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CORPORATE SOCIAL RELATIONS IN OIL AND GAS INDUSTRY

CORPORATE SOCIAL RELATIONS IN OIL AND GAS

Nigeria Shell and Saudi Arabian Aramco Oil Companies analysis

Corporate social relation (CSR) practices taken by both the Nigerian Shell oil company and the Saudi Arabian Aramco oil company in those two respective countries and the roles the social movements do play in the corporate social relations governance is quite complicated to outline. Both countries characterize no fundamental CSR laws to govern the oil sectors. For instance, in Nigeria, the CSR responsibility is left to the international oil company(IOC), despite shell company having official CSR practices and the international reporting standards but such accusations dos not cease to exist (Burger, 2012).

In the case of Saudi Arabia, the focus is at the Saudi Aramco which is reported to have started the initiative of institutionalizing the CSR practices. Such actions have since seen the company contributed towards the country’s economy, social and environmental improvements. In this way, the company through its CRS initiative can generate value for all stakeholders by acting responsible towards them, engaging in dialogue with them and finally familiarizing to the social concerns of those shareholders (Abro, Khurshid and Aamir, 2016).

By incorporating the Friedman’s shareholder’s theory, Saudi Aramco makes the shareholders become the sole stakeholder by taking a strategic CSR approach so as to invest in the strengthening of their company competitiveness through bank loans and infrastructure of which gives the company license of operations. Because the company has restructured their operations, sooner the government and shareholders may be given priorities since the government is by virtue the controller of the company because the enterprise is a state-owned corporation.

With the struggling state of Nigeria, many international organizations and the non-governmental organizations have decided to impact on the Nigerians affairs by involving themselves in matters related to the CSR (Burger, 2012). Such cases are not eminent in Saudi Arabia rather the severe cases reported in that country is what has led the international community to criticize their approaches, but there is no effect on the country. The Saudi government has no pressure altering those policies based on the international community outcry (Abro, Khurshid and Aamir, 2016). As a countermeasure to such pressure, they have led the United Nations human rights body making them continue to deal with other countries. Because of the existence of many shareholders of the shell company, they have to keep maintaining their operational license which is the least of their worry since they have to obtain the license to operate and content the Saudi state.

Major CSR changes are expected to come from the government in the case of Saudi Aramco, while in the shell company, such changes are expected from various stakeholders. Oil and gas exploration remains a complicated deal that involves both political and social diversity as it also includes the environmental costs and social challenges. As a result, the stakeholders will continue to exert pressure on those companies to make up to the evolving social and legal expectations.

In conclusion both the Aramco and shell’s corporate social responsibility strategies only differ because of their internal regulations and national civil society. In Saudi Arabia, the civil societies have no influence to pressurize the Aramco CSR strategy (Abro, Khurshid and Aamir, 2016). Since the company is partly state owned, not even the non-governmental organizations, media, and or the trade union which can protest the treatment of workers of which the contrary results to shutting down of those various agencies existence.

On the other hand, in Nigeria, freedom of speech and association are recorded highly, and most NGOs such as the Christian Aid get financial support from the international community and organizations. The media and trade unions have influence and together with other agencies including the public, they can impact the shell company CSR strategy (Burger, 2012). The effects of the civil society can be felt in shell company as they have a representative as the stakeholders and must be consulted in case of any program or initiatives to avoid the clash of interests as what have happened on various occasions. Those groups have kept shell company under surveillance because of its status as the biggest economic influence in Nigeria.

Reference List

Abro, M.M.Q., Khurshid, M.A. and Aamir, A., 2016. CORPORATE SOCIAL RESPONSIBILITY (CSR) PRACTICES: THE CASE OF SAUDI ARAMCO.Journal of Competitiveness Studies24(1/2), p.79.

Burger, A. (2012). [online] Available at: http://Shell in Nigeria: Oil, Gas, Development & Corporate Social Responsibility [Accessed 29 Jul. 2012].

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