Societal Perception Of Foreign Business In Nigeria - Dissertation Example

Societal Perception Of Foreign Business In Nigeria The Niger delta region has been the epicenter of exploration and exploitation in Africa. The region has suffered violence, environmental degradation and monumental maltreatment. This has happened through political and economic marginalization. The response of the government has been to ban community protests in the Niger delta through militarization of the area. The aim was to ensure protection of the oil facilities and crude oil. This has been the genesis of negative societal perceptions towards the foreign companies by the communities in the region. The combination of broad acceptance, community support and goodwill constitutes the social license to operate. Such permission can only be granted by the local communities like the Ogoni. The social perceptions towards the foreign companies operating in Nigeria deteriorated as communities became displaced and their resources forcefully taken to accommodate the oil fields. Problem definition To change the social perceptions of the locals about the foreign investors in the Niger Delta Research question How/why does the Government intervene in the prevention regulation of ore acidy: perception of local residents? Hypothesis: The locals in Niger Delta have negative social perceptions about foreign investors. Literature review The societal perceptions of the oil-led development in many countries have many consequences. Some of these consequences include slow growth, inequality, and unemployment. Countries that depend on oil production are characterized by poor governance, high rates of corruption and high instances of conflict. This has added to the notion that foreign companies are exploitive and unfriendly. Norway has used the benefits of North Sea petroleum to develop its economy. Nigeria and Angola have been suffering from poor management of the same resource. In Nigeria, the disparity between poverty and oil wealth is notable (Parker 2006). The same trend has been observed in Venezuela. Foreign companies like shell-BP for partnerships with domestic elites with an aim of protecting their interests. The multinational have been blamed for the inequalities created by the oil-led development. In the Niger Delta region, exploration began in 1958. The compensation of the land acquisition in the delta region has aided only a small group of people (Apter 2005). The environment and the local economy remain devastated. Gas flaring has permanently destroyed food crops and the only source of livelihoods for the local communities (Parker 2006). Barren farmlands and destruction of drinking water has created tensions between the local communities and the foreign mining companies. Thousands of villagers have been killed through explosions and raptures. In the Niger delta region, land has become one of the scarcest resources. Land and water are the most treasured resources for the economic and social value they add to the communities living there. The introduction of the oil wells by the foreign companies has drastically reduced the value of the land (Parker 2006). The shell-BP companies have operated major oil wells that have led to the displacement of the local communities for decades. The history of the oil exploration has been involved with displacement and production of socio-physical topography (Frynas 2000). This has produced underdevelopment and resentment of from the communities living in this region. Strategic organizational management demands that success must incorporate the needs of the communities through corporate social responsibility. Shell and BP have made deliberate steps to reconcile with the communities through funding of community based initiatives (Nde Fru 2011). The social political marginalization of the Ogoni community has resulted into acquisition of illegal firearms. This has made the situation more volatile. The local communities believe that multinational companies in conjunction with the state are oppressive and ignorant of their needs. The local communities have been resisting the idea of the privatization of the state (Obi & Rustad 2011). Communities have been complaining that the government and the multinationals have treated the area as a colonial enclave (Apter 2005). The international oil drilling companies have plundered the resources with impunity for years (Olubayo & Oluduro 2012). The frustrations in Nigeria and Angola have been aggravated by the use of political elites to develop other regions. The innumerable gas flares keep dotting the Niger delta are been counterproductive to the locals. The government and the foreign companies have declined to show the expected sensitivity. According to studies oil spills in the region has caused loss of livelihoods, reduction in the agricultural productivity and poverty. The environmental protection policies in Nigeria are dormant as the local communities suffer from poverty and deplorable conditions (Frynas 2000). Gas flaring has led to thermal pollution, acid rain and depletion of flora in the region. Most of the communities are frustrated as the socio-economic practices in oil bearing areas remain stagnant and unproductive (Hicks 2010). The initial hope and the excitement that came with the discovery of oil have been frustrated by massive military crackdowns against protestors. This has led to many instances of detention without trial. In Norway, the discovery of oil led to construction of modern structures and increased energy production. The move improved the living standards for the local communities. The local communities in the Niger Delta region have been complaining that oil companies have been using modern structures and facilities to comfort their employees. Most of these employees are foreigners (Obi & Rustad 2011). However, Shell and BP are accused of not giving the local communities adequate consideration. Taking care of the concerns of the local communities would be less expensive and convenient yet the results would benefit the oil drilling multinationals. Most locals believe that Shell and BP are only willing to build roads if they lead to a new oil field (Hicks 2010). The communities watch is the companies generate enough electricity for their needs without creating a link to the locals. The local communities have been suffering from extreme unemployment even after attending schools abroad (Katz & International Monetary Fund 2004). The frustrations have caused the locals to vandalize the pipelines and practice illegal bunkering. The communities have also resulted to militancy as a defense mechanism (Frynas 2000). The local communities in the Niger Delta region had hopes and expectations that the multinationals like Shell and BP would embrace corporate social responsibility (Vidal 2010). This would result to more job opportunities for the locals. However, prolonged denials have led to frustrations (Obi & Rustad 2011). The government has resulted to the use of force and Shell-BP use state protection to advance its interests against the locals. The oil companies have not come to terms with the pervasive social expectations. Case study of Columbia Colombia has been suffering from conflicts related to oil from 1920. The country has many migrants hoping to get employed in the massive oil fields. Oil has caused the rent to rise by 300 percent. Arable land is being used for extraction and environmental damage is a reality. The nature of the jobs is temporal and instability in income and employment has been on the rise (Frynas 2000). This has led to instability in the local industry. The social fabric of the location of oil has also changed. The disparities in salaries have emerged. Locals are fighting with migrants as inflation, chronic underemployment and other challenges continue to increase. This case study illustrates the dilemma of the relationship between multinational oil companies and the social-political environment. BP has been avoiding getting dragged into the complexities of the environmental or political issues in Colombia. The central redistributive authority in Colombia has failed to address the concerns from locals. In 1986, there was a massive campaign to reduce oil stealing. The communities began to damage oil pipeline causing a loss of 400 million. Oil revenues are a major contributor to the finances. The national debate about oil production and misappropriation brought healing. In 1999, oil generated $2 billion. Colombia has developed a counter terror armed unit with the help of the US to deal with the conflicts around oil. Colombia has legislations that give the province and municipality that produces oil 9 and 2 percent of the share. This has really helped the local communities. Most of the oil communities are trying to move away from isolated and informal mobilization to formal and assertive means of grassroots actions. The local communities had expectations that water supply infrastructure would have been constructed to enhance the lives of the Gbarain-Ubie and other communities. The communities had hoped that health projects, schools and civic centers would have been constructed by the oil-drilling companies (Treisman 2010). All these companies failed. The relationship between community problems and oil industry has led to development of negative social perceptions. The oil companies have aggravated the situation by the use of force while dealing the locals. The negative perceptions have tampered with the operations of the company. Shell and BP have coming to the understanding that perception plays a major role in the resolution of conflicts. The conflict arising from the negative relationship between the communities and the foreign oil drilling companies has been escalating steadily over the years. The government, Shell/BP and other stakeholders have started peace building efforts to reduce the negative perceptions (Katz & International Monetary Fund 2004). The foreign oil drilling companies are beginning to negotiate and dialogue with the communities in the Niger Delta region. This includes trauma healing and restorative justice. The government must accept its role in protecting the needs of the local communities to reduce the escalation of the conflict and the impeding dangers in the oil exploration in Niger delta. Observation of perceptions To confirm the initiatives the government and the oil-drilling multinationals need to respond to the needs of the community, This shall involve one week of observing the communications and interactions of the communities to the government and Shell/BP personnel while conducting interviews. This shall also include observation of any incidents and their causal factors. Members of the local communities shall be interviewed. Structured interviews shall be conducted on community leaders like religious leaders, councils of elders and the young or upcoming leaders. The interview shall shed light of the perception and the expectations of the local communities from the foreign companies. The third phase of interviews shall entail interviewing government officials. This shall include the local officials at the location and division level. The state leadership and the concerned ministry shall also be asked to offer their opinions of the needs for the local communities. This shall happen in 7 days. Short- term recommendations Sincere and constructive dialogue is the only solution to the challenges of the negative perceptions the local communities in the Niger Delta. Representatives from local communities must be picked through community involvement. The local communities must be given an authotitive and sympathetic hearing on matters that affect them. The government must come up with a marshal plan to ensure sustainable growth and restore a sense of belonging in the marginalised communities in the Niger Delta. Long-term solutions For long term solutions to be found, adequate compensation must be to cater for oil spills. The foreign companies must conduct genuine corporate social responsibility to ensure sustainable peace and development. This includes construction of infrastructure like hospitals and schools. The governance must be professionalised to reduce corruption. Bad governance and political elites are known to use power to protect their needs while ignoring the needs of the locals. A sustained drive must be established to ensure that social and human capitals are expanded. Drafting the long term solutions should take two days. References Apter, A. H. 2005. The Pan-African nation: Oil and the spectacle of culture in Nigeria. Chicago: University of Chicago Press. Frynas, J. G. 2000. Oil in Nigeria: Conflict and litigation between oil companies and village communities 1st ed. Munster: Lit Verlag. Gary, I. and T. Karl, 2003. Bottom of the Barrel: Africa’s Oil Boom and the Poor. Catholic Relief Services, Baltimore, Maryland. Gedicks, A., 2001. Resource Rebels: Native Challenges to Mining and Oil Corporations. South End Press, Cambridge, Massachusetts. Hicks, M. 2010 BP: social responsibility and the easy life of the monopolist, American Journal of Business, 25, 2, 9–10. Katz, M., & International Monetary Fund. 2004. Lifting the oil curse: Improving petroleum revenue management in Sub-Saharan Africa. Washington, D.C: International Monetary Fund. Obi, C. I., & Rustad, S. A. 2011. Oil and insurgency in the Niger Delta: Managing the complex politics of petro-violence. London: Zed Books. Olubayo, O. and Oluduro, O. 2012 Nigeria: in search of sustainable peace in the Niger Delta through the amnesty programme. Journal of Sustainable Development, 5,7. Nde Fru, V. 2011, The international law on foreign investments and host economies in Sub-Saharan Africa: Cameroon, Nigeria, and Kenya. London: LIT Verlag Münster. Parker, P. M. 2006. 2007 report on oil, gas, and mining exploration services, the: world market segmentation by city, 1st ed. ICON Group. Treisman, D. 2010, Spring/ Summer ‘Rethinking Russia: is Russia cursed by oil? Journal of International Relations, 63, 2, 85-102. Vidal, J. 2010, May, Nigeria's agony dwarfs the Gulf oil spill. The US and Europe ignore it, The Guardian. 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