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3 Literature Review: Social Investment …
to a shift in the role of the government from being a provider, to a recipient, of social
welfare (Cash, 2012; Frynas, 2005, 2009a; Hilson, 2012). Within this process, the
company takes control of welfare provision and strategically fosters a relationship of
dependency between the company and the host society. This positioning harms host
communities because it (1) raises high and unrealistic expectations of what should be
expected of O&G companies; (2) strengthens corrupt governments to withhold their
participation in development initiatives; (3) raises community dependency upon the
company’s provision; (4) leaves communities unattended in post-production times
and (5) hinders democratic decisions on operational licensing because of the unequal
balance of power among the firm, government and local community (Cash, 2012;
Frynas, 2009b).
Studies suggest that the best way to approach social investment where there are
gaps in a government’s provision is through partnerships with the host government
and civil society (Anderson & Bieniaszewska, 2005; Ite, 2005). In this way, the
O&G industry acknowledges all actors involved and promotes participatory social
investment. Social investment that entails a participatory approach involving the
government, community and firm is more likely to empower all groups involved and
restore or retain the social balance of power (Frynas, 2009a).
3.1.5 O&G Social Investment Solely Based on Philanthropy
Corporations within and outside the O&G sector around the world increasingly invest
in philanthropic programmes. In a philanthropic approach, companies are expected
to donate to augment the host community’s health and stability (Heald, 1970). Philanthropy is based on a non-reciprocal, bipartite relationship between the donor and the
recipient framed as companies’ voluntary expenditure to support local civil causes
(Porter & Kramer, 2002; Varadarajan & Menon, 1988).
Thailand, Pakistan and Nigeria are three countries where O&G social investment is
based on charitable practices. In Thailand, companies—within and outside the O&G
industry—see social investment as a form of social contribution, which is embedded
in the country’s social values of “religious” and “bilateral patronage” (Srisuphaolarn, 2013, p. 62). According to Srisuphaolarn (2013), Thai society expects O&G
companies to donate to “religious causes, scholarships, fund-raising for hospitals,
help-the-victims-of-disasters” (Srisuphaolarn, 2013, p. 62).
Likewise, companies in Pakistan develop social investment mainly founded on a
‘sense of religious obligation’ (Ahmad, 2006). Ahmad’s study suggests that Pakistani
companies perceive corporate obligations to society to be contingent upon their size
and financial performance. That is, in Pakistan, there is a shared assumption that
small and non-profitable companies are exempt from being accountable to the host
communities and from performing corporate-giving programmes (Ahmad, 2006).
Although Thailand and Pakistan’s social investment programmes are mainly based
on religious values that are directly connected to charity, the literature on O&G social
investment provides a cautionary tale in relation to social investment as charity.
3 Literature Review: Social Investment …
to a shift in the role of the government from being a provider, to a recipient, of social
welfare (Cash, 2012; Frynas, 2005, 2009a; Hilson, 2012). Within this process, the
company takes control of welfare provision and strategically fosters a relationship of
dependency between the company and the host society. This positioning harms host
communities because it (1) raises high and unrealistic expectations of what should be
expected of O&G companies; (2) strengthens corrupt governments to withhold their
participation in development initiatives; (3) raises community dependency upon the
company’s provision; (4) leaves communities unattended in post-production times
and (5) hinders democratic decisions on operational licensing because of the unequal
balance of power among the firm, government and local community (Cash, 2012;
Frynas, 2009b).
Studies suggest that the best way to approach social investment where there are
gaps in a government’s provision is through partnerships with the host government
and civil society (Anderson & Bieniaszewska, 2005; Ite, 2005). In this way, the
O&G industry acknowledges all actors involved and promotes participatory social
investment. Social investment that entails a participatory approach involving the
government, community and firm is more likely to empower all groups involved and
restore or retain the social balance of power (Frynas, 2009a).
3.1.5 O&G Social Investment Solely Based on Philanthropy
Corporations within and outside the O&G sector around the world increasingly invest
in philanthropic programmes. In a philanthropic approach, companies are expected
to donate to augment the host community’s health and stability (Heald, 1970). Philanthropy is based on a non-reciprocal, bipartite relationship between the donor and the
recipient framed as companies’ voluntary expenditure to support local civil causes
(Porter & Kramer, 2002; Varadarajan & Menon, 1988).
Thailand, Pakistan and Nigeria are three countries where O&G social investment is
based on charitable practices. In Thailand, companies—within and outside the O&G
industry—see social investment as a form of social contribution, which is embedded
in the country’s social values of “religious” and “bilateral patronage” (Srisuphaolarn, 2013, p. 62). According to Srisuphaolarn (2013), Thai society expects O&G
companies to donate to “religious causes, scholarships, fund-raising for hospitals,
help-the-victims-of-disasters” (Srisuphaolarn, 2013, p. 62).
Likewise, companies in Pakistan develop social investment mainly founded on a
‘sense of religious obligation’ (Ahmad, 2006). Ahmad’s study suggests that Pakistani
companies perceive corporate obligations to society to be contingent upon their size
and financial performance. That is, in Pakistan, there is a shared assumption that
small and non-profitable companies are exempt from being accountable to the host
communities and from performing corporate-giving programmes (Ahmad, 2006).
Although Thailand and Pakistan’s social investment programmes are mainly based
on religious values that are directly connected to charity, the literature on O&G social
investment provides a cautionary tale in relation to social investment as charity.