Can multinationals deliver selfless community projects?

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Nigerian oil and gas company Oando is trying to encourage thousands of girls to register for school for the first time.

The Guardian

Community projects undertaken by big multinationals, however well-meaning, often lack community involvement and focus on what they give rather than the long-term impact

Oliver Balch

Today, Nigeria has the most out-of-school children in the world – some 10.5 million, the majority of them girls. This April could see a small dent in that number as Nigerian oil and gas company Oando seeks to encourage thousands of girls to register for primary school for the first time.

As corporate social responsibility (CSR) projects go, it ticks all the obvious boxes: it’s well-funded (to the tune of £4m), its goal is clear (to get 21,000 girls into school over the next three years) and its approach is partnership-based (the British Council and the Clinton Global Initiative are both on board).

A company cannot simply sign a cheque and say it’s done its bit. I want to know what happens after five years–  Bobby Banerjee
But will it deliver? Oando’s director, Tokunboh Durosaro, is predictably upbeat. She points to the company’s existing track record. The Lagos-based energy conglomerate already supports education programs in more than 50 “adopted” schools in 23 Nigerian states. Importantly, it also boasts a strong working relationship with state education authorities, as well as with local charity partners and aid agencies.

Still, development professionals may well raise their eyebrows. Not because Oando’s track record or proposed approach doesn’t seem sound. It does, on paper at least. But rather because they’ve heard it all before.

“If you look at the Niger Delta, between Shell, Exxon and all the other oil companies, hundreds of millions of dollars have probably been spent on CSR over the last 30 or 40 years”, says Bobby Banerjee, a development expert and professor of management at Cass Business School. “So why are these communities worse off than they were before?”

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It’s a legitimate and important question. The way massive oil wealth can skew a country’s economic development is well-documented. Nigeria is no exception. Official figures indicate that nearly 61% of the population were living in poverty in 2012, compared with 15% in 1960 prior to Nigeria’s oil boom (pdf). Corruption, lack of economic diversification, political instability and violence (Nigeria suffered the highest level of civil deaths in African war zones last year) all play their part.

While these macro trends inevitably affect localized development initiatives, they don’t entirely explain why CSR projects so often fail to deliver.

According to Banerjee, corporate-led efforts at development trip up for at least two main reasons. The first has to do with community involvement. “Whoever the recipients of the initiative are, they have to be involved in this from day one,” he says. Too often that’s not the case.

Companies enter a community, build a school, say, or a health center, and then leave (although not without taking a photograph for their CSR brochure). Even when participation does happen, it’s often limited to negotiations with community elites, without regard to marginalized groups who typically need development assistance the most, Banerjee says.

Second, companies tend to focus on what they give, not on what their contributions achieve. So if a company invests in a women’s entrepreneurship project, for example, the key information is not how much it cost or even how many people participated. It’s the new businesses that emerged as a result or the long-term differences it made to women’s lives.

“A company cannot simply sign a cheque and say it’s done its bit,” Banerjee says. “I want to know what happens after five years. Have these monies produced the kinds of outcomes that were intended?”

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Richard Kuevor adds a third reason: lack of coordination. A program officer for Oxfam’s extractive industry team in west Africa, Kuevor says that the natural instinct of most companies – particularly industry competitors – is “not to share” and to “do their own thing”. The result in the past has been scenarios in which three separate companies build three village halls in the same community, “which doesn’t benefit anyone”.