6
1 Introduction
Social Investment
‘Social investment’ is a term widely adopted by the O&G industry. However, there is a
lack of consensus regarding the use of this term in reference to companies’ allocation
of services or resources to local communities. The literature within and outside the
O&G sector refers to social investment in many different ways. For example, some
authors refer to corporate social responsibility and social investment interchangeably.
Other terms include sustainable development programmes, corporate philanthropy,
philanthropy, charity, community assistance programmes and community development programme. In this research, I use the term social investment, rather the terms
noted above.
Initially, I had decided to adopt a definition of social investment developed by
the Global Oil and Gas Association for Environmental and Social Issues (IPIECA).
According to IPIECA, O&G social investment is the voluntary allocation of services
or resources that companies make to host communities and/or societies (IPIECA,
2008). The IPIECA guide for social investment is the single guide that specifically
targets social investment in the O&G industry. Major O&G global companies such as
Shell, Chevron, BP, ExxonMobil and Statoil are IPIECA members and adopt IPIECA
social investment guidelines in developing and implementing social programmes in
host countries.
However, IPIECA definition of social investment did not match some participants’ views of social investment. Participants’ definitions included compulsory
social investment that the IPIECA definition, at that time, did not include. Since
then, IPIECA revisited their social investment approach and definition and reissued
it in 2017.
2 In this research social investment is defined as the voluntary or mandatory allocation of services or resources that companies make to the local communities
and/or the wider society in which O&G companies operate.
Community
The concept of community is central to the construction of social investment in the
O&G sector. For this research, community refers to a social group of any size whose
members often have a common cultural and historical heritage (Watson, 2013), and
who reside in a specific region located nearby the prospection/production field (for
onshore activities) or port (for offshore activities).
In this book, I focus on social investment in communities that reside within the
‘area of influence’ of O&G activities. The term ‘area of influence’ refers to the
maximum radius in kilometres within which an O&G activity may impact the natural
environment and the local or host community. The area of influence is divided into
direct and indirect areas of influence. The area of influence varies according to a
country’s government legislation and the company’s definition of the area of influence. For instance, when working in social investment, I adopted the Amazonian
governments’ criteria for direct areas of influence (communities residing within a
5-kilometre radius of O&G activities) and indirect areas of influence (communities
2 For more go https://www.ipieca.org/resources/good-practice/redefining-key-components-of-soc
ial-investment-practitioner-note-1/.
1 Introduction
Social Investment
‘Social investment’ is a term widely adopted by the O&G industry. However, there is a
lack of consensus regarding the use of this term in reference to companies’ allocation
of services or resources to local communities. The literature within and outside the
O&G sector refers to social investment in many different ways. For example, some
authors refer to corporate social responsibility and social investment interchangeably.
Other terms include sustainable development programmes, corporate philanthropy,
philanthropy, charity, community assistance programmes and community development programme. In this research, I use the term social investment, rather the terms
noted above.
Initially, I had decided to adopt a definition of social investment developed by
the Global Oil and Gas Association for Environmental and Social Issues (IPIECA).
According to IPIECA, O&G social investment is the voluntary allocation of services
or resources that companies make to host communities and/or societies (IPIECA,
2008). The IPIECA guide for social investment is the single guide that specifically
targets social investment in the O&G industry. Major O&G global companies such as
Shell, Chevron, BP, ExxonMobil and Statoil are IPIECA members and adopt IPIECA
social investment guidelines in developing and implementing social programmes in
host countries.
However, IPIECA definition of social investment did not match some participants’ views of social investment. Participants’ definitions included compulsory
social investment that the IPIECA definition, at that time, did not include. Since
then, IPIECA revisited their social investment approach and definition and reissued
it in 2017.
2 In this research social investment is defined as the voluntary or mandatory allocation of services or resources that companies make to the local communities
and/or the wider society in which O&G companies operate.
Community
The concept of community is central to the construction of social investment in the
O&G sector. For this research, community refers to a social group of any size whose
members often have a common cultural and historical heritage (Watson, 2013), and
who reside in a specific region located nearby the prospection/production field (for
onshore activities) or port (for offshore activities).
In this book, I focus on social investment in communities that reside within the
‘area of influence’ of O&G activities. The term ‘area of influence’ refers to the
maximum radius in kilometres within which an O&G activity may impact the natural
environment and the local or host community. The area of influence is divided into
direct and indirect areas of influence. The area of influence varies according to a
country’s government legislation and the company’s definition of the area of influence. For instance, when working in social investment, I adopted the Amazonian
governments’ criteria for direct areas of influence (communities residing within a
5-kilometre radius of O&G activities) and indirect areas of influence (communities
2 For more go https://www.ipieca.org/resources/good-practice/redefining-key-components-of-soc
ial-investment-practitioner-note-1/.