ABSTRACT
The study evaluated Shell Petroleum Development Company social investment outreach and enterprise sustainability in Bayelsa State, Nigeria. The specific objectives were to described the socio-economic characteristics of clients of SPDC social investment outreach, ascertain the level of social investment outreach by SPDC in Bayelsa State, assess the benefits of social investment outreach to clients and clusters, determine the level of enterprise development and effect of social investment intervention on enterprise development among clients, determine the factors influencing the level of social investment intervention received among the clients and clusters, ascertain the sustainability of enterprises under the social investment programme among the clients (agricultural and non-agricultural), determine the perception of stakeholders on the strengths and weaknesses of GMoU strategy of development. Purposive sampling technique was used in selecting 150 clients (90 social investment beneficiaries and 60 cluster members). For in-depth study, primary and secondary source data were used in this study. The primary data were collected through a well-structured questionnaire and personal interview schedule. Data were analyzed using frequencies counts, percentages, means, enterprise percentage change, outreach level and coverage, OLS regression analysis, enterprise performance indicators, Outstanding Balance Method (OBM), t and z statistics. The study showed that majority of the respondents studied were male (60%), married (53%), educated (74%) and young people who are mostly agitating for socio-cultural, economic, and environmental concerns in their various communities. The outreach coverage for training intervention in the State and clusters was 0.00151% and 0.0036% while for both training and financial intervention in the State and clusters was 0.00084% and 0.00205%. The outreach coverage for the State and clusters were low relative to the target population. Moreso, there was 38% and 43% increase in revenue and 50% and 70% increase in assets for both enterprises respectively at the exit point with SPDC signifying a positive effect of SPDC on enterprise development. Furthermore, majority of the clients (76%) and clusters (94%) adopted highly sustainable measures to have self-reliant enterprises after intervention from SPDC. Agricultural enterprises had gross margin (N 6,886,000) and profitability (N 3,985,000) while non-agricultural enterprises had gross margin (N 7,379,000) and profitability (N 3,713,000) indicating that both enterprises were viable and financially sustainable. There was a mean sustainability stance of 30.3% for the clusters in the second phase of GMoU implementation indicating that the clusters are eligible for another round of SPDC’s social interventions. Marital status, level of education, years of experience, NGO visit, values of sale and age were variables influencing social investment intervention for agricultural and non-agricultural enterprise clients while freedom to operate, involvement of government agencies, engagement with SPDC by the community, absence of pipeline vandalism were factors influencing sustainability of social investment outreach to clusters. The study therefore recommended that SPDC social investment programme should continue and spread their outreach net to reach more people. This measure would enhance social harmony, peace and prosperity in the state. Moreso, government should play more active role in funding and ensure transparency in the implementation of the GMoU development strategy.
TABLE OF CONTENTS
Title Page i
Declaration ii
Certification iii
Dedication iv
Acknowledgements v
Table of Contents vii
List of Tables
x
List of Figures
xii
List of Acronyms
xiii
Abstract xiv
CHAPTER 1: INTRODUCTION
1.1 Background Information 1
1.2 Problem Statement
5
1.3 Objectives of the Study 12
1.4 Hypotheses
13
1.5 Justification 14
1.6
Conceptual Definition of Terms 15
1.7
Organization of Research Report
16
CHAPTER 2: LITERATURE REVIEW
2.1 Conceptual Framework 17
2.1.1
Concept of Investment 19
2.1.2 Interventions as investments 22
2.1.3 Concept of social investment 22
2.1.4 Concept
of outreach 27
2.1.5
The essence of social
investment 29
2.1.6 Social
investment and sustainability 30
2.1.7 Global
Memorandum of Understanding (GMoU) under SPDC 35
2.1.8
Social finance and socially
orientated financial activities 45
[
2.2 Theoretical Framework 47
2.3 Empirical Literature 68
CHAPTER 3: METHODOLOGY
3.1 Study Area 83
3.2 Study Population 86
3.3 Scope of Study 86
3.4 Sampling Procedure 87
3.5 Source of Data 88
3.6 Data Collection Method 89
3.7 Instrument for Data Collection 89
3.8 Analytical Technique 90
3.9 Test of Hypotheses 97
3.10 Ethical Considerations 100
CHAPTER 4: RESULTS AND DISCUSSION
4.1 Socioeconomic Characteristics of
Respondents 101
4.2 Social Investment Outreach of SPDC in
Bayelsa State 106
4.3 Benefits of Social Investment Outreach
to Clients and Clusters 112
4.4 Level
of Enterprise Development and Effect of Social Investment Intervention on
Enterprise Development among Clients 118
4.5
Factors Influencing the Level of Social Investment Intervention received by
Agricultural and Non-agricultural Clients 126
4.6.
Sustainability of Enterprises under the Social Investment Programme among the
Clients 137
4.7
Perception on the Strengths and Weaknesses of GMoU Development
Strategy 160
4.8 Testing of Hypotheses 167
CHAPTER 5: SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Summary 172
5.2 Conclusion
177
5.3
Recommendations
178
References
181
LIST
OF TABLES
4.1: Distribution of respondents involved in
social investment program of SPDC based on sex
101
4.2:
Distribution of respondents based on marital status 102
4.3: Distribution of respondents based on level of
education 103
4.4: Distribution of respondents based on age 104
4.5: Distribution of respondents based on years of
business experience 105
4.6: SPDC social investment outreach
in Bayelsa State from 2015-2019
106
4.7: Outreach coverage of SPDC in Bayelsa State 108
4.8: Social investment funds utilization by clusters
110
4.9: Benefits of social investment outreach to clients 112
4.10: Benefits of social investments to clusters 115
4.11: Level of enterprise development (revenue growth)
among clients 118
4.12: Level of enterprise development (asset growth)
among the clients 119
4.13:
Effect of social intervention received on revenue growth for Agricultural
enterprises 121
4.14:
Effect of social intervention received on asset growth for Agricultural
enterprises 122
4.15:
Effect of social intervention received on revenue growth for non- agricultural
enterprises 123
4.16:
Effect of social intervention received on asset growth for Non-Agricultural
enterprises 124
4.17: Effect of social intervention on
enterprise development 125
4.18:
Factors influencing the level of social investment intervention received among
the clients 127
4.19:
Factors influencing the level of social investment intervention to the
clusters
134
4.20:
Sustainability of agricultural enterprises under SPDC Social investment
intervention 137
4.21:
Sustainability of non-agricultural enterprises under SPDC Social investment
intervention 141
4.22: Sustainability stance of clusters
under the two phases of GMoU 145
4.23: Measures adopted by clients to
guarantee enterprise sustainability 147
4.24:
Measures adopted by clusters to guarantee sustainability of programmes/projects
149
4.25:
Factors influencing sustainability of social investment intervention among
agricultural and non-agricultural enterprise clients 151
4.26:
Factors influencing the sustainability of social investment intervention to
clusters 157
4.27: Perception on the strengths of GMoU
development strategy 160
4.28: Perception on the weaknesses of GMoU
development strategy 163
4.29: Test of difference in the
cost on social investment outreach by SPDC in the first and second phase of the
GMoU in the State 167
4.30: Test of difference in the
social investment outreach to agricultural and no agricultural clients 168
4.31:
Test of difference between initial and final asset value, initial and final
revenue values for agricultural and non-agricultural clients 169
4.32:
Test of difference between revenue and operating cost of agricultural and
non-agricultural clients 170
LIST
OF FIGURES
1: Conceptual framework explaining Shell Petroleum
Development Company’s social investment outreach to agricultural and
non-agricultural enterprises 17
2:
Social investment scale 26
3: GMoU approaches adopted by SPDC 38
4: Structure of SPDC GMoU 40
5: Phases and crises of enterprise growth 53
6. Stages of an enterprise growth 55
7: Chasms of growth 57
8: Map of Nigeria showing the geographical
scope of the Bayelsa State 86
LIST OF ACRONYMS
Corporate Social Responsibility (CSR)
Commission of the
European Communities (CEC)
Social Investment (SI)
International Petroleum Industry Environmental Conservation
Association (IPIECA)
According to Business Partners for Development (BPD)
Multi-National Companies (MNCs)
Niger Delta Development Commission (NDDC)
Shell
Petroleum Development Company and its joint venture partners (SPDC JV)
United Nations
Development Programme (UNDP) (2006)
Global Memorandum of
Understanding (GMoU)
Nigerian National Petroleum Company (NNPC)
Community Trusts
(CTs)
Community
Development Board (CDB)
National Population Commission
(NPC)
National Petroleum Investment Management Services ((NAPIMS)
Non-Governmental Organizations
(NGOs)
Freedom To Operate (FTO)
Local Content Deployment (LCD)
United Nations (UN)
Food, Agriculture
Organization (FAO)
Sustainable
Livelihood Assessment (SLA)
Community
Development Plan (CDP)
Operating
Principles and Procedure Guidelines (OPPG)
International Oil
Companies (IOCs)
Federal Government of Nigeria (FGN)
Department of
Petroleum Resources (DPR)
Right Of Way (ROW)
CHAPTER
1
INTRODUCTION
1.1
BACKGROUND INFORMATION
Contemporary
exigencies due to globalization, information technology revolution and the
divergence of world politics have all necessitated the re-evaluation of
business-society relationship and enabled revolutionary business social
responsibility practices (Idemudia, 2010). The re-emergence of the idea that
business has social responsibility that goes beyond profit making, to include
helping to solve societal social and environmental problems is now a major
discuss. Corporate Social Responsibility (CSR) has provided a fertile ground
for the debate that has shaped the present direction now assumed by
business-society relationship.
Corporate
social responsibility is a concept which hovers on
an ongoing call on businesses not just to act morally but to equally contribute
to the socio-economic growth of the immediate society they live to carry on
their business activities and the world at large while demonstrating respect
for the people, the community and environment (Idemudia, 2010). CSR is defined
by the Commission of the European Communities (CEC) as “a concept whereby
companies integrate societal and ecological concerns in their corporate
processes in addition to the interaction with their stakeholders on a voluntary
basis” (Raimi et al., 2016). The preceding definition is synonymous with
the recently adopted term “Social Investment” used by multinational oil and gas
firms/industries necessitated by the measurable impact.
Social Investment (SI)
is defined as the voluntary contributions companies make to the communities and
broader societies where they operate, with the objective of mutually benefiting
external stakeholders, typically through the transfer of skills or resources,
by the company. This new concept was born with the aim of establishing
and maintaining good relationships with local,
regional and national stakeholders, and to enhance the company’s social impact
on its host society (International Petroleum Industry Environmental
Conservation Association) (IPIECA), 2008).
However, despite companies’
best efforts and ongoing engagement, many social investment programmes fail to
generate the goodwill that companies hope for and instead become a burden
beyond the originally intended period (IPIECA, 2008). There are instances where
well-intended initiatives may even be used by stakeholders against the
companies (IPIECA, 2008). For this reason, companies often find it difficult to
quantify and measure their social performance. Within the defined or limited
life-span of any operation in a specific region, it is important for companies
to build sustainability into their social investment programmes to make sure that
the investments survive the corporate presence in the communities (IPIECA,
2008).
In context, ‘sustainable’
investment of companies is one that continues to make
positive impacts well beyond the end of company involvement, for example by
enabling people to take control of, and improve, their own lives without having
to depend on corporate resources.
Social critics have argued that social investment responsibility of
multinationals is a distraction for business from meeting its primary goal of
profit making, an inefficient means of allocating scarce resources, and that
business lacks the legitimacy and competency to take on any such responsibility
outside its primary area of expertise. In contrast, proponents of social
investment have responded that the monumental increase in business power, the
widespread incidence of corporate wrongdoings, issues of ethics and the
increasing inability of governments to meet their basic responsibility to
society as well as regulate business activities have meant that the acceptance
of social investment responsibility by business was both inevitable and a
necessity.
As this conversation is distant from being
fixed, pressure has afterward moved from whether establishments should adopt
the ideologies of social investment to the degree on how it can affect business
decisions/practices and how business can best address its social
responsibilities. Partly in response to the critics’ argument that social
investment is costly, the coinage of the ‘business case’ for social investment
is increasingly becoming a formidable cornerstone for securing business
commitment to CSR (Idemudia, 2010). The business case suggested that business acceptance of
social investment responsibility invariably results in a ‘win-win’ situation
for both business and its stakeholders (Idemudia, 2010).
As
a result, the business case successfully moved social investment
(responsibility) programmes from the realm of altruism (selflessness) or
morality to the realm of rational economic business decision-making. Although
findings from empirical research have yet to support incontrovertibly the
business case. Therefore, the appeal of
the business case has remained enduring both in the business community and in
academia (Idemudia, 2010). The inherent consistency between the logic of
‘win-win’ and the appreciation that business, government, or society alone
cannot solve today’s complex social and environmental problems allowed for the
touting of partnership formation and stakeholder engagement as a useful
strategy for business to meet its social responsibility.
However,
despite widespread adoption of partnerships and claims of its benefits, the
reality is that partnership remains a fragile field with respect to its role in
the development of the Niger Delta area of Nigeria especially Bayelsa State. In
addition, decades of political and obvious economic marginalization, resulted
in the neglect of the region by successive Nigerian governments and the initial
hesitation of oil Multi-National Companies (MNCs) to address their social
investment obligations and contribute to social development in the region
(Idemudia,2010). The neglect overtime created poverty in the region and
particularly in the state.
Poverty
in Bayelsa State is substantial, widespread, and far-reaching; it is both urban
and rural phenomenon. Lack of clean and safe water and unemployment topped the
problem of the poor. The worse effect of poverty is the vulnerability of the
poor to diseases due to lack of safe drinking water and poor access to medical
care. Lack of access to credit facility, lack of skilled manpower with the fact
that the State suffers from severe environmental degradation due to oil
production (Fiderikumo and Bredino, 2018). This is the situation even though the
Niger Delta accounts for 90% of national exports and 70% of government revenue
mainly from oil and gas export. The region therefore epitomizes an empirical
case of the resource curse theory or paradox of
plenty scenario (Siakwah,
2017).
Social investment initiatives
in the Niger Delta go back to the 1960s and 1970s, when the first wave of
transnational oil corporations started oil exploration and production in the
region. The Royal/Dutch Shell company, operating under the Shell Petroleum
Development Company of Nigeria, began commercial production of oil in the Niger
Delta in 1958 (SPDC, 2019). The company extracts more than half of Nigeria’s
crude oil. SPDC, Exxon-Mobil, Chevron-Texaco, Agip, and Elf operate over 5,284
oil wells and thousands of miles of pipelines traversing the entire Niger Delta
region. The industry expanded in the 1990s, attracting new entrants such as the
Statoil/BP Alliance, Total Nigeria, Amoco, Conoco, and Abacon. SPDC, the oldest
oil company in the region, started operations in the 1930s; Chevron, Texaco
Overseas, Elf and Philip came later in the 1960s; and Pan Ocean Oil and Agip
arrived in the 1970s (SPDC, 2019).
To
make meaningful contribution in the areas of operations, Shell Petroleum Development Company (SPDC) and its Joint Venture
Partners (SPDC JV) invest in social projects and programmes in Niger Delta communities
(Shell World, 2022). The initial social investments were in agriculture in the
mid-sixties and have grown to include health care, roads and civil
infrastructure, water projects, small businesses, and education, which benefit
hundreds of thousands of people involved in agribased and non agribased
enterprises (Shell World, 2022). Over the years, SPDC has improved on its
relationship with local communities as to deliver these projects efficiently.
In 2006, it introduced a new way of working with communities called the Global
Memorandum of Understanding (GMoU). The GMoU represent an important shift in
approach, placing emphasis on more transparent and accountable processes,
regular communication with the grassroots, sustainability and conflict
prevention.
1.2 PROBLEM STATEMENT
The prevalence of poverty is very high in
Nigeria, with over 70 percent of the population surviving on less than US$1 per
day, meaning that most Nigerians are living in unbearable poverty (Fiderikumo and
Bredino, 2018). The soaring incidence of poverty in Nigeria is in sharp
contrast with the country’s position as a prominent petroleum producing country
in the continent of Africa. Over 90 percent of Nigeria’s external revenues are
derived from crude oil exports; yet this huge profit has yet to improve the
deplorable human condition and misery index of the oil producing communities (Elum et al. 2016).
Idemudia (2010) argued that neglect of basic services in the Niger Delta in
past years by successive Nigerian governments was the cause of poverty in the
region.
Amnesty International in support of
Idemudia (2010) noted that the Nigerian oil region has been laid prostrate by massive
oil related environmental degradation resulting in soil fertility loss,
agricultural decline, forest loss, fisheries decline and biodiversity
depletion. Moreso, result of the environmental damage unleashed on the
oil-bearing communities is the violations of the rights to health and a healthy
environment, the right to adequate standard of living (including the right to
food and water) and the right to gain a living through work for hundreds of
thousands of people (Siakwah,
2017). The apparent denial of resources of
livelihood has consequently disinherited and dislocated the local people who
are dependent on the primary economies of farming, fishing and hunting for
livelihoods (Bayelsa State Government, 2020). Based on these situations, Siakwah (2017) observed,
that the Niger Delta region of Nigeria
is an odd paradox.
In addition, the approach to
social investment adopted by SPDC and other oil companies seem to be predicated
on the primacy of business objectives and focused on fulfilling
only the most minimal ethical obligations. Underlying this approach is the
assumption that the economic goals of business are incompatible with the
developmental aspirations of the local people. Based on this premise, social
investment practices seldom varied from legal compliance and providing the
“moral minimum” (DesJardins, 2006). Reliance on this narrowly defined business
focus prevented the oil companies from taking proactive steps in designing and
implementing social investment programs. In sum, despite millions of dollars
invested in community help projects, social investment practices in the Niger
Delta were perceived by observers and the communities as cosmetic attempts to
act in a socially responsible manner or actions taken only to protect the
companies’ reputations (Raimi, et al 2016; Fiderikumo, and Bredino (2018).
Second, social investment projects were
not designed to address urgent economic, environmental and social problems. For
example, SPDC’s gifts of schools and healthcare facilities existed as one-time
offers as a replacement for sustainable projects to the local people. The
continuation of gas flaring, despite calls for reduction, is another example
(Federal Republic of Nigeria, 2006). Though the oil companies have attributed reasons
for the slow progress to the costs of implementing alternative systems,
continued gas flaring suggests a lack of urgency concerning a serious
environmental problem. Ad hoc implementation of social investment projects and
the failure of the Nigerian government to respond to the needs of the region
left the burden of dealing with the negative consequences of oil extraction on
the communities.
Third, the integration of community
development and self-help projects in social investment strategy in the Niger
Delta did not occur until the mid-1990s. The evidence suggests that early
attempts at community help projects and infrastructure development were
reactive. The oil companies integrated social investment into corporate
strategies only when hostility against the companies intensified.
Fourth, the lack of a coordinated
strategic approach to the implementation of social investment produced uneven
results that had little impact on the people of the Niger Delta (Elum et al.,
2016). The millions of dollars spent on scholarships, schools and agricultural
extension projects have had no impact on poverty alleviation or the
socio-economic development of the region. The absence of a comprehensive
emergency response plan to address oil spills in the region illustrates this
point. The oil companies’ reactions to these conservational disasters rarely
extends outside the villages in the vicinity to communities downstream where
farmlands and rivers have been equally ruined. The oil companies have also made
little effort to extend social investment projects to the poorest and most
ecologically devastated communities in the region (Fiderikumo and Bredino, 2018).
One of the major by-products
of the GMoU model is infrastructure (in forms of roads, health centres, town
halls, footbridges, water schemes, etc) that is built in the communities (SPDC,
2013). As at 31st December, 2011, GMoU agreements have been signed and funded
in 27 clusters and 596 projects have been completed while 110 are on-going and
over N 11.9b (about $79.5m) has been
provided by SPDC. The model has also been useful for the management of
community interface and social impact of SPDC’s major projects. As at 31st
December, 2011, 116 Project GMoU have been implemented at the cost of N 6.4bn ($42m) (SPDC, 2013).
As of 2010, Chevron’s GMoUs
with 24 clusters, encompassing 244 communities have also produced 490 projects
(Bede and Haslinda, 2011). Therefore, GMoU model is really spreading projects
across the host and non-host communities in the Niger Delta. However, as it has
been stated based on empirical evidence, the communities are not maintaining
these projects as they ought to be. The quality of these projects born-out of
the GMoU model is also a thing of great concern (Raimi et al., 2016). The
general assumption is that communities do not maintain projects and programmes
in their domain because of the top-down philosophy that underscores community
development practices before now.
Generally, project and
programme maintenance is a bane all over the developing countries. Different defunct and still existing
government agencies such as: Directorate of Food, Roads and Rural
Infrastructure (DFFRI); Better Life for Rural Women Programme (BLP); National
Directorate of Employment (NDE); Peoples Bank of Nigeria (PBN); Family Support
Programme (FSP); Family Economic Advancement Programme (FEAP); Poverty
Eradication Programme (PEP); National Poverty Eradication Programme (NPEP);
National Economic Empowerment Development Strategy (NEEDS); Oil Minerals Producing
Areas Development Commission (OMPADEC); Niger Delta Basin Development Authority
(NDBDA); Niger Delta Development Authority (NDDC); and the Niger Delta Ministry
(NDM) were/are established to develop the nation though the provision of
projects and programmes in mostly the remote communities.
However, hundreds of thousands
of these projects and programmes developed and executed with billions of
dollars by these agencies have been allowed to rot in the communities they were
located, in most cases there are no signs of these projects and programmes in
most parts of the country because of total lack of maintenance from all the
stakeholders. In the Niger Delta, government and non-governmental agencies have
also executed thousands of projects reduced to nothing because of total lack of
maintenance and extremely questionable quality. For instance, the World
Bank/Federal Government sponsored sanitation and water projects through the
MPP1 to 9 understanding that covered almost the whole region have been abandoned
to decay because of lack of maintenance and highly questionable quality issues.
The multi-national oil firms
have also executed thousands of projects in the region that have failed because
of poor quality and lack of maintenance. A 2000/2001 SPDC sponsored projects
review report indicated that, less than a third of the company’s community
development projects had been successful (The Ecumenical Council for
Cooperate Responsibility, 2010 and USA Institute of Peace, 2010). According
to Legborsi (2010) even the projects the UNDP handled for the company
recorded almost zero successes. Kiikpoye (2011) field survey of mostly new
CSR projects in the Niger Delta revealed that: The region is replete with
overhead water tanks of uncompleted or poorly completed and dysfunction water
projects, shore protection projects fully paid for, but not completed, and
redundant generating plants that worked for a few days after commissioning of
electricity projects in communities where people are too poor to afford diesel,
and so on (Kiikpoye, 2011).
For the past half a decade or
more, Chevron, SPDC and others have spent more than half a billion dollars each
year for community development in the Delta Region (Aaron and Jim 2010).
However, most of these projects that were done in recent times mostly through
the GMoU model are beginning to attain the usual descript conditions because of
poor quality and lack of maintenance. Virtually, all the stakeholders are in a
fix because they could not easily interpret and make sense of what is really
wrong with our individual, communal and even corporate lack of maintenance
culture toward community projects (Aaron and Jim 2010).
Harold (2001) postulation
seems to explain this dilemma. According to him: There appears to be absence of
consensus and appreciation among many NGOs about the level of on-going, post
construction support required to guarantee that project benefits are maintained
over the long term. It is doubtful whether many firms can provide systematic
post project follow-up. Most agencies try to prepare communities to manage and
administer their own systems during implementation, but they do not share
common approaches and standards in terms of interventions (such as training
etc) and institutional strengthening within the communities. Harold (2001)
therefore recommended that communities must be strengthened and empowered to
meet their responsibilities through the formation and development of a
recognized structure; and in addition to an increased role for the community,
there is also a need for external institutional support in the long term to
maintain project benefits over time.
Besides, the issue of
maintenance of projects built through the help of the GMoU model, the technical
and the perception quality of the projects appear to be deficient too. Most of
the projects done so far through the model are below internationally recognized
standards or quality. GMoU as a model is purely community driven, it is
difficult to place the poor quality of the projects done in the communities squarely
on the sponsoring agencies, Chevron and SPDC. However, the insinuation of
projects’ poor quality is as controversial now as most other issues associated
with the model, GMoU.
The
problems as enumerated above created development gaps which have led to the
reliance on the oil multinational companies (MNCs) by their host communities to
step in and fill this wide development gap. Despite their contribution to the
development of society, governments at all levels in Nigeria and the political
elites continue to apportion blame on the MNCs for the poverty situation in the
region; with such culture of blame inciting the community members into
believing that the MNCs are massively exploiting them, while giving too little
or nothing in return to them in the form of development. This has occasioned
community protests, agitations and conflicts in the State. Given the fact that
the introduction of social investment intervention was meant to address issues
relating to conflicts/ agitations and exploitation of the natural environment,
the issue of outreach and sustainability of social interventions become
important. As a consequence of relatively poor contributions of MNCs to
socio-economic transformation and poverty alleviation as highlighted previously,
the contemporary research questions are:
1.
What are the
socio-economic characteristics of beneficiaries/clients of involved in SPDC
social investment outreach with respect to enterprise development?
2. what
is the level of social investment outreach by SPDC in Bayelsa State?
3.
what
are the benefits of social investment outreach to clients and clusters?
4.
what is the level of
enterprise development and effect of social investment intervention on
enterprise development among clients?
5.
what
are the factors influencing the level of social
investment intervention received among the clients and cluster?
6.
Are these enterprises under
the social investment programme sustainable?
7.
How do the relevant stakeholders perceive SPDC
GMOU community development strategy?
1.3 OBJECTIVES OF THE STUDY
The broad objective of the study is to evaluate Shell Petroleum Development Company social
investment outreach and enterprise sustainability in Bayelsa State. Specifically, the study:
1.
described the
socio-economic characteristics of Agricultural and non-agricultural beneficiaries
of SPDC social investment outreach
2. ascertained
the level of social investment outreach by SPDC in Bayelsa State
3.
assessed
the benefits of social investment outreach to beneficiaries and clusters
4.
determined the level of agricultural
and non-agricultural enterprise development and effect of social investment
intervention on enterprise development among beneficiaries
5.
determined
the factors
influencing the level of social investment intervention received among agriculture
and non-agricultural beneficiaries and clusters
6. ascertained
the sustainability of agricultural and non-agricultural enterprises under the
social investment programme among the beneficiaries
7.
determined the perception
of relevant stakeholders on the
strengths and weaknesses of GMoU strategy of development
1.4
HYPOTHESES
The
following hypotheses are stated in the null and the alternative applies.
H1: There is
no significant difference in the cost of social investment outreach by SPDC in
the first and second phase of the GMoU in the State
H2: There is
no significant difference between social investment outreach to agricultural
and non-agricultural beneficiaries
H3: There is
no significant difference between initial and final asset value, initial and
final revenue values for agricultural and non-agricultural beneficiaries
H4: There is
no significant difference between revenue and operating cost of agricultural
and non-agricultural beneficiaries
1.5 JUSTIFICATION
Bayelsa
State is a major oil producing state in Nigeria and has seen its share of the
conflicts that has bedeviled oil exploration in Nigeria since the oil boom.
These conflicts have not gone unnoticed as it affects all the stakeholders in
oil production, and being the backbone of the Nigerian economy, any conflict that
disrupts its production directly affects the economy and therefore, affects the
life of the citizenry. These problems attracted the attention of the
stakeholders and that of researchers to the root of the conflicts which
specifically is always between the host groups of the oil companies and the
companies which the youths of these communities see as government allies (Elum et al.,
2016).
This
study therefore would help improve the community perception on their
expectations of responsible corporate behaviour which would form the foundation
for community attitude towards business corporations. In addition, provide a
veritable platform for strengthening the community-company relations that would
provide a near perfect consideration for the views of the communities and
reduce the domination of the
oil industry by different administrations and transnational oil corporations.
These
communities have accused the government together with the oil companies of
exploring and exploiting natural resources in their environment, in the process
of which they destroy their sources of livelihood. The process of oil
exploration, leading to gas flaring, oil spillage, crop and aquatic environment
destruction as a result of careless abandon which the oil companies have
adopted as a method, is the major cause of agitation by the host communities of
oil companies (Elum et al., 2016).
Therefore, this study would ensure that the benefits of social investment geared towards
poverty reduction on a sustainable scale gets to community members (clients).
Thereby eliminating the
existing system of disparities that leads to frustration/violence and curb the
restiveness which is becoming a part of life for the youths of these
communities especially through the promotion of the Global Memorandum of
Understanding (GMoU) strategy of ownership of development process. Furthermore,
this study would be useful for the oil companies when balancing the interests
of all key stakeholders that may allow for better harmonization of social
investment programs.
1.6 CONCEPTUAL DEFINITION OF TERMS
Social investment- Social
Investment (SI) is defined as the voluntary
contributions companies make to the communities and broader societies where
they operate, with the objective of mutually benefiting external stakeholders,
typically through the transfer of skills or resources, by the company.
Social investment outreach- is
the action taking by multinational oil companies to deliver financial/ non-financial
resources and skills to people that do not have access to these interventions.
Enterprise development- is an activity that
increases, or is intended to increase, the profit/revenue, production, or
service potential of an enterprise; investment of capital and time that causes,
or is intended to cause, the growth and expansion of an enterprise in terms of
volume of the business.
Enterprise sustainability- is the effort or activities adopted by enterprise operators
that enabling them to take control of, and improve, their own lives/business
outlook on a permanent scale without having to depend on external assistance.
1.7
ORGANIZATION OF RESEARCH REPORT
Evaluation
of Shell Petroleum Development Company social investment outreach and enterprise
sustainability in Bayelsa State, Nigeria a study carried out by Ogbe Samuel E.
MOUAU/PhD/11/2151 of the Department of Agricultural Economics as a requirement
for the award of Doctor of Philosophy in Agricultural Economics (Agricultural
Finance) submitted to the Postgraduate School, Michael Okpara University of
Agriculture Umudike. The study contains the preliminary pages (declaration,
certification, dedication, acknowledgments, table of content, list of tables,
list of figures, list of acronyms, abstract).
The main body of the study contains five chapters namely chapter
one-introduction, chapter two-Literature review, Chapter three- methodology,
chapter four-results and discussions, chapter five-summary, conclusion, and
recommendations, and finally the references.
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