Big oil takes responsibility; Corporate Social Responsibility is sometimes viewed as the philanthropic impulse of big business. Not so, argues Stephen Williams, who reports that significant numbers of oil majors as well as companies operating in other sectors in Africa are realising that engaging with their host communities is good for business.

When industry leaders, ministers and other stakeholders gathered in Madrid in July for one of the most important of the world's oil and gas industry meetings, the World Petroleum Congress (WPC), this three-yearly event had a number of special features. Not only did it coincide with Spain, the host country, winning the European Cup on the evening of the WPC's opening gala dinner, contributing a festive feel to the occasion, but great attention was paid throughout the congress to the issues surrounding Corporate Social Responsibility (CSR).

A special two-hour CSR session was incorporated into the WPC's proceedings. Given that 2008 marks the 60th anniversary of the UN Declaration of Human Rights, it was deemed appropriate that the discussion, moderated by Lionel Jospin, the former French prime minister, should focus on this particular aspect of CSR.

The session's speakers included Rilwanu Lukman, former secretary-general of OPEC and Nigeria's one-time presidential advisor on oil and gas, and Georg Kell, executive director of the UN's Global Compact (UNGC).

Once thought of as simply a charitable afterthought, CSR is now a mainstream consideration in the business plans of major corporations.

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This is largely due to the vision of the former UN secretary-general Kofi Annan who, while addressing the 1999 World Economic Forum in Davos, Switzerland, challenged world business leaders to help build the social and environmental pillars to sustain the new global economy and make globalisation work for all the peoples of the world.

Annan's call led to the launch of the UNGC in 2000. The UNGC works closely with six other UN departments within four main areas, specifically the areas of human rights, labour, the environment and anti-corruption. Those UN departments are the Office of the High Commissioner for Human Rights, the UN Environment Programme, the ILO, UNDP, UNIDO and the UN Office on Drugs and Crime.

In effect, the UNGC acts as a network, linking together not only the work of the six UN departments but its membership in national and regional affiliations. The networks' knowledge of the local business environment and its familiarity with social, cultural and political factors are positive drivers for the implementation of collective action and the UNGC's 10 principles (see panel, right) that fall under the four main areas listed above.

The UNGC is a voluntary not a regulatory instrument. It does not police or enforce the behaviour or actions of companies. Rather, it is designed to stimulate change and to promote good corporate citizenship and encourage innovative solutions and partnerships. It can only empower businesses with the opportunity to entrench the 10 principles as part of their business strategy.

Georg Kell has been the UNGC's executive director since its inception. Speaking at a WPC luncheon, sponsored by Chevron and dedicated to CSR, he addressed the growing social demands and expectations that impact the oil and gas industry.

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He insisted that "those corporations that have proactive human rights policies, that treat their workers well and have a strong environmental policy, on average are better equipped to mitigate risk and seize opportunities".

But he also pointed out that of the 4,300 businesses that have signed up to the UNGC initiative, only 120 companies were involved in the oil and gas sector. "This is a solid number," he commented, "but it is not enough."

There were 280 companies exhibiting at the Madrid WPC and 12 multi-media stands surrounded a central gathering area in what the organisers called the CSR Global Village-a new departure for the WPC that had never before given such a focus to CSR.

The oil industry attracts its fair share of detractors who blame it for a wide range of the world's problems-from high fuel prices to environmental degradation, global warming and high-level corruption. But many of the big oil companies are heavily involved in CSR initiatives in Africa.

At the CSR Global Village, two projects were sub-Saharan Africa specific: ExxonMobil's CSR investments in education and health in Angola, and Marathon Oil's Bioko Island Malaria Control CSR initiative in Equatorial Guinea.

Even if these two projects are quite similar, concerned with the health of the communities in which they operate-they are typical of the way that an oil company can harness its own capabilities and resources to reach out as development partners.

Case studies

ExxonMobil is the world's largest publicly traded integrated petroleum and natural gas company. In 2007 it provided $174m to improve education and prevent infectious diseases, working through the ExxonMobil Foundation's two initiatives-the Africa Health and Educating Women and Girls programmes.

Much of ExxonMobil's Angola CSR operations is focussed on Kwanza Sul province where, partnering with Save the Children and Africare, they have built three community health posts that have been incorporated within the country's national health system. These posts provide vaccines, essential medicines and primary care services in their region benefiting some 6,500 people. Exxon is also providing training in nutrition, immunisation, malaria and other common childhood diseases for 60 teachers and more than 500 health professionals and community health workers.

The education component of Exxon Mobil's Kwanza Sul CSR project has increased access to high quality schools by constructing classrooms for children and training teachers and school administrators. There is also an emphasis on raising awareness of the benefits of educating girls.

Six community schools were built, each equipped with separate bathroom facilities for girls, access to safe water and educational materials. Four more community schools are being funded-two already completed and two more will be ready by the end of this year to serve more remote communities around Kibala.

Marathon Oil's Bioko Island Malaria prevention programme is in some ways similar to ExxonMobil's Angolan programme in that it addresses crucial health issues. It works closely with the government of Equatorial Guinea and wants a progressive transfer to be made to local people of the responsibility for their multimillion-dollar CSR initiative. Marathon launched its anti-malaria strategy in 2003 by conducting a baseline health care survey, the following year conducting the first annual indoor residual spraying of homes and launching information campaigns. The main focus was protecting children under five and pregnant women. The spraying of internal walls to break the cycle of infected mosquitoes continuing to bite and infect new victims proved extremely effective. Figures provided by Marathon suggest that the number of children on Bioko Island with malaria parasites in their blood has almost halved in four years.

Medical staff are being trained to diagnose and treat malaria at an early stage, and Marathon and its partners underwrite the costs of these new drugs for children 15 years and younger. Marathon also assisted the Equatorial Guinean government in securing $26m in financing from the Global Fund to extend this programme from Bioko Island to the mainland, making an additional $1m contribution to this extension.

The UK-based super-major BP was another WPC exhibitor, and chose to present its global alternative energy solutions at the CSR Global Village, namely its investments in a portfolio of new technologies to provide low-carbon energy solutions-from innovative new solar and wind systems to advanced biofuels.

BP's solar business is growing fast and Emilio Mera of BP Solar (Spain) addressed a WPC forum to make an extremely optimistic forecast regarding solar soon meeting "grid parity"-in other words, becoming as cost effective in generating power as conventional grid-sourced electricity.

Business solutions

The Shell Foundation has developed linkages between poor communities in South Africa and a major European retailer. The retailer placed orders to import more than a million bouquets of flowers harvested and packed by South African workers in a scheme that will help to protect 30,000 hectares of biodiversity-rich land on the Agulhas Plain in the Western Cape. This area has an unemployment rate of some 80%. As the Foundation points out, the business' challenge was the need to deliver consistently good products at the right time and in the right quatities.

The Shell Foundation is anxious to point out that it operates independently of Shell as an independent charity. Furthermore, it represents just a small part of the company's overall CSR programme. Established in the late 1990s it says it has a broader remit than most companies' CSR agenda in addressing global poverty and environmental challenges with business solutions.

Arguably, the parent company Shell's greatest CSR challenge has been working in the oil-rich Niger Delta region of Nigeria-a region steeped in tension and grievances where difficult community issues persist.

Italian super-major Eni's Green River project in the Delta has made some headway in the region and been widely lauded as an exceptionally effective CSR project. It was designed to promote aquaculture, increase field-crop production and develop livestock rearing activities.

By creating new product processing co-operatives and encouraging small business, it aimed to increase youth employment opportunities. Two seed propagation centres, a technical assistance unit and a centre for aquaculture and rice farming were also funded.

The Eni Foundation is also playing a key role within its parent company's commitment, announced last May, to invest $4.78bn over the next four years in Congo Brazzaville. The Eni Foundation plans a major $13m immunisation programme to protect 200,000 infants against major preventable diseases.

The CSR rationale

All the many CSR programmes that the oil majors and other multinationals are undertaking in Africa are making a substantial contribution to the continent's development trajectory. However, business has the primary objective of returning a profit, so how do they justify their CSR expenditure to shareholders?

While not belittling their CSR programmes, it should be noted that by investing in the wellbeing of local communities, companies have a better-educated, healthier labour pool to employ and a population more disposed to welcome their operations.

Invariably, the host government also offers substantial tax benefits to offset CSR expenditure, meaning they can be funded at little financial expense to a business while doing no harm to its public image.

In short, CSR is, happily, a win-win scenario.

The 10 Global Compact Principles

The Global Compact asks companies to embrace, support and enact, within their sphere of influence, a set of core values in the areas of human rights, labour standards, the environment, and anti-corruption:

Human Rights

(1:) Businesses should support and respect the protection of internationally pro claimed human rights.

(2:) Businesses should make sure that they are not complicit in human rights abuses.

Labour Standards

(3:) Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining.

(4:) The elimination of all forms of forced and compulsory labour.

(5:) The effective abolition of child labour.

(6:) The elimination of discrimination in respect of employment and occupation.

Environment

(7:) Businesses should support a precautionary approach to environmental challenges.

(8:) Undertake initiatives to promote greater environmental responsibility.

(9:) Encourage the development and diffusion of environmentally friendly technologies.

Anti-corruption

(10:) Businesses should work against all forms of corruption, including extortion and bribery.

The UNGC's Georg Kell (left) wants more CSR involvment from the oil industry