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

=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. 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.

=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. 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.” 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. 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.

=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.

BG Group
BG Group 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. 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. 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.

Statoil
In an effort aimed at strengthening capacity-building in the oil and gas sector, Statoil Tanzania is currently financing 31 Master’s students and one doctorate degree student mainly in petroleum engineering, geo-science and finance in Norway and Tanzania. Statoil 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. Statoil is also conducting training for 40 youths in Mtwara in Business Management Skills.

Maurel & Prom
Maurel & Prom is involved in developing local communities through drilling of water wells and road maintenance. The company has also bought equipment for a health clinic at Mkuranga.

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). 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.

=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."

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.

The following companies emerged winners in various categories of the 2014 award: North Mara Gold as overall winner and scooped the large scale mining company; Small Scale Mining firm (Busorwa Mining Ltd); Oil and Gas Production (Songas Ltd); Mineral Exploration (Mantra Tz); Medium Scale Mining Award (Shanta Mining (T) Ltd); Buzwagi Gold Mine (infrastructure award), Statoil Tanzania (tertiary education development) and Geita Gold Mine (GGM) (secondary education development).

=References=