Oil firms’ dwindling perception amidst ‘good deeds’


gas-flare-nigeria-akinleye4-gaDespite the volume of investment in corporate social responsibility to secure the trust of the host communities and reposition the corporate image of oil companies in the country, their perception rating amongst Nigerians have continued to nosedive.

This was evident in a recent report by the US-based Climate Accountability Institute, which revealed that Chevron, ExxonMobil, Statoil are amongst the ‘worst climate offenders.”

The oil giants, including ChevronTexaco, British Petroleum (BP) and Statoil were identified in the research report as some of only 90 companies most responsible for historic carbon dioxide emissions that are believed to have caused climate change.

The findings revealed that the 90 companies have between them generated nearly two-thirds of greenhouse gas emissions since the dawn of the industrial age.

They are said to have been responsible for 63 per cent of cumulative emissions between 1751 and 2010, amounting to about 914 gigatonnes of CO2 out of a total of about 1450 gigatonnes, according to the published report.

The list of climate offenders includes 50 investor-owned companies, mainly oil super-majors, as well as 31 state-owned companies such as Statoil, Saudi Aramco and Russia’s Gazprom.

ChevronTexaco is the leading emitter among investor-owned companies, causing 3.5 per cent of greenhouse gas emissions, with ExxonMobil not far behind at 3.2 per cent. In third place, BP has caused 2.5 per cent of global emissions, while Statoil was ranked as the 34th largest emitter on the overall list of 90 companies.

In Nigeria, poverty and conflicts are endemic in the Niger Delta even as oil companies operating in the region intensify CSR initiatives in community development. Yet, there is hardly any assessment of the transnational companies’ CSR initiative privileging evidence from host communities.

Godwin Uyi Ojo, a lecturer, who recently presented a paper on community perception and oil CSR initiatives in the Niger-Delta said his presentation is aimed at assessing, rather selectively the oil companies CSR as an anti-conflict strategy for development mainly from the viewpoint of Niger Delta residents.

The author assesses how commitment in social investment seems to conflict with managing negative impact of oil production on host communities and their livelihoods. Using qualitative research methodology and perception survey it attempts to delimit the “blurred” boundaries of oil companies’ social investments that are philanthropic gestures rather than obligatory ones. The paper suggests that CSR is only coincidental to community development. It thus suggests a transition from the voluntary mechanism of CSR if obligatory framework that will separate social investment from operational costs could be installed.

In the past decade, oil companies have invested hugely in healthcare, education, environment, and sports amongst other areas but these massive investments have not overshadowed their negative impact on the environment and the host communities. Instead of their activities to turn things around for them, it worsens it.


Wake up call

According to Public Relations/communications specialist, Muyiwa Akintunde, the battle to turn perception around is sometimes life-long. But the report should be a wake-up call for the concerned parties to review their strategy as there might have been a disconnect between them and their target publics. It is either the messages are not reaching home or the companies are truly not doing enough, he said.

“Issues of doing enough cannot be wish away though, but it is on record that while some oil firms are simply does not care about how they are perceived others have worked hard to change this unpalatable perception through several CSR initiatives.

“First of all, we need to understand that these oil companies are in business to make money, otherwise they won’t even be here at all. Their commercial interest is also being protected by the government, maybe at the expense of the local folks in the neighborhoods where the multinationals operate,” he added.

So on why the negative perception persists, despite several impactful initiatives by these companies, Rufai Ladipo, a communication expert and former Association of Advertising Agencies of Nigeria President said “We need to examine the opinion leaders and influencers in these environments to identify how well the largesse being dished out by oil majors get to the grassroots.”

For him, “it will be worthwhile for the oil companies to be more proactive in their efforts to reach out to the communities where they operate, as damage control often cost more. But on their side, the people must be very realistic with their demands, which is never enough, thus perpetrating the wrong perception and eroding the goodwill of the oil companies.”


Indentifying with hosts

For Udeme Ufot, Chief Executive Officer of SO&U, an advertising firm, oil companies need to focus not just on sustainable programmes and investments that empower members of their communities, but understand their communities and identify with those aspirations that are important to them. To remove the suspicion with which the oil companies are viewed, there must be transparency in their relationships with the communities. Engagement with the communities must be ongoing and only professionals who can empathise with the plight of the communities and deal with them in a true spirit of partnership should be assigned community facing roles.

According to Ufot, the oil companies should not expect any quick fixes. Many years of mutual suspicion cannot be reversed in one day. It will take time to swing negative perceptions and position oil companies as true partners and good neighbours.

Managing Director of Mediacraft, John Ehiguese blamed the oil companies’ predicament on their poor crisis management rather than sustainable programmes. He said “it is true that a lot of the Oil & Gas exploration companies in Nigeria invest significantly on CSR, but I think that the reason why this does not seem to be impacting positively on their public perception is their poor crisis management records, especially with regard to environmental issues.”

By the nature of the oil exploration business, he said there is always a high risk of environmental degradation. Operators in that sector need to be both proactive and responsive in dealing with issues that do not often appear to be the case in Nigeria. Besides, there is that widespread perception that the regulatory agencies are not doing enough to sanction breaches, which does not help their case at all.

Ehiguese suggested that oil and gas companies engaging in operations that threaten the environment, must be strategic in dealing with environmental and labour crises.

“It is important that they are seen to be sensitive and humane in their responses when such crises occur. In other words, they need to step up their game in the area of Crisis Communication management.”

Ufot however sees it differently. A lot, he believes, will still depend on the government at state and local levels to provide facilities that make these communities livable.

It is the job of government, he continued, to provide the basic necessities of life for its citizens. For as long as the communities remain deprived, and know that it is the wealth from their communities that oils the wheel of progress elsewhere, they will remain disgruntled and take out their frustrations on the oil companies. The oil companies are businesses, answerable to shareholders. CSR budgets are not inexhaustible and the activities in that area are only adjuncts to their business. There is a limit to how far they can play the role of government no matter how sympathetic they may be to their neighboring communities.

Adedayo Ojo, who runs Caritas, a reputation solution company, said “oil companies are being vilified largely because of what people think, not reality.  It is a perception issue.”


Most regulated

The oil and gas industry is arguably the most regulated sector in Nigeria with multiple agencies in several areas. In some cases, states have a regulatory agency to do similar work with Federal agencies. These agencies range from Department of Petroleum Resources (DPR) to NOSDRA, have minimum standards of operations, and any operator that does not conform to those standards are sanctioned.

For the multinationals, the issue of protection of license to operate is one that must be flawlessly executed. They therefore generally adhere scrupulously to defined standards.  Indeed, it is an issue of competition for oil companies to have standard procedures for dealing with environment, safety and health issues for their staff and communities.

However, Ojo said the challenge that oil companies face is one of perception, which requires that the companies do more with strategic communication and engagement of stakeholders.

“With the explosion of communication and access of citizen journalists to Internet platforms, there is an urgent need for most oil and gas companies to review their communication paradigms to assure that messages about their operational practices and priorities are communicated widely and timely.

The extractive and environmentally invasive nature of the oil companies business already establishes a massive burden of responsibility and negative perceptions amongst stakeholders. It is incumbent on oil companies to continue to embed the requisite programmes and initiatives to create a “wish image” that will help to achieve social capital and goodwill.



According to Gbenga X-adebija, Managing Director of Ashton & Layton, “oil companies must mainstream the principles of sustainability and corporate social responsibility into organizational strategy. CSR must evolve from being a sideshow for companies in the oil sector but should instead be regarded as a key component which must be woven into the fabric of company operations. It should now be doing good in order to do well, and not doing well in order to do good.”

But for Akonte Ekine, MD, Absolute PR, the legislation can be a good way to help work with standard and the entire perception will change over a period of time.


[Goddie Ofose, Daily Independent]