CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Nigeria as a country is blessed with natural resources the largest deposit of which is Petroleum or Crude Oil since its (crude oil) discovery in 1956 at Oloibiri in Bayelsa State, Oil Companies have not ceased coming to the country for its exploration. And one of such companies is Shell petroleum Development Company of Nigeria (SPDC) Shell Petroleum Company of Nigeria came into Nigeria as the pioneer and leader of petroleum exploration Industry in 1937. Then it was known as Royal Dutch/Shell group of Companies and the British Petroleum (BP) on a equal basis until a time when the name fully metamorphosed to Shell Petroleum Development Company of Nigeria (SPDC).

     SPDC and other oil firms in Nigeria operate and explore oil from both urban and rural communities in Nigeria without doing much for them in return, despite the increasing population of the country. Social amenities not enough and improved upon. Little wonder Nnamdi &Ugwere, 2010 put it this way “ The population is at geometrical increase without corresponding increase in social amenities known cites are congested due to high rural-urban responsibility.

It is a matter of necessity for every company to have Corporal Social Responsibility (CSR) enshrined in their mode and manner of operations. Corporate Social Responsibility is a form of corporate self regulation integrated in a business mode CSR policy function as a built in self regulating mechanism whereby a business or company monitors and ensures its active compliance with the spirit of the law, ethical standards, and international norms. CSR is a process with the aim to enhance responsibility for the company actions and exchange a positive impact through its activities on the environment, consumers employees communities, stakeholders and other members of the public sphere who may also be considered as stakeholders. SPDC has been and still engages in CSR activities like provision of health facilities, building of roads, schools scholarship, provision of water and other community needs.

     Rural development is one of the benefits that has eluded host communities in Nigeria. Rural development generally refers to the process of improving the quality of life and economic well being of people giving in relatively isolated and sparsely populated areas. Batten (1967) defines it as “a process during which people in the small community firstly thoroughly discuss and define their wants, and then plan and act together to satisfy them.”

     It has traditionally centered on the exploitation of – intensive natural resources such as agriculture and forestry. However, changes in global production net works and increased urbanization have changed the character of the rural areas. The need for rural communities to approach development from a wider perspective has created more focus on a broad range of development goals rather than merely creating agricultural or resource based businesses. Communities by way of Corporate Social Responsibility(CSR).

1.2     STATEMENT OF THE PROBLEM

Though, it is truism that companies and firms ought to render corporate social responsibility to host community. It is contradictory that most firms do not engage in it while others do. In the case of Shell Petroleum Development Company of Nigeria, all multi-national oil Company operating in Delta State, is expected to perform cogent social responsibilities to the host community of Isoko and Ndokwa.

A lot of factors could be responsible for the inability of SPDC to implement CSR activities in the aforementioned communities, and some of them are as follow:

Differences and discrepancies between community expectations and agreement reached in the memorandum of understanding (Mou).

Another major problem could be political instability which mostly results in tights insecurity and general unrest which leaves negative impact on the operations of Shell Petroleum Development Company of Nigeria (SPDC).

Lastly, is rising expectations of communities’ members against agreement reached in the memorandum of understanding. Therefore, this work is carried out to show whether Shell Petroleum Development Company of Nigeria has been living up to billing.

1.3 RESEARCH QUESTIONS

The following research questions will act as guide towards the completion of this study and will be answered in the course of the work.

1. Is it that the company (SPDC) has not provided what the communities want?
2. Is it that the company (SPDC) has not done enough by way of Corporate Social Responsibility (CSR)_?
3. Is it that the funds meant for corporate social responsibility (CSR) projects by the company (SPDC) are being diverted by officials for other purposes?.

1.4   OBJECTIVES OF THE STUDY

The objectives of this study will include the following

1. To ascertain whether the company (SPDC) has provided the needs of the host communities by way of Corporate Social Responsibility(CSR).
2. To find out if the company (SPDC)has done enough or not implement Corporate Social Responsibility (CSR) projects
3. To establish if the funds meant for (CSR) is diverted by the company (SPDC) officials for other for other purposes.

1.5   HYPOTHESES

(1) Ho: The company (SPDC) has not provided the needs of the

                 Communities

           H1: The company (SPDC) has done enough by way of  

                 corporate Social Responsibility (CSR)     

     (2)   Ho: The company (SPDC) has not done enough by way of

                 corporate Social Responsibility (CSR).

           H1: The company (SPDC) has done enough by way of

                   CORPORATE Social Responsibility (CSR)

       (3) Ho: The funds meant for Corporate Social Responsibility

                   (CSR) projects are not used for the purpose

           H1: The funds meant for Corporate Social Responsibility

                 (CSR)   projects are used for the purpose.

   1.6    SIGNIFICANCE OF THE STUDY

This research work will be relevant and of great benefit to oil firms, host communities, generations born and urban and other researchers who may carry out a research on a similar topic in the near future. The work will enable oil firms such as the company (      SPDC) to identify their lapse and thereby work out measures at correcting such short-comings. It will also be an eye opener to host communities as they will see the need to embark on peace dialogue and employ all avenues towards oil explorers to implement (CSR) activities.

       This work will be important to rural and community development practitioners as it will open their eyes to damages caused by some oil firms and companies to host communities. This work will be of huge benefit to researchers as it will form the companies and the social responsiveness which regards to rural development.

     And finally, government at the Federal, State and Local levels will not be out as to improve the lives of the citizens of host communities.

1.7 SCOPE OF THE STUDY

The scope of this study covers the corporate Social Responsibility efforts of (SPDC) in the twin communities of Isoko and Ndokwa. The Isoko and Ndokwa communities are both in Delta State, and they are among the oil producing communities in the state.

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