Analysis On The Impact Of Social Responsibilities Of Oil Companies In The Host Communities In The Niger Delta Region Of Nigeria: A Case Study Of Shell Petroleum Development Company

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Analysis On The Impact Of Social Responsibilities Of Oil Companies In The Host Communities In The Niger Delta Region Of Nigeria: A Case Study Of Shell Petroleum Development Company


This contains the impact of social responsibilities of Oil Companies in the host communities of the Niger Delta region of Nigeria: A case study of shell petroleum Development Company. It is true that most corporate organizations especially multinational companies are not living up to expectation in solving the problems contributed in the region by their activities. Their oil exploration had causes pollution in the area, which has caused untold hardship to the people. Thus, the objective of the study was to explore how best to use the practice of public relations in solving these challenges. Both primary and secondary data were collected. Instrument used to collect primary data were personal interviews, questionnaires and observation. Secondary data were collected from textbooks, journals, magazines, newspaper and libraries. Questionnaires administration and interview methods were the principal methods used for collecting data. Descriptive research methods and survey technique were adopted by the researcher. The research findings of the project work reviewed that social responsibilities programmes are necessary. The findings also unyield that shell company earnies out its social responsibility programmes in its host community. The researcher recommended that the company should increase and expand its social responsibility programmes and government should help in the development of the communities in which most multinational companies exist.

Table of Contents

  • Title Page
  • Certification
  • Dedication
  • Acknowledgments
  • Abstract
  • Table of Contents

Chapter One:


  • 1.1. Background of the Study
  • 1.2. Statement of the Problem
  • 1.3. Objectives of the Study
  • 1.4. Research Questions
  • 1.5. Formulation of Hypothesis
  • 1.6. Significance of the Study
  • 1.7. Scope of the Study
  • 1.8. Limitation of the Study
  • References

Chapter Two:

Literature Review

  • 2.1. Theoretical Framework
  • 2.2. Historical Background
  • 2.3. Current Literature on Theory Postulated
  • References

Chapter Three:

Research Design and Methodology

  • 3.1. Research Design
  • 3.2. Sources of Data
  • 3.2.1. Primary Sources of Data
  • 3.2.2. Secondary Sources of Data
  • 3.3. Population of the Study
  • 3.4. Sample Size Determination and Sampling Technique
  • 3.4.1. Sample Size Determination
  • 3.4.2. Sampling Technique
  • 3.5. Methods of Data Collection
  • 3.6. Method of Data Presentation and Analysis

Chapter Four:

Data Presentation, Analysis and Interpretation

  • 4.1. Presentation of Data

Chapter Five:

Summary of Findings, Conclusion and Recommendations

  • 5.1. Summary of Findings
  • 5.2. Conclusion
  • 5.3. Recommendations
  • Bibliography
  • Appendix
  • Questionnaire

Chapter One


1.1 Background of the Study

The impact of oil companies towards improved welfare (social responsibility) for Nigerians as a whole and Niger Delta in particular goes to the very beginning. In 1962, most of the oil companies began oil exploration activities in the country. They presented the federal government an Aid-to-education plan under which they pledged to provide $900,000, over a period of five years for the education of Nigerians in various field. Since then, the oil companies have evolved a comprehensive programme for supporting the development of Nigeria’s different sectors namely education, health, infrastructural development, employment generation among others.

The concept of corporate social responsibilities as a new concept in the business world is the ability of a corporation to relate its operations and polices to the needs of the environment and the work force to the benefit of the organization and the host communities.

Corporate social responsibility involves management of an organization, working and relating with host communities and own labour force to ensure that the company is responsible and responsive to corporate government. It includes the participation of the company in such vital areas as environmental protection, training of its work force and welfare package and employment, provision of social amenities within plant location, such as water, electricity, bridges, roads, schools, scholarship programmes and youth development programmes for the community and natural development.

Business and society are inter-dependent because business cannot operate in a vacuum, it operates in the society and contribute immensely to the hazards of the environment from citizens and at same time provides employment, security and other many values to the community.

Thus, the concept of social responsibility of oil companies is vital in the life of organized business operations.

1.2 Statement of the Problem

Presently, it is obvious that oil companies are not living up to expectations of their duties in the host communities. This contributed immensely to environmental degradation of the region, the air, water and land pollution, destruction of natural habitations and waste disposal system that are harmful and destructive to the host community.

Lack of corporation to tackle the problem and reduce the effects of drilling activities on the environment and raise the standard of living of the people in the host communities became a source of concern to the youth of the region.

Secondly, lack of infrastructures and social amenities in the host communities of Niger Delta region by the federal government and oil companies operating in the region. Thus, the researcher is intended in finding out the cause of these problems in the region.

1.3 Objectives of the Study

The research objectives include the following:

  1. To assess if oil companies as part of their social responsibilities can tackle varying ecological issues in the host communit
  2. To determine the extent to which oil companies have contributed to the infrastructural development of the host communit However, this should delve into health care, portable water supply and education.
  3. To evaluate the impact of the social responsiveness of the company on the life of the people in the host communit
  4. To ascertain the impacts of the activities of the oil companies on their host environment.

1.4 Research Questions

The following research questions were formulated to enable the researcher carry out the study:

  1. How has the social responsibility of Shell Company tackled varying ecological issues in the host environment? (That is help in preserving the environment.
  2. How has shell Oil Company as part of its social responsibilities to the host communities contributed in the infrastructural development in the host community?
  3. In their assertion that all the issues raise above are met, how has it impacted on the life’s of the people?
  4. How has Shell Oil Company through its activities made an impact on individual in the host community?

1.5 Formulation of Hypothesis

The following hypothesis was formulated base on the objectives and problems of this research.

  1. Ho: Shell Company has been useful in providing some of the amenities to the host communities.
    Hi: Shell companies has not been useful in providing some of the amenities to the host communities.
  2. Ho: The multinational companies provide adequate infrastructures and amenities in the region.
    Hi: The multinational companies do not provide adequate infrastructures and amenities in the region.

1.6 Significance of the Study

The significance of the study lies in the fact that it would add to the alliteration guiding the federal government of Nigeria on how best social responsibilities of oil companies could be used and investigated in the region in order to restore progress, peace and security of life’s and property of the communities they operate.

It will equally help the government make motivating polices to encourage organizations in the region participate and implement fully, the corporate social responsibilities policies and goals in communities of operation.

1.7 Scope of the Study

The scope of the study focused on the role of corporate social responsibilities of multinational companies in the host communities. Specifically, the host communities expect the companies to improve and raise the standard of living of the people and also what the companies expect from the host communities, especially what shell company is able to do in this direction, to alleviate the impacts of oil exploration on the people of the region.

1.8 Limitation of the Study

This research is limited to the impact of social responsibilities of oil companies on the host communities in the Niger Delta region of Nigeria. Though, there are many oil companies in Nigeria, but this research only concentrates on the social responsibilities of shell Petroleum Development Company of Nigeria.

However, due to the constrain in getting funds, the research work was fully financed by my sponsor and was restricted from odds.

Furthermore, the problem of meeting the needed population size and other offices as regards data collection makes the research work base on questionnaires. The method of data collection was centered on the distribution of questionnaires and partly personal contracts or interview when and where necessary.

Therefore, the researcher will continue to put together the necessary and available materials and data in spite of the difficulties involved in the actualization of this research.

Chapter Five

Summary of Findings, Conclusion and Recommendations

This chapter deals with summary and conclusion of this research.

However, recommendations are also provided which will be aimed at improving and enhancing Shell Petroleum Development Company’s ethical posture for the benefits of the study.

5.1. Summary Of Findings

The paramount purpose of this research was to investigate, disclose, examine and determine the extent to which the social responsibility of oil companies enhances the development of their host communities. A case study of shell petroleum development company was conducted and the level of the company’s fulfillment of this objectives to their host communities.

The basic problems faced to the achievement of this research includes, of workers to management and causes of community saboteurs.
More so, through the concept of social responsibilities of the company, the host communities in the Niger delta region has benefited immensely in the aspect of infrastructural development and ecological issues such as scholarship, medical services, employment opportunities, qualitative education, environmental education, piling of water front, environmental sanitation etc. yet, they are still faced with the problem of poverty.

However, with regards to shell petroleum development company, a test of the formulated hypothesis based on the data colleted from questionnaires administered shows that the statistical significant of social responsibilities of the company does not enhance the success and development of the company goes along with its social responsibility.

5.2. Conclusion

This research work has been concerned with reviewing the contributions of Shell Petroleum Development Company to the development of its host community as a means of achieving its social responsibility objectives.

Shell Petroleum Development Company has tried to show that they are socially responsible to those communities in which they operate in different areas.

Checking from the annual reports of Shell Petroleum Development Company 2008/09, they have provided roads, electricity, pipe borne water, building of primary and secondary schools both in rural and urban areas of their community as a whole.

The call for government to look into the development of those communities was as a result that the social responsibility does not significantly enhance development and success of the community.

5.3. Recommendations

If actually Shell Petroleum Development Company’s annual profit in Nigeria is between US $170 and 190 million as Banfield and Marro (1979) reported, the company ought to do more than it is doing in community development projects. A company glosses over such high amount of profit per annum in any business is obviously supposed to demonstrate greater commitment to environmental responsibility of the region.

Although, it is of importance to say that Shell Petroleum Development Company have contributed immensely to the development of our economy as a developing country. But rather their contribution is not enough to enhance the success and development of the host community.

Hence, it is necessary to encourage their continuous existence in this part of the nation. To this end, the following policy statements are extended which is hoped will help prevent failures and encourage company’s survival:

Shell Petroleum Development Company should understand that in developing their host community they are also striving for their own development, hence they should endeavour in building of training centers, training programme could be carried out for their workers and indigenes as well.

Apart from building roads and electrifying the community which the company has already carried out, it is recommended that Shell Petroleum Development Company should look into the provision of social services such as the building of post offices and telephone services so as to increase the level of communication and thus link the outside world.

Government should contribute to the impact made by Shell Petroleum Development Company to the development of the community through industrial managerial expertise and centre for training staff to increase the efficiency and success of the company.

It is recommended that government should assist the company in eradicating the problem of poverty in the community by looking into the issue of oil exploitation. Thereby enhancing the life of the people.

Although, the company has tried to take care of pollution problems. Yet, they should be conducted in a very clean environment. This will bring more customers because a good atmosphere or environment will attract customers.

It is also recommended that the company should know that it is necessary for them to initiate policies through which they can assess themselves and their peace in the society.

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