- February 19, 2020
- Posted by: CSR-in-Action
- Category: Insights
The management of the extractive sector (oil, gas and minerals) is a major challenge and opportunity, especially for majority of the developing countries in Africa. Despite having the potential to drive growth, bring about development and reduce poverty, the exploitation of non-renewable natural resources has often solely been a source of wealth creation for elites in resource-rich countries in Africa, while the rest of the people are left to wallow in extreme poverty and face most of the negative impacts of extractive operations, including adverse social, environmental and health impacts.
This has often resulted in agitations, confrontations, insecurity such as pipeline vandilisation, resource theft, social instability and conflicts in most resource-rich countries. A trend which have been worrisome, especially at a time when countries are committing to make meaningful progress towards the attainment of the Sustainable Development Goals.
For a while now, we have witnessed increased awareness and calls for multinationals to not only pay attention to increasing their earnings, but to make significant contributions to both society and the environment by incorporating a triple bottom line approach as part of core business strategy and be a responsible corporate citizen that is using business to drive change.
With exception of a few multinationals, who have taken the lead to dedicate their organisation’s resources to solve social and environmental problems, using business as a tool, the majority are still depending on the less impressive model of solely driving their development agenda within the society.
Some of these multinationals, for example, engaged in an innovative approach for local development that has shown significant results and drawn the attention of development practitioners, by moving away from the traditional corporate social responsibility (CSR) model whereby a private company would finance one-off infrastructure or service programmes.
To sustainably address the underlying development challenges of local communities and stimulate inclusive economic growth in Nigeria for instance, the Niger Delta Partnership Initiatives (NDPI) Foundation, an independent development organisation with an initial funding of USD 100 million, was created. In turn, NDPI created a Nigeria-based implementing partner, the Partnership Initiatives in the Niger Delta (PIND), which is focused on creating social stability and prosperity in the areas where they operate, with the aim to reduce operational risks and improve the company’s business performance, thereby lead to substantial increase in government’s revenue from the sector – a model that not only caters to the business need, but also contributes to the development in the larger society empowering communities and providing revenue to enable government meet the developments needs of it’s people.
While some multinationals have succeeded with their initiatives, others who have spent large amount of monies have not achieved impressive results, let alone make significant impacts, despite the billions of dollars that have been spent on the development of the communities and countries where they are domiciled. A little fact-finding will reveal to you that nothing worthwhile have been achieved by most of these businesses.
This is so because the developmental challenges in any country today are complex, multifaceted and cannot be solved by just one business working in isolation, as it requires pulling all an organisation assets – including it’s people and identifying external resources to leverage online order to achieve meaningful outcomes . Hence, the solution to the challenges faced by multinationals in Africa’s extractive industries and elsewhere, require multi-sectoral collaboration, deployment and utilisation internal resources and the formation of strong and effective partnership with other organisations who are passionately working in areas of mutual interest; with the aim to leverage on the expertise, experience and resources from these partners and use business to create social change.