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Corporate Social Responsibility in Oil and Gas

When engineers discover oil or gas and an energy company moves in to exploit it, local people may wonder what these developments will mean for their community. How will construction work affect their villages? Will the government build a new port? Will there be jobs for them? Managing expectations about the payoffs to local economies from oil and gas extraction is difficult and, historically, companies and governments have done a very poor job of it, according to Middesex's Professor of Corporate Social Responsibility and Strategic Management, Jedrzej George Frynas.

Professor Frynas, who occasionally advises international oil and gas companies, governments and specialist management consultancies on how to pre-empt conflicts between companies and local communities, has published extensively on corporate social responsibility (CSR) in this context. His work has included, for example, studies of CSR issues in oil spills at sea, revenue transparency and economic development, and the management of local spill-over effects from company investment in developing countries. Fieldwork in Nigeria's oilfields, for instance, allowed Frynas to witness how things can go badly wrong. At first, development may be welcomed: a new school road is built, and local people take well-paid construction jobs. Then foreign workers move in. Locals are laid off. Inflation rises. Roads are damaged, irrigation is affected by dredging. There may even be environmentally harmful oil spills. "The problem" Frynas observes, "is that governments often lack experience in dealing with these companies. It's very frustrating to witness how they lack the acumen or willpower to stand up to them."

Yet many of these problems can be avoided if companies and governments involve local people at an early stage. Frynas is keen to make practical use of his research. After writing a brief for an international oil company working in Morocco, for example, he has twice spoken at government workshops in Rabat to improve local community understanding too. The Morocco government is concluding public consultations in the disputed territory of Western Sahara and these, he says, have been taken seriously. "The more ungovernable a place, the more difficult it is to sort out these problems". He has particular expertise in Africa, where he has worked, for example, in Sao Tome, Equatorial Guinea and Egypt, but is extending his research elsewhere too.

Middlesex University is also trying to build some of the capacity needed to improve the situation. It offers an online MBA in Oil and Gas for professionals needing a specialist degree but unable to attend a traditional university course since many work offshore. "It's really exciting to be part of that," says Prof Frynas, "not least because students often discuss the CSR issues that arise in their working lives". He is also organising a one-day CSR research training workshop in Botswana, and is pleased that ESRC has funded six travel bursaries for African PhD students. "We need a lot more capacity-building to raise the understanding of social and environmental issues among managers and among researchers if behaviour is to change for the better", says Frynas.

Find out more about Professor Frynas' work on CSR in the oil and gas sector

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