Companies that pursue corporate social responsibility are acting against its shareholders. This is because they have economic responsibilities to their shareholders, by making/maximizing profits and are agents to their shareholders, not the government to penalize their shareholders. However if managers believe that being socially responsible will invariably improve their financial position and sustain their operations, then it is only wise for them to engage the community before embarking on such social activities.
Community engagement/participation (CE) to us, is the direct involvement of the local community (various stakeholders within the community) in the processes of CSR polices formulation, administration decision making and implementation. This is done on the basis of issues, concerns and needs facing the community.
Communities have different needs, problems, beliefs, practices and resources. Getting the community involved in program design and implementation helps ensure the best strategies appropriate for and acceptable to the community.
According to us, the firm stand to gain a lot of community participation in its community action plan and these are some of the benefits. CE can help MDL improve on its communication channel between the firm and the community. This will facilitate buy – in on social project undertaken by the firm; generating community support. Additional information about the community can be taped into by the firm to its advantage. The art of listing to community concerns and desire, to us can help MDL take into account different priorities and perspective in their CSR activities and can secure the firm “social license to operate”.
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Social, environmental and economic problems can be complex, involving the community is a good ideal for MDL. Together, MDL can build a sense of joint purpose and increase the possibility of finding sustainable solutions to such concerns. CE can also reduce the sense of “us” and “them” that normally exist between communities and firms in the favour of MDL. This will help in building trust and understanding between the two.
The legitimacy of the final outcome (policy, program, project) may be increased, when opportunities are given to the community to state their own case and influence the outcome (i.e., a due process argument; the process being fair).
Community empowerment is necessary for community support and shared responsibility of any CSR activities, which can also be achieved through CE.
Despite the obvious benefits of ensuring that community fulfil an integral role in the CSR decision making process and in the administration of the subsequent polices. There is a potential cost involved in such activities, which we have identified. Community involvement in CSR activities can shoot up the initial funds located for such activities. This is because to recognize contributions made by various stakeholders, money need to be given to them in the form of donations.
Normally, it is believed that community in Africa including Ahafo Ano do not really know what they need. They might only be interested in short-term benefit of the company`s CSR activities. Meanwhile, the management intentions are far reaching into the future welfare of the community involved. To involve them in CSR activities will be lose of resources to MDL.
ENVIRONMENTAL ISSUES
This aspect of the question demands a critical assessment of the environmental issues facing by MDL, in the wake of environmental problems and social activism that has continued to bedevil the development and economic growth in the Ahafo Ano District in the Western Region. Air, water and land pollutions are the main environmental issues that MDL will face when they incept operations in the area.
Air pollution in the Oil industry is predominated by Gas flaring, which is the process by which excess natural gas is released from an oil field and burned. This “associated gas”, a waste by-product, under these circumstances, can be used to generate electricity; however, necessary infrastructure (liquidified natural gas plant) is presently not available, necessitating such actions.
It is a regular occurrence in many oil exploration areas which is a dehumanizing experience. It has negative effects on the immediate environment, particularly on plant growth and wide life as well as human health (Orubu, 2002). It is one of the greatest contributing factors to climate change and global warming, a huge threat to environmental security.
The people suffer immeasurable hardship resulting from intense heat, strange diseases and respiratory problems. This and many others acts of irresponsibility on the part of the existing Oil companies have lead to youth restiveness in the area.
Water pollution is dominated by oil spillage, which is the release of a liquid petroleum hydrocarbon into the environment, especially marine areas such as the ocean or coastal waters due to human activity, but spills may also occur on land and is a form of pollution
The effect of oil spillage on the livelihood of the community is immerse and diverse. It leads to the destruction of natural living organisms ( animals, fish and plant) which are their main source of living; and to some extend their source of water (pore-holes, walls, springs, lakes etc).
Land pollution is basically the loss of vegetation cover of a particular geographical location as a result of human activities. There is gradual extinction of biodiversity in oil extraction areas leading to increased environmental degradation where critical ecological species loss their varieties (Chinedum, 2001). Before the advent of oil production, the basic source of livelihood of the local people are farming, hunting and fishing. However, literature has shown that oil extraction has lead to the lost of productive farmland as the case of Ahafo Ano District. Since this includes ancestral homelands, it is expected that violence will increase, especially against bigger oil firms like MDL.
Principles of Environmental Reporting
Environmental reporting has two fundamental functions, external (or social) function and internal function, which promotes environmental efforts in organizations’ activities. It plays very important role in strengthening voluntary environmental efforts in organizations activities. Environmental reporting is published as a tool for environmental communication from the perspective of social accountability. The following five principles are essential in order to make environmental reporting an effective tool for environmental communication and fulfilling social accountability MDL.
Relevance – Environmental reporting needs to provide information which is useful for interested parties decision making by reporting the state of environmental burden caused by its business activities and environmental programs that mitigate the burden and it needs to be issued in proper timing.
Reliability – In order to ensure reliability of environmental reporting, it must be free from errors and omissions. MDL must provide environmental reporting that is accurate; include substantial contents that reflect environmental burden the organization produce.
Clarity – Environmental reporting needs to provide necessary information with clear and easy-to-understand expressions to avoid misunderstandings among interested parties.
Comparability – Information included in environmental reporting needs to be comparable between different reporting periods of the organization. Even among different organizations, information that enables certain comparison should be provided.
Verifiability – Information in environmental reporting needs to be accompanied by the basis and foundation of the statement and it should be verifiable with objective standpoint. There is empirical evidence to indict oil firms for failing either to meet the environmental laws or the concerns of the people of the communities they operate. This is mainly because, the cost-benefit analysis embarked on by the firms, which do not allow them to invest in areas that will not improve their bottom-line. Therefore, MDL should have a second look at theory before it incepts its operations in the targeted area. This is because the community is hostile compared to other areas of their operations.
COMMUNITY PARTICIPATION
Community participation concerns the engagement of individuals and communities in discussions about things that affect their lives. Sometimes, people do not want tobe involved in decision making, but it is obvious that everyone should have the opportunity to do so. Community engagement is not the same as community consultation. Manay organizations say that they have a community engagement strategy when they mean consultation strategy. Therefore, community participation means that communities are playing an active part and have a significant degree of power and influence over the CSR project from scratch to finish.
The CEO`s view of not engaging the target community can be a policy strategy of MDL, which is still believed to be practiced by many managers in the contemporary world of business. The argument in favour of the strategy are valid and sound, some of which are as follows:
Sometimes, the target community members do not know themselves what the want, hence their involvement can be pretty waste of time and energy. This can manifest in situations where the local people lack capacity to analyse and evaluate social projects for their communities. They sometimes have to relay on the expert service of a volumteer to be able to participate in the process.
Secondly, social responsibility interventions are the initiatives of corporate management largely because, the final decision to appropriate company`s resources to CSR activities is a sole responsibility of corporate managers of MDL. The community are just the beneficiaries. Since, they are not the providers of the resources what is their business demanding participation.
Again, the concern of the CEO is a legitimate one, in the since engaging the community in a dialogue on what they need can be a potential danger and MDL may run the risk of spending more resources on any agreed activity that would not impact positively on their bottom-line. There is the possibility of spending more resources on these social intervention than the budget can contain.
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Most importantly, the chief executive officer of MDL is in an agency relationship with the stockholders and will respond solely to the principal interest which is to do business according to the norms of society and gain profit as much as possible. Therefore, the social responsibility of the CEO is to execute business lawfully and make profit. This relationship is a contractual one and any disbursement of funds outside the agreement is inimical to business objectives (Friedman, 1970).
However, whatever arguments advanced for the non engagement of the community in any social intervention does not add up. Both parties rather stand to gain for the following grounds:
Communities have different needs, problems and concerns which are better known to themselves. So getting the community involved in program design and implementation helps the local people to accept, support and benefit from such social intervention, a win-win senarior.
Again, community engagement improves communication between the firm and the community. This enables a pool of knowledge for the benefit of both parties in terms of social, environmental and economic concerns petinent to that locality. Social, environmental and economic problems can be complex. Engaging the community is a better way of finding sustainable solutions to such problems in the community.
Oil firms in the Ahafo Ano District might have spent millions of dollars in their bid to give back to society but still violence, conflicts and insecurity still continue to feature prominently in community. Clearly then, there must be something that they are not doing right. Though there have been marked improvement and efforts to curb gas flaring through projects like liquefied Natural Gas plant, which can be a defining features of corporate social responsibility.
According to Jike (2004) since the bone of contention between the oil companies and host communities is the degradation of the environment the solution for Ahafo Ano District must be located within such environmental issues. Oil multinational companies should stop paying lip services but redefine true corporate social responsibility with a human face consistent with global standards. Their double standards only intensify outrages and uprising.
It is therefore in the light of the above, that we recommend that, lasting peace and security can be achieved in the Ahafo Ano District if environmental related issues are incorporated into the corporate social responsibility framework of MDL and other iol firms. This is logical given the fact that the environment constitutes the economic base for majority of the inhabitants who depends on it for their daily bread.
STANDARDS FOR EFFECTIVE CSR
Given something back to the community is just part of CSR activities firms undertake, this must be clear for all. Meeting the demand of different groups of stakeholders as mention earlier on, to me is CSR. In my view CSR is a circular activities that cut across all stakeholders in a business environment. Meeting one stakeholder group, affects the rest positively and negatively depending on the circumstances. For instance when a firm is able to maximize its profits, it means that cost of production (suppliers, employees; non and management team, machines and government) was less than sales (customers). Increase in demand by customers, may be the result of social activities embark on by the firm. Improvement of goods and services quality and efficiencies through research and development, as well as investing in environmentally friendly technologies and machines also increase productivity.
With the cost of production, paying taxes regularly and adibding the law will not lead to a shut down or government takeover (nationalization). Payment to suppliers on time will lead to a continuous flow of raw materials. Meeting employees’ needs through high remuneration and other allowances will increase their commitment to the firm’s operations.
All of these are part of CSR activities made possible by shareholders investment and the profits made by the firm. For one to eliminate social amenities in is CSR activities may lose some customers, who are very sensitive about what firms give to the communities in which their operators. Social amenities provided by firms are enjoyed by everyone even including members of the firm. Classical example in Ghana is cocoa clinic which staff of cocoa board, farmers and the entire nation benefit. The different stakeholders are all part of the community that enjoy and endure whatever the community experience, good or bad road conditions, the air population just to mention a few, this will affects all, not just the local people.
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