ABSTRACT
The role of multinationals in community development cannot be overemphasized. Corporate Social Responsibility (CSR) is an important aspect of integrating the community and the companies that are within a given community. It is fundamental that corporate take into consideration the needs of the community beyond the growth of their organizations. Governments in developing countries are faced with great challenge to provide fundamental services to the people and this has left gaps in the community development. The government efforts in development of infrastructure, social amenities, health care, education among others has not been sufficient. It is these gaps that the multinationals are required to fill through initiatives that support the development of communities. However their role in community development is not always understood especially in Africa where they are involved in the production and processing of valuable commodities in agriculture, oil and gas industries. In Akwa Ibom state the presence of multinationals dealing with tea production has been very prominent. These multinationals include Mobil Nigeria Limited (MNL), James Finlay and Unilever Tea. Mobil Nigeria limited is the largest of these multinationals in Akwa Ibom state Oron LGA with fifteen tea estates and seven tea factories. This study was motivated by the increasing conflict between communities and the multinationals. There have been continued conflicts between the two and the study aims at assessing what role the MNCs play in community development and this assessed their contribution to community development as the main objective of the study. The specific objectives were based on their role in education, social welfare and infrastructural development. The study adopted two theories, the stakeholders’ theory and the theory of legitimacy. The study adopted a descriptive research design which was appropriate to bring out the reality on the role of MNL in community development. The data collected was analyzed and presented in topical discussions, tables and graphs as appropriate. From the study it was found that MNL has played a fundamental role in the community development in Oron LGA. In education it was evident that MNL has offered bursaries and sponsorship and also taken part in the infrastructure development of the schools. Under the social amenities MNL has played a crucial role in the construction of health facilities, taken part in the construction of churches and social halls. Finally, MNL has been involved in various projects under infrastructural development which include provision of water, maintaining roads and maintenance of playing grounds for various schools. MNL has therefore played an important role in ensuring the development of the community in Oron LGA.
CHAPTER 1: INTRODUCTION
1.1 Background of the Study
Corporate Social Responsibility (CSR) has played a key role in the development of communities through promotion of individual wellbeing, group and community growth and development that are promoted through initiatives of corporations within communities. In the recent past there has been a widespread demand by communities for relevant direct and sustained benefit from Multinational Corporations (MNCs). The government has failed in many developing countries to respond to the needs of communities and this gap has been passed to various Multinational Corporations that have been set up within communities in developing countries. Due to the limited capacity of developing countries to utilize their resources especially in the mining industries and other industries such as coffee and tea industries MNCs have become wide spread in developing countries as they seek to fill the gap in the utilization of the resources in the developing countries (Culverwell, Lee, &Koziell, 2003).
In Africa there are various MNCs that exist within the communities. In Nigeria due to the existence of the oil and gas mining the presence of MNCs has been increasing by the decade. In Cameroon there are several MNCS in the Fast Moving Consumer Goods (FMCGs) that have been set up including MTN, British American Tobacco (BAT) among other MNCs. East Africa has an increasing number of MNCs that run across various industries in the economy. In Nigeria MNCs can be traced back to the colonial period and this have continued to set base in Nigeria in a bid to take advantage of the rich resource base in the country. The tea and coffee industry are among the industries that have attracted MNCs in various parts of the country and their presence has been felt in all tea growing regions,(Buchholz and Rosenthal,2004).
The World Bank in its annual report in 1995 recognized that beyond capital investment it is important for MNCs to get involved in human capital investment. The World Bank holds that human capital investment is important for the overall economic as well as social development. It is therefore important to note that MNCs are not only important for capital investment but they hold a key role in global development through investing in human capital and providing the local people with tools to drive their own economic development (Nelson, 2006).
It has therefore been argued that corporations have a responsibility and obligation to help in solving problems of public concern (Monsen, 1974; Quinn & Jones, 1995). This therefore is a matter of the corporations going beyond self-interest of profit maximization and looking into the needs of the local people who are critical stakeholders of the corporations, (Velasque, 1996).
According to Ojala (2004), social responsibility has three major facets: operating within the given law (legal), having and abiding by the common ethical and moral standards, and giving philanthropically. He defines social responsibility as the obligation of both business and society to operate legally, uphold the moral-ethical standards, and philanthropic actions that takes care of interests of both parties their welfare as a whole, all of which has to be attained within their economic structures and capabilities of the society and the business.
Having good corporate practices by any corporations not only MNCs goes beyond the legal requirement. This has to be voluntary from corporations and generally acceptable as well as beneficial to the social communities surrounding the corporation. MNCs can therefore have direct participation in societal governance that is not limited to within the surrounding of the business but as far as the entire society in general. MNCs may from time to time be asked to take up extra responsibilities especially in circumstances where mechanisms regulating free market are not effective or not yet fully developed. Thus the MNCs have the extra challenge oin trying to address social responsibility matters especially where legal framework is not in place, lack of societal infrastructure or prior existing traditions and inexperience in the market economy from the host country (Moon, Crane, and Matten, 2005).
Mobil Nigeria Ltd
Mobil Nigeria Ltd (MNL) has been rated as one of the biggest multinational tea producers in Nigeria. Reports from the state government of Akwa Ibom shows that MNL has 15 tea estates covering a total area of approximately 20,000 acres within Akwa Ibom state. The report also shows that MNL have established 7 tea factories within Akwa Ibom state. These tea estates are; Kapsumbeiywo, Kibabet, Chemomi, Kipkoimet, Savani, Kepchomo, Sitoi, Kipkeibon, Kaprochoge, Siret and Kibwari. From the list, MNL manages Siret, Kipkeibon, Kaprochoge and Kibwari on behalf of various private investors. MNL also owns 40% of NSE- listed Kakuzi Ltd that owns the entire 1500-acre Kaboswa tea estate. MNL is 70% owned by Camellia PLC which is an international group operating across 12 countries and the second largest private produce of tea globally.
1.2 Statement of the Problem
The impact of Multi-National Corporations on host community development is not always clear. There has been continued pressure for corporations to be more open and accountable and to report publicly on their undertakings economically, socially and environmentally. A worldwide debate fueled by perceived double standards, corporate scandals and significant decline in social, economic and environmental developments in host communities by MNCs, has raised questions on commitment of the MNCs in supporting community development beyond pushing for their main agenda of profit generation for themselves.
This has led to continued pressure globally for MNCs to demonstrate their social accountability especially MNCs that are established in regions that have political sensitive environment worldwide. The continued involvement of multinationals companies in community and development initiatives has lead to the World Business Council for Sustainable Development (1998) definition of social/community involvement (issues) as: varied range of activities that includes community assistance programs; supporting education matters; nurturing a shared vision of a corporation’s role in the community; involvement in community health and safety; inculcating the culture of voluntary community work in employees; philanthropic giving; sponsorship;
1.3 Objectives of the Study
This study was guided by the following objectives:
1. To determine how MNL has contributed to promotion of Education in Oron LGA.
2. To ascertain the contribution of MNL to Social welfare initiatives in Oron LGA.
3. To examine how MNL has taken part in infrastructural development in Oron LGA.
4. To establish the challenges faced by MNL in promoting community development in Oron LGA.
1.4 Research Questions
The study was guided by the following questions:
1. What has the existence of MNL in Oron LGA played in the promotion of Education?
2. How does MNL contribute to Social welfare initiatives in Oron LGA?
3. What has been the contribution of MNL to infrastructural development in Oron LGA?
4. What challenges is faced by MNL in Oron LGA in promoting community development?
1.5 Research Premises of the study
The study was undertaken under the premise that:
1. The MNL has promoted Education by contributing to construction of schools in Oron LGA.
2. The MNL has contributed to the Social welfare development through construction of social halls in Oron LGA.
3. The MNL has contributed to infrastructural development through the building of stadia in Oron LGA.
4. The MNL has faced challenges in the promotion of community development in Oron LGA.
1.6 Justification and Significance
This study was based on the background that MNCs have a responsibility to support community development in one way or the other. The findings of this study were instrumental in bringing out the effects that the MNCs bring on host community development and thus this will be fundamental for the government to understand these effects and keep the MNCs accountable where necessary. The study will also be important to the MNCs as this will bring out the expectations of the community to the MNCs and thus creating room for the MNCs to plan their CSR activities to respond to the expectations of the communities. The study will also be helpful to the local community in Oron LGA as this will be a communication tool for them on what the MNL have contributed in the development of their community and how they would want MNL to farther support them in development.
1.7 Scope and Limitations
The study was conducted in Oron LGA, Akwa Ibom state. The Sub state was purposively selected due to the heavy presence of MNCs that have invested on thousands of acres of tea in the region. The study was also limited to the tea industry and in particular MNL company in Oron LGA. This study was limited by the minimal research that has been done locally on MNCs. Very few scholars have conducted studies on MNCs and this thus poses a challenge to the researcher due to lack of a grounded reference point for the study. The researcher however overcame this by relying on studies from other regions especially developing countries and this were used as reference points to develop a Nigerian context.
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