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Times Online: Developing responsible strategies

Partnering sustainable development and corporate social responsibility is never easy

January 27, 2008
Steve Farrar

There was trouble on the chicken farm. It had been built by Total, the French oil and gas giant, to help people living in the shadow of its refinery in the central African country of Congo Brazzaville learn the skills necessary to start their own businesses. But a month after it opened, the farm’s first students demanded wages.

When Total refused, pointing out that the exercise was about learning not earning, many walked out, accusing the firm of exploiting their labour. The initiative, supposedly a perfect example of corporate social responsibility (CSR), seemed to have backfired.

Anne-Sophie Leroy, co-ordinator of Total’s sustainable development correspondents network, says the problem could have been avoided had there been effective dialogue about the initiative’s aims between the company and community as well as nongovernmental organisations (NGOs) in the region. So they talked and listened. This required a change in culture, based on a more professional approach to development aid and an effort to develop people rather than donate resources. In Congo Brazzaville, that change has been a challenge for both locals and the company. “We supported the community for years,” says Leroy. “Becoming its partner isn’t easy.”

But there has been progress. Now all of Total’s projects in the country have to be approved by joint meetings of the firm, community and NGOs at which everybody’s responsibilities are made clear. As a result, industrial relations with locals have improved. Meanwhile, the first graduates from the poultry farm are making a good living from their own operation and some of those who walked out have asked if they can go back.

The energy industry says the importance and profile of CSR have grown in recent years. Oil companies publish detailed sustainability reports, launch environmental initiatives and recruit experts such as Leroy to improve their relations with locals.

When Leroy accepted an offer of work from Total five years ago, her former colleagues with NGOs working in Central and South America accused her of joining the enemy. She did not see it that way. “It was not so easy going to work for an oil company but I felt things were not that black or white,” she says.

She had started work with Bolivian NGOs after graduating in agronomy in 2000, learning how to listen to people and help them help themselves. It was her ability to foster good relationships that prompted Total to approach her to improve relations with locals in Bolivia. She then worked on the ground reforging community relations in Congo Brazzaville before moving to the company’s headquarters in Paris, where she supervises sustainable development work around the world.

Jean-Michel Gires, executive vice-president sustainable development and the environment at Total, says this approach was being adopted by companies the world over. “We have to make our activities understood, accepted and supported by our many different stakeholders rather than have them make life more difficult for us. If we are not at the required level, we are not going to be welcome and will have difficulties developing new exploration, building new plants and introducing new products — even difficulties operating where we already are.”

In recent years a clear commitment to CSR has been seen in the energy industry as a requirement to doing business, winning operating licences, attracting finance and forging partnerships. This includes contemporary issues from climate change and biodiversity to community development and financial transparency.

The challenges are great as the price of getting it wrong can be high. The oil industry’s reputation suffered from prolonged problems in regions such as the Niger Delta in Africa, which involved environmental pollution, the kidnapping of oil workers and violent conflict between locals and the government over where royalties wound up.

Martin Parker, professor of culture and organisation at the University of Leicester’s Management Centre, says that CSR still appears to be a form of marketing in the delta, where he has two students investigating the situation. “All those oil companies tell us they are building schools and roads and are dealing with oil spills, but we don’t see those things on the ground.”

Alex Nevill, sustainable development adviser at Shell, says the company learnt harsh lessons in the mid-1990s, when the problems in the Niger Delta were at their height. “We have been through pretty hefty evolution. We are trying to understand the impact we have on the world we’re operating in and the impact that the world has on us, and then look to minimise the negative aspects and build on the positive. It goes right to the heart of our business.”

Joanna Cochrane has been putting this into action as a governance adviser representing Shell on a joint venture between national and international oil companies to set up a liquefied natural gas plant in a different part of Nigeria. Cochrane, who was an environmental consultant before being head-hunted by Shell in 2001, said the mistakes of the past would not be repeated. This involved effective relationship building with local communities and the company’s partners, and effectively managing Shell’s reputation.

“Painful experiences such as the Niger Delta raised the profile of CSR issues on the agenda,” she says. “Some dismissed it as fashionable flim-flam at first but there is no longer resistance to it. Senior management know these sorts of issue can stop a project.”

As a result, the skills needed to be effective in such work are in demand. Beth Cauldwell, managing director of the industrial sector with executive search consultant Norman Broadbent, says the oil industry is increasingly interested in the so-called “softer” interpersonal and cultural awareness skills.

“It’s about influence and persuasion,” she says. “You need somebody who can go out into what can be pretty tough environments and have empathy and the ability to communicate.” As these senior jobs usually also required strong technical skills, most people were recruited from within the industry. With a global skills shortage making it difficult to find the right people, Cauldwell adds that some companies are hiring individuals from outside and putting them through 12 months of technical training.

“There is a need for experts, people with particular skills in areas such as environment and social impact, but this is really something that anyone and everyone in the company can and should be contributing to,” says Nevill.

http://www.timesonline.co.uk/tol/life_and_style/career_and_jobs/careers_in/careers_in_energy/article3237945.ece

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