water Supply
The objective here is to assist with provision of portable water, which
although is a necessity of life, but very difficult to come by in the several
communities where they operate. Assistance in the area of water supply often
includes provision of deep-water borehole completed with storage tanks, pipes
and submersible pumps.
Shell in the year 2004 completed solar powered water scheme at
Egbeleku, as part of new initiative to encourage use of solar powered schemes
to reduce maintenance cost. It provided operational land maintenance training to
50 people to help mitigate difficulties with maintaining community water
projects.
lxv
Health
The multinational oil companies’ objective(s) in sponsoring projects in
the health sector is to help sustain a viable and an active population project. In
this sector, the oil companies under review has helped in the repairs of hospital
wards, theatres, staff quarter, furnishing and provision of water, electricity,
equipment and drug to the hospitals.
Chevron built the Ugbordo Community Hospital near its Escaravos tank
and terminal to take care of the health needs of the communities located around
the tank farm. The hospital is an 18-bed facility. Before this hospital was built
the nearest clinic to the people of Ugborodo, was in Warri, some 60 kilometres
away.
In January 2006, Chevron Texaco JDZ Limited and its partners) EXXON
Mobile, Dangote Energy Equity Resources (DEER) in Block 1 of the Joint
Development Zone (JD) between Nigeria and Sao – Tome and Principe,
launched a Roll Back Malaria (RBM) programmes in Ikwerre, Rivers States. As
part of the campaign, the company donated 5, 000 pieces of Insecticides Treated
Net (ITNS0 drugs for Intermittent Preventive treatment (IPP), and diagnostic
kits to the people. Twenty six (26) community health workers were also trained
to spread the campaign and provide malaria treatment to the people. Daily Sun
(2006: 39).
In the year 2004, Shell provided support for completion of 2 health
centres, 27 SPDC supported health facilities treatment, drugs and ancillary
services to some 200, 000 people. Shell topped up salaries provided as incentive
to 968 health workers that same year. It made greater use of mobile clinics,
leading to the extension of health services to 8 temporary health centres. The
company trained 42 medical staff from various communities as well as 40
voluntary village health workers and traditional Birth Attendants in basic life
lxvi
support procedure, continued provision of support for immunization services,
and HIV/AIDS media awareness campaigns.
Shell also in the year 2004, commenced preliminary activities to develop
a health integrated project for reducing deaths from malaria in the Niger-Delta,
a key aspect of the $4.5 million 3 year partnership agreement with Africare. It
also signed $18 million partnership agreement with United National
Development Programme (UNDP) to strengthen local level governance, bio-
diversity and health, particularly HIV/AIDS control and prevention.
Women Empowerment
The aim of the multinational companies for sponsoring women
empowerment programmes is to give the women a sense of belonging through
training and financial assistance, since they are disadvantaged when other
resources donated to the communities by companies are distributed. More over
they are easily affected by conflicts on the region. Shell has developed initiative
for granting economic empowerment to women and increased capacity for
leadership, project management and pace building. In the year 2004, 3000 men
development centres and two (2) other income-generating projects for women
were completed. Training and starter packs were provided to 120 women from
24 communities through women vocational skill acquisition programmes in
Oto-udu and Kiagbado.
Micro Credit and Business Development
The multinational oil companies under study encourage business
development and micro credit schemes, so that the people of the Niger-Delta
will be self-reliant. The people trained under the various vocational and skill
acquisition programmes are encouraged through the micro credit initiative to
practice the skills gathered from the training programme.
Chevron in line with its consistent commitment to identify with the
aspirations of its neighbours put up measures that promote indigenous
participation in the oil industry. In line with this objective, Chevron became the
lxvii
first oil company to relinquish its stake in a marginal indigenous operator Niger-
Delta Petroleum Refiner (Niger-Delta Department of Petroleum resources Ltd).
In the year 2004, Shell facilitated extension of credit to some 300 entrepreneurs
in three (3) micro-credit scheme and launched 27 land and marine transport
business for several communities. In addition, feasibility study for establishing
Onueke Igwurunta Community Bank was completed in the year and following
the completion of building by the community, Shell has been equipping the
building as well as processing licence prior to projected commencement of
business.
Multinational oil companies under the Nigerian Content Scheme ensure
that the multinational companies to discourage capital flight award Nigerians
contracts for products and services. Shell in the year 2004, gave approximately
$272 million worth of contracts to Nigerian Companies (20% from the Niger-
Delta)
Chevron co-sponsored and participated in the first local content fair in Nigeria
put together by a unit of Chevron established specifically for ensuring the
accomplishment of the company local content goals. The fair among other
things, showed cased exhibitions by about 40 companies range of services to the
oil industry.
ENVIRONMENT
The multinational oil companies are all developing ways to stop the
pollution and the destruction of the bio-adversity of the Niger-Delta region.
Chevron has been conducting environmentally sensitive programmes. It has
collaborated with both the Nigerian Conservation Foundation (NCF) a non-
governmental organization and the Federal Environmental Protection Agency
(FEPA) among other organizations concerned with the environment to pioneer
programmes aimed at protection and conservation of both the flora and fauna in
the environment. Chevron gives top priority to environmental protection and
employs its high environmental protection activities wherever it operates. In
lxviii
recent times, Chevron has been engaged in significant upgrade of its production
facilities, installation of improved equipment to reduce the risk of oil spills. This
project is costing Chevron about $400 million.
In the year 2004, Shell improved compliance with Government’s 2002
Environmental Guidelines and Standards for the Petroleum Industry in Nigeria
(LEGASPIN) – 87 percent, compared to 42 percent in 2003, successfully
carried out 6 post – ISO 14001 certification surveillance audits, leading to the
re-certification of our assets, including Forcados Terminal. It commenced the
certification of their facilities in accordance with the Occupational Health and
Safety Assessment Series (OHSAS) 18001 standard, including Bonny Terminal.
There was 19 percent reduction in total volume of oil spillage as well as
significant reductions in volume of controllable spoils. Shell made significant
progression restoration of past impacts sites. Some 199 sites were restored. It
received regulatory approval for Environmental Impact Assessment (EIA) for
12 projects and completed environmental Evaluation Reports (EER) for 16
existing fields including 12 marginal fields transferred to indigenous oil and gas
companies. Shell also concluded a major review programme for a
comprehensive assessment of their asset integrity management systems (Wells,
Pipelines, flow lines and other production facilities). It also developed a
maintenance reference plan for nearly 300km of pipelines, as part of the SPDC
pipeline integrity Management System (PIMS).
REFERENCES
Aboribo, Igbo R. (2001) “Oil Politics and the Niger-Delta Development Committee The Tussle for Control and Domination” African Journal
of Environmental Studies Vol. 2 No. 1 2001 Development Africa Consortium (online). Achebe, Emeka (1995) “Companies and their host Communities” Newswatch,
December, 18th.
lxix
Adenkiju, A.F. (1998): “Productivity growth and energy Consumption in the
Nigerian Manufacturing Sector A Panel data analysis” Energy policy 26 (3) 199 – 205.
Adewale, Omobolaji (1993) “Introduction, Legal Framework of Federal
Environment Laws” Lagos Institute of Advanced Legal studies. Akpala, Agwu (1988): “Industrialization Relations Model for Developing
Countries” The Nigerian System Enugu. Forth Dimension. Babasola, S. F. (2003) “Institutional Joint – Funding and CoOperation, for
sustainable Agriculture and Environmental Projects in Oil Producing Communities” A lecture delivered at the Oil and Gas Forum. Community Relation and Sustainable Development at the NICON-NOGA Hilton Hotel, Abuja 23rd – 25th.
Daily Independent (2005) “The Shell Petroleum Development Company
Nigeria Limited: One year Sustainable Development Report (2004)” August, 25th.
Daily Sun (2006) “Chevron Partners Joint to fight Malaria Host Community” Deming, W. E. (1986) “Out of Crisis” Cambridge, Mass: MIT, Centre for
Advanced Engineering Study. Downloaded 09/09/06. Ejuwa, Gab (2005) “Why is the Niger-Delta Region still a forest?” Vanguard
September 2nd. Garritt, H.L. (1919): “Organization for Work”, New York, Hard Cover
Publishing Co. Gilbert, D (2000) “Nigeria, Shell and the Royal Geographical Society” Critical
– Geography – Forum Online. Gordon, J. R. (1990): “Management and Organisational Behaviour”, Boston:
Allen Bolg. Imomolo, E.U. (1997) “protecting the Environmental on 5 Operators
Perspective”, A paper presented at the National Seminar on Community Relations and Sustainable Development at NICON NOGA Hilton Hotel Abuja April 3rd – 5th.
lxx
Maass, Peter (2005), “Road to Hell” Niger Delta Dispatch The New Republic
Online (ww.tnr.com) Downloaded 28/07/09. Madu, Christian N. (2004) “Competing on Quality and Environment” New
York, Chi Publishers. Mallen, Baker, “Corporate Social Responsibility – What does it mean?”
www.mallenbarken.net.csr/csrfles. Downloaded 28/07/09. Milton Friedman, “Corporate Responsibility”
(www.colorado.edu/studentgroups/liberations/issues/friedman-sori-resp-business.htm). Downloaded 28/07/09.
Ogedegbe, Tamunor (1998) “When things go wrong (Crisis Management)”
A paper presented at the Oil and Gas forum at NICON NOGA Hilton Hotel Abuja.
Ohomir, P.E. (1995), “Companies responsibilities on host Communities”
Newswatch December 18th. Omole, Shola (1997) “The Environment and Operation Oil Industry
Perspective”, A paper presented at the Environment National Public Relations Conference, November 26th.
Sagar, I.E (1997) “Compensation for Land Rights and Pollutants: Two
sources of Conflict in Oil Producing Company Relationship” Lagos: Macmillan Publishing Co. Ltd.
Shell Nigeria, “Sustainable Community Development”
(www.shell.com/home/nigeria/html).Downloaded 28/07/09. Steiner, George (1971) “Business and Society”, New York: Random House. This Day (2006), Audit Report on Shell Detects $1.79bn Discrepancy August
21st. Wikipedia, “Corporate Social Responsibility”
(www.wikipedia.org/wiki/corporatesocialresponsibility.
lxxi
World Bank (http:) rru. Worldbank.org/Discussions/topics/topics 43.aspx) archived online discussion “How can corporate social responsibility initiatives Deliver Results? Downloaded 28/07/09.
World Bank (http:/rru/World Bank.org/Discussions/Topics 72 aspex/archived
online discussion. “Will Responsible Business Increase the Competitiveness of Developing Countries”. Downloaded 28/07/09.
Yusuf, F.A.O. (1992) “Business Corporate Social Responsibility” A lecture
delivered at a monthly meeting of the Nigerian Institute for Public Relations at the NICON NOGA Hilton Hotel Abuja February 21st – 23rd.
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 SCOPE OF THE STUDY
The study covered the producing communities and the multinational oil
producing companies in Nigeria with particular emphasis on Chevron
Producing Nigeria Limited and Shell Petroleum Development Company.
The study will be conducted in two oil producing communities namely
Port Harcourt in River State and Warri in Delta State.
lxxii
3.2 SOURCES OF DATA
In every research work, the researcher explores two broad categories of
data. These are the primary and secondary data. The primary data, according to
Eboh, (1998:63) are the sampling or study units from which information is to be
collected on first hand basis. While the secondary data, on the other hand,
according to Eboh (1998:64) are second hand information with respects to
existing literature, research reports, government documents, institutional
publications and statistical remarks. A systematic enquiry (research) must
obtain evidence based on inferences and conclusions drawn. The data collection
instruments or sources used in this study include both the primary and
secondary sources of data collection.
3.2.1 Primary Sources
The study adopted a survey technique through an extensive use of
questionnaires administered on the staff of the multinational oil companies and
members of their host communities, selected for the study. Furthermore, the
researcher conducted oral/personal interview to ensure that both the literate and
illiterate respondents’ views in the host communities respond to the
questionnaire. Those who responded to the oral interviews include residents of
the communities of the study like organisations, community leaders and public
relations personnel. The questionnaire was formed using the three methods
below: -
a) Dichotomous questions
b) Multiple choice questions
c) Open – ended questions
3.2.2 Secondary Sources
Secondary data used in the study was sourced through the following:
♦ Textbooks
lxxiii
♦ Journals of Marketing and Public Relations;
♦ Library materials;
♦ Newspaper publications
♦ Magazine and seminar/workshop materials.
♦ Newsletter of oil companies;
♦ Company records, and
♦ Internet
3.3 POPULATION OF THE STUDY
The population of the study is made up of residents of Port Harcourt in
Rivers State, Warri in Delta State and the Management and staff of the
multinational oil companies under review as defined by the scope of the study.
The sampling frame for the host communities are youths and adults
ranging between 18 years and 70 years and for the staff of the oil companies are
the middle and top management levels. Using this as a guide, the samples were
drawn from Warri North and South Local Government Area and Port Harcourt
respectively. This is because the oil companies in question have strong holds in
these areas.
3.4 SAMPLE SIZE DETERMINATION
According to Ezejelue and Ogwo (1990:130) there is often no satisfactory
generation of what the appropriate sample size should be. However, Eboh
(1998:55) argues that the level of variation in the population is the major factor
to be considered.
Since the researcher cannot get information from the entire population, it
will be logical to estimate the sample frame based on the data gathered from the
members of the communities and from the management of the oil companies of
the case study from where the sample size can be calculated mathematically.
lxxiv
The actual sample size of the oil companies was estimated to be 68 and
for oil producing communities are 240. This was determined by a simple
calculation, as shown below, and the selection of these samples was through
random sampling.
The sample size was determined using the formula
N = Z2Pq
e2
Where N = Sample size
= Number of standard deviation for exact level of
confidence. (Proportion/percentage of success)
q = Percentage/Proportion of failure (1 – P)
e = Limits of tolerable error at 75%
confidence level.
(A) The sample size for the residents in the oil producing communities
was determined thus:
Given, Z = 1.9% deviation at 5% tolerable error.
P = 80%
Q = 20%
N = Z2Pq e2
N = (1.96)2 x 80 x 20 52 = 3.8416 x 1600 25
= 6146.56 25
∴ N = 245.8624
= 240
lxxv
(B) The sample size for the staff of the multinational oil companies under
study was determined thus:
Given Z = 80%
Q = 20%
N = Z2Pq e2
N = (0.98)2 x 80 x 20
52
= 0.9604 x 1600
25
= 1536.64
25
∴ N = 61.4656
= 68
3.5 SAMPLING TECHNIQUES
Sixty-eight (68) questionnaire copies were administered on staff of the oil
companies and 240 questionnaires on the residents of the oil producing
communities. The respondents were randomly selected.
The research questionnaire was distributed to the people chosen for the
study. The respondents were asked questions and were requested to tick the
option that best suited their choices and fill in the blank spaces with whatever
they felt were the answers.
To facilitate the distribution and fast return of the questionnaire, coupled
with the interest of high percentage return, the researcher distributed the
questionnaire by hand and collected them back when the respondents have duly
filled them.
lxxvi
3.6 RELIABILITY AND VALIDITY OF DATA COLLECTION
INSTRUMENTS
The validity of the questions as indicated by the test measure with
reference to what it is supposed to measure should be on what is being
measured. Reliability is for dependability and consistency of the test instrument
so that irrespective of the number of population if the same conditions exist,
then the result ought to be the same (Okpara 1998:45).
For maximum reliability of the instrument of the research, the researcher
ensured that the questions were not ambiguously presented to respondents in a
manner likely to communicate different meanings that could guarantee
inaccurate and inconsistent responses. To maintain objectivity, leading
questions were avoided. A plot survey using the instrument was earlier carried
out to ensure validity and reliability.
3.7 DATA ANALYSIS TECHNIQUES
The data gathered from the survey questionnaire is analyzed using simple
percentages. In a bid to enhance clarity and easy comprehension of the data
generated, the tables and percentages were used to summarize the data
generated. The opinion, which has the highest percentage in the presentation, is
assumed favoured.
The techniques to be employed in testing the designed hypothesis,
accepting or rejecting possible results based on the stated decision rules in the
chi-square (X2) distribution.
Thirketle (1981:103) states that the chi-square measures the variance
between the observed frequencies and the expected frequencies to warrant a
conclusion that the null hypothesis is false, and therefore is rejected in favour of
lxxvii
the alternative hypothesis or that the null hypothesis is true and so the
alternative hypothesis is rejected in favour of the null hypothesis.
The chi-square (X2) statistical test is given by the formula.
X2 = ∑(oi – ei)2 ei
Where
X2 = Chi-square
oi = Observed frequency
Ei = Expected frequency
∑ = Summation
Further explanations,
E1 = (Row total) x (Column total) Grand Total
O1 – E1 = The deviation between the observed and expected
frequency
(o1 - e1)2
= Square of the deviation.
∑(o1 – e1)2
Ei = The summation of all weighted square deviations.
Summarily, the procedure for computing the chi-square is as follows: -
i) Compute totals of columns, rows, and the grand total of the
observation.
ii) Compute the expected frequencies (ei) and ensure that the total of
rows, columns and the grand totals are the same as those of the observed
frequencies.
iii) Compute the frequencies between the observed and the expected
frequencies (Oi – ei)
iv) Square the differences found in the step (iii) above and divide by the
expected frequencies.
(Oi – Ei)2
ei
lxxviii
v) Determine the degree of freedom (df).
Compute thus: -
d.f. = (r-1) (C-1)
Where,
r = Number of rows on the contingency table;
c = Number of columns on the contingency table;
i = Constant
vi) From the degree of freedom and the level of significance determine the
probability of association between the attributes by checking the observed
data against the tabulated X2 from the statistical table and make decisions
based on the decision rule.
3.8 LEVEL OF SIGNIFICANCE
This is an indicator of the amount of risk or degree of confidence the
researcher is attaching to the result. Selecting a 95 percent, level of significance
implies that the researcher is expecting that 95 out of 100 time’s occurrence of
the outcome could be tested as expected variation. In other worlds, the
researcher is pacing a 95% confidence on the expected result and allowing 5%
for error.
3.9 DECISION RULE
If the computed or (calculated) test statistics is greater than the tabulated
test statistics, reject the null hypothesis (Ho) and accept the alternative
hypothesis (HI) if otherwise accept the null hypothesis (Ho) and reject the
alternative hypothesis (HI).
Mathematically, this is given as reject Ho: if X2 (call) > X2 (tab) accept
Ho: if X2 (tab).
Where Cal = Calculated from the observed values
Tab = Tabulated from the chi-square table.
lxxix
(Gouri and Richard 1977:265 – 268)
REFERENCES
Anyanwu, .A. (1994) “Data Collection and Analysis” Okigwe: Evens Global Publications.
Eboh. C.E. (1998) “Social and Economic Research Principles and Methods”,
Lagos, Academic Publications and Development Resources Ltd. Ezejelue, and Ogwo E.O. (1980) “Basic Principles of Managing Research
Projects”; Onitsha, Africana Feb Publishers Ltd. Gouri, K. B. and Richard A. J. (1977) “Statistical Concepts and Methods”,
New York: John Wiley and Sons. Okpara G.C. (1998) “Methods of Data Analysis for Researchers: a Statistical
and Economic Approach”, Abakaliki: Willey Rose and Apple seed Publishing Co.
lxxx
Thirkettle, G.L. (1981) “Wheldon’s Business Statistics and Statistical Method”, London: MacDonald and Evans Ltd.
lxxxi
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
4.1 INTRODUCTION
This chapter contains the presentation and analysis of data collected from
the responses of the questionnaires administered to respondents and staff of
Chevron and Shell multinational oil companies and the residents of the host
communities of the oil companies under study. The presentation and analysis of
data is based on the responses obtained from the respondents of the sample size.
All data presented and analyzed are only those that directly relates to and reflect
the objectives and hypothesis of this study.
4.2 ALLOCATION AND RETURN OF QUESTIONNAIRE
Three hundred and eight (308) questionnaires were distributed to both the
staff of Chevron and Shell Multinational Oil Companies and their host
communities (Port Harcourt and Warri). However, two hundred and eight six
(286) questionnaires were returned while twenty-two(22) questionnaires were
not returned due to wrong filling and absence of respondents.
lxxxii
4.2.1 DISTRIBUTION AND COLLECTION OF QUESTIONNAIRES.
Respondent
Number
Distributed
Number
Returned
Number
not
returned
%
Returned
%
Unreturned
STAFF OF MULTINATIONAL OIL COMPANIES
SHELL 34 30 4 48.39 66.67
CHEVRON 34 32 2 51.61 33. 33
TOTAL 68 62 6 100.00 100.00
RESIDENTS OF THE HOST COMMUNITIES
PORT
HARCOURT
120 114 6 50.89 37.5
WARRI 120 110 10 49.10 62.5
240 224 16 100.00 100.00
TOTAL 308 286 22 100.00 100.00
Source: Field Survey/Work, 2009
4.2.2 EDUCATIONAL QUALIFICATIONS OF RESPONDENTS
RETURNED
Option Staff Residents % of Staff % of Residents
WASC/GCE 7 90 48.39 40.18
OND/NCE 15 40 24.19 17.86
HND/B.Sc 30 64 11.29 28.57
Others 10 30 16.12 13.39
TOTAL 62 224 100 100
Source: Field Survey/Work, 2009.
The table above shows that 30 (48.39%) of the staff are HND/B.Sc and
the highest category/ number of staff for both Chevron and Shell multinational
lxxxiii
oil companies while 90 (40.18%) of the host communities consisting of Port
Harcourt and Warri under study has the highest response with WASC/G.C.E.
qualification.
4.2.3 GENDER OF RESPONDENTS
Respondents Staff Residents % of staff % of Residents
Male 42 156 67.74 69.65
Female 20 68 32.29 30.36
TOTAL 62 224 100 100
Source: Field Survey/Work, 2009.
This table shows that 42 (67.74%) of the staff were male and 20 (32.29%)
were female while 156 (69.54%) of residents of the host communities under
study were males and 68 (30.36%) females.
4.4 ANALYSIS OF MULTINATIONAL OIL COMPANIES
RESIDENTS/HOST COMMUNITIES QUESTIONNARIES
TABLE 4.4.1: Have you witnessed any problem(s) and life
inconveniences because of oil exploration activities
in the Niger Delta Region.
Option Shell
(Port Harcourt)
Chevron
(Warri)
Total Percentage
Yes 100 100 200 89.29
No 10 14 24 10.71
TOTAL 110 114 224 100.00
Source: Field Survey/Work, 2009
lxxxiv
The table above reveals that 200(89.29%) of the respondents are of the
opinion that they have witnessed problem(s) and inconveniences(s) because of
oil exploration activities in their region. While, 24(10.71%) said no.
TABLE 4.4.2: Have the oil companies operating in your locality
taken any measure(s) towards finding out from
their host communities/residents if their oil
exploration activities have constituted any
inconvenience(s) for the community.
Option Shell
(Port Harcourt)
Chevron
(Warri)
Total Percentage
Yes 38 42 80 35.72
No 72 72 144 64.29
TOTAL 110 114 224 100.00
Source: Field Survey/Work, 2009
The table above indicates that 144(64.29%) were of the opinion that the
oil companies have not taken any measure(s) over their exploration activities in
the region and that their activities have constituted serious inconvenience(s) on
the community. However, 80 (35.72%) noted that the oil companies have taken
measure(s) to find out how their exploration activities have inconvenienced the
community.
TABLE 4.4.3: Do you think that Shell and Chevron multinational
oil companies have been duly implementing the
rudiments of Societal Marketing Concept in your
environment and have you heard about Societal
Marketing Concept.
Option Shell
(Port Harcourt)
Chevron
(Warri)
Total Percentage
Yes 24 22 46 20.54
No 86 92 178 79.46
TOTAL 110 114 224 100.00
lxxxv
Source: Field Survey/Work, 2009
The table above shows that 46(20.54%) were of the view that the oil
companies under study have been duly executing and are aware of the
rudiments of Societal Marketing Concept. While, 178(79.46%) indicated that
the multinational oil companies under study have not duly implemented the
rudiments of Societal marketing Concept.
TABLE 4.4.4: Have the multinational oil companies tried to
render any form of adequate compensation.
Option Shell
(Port Harcourt)
Chevron
(Warri)
Total Percentage
Yes 30 36 66 29.46
No 80 78 158 70.54
TOTAL 110 114 224 100.00
Source: Field Survey/Work, 2009
The table above shows that 66(29.46%) of the residents of the host
communities have rendered adequate compensation. While, 158(70.54%) are of
the opinion that the oil companies under study have not rendered adequate
compensation to their host communities.
TABLE 4.4.5: How do you perceive the multinational oil
companies in your community.
Option Shell
(Port Harcourt)
Chevron
(Warri)
Total Percentage
Uncaring 40 30 70 31.25
Caring 10 10 20 8.93
Exploitative 60 74 134 59.82
TOTAL 110 114 224 100.00
Source: Field Survey/Work, 2009
The table above shows that 70(31.25%) of the residents of the host
communities under study perceived the multinational oil companies as uncaring,
lxxxvi
20(8.93%) stated that they are caring however, 134 (59.82%) indicates that the
oil companies were exploitative.
TABLE 4.4.6: Is the multinational oil companies operating in
your community paying adequate attention to
enhancement and sustainability of good
community relation practice.
Option Shell
(Port Harcourt)
Chevron
(Warri)
Total Percentage
Agreed 17 13 20 13.39
Disagreed 63 75 138 61.61
Undecided 30 26 56 25.00
TOTAL 110 114 224 100.00
Source: Field Survey/Work, 2009
The above table shows that 20(13.39%) agreed that the oil companies
under study and operating in their communities pay adequate attention to the
enhancement and sustainability of good community relation practice. While,
138(61.61%) disagreed and noted that these oil companies do not pay adequate
attention to the enhancement and sustainability of good community relation
practice. Also, 56(25.00%) were undecided.
TABLE 4.4.7: Do you think that the plan/policy decisions of
multinational oil companies reflect the interest(s)
of the residents of their host communities.
Option Shell
(Port Harcourt)
Chevron
(Warri)
Total Percentage
Yes 30 20 50 22.32
No 80 94 174 77.68
TOTAL 110 114 224 100.00
Source: Field Survey/Work, 2009
The table above shows that 50(22.32%) of the residents supports that the
plan/policy decisions of the multinational oil companies reflect the interest of
the residents of the host communities. While, 174(77.68%) were of the negative
lxxxvii
opinion and did not support that the plan/policy decisions of the oil companies
reflect the interest of the residents of the host communities.
4.5 ANALYSIS OF MULTINATIONAL OIL COMPANIES STAFF
QUESTIONNAIRES
TABLE 4.5.1: Do you think that your oil company has adversely
affected and constituted enormous
inconvenience(s) on the environment of their host
community.
Option Shell (Port
Harcourt)
Chevron
(Warri)
Total % of Residents
Yes 10 10 20 32.26
No 22 20 42 67.74
TOTAL 32 30 62 100.00
Source: Field Survey/Work, 2009.
The table above indicates that 20 (32.26%) supported that their
companies has adversely affected and constituted enormous inconveniences on
the environment of your host communities, while 42 (67.74%) did not support
that their company has affected and constituted enormous inconveniences to
their host community.
TABLE 4.5.2: Do you think that the oil company operating within
the locality should adequately compensate the host
communities for all such adverse affect and
damage.
Option Shell (Port
Harcourt)
Chevron
(Warri)
Total % of Residents
Yes 20 18 38 61.29
No 10 14 24 38.71
TOTAL 30 32 62 100
Source: Field Survey/Work, 2009.
The table above reveals that 38 (61.29%) are of the opinion that host
community should be compensated adequately for adverse effect(s) and
lxxxviii
damage(s) while, 24 (38.71%) are of the opinion that the host communities
should not be compensated for adverse effect(s)/ damage(s) caused by their oil
company.
TABLE 4.5.3: Has your oil company effectively deliberated with
the host community with the aim of principally
finding out in what areas/aspect(s) the host
community expects to be adequately compensated for
all the adverse effect(s) on their environment.
Option Shell (Port
Harcourt)
Chevron
(Warri)
Total % of Residents
Yes 20 25 45 72.58
No 10 7 17 27.42
TOTAL 30 32 62 100.00
Source: Field Survey/Work, 2009.
The table above shows that 45 (72.58%) of the staff said that they have
effectively deliberated with the host communities about the effected areas and
the need for adequate compensation while (27.42%) were opinion not
supporting the idea.
lxxxix
TABLE 4.5.4: In what aspect(s) do the residents of the host
community expect positive impact and
compensation by your oil company.
Option Shell (Port
Harcourt)
Chevron
(Warri)
Total % of Residents
Provision of
Employment
8 7 15 24.19
Provision of
Infrastructure
5 5 10 16.13
Cleansing if the
polluted
Environment
6 4 10 16.13
All of the above 9 16 25 40.32
TOTAL 30 32 62 100.00
Source: Field Survey/Work, 2009.
The table above shows that 15 (24.19%) of the staff were of opinion for
provision of employment, 10 (16.13%) were for provision of infrastructure,
while 10 (16.13%) were for cleansing of the polluted environment and 25
(40.32%) were for all of the above.
TABLE 4.5.5: How long have your oil company been in oil
exploration activity within the environment.
Option Shell (Port
Harcourt)
Chevron
(Warri)
Total % of Residents
For long 21 19 40 64.52
Not very long 9 13 22 35.48
TOTAL 30 32 62 100.00
Source: Field Survey, 2009.
The above table reveals that 40(64.52%) of the respondents said that it
has been long they were into exploration there while 22 (35.48%) said that it
has not been very long.
xc
TABLE 4.5.6: Do you know what societal marketing concept is.
Option Shell (Port
Harcourt)
Chevron
(Warri)
Total % of Residents
Yes 26 22 48 77.42
No 4 10 18 22.53
TOTAL 30 32 62 100.00
Source: Field Survey/Work, 2009
The table above shows that 46 (77.42%) are for the opinion that they
were aware of what societal marketing concept is while 14 (22.58%) said that
they were not aware of what societal marketing concept entails.
TABLE 4.5.7: Should societal marketing concept and corporate
social responsibility programme be fully adopted
and implemented by multinational oil companies.
Option Shell(Port
Harcourt)
Chevron
(Warri)
Total % of Residents
Yes 21 23 44 70.97
No 9 9 18 29.03
TOTAL 30 32 62 100.00
Source: Field Survey/Work, 2009.
The table above shows that 44 (70.97%) of the respondent were of the
opinion to adopt and implement societal marketing concept and corporate social
responsibility while 18 (29.03%) were not of the opinion of societal marketing
concept.
xci
TABLE 4.5.8: Is your oil company effectively and efficiently
carrying out its societal marketing concept
responsibilities as required by their host
communities.
Option Shell(Port
Harcourt)
Chevron
(Warri)
Total % of Residents
Yes 18 21 39 62.90
No 12 11 23 37.09
TOTAL 30 32 62 100.00
Source: Field Survey/Work, 2009.
The table reveals that 39 (62.90%) supported that the company
effectively and efficiently carryout its societal marketing concept
responsibilities as required by their host communities while 23 (37.09%) of the
respondents did not support the idea.
TABLE 4.5.9: How would you describe the relationship between
your Oil Company and resident of the host
community.
Option Shell(Port
Harcourt)
Chevron
(Warri)
Total % of Residents
Cordial 20 30 50 80.65
Not Cordial 10 2 16 25.81
TOTAL 30 32 62 100.00
Source: Field Survey/Work, 2009.
The table above reveals that 50 (50.65%) indicated that the relationship
between their multinational oil company and residents of the host community is
cordial while 16 (25.81%) said that the relationship is not cordial.
xcii
TABLE 4.5.10: In which one of the following ways has your oil
company discharged the rudiments of societal
marketing concept for their host communities.
Option Shell
(Port Harcourt)
Chevron
(Warri)
Total % of Residents
Provision of
Employment
5 10 15 24.19
Award of Scholarships 10 7 17 27.42
Provision of
Infrastructure
15 15 30 48.39
TOTAL 30 32 62 100.00
Source: Field Survey/Work, 2009.
The table above shows that 15 (24.19%) of the staff of the oil companies
under study were for the provision of Employment, 17 (27.42%) were for award
of scholarship. While 30 (48.39%) were of the opinion that the provision of
infrastructure are the various activities that their multinational oil company
discharge the rudiment of societal marketing concept to their host community.
In addition, an analysis of data obtained form the field indicates that 77.42% are
aware of the concept of Societal Marketing while 22.58% are not aware of this
concept.
TABLE 4.5.11: Should Societal Marketing Concept and Corporate
Social Responsibility programme(s) be fully
adopted/ implemented by multinational oil
companies.
Option Shell
(Port Harcourt)
Chevron
(Warri)
Total Percentage
Yes 21 23 44 70.97
No 9 9 18 29.03
TOTAL 30 32 62 100.00
Source: Field Survey/Work, 2009
xciii
The table above shows that 44(70.97%) of the staff of the multinational
oil companies under study were of the opinion to adopt and implement Societal
Marketing Concept and Corporate Social Responsibility. While, 18(29.03%)
were of the negative opinion.
TABLE 4.5.12: Is your Oil Company effectively and efficiently
carrying out its Societal Marketing Concept as
required by their host communities.
Option Shell
(Port Harcourt)
Chevron
(Warri)
Total Percentage
Yes 18 21 39 62.90
No 12 11 23 37.09
TOTAL 30 32 62 100.00
Source: Field Survey/Work, 2009
The table reveals that 39(62.90%) supported that oil companies
effectively and efficiently execute its Societal Marketing Concept as required by
their host communities. While, 23(37.09%) of the respondents did not support
this idea.
TABLE 4.5.13: How would you describe the relationship between
your multinational oil company and the residents
of the host community.
Option Shell
(Port Harcourt)
Chevron
(Warri)
Total Percentage
Cordial 20 30 50 80.65
Not Cordial 10 6 16 25.81
TOTAL 30 36 66 100.00
Source: Field Survey/Work, 2009
The table above indicates that 50(80.65%) shows that their relationship
with their host community is cordial. While, 16(25.81%) noted that such
relationship is not cordial.
xciv
TABLE 4.5.14: Which of one of the following ways has, your
multinational oil company discharged the
rudiments of Societal Marketing Concept to their
host communities.
Option Shell
(Port Harcourt)
Chevron
(Warri)
Total Percentage
Provision of
Employment
5 10 15 24.19
Award of
Scholarship
10 7 17 27.42
Provision of
Infrastructure
15 15 30 48.39
TOTAL 30 32 62 100.00
Source: Field Survey/Work, 2009
The table above indicates that 15(24.19%) supported the provision of
employment, 17(27.42%) award of scholarship while 30(48.39%) supported the
provision of infrastructure by multinational oil companies under study as ways
of discharging the rudiments of Societal Marketing Concept to their host
communities.
4.6 TESTING OF HYPOTHESES.
Having analyzed some relevant and necessary data for the study, the
hypothesis earlier formulated in the Chapter one of this research study would be
tested. In testing the hypotheses, the chi-square and percentage would be used.
In addition, be presented as follows:
X2 = Σ (0 – E)2 E
Where X2 = Chi-Square
O = Observed frequency
E = Expected Frequency
Σ = Summation Symbol.
xcv
Degree of Freedom (df) = (r -1) the confidence level of 95% or 0.95 and 5% or
0.05 decision rule: If calculated value of X2 is greater than critical or table
value, null hypothesis (H0) is rejected and alternative hypothesis is accepted but
when calculated value of X2 is less than the table value, of null hypothesis (H0)
is accepted and alternative hypothesis is rejected.
4.6.1 HYPOTHESIS ONE (1)
H0: Multinational oil companies in Nigeria do not effectively and efficiently
apply the rudiments of societal marketing concept in their host
communities.
HI: Multinational oil companies in Nigeria effectively and efficiently apply
the rudiments of societal marketing concept to their host communities.
TABLE 4.6.1(a): Testing of Hypothesis one (1)
RESPONDENT STAFF HOST COMMUNITIES TOTAL
Positive 30 166 196
Negative 32 58 90
Total 62 224 286
Row Total X Column Total Grand Total
196 x 30 = 20.56%
286
196 x 166 = 113.76%
286
90 x 32 = 10.07
286
90 x 58 = 18.25
286
TABLE 4.6.1(b): Expected Frequency (Chi-Square) Table
xcvi
SN O E O – E (O – E)2 (O – E)
2
E
1 30 20.56 9.44 86.11 4.20
2. 166 113.76 52.25 2730.06 23.99
3. 32 10.07 21.93 480.92 47.76
4. 56 18.25 39.75 1580.06 86.58
162.53
Degree of Freedom (df) = (r-1)(C-1)
(2-1) (2–1)
1 x 1 =1
Level of significance(s) = 5% (0.05), the (df) from the Chi- Square table=
3.841) X2, 162. 53. The calculated value table of 3.841. We therefore reject the
null hypothesis (H0) and accept the alternative hypothesis (HI) which states that
multinational oil companies in Nigeria effectively and efficiently apply the
rudiments of societal marketing concept to their host communities.
4.6.2 HYPOTHESIS TWO (2)
H0: Host communities of multinational oil companies are not satisfied
with the applicability of Societal Marketing Concept so far rendered
to them by multinational oil companies under study.
HI: Host communities of multinational oil companies are satisfied with the
applicability of societal marketing concept so far rendered to hem by
oil companies.
xcvii
TABLE 4.6.2(a): Testing of Hypothesis two (2)
RESPONDENTS STAFF HOST COMMUNITIES TOTAL
Positive 28 140 168
Negative 34 84 118
Total 62 224 286
168 x 28 = 16.45
286
168 x 140 = 82.24
286
118 x 34 = 14.03
286
118 x 84 = 34.66
286
TABLE 4.6.2(b): Expected Frequency (Chi- Square) Table
SN O E O – E (O – E)2 (O – E)
2
E
1 28 16.45 11.55 133.40 8.11
2. 140 82.24 57.76 2336.21 40.57
3. 34 14.03 19.97 398.80 28.42
4. 84 34.66 49.34 2434.43 70.24
147.34
Degree of freedom (df) = (r-1) (C-1)
(2-1) (2-1)
1x1 = 1
Level of significance(s) = 5% (0.05), the (df) from the Chi-Square table is
3.841. The calculated value of X2 = 147.34 is greater that the critical value table
of 3.841. The null hypothesis (H0) is therefore rejected and alternative
xcviii
hypothesis (HI) is accepted which states that Host Communities of multinational
oil companies are not satisfied with the applicability of societal marketing
concept so far rendered to them by multinational oil companies.
4.6.3 HYPOTHESIS THREE (3)
H0: The policy decisions of multinational oil companies do not reflect the
interests of their host communities.
HI: The policy decisions of multinational oil companies reflect the interests
of their host communities.
TABLE 4.6.3(a): Testing of Hypothesis three (3)
RESPONSE STAFF HOST COMMUNITIES TOTAL
Positive 35 124 160
Negative 26 100 126
Total 62 224 286
160 x 36 = 20.14
286
160 x 124 = 69.37
286
126 x 26 = 11.45
286
126 x 100 = 44.06
286
xcix
TABLE 4.6.3(b): Expected Frequency (Chi-Square) Table.
SN O E O – E (O – E)2 (O – E)
2
E
1 36 20.14 15.86 251.53 12.49
2. 124 69.37 54.63 2984.44 43.02
3. 26 11.45 14.55 2111.70 18.49
4. 100 44.06 55.94 3129.28 71.02
145.02
Degree of Freedom (df) = (r – 1) (C – 1)
(2 – 1)(2 – 1)
1 x 1 =1
Level of significance(s) = 5% (0.05), the (df) from the Chi-Square table is
3.841. The calculated value of X2 = 145.02 is greater than the critical value of
3.841. Therefore, we reject the null hypothesis (H0) and accept the alternative
hypothesis (HI) which states that the policy decisions of multinational oil
companies do not reflect the interests of their host communities.
4.6.4 HYPOTHESIS FOUR (4)
H0: There is no cordial relationship between the multinational oil companies
and their host communities.
HI: There is a cordial relationship between the multinational oil companies
and host communities.
c
TABLE 4.6.4(a): Testing of Hypothesis four (4)
RESPONSE STAFF HOST COMMUNITIES TOTAL
Yes 29 149 176
No 33 77 110
Total 62 224 286
176 x 29 = 17.85
286
176 x 149 = 91.69
286
110 x 33 = 12.69
286
110 x 77 = 29.62
286
TABLE 4.6.4(b): Expected Frequency (Chi-Square) Table
SN O E O – E (O – E)2 (O – E)
2
E
1 29 17.85 11.15 1224.32 6.96
2. 149 91.69 57.31 3284.41 35.82
3. 33 12.69 20.31 412.49 32.51
4. 77 29.62 47.38 2244.86 75.79
151.08
Degree of Freedom (df) = (r – 1) (C – 1)
(2 – 1)(2 – 1)
1 x 1 =1
Level of significance(s) = 5% (0.05), the (df) from the Chi-Square table is
3.841. The calculated value of X2 = 151.08 is greater than the critical value of
ci
3.841. Therefore we reject the null hypothesis (H0) is rejected and alternative
hypothesis (HI) is accepted which states that there is no cordial relationship
between the multinational oil companies host communities.
cii
CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSION AND
RECOMMENDATIONS
5.1 SUMMARY OF FINDINGS:
In the course of this research study, various data were generated,
analyzed and presented. The researcher therefore, presents a detailed report of
the various findings made from the presentation and analysis of data, which
include:
(1) Multinational oil companies in Nigeria have not effectively and
efficiently apply the rudiments of societal marketing concept to their host
communities.
(2) Host communities of multinational oil companies are not satisfied with
the level of applicability of societal marketing concept so far rendered to
them by oil companies.
(3) The policy decisions of the multinational oil companies do not reflect the
interests of the host communities.
(4) There is no cordial relationship between the multinational oil companies
and their resident host communities.
(5) Multinational oil companies in Niger Delta Region do apply the
rudiments of societal marketing concept to the host communities through
provision of employment, provision infrastructural facilities, scholarship
etc, for compensation purpose.
(6) Shell and Chevron multinational oil Companies in the Niger Delta Region
do not encourage sustainability of good community relation practice in
the region.
The researcher also discovered that these oil producing companies under
study have substantially spent much on community relations activities,
however, the residents of the host communities under study regards all these as
ciii
inadequate as evident from the high tempo friction, escalating community
hostilities, series of kidnapping saga’s and numerous vandalization acts. In
addition, some residents of the host communities are of the view that the basic
and social amenities provided by the oil companies are all virtually below
standard. Others have this incline/mentality that there is so much imbalance
between what the oil companies realize from the abundance of their natural land
and what the oil companies have provided for them in return.
5.2 CONCLUSION
Arising from the statistics drawn during the course of this research, Shell
and Chevron multinational oil companies’ practices in the Niger Delta Region
(Warri and Port Harcourt) are very much below average and expectation(s) as
the oil companies have evidently failed to effectively implement a performance
test on its activities. In addition, the effort(s) of community relations should be
intensified. The multinational oil companies in Niger Delta region should
encourage adequate enhancement and sustainability of good community relation
practice to their host communities.
Oil producing communities are incessantly alleging that their natural
endowments (both the flora and fauna) are left in a dilapidated condition. This
trend of incessant allegation(s) has revealed a great threat to the possible co-
existence of an enabling environment between the host oil communities and the
oil producing companies, thus posing a serious political threat and instability.
Hence, the need to address this situation to forestall any adverse effect/impact
on the nation at large and on its economy, which depends extensively on oil
revenue. There is need for residents of host communities to provide an
enabling, friendly and conducive environment for the oil producing companies.
Strict compliance of all corporate business strategies and environmental code of
ethics by Government would reconcile the present estranged relationship
existing between the multinational oil companies and their host communities.
civ
5.3 RECOMMENDATIONS
The following recommendations should help to bring a lasting solution
between the residents of the host communities and the multinational oil
companies under study.
(1) Multinational oil companies operating in Niger Delta Region should
increase and expand the rudiments of societal marketing concept in their
environment through compensation.
(2) Federal Government should thoroughly ensure that the multinational oil
companies in Nigeria fully apply the rudiments of societal marketing
concept and its strategies to their host communities.
(3) Federal Government should also help to provide infrastructural facilities
that those companies cannot handle especially roads to link to the rural
communities to boast more development in those areas.
(4) Adequate security should be provided to the oil companies and in the host
communities to avoid vandalization, conflict, oil bunkery etc. that would
lead to destruction of properties and lives.
(5) They should increase and intensify the cordial relationship with the
residents of the host communities in the Niger Delta Region so that the
oil companies will know more about their problems and find lasting
solution(s).
Shell and Chevron multinational oil producing companies in the Niger
Delta Region should routinely review their scope and impact towards the
effective implementation of the cardinal principles and fundamentals of societal
marketing concept and corporate social responsibility strategy periodically. It is
pertinent to note that the level of host community relations involvement needs
to be improved. The importance of adequate and routine monitoring of
project(s), thorough scrutiny of contractors and the award of such contracts
under a transparent and due process is enforced.
cv
Multinational oil companies are to create and adopt strategies that would
promote sustainable community relation activities in line with the needs of the
host communities. This research work/study has found and opines that majority
of the host communities are interested in educational scholarship(s), which
would invariably enhance and develop work force in the Niger Delta region.
Thus, multinational oil companies should focus more on education. The
establishment of Zonal Community Development Boards in the oil producing
areas of the Niger Delta Region to ensure optimal integration of societal
marketing concept is pertinent. In addition, the need for these oil-producing
companies to organize series of workshops, conferences, seminars etc all
targeted at effective communication and education of residents of host
communities on their proposed activities and good intention(s).
cvi
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cxi
APPENDIX 1
Department of Marketing
University of Nigeria
Enugu Campus
Enugu State.
3rd
November 2009
Dear Sir/Madam,
RESEARCH QUESTIONNNAIRE FOR STAFF OF MUTLINATIONAL
OIL COMPANIES
I am a postgraduate student of the above-mentioned Department and
institution. In fulfilment of the requirements for the award of Master of
Business Administration in Marketing of the institution, I am carrying out a
research work on the topic “The Applicability of Societal Marketing Concept by
Multinational Oil Companies (A Study of Shell and Chevron in Niger Delta
Region)”. In sourcing data for the research, you are to supply your candid
views/answers to the following questions in the questionnaires. May I also
assure you that information supplied by you will be treated with strict
confidence and solely for academic purposes.
Counting on your co-operation.
Thanks
Yours Faithfully, Ihezue Chiemerem Osinachi
PG/MBA/08/47520
cxii
APPENDIX 11
Department of Marketing
University of Nigeria
Enugu Campus
Enugu State
3rd November 2009
Dear Sir/Madam,
RESEARCH QUESTIONNNAIRE FOR RESIDENTS OF OIL
COMMUNITIES I am a postgraduate student of the above-mentioned Department and
institution. In fulfilment of the requirements for the award of Master of
Business Administration in Marketing of the institution, I am carrying out a
research work on the topic “The Applicability of Societal Marketing Concept by
Multinational Oil Companies (A Study of Shell and Chevron in Niger Delta
Region)”. In sourcing data for the research, you are to supply your candid
views/answers to the following questions in the questionnaires. May I also
assure you that information supplied by you will be treated with strict
confidence and solely for academic purposes.
Counting on your co-operation.
Thanks
Yours Faithfully,
Ihezue Chiemerem Osinachi
PG/MBA/08/47520
cxiii
QUESTIONNAIRE
INSTRUCTION
Please check the appropriate boxes and mark (√) against each box that applies and give our opinion on the open-ended questions. FOR STAFF OF MULTINATIONAL OIL COMPANIES
1. Sex of Respondent?
(a) Male ( ) (b) Female ( )
2. What is your educational level? (a) WASC/GCE ( ) (b) OND/NCE/HND ( ) (C) HND/B.SC ( )
3. How long have your oil company been in oil exploration activity within the locality? (a) For long ( ) (b) Not very long ( ) 4. In your opinion do you think your oil company has adversely affected and constituted enormous inconviencies on the environment of your host community? (a) Yes ( ) (b) No ( ) 5. If yes to question 4 above, which of these adverse effect(s) and inconvenience(s) have you left on your host community? (a) Land Pollution ( ) (b) Water Pollution ( ) (c) Air and Noise Pollution ( ) (d) Ecological pollution ( ) (e) All of the above ( ) 6. Do you think these host communities should be adequately compensated for all such adverse effect(s) and damage(s) by the oil company operating within the locality? (a) Yes ( ) (b) No ( )
cxiv
7. Has your oil company effectively deliberated with the host community with the aim of principally finding out in what areas/aspect(s) the host community expect to be adequately compensated for all the adverse effect(s) on their environment? (a) Yes ( ) (b) No ( ) 8. Would you say that the host community are aware of the impact of all such adverse effect(s), damage and inconvenience(s) of your activities on their environment? (a) Strongly Aware ( ) (b) Not very much Aware ( ) (c) Not Aware ( ) 9. If yes to question 7 above, in what aspect(s) does the host community expect to positively feel the impact and compensation of Oil Company (a)Provision of Employment ( ) (b) Provision of Infrastructure ( ) (c) All of the above ( ) 10. In your opinion, would you say that your host community over estimated the quantum of compensation required and expected from the oil company in relation to the adverse effect(s) of their oil exploration activities on their environment? (a) Yes ( ) (b) No ( ) 11. Do you know what Societal Marketing Concept is? (a) Yes ( ) (b) No ( ) 12. Should societal marketing concept and corporate social responsibility programme be fully adopted and implemented by multinational oil companies? (a) Yes ( ) (b) No ( )
cxv
3. In your opinion, is your oil company adequately executing corporate social responsibility programme beneficial to their host communities? (a) Yes ( ) (b) No ( ) 14. Is your oil company effectively and efficiently carrying out its societal marketing concept responsibilities as required by their host communities? (a) Yes ( ) (b) No ( ) 15. In which one of the following ways has your company discharged the rudiments of societal marketing concept? (a) Provision of employment ( ) (b) Execution of community project ( ) (c) Award of scholarships ( ) (d) Cleansing of polluted flora and fauna ( ) 16. How would you describe the relationship between your Oil Company and residents of the host community? (a) Cordial ( ) (b) Not Cordial ( ) 17. Is your company paying good attention to sustainable development of the environment and good community relation practises?
(a) Yes ( ) (b) No ( )
QUESTIONNAIRE (2)
cxvi
INSTRUCTION Please check the appropriate boxes and mark (√) against each box that applies and give our opinion on the open-ended questions. FOR RESIDENTS/HOST COMMUNITIES OF MULTINATIONAL OIL
COMPANIES 1. Sex of Respondent?
(a) Male ( ) (b) Female ( ) 2. What is your educational level?
(a) WASC/GCE ( ) (b) OND/NCE/HSC ( ) (C) HND/B.SC ( )
3. Have you experienced any oil exploration activity in your community? (a) Yes ( ) (b) No ( ) 4. Which of these oil companies operate in your community? (a) Chevron ( ) (b) Shell ( ) 5. What is your connection with any of these oil companies mentioned above? (a) Employee ( ) (b) Contractor/Supplier ( ) (c) Shareholders ( ) (d) Beneficiary ( ) (e) No strong connection ( ) 6. Have you witnessed any problem(s) and life inconvenience(s) as a result of oil exploration activities?
(a) Yes ( ) (b) No ( )
7. If yes to question 6, above, which of these inconvenience(s) have you experienced? (a) Land Pollution ( )
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(b) Water Pollution ( ) (c) Air and Noise Pollution ( ) (d) Ecological pollution ( ) (e) All of the above ( ) 8. Are you of the opinion that your community need to adequately compensated for such adverse effects on your environment? (a) Yes ( ) (b) No ( ) 9. Have the oil companies operating in your locality taken any measures towards finding out from the host community if their oil exploration activities have constituted any inconvenience(s) on the community? (a) Yes ( ) (b) No ( ) 10. Have the multinational oil companies tried to render any form of compensation? (a) Yes ( ) (b) No ( ) 11. If yes to question 9 above, in which of these ways has your community benefited? (a) Provision of employment ( ) (b) Execution of community project ( ) (c) Cleansing of the degraded environment ( ) (d) Award of scholarships ( )
(e) Others, please specify __________________ 12. Have you heard about Societal Marketing Concept? (a) Yes ( ) (b) No ( ) 13. If yes, do you think that Shell and Chevron have been duly implementing the rudiments of societal marketing concept? (a) Yes ( ) (b) No ( ) 14. In your opinion, do you think that oil companies in Nigeria are effectively and efficiently carrying out the tenets of societal marketing concept and corporate social responsibilities as required by them by their host communities? (a) Yes ( )
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(b) No ( ) 15. In your opinion, are multinational oil companies in Nigeria adopting cautionary strategies to forestall oil pollution? (a) Yes ( ) (b) No ( ) 16. In your opinion can you describe the relationship between your community and multinational oil companies as been cordial? (a) Yes ( ) (b) No ( ) 17. The multinational oil company operating in your community is paying adequate attention to enhancement and sustainability of good community relation practices. (a) Agree ( ) (b) Disagree ( ) (c) Undecided ( ) 18. Do you think that the plan/policy decisions of multinational oil companies reflect the interest of their host communities? (a) Yes ( ) (b) No ( ) 19. In your opinion, how are multinational oil companies perceived in your community? (a) Uncaring ( ) (b) Caring ( ) (c) Exploitative ( )
