Corporate Social Responsibility (CSR) in Tanzania’s Oil and Gas Industry

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Overview

In the Oil and Gas Industry, Corporate Social Responsibility (CSR) refers to voluntary actions undertaken by oil and gas companies to either improve the living conditions of local communities or reduce the negative impacts of oil and gas projects in areas where they operate. Voluntary actions are those that go beyond legal obligations, contracts, and licence agreements. CSR programmes usually invest in social infrastructure, building social and human capital. [1] Over the decades, CSR has been touted as a driver of sustainable development. It is widely believed that long-term economic growth in societies requires an effective implementation of the responsible business practice principles. [2]

CSR in Oil and Gas Tanzania

Although the concept of CSR in the oil and gas industry is relatively new in Tanzania, it has been generally practised in other sectors of the economy such as mining for years now. A number of initiatives that affirm its presence in the country have been carried out by both public and private business institutions. [3] Significantly, the importance of CSR has been captured in the National Natural Gas Policy of Tanzania. The policy states that the government shall “ensure there is a contractual obligation to all investors and contractors in the natural gas activities to undertake locally prioritised community development programmes, and ensure that companies in the natural gas industry submit credible Corporate Social Responsibility action plans to the appropriate authority.” [4] However, studies on nine (9) oil and gas exploration companies operating in Tanzania indicate a general lack of compliance with international standards regarding the preparation of CSR policies. This, among others, includes lack of community involvement at the grassroots in the preparation of CSR as communities must be involved at every stage in the best CSR practice. [5]

The government now plans to introduce a CSR Act to encourage legal businesses, including multinational corporations, to contribute to community projects. Currently, the choice is largely left up to the companies themselves. [6]

CSR Activities by Companies

PanAfrican Energy Tanzania

Since 2005, PanAfrican energy has been developing and implementing health and education programmes that have improved the health of SongoSongo islanders, provided education to the youths, trained and equipped new teachers. Additionally, the company’s employees have volunteered in providing life skills training on the prevention of HIV/AIDS and the dangers of drug and alcohol abuse to local communities. [7]

BG Group Tanzania (Now Shell)

BG Group in Tanzania has teamed up with the Tanzanian government and an international development charity to help young people in the southern regions of Mtwara and Lindi. This partnership between BG Group, the government body Vocational Education and Training Authority (VETA), and Volunteer Service Overseas (VSO) is aimed at benefiting about 840 students in both regions. [8] BG also assists local communities with waste management. The Supply Base Solutions waste facility near Mtwara treats all the waste generated by the oil and gas companies operating at the Mtwara port as well and many others. [9] BG has an office that works to establish a grievance mechanism through which the community can air concerns with the Group in a way that gives them confidence that their concerns will be addressed. [10]

Equinor (formerly Statoil)

In an effort aimed at strengthening capacity-building in the oil and gas sector, Equinor Tanzania is financing Master’s students and doctorate degree students mainly in petroleum engineering, geo-science and finance in Norway and Tanzania. [11] Equinor also provides solar lanterns in rural Tanzania, and provides malaria vaccines through the Malaria Vaccine Initiative’s Vaccine Advocacy Fellowships and training of medical staff. [12] In 2014 Equinor launched the Heroes of Tomorrow business competition in Mtwara which aims to encourage and train local entrepreneurs. Participants must submit business plans and the winning business plan is picked by a jury. The winner of the annual competition receives a cash-price to fund her/his project.[13] Equinor also donated a computer library to Stella Maris University in Mtwara, renovated the Mtwara Regional Library and donated 900 books to the library. [14] Since 2015 Equinor has been conducting the Neglected Tropical Diseases Campaign which facilitates operations for Hydrocele patients. [15]

Maurel & Prom Tanzania

Maurel & Prom funds and manages projects that are aimed at improving the access of local communities to education, health, water and energy.[16] The company has bought equipment for a health clinic at Mkuranga for example.[17]

Afren Tanzania

Afren Tanzania has, among other things, assisted in the construction of the Mayomboni Village Water Project which will provide water to more than 2,000 people. It is also planning to construct a nurse’s home at Mwandusi Village (Tanzania). [18] Afren Tanzania Limited, in collaboration with the University of Dar es Salaam (UDSM), has a scholarship scheme that has benefited five (5) undergraduate and two (2) postgraduate students in the 2014/2015 academic year. [19]

Exxon Mobil Tanzania

Exxon Mobil Tanzania is supporting the distribution of manual irrigation to farmers and the distribution of solar lanterns to rural parts of Tanzania. Exxon is moreover implementing an Anti-Malaria programme which builds the capacity of Tanzanian hospitals and trains researchers, ministry staff and health authorities. [20]

Presidential Award on Corporate Social Responsibility and Empowerment

On 28th February 2012, President Jakaya Kikwete launched the Presidential Award on the Extractive Industry Corporate Social Responsibilities and Empowerment. In his speech, the president noted that the award “is an important milestone in the history of the extractive industry in Tanzania. It is intended to align corporate policies and practices of companies in the extractive industry with sustainable development. It is about making local communities where companies operate benefit from the operations of the companies. And, it is about the companies benefitting from the friendliness, harmony, understanding and cooperation that will ensue with the government and the people in the areas where the companies operate."[21]

The President highlighted the need for extractive companies to outsource goods and services locally saying that “companies should make it their policy to engage local companies and local people.” He also underscored the nature of relationship between large and small companies noting that by helping small companies to progress, large companies are also benefitting. The President said he was happy with the key indicators to be used to evaluate the scores for the Award and considered the following indicators very pertinent:

1. Community well-being and sustainability;

2. Human resource development and training;

3. Local industry participation;

4. Community safety, water and environment;

5. Social infrastructure such as housing and health services; and

6. Infrastructure development such as roads, electricity etc.[22]

The last presidential award was awarded to North Mara Gold in 2015.[23]

References

  1. Corporate Social Responsibility and Development Cooperation”, “GIZ”, retrieved 10 November 2014.
  2. A new era of sustainability: UN Global Compact-Accenture CEO study 2010”, “UN Global Compact”, retrieved 10 November 2014.
  3. Oil, gas sector not standards-compliant: study ”, retrieved 10 November 2014.
  4. The National Natural Gas Policy 2013”, “Government of Tanzania”, retrieved 10 November 2014.
  5. The National Natural Gas Policy 2013”, “Government of Tanzania”, retrieved 02 September 2014.
  6. Tanzania Wants to Make CSR Compulsory”, “All Africa”, retrieved 10 November 2014.
  7. Social Responsibility”, “Panafrican Energy”, retrieved 10 November 2014.
  8. Training young people in Tanzania”, “BG”, retrieved, November 10 2014.
  9. Training young people in Tanzania”, “BG”, retrieved, November 10 2014.
  10. Social programmes in Australia, Tanzania and Trinidad and Tobago”, “BG”, retrieved 10 November 2014.
  11. Statoil donates 125 desks to two primary schools in Mtwara Region”, “Masatu Media”, retrieved 10 November 2014.
  12. Corporate Social Responsibility Tanzania”, “Exxon Mobil”, retrieved 10 November 2014.
  13. Youth Empowerment”, “Equinor”, retrieved 02 September 2018.
  14. Youth Empowerment”, “Equinor”, retrieved 02 September 2018.
  15. Youth Empowerment”, “Equinor”, retrieved 02 September 2018.
  16. Corporate Social Responsibility”, “Maurel and Prom”, retrieved 02 September 2018.
  17. Aid for developing local communities”, “Maurel and Prom”, retrieved 10 November 2014.
  18. Kenya, Tanzania, Madagascar and Seychelles”, “Afren”, retrieved 10 November 2014.
  19. UDSM & AFREN 5 Undergraduate and 2 Postgraduate Scholarships”, “Wanabidii Blog”, retrieved 10 November 2014.
  20. Tanzania Overview”, “Exxon Mobile”, retrieved 09 September 2018.
  21. JK launching the Presidential Award on the Extractive Industry Corporate Social Responsibility and Empowerment Programme (CSRE)”, “Global Publishers”, retrieved 25 August 2015.
  22. JK launching the Presidential Award on the Extractive Industry Corporate Social Responsibility and Empowerment Programme (CSRE)”, “Global Publishers”, retrieved 25 August 2015.
  23. Is Acacia Getting Its CSR Act Together in Tanzania”, “CSR21”, retrieved 02 September 2018.