Economics / 9. Industrial Economy.

BABALOLA YISAU ABIODUN [PhD student].

Accounting and Auditing Department

Volodymyr Dahl East Ukrainian National University, Lugansk, Ukraine

CORPORATE SOCIAL RESPONSIBILITY DEVELOPMENT IN NIGERIA

Introduction

A fast establishing trend in the business world is the evolution of Corporate Social Responsibility (CSR) packages by multinationals and other corporate bodies. This is unconnected with public outcries over the adverse effect of day-to-day business activities of the companies, how it affects the environment, economy and the lives of the host communities. Corporate Social Responsibility (CSR) is a set of standards to which a company subscribes in order to make its impact on society. Its potential to contribute to sustainable development, poverty reduction, caters for the vulnerable and senior citizens as well as contributes to national economy and private enterprise (Philips J.A. (2013).

The development of corporate social responsibility in Nigeria has been party to several international human rights treaties. The government of Nigeria is one of the governments together with Azerbaijan and Ghana, Kyrgyzstan who have committed to the UK-led Extractive Industries Transparency Initiative, where they have committed to making public all their revenues for oil, gas and mining.

Building on the United Nations declarations, conventions and efforts of constituents especially the International Labour organisation, the ISO has continued a process towards a harmonized approach under the leadership of both the Swedish Standard Institute and the Brazilian Association of Technical Standards. This process has active participation of Nigeria where the National Mirror Committee on Social Responsibility is working to contribute towards the completion of ISO26000 by 2008. The aim is to encourage voluntary commitment to social responsibility and will lead to common guidance on concepts, definition and methods of evaluation.

The Nigerian government has also through its NEEDS strategy (Nigerian National Planning Commission 2004) set the context by defining the private sector role as by stating that “the private sector will be expected to become more proactive in creating productive jobs, enhancing productivity, and improving the quality of life. It is also expected to be socially responsible, by investing in the corporate and social development of Nigeria.”

Further a Global Compact network was officially launched in Nigeria during the 12th Annual Nigerian Economic Summit in Abuja in 2006 where some Nigerian companies have already signed on to the Global Compact. The Nigerian oil sector is dominated by multinational companies. To compensate for the government’s governance failures and to protect their own business interests, the companies often engage in corporate social responsibility. The history of formalized corporate social responsibility in Nigeria can be traced back to the corporate social responsibility practices in the oil and gas multinationals with the focused on remedying the effects of their extraction activities on the local communities. The companies provide pipe-borne waters, hospitals and schools. Many times these initiatives are ad hoc and not always sustained (Amaeshi, Adi, Ogbechie & Amao, 2006).

According to a study on corporate social responsibility in Nigeria (Amaeshi, Adi, Ogbechie & Amao, 2006) it appears that Nigerian companies are engaged in one corporate social responsibility activity or the other. However, 85 percent of the respondents said that there is an awareness of corporate social responsibility in Nigeria but without significant actions, while 7.7 percent either claimed there is almost no awareness with significant actions and also revealed that there is more emphasis on community involvement, less on socially responsible employee relations and almost none with regard to socially responsible products and processes. Unlike in many other countries, the Nigerian consumer is not as empowered and is just beginning to have the basic safety of products by the National Agency for Food and Drug Administration and Control (NAFDAC), and the Standards Organisation of Nigeria (SON) (Amao, 2006).

As to environmental protection, prior to oil, agriculture (before 1970) was the economic mainstay in Nigeria. When financial resources became available from oil and with no development policy, unguided urbanization and industrialization emerged which led to degrading the environment.

When the illegal dumping of toxic wastes took place in Koko, in 1987 the Nigerian Government promulgated the Harmful Wastes Decree. This decree provides a legal framework for control of disposal of toxic and hazardous waste in any environment within Nigeria. After the decree, the Federal Environmental Protection Agency (FEPA) was established in the 1988, charged with the responsibility of protecting and developing the Nigerian environment.

Even though progress is made, Echefu and Akpofure (2003) cited by Babalola Y.A. (2012) claim that when examining the various statutes, the framework for the EIA process, and the entire environmental regulatory process, it reveals that many of the statutes are not working according to intentions. The authors stipulate that there is a duplication of the functions in the processes which results in serious bottlenecks and bureaucratic confusion in the environmental process of Nigeria.

Summarizing above, there are positive trends with a number of national initiatives regarding corporate governance and environmental initiatives. At the same time, it still seems to be bureaucratic and institutional hindrances for the effective implementation of many of these initiatives. This in recent times is fast becoming an apology medium for vagrant abuse of social responsibility and protection of the environment in the scramble for maximizing profits.

REFERENCES

Amaeshi, K, Adi, B, Ogbechie, C & Amao, O. (2006) Corporate Social Responsibility in Nigeria: No. 39-2006, ICCSR Research Paper Series –ISSN 1479 – 5124, The University of Nottingham, pp. 4,17, 25.

Babalola, Y.A. (2012) The impact of Corporate Social Responsibility on firms’ profitability in Nigeria: European Journal of Economics, Finance and Administrative Sciences ISSN 1450-2275 Issue 45 (2012).

Phillips Julius A. (2013) Governance and Corporate Social Responsibility in Nigeria: Nigerian Observer Online, Wednesday, January 23, 2013.