Categories: Big oil / CSR reality check / Energy issues

6 January 2010


CSR: it’s not the same in Lagos as in London

Amnesty International has accused Shell Nigeria of human rights abuses, spreading pollution and other crimes against corporate responsibility (CSR). It provoked Paul Holmes, editor and publisher of The Holmes Report, to argue that companies will and should be held to the same standards globally. That’s a naïve response.

Holmes rubbishes Shell’s Andrew Vickers’ comment to the FT where he said of his company’s Nigerian challenge: “We’re not operating in the North Sea”. According to Holmes, this response is no longer a viable defence. He says if something is clearly unethical or unacceptable in New York or London or Amsterdam, it’s unethical and unacceptable in the developing world too.

Now, I’m an advocate of CSR. It is good and useful if it helps or forces firms and their customers to consider the wider implications of business and to manage risk. But Nigeria should help us see that CSR cannot be implemented evenly and easily everywhere. On this I speak from experience.

In 2007/8 I did a near year-long stint in front-line PR in Nigeria. It was a great and complicated experience. So here’s a snapshot of my take on things there.

You can’t do business in Nigeria as you would in the UK. Those who say you can haven’t been there. The standards in Nigeria are improving in some sectors and very much so because of foreign involvement. However foreign companies are forced to use Nigerian suppliers and most of those (if not all) are corrupt by Western standards. That corruption can be transparent or opaque. It takes many forms, but the culture of kickbacks is systemic. There’s no point pretending otherwise.

One petty example I observed as widespread practice was the necessity to grease the wheels of accounts departments to ensure invoices were settled (that barrier existed even at the heart of localised multi-national companies). Another was arranging a meeting with a state governor. He set the precondition that my client sponsor the upkeep of a roundabout and road section. He also demanded a photo opportunity and press release to go with it. That was CSR, but not as we know it.

As a PR I was faced with the fact that all TV and radio news coverage of any commercial event or promotion had to be paid for by the minute as if it were advertising (though the cash did not always guarantee a positive report). This advertorial approach was not readily transparent to viewers. However because TV and radio are mass media with great influence in Nigeria, no PR campaign could bypass them.

Moreover, most journalists expected brown envelopes in exchange for turning up at press conferences. Most western companies obliged them with such bribes. Most listed them euphemistically as lunch and travel expenses for media (or the PR company buried the payments in their invoices). Front-page spreads were sometimes bought. This practice was widely condemned during my time, but still took place; that’s how some CEOs got their picture on the front-page attending gala dinners with their wives etc.

Having said that, Nigeria is topsy turvy. It has a free, robust, critical, opinionated press that covers the political spectrum. The Nigerian media embodies the highest and the lowest standards in the business. Sophisticated readers of Nigerian newspapers know how to spot puff and how to spot the nuggets of merit. Hence doing credible PR in Nigeria is a job for experts rather than for charlatans with fat wallets.

The Nigerians are rightly famous and infamous for being very smart and very interested in money. The culture has not encouraged what one might call pro bono or European attitudes to business, but that’s changing. As the economy improves – and signs of that are everywhere – firms are realising that they have to operate according to international standards. Self-interest is driving improvement. Many Nigerians are highly-educated. In general that tends to bring with it a desire that Nigeria should operate to Western standards.

But, and it’s a big but… Nigerians have powerful obligations to family, tribe, religion, region, village and business partners. They live and operate in a world in which corruption and reciprocating favours goes very deep and very high. It is an environment in which political instability and violence are in some places severe and endemic. This edgy reality is likely to continue for many years.

Actually, much of what constitutes Nigerian PR would be called lobbying in the West. It takes place behind closed doors. It involves haggling and trading favours of many sorts in return for winning the support and third party endorsement clients require to win influence with networks that matter. Reputations are often battered in robust discussion or, sometimes, held hostage as an adjunct to negotiations.

For instance, the anti-corruption drive is often corrupt. Many of those under investigation for various fraudulent business practices are “victims” of their rivals’ desire to replace them with equally dubious practices of their own. Sometimes fraud accusation and investigations are simply methods of holding reputations to ransom in return for under the counter cash or business.

Instability and profit go hand in hand in Nigeria. Oil is part of that: it’s both a cause and a victim of the instability. However one could spot similar trends in telecommunications with Area Boys (local thugs) and their protection or otherwise of base-stations; and much of the banking industry was recently exposed as being cash dispensers of non-repayable “loans”. The point is that the prevailing chaos suits many powerful players. In such circumstances it is silly and wrong and counter-productive to imagine that one can operate as though one were in the UK or the US.

When I worked in the country, I was sheltered from much of the worst of the country’s habits. It was understood that I would operate to broadly European rules. But I would have been myopic not to have spotted what was going on around me. It would have been absurdly naïve if I thought things could change as rapidly as I would have liked. Worse, I knew and was enthused by the thought that if I and other Westerners totally washed our hands of the place, we would be pandering to the worst of the country instead of tending to encourage the best.

And yes, before you say it, let me. There are all sorts of Nigerians. And, yes, African culture’s great. The amazing thing in Nigeria is how much gets done, not how much breaks down. The country has a vibrant entrepreneurial feel to it. The people are friendly and open etc etc. But we have to accept that the liberal standards of Amnesty are European, and North European at that. One has to accept that liberalism’s universalism is, ooh, sort of colonialist in a good way, but it is also bossy and arrogant. That’s perhaps why Western NGOs are deeply unpopular in Nigeria.

In Nigeria I did not work for Shell or in oil. My clients were in banking, pharmaceuticals, telecoms, consumer goods and the state. I was based in Lagos and sometimes in Abuja, but never in the Delta region where Shell operates. So I don’t know the Shell situation well. But I read the papers and I’ve listened to locals of all backgrounds talk. That enables me to make the following incomplete observations:

* In Nigeria, Shell is a minority shareholder with management responsibility. Often, with operations badged as “Shell” it is actually an operation in which Shell Nigeria is a minority partner. That makes a Shell an easy scapegoat and target for all sorts of lobbies ranging from government to NGOs.

* If Shell weren’t involved in the operations as managers the situation on the ground would be far worse than it is (unless another Western firm replaced it).

* Shell’s operations are often blamed for eco-problems that are caused because of plant shut down for years by sabotage of a criminal or political nature.

* The sabotage and hostage-taking caused by criminals, sometimes politically-inspired criminals, and politically-motivated direct action, often involve desperately poor people. They are all very complex and intertwined.

Amnesty may well be right to draw attention to this matter. They may be right to target Shell (sadly, who else will care what goes on in the Delta region if Amnesty did not target Shell as the bad guy?). My instinct suggests that Amnesty is courting headlines and targeting the good guy. But whatever the truth of this matter, it’s still right to remind people that life’s not black and white.

The truth is that if the media and activists insist on the impossible as a CSR requirement, firms will either have to stop doing business in countries such as Nigeria or tell lies. Neither is a good way forward for the developing world or for corporations.

13 responses to “CSR: it’s not the same in Lagos as in London”

  1. […] the rest here: CSR: it's not the same in Lagos as in London | 21st-century PR … Share and […]

  2. […] the original here:  CSR: it's not the same in Lagos as in London | 21st-century PR … Share and […]

  3. Tim Beighton says:

    An amusing post paul, only in the fact that as you know I am currently in Lagos on a simlair ‘PR mission’ so to speak!
    Yes what you say about Nigeria and the status of PR is correct, and mirrors a lot of the way other business is done over here.
    What you allude to, and what i belive Paul Holmes actually means is that Good governance and true CSR should be strived for at every opportunity.
    Yes this country I currently call home is not connected to the North Sea, Yes it has major issues in these areas, both in the public and increasingly the private sector. However that does not mean Global companies coming into Nigeria can and should treat the place like a 3rd world dumping ground where the people or environment don’t matter. Rather they should represent their corporate identity in the best way possible. After all in this global village every action of a company be it operating in the North Pole, New York or the Congo is checked and balanced by its shareholders and the wider stakeholders. If a companies profits are judged in London or New York, so to should the standards of its CSR and corporate governance.
    There are many cases where companies have come into countries, rode roughshod over the local and international laws and believed they could get away with it, because its ‘different’ over there only to be caught and prosecuted. KBR/Haliburton for expample here in Nigeria, and other examples…
    Shell has done many things in this country that would be reprehensible in the UK or Europe, all because they believed they could ‘get away’ with it or it was necessary to do business. Interestingly it was Nigerian activists from the Ogoni tribe (Ken Saro Wiwa et al) who notified the world of the company’s malpractice and asked for something to be done, the ‘liberal standards’ are perhaps more global than you suggest.
    As for your final point, I believe it is the job of the activists and sectors of the media to insist on the ‘maximum’, whatever they get that is close to that is a bonus. If you sit back and accept that a country or situation will never change, it never will. On the flipside it will be a long struggle before this changes to how I and many others want, however it will happen I am sure…

  4. Richard D North says:

    Tim writes that “it was Nigerian activists from the Ogoni tribe (Ken Saro Wiwa et al) who notified the world of the company’s malpractice…..”. When I investigated those claims for the Independent (as a controversial freelance contributor) in 1996 I came to the concluson that many of those claims were nonsense, many more badly-skewed and some more or less accurate. My strong impression was that most of Shell’s “bad behaviour” flowed from its forced partnership with Nigeria’s state oil company and with chronic under-investment by Shell’s state partners. Let alone masses of other problems with the Nigeria state, local authorities and local power networks.

    I am inclined to think that it is true that the whole issue would have remained undisclosed and undiscussed were it not for activists. I am inclined to think, too, that the terms in which they did their work were so wrong-headed and plain false that their activism may have done more harm than good. After all, one way or another, “activists” have brought much of Shell’s Delta operations to its knees and I can’t see how that helped anyone.

  5. Tim Beighton says:

    The point you miss is that whether or not the ‘activists’ claims were ‘nonsense’ it is a duty of a global company with global reposibilities to push for the correct behaviour to be implemented. Idealist thinking I’ll admit but the ‘forced partnerships’ you talk about, are a necessary method of protecting Nigerias interest and keeping some profits within the country, without which companies such as Shell would take while giving very little value back to the communities they work in.
    Just out of interest did you visit the region when you were investigating?

    If you did, I’m sure you will agree that aside from the massive oil spills, when you see the villages close to the Shell and other Oil company compounds without electricity and running water, whilst the compounds are floddlit, clean ‘different world’ areas with 24/7 electriciity it makes you understand why the people are a little disaffected. Of course as Paul has stated its not so Black and White here and there are issues with bad governance on both sides, but visitors must bring with them morals and have certain obligation to ensure improvements are made, not just to hand out cash.
    As an aside Nigerian Liquified Natural Gas (NLNG) has used a model in Bonny that perhaps should be used as best practice in dealing with communities when involved in oil exploration and production etc.

  6. emeka ozumba says:

    Paul’s observation on the common practises in the Nigerian media landscape is already well documented, often money changing hands to influence mention in the media, are fuelled more by infrastructural inadequacies like transportation rather than the need to corrupt and gain undue advantage over competition. It is instructive that just like Nigeria’s electronic broadcast are paid for, our Ghanain neighbours made payment for news official.

    Shell paid and is still paying a price of long years of playing the ostrich while the plunderers held sway in Niger Delta. A truely global standard must not be measured on the merits of what obtains in the west and other emerging economies alone but in consonance with the cultural diversities and obvious challenges of developing countries like Nigeria. Perhaps then most multinationals will stop pretending that corporate gifting is synonymous with CSR just because it aids the bottom line.

  7. Paul Seaman says:

    Emeka, yours is a good comment. It amazes me how easily western-based PRs feel qualified to talk about Nigeria as if it were Goldalming in Surrey, UK. If they were serious about applying the same standards and expectations in Nigeria as exist in the UK or Amsterdam they would have to advocate breaking all links with Nigerian-based PR practioners (or tell lies about what goes on). Because it is no good PRs lecturing Shell about its behaviour unless they can address honestly the problems faced by their own colleagues.

    Moreover, if they believed their own line, they would have to call for Western firms to leave Africa immediately (or ask firms to tell lies). Hence, I say, in contrast, that if we are to have a dialogue with credible or even with dreamy protesters about what goes on in Africa, we will only be able to do so if we speak with integrity about the realities on the ground because honesty matters and so does clear-headed thinking.

    My experience in Africa left me with nothing but respect for the best PRs in Nigeria and for the best multi-nationals which operate there. But Lagos is not London and when I was in Lagos I did not expect things to be as they were in Zurich which is near to where my real home rests.

  8. Richard D North says:

    Dear Tim,

    Yes, I did visit the Delta, in 1996 in company with a few other UK national journalists (courtesy of Shell). Actually, Shell has always divvied up a voluntary local tax (over and above its “rental”to the national government). Of course, that tax as well as its payments to local communities were all open to abuse. In general I have found this issue is very badly written-up in the UK press. “From Clash To Cash”, Financial Times, 7 January 2010 seemed to me much better stuff and I strongly recommend it.

  9. […] 130th most corrupt state, and falling) as I recently explained in my personal account, CSR: it’s not the same in Lagos as in […]

  10. chinonso (ph.d) says:

    I do not think you understand what CSR is all about. Do try and take a course on business ethics.It will improve your blog on such a topic.

  11. Maris Obichie says:

    The Nigerian society as a whole need to be well informed on Corporate Social Responsibility and the role of government. The people believe that the Oil companies should do the work of the government like building schools , roads and providing Light for the community to them that is CSR and the only part of CSR they understand. They need to understand that aside from the CSR which these companies really do carry out other duties are expected of them, by the Nigerian government like Tax and some other financial payments that run in millions if not billions of Naira which should be used on community development by the government. I do sympathise with my people living without light, road or clean water is sad and unfortunate. The Government need to step up and not push its responsibilities around.

  12. […] To reconcile this seeming contradictory position he draws on the useful work of Donalson and Dunfree. They say there’s a need in such communities for “moral free space” and for “micro-social” contracts to function based on their own established norms. We should, they say, acknowledge the existence, up to a point, of an indeterminate social contract that’s based on pragmatism. I agree (see my CSR: it’s not the same in Lagos as in London). […]